Orange County Transportation Authority Citizens Advisory Committee Traffic and Revenue Analysis for the San Diego Freeway (Interstate 405) Project Chairman Amante, Vice Chair Bates and Directors, my name is Rose Casey and I am a Program Manager in Highway Project Delivery. I’m here to share with you the outcome of the Traffic & Revenue analysis we’ve completed to determine the financial viability of implementing Express lanes on the I-405, and to discuss staff’s recommendation to continue with evaluating the Express lanes alternative through the environmental process. Orange County Transportation Authority Citizens Advisory Committee March 16, 2010

Interstate 405 Project 14 miles from SR-73 to I-605 Continue partnerships with Costa Mesa, Fountain Valley, Huntington Beach, Westminster, Garden Grove, Seal Beach, Los Alamitos, community of Rossmoor, Long Beach in LA County

Study Alternatives Add one lane each way ($1.7 billion) Add two lanes each way ($1.9 billion) Available funding <$600 million Alternatives not currently funded If questions: Present costs: Alt 1: $1.3 B Alt. 2: $1.4 B M2: $300 M Aug. 2009 Staff Report: Alt. 1: $1.2 B Alt. 2: $1.7 B M2: <$400 M

Added Alternatives Nominal improvements within available funding ($600 million) Two-lane Express Lane toll facility ($2.2 billion) Nominal improvements may not meet M2 commitment of adding one lane throughout corridor Express lanes could provide additional revenue to fund two lanes each way (Present cost for Alt. 3: $1.7-1.8 B) Additional costs beyond Alt. 2 include: Direct connector structure from SR-73 to I-405 Widening for additional lanes between SR-73 and Euclid Infrastructure/technology to operate and toll Express lanes

Express Lanes Lane Diagram HOV Lane 4 Existing GP Lanes Express Facility New Exist. HOV New GP 4 Existing GP Lanes If questions: Current assumption: transponder required like 91 Express Lanes Evaluate new technology between now and project implementation Sense occupancy: SOV’s, 2+, 3+ Express alternative: accommodates both HOV and toll operations improves mobility in GP lanes may fund other improvements

Expected PM Peak Speeds Speed in MPH 2 Express Lanes 1 HOV Lane -With no improvements in the corridor, speeds will continue to deteriorate during the peak periods. -Without a change in HOV lane operational policy, speeds in the HOV lanes will deteriorate and become no faster than the general purpose lanes. -None of the alternatives will provide high speeds (50+ mph) for all freeway users. -The number of hours of peak period congestion in 2035 will decrease progressively with alternatives further to the right on the slide. -The slide presents estimates based on limited information. Additional study is required to confirm the estimates. Funding to build project (without, will take decades to fund) Improved mobility across all lanes including GP lanes, revenue to fund 7 lanes total in each direction Calculated across 7 lanes, Alt. 2 avg speed is 31 mph, Alt. 3 avg speed is 35.7 mph Alt. 3 is 5 mph better or 15% better. 2 Express lanes will be managed to provide at least 25% of corridor traffic (2 of 7 lanes) with free flow speeds and a reliable, faster trip time during peaks. Choice with Alt. 3 is maximizing revenue or maximizing throughput through managing the Express lanes. Policy decision is to manage the 7 lanes somewhere between the bars in Alt. 2 and Alt. 3. Additional info for possible questions: Why does speed of HOV lane improve with addition of 1 or 2 GP lanes? HOV’s will shift back and forth from HOV to GP to drive in less congested lanes; speeds in HOV and GP will equalize. Why is speed better for 5 GP’s with Alt 3 than for 5 GP’s with Alt 1? Alt 3 has more lanes (7 total vs 6). Add’l lane is Express lane which will draw traffic out of GP lanes. 38,000 of bi-directional total of 50,000 daily HOV2 (75%) would shift to GP if tolled, replaced by same # of SOV’s (Express lanes managed to maintain speeds) 1 HOV Lane 1 HOV Lane 6 GP Lanes 1 HOV Lane 5 GP Lanes 4 GP Lanes 1 HOV Lane 5 GP Lanes 4 GP Lanes 4 GP Lanes Today 2015 No Improvements 2035 No Improvements 2035 Add One Lane 2035 Add Two Lanes 2035 Express Lanes *Based on estimates, further study required.

Traffic and Revenue Study Phase 1 - indicates financial viability, based on existing traffic data and model Phase 2 - more refined traffic and revenue estimation to be initiated later in environmental phase Phase 3 - investment-grade analysis Gerry handles this slide Phase 1 completed Phase 2 will be done as part of additional scope of work for Alt. 3 during environmental phase Phase 3 will be done later as preparing to seek financing

Proposed Access Points Gerry handles this slide Direct access from SR-73 and I-405 on south end, SR-22 and I-405 and I-605 on north end. Intermediate access at Brookhurst/Talbert and Goldenwest/Bolsa.

Annual Revenue Forecasts Scenario Annual Revenue SOV Toll HOV 2+ Free $45.1 million HOV 3+ Free $196.7 million Gerry handles this slide HOV2+ free: about 20% capacity for toll-payers HOV3+ free: about 80% capacity for toll-payers If questions: Phase 2 T&R: could evaluate scenario for 3+ during peak hours and 2+ during off-peak Also could evaluate scenario for starting with 2+ , then point at which should change to 3+

Supported Construction Costs Scenario Bonding Capacity SOV Toll HOV 2+ Free $300 million-$500 million HOV 3+ Free $1.4 billion-$1.8 billion Gerry handles this slide A 30-year bonding period was assumed (2020 – 2050); Taking the traffic growth rates implicit in the traffic model, there is an estimated annual growth of slightly less than 1 percent per year; Toll increases are assumed to be implemented annually to fully reflect a perceived inflation rate of 2.5% to 3% per year; Operation and Maintenance costs are assumed to be 15% of gross toll revenues, reflecting an efficient and experienced operator; Loss of revenue, due to violations and other non-payment, is assumed to be of 6% of gross toll revenues, based on improving enforcement procedures in place; A requirement for coverage ratios of 1.75X was assumed based on current market requirements; this could be lowered depending on the use of the financing power of Orange County and/or other financial supports are included in the offering terms; A present worth factor of 6% was assumed based on possible bond interest rates; Issuance costs of 25% were assumed.  These can include: the establishment of reserve funds; engineering, legal and other fees; and underwriters discount; it can exceed the assumed 25%.

Express Lanes Financial Viability Alternative 3: Express Lanes Funding gap $2.2 billion - $600 million = $1.6 billion Revenue potential range HOV 2+ Free $0.3 billion -$0.5 billion HOV 3+ Free $1.4 billion -$1.8 billion

Re-cap of Progress to Date One and two lane alternatives can generally fit within existing ROW Express lanes alternative could provide needed funds Four public scoping meetings conducted Good attendance (400+) Active Q&A sessions Concerns remain about local ROW impacts Reported ROW findings to Board in Aug. 2009 Now, we have information that the Express Lanes alternative is financially viable and could fund the improvements If questions: Categories of majority of comments received during scoping: ROW Express lanes and being tolled Noise Public Hearing and Draft ED: late 2011 (mid 2012) PWG SWG

Next Steps Prepare environmental technical studies on the build alternatives Return to Board to discuss: Preliminary findings from environmental studies Potential reduction in number of build alternatives Operating scenarios for Express Lanes In summary: Based on findings from the T&R study, the Express Lanes alt. could provide the funding to build the project and add 2 lanes in each direction. Will improve mobility across all lanes, including GP lanes, with 2 Express lanes managed to offer free flow speeds and a reliable, faster trip time. Staff is therefore recommending that the Express Lanes alt. be evaluated further through the environmental process and that Parsons’ contract be amended to perform this additional work. Questions? If questions: Parsons’ contract: original: $9,605,417, $4.5 million amendment totals to $14,105,417 Without Alt. 4, $3.5 million amendment totalling to $13,105,417 Elimination of alternative(s): Key studies: traffic, air quality, cost estimates (benefit/cost) If design-build, potential savings of 1-2 years or more. Current schedule: complete environmental mid 2012 (early 2013) Start construction: mid 2017 (early 2018) Complete construction: mid 2022 (early 2023) If Alt. 3 included, impact to schedule of 8 months + 3 months = 11 months, ~1 year.