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The $4.2 billion question

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Friday, August 01, 2008



Answers are few and the clock is ticking as the project to replace the I-5 bridge over the Columbia starts looking for billions of dollars in funding.

By Abraham Hyatt

Fifty-two days. That’s the amount of time between when the Columbia River Crossing task force made its final recommendation in June for a replacement I-5 bridge across the Columbia River, and when the funding reality for the $4.2 billion project hits. Aug. 15 is the first deadline that Oregon and Washington have to make to apply for federal grants; it’s a deadline the CRC is expected to easily make.

But the date has another significance. For the past three years, the 39-member task force limited itself to generalities as it researched potential projects. This month, however, the CRC is going to have to begin looking for hard answers to a question that has the possibility of killing the project: How is this thing going to get paid for?

“There’s a number of potential hurdles that the project still has to go through, [and one is] getting an absolutely fixed funding plan,” says Dave Thompson, spokesman for the Oregon Department of Transportation (ODOT). “You’ve got a couple counties, two cities, two governors, two states that all have to have consensus and level of comfort that this is the right thing to do.

“If a major player says, ‘No, I hate it, stop it,’ that’s a huge death blow.”

There’s a long road ahead. Exactly how much of the funding will come from the federal government? Oregon and Washington will bear a significant portion of the cost, but who should pay more? Tolls seem to be inevitable, but how much should they be? As fuel prices hit record highs, would the Oregon Legislature really gamble on floating a gas tax in front of the state’s fiercely tax-adverse voters?

This summer, Gov. Ted Kulongoski and Gov. Chris Gregoire will create a project sponsors’ council — made up of regional, city and transit agencies — that will look at funding options and engineering proposals before passing recommendations on to the agencies that will make the final decisions: Oregon and Washington’s state departments of transportation.

Possible Funding Sources for the Columbia River Crossing Project

• EXISTING STATE REVENUES: includes only the $20 million currently committed to the project by WSDOT.

• STATE-ADMINISTERED FUNDS: various state sources,  including fuel and motor carrier taxes, vehicle registration and licensing fees, lottery funds and sales tax (WA); and federal sources.

• FEDERAL DISCRETIONARY HIGHWAY FUNDS: highway, transportation, maintenance, research and environmental funds.

• FEDERAL DISCRETIONARY TRANSIT FUNDS: includes rail, bus, and other transit-eligible grant programs.

• TOLL BOND PROCEEDS: revenue backed by tolling; includes the possibility of 40-year non-recourse debt or 30-year state-backed bonds.

• C-TRAN AND TRIMET REVENUES: includes federal funds administered by the agencies. Other sources are dependent on each agency.

TOLL CREDITS: expenditures used as a credit toward federal highway funds.

SOURCE: Columbia River Crossing Task Force

But support for the project is far from unanimous at this point. As local and regional agencies and governments voted on a preferred project concept this summer, nearly every entity voiced multiple environmental, congestion and sprawl-related concerns. The City of Portland and the Metro Council, for instance, conditionally supported the project but demanded further study into possible impact to the region. In a 15-page letter to federal highway and transit officials in July, the Environmental Protection Agency wrote that while it generally supported the project, there were many unresolved land-use and water- and air-quality issues.

Thompson says ODOT is acutely aware that it needs to do more than simply alleviate critics’ fears. The agency isn’t planning any formal public relations outreach. “I don’t know if that’s applicable and I don’t know if [we] would have the money for it,” he says. Instead, the agency will rely as it has in the past on public forums and interaction with agencies.

Many CRC task force members — along with community and business leaders — agree that the time has come for leaders to step forward and act as builders of compromises and partnerships as the project progresses.

It’s not a moment too soon. This month, funding becomes the   defining element for the CRC and for how Oregonians see the project.

While the bridges that carry Interstate 5 over the Columbia are aging, they’re still structurally sound, according to a 2007 Oregon Department of Transportation study. But the daily raising of the lifts, combined with short highway exits and entrances along that stretch of I-5, creates high accident rates and an average of six hours of congestion a day. That’s expected to increase to 15 hours a day in the next 20 years.

A fix is obviously needed. The question is: Do you make more room for drivers or do you make fewer drivers by increasing mass transit?

Proponents of a bigger bridge — including business groups and the governors of both states — say the project is needed to fix a traffic-clogged bottleneck that impacts trade and transport from Canada to Mexico. I-5 cannot be seen as just a regional highway, the argument goes; it’s also part of a national and international economic network.

A new bridge also is seen as an essential component of the future economic health of the region. Evidence of that can be found in a December 2005 study on congestion funded by Metro Council, the Port of Portland and the Portland Business Alliance. The report looked at the entire Portland region, not just the Columbia River bridge, but the findings are still illuminative: Failing to invest in transportation infrastructure improvement could cost Portland as much as $844 million in jobs, wages, and economic growth by 2025. I-5 is one of the major components of that infrastructure.

Opponents of a bigger bridge — but who still support new mass transit options for the bridge — ask how a project designed to  increase traffic by tens of thousands of vehicles is consistent with a new Oregon law that requires the state to reduce its greenhouse gases 10% by 2020. Reducing congestion and vehicle idling time, the argument goes, will not balance out the amount of emissions released by a 40% increase in rush-hour traffic, which is what would be allowed by a larger span.

These opponents also question the CRC task force’s findings that a bigger bridge and an easier drive for commuters will not increase urban sprawl in North Portland or Southern Washington. The task force’s findings were challenged earlier this year by an Oregonian story that cited a 2001 report by regional planners who found that sprawl was indeed possible. There are also questions as to whether the data used by the task force to project traffic flow in coming years has been rendered obsolete by current fuel prices.

Then there’s the question of light rail, and Portland versus Vancouver attitudes toward mass transit. An independent poll in June — conducted and paid for by Portland’s Riley Research Associates — shows Clark County residents giving light rail a 62% approval rating. That’s a significant change from only a few years ago when many residents and businesses saw light rail as something being forced on them by Portland.

If the Riley polling numbers stand, the issue of connecting Clark and Multnomah counties via rail will probably be the first major CRC controversy that has found some kind of resolution.

If controversy over planning has been intense, deciding who pays for the project likely will be more contentious. The estimated $4.2 billion price tag is far beyond what either Washington or Oregon can fund. Nor is that likely to be the ultimate cost. Until final construction bids on the CRC project have been accepted by the transportation departments, any estimate is just that — an approximation based on current engineering data. Additionally, the $4.2 billion is in 2008 dollars; inflation will likely alter the final figure.

Whatever the amount, the states plan to look to several sources — federal transportation dollars being the most obvious. The state departments of transportation are up against a deadline for some of that money: They need to apply by Aug. 15 for what might be as much as $750 million in public transit grants from the Federal Transit Administration. Congress will reauthorize — and the CRC needs to apply for — federal highway funds in 2009; if the CRC misses that deadline it will have to wait until 2015 to try again. In all, the CRC project has identified 21 possible sources — some big, many small — of federal funding.

But getting federal financing is not as easy as it may sound. First, there needs to be strong support by Oregonians and Washingtonians for a project before Congress will seriously consider offering money, say project supporters like Corky Collier, executive director for the Columbia Corridor Association. A region needs to prove it both needs and wants it or somewhere else will get the money, he says.

Contrast that against the “wishful thinking” argument. “We’ve constructed this mythology that there’s this huge pot of funds on the federal level if we only get our act together,” says economist Joe Cortright — vice president of Portland-based consulting firm Impresa, and a vocal opponent of the project. “The era of big earmarks is over.”

Tolls — modern electronic systems have eliminated the need for collection booths — will almost certainly be a part of the project. In fact, Welches’ Rick Metsger, the Democratic chairman of the senate Business, Transportation and Workforce Development Committee, thinks tolls could fund the bulk of the project — putting the funding burden on drivers instead of state residents. That certainly will be controversial. The actual toll can’t be determined until other types of funding have been obtained, but early estimates put the peak-hour, one-way toll at $2.50.

That’s a wildly unpopular idea. A poll paid for by the CRC project in 2006 found that only 36% of residents in the Tri County and Clark County region approved of a toll that size. The Riley Research poll from earlier this year — which surveyed residents in Washington, Clark, Multnomah and Clackamas counties — came up with similar numbers: Only 38% of people approved of a fee. Clark County residents, who make up the majority of commuters crossing the I-5 bridge, were the most vehemently against it: 59% told Riley Research they strongly opposed any kind of toll.

After federal funds and tolling, another avenue of funding will be the pockets of Oregon and Washington residents.

The list of potential funding options that the CRC reviewed in its final report reads like any state project’s most wanted list: gas taxes; DMV fees and taxes; lottery funds; private-sector funds. Convincing voters to raise or change any kind of tax likely will be a formidable task. Oregonians actually agreed to gas tax increases throughout the 1980s, but since then, other proposed increases — whether for gas or otherwise — have not passed.

It’s arguable that in order to tap into those funding sources, state officials, legislators and transportation planners will have to develop a significant level of trust with Oregonians to convince them why it’s important that the state take on any financial burden, big or small.

Many members of the task force and the region’s business community think that the CRC task force process, with its emphasis on collaboration and addressing multiple viewpoints, laid the foundation for just that kind of relationship.

That’s a sentiment echoed by Bob Russell, president of the Oregon Trucking Association; Rich Brown, market development manager for Bank of America in Portland; and Marion Haynes, Portland Business Alliance’s government relations director and associate general council; and others.

“To this point we’ve just been looking at alternatives. It’s been about building consensus,” Haynes says.

But there’s a marked lack of trust between other players and the two main agencies — Oregon and Washington’s transportation departments, which will be asking for project funding. CRC Task force members such as Metro Council president David Bragdon and Jill Fuglister, co-director of the Coalition for a Livable Future, deeply question the ability of state highway planners to objectively decide on the size or appropriateness of a project.

“One reason that you’ve seen a diluted leadership, in the traditional sense, is because the [transportation departments] are running the projects — they’re the ones setting the structure on how we move forward,” says Steve Stuart, a CRC task force member and a Clark County commissioner. “They have been the leaders but they can’t keep that role. It’s the fox guarding the henhouse.”

The search for funding will reshape the leadership needs for the CRC project. But the project’s many-headed nature — by some counts there have been at least 90 entities involved up to this point — means it’s difficult to predict just what kind of leadership will be able to address the controversies and negotiate solutions.

There are many opinions as to where leadership should come from. Royce Pollard, mayor of Vancouver, thinks it should have its roots in Portland’s business communities. Multnomah County commissioner Jeff Cogen echoes the thoughts of many on the task force when he says that a small group of people from multiple agencies could emerge as leaders.

Whatever the source of leadership, the schism is clear: taxpayers hungry to see construction start vs. taxpayers who are wary of the entire process. Only one of those groups will win when Oregonians are asked to open their wallets and help fund the most expensive transportation project in Pacific Northwest history.

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