Infra Insight Blog : written by Nossaman LLP Infrastructure attorneys, covers infrastructure project delivery, including Public-Private Partnerships, Operations & Management Agreements, policy, and news.

Our October 21 blog on managed lanes projects in Southern California talked about how three county transportation agencies are expanding on the success of the SR91 Express Lanes in Orange County, Calif., by using managed lanes to further relieve congestion and improve mobility in the region.  Not to be outdone by its Southern California cousins, the Metropolitan Transportation Commission (MTC), the transportation planning and funding agency for the nine-county San Francisco Bay Area, just received the blessing of the California Transportation Commission (CTC) to develop and operate a value pricing program that will involve either the conversion of existing HOV lanes or the development of new HOT lanes.  As with the Southern California setting, several Bay Area agencies are already developing and operating HOT lanes in their jurisdictions.  MTC’s application is the last that will be processed under California’s HOT lanes demonstration program, which expires at the end of this year, and authorized four HOT lanes projects (the RCTC and LA Metro express lanes projects described in our last entry secured the two Southern California slots under this legislation).

MTC’s goal in pursuing the HOT lanes application is to fill in the “gaps” in the HOT lanes network by converting 149 miles of existing HOV lanes to HOT lanes and adding 116 miles of new HOT lanes to create a seamless experience for the motorist.  According to a detailed cost-benefit analysis, implementation of the program could produce benefits equal to over 3.3 times the costs of developing the network, achieved primarily from travel time savings and emission reductions.  MTC estimates that—depending on the availability of funding and the timing of the permitting process—delivery of the new network will occur between 2015 and 2030.  The Bay Area Toll Authority, which operates the seven state-owned toll bridges in the region, is likely going to be the toll collection entity.  MTC anticipates utilizing a variety of funding sources, including senior toll road revenue bonds, TIFIA loans, local contributions, and grant funds to pay for the $3.5 to $4.3 billion capital costs of the program.

MTC’s application acknowledges that there is still a fair amount of work ahead to implement the program, including the execution of agreements with the California Department of Transportation (the network will be built in state right of way), FHWA (several of the projects involve tolling federal interstates), and county transportation agencies (integration of the new/converted lanes into the existing projects).  And MTC will be looking at the optimal delivery approach for design, construction, operations, and financing.

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Today, DesertXpress Enterprises, LLC (“DXE”), a group of private investors, received authority from the U.S. Surface Transportation Board (“STB”) to construct and operate a 190-mile dedicated high-speed passenger rail line between Las Vegas, NV and Victorville, CA.  Once the line is constructed, trains will operate at up to 150 miles per hour and provide an energy-efficient alternative to automobile travel on the I-15 corridor and air travel between these two areas of the country.

DXE requested that the STB grant authority to construct and operate this line under an expedited review process that allows for an exemption from certain statutory prior approval requirements.  The STB granted DXE’s request, citing the many benefits of the project.

The STB found that the project will clearly promote the rail transportation policies set forth in the federal agency’s governing statute.  By providing a passenger rail transportation option in this market and alleviating automobile congestion on the I-15 freeway, the project will reduce air pollution and overall fuel consumption.  The proposed line also will alleviate constraints on the expansion of air travel in Southern California and is expected to have a multi-billion dollar beneficial impact on the economies of both Nevada and California. 

The majority shareholder in DXE – The Marnell Companies – is an experienced architect and real estate developer with large-scale project development, construction and finance experience. 

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Yesterday, the Knik Arm Bridge and Toll Authority (KABATA) announced its decision to shortlist three of six teams that submitted statements of qualifications for the Knik Arm Crossing project.  KABATA is procuring an availability payment public-private partnership for the $750 million project. Nossaman acts as KABATA's legal advisor for the procurement.
 
Michael Foster, KABATA's Board Chairman, said, "The process becomes very competitive from here on out. We expect to see some top notch proposals."
 
The shortlisted teams are:

Alaska Infrastructure Access Partners
Infrared Capital Partners Limited
Bouygues TP
Colaska Inc. dba QAP
Weeks Marine, Inc.
URS Alaska, LLC
Moffatt & Nichol, Inc.
USKH, Inc.
R&M Consultants, Inc.
Macquarie Capital (USA) Inc.

Cook Inlet Passage Partners
Meridiam USA III, LLC
Meridiam Infrastructure North America Corporation
Meridiam Infrastructure North America Fund II AIV, LP
Meridiam Infrastructure North America Fund II, LP
Meridiam Infrastructure North America Fund II (Domestic), LP
Kiewit Development Company
Kiewit Infrastructure West Co.
Manson Construction Co.
VMS Inc. dba Transfield Services North America, Transportation Infrastructure
Parsons Transportation Group Inc.
Golder Associates Inc.
Dowl HKM
Dan Brown and Associates, PLLC
BMT Fleet Technologies
KPMG Corporate Finance LLC

North Star Mobility Group
HOCHTIEF PPP Solutions North America, Inc.
HOCHTIEF Aktiengesellschaft
ACS Infrastructure Development, Inc.
ACS Servicios y Concessiones, S.L.
Iridium Concesiones de Infraestructuras, S.A.
Flatiron Constructors, Inc.
Dragados USA, Inc.
Dragados SA Traylor Bros., Inc.
HNTB Corporation
CH2M Hill Engineers, Inc.
Alaska Interstate Construction LLC
Arcadis
Kodiak Map
Hart Crowser
Earth Mechanics
Bitttner-Shen
Denali Drilling
Gregg Drilling

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Southern California can’t say it’s “number one” when it comes to having the worst traffic congestion in the country, but it’s a huge economic and social problem for the region which three Southern California transportation agencies are addressing through the use of managed lanes.  That’s what we recently learned at the Women’s Transportation Seminar presentation on October 14, 2011.

On a panel moderated by Rick Backlund, an FHWA region official, we heard from Rose Casey, Program Manager for the Orange County Transportation Authority; Stephanie Wiggins, Executive Officer with LA Metro; and Michael Bloomquist, Toll Program Director for the Riverside County Transportation Commission.  After hearing a brief history of managed lanes from the first HOV lanes in the early 1960s to the first all-electronic toll facility which opened in the early 1990s, Casey briefed the audience on one of the largest highway projects in Southern California, the widening of I-405 (or “the 405” if you are from Southern California) between SR55 and I-605.  With a capital cost of between $1.3 and $1.7 billion the project is expected to have a large funding gap, even if the express lanes alternative is selected by the OCTA board (the express lanes is one of three alternatives the authority is studying during the environmental process).  As to the feasibility of a tolled alternative, Casey alluded to the positive experience of the SR91 Express Lanes in Orange County which extend east to the Riverside County line, the first all electronic toll facility in the United States.

Bloomquist picked up on Casey’s presentation by describing RCTC’s efforts to develop and finance the extension of the SR91 Express Lanes from the Orange County border to I-15, as well as the plan to add express lanes to the I-15 to create an express lanes network (note: San Diego County is already operating an express lanes project on I-15 south of the proposed RCTC project—maybe someday there could be a connection between the facilities in the two counties??)  RCTC’s plan would be to leverage off of a significant commitment of local sales tax dollars and a TIFIA loan to issue toll road revenue bonds to finance this billion dollar project which includes new general purpose lanes.  To piggyback on the success of the SR91 Express Lanes project in Orange County, RCTC and OCTA have nearly finalized a co-op agreement for the new project that would take advantage of a common toll collection system and operator, would combine marketing efforts, and would coordinate toll policy.

The LA Metro project presented by Wiggins is the farthest along of the three projects.  Taking advantage of a $210 million federal grant, LA Metro is converting several miles of HOV lanes along the I-110 and I-10 leading into and out of downtown Los Angeles into HOT lanes.  Net tolls would be reinvested in transit and additional HOV improvements in the Los Angeles County area.  A common complaint about managed lanes is how they may adversely affect low income drivers.  To address this concern, LA Metro conducted a toll equity study and has agreed to offer toll discounts as well as a waiver of account maintenance fees to qualified individuals.

These three regional transportation agencies are building upon the success of previous managed lanes projects to work smarter to increase capacity in one of the most congested and physically contrained highway systems in the country.

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Ted Houghton is the new chair of the Texas Transportation Commission. Governor Rick Perry announced Houghton's appointment, effective October 7.  Houghton succeeds Deirdre Delisi, who recently resigned.  Delisi had served as chair since 2008.

Houghton was first appointed to the Commission in 2003 and was reappointed in 2009. A native of El Paso, Houghton is self-employed in the financial services industry. He is the first resident of El Paso to serve on the Commission.

"I'd like to thank Governor Perry for his trust in me to continue TxDOT down a path of responsiveness, change and modernization,” Houghton said.  “I look forward to leading the department as it becomes a better TxDOT, living up to the expectations of the Governor, the Legislature and our stakeholders.  Texas is a national leader in infrastructure and transportation system development, and I intend to reaffirm our place among the best, strongest and most innovative states as TxDOT delivers the projects the Legislature, our local partners and Texas motorists expect."

Houghton previously served on the School Land Board, the El Paso Water Utilities Public Service Board, El Paso's Rapid Transit Board, the board of directors of the El Paso Electric Company and as president of the Sun Bowl Association. He was also a member of the 1984 Los Angeles Olympic Committee.

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At its first regular meeting since the retirement of Amadeo Saenz, Jr. at the end of August, the Texas Transportation Commission named its choice for his replacement.  Effective October 17, 2011, former Texas Secretary of State Phil Wilson began his new job as TxDOT’s 19th Executive Director.  Mr. Wilson comes to TxDOT from Luminant, a Dallas-based electric generation company, where he was the senior vice president of public affairs.

In addition to his position as Texas’ Secretary of State, Mr. Wilson’s history of public service includes time working for both former U.S. Senator Phil Gram and current Texas Governor Rick Perry.  He also served as the chairman of the Governor’s Competitiveness Council where he fostered ideas for improving the state’s economic position for continued long term success including proposals to re-examine public-private partnerships, expand inland ports, repair and maintain existing infrastructure and promote rail relocation efforts.

In 2009, Texas adopted new legislation removing the requirement that TxDOT’s executive director must be a professional engineer.  Mr. Wilson will be the first non-engineer to hold the position since the new law passed.

“I am honored to be selected as the next executive director of TxDOT.  This is an agency with a rich history in successfully building for our future with dedicated employees,” said Wilson.” I look forward to working with the agency, Commission, Legislature and local communities on the most efficient ways to build infrastructure for Texas.”

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On October 24, 2011, the Alliance for Toll Interoperability (ATI), an organization of more than 40 toll road operators founded in 2007 for the purpose of promoting and implementing interstate interoperability, will commence pilot operations for four license plate interoperability hubs.  Pursuant to the Interoperability Network Pilot Program (INPP), separate hubs established by four vendors (ACS [a subsidiary of Xerox ], Federal Signal, Cofiroute USA, and Secure Interagency Flow [a CS/Egis joint venture]) will receive license plate data from six tolling agencies (E470 in Colorado, Florida Turnpike Enterprise, Maryland, North Texas Tollway Authority, Oklahoma Turnpike, and Washington State DOT) on a daily basis.  Hub operators are in turn expected to provide a response with matches of account information on a daily basis.

Pilot operations will test the vendors’ respective abilities to interchange data between the six independent toll operators.  The data would facilitate a toll operators’ use of license plate images generated by its gantry-mounted cameras to identify out-of-area motorists that do not have a transponder account with the toll operator’s facility.

According to ATI, the INPP, expected to continue for approximately three months, will permit selection of one or more operators for a clearinghouse or hub that will provide customers with the ability to utilize a single account to pay for their services.  While the hub(s)’ initial effort will be exchange of license plate image data, the focus may be expanded to cover out-of-area transponder toll clearance.  If successful, the project ultimately will increase the ability of toll agencies to use license plate image data to collect tolls with certainty from out-of-area drivers.

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Nossaman's Geoff Yarema, chair of the Firm's Infrastructure Practice Group and a Commissioner on the Congressionally mandated National Surface Transportation Infrastructure Financing Commission, provided testimony this week to the U.S. House of Representatives Committee on Transportation and Infrastructure, Subcommittee on Highways and Transit, "Hearing on National Infrastructure Bank: More Bureaucracy & More Red Tape."

View the video of the hearing here.

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As discussed in a previous blog post, the U.S. Department of Transportation (USDOT) recently set new level-entry boarding requirements for disabled passengers on intercity and commuter railroads through amended regulations implementing the Americans with Disabilities Act (76 Fed. Reg. 57924).

In the proposed rule, USDOT stated its intent to require passenger railroads to provide level-entry boarding at all new or altered station platforms, unless the passenger railroad could show that level boarding was infeasible.  In the final rule, USDOT retained the level-boarding mandate, but will permit alternatives at platforms adjacent to track used by freight railroads if the passenger railroad can demonstrate reliability, safety and access to all cars available to non-disabled passengers.

Due to concerns about equipment clearance issues, freight railroads generally refuse to permit passenger railroads to construct station platforms more than 8 inches above top-of-rail.  USDOT’s ADA regulations give it authority over owners or persons in control of a station (e.g., passenger railroads), but not owners or persons in control of track that passes through the station (e.g., freight railroads). Due to this limitation, USDOT concluded that it “does not currently have legal tools to overcome this refusal” (76 Fed. Reg. at 57927).

This is an unusually candid assessment on the part of USDOT, especially in the context of the ADA.  What remains unclear is what passenger railroads will need to demonstrate in order to meet this performance based standard for an alternative to level boarding and what will happen if the standard cannot be met at a particular location.

Stay tuned.

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In a recent move that will have wide-ranging impact on the rail industry, the U.S. Department of Transportation (USDOT) set new level-entry boarding requirements for the access of passengers with disabilities to passenger railroads, applicable to new and altered station platforms where construction or alteration begins on or after March 2, 2012.  Through a final rule promulgated on September 19, 2011, USDOT amended its Americans with Disabilities Act regulations to require intercity and commuter passenger railroads to provide that disabled passengers can access any passenger cars accessible to non-disabled passengers (76 Fed. Reg. 57924)  This rule does not require railroads to retrofit existing station platforms.

In stations not shared with freight railroads, passenger railroads must provide level-entry boarding to all passenger cars.

In stations where freight railroads run on track adjacent to passenger platforms, passenger railroads may choose among non-level boarding alternatives – including car-borne lifts, station-based lifts or mini-high platforms – to meet a prescribed performance standard.  In order to use a non-level boarding alternative, a passenger railroad must submit a detailed plan to the Federal Railroad Administration (FRA) and the Federal Transit Administration (FTA) demonstrating that the selected alternative meets USDOT’s accessibility performance standard efficiently and safely, and in a manner that integrates disabled and non-disabled passengers.  The plan must provide details on deployment, maintenance and operation of the non-level boarding alternative, and FRA and FTA have discretion to modify or disapprove the plan.  If proposing an approach other than car-borne lifts, USDOT also requires railroads to submit a cost/benefit analysis of car-borne lifts versus that other technique.

Compliance with these new level-entry boarding requirements will involve significant cost to passenger railroads.  First, covered railroads must alter design plans for any station platform construction that will begin on or after March 2, 2012.  Passenger railroads that alter or construct station platforms accessing track shared with freight railroads will also incur expensive ongoing work-arounds to the level-entry boarding requirement.

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