Public Weighs in at Metro’s Cost/Benefit Analysis Meeting

Commentary by Bill Sherman


There was an informational meeting at the Pasadena Convention Center last Thursday, September 22, to discuss the Cost/Benefit Analysis (CBA) of the SR 710 North Study. The meeting was the result of a bill introduced by State Senator Carol Liu to inform the public about what the SR 710 tunnel extension will cost to build and what the supposed benefits will be to the public. The Metro Board had also passed a motion for a CBA study in June of 2010. It should be noted that this tunnel is a State Route (SR) not an interstate highway.

Now that seems a simple thing, but it is not. Metro put out for public comment the Cost/Benefit Analysis in June of 2015, a month after the Draft Environmental Impact Report, but there was never an opportunity for the public to weigh in at a public meeting to ask questions and make comments. The study included all five alternatives and several variations of the alternatives, including: Transportation Systems Management and Transportation Demand Management (TSM/TDM), tunnel single bore, tunnel dual bore, bus rapid transit, and light rail transit).

Even though there are five alternatives still on the table the tunnel is the only real alternative. The tunnel cost was presented as two options, a single bored tunnel with four traffic lanes and a dual bored tunnel with eight traffic lanes which has been challenged as not being accurate. Note that the dual bore tunnel will carry 180,000 vehicles per day and the single bore tunnel 90,000 vehicles per day. The dual bore tunnel was estimated to cost $5.6 billion and the single bore tunnel $3.86 Billion.

These figures are presented without an itemized listing of the components of the cost. How they came up with these figures is a real mystery. The study anticipates tolls. The amount of the tolls for this study was set at an amount that would attract 75% of the physical capacity of the tunnel and operate at a speed of 45 mph or greater. So the tolls will be set to limit the use of the tunnel by people of lower income. They plugged all their data into something called the California Benefit/Cost (Cal-B/C) model.

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This model is something that can only be understood by traffic engineers. Carol Liu had prepared a detailed analysis of the use of this model and believes it was not used correctly. Marina Khubesrian, City Councilperson for South Pasadena, in the Q & A segment of the meeting, brought up these defects and the panel listened, but made no comments were made on their validity. These are very technical points understood by few. The benefits came in many categories: travel time, capital expenditures (construction and right of way costs), vehicle operating costs, system and maintenance costs, safety effects, emissions effects, employment benefits, and residual values.

The results of the CBA were simplified to a single table:
Alternative/Variation; Present Value of Costs; Present Value of Benefits; Net Present Value
Tunnel single Bore; $1,951-1,997 Million; $ 3,429-3,587 Million; $ 1,478-1590 Million
Tunnel Dual bore; $3,227-3374 Million; $3,337-3,733 Million; -$37-506 Million
Bus Rapid Transit; $510 Million; $879 Million; $ 369 Million
Light Rail Transit; $2,163 Million; $1,293 Million; – $870 Million
TSM/TDM; $255 Million; $599 Million; $ 344 Million

So the winner is the single bore tunnel! The key to this table is the Net Present Value (NPV). The NPV is your best bang for the buck and the single bore tunnel is the best with a value of $1,478-1,590 million.

Questions and Answer period
Many questionable assumptions are made along the way and some of these were brought out in the Q & A segment. The Sepulveda Pass Tunnel was estimated at one Billion/mile. The 710 tunnels are estimated at ½ Billion/mile.

The Alaskan Way Tunnel in Seattle was also about one billion/mile. The discrepancy was not explained. The monetary benefit for tunnel users, aka drivers, was $22/ hour while for transit users it was $6/hour. It was asked, since the air pollution studies were inadequate per the United States Environmental Protection Agency (no analysis of hot spots like Old Town in Pasadena), if the CBA will be redone to reflect the health costs due to the increased pollution in Pasadena, La Cañada, and other areas seeing increased vehicular traffic. In my mind, this was not really answered.

The next step in the process to build the tunnel is to analyze the 8,000 comments submitted regarding the EIR/EIS. This will be done some time in 2017. After this is done, a preferred alternative will be selected. Michelle Smith, Metro’s lead representative, said that when the preferred alternative is presented to the Metro Board there will be a funding plan. They plan on funding this project by creating a Public Private Partnership (PPP). This means that they will have to sell this project to someone and their numbers and assumptions cannot be as vague as presented in this CBA.

Background Provided by Metro
On June 19, 2015, Metro and Caltrans issued an Analysis of Costs and Benefits (CBA) for the State Route 710 (SR-710) North study alternatives for public review. The CBA was prepared in response to direction by the Metro Board and is a means of applying an economic value to alternatives being evaluated for the SR 710.
The CBA is one of many technical reports that will be used to evaluate the alternatives in the SR 710 North Study Draft Environmental Impact Report/Environmental Impact Statement (EIR/EIS).
Editor’s Note: Metro provided the background for this commentary.

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