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Hb 5045 (2017) Prepared for the Oregon Legislature’s Joint Committee on Transportation per HB 5045 by the Oregon Department of Transportation I-205: STAFFORD ROAD TO OR 213 FUNDING SCENARIOS December 2018 Legislative Report I-205: Stafford Road to OR 213 Funding Scenarios Purpose of this Funding Scenarios Report During the 2017 Legislative Session, the Oregon Legislature made historic investment in Oregon’s transportation system via passage of HB 2017, Keep Oregon Moving. The package invested in projects directed to provide congestion relief, including I-5 Rose Quarter and OR217, and establishing a Value Pricing Program to manage congestion and generate revenue for bottleneck relief projects. The budget report accompanying this investment package, HB 5045 (2017), directed ODOT to ensure an ongoing commitment to fully funding the I-205: Stafford Road to OR 213 project, including direction of any value pricing revenues to this project, and identification of potential funding opportunities in the event value pricing revenues are insufficient. The budget note further directed ODOT to report to the Legislature during December 2018 Legislative Days.1 This report satisfies this directive and includes: • I-205 Project overview; • Proposed tolling projects; • I-205 funding options and scenarios for consideration by the Joint Transportation Committee to deliver the project on the schedule provided in the I-205 Cost to Complete (CTC) Report presented to the Joint Transportation Committee in January 2018. 1 HB 5045 Budget Note: “(ODOT) is directed to ensure an ongoing commitment to fully fund congestion relief on I-205, including but not limited to the Stafford Rd to Abernethy Bridge bottleneck. Pursuant to HB 2017, any value pricing revenue shall be dedicated to I-205. In the event that value pricing revenue is not sufficient, or should value pricing prove not to be a viable funding source, the agency shall report immediately to the Legislative Assembly on the funding issues along with specifics on funding needs and options available to the Legislative Assembly to quickly remedy such funding gaps. An initial report shall be provided to the Joint Transportation Committee no later than the last legislative days in calendar year 2018.” 1 I-205: Stafford Road to OR 213 Project I-205 is a designated seismic life-line route and must be functional following a major Cascadia Subduction Zone event to bring life-saving services and supplies to Oregonians. This segment of I-205 sees high levels of use and is often unreliable due to approximately 5.5 hours of daily congestion impacting more than 100,000 daily drivers and 8,900 freight vehicles daily. Most of I-205 in Oregon is three lanes in each direction with the third lane currently ending near the OR 99E interchange to the north and at Stafford Road to the south. I-205 in this area consists of an urban freeway that includes two travel lanes in each direction with auxiliary lanes at the Abernethy Bridge over the Willamette River in Clackamas County Oregon. With this Project, ODOT would add a third travel lane in each direction between OR 99E and Stafford Road, as well as a new northbound auxiliary lane between OR 99E and OR 213. Improvements include widening the Abernethy Bridge over the Willamette River to address morning and evening operational bottlenecks, which have grown significantly between 2013 and 2015. In addition, ODOT proposes to widen and seismically upgrade eight other bridges, and replace four bridges. 2 I-205: Stafford Road to OR 213 Project Costs: $500 million In January 2018 the Oregon Transportation Commission (OTC) presented the Joint Committee on Transportation a Cost to Complete (CTC) Report for the I-205 Freeway widening project as required by HB 2017 (Section 27c.(1)). The CTC Report provided a plan for accountable, transparent, and efficient project delivery. The CTC Report defined the Project’s scope, a clear delivery timeline, and a recommended delivery method. Importantly, the CTC Report identified the total cost to complete the project with the assumption funding would be made available as required to maintain schedule; project delays would cause costs to increase as a result of inefficiencies, escalation, and inflation. Since completion of the CTC Report, further progress has been made on project engineering and design. Cost estimates are refined as more analysis becomes available and design decisions are made. The current cost estimate, November 2018, ranges between $495 million and $515 million, reflecting the ongoing nature of some project decisions, risks that will be mitigated through design refinement, and other project unknowns (e.g. cost of steel prices). The project’s future estimates are expected to remain in line with the project cost estimate presented in the CTC Report around $500 million. After comprehensive analysis of multiple construction scenarios, the CTC Report recommended delivery of the project in three packages: COST TO COMPLETE DESCRIPTION FINANCIAL CONSTRUCTION ESTIMATE NEED (if funding is available) Package A: Abernethy Abernethy Bridge widening and By May 2020 the Spring 2020 – 2025 Bridge Widening retrofit, the OR 43 and OR 99E Project needs (pending funding) $252 million interchange reconstructions on $250 million either end of the bridge, the widening and retrofit of the West ≈ Linn Main Street Bridge, and the construction of a new I-205 NB auxiliary lane from OR 99E/ OR 213 Package B: I-205 I-205 widening from Stafford Road By August 2020 Fall 2020 – 2025 Widening to the Abernethy Bridge. Project the Project (pending funding) $200 million includes significant rock cuts to needs accommodate three traffic lanes $200 million and the replacement or widening including seismic retrofits of all ≈ bridges carrying I-205 from 10th Street to Stafford Road. Package C: Active Traffic A total of seven electronic message 100% funded Fall 2019 – Fall 2020 Management signs, changeable advisory speeds $5.1 million and warning information aimed to reduce crashes, better manage incidents, and improve travel time reliability for the road users. 3 The State’s Strong Commitment to the Project - $53,700,000 Committed To keep the project on schedule, consistent with legislative direction and to meet the needs identified in the CTC Report, ODOT has recommended and the OTC has approved the dedication of $53,700,000 from a variety of sources, including: I-205 Project Funding to Date March 2016 FAST Act Freight Formula Funds $2,500,000 August 2017 Federal National Highway Freight $10,000,000 Funds March 2018 Regional Flexible Funds process $2,500,000 from TriMet & Metro April 2018 Sunrise Jobs & Transportation Act $15,400,000 reallocated savings September 2018 Federal revenue (unanticipated) $17,100,000 Cancelled projects and program $6,200,000 funds TOTAL $53,700,000 With the funding allocated to date, the project remains on schedule to complete construction for Package C (Traffic Management) and develop “bid ready” plans for Package A (Abernethy Bridge Widening) and Package B (I-205 widening) by mid-2020, consistent with the CTC Report. Based on the estimated construction costs and the funding already committed to the Project a funding gap of $450 million ($500m CTC Report Estimate minus $50 million of committed funds) remains for construction of packages A and B. ≈ ≈ Existing Interstate 205 Abernethy Bridge 4 Anticipated Tolling Revenue HB 2017 Section 120 directed the OTC to implement value pricing on I-5 and I-205 in the Portland metropolitan area and submit an application to FHWA by Dec. 31, 2018. Oregon’s proposed congestion pricing projects on I-5 and I-205 are shown in the following figure. The preliminary toll revenue projections for I-205 assume gross revenue of $45-55 million per year in 2017 dollars (see Attachment 1). The I-5 tolling project is also anticipated to generate $45-55 million in gross revenue per year in 2017 dollars. These numbers are preliminary and will be refined upon further analysis. Together these segments are anticipated to generate enough revenue to fund the remaining balance of the I-205 Stafford Road to OR 213 Project, however, there are implications and issues associated with each. Value pricing, also known as congestion pricing or peak-period pricing, is a type of tolling in which a higher price is set for driving on a road when demand is greater, usually in the morning and evening rush hours. The goal is to provide a more reliable travel time for paying users and reduce congestion by improving traffic flow or encouraging people to travel at less congested times or by other modes. Transit improvements typically accompany pricing programs. Recommended Value Pricing Concepts 5 Funding Issues and Opportunities This report identifies three key funding issues for potential legislative consideration. 1) While tolling revenue may provide sufficient funding to construct the I-205 project in 2026 when tolling could feasibly begin, the $450 million ($500 million CTC Report estimate minus $50 million on-hand) needed for construction cannot be made available by the mid-2020 timeframe required to ≈ meet CTC Report timelines. 2) The $102 million necessary to conduct the required National Environmental Policy Act work ($17 million) and tolling system build out ($85 million) as described in ODOT’s Tolling Application to FHWA was not provided for in HB 2017. 3) ODOT has identified the opportunity to advance Rose Quarter final design if funding ($60 million) could be advanced to 2020 instead of 2022 as currently anticipated. This opportunity could provide $32 million of inflationary savings over the course of the project. Funding Scenarios To address these three issues, per legislative Funding and Project Delivery Objectives direction, ODOT provides a “current course of action” scenario (showing current anticipated Although this report focuses on the ability to fund the project delivery and tolling implementation I-205 project with toll revenue, it is important for ODOT timelines) and two additional illustrative scenarios to continue to meet other, existing requirements and for discussion and consideration.
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