State moves quickly on rail contracts (Business Journal of Milwaukee)

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Governor’s race comes into play on contracts’ pace

The state’s rail bureau is scurrying to get contracts for the high-speed rail corridor between Milwaukee and Madison out the door so work on the controversial line is well under way in case Milwaukee County Executive Scott Walker is elected governor this fall.

The fear at the Wisconsin Department of Transportation, and within Democratic Party circles, is that GOP gubernatorial hopefuls Walker and also Mark Neumann will stop planning and construction of the 85-mile, high-speed rail project in its tracks if one of them is elected governor over Democratic candidate Tom Barrett, the mayor of Milwaukee who supports the rail initiative. Gov. Jim Doyle, who supports the project, is not running for re-election.

“There is a keen sense of urgency to get this moving as fast as they can,” said Craig Thompson, executive director of the Transportation Development Association of Wisconsin.

Added a Milwaukee-area architecture executive, “They are doing everything they can to be in the ground by August. I’ve never seen state bureaucrats move this fast on a project.”

The hope among Gov. Jim Doyle’s operatives at DOT is that if enough money is spent on engineering and construction contracts on the high-speed rail line there is less of an opportunity for Republicans to strike down the controversial rail initiative.

“I think Scott Walker is decisive enough to shut down the high-speed rail project to save millions in operating costs even if the state has spent $50 million,” said J. Michael Mooney, chairman of NAI MLG Commercial Inc., Brookfield.

DOT rail bureau planners already have chosen several engineering firms to work on five high-speed rail contracts through a request for qualification process that’s commonly used for transportation projects using federal funds.

Graef USA is one Milwaukee-area engineering firm negotiating to complete work at the Milwaukee Intermodal Station to allow the station to handle additional passengers heading west to Madison.

In late January, DOT announced the Milwaukee-to-Madison corridor was one of 13 high-speed proposals selected by the Federal Railroad Administration to receive $823 million in federal stimulus money for construction of the rail line. The annual operating and maintenance of the line will come from state transportation budgets.

The Milwaukee-Madison high-speed rail service will be a first-phase project of the Midwest Regional Rail System. The passenger service includes high-speed trains that will originate in Chicago with connections in Milwaukee, Brookfield, Oconomowoc, Watertown and Madison. Phase two of the high-speed regional rail system will include service to Minneapolis.

While DOT officials would not talk to The Business Journal about the high-speed rail contract procedure, agency planners have been very busy in recent weeks talking to professional engineering organizations about contracts and timelines for the $811 million Milwaukee-to-Madison route and an additional $12 million allocated to improving the Chicago-to-Milwaukee Amtrak line.

Over the past five years, DOT has spent more than $40 million in preliminary engineering and rail corridor acquisition costs related to the proposed high-speed rail project. Because the agency did a significant amount of pre-planning, DOT planners are able to get high-speed rail contracts out faster than they ordinarily could, said Pete Beitzel, a vice president and transportation specialist at the Metropolitan Milwaukee Association of Commerce.

By the time a new governor is inaugurated in 2011, some politicians estimate the state will have spent more than $57 million in federal funds on the Milwaukee-Madison corridor. If the project is canceled, the state would have to repay the federal government for money spent on the project.

Walker was first to declare the federal stimulus money for high-speed rail is not free. More than a month ago, Walker said accepting this money means obligating Wisconsin taxpayers to spend millions more every year.

Walker said no one seems able to provide an accurate estimate of what it will cost to operate and maintain the new rail line or equipment, or who will pay for it. Rail projects in other areas have seen original cost estimates skyrocket once construction begins.

In addition, studies show that rail passenger fares are likely to cover just 20 percent of the operating costs, said Walker. Taxpayers will pick up the other 80 percent through higher taxes and fees.

“Now is not the right time to be promoting a major tax or fee increase,” Walker said.

Neumann has been equally pessimistic about taxpayers covering the high-speed rail’s operational costs and has publicly stated he might also shut down the project if it becomes an economic failure.

Mooney, who is involved in several statewide economic development groups, supports allocating more transportation funds for highway and bridge projects such as the Zoo Interchange in Milwaukee and Wauwatosa. Mooney said the state doesn’t need to add to the budget burden.

“We need to know where the state will get the money to fund high-speed rail when it can’t even afford to maintain our current transportation systems,” Mooney said.

But Waukesha Mayor Larry Nelson said a high-speed rail system could appeal to younger workers and improve transportation options throughout southeastern Wisconsin.

“This could be the first step to real 21st century transportation,” he said.

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