The Current Formula

Before turning to the new priority list, we must resolve a controversy concerning the formulas used by Staff to establish the recommended priority rating for each project.² As stated above, Staff developed that formula after conducting a workshop mandated by our final decision in the previous proceeding, and applied it to the data in the current proceeding as contemplated by the OII. (See OII, p. 4.)

The formula we adopted after the workshop involves a significant departure from past practice. To develop the current priority list Staff used the amount of State funds requested, rather than the total estimated cost of the project, to define the project cost in the denominator of the formula. Under Streets and Highways Code Section 2454 (g) each project to improve or eliminate an individual grade crossing is subject to a $5 million cap, and because the actual construction cost for most nominated projects exceeds that cap, the consequence of making the change was that most of the nominations showed $5 million as the project cost in the formula. This affected the priority rankings of individual projects whose cost will exceed that figure.

The representative for the City of Bakersfield and Kern County, joined by several others from rural jurisdictions, objected to the use of this new method, because it tended to lower the priority rankings of projects they nominated. They argue that projects of equivalent cost and type in larger urban areas are favored, and that there is a bias in the formula because the numerator incorporates such factors as accident history and traffic volumes. This amplifies the impact of the numerator when the denominator decreases or is capped at the $5 million level. The objecting parties urge us to return to our former practice in order to restore their projects to previous priority rankings, and argue that to do otherwise would be unfair.

Staff conducted sensitivity tests to ascertain the effect of making the change in the formula, and acknowledges that the change in methodology to some degree had the effect claimed by these parties. However, the change from past practice reflects the reality that, while the cost of the grade crossing projects has dramatically increased in the 45 years since the Legislature created the program, the total amount of annual funding available for all single crossing improvement projects-$15 million-does not increase from year to year. Even though funding for an individual project by law is limited to one-third of its cost or $5 million (whichever is less), sufficient funds in reality are never available to fund all qualifying projects, even to the extent of the $5 million cap, because of the large number of projects nominated for funding.

The available funding is distributed according to priority ranking, rather than being proportionally allocated to every qualifying project on the list. In simple terms, the project on the list with the highest priority has first claim to the available funds to the extent of the cap, then the next in ranking, and so on until the fiscal year's funds are exhausted. The next fiscal year's list is comprised of the projects remaining after the first-year funds are allocated, removing those which were high enough on the list to be within reach of funding, met all of the allocation requirements by the first-year deadline, and actually received allocations. When the second fiscal year's funds are exhausted no more projects are funded, and the process of creating the list starts over. Some projects may wait years to qualify for an allocation, and others may never receive funds, depending on the number of higher priority projects that are nominated in each cycle.

Although this system may outwardly seem unfair to rural jurisdictions that have planned projects of great local significance, it is driven by risk level: grade crossings that pose the greatest hazard to public safety, wherever they may be located, are intentionally highest on the list. By extension, assuming they subsequently satisfy CTC's allocation requirements and receive funds at the earliest possible time, the most hazardous grade crossings will be the first to be eliminated, and the public safety will be optimally served. The list is dynamic, responding to local demographic changes, and some projects may be subordinated from year to year to new ones where factors such as rising vehicular traffic levels, increased train activity, or recent accident history indicate a greater public need for grade separation or improvement.³ The system is not one where the first to come to the table is necessarily the first to be served.

Many projects elevated on the priority list in each cycle are in crowded urban areas. Larger populations in these regions generate more vehicular traffic, so the potential for vehicular conflict with trains (assuming that an equal number of train movements occur at comparable crossings slated for improvement) is greater, and there will be a greater number of accidents. Giving priority to the elimination of these busier crossings is good public policy: more lives will be saved.

We are cognizant of the hardship this system poses for jurisdictions that feel they are entitled to their "share of the pie." Their desire to improve local streets and highways for the safety of their constituents, who are perhaps fewer in number, is undoubtedly as great as that of more populous jurisdictions, and intuitively they seem equally deserving. However, there is nothing we can do to alter the program, and the solution is not to go back to a methodology that favors the costliest projects and de-emphasizes population and traffic factors to the detriment of overall public safety.

All of the parties to this proceeding, including our Staff and that of the California Department of Transportation (which disburses the prioritized allocations on behalf of the CTC) agree that the Program is woefully underfunded. Annual inflation takes its toll, and even $5 million is a pittance in relation to what the record indicates the cost is for a major grade crossing elimination project. If the State could make sufficient funds available, deserving projects everywhere would not go unfunded, and there would be no need for us to create a priority list to determine the order in which increasingly scarce funds are allocated until exhausted. However, unless the present situation changes, the number of worthwhile projects on the drawing board will increasingly outpace the State's ability to provide funding assistance.

In order to carry out the intent of the Legislature when it established the program, we must create the priority list in a manner that optimizes public safety with the limited funds we administer. The methodology we have used in the past does not accomplish this goal as well as that which Staff recently developed with the assistance of interested parties, and we will therefore not revert to using it. We will adopt the list created and recommended by Staff, using the methodology developed in the workshop.