Los Angeles votes to toll HOV lanes on busiest freeways, gets NYC's US$s ADDITIONS

April 25, 2008
By Peter Samuel

New York's loss in rejecting congestion pricing is Los Angeles potential gain. $213.6m of federal transit funds previously set aside New York City is now committed to supporting an ambitious variable tolls project on HOV lanes on some of the busiest freeways in the Los Angeles (LA) area. The earmarking of federal money follows a unanimous vote this week of Los Angeles County in favor of the proposal.

An agreement signed between USDOT and California DOT and Los Angeles County Metropolitan Transportation Authority (LACMTA) commits the $213.6m of US funds to transit projects in connection with the LA's conversion of High Occupancy Vehicle (HOV) lanes to HOT Lanes (High Occupancy free, others Tolled) on three busy freeways. This is the first part of a two phase scheme developed by LACMTA to convert or build anew 295 lane-km (183 lane-miles) from HOV to tolled or HOT lanes.

If given the needed approval in the state legislature - which has already approved devising the plan and seeking USDOT support - this will use the power of dynamic tolling to manage efficient free flow traffic in the heart of the country's most congested metro area.

Under Phase 1 HOV-to-HOT conversion tolls will go on 121 lane-km (85 lane-miles):

- I-10 San Bernardino Freeway, Alameda St to I-605, 45 lane-km (28 lane-miles)

- I-210 Foothill Freeway , I-710 to I-605, 39 lane-km (24 lane-miles)

- I-110 Harbor Freeway, 182nd St to Adams Blvd 53 lane-km (33 lane-miles)

These are major freeways immediately east and south of downtown LA with some of the highest traffic counts in the country.

Phase 2 HOV to HOT conversion would extend tolls on two of these freeways (I-10 and I-210) and add them to CA60, a third major east-west freeway for another 158 lane-km (98 lane-miles).

These are the toll aspects of a larger Los Angeles Region Congestion Reduction Demonstration Initiative that involves some $851m of HOT lanes, interchange improvements and a downtown intelligent parking scheme called a Congestion Pricing System. Total cost of the congestion reduction Initiative is $1.43b.

Also involved are:

- $350m of transit projects

- $228m of complementary services such as traffic management, traveler informations services and transit fare technology

Announcement ceremony

In a joint press appearance with a freeway behind California governor Arnold Schwarzenegger, Los Angeles mayor Antonio Villaraigosa, US sec transportation Mary Peters, Transportation secretary Dale Bonner, Caltrans' Will Kempton, and other local officials praised the program as a bold initiative.

Villaraigosa said gridlock had become common because officials had avoided making tough decisions.

He continued: "Everywhere, everywhere I go, people ask me: what are you going to do about the traffic... Working (with state and federal authorities) we are going to do bold things. Congestion pricing has been controversial for some. It's not something that people are familiar with. They like the free in freeway, But at the same time they complain about the gridlock. You will hear me say again and again when people ask what are you going to do about the traffic my response is: what are you going to do about the traffic. When are you going to get out of your single occupant vehicle? We've invested unprecedented way in public transportation.... but here is a new, important, bold new effort on behalf of the federal government in partnership... to really do something about traffic."

"We've got to dream about having a Los Angeles where we don't have the ignominious distinction of being the traffic congestion capital of the US... If we want to make that dram come true we are going to have to be bold. We are going to have to make tough decisions, and I'm here standing with Governor Schwarzenegger (and others) to say: I'm ready to stand up and to say we're going to try something new and innovative. It's a pilot project, and the bottom line is it's going to address the gridlock in this city."


Gov Schwarzenegger said he was "passionate" about rebuilding the country's infrastructure and spoke about a Rebuilding America coalition he had formed with Pennsylvania Governor Ed Rendell to get governors and mayors to focus on the issue. The HOT lanes congestion pricing project he said will "relieve congestion on some of the busiest freeways in the world." Getting people and goods moved around quickly is "economic power," he said.

Dale Bonner the state DOT secretary said the plan is a response to "one of the most difficult challenges of our time" and a "significant step forward to reducing congestion"

Mary Peters said there are very few places in America that contain the promise and the problems of highways than those in Los Angeles. Congestion, she said is "keeping families apart, hurting businesses, and unnecessarily polluting the air."

"All of that is about to change" Peters said with "bold leadership" in the region adopting variable tolls to manage free flow traffic and generate a new revenue stream for improvements. She said congestion pricing and faster more reliable bus service are "proven approaches" to reducing congestion.

The objective of the plan is to "to make L.A. an easier place to live, a better place to do business and a healthier place to raise a family. She added: "This will help put the story of smog in LA right where it belongs - in the history books. We want this iconic American city to continue to be known for epic Hollywood movies, not epic traffic tie-ups."

HOT lanes Peters said are better than HOV lanes: "a better option than being stuck in traffic and staring at an open lane just to your left." She praised local officials saying: "You have dared to dream big, and with the support of Sacramento and Washington DC, their vision of a traffic(congestion)-free LA can begin to become a reality."

"No matter what you earn and no matter how you commute, it is very important to all of us to save time. The funds generated can be used to provide new bus service that will take advantage of these new lanes... commuters will notice a real difference."

"As more cars take advantage of the HOT lanes data and experience tell us that traffic on the other lanes will improve as well."

Deadline Oct 15

The region has until October 15 to gain legislative authority for the tolling. Major opposition so far is a move in the US Senate by senators Dodd, Shelby and Schumer to transfer the $213.6m from Los Angeles to general transit funding where it would be sprinkled on small projects all around the country (Amendment 4552 to HR1195).

Agreement

The agreement between USDOT and the Californians says that "congestion is one of the greatest threats to our nation's economic prosperity and way of life" and costs about $200b/year. It declares: "The signatories to this MOU do not believe that gridlock is our inevitable fate."

see the eight page MOU here:

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

Poor stop-&-go performance in both HOVLs and GPLs

Background information provided by LACMTA on the four corridors to be converted from HOV to HOT lanes show that both HOL and general purpose (GP) lanes work poorly in a typical peak hour, carrying fewer vehicles and people at this time of high demand than they do in times of lower demand when there is free flow.

GP lanes operate poorly because of stop-&-go conditions and the inevitable decline in throughput as well as speed. Average speeds in the peak hour are around 40km/hr (25mph). HOV lanes (HOVLs) work poorly because they are underutilized and in single lane HOV speeds are set by the slowest vehicle which they tend to bunch up behind.

HOVLs are carrying 1389 to 1588 vehicles in the peak hour and GPLs operate at only 1341 to 1535 vehicles/hour. In free flow conditions these lanes carry up to 2400 vehicles an hour so LA's four major corridors are operating about 60% of capacity because of the inefficiencies of stop-&-go and in the case of GPLs and 62% in the case of HOVLs because of underuse and queuing.

LA's HOV to HOT potential will only be fully realized when twin HOT lanes each direction are provided to overcome the 20 to 25% capacity reductions of single lane operation, but by adding tollpayers to fill unused capacity while preventing managing entering volumes with the variable toll rates they should be able to up efficiency of use to 75% to 80% of 2400 in the single lanes, and keep that through many hours of peak demand. (Only a small elevated stretch of I-110 has the desirable 2+2 lanes for effective conversion of HOVL to HOTL.)

LACMTA say that the HOVLs will increasingly lose their travel time advantage over GPLs and become equally congested as corridor traffic increases without increases in vehicle occupancy requirements. They project HOVLs will cease to have any significant value in encouraging carpooling by 2015 because their advantages in travel time will have disappeared based on 1650 vehicles/hour being single lane capacity.

The LA region with 18m people has the worst congestion in the country with peak hour travel time index of 1.50 meaning average trips take 50% longer than free flow travel times. 86% of peak period travel occurs under congested travel and 62% of total lane miles suffer recurrent congestion. LA County where the congestion pricing initiative is located has about 10m people.

HOT Lanes plan

The county's HOT Lanes plan provides for:

- no trucks allowed

- tolls on single and two occupant vehicles

- toll rates to be set dynamically to provide minimum speeds of 80km/hr (50mph) and LOS-C level of service

- modeled on I-15 San Diego with toll rate adjustments as frequently as every three minutes in response to traffic density measurement

Implementation costs in existing HOVLs are put at $1.3m/lane-km ($2.1m/lane-mile)

Scully Capital estimates value

Scully Capital of Washington DC has produced a preliminary estimate of the earning capacity and bondable value of the proposed Phase 1 of the LA HOTLs based on them being run like a state toll authority (no equity, all debt).

Assuming 40 year life, BBB- rating, standalone financing, 1.7x debt service coverage, 5.2% senior debt, 4.62% TIFIA, SOV toll rates 75c/mile (47c/km) morning peak, $1.00/mile (60c/km) afternoon peak, HOV2+ 50c/mile after lanes reach capacity, they valued the project at $786m. Done with 100% TIFIA relaxing the normal 33% TIFIA financing limit it will support $839m, Scully Capital say.

Scully don't estimate the private sector concessioning potential but presumably this would be higher.

Construction cost of the segments modeled by Scully is $785m so the project looks to be self-financing.

They modeled 39k transactions in the third year when 'ramp-up' is complete, rising to a maximum 70k in 2029. They assume a 'discount' HOV toll of 50c/mile (30c/km) from the third year. As traffic builds HOVs paying the discount toll of 30c/km (50c/mile) begin to dominate and by 2027 all SOVs have to be kept out.

Operations and maintenance costs assumed by Scully look to be large at $71m in the third year, nearly half toll revenues. They are much lower on 91 Express Lanes operated by Cofiroute, the France-based toll perator.

SEMANTICS:
These are not really HOT lanes in the original sense of the term since the assumption is HOVs will pay tolls, albeit discounted tolls. They are better called toll lanes, or toll express lanes.

NOTE: Scully's model is based on policy assumptions, not decisions. LACMTA haven't yet decided exactly how the system should be operated.

COMMENT:
This is one exciting project. It promises to make productive use of wasted HOV Lanes - mainly occupied by family members or work colleagues who'd drive together anyway. Single lanes need to have an enforced minimum speed in order to prevent the snails from wrecking their potential as express lanes. As soon as possible they should move to provide a pair of toll lanes each direction to allow the concept to reach its full capacity. With twin lanes each direction they could relax the restriction on commercial vehicles providing business with benefits also.

TOLLROADSnews 2008-04-25 ADDITIONS THRU 2008-04-7

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