New ORT+cash toll plaza in S Maine looks lousy choice v all-electronic (AET)

Usually protest movements involve angry people at meetings, placard carrying picketers, a petition perhaps, two or three local politicians, and a rather predictable litany of narrowly cast complaints from an environmental group. But south Maine, and especially the Town of York, has generated something rather unique in the case of a proposed new open road tolling and cash toll plaza (ORT+cash) nearby  - a set of formal, well-researched and carefully argued submissions against the Turnpike authority tapping the expertise of several expert consultants.

Maine Turnpike with only architect/engineers of HNTB looks to be seriously out-consultanted.

The Turnpike lacks any consultants with operational and financial expertise in ORT/AET to contest the submissions of their opponents.

Year 5 but still only Phase One

Although now five years in planning the toll plaza replacement is only into a Phase I submission to the federal permitting authority (in the case of this coastal road it is US Army Corps of Engineers).

At this point in the permitting they argue over what options should, or shouldn't, be evaluated.

The actual evaluations come in a later phase.

Is AET an option?

The central argument before the US regulators of whether toll authorities need to consider all-electronic tolling - no cash lanes - could be a pattern setter for future permitting.

Maine Turnpike Authority with the support of the civil engineers at HNTB say in effect: "Cashless is not an option, federal regulators should only help us choose between different locations for a traditional ORT+cash toll plaza."

They have an uphill battle.

Opponents of the big wide new toll ORT+cash plaza have prepared the battleground and deployed some heavy consultant artillery.

The Town of York and an umbrella group Think Again are represented by Verrill Dana one of the state's leading environmental law firms. And they have hired other specialist consultants to provide critical analysis and commentary on different aspects of the Turnpike Authority's proposal.

Their submissions against an ORT+cash toll plaza near the Turnpike's south end seem to us overwhelming.

eTrans

First up was a report by eTrans' Daryl Fleming, a veteran consultant on toll operations and a pioneer of all-electronic tolling (AET) on 407ETR in Toronto Canada and the 91 Express Lanes in southern California. He concluded that AET was not only the environmentally friendly option but "is by far the least expensive option; and if managed properly can be the most cost-effective option." (see earlier report in TOLLROADSnews, link at the bottom)

Now there are two more serious submissions in favor of AET, or at least avoiding ORT+cash until AET can be implemented.

Financial analyst

Peter Smith, secretary-treasurer of a major homeowner association and former a financial analyst/entrepreneur has focussed on the HNTB/Maine Turnpike claim that AET is infeasible on account of revenue "leakage" due to an inability to collect from out-of-state motorists.

Smith generates a spreadsheet - under what seem to be feasible assumptions - the likely losses from AET leakage. These losses are considerably less than the savings to  beh had on cash operating costs and amortized capital cost with AET.

$130m ahead over 10 years

He estimates that over a ten year period Maine Turnpike will be about $130m ahead with AET rather than ORT+cash.

Leakage is assumed at 5% for Maine vehicles without E-ZPass and 10% for non-Maine/non-E-ZPass motorists.

At present traffic volumes, toll rates and E-ZPass usage that translates into about $1.11m of $37.12m or about 3% of revenue with no cash collection (AET).

A major difference in favor of AET is revenue from an assumed 'administrative fee' or non-payment penalty.

Although Smith assumes 15% leakage of the fee itself, the fee collections yield almost as much as video tolls. This is in line with the practice of 407ETR which has operated administrative fees as a profit center against unbillables. (407 International the operator recently reported unbillables are now down to 3% of total trips v a high of 8.6% in the early years of operation. see slide 19 http://www.407etr.com/Documents/BMOCapitalMarketsInfrastructureConferenceFeb182010.pdf)

Lower capital and operating costs of AET decisive in its favor

Even leaving aside higher administrative fee revenues of AET, it has a net financial advantage over ORT+cash.

The ORT+cash toll plaza has operating costs of $4.13m/yr, debt service costs from the capital expense of $3.5m and $0.53m maintenance for total expenses annually of $8.2m.

The much lower capital cost of AET generates operating costs of $2.62m, a debt service of only $0.55m, and maintenance of $0.19m - for total annual expense of $3.4m.

The difference in the first year's annual expense $4.8m in favor of AET compares to a difference of around $1.0m in favor of ORT+cash in toll leakage ($0.11m for ORT+cash v $1.11m for AET).

Smith concludes: "By eliminating the costly initial construction investment and substantial ongoing operating expense of a large (ORT+cash) toll plaza and by assuring a positive revenue stream through prudent management practices, the MTA can realize a strong profit while also protecting the environment."

Verrill Dana

Think Again, the umbrella group comprising the Town of York. local businesses and interested citizens has made the most formal submission under the name of the Verrill Dana law firm. 

This contests the claim that the existing toll plaza is unsafe citing Turnpike Authority data that sideswipe incidents have been largely eliminated since E-ZPass transponders have been accepted and handled in all lanes.  

Downsizing of toll plaza

Maine Turnpike advised by HNTB at one point proposed a new toll plaza 439ft (134m) v the existing 17 lane toll plaza of 295ft (90m). Being longer also the total footprint was 67% greater. This was to handle the highest anticipated hourly traffic load rather than a more conventional requirement of the 30th highest hourly load each year.

Pennoni Associates

Think Again hired Pennoni Associates consultants from New Jersey who say designing to the highest ever hourly load is wasteful overdesign, and produces excessive costs and impacts.

In a mistake HNTB understates present E-ZPass usage by 16%, Pennoni say.

Pennoni recommend that the Turnpike maintain the existing toll plaza until AET replaces cash tolls, or until a smaller cash toll capability is needed alongside the open road toll lanes.

"Drop in traffic provides time to reconsider"

They say given the declines in traffic in the past few years the Turnpike authority can "take the time to fully examine possible overall capital and operational cost savings" of moving to full AET.

Pennoni say that a statement by HNTB's Roland Lavalle that the new toll plaza might be adequate with 9 cash lanes v  15 as originally estimated by HNTB  renders obsolete the elimination of several sites from the permitting process.

Stantec say HNTB got numbers wrong

Stantec, another consultant to Think Again find that HNTB misstate wetland impacts of improvements at the existing toll plaza as an interim measure.

Verrill Dana for Think Again: "This obvious over-inflation of the wetland impact estimate raises significant concerns regarding the veracity and reliability of the MTA’s preliminary screening process."

They conclude: "MTA has improperly eliminated several alternatives from consideration in the Phase II process.

"These alternatives include re-use options
of the existing site as developed by the MTA, reconstruction of the existing site with electronic and cash lanes on the existing plaza footprint, and the use of an All Electronic Tolling system just to the south of the existing plaza.  

"Reuse of the existing site, within the existing footprint, or the AET design would result in no wetland impacts, no community impacts, no displacement of homes or loss of personal property.

AET "may not even require federal permit"

The lawyers question whether AET would even require a permit from the Army Corps of Engineers.

But given that the permitting process is with the feds they say: "These less environmental damaging alternatives, in particular AET, should be carried over to the Phase II process, as they offer a more cost effective, more efficient, safer, and environmentally less damaging alternative that allows the MTA to meet its project purpose."

Peter Smith's spreadsheet:

http://www.tollroadsnews.com/sites/default/files/Smith$s.xls

His submission:

http://www.tollroadsnews.com/sites/default/files/PSmith.doc

copy of the Verrill Dana filing on behalf of Think Again, includes Pennoni and Stantec comments:

http://www.tollroadsnews.com/sites/default/files/ThinkAgain.pdf

earlier report on eTrans study for Town of York:

http://www.tollroadsnews.com/node/4720

Maine Turnpike's documents on the case

http://www.maineturnpike.com/about/stp.php

TOLLROADSnews 2010-05-02