A twitter thread, since deleted, questioned which dollars the new Center City Connector cost estimates were expressed in. If the study counts year of expenditure (YOE) dollars, then simply deferring the project balloons the cost.
Absolutely obsessed with questions about YOE vs. constant dollars during the ST3 campaign, I was embarrassed not to think of this question myself. The Mayor’s Office responded like this:
Capital costs are estimated in current (2018) dollars with escalation included through mid-point of construction at 5% per year. The mid-point of construction was estimated to be in September 2020. KPMG used a 4% annual growth rate (real + nominal) to get to Opex figures, which are reflected in the increases.
Although the wording is unclear, it describes YOE dollars. The CCC is a relatively short project, so YOE doesn’t transform the numbers. The study summary is actually quite specific that delaying completion to 2022 accounts for $8m of the $54.8m capital cost increase. This is roughly in line with construction costs delayed for two years at 5% inflation ending up at $83m.
In the ST3 debate, these questions mattered a lot. Thanks to the long timeline, different units resulted in huge differences in headline figures in the context of a campaign. For the CCC, I’m not sure it matters. Apportioning blame is a fun parlor game. But most of the funding streams are fixed, so regardless of the cause, supporters will have to find the money somewhere.