A LOOK BACK: CALIFORNIA STATE ROUTE 91

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A LOOK BACK CALIFORNIA STATE ROUTE 91

• Edward C. Sullivan,
• California Polytechnic State University, San Luis
  Obispo

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Facility Features

• 4 lane toll road in median of 8 lane freeway
• 16 km. in length
• Express travel (no intermediate access)
• Heavy vehicles not permitted
• Electronic toll collection only (no cash)
• Time-dependent tolls, reflecting demand
• Originally constructed and operated by private
  company under franchise agreement with the State

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Project Location
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History of the SR 91 Express Lanes
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Typical PM Peak Operations
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Genesis Calif. AB 680 (1989)

• Goals of the legislation
• Attract alternate funding sources to meet state
  transportation needs
• Gain private sector efficiencies in developing
  projects
• Reduce congestion in crowded corridors
• Provide alternate route selections
• Provide private partners a reasonable profit

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Provisions of AB 680

• 4 demo projects w/ geographic distribution
• Provides up to 35 year lease of right-of-way and
  airspace, which then reverts to the State (but
  may remain a toll road)
• Projects become part of the state highway system
• Must meet all applicable laws, environmental
  requirements, and be built to State standards
• Any State services fully compensated state
  powers (e.g. condemnation) made available
• Excess tolls either go to the State or used to
  reduce project debt

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SR 91 Performance Summary
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The State Route 91 Impact Assessment Study

• Objective measure reactions to variable toll
  pricing and the other innovative features of the
  toll facility
• Impacts tracked from mid-1994 through 1999 (one
  year after opening day)

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The State Route 91 Impact Study Focus Areas

• Traffic counts, occupancy counts and speeds
• Effects on corridor bus, rail and park ride
• Effects on accidents and significant incidents
• Traffic operations at entrances/exits
• Origin-destination (revealed preference) surveys
• Public opinion surveys
• Emissions modeling
• Calibration of choice models

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Findings Tolls Time Savings

• Express lane use strongly reflects hourly travel
  time savings
• Flattening of traffic peaks is weakly responsive
  to tolls more responsive in the AM period
• Commuters typically overestimate time saved by
  5-30 minutes
• Some users cite driving comfort safety to
  justify paying tolls if time saving is minimal
• About 18 do not pay their own tolls

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Findings User Demographics

• Income correlates positively with use frequency
  for all groups
• Middle-income groups seem relatively most
  affected by toll increases
• Being female strongly correlates with using the
  toll lanes
• Middle age groups use toll lanes more than the
  youngest and oldest age categories
• More education also correlates with toll lane use

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Lessons Learned About User Demographics

• Results from CA Route 91 show a moderate income
  effect in travelers use of the toll lanes
• Nevertheless many frequent users are low income,
  and many high income commuters are infrequent or
  non-users
• Having said all this, the choice to use the
  optional toll lanes seems more related to current
  travel conditions and needs than to user
  demographics

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Findings Ridesharing Transit

• Toll incentives were accompanied by long-term
  increase in 3 ridesharing
• HOV users have been more likely to use X-lanes
• Flexible work schedules seem unrelated to X-lane
  use
• No significant impacts on corridor transit use
  (public transit is about 1 of total corridor
  travel)

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Findings Collision Experience

• Accident rates in the corridor have generally
  varied with congestion there appear to be no
  particular effects related to the special
  operating characteristics of the toll lanes

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Findings Public Opinion

• 91X lanes image suffered in 98-99 from disputes
  about ownership congestion
• Approval of variable tolls fell but overall
  approval of toll financing remains high
• Toll payers express higher approval of variable
  tolls than non-payers
• Approval declined for private operation
• Approval of HOT lane concept is high

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SR 91 Benefit-Cost Summary
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Seeds of De-Privatization

• Traffic growth led to substantial renewed
  congestion
• Some partners changed business strategy and
  wanted out
• A 1999 buy-out offer from start-up non-profit
  (New-Trac) for 260 million was widely perceived
  as sweetheart deal contrary to public interest,
  with a major political outcry
• A 1999 CPTC lawsuit against Caltrans stopped
  planned capacity improvements (Caltrans settled)
• A 2000 Riverside County lawsuit against CPTC and
  Caltrans tried to void the franchise agreement
• At least two unsuccessful legislative bills (AB
  1091, AB 1346) sought to void the non-compete
  clause and have the public acquire the toll lanes
  by condemnation
• In 2001, CPTC successfully refinanced 135
  million in debt to pay loans from partners and
  cover remaining construction debt at 7.63 rather
  than 9

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De-Privatization Arrives

• In spring 2002, the CPTC and the Orange County
  Transportation Authority (OCTA) agreed to a sale
  of the 91 franchise for 207.5 million
• In fall 2002, the governor signed AB 1010 which,
  among other things, authorizes the transfer
• The sale became final in January, 2003
• CPTC metamorphosed into Cofiroute Global
  Mobility, which now operates SR 91 for OCTA

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Provisions of AB 1010 (2002)

• Authorizes OCTA to buy the CPTC franchise
• Calls for improving congestion by eliminating the
  non-compete clause
• Calls for reduced SR 91 tolls and a minimum toll
  period
• All projects become non-toll when franchises
  expire
• No more new franchises after January 1, 2003
• OCTA prohibited from transferring its franchise
  without State approval
• Creates an SR 91 advisory committee with strong
  local political control

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A Good Deal for All

• CPTC receives 135 million to cover its (newly
  refinanced) debt plus 72 million for the
  original partners
• OCTA can use a 30 year payback schedule of 13
  million per year
• An Ernst Young study for OCTA predicts 40.5
  revenue by 2010 with daily traffic to grow from
  25,500 in 2001 to nearly 64,000 in 2030
• HOV-3 again travel free (except during the worst
  of the afternoon peak, where the 50 toll is
  maintained)
• In Nov., 2002, voters approved Measure A to
  provide nearly 1/2 billion in road improvements
  elsewhere in the 91 corridor, which would have
  been blocked by the non-compete clause

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In Retrospect

• Despite de-privatization, the SR 91 project was a
  very successful project on many dimensions
• It was an innovative model that helped establish
  in the U.S. an open mind toward market-based road
  pricing
• It proved that public-private highway
  partnerships can be financially successful
• The Achylles heal of this privatization project
  turned out to be the non-compete clause in the
  franchise agreement

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More Final Observations

• Public-private infrastructure projects should be
  eligible for tax-exempt bonds, even with a
  for-profit private partner (OCTA debt will be
  about 5.5, compared to CPTCs 7.6)
• SR 91 showed the value in having the public
  partner obtain prior environmental clearance, on
  a reimbursement basis
• Given the resource limitations of most public
  transportation authorities, the SR 91 non-compete
  clause was probably neither needed nor desirable

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The Bottom Line

• CA Route 91 has demonstrated that innovative road
  pricing (premium service for a premium price) can
  be economically attractive, win public approval,
  and significantly influence travel behavior.
• Increasing traveler options is a subtle yet
  powerful outcome from such value pricing
  projects.
• One size fits all in road pricing has clearly
  failed. Increasing transportation choices
  through pricing has succeeded in CA and deserves
  careful consideration elsewhere.