Free Market Transportation Denver Association of Business Economists, October 17, 2017
Microeconomics Capital Markets Public Private Partnerships User Fees Autonomous Vehicles *I am a lawyer who went to law school so I wouldn't have to do math 2
What Does CDOT Do? FY 2017-2018 $1.42 BILLION BUDGET 3
What Does HPTE Do? Required to aggressively pursue innovative means of more efficiently financing important transportation projects: -Public Private Partnerships -Operating concession agreements -User fee-based project financing (tolls) -Annual performance payment agreements Exists to make Coloradans commutes better 4
How Do We Compare? PAVEMENT CONDITION BRIDGE CONDITION SYSTEM RELIABILITY CO #32 Source: Highway Statistics FHWA 2015 NV UT FL SC KY MO MT WY KS AL ND AZ GA SD TN NM WV ME NC OR VT NE MN ID MS NH AR DE VA IL TX CO CO IN OK PA OH IA MI WI CT WA LA MD NY AK CA HI NJ MA RI DC Potholes and rough roads cause drivers as much as $300 per year in vehicle repair bills U T CO #18 Source: National Bridge Inventory Data USDOT FHWA 2015 UT TX HI NV FL GA MD AL AZ KS OR MN WI OH DC VA KY CO DE TN NM MS VT SC IN ID AR ND NJ MT WA NE ME CA MI WV LA AK OK NH MO NC IL IA SD PA NY WY MA CT RI 48% of Colorado bridges need preventative maintenance and 5% are structurally deficient DEN #28/46 Colo. Springs #14/33 Source: Urban Mobility Scorecard TTI 2015 Richmond Salt Lake City Cleveland Jacksonville - - - - St. Louis MO San Antonio Nashville Virginia Beach Las Vegas Orlando Baltimore Minneapolis Philadelphia DENVER Oklahoma City - - - - New York San Francisco Los Angeles Washington DC Bakersfield Provo Fresno - - - - Raleigh CO SPRINGS Knoxville Wichita - - - - Tucson Bridgeport Honolulu Large Cities Medium Cities Colorado s population has grown 53% since 1990 while lane miles on our highways have only gone up 2% Denver *All figures as of June 22, 2016 Colorado has no funds for new capacity. Colorado relies on 75% of construction $$ coming from the feds. 5
$1.14/gal. Average Gas Price 1991 Avalanche logo The Last Time Colorado Raised the Gas Tax Denver s Stapleton airport 4 years away from closing $15,473 Average Price of a New Car President George H.W. Bush $109,071 Metro Denver Median Home Price Dan Reeves was Broncos head coach with John Elway as Quarterback and Gary Kubiak asbackupqb Terminator 2 released Broncos logo 6
Colorado Statewide Transportation Plan Needs & Gap Analysis $1 billion annual shortfall 7
Our Challenge Continued Growth 1991 2015 2040 3.3 million 5.4 million 7.8 million 27.7 billion vehicles miles traveled 50.5 billion vehicle miles traveled 72.3 billion vehicle miles traveled All dollar figures adjusted for inflation 8
CDOT Existing Budget: Focus on Maintaining the System $800,000,000 $700,000,000 $600,000,000 $500,000,000 Significant Focus on Maintenance $400,000,000 $300,000,000 $200,000,000 Generally No New Funds for New Capacity* $100,000,000 $- 9 9
Public Private Partnerships 10
WHY use P3 to deliver a project? Project Acceleration Risk Allocation Engineering Innovation Life Cycle Costs/ Value For Money Many types of P3 Toll/revenue risk DBFOM DBM Revenue share? Risks and Roles are transferred Not designing a project, but establishing performance standards for design Not engineering a project, but creating performance standards for engineering Not plowing the highway, but creating performance standards for plowing 11
Delivered project 20 years early All lanes benefit from more consistent, faster speeds & reduced travel times Project is a national model Multimodal success Cost & Financing -TIGER grant - $10M -TIFIA loan - $54M -CDOT $92.7M -DRCOG - $61.6M -RTD - $124M -Local - $16.6M -Private $120M 12
Region-wide Express Lanes
MEXL Winter Season Improvements 2014 Saturday Travel Times 2017 Saturday Travel Times 2014 Sunday Travel Times 2017 Sunday Travel Times
Healthy Multi-modal System Makes Travel Easier I-70 at Empire BEFORE EXPRESS LANE Sundays Dec. 2014 Mar. 2015 AFTER EXPRESS LANE Sundays Dec. 2014 Mar. 2015 I-70 at Idaho Spgs 10am 10pm 10am 10pm = Winter Travel Speeds Improved by 26-52%
North I-25 Express Lanes Results: Comparing 2014 to 2016 2014 Southbound 2016 Southbound 17
Road Usage Charge: What s the Problem? Increased Vehicle Fuel Efficiency Declining purchasing power Increasing Population 18
Unsustainable Gas Tax Model Lack of gas tax increase Gas tax not indexed to inflation 19
Increased Vehicle Fuel Efficiency Increased Vehicle Fuel Efficiency Standards New vehicles in 2016 have an average fuel economy of 35.5 mpg 2025 that standard increases to 54.4 mpg Emerging fleet of alternative fuel vehicles 20
Declining Purchasing Power 21
Declining Purchasing Power Cost in 1991 Cost in 2016 Cost of a New Home $125,841 $366,900 Cost of a New Car (average Size) $9,989 $34,846 Cost of a Color Television $660 $1,997 Cost of a Pound of Bacon $1.95 $4.99 Cost of a Gallon of Milk $2.80 $3.43 Colorado Gas Tax (per gallon) $.022 $.022 $1 in 2016 is worth approximately 56.5 percent less than it was in 1991 22
How will RUC Address the Problem? All vehicles pay an equal amount for the same miles traveled 23
Colorado Road Usage Charge Pilot 4-Month Statewide Pilot (December 2016 April 2017) 100-participants consisting of transportation leaders, officials, media, and general public Geographic (Urban/Rural) and Vehicular (MPG) stratification Payments and associated revenues were simulated 24
Colorado Road Usage Charge Pilot Enrollment 100 Participants/101 vehicles enrolled (30 stakeholders/71 general public) Geographic Stratification (27 counties, urban/rural) Vehicular Stratification (Gas, Hybrids and Electrics) 25
PROJECTS Smart 25 Ridgegate to University Software and sensor upgrades to better manage flow resulting in: Smart 70 Golden to Vail Partnership to provide real time data about safety hazards such as: Smart 70 Panasonic Data ecosystem to power connected & self-driving vehicles for:
PROJECTS Trucking Self driving vehicles and future of transport Hyperloop New way to move people and freight Smart Truck Parking Using detection & software to report available parking spots to truckers
Innovative Finance Think Tank 28 Parking Facilities Road X Hyperloop Digital Communication Networks Land/Right of Way Development? Tunnel Lighting? In-Road EV Charging? Employee Housing? Airports?
Questions?