Boulder Turnpike privatization backer refutes most (but not all) of critic's claims
Earlier this week, we posted about criticism of the public-private Boulder Turnpike project from the Drive SunShine Institute, which hoped a lawsuit would stop final contracts from being signed. That seems unlikely, however. Last night, a Colorado Department of Transportation board unanimously voted to move forward with the pact, and the Colorado Transportation Commission is expected to add its blessing today. And a former Boulder official thinks that's a good thing for the most part.
"The privatization of U.S. 36 will present a large financial cost to Colorado taxpayers," DSI spokesman Ken Beitel told us for our Tuesday post. "Hundreds of millions of dollars in toll revenues on U.S. 36 will be drained out of Colorado to provide profits for Goldman Sachs and the Australian toll road developer the Plenary Group."
As we reported, Goldman Sachs is officially designated as the Colorado Department of Transportation's "financial adviser" on the project, while Plenary Roads Denver has agreed to pay approximately two-thirds of the cost for renovations to both the Boulder Turnpike and Interstate 25 in exchange for collecting all new tolls on U.S. 36 and the existing I-25 express lanes for fifty-year length of the contract, the most recent version of which we've shared below.
Beitel sees the agreement as a bad deal for a number of reasons. Among them, he claims that neighboring municipalities are forbidden from making road improvements without paying compensation to Plenary; that electric cars won't be able to use high-occupancy-vehicle lanes without a similar compensatory payment; and that a plan to start charging anyone using HOV lanes if their vehicles contain fewer than three people (up from two) will lead to greater pollution. Furthermore, he thinks suggestions that construction might have been delayed for twenty years without help from Plenary is "basically marketing propaganda."
Will Toor offers another take. Currently the director of the transportation program for the Southwest Energy Efficiency Project, Toor is a former Boulder mayor and longtime city council member who worked on U.S. 36 planning issues from 1999 until he was term-limited out of office early last year. In his view, "this is generally a really good contract, even though there are what I would characterize as relatively minor concerns around it."
Chief among the latter is the question of electric cars in HOV lanes, which could indeed raise the question of compensation if the State of Colorado decided to let more of the vehicles commute without charge as a way of promoting their purchase.
"The contract uses the existing program under legislation passed a decade ago," Toor points out. As such, "there are 2,000 alternative fuel or hybrid vehicles that are allowed toll-free access to HOV lanes -- and the contract memorializes that number. And it also says it can be a compensation event if that number goes above 2,000.
"That's the one element of the contract that I agree is problematic," he goes on. "I am very involved in working on electric-vehicle policy and advocating that incentives be expanded beyond 2,000. And certainly, I would not want to see a clause of that sort in any future contracts."
In contrast, Toor sees other assertions made by Beitel in our post as either dubious or, in at least one case, flatly incorrect.
Continue for more about the Boulder Turnpike project, including photos and two documents. What does Toor think Beitel has wrong? "The claim that the contract prohibits improvements to parallel transportation corridors. People have said there's a non-compete clause that says you can't put in a train or improve other roads in order to drive people into the toll lanes, and that's just not true. The non-compete clause is actually far narrower. In practice, it basically says you can't double-deck U.S. 36. And it has no restrictions whatsoever on any parallel road or transit-line infrastructure."
Likewise, Toor calls false the claim that every dime of toll money for a half-century will go to Plenary. "The way this contract is structured, there are various sorts of revenue targets for the contractor, and once they reach certain targets, funding starts getting shared back to the state. When the revenue starts flowing back will depend on how many people use the roadway and how much revenue they bring in. But while it's likely it won't happen in the first decade, I'd predict that during the second decade, a share of the revenues will start flowing back to the state."
He adds that "under state law, those revenues are required to be spent on projects within the U.S. 36 corridor. And we negotiated that local governments will have a say in how that money gets spent."
As for critics' belief that fifty years is excessive, Toor reveals that the bonding of the project "is very long term -- the toll revenues are already bonded out for forty years with or without a public-private partnership. So while the fifty-year term sounds long, it's only a few years longer than what you would have had if CDOT was doing everything itself."
Beitel also argues that the environmental impact process surrounding the project was flawed, but Toor doesn't buy it. He notes that "there was a very vigorous public process throughout," dating back to an approach pushed by the administration of former Colorado Governor Bill Owens and running through the present day. And in the end, he believes, "we were able to come to consensus on a plan that is primarily about improving public transit. And from an environmental perspective, it's probably the best designed roadway project I've seen. It's really designed not to just move cars, but to move a lot of people on rapid transit."
What about the suggestion that without Plenary's largesse, construction might not have gotten underway for twenty years? "There is funding in the long-range transportation plan," Toor says, "but that's the 2035 plan, and there's an awful lot of competing projects out there. Would it have been delayed by decades? I don't know. But would it have been years? I think that's likely."
What about the increase in the number of people required in vehicles for free use of high-occupancy-vehicle lanes -- a switch shorthanded as going from HOV2 to HOV3? Toor understands complaints about it, but he feels such a change was inevitable.
"We had extensive discussions about this a couple of years ago," he allows, "and CDOT was very interested in going to HOV3, because it made their revenue model work for them -- and it does mean you have more people paying tolls. They were having a hard time seeing how they could close a financing gap and actually get this built. without it... And while we weren't thrilled about it, we thought it was a reasonable trade-off in order to finance the project, because state traffic modeling basically indicated we would have to make this change eventually anyhow.
"The date to go from HOV2 to HOV3 is January 1, 2017, and the modeling showed that somewhere in the 2017-2018-2019 range, there would be so much traffic in the HOV lanes if we didn't that free flow couldn't be maintained. And everyone agreed that performance standards had to make sure traffic in the lanes kept moving. To have bus and rapid transit in place, they had to be able to go 55 miles per hour during rush hour, and in order to meet those performance guarantees, the change had to be made at some point. So it became a date certain, since it was probably going to happen in a couple of years anyhow."
Overall, Toor believes the U.S. 36 project will prove to be a model "because of the fact that we got significant transit and car-poolers components in" -- and that makes it more egalitarian, since it will benefit average commuters as well as those with enough dough to regularly pony up for the tolls.
Next time around, however, Toor hopes "there will be more transparency. My sense is that CDOT has learned from this and the legislature will act to put in greater disclosure during the financing process, and give the public more opportunities to have good access throughout.
"But fundamentally, what we're getting out of this is a good project that's going to be good for the citizens of Colorado."
Here's the most recent version of the concession agreement, dated February 14, 2014. Below it is a PDF of a Change.org petition featuring more than 20,000 signatures calling for lawmakers to strip the High Performance Transportation Enterprise Board of the ability to sign the contract. Beitel and his associates plan to electronically present the signatures to Governor John Hickenlooper and state reps today.
One more thing: At last night's CDOT meeting, critics of the proposal were actually escorted out of the proceedings -- an action decried by Beitel and the Drive SunShine Institute.
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More from our News archive: "Boulder Turnpike privatization plan rips off Colorado, says advocate behind lawsuit."