Oral Testimony of the Honorable Janice Hahn

Member, Los Angeles City Council

Chairwoman, Alameda Corridor Transportation Authority

to a

Joint Hearing

of the

U.S. Senate

Environment & Public Works Committee

and

Finance Committee

September 25, 2002

 

 

Honorable Chairmen, and members of the joint Committees, good morning,  and thank you for inviting me here today.  My name is Janice Hahn.  I am a Los Angeles City Councilwoman and serve as Chairwoman of the Governing Board of the Alameda Corridor Transportation Authority.  On behalf of City of Los Angeles Mayor James Hahn, City of Long Beach Mayor Beverly O’Neill, the Corridor Authority’s Governing Board, and our CEO Jim Hankla, I am honored to be here.  Accompanying me today are Dean Martin, the Corridor Authority’s Chief Financial Officer, and Joseph Burton, our General Counsel. 

The Alameda Corridor Transportation Authority is a joint-powers authority created by the Cities of Long Beach and Los Angeles in 1989 to oversee the financing, design and construction of the Alameda Corridor.   The Governing Board of the Alameda Corridor Transportation Authority is a seven-member board representing the cities of Los Angeles and Long Beach, the ports of Los Angeles and Long Beach and the Los Angeles County Metropolitan Transportation Authority (MTA). 

INTRODUCTION

We are commonly called ACTA.  ACTA is the public agency that built the Alameda Corridor, a 20-mile-long freight rail expressway linking the Ports of Los Angeles and Long Beach to the rail yards near downtown Los Angeles. The project was monumentally complex, running through eight different government jurisdictions in urban Los Angeles County, requiring multiple detailed partnerships between public and private entities, and presenting extensive engineering challenges.  

One of the key partnerships that has been vital over the years has been with the United States Congress.  We greatly appreciate the strong support you and your colleagues provided to ACTA in developing the innovative loan from the Department of Transportation.  Indeed, the Federal Government by its $400 million DOT loan became the first financial partner in this magnificently successful project.  We are particularly thankful for the strong leadership demonstrated by many of you in Congress including our two distinguished Senators, Dianne Feinstein and Barbara Boxer along with California Congressman Stephen Horn and Congresswoman Juanita Millender-McDonald.   Without their vision and support it is unlikely the Alameda Corridor would be in operation today, strengthening the nation’s global economic competitiveness.

Over the years there wereas many who doubted the Corridor project could be built, let alone on time and on budget.  But after more than 15 years of planning and five years of constructing the $2.4 billion Alameda Corridor, one of the nation's largest public works projects opened on time and on budget on April 15.  Today, more than 35 freight trains per day use the Alameda Corridor, handling containers loaded with shoes, clothing, furniture and other products bound for store shelves throughout the United States.   They also deliver to the ports U.S. goods such as petroleum products, machine parts, and agricultural products for shipment to worldwide markets.  A trip from the Ports of Los Angeles and Long Beach to the transcontinental rail yards near downtown Los Angeles used to take more than two hours.  It now takes about 45 minutes.  As cargo volumes increase, this enhanced speed and efficiency will be critical; more than 100 trains per day are expected on the Alameda Corridor by the year 2020.  It is important to note that ACTA is collecting revenue from these rail shipments in amounts sufficient to meet its current and future financial obligations. 

MODEL FOR SUCCESS

The key to our success can be attributed to two major themes that guided us throughout the planning, financing and construction of the project:  First is multi-jurisdictional cooperation.  The Alameda Corridor is built on the partnerships forged between competitive public agencies and between those agencies and the private sector.  We have demonstrated that governments can work together, and they can work with the private sector, putting aside competition for the benefit of greater economic and societal good.  Second is direct and tangible community benefits.  The Alameda Corridor provided direct community benefits in the form of significant traffic congestion relief, job training and other programs.   We have proven that communities don't have to sacrifice quality of life to benefit from international trade and port and economic activity.  

PROJECT NEED AND PLANNING

The volume of containers crossing the wharves doubled in the 1990s and last year reached more than 10 million 20-foot containers per year.  That figure is expected to exceed 36 million by the year 2020.  Last year, the ports handled more than $200 billion in cargo, or about one-quarter to one-third of the nation's waterborne commerce.  This has had huge ripple effects in Southern California and across the country in the form of jobs, tax revenues and general economic activity.

In the early 1980s, there was growing concern about the ability of the ground transportation system to accommodate increasing levels of trade-related rail and truck traffic in the port area.  By 1989, the cities and ports of Los Angeles and Long Beach had joined forces to form a joint powers authority that later became the Alameda Corridor Transportation Authority.  The agency then selected a preferred project: consolidating four branch lines serving the ports into a 20-mile freight rail expressway that is completely grade-separated, including a 10-mile-long 30-foot-deep trench that runs through older, economically disadvantaged industrial neighborhoods south of downtown Los Angeles.     

PROJECT FINANCING AND FUNDING

Our broad base of cooperation is also evident in the project's unique finance plan, which draws revenue from a range of both public and private sources. 

The linchpin of this funding plan was designation of the Alameda Corridor as a "high-priority corridor" in the 1995 National Highway System Designation Act.  That designation cleared the way for Congress to appropriate $59 million needed to back a $400 million loan to the project from the U.S. Department of Transportation.   

The collective assistance offered by federal, state and local agencies and elected officials provided the base funding -- the leverage, if you will -- for the biggest piece of our financing package -- more than $1.1 billion in proceeds from revenue bonds sold by ACTA.  The bonds and the federal loan are being retired by corridor use fees paid by the railroads.  

The Use and Operating Agreement between ACTA and Burlington Northern and Santa Fe Railway and Union Pacific Railroad, approved in October 1998, is truly unprecedented. Never before had the competitive railroads cooperated on a project to the extent that they did on the Alameda Corridor.  Like the ports, the BNSF and the UP put aside their rivalry to cooperate on a project with positive economic implications at the national, regional and local levels. 

In the end, funding for the Alameda Corridor came from multiple public and private sources and resulted from bipartisan support.  The funding breaks down roughly like this: 46% from ACTA revenue bonds; 16% from the U.S. Department of Transportation loan; 16% from the ports; 16% from California state and local grants, much of it administered by the Los Angeles County Metropolitan Transportation Authority, and 6% from other sources.  

PROJECT CONSTRUCTION

There are many reasons why our project stayed on schedule, but at the top of the list are our permit facilitating agreements with corridor communities and utility providers, and our decision to use a design-build contract for the Mid-Corridor Trench. 

Before construction began, ACTA negotiated separate Memoranda of Understanding with each city along the route, detailing expedited permitting processes, haul routes for construction traffic and the protocol for lane closures and temporary detours.  By agreeing in advance on these and other issues, we streamlined a complex construction process and saved time and money. 

DIRECT COMMUNITY BENEFITS

One key to securing the MOUs and additional community cooperation and support was to deliver on our promises of direct community benefits. 

By eliminating more than 200 at-grade railroad crossings, the Alameda Corridor is projected to reduce emissions from idling trucks and automobiles by 54 percent, slash delays at railroad crossings by 90 percent and cut noise pollution by 90 percent.   

Disadvantaged firms – known as DBEs – have earned contracts worth more than $285 million, meeting our goal for 22 percent DBE participation.

§       The goal of our Alameda Corridor Job Training and Development Program was to provide job training and placement services to 1,000 residents of corridor communities.   We exceeded that goal- almost 1,300 residents received construction industry-specific job training, and of those 637 were placed in construction-trade union apprenticeships. 

§       The Alameda Corridor Conservation Corps provided life skills training to 447 young adults from corridor communities, exceeding the goal of 385.   

THE FUTURE

The efficient movement of cargo through our nation's ports and on our rail lines and highways is a critical issue not only in Southern California -- which has the nation's two busiest ports -- but the nation as a whole.  The Alameda Corridor is truly the backbone of an emerging trade corridor program in Southern California.  Already, others are following our lead, including governmental agencies in Los Angeles, Orange, San Bernardino, and Riverside Counties who are building grade-separation projects. 

In addition, ACTA and the California Department of Transportation are working under an innovative cooperative agreement to develop plans for a Truck Expressway that would provide a  “life-line” link between Terminal Island at the Ports and the Pacific Coast Highway at Alameda Street.  The Alameda Corridor Truck Expressway is intended to speed the flow of containers into the Southern California marketplace. Environmental reports are being prepared, and the project could be ready for approval as early as March 2003.  At ACTA, we believe that by restructuring our federal loan we can undertake this critical Truck Expressway project without any additional federal financial support.

IMPLICATIONS AND RECOMMENDATIONS

As your committees, the full Congress, and the U.S. Department of Transportation begin the TEA-21 reauthorization process, including the formulation of policies to address growing freight rail and truck traffic congestion and other challenges posed by international trade, we respectfully offer these policy recommendations, based on our experience with the Alameda Corridor:

§       The planning and funding of intermodal projects of national significance, directly benefiting international trade, should be sponsored at the highest levels within the Office of the Secretary of Transportation.  There should be a national policy establishing the linkage between the promotion of free trade and support for the critical intermodal infrastructure moving goods to every corner of the United States.  Public-private partnerships do in fact work and should be promoted and encouraged by federal transportation legislation.   

§       A specific funding category is needed to support intermodal infrastructure projects, and trade connector projects.  Consideration should be given to new and innovative funding strategies for the maritime intermodal systems, infrastructure improvements enhancing goods movement. 

§       The Alameda Corridor project benefited from a Department of Transportation willing to undertake risk and provide loan terms that were not available on a commercial basis.  This federal participation gave private investors confidence in the project and made bond financing possible. 

Most important, in my mind, is this:  The success of the Alameda Corridor has shown that federal investment in trade-related infrastructure can benefit the economy without sacrificing quality-of-life issues. 

Mr. Chairmen, once again, thank you for inviting me here today.  That concludes my remarks.  I would be happy to address any questions.

 

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