FasTracks, other transportation projects aren’t on such a fast track
The Colorado Statesman
February 17, 2014
Funding the state’s transportation system has long been a controversial issue. Facing shortfalls, state transportation officials and local governments are examining ways to creatively fill a $770 million gap, including tolling and gas and vehicle mileage-based taxes.
But convincing voters to raise revenues for roads and highways has never been an easy conversation; taxpayers have never appeared hungry for an increase.
In 2009, state lawmakers — led by Democrats — took matters into their own hands by passing the Funding Advancement for Surface Transportation and Economic Recovery Act, or FASTER.
The so-called “High-Performance Transportation Enterprise” arm within CDOT, which oversees public-private deals, has been in the spotlight recently. The state’s first major public-private partnership managing a highway through tolls is just days away from a final contract.
The state is likely to enter into a 50-year contract with Plenary Roads Denver that would hand over operation and maintenance of U.S. 36 along the Boulder Turnpike — between Denver and Boulder — to the private consortium.
Plenary Denver is made up of six companies that include experts on everything from financing to highway development. The group was chosen last year to complete the second phase of the $425 million U.S. 36 Managed Lanes project, including maintenance of the corridor, as well as snow removal.
The consortium would also have responsibility over maintenance along Interstate 25 from U.S. 36 to downtown Denver.
Controversies surrounding the deal mostly revolve around transparency issues. Because the contract involves a private interest, CDOT officials originally said proprietary financial information must remain confidential.
But on Friday afternoon, officials released the agreement, including contract provisions and standards of service.
Beyond the disclosure issues, there are also fears around tolling. Under the 600-page contract, Plenary Roads would collect all revenues from toll lanes currently being constructed in both directions along the corridor.
Given the concerns, a group of 14 state lawmakers — who mostly have districts along the turnpike — have asked for a 60-day timeout so that they can review the terms.
“As people who use the U.S. 36 corridor daily we are not trying to derail the project. We need it. But a simple review of the contract by the legislature and the public is not too much to ask,” the lawmakers state in their request.
Lawmakers were appeased with a hearing on Thursday in which CDOT officials presented information to a joint transportation committee.
Transportation officials were asked to answer questions on growing concerns from the public, including issues around tolling that some say could grow to as high as $28 during peak times. That number could be adjusted upward for inflation, say critics.
Another concern is that the number of occupants per vehicle to qualify for high occupancy lanes without paying a toll could rise from two to three.
Yet another fear with the contract revolves around so-called “compensation events,” in which the state would have to compensate Plenary for construction along the corridor if the development lowers toll revenues. Similarly, critics of the contract worry that if legislators pass laws that expand vehicle exemptions, such as for low-emission cars, the state would need to compensate Plenary for the loss in toll revenue.
Project planners have repeatedly said that the high maximum toll rates are necessary to ensure that toll lanes are not congested, which would defeat the purpose of having managed lanes. Fees would most likely start at around $6, say CDOT officials, and they doubt rates would climb to as high as $28.
Engaging a furious public
During the hearing on Thursday, lawmakers expressed concerns with the transparency of the project. Even though the contract is days away from being signed, public meetings were still being scheduled this week. One meeting was held in Westminster on Wednesday and another was held in Louisville on Thursday.
During those meetings, outraged citizens attacked CDOT officials for moving forward with a project that they believe was organized in secret without public input.
Rep. Tracy Kraft-Tharp, D-Arvada, said some of her constituents have called for her resignation for not having pushed for a more open process. She believes CDOT should have done more to engage the public.
“Nerds go to these meetings. I go to these meetings. I dare say a lot of us go to these meetings,” she addressed CDOT officials during the hearing. “But the people that are… emailing me right now asking for my resignation over this… are not the nerds that are going to this. But they are the people that drive their cars down the highway; they are the people that live in this corridor, whose lives will be directly affected… What I’m disturbed about is… we’ve missed this whole segment.”
CDOT, however, points out that conversations around the turnpike project have been ongoing for nearly 15 years, with public meetings between CDOT, the Regional Transportation District and the Denver Regional Council of Governments taking place often during that time.
Still, Don Hunt, executive director of CDOT, acknowledged that more could have been done.
“I will consent that we need to make this a better public process during the financing discussion of a project,” he answered Kraft-Tharp.
One of the most outspoken lawmakers criticizing the project has been Sen. Matt Jones, D-Louisville. He worries that the contract could foreshadow an erosion of democracy in the state.
“Do we want to give that kind of authority to a private company to drive policy in this institution?” Jones asked. “Are we so cash strapped that we’re willing to give up that democratic institution? That is a big decision that I think people are not thinking about…”
Transportation officials and regional governments say that without the partnership, it would take 20 years to make improvements to the turnpike. Jones, however, believes stakeholders could have come up with the $120 million to close the shortfall.
“We’re going to basically use somebody else’s credit card to pay for roads that we have to pay back,” cautioned Jones.
Leading the concerns for citizens is Ken Beitel, spokesman for the Boulder-based Drive SunShine Institute, an alternative energy advocacy organization. He has started a petition calling for a timeout and review of the contract that already has 18,000 signatures, he said.
“When you see 500 very concerned citizens in Louisville, they are concerned because you as elected officials have not read that contract, and we’re counting on you to ensure that the public interest is guarded here,” Beitel told lawmakers.
But Will Toor, the former mayor of Boulder and also a former Boulder County commissioner, who usually leans to the left, said that without the partnership, there would be no improvements to the Boulder Turnpike. He pointed out that the Taxpayer’s Bill of Rights ties the hands of lawmakers to raise revenues for transportation.
“I wouldn’t say that local elected officials were wildly enthusiastic about the notion of a P3, but we did become convinced that there was a financing gap, that unless CDOT was able to bring additional public dollars to the table that there was not enough money available… So, we were willing to support a P3 if it allowed the project to move forward,” explained Toor.
Should Democrats have slowed FASTER?
Rep. Cherylin Peniston, D-Westminster, who signed the letter asking for a timeout, acknowledged that she backed FASTER in 2009, which allowed for the public-private partnership. But she is still alarmed by the outpouring of anger from constituents.
“I proudly voted for that, I thought it was a very creative way of dealing with several knots…” Peniston explained her vote on FASTER. “So, I commend you for the bulk of what has gone on… and I commend our citizens for letting us know there was a problem and coming in droves. I wish they weren’t as angry… but they’re telling us something with their anger and that’s a healthy thing to.”
Summit County Commissioner Dan Gibbs, who sponsored FASTER in 2009 when he was a state senator, also spoke at the hearing. He defended FASTER, saying it is functioning as intended.
“It really helped make a dent in terms of the maintenance needs of the state… and looking towards the future, looking at creative sources for funding,” said Gibbs, who is also vice chairman of the I-70 Coalition.
Hunt appeared dismayed by some of the backlash from lawmakers and the public. He pointed out that when the legislature passed FASTER, it granted CDOT the ability to engage in public-private partnerships.
“That’s why FASTER was enacted… it obviously restored some of our funding… but it created the High Performance Enterprise, and I don’t think it could be clearer… what the High Performance Enterprise was supposed to do,” surmised Hunt. “There’s no surprise. Read it.
“While we have not delved into all the details of the contract with legislators, I think we have been absolutely open and transparent about what we’re trying to do,” he continued.
Republicans have a different spin on the issue. They point out that FASTER was perhaps written without considering all of the consequences.
“There’s something called reality, and right now we’re dealing with reality…” Rep. Ray Scott, R-Grand Junction, said of FASTER during the hearing. “Apparently something was wrong with this bill. You guys could have spent 20 years writing this bill, but if there’s something wrong with it, then apparently something needs to be worked on.
“You’re not going to have rooms full of people wanting to testify against something that’s wrong or bad if you drafted perfect legislation…” he added, pointing to the overflow at the hearing on Thursday and the hundreds of people who showed up for the public meetings this week.
Senate Minority Leader Bill Cadman of Colorado Springs also chimed in with a statement following the hearing on Thursday.
“We tried our best to stop… FASTER, but the Democrats wouldn’t listen,” declared Cadman. “Their legislation… created unelected commissions and empowered them to secretly contract with private companies.
“CDOT dutifully followed the orders crafted in this partisan bill, but now that the Democrats’ secret is out, the public is displaying the same outrage that we exhibited when we tried to stop this legislation. I don’t want to say ‘I told you so,’ but…”
Conservative-leaning Compass Colorado is also dismayed by Democrats raising concerns over the public-private partnership, launching a series of calls to voters informing them of Democrats' past support of FASTER.
"Coloradans can thank Democrats for the lack of transparency," quipped Kelly Maher, executive director of Compass Colorado. "People are outraged that Democrats bypassed the people and subverted their rights. Now, people are faced with increased burdens and no recourse for the fact that important decisions are being made behind closed doors."
Taking the high road
The U.S. 36 controversy is only a microcosm of the transportation woes facing the state. Beyond the corridor, officials must address a deficit that is affecting roads, highways and bridges across the entire state.
Transportation officials spoke at a summit on Feb. 7 hosted by the University of Colorado Denver. They addressed issues including the completion of the underfunded FasTracks expansion project and accelerating CDOT priorities.
The bottom line is that the state needs more money. Ideas being floated include a gas tax, mileage-based fees and tolling along such highways as Interstate 70. But none of the proposals are gaining traction with voters.
“We really have to work on engaging the voter, I think that’s the next phase… and the discussion that we can have with them about bringing them into the same understanding…” said Jim Gunning, the mayor of Lone Tree and the chairman of the Colorado Metro Mayors Caucus.
Gov. John Hickenlooper has attempted to address the issue, implementing the so-called “Responsible Acceleration of Maintenance and Partnerships, or RAMP plan, which allowed CDOT to immediately use an additional $300 million per year over five years on projects across the state.
But the state still struggles, explained Herman Stockinger, director of policy and government relations for CDOT.
“We need to try to do some creative things… rather than the old standard of CDOT: ‘We’ll build a new highway,’” explained Stockinger. “Gone are those days. We need to be as creative as we can.”
The centerpiece of the state’s transportation funding problem is FasTracks, which has maintained a significant budget shortfall that is delaying completion of the project. It has been bolstered by public-private partnerships, but funding remains an issue.
“There’s all kinds of challenges on FasTracks…” explained Richard Clarke, assistant general manager of capital programs for RTD. “There’s nothing more difficult than building major infrastructure through a dense urban environment.”
Clarke acknowledged that officials have been able to build shorter segments of the project through innovative funding strategies, such as the public-private partnerships. But he said a more steady revenue stream will ne necessary.
Denver metro-area voters in 2004 backed a 0.4-percent sales tax increase to fund the 119 miles of new light rail, and were promised that the project would be completed by 2017. They may be asked to approve yet another 0.4-percent sales tax increase to complete the project, though support remains uncertain.
“Eventually we’re not going to be able to pull any more rabbits out of the hat…” said Clarke. “We’ve been very supportive of potential initiatives and looking at additional revenue sources, and that will be the main challenge.”
Maria Garcia Berry, who has served as a strategic consultant for FasTracks, does not sugarcoat the funding dilemma facing all of the state’s transportation projects. She has little faith in voters today passing any taxes to raise revenues.
“It doesn’t matter what lipstick you put on the pig, it’s a pig,” she explained. “They are not fond of doing that, so we have to look at other revenue forces.”
She said the most efficient approach is to first run campaigns convincing voters that transportation funding should be a priority.
“The voter doesn’t think there’s a problem in transportation,” said Berry. “Legalizing marijuana is more important in the heart of the voters right now than it is to solve the transportation issues in the state.”