January 23, 2018

Legislature Kills Max Tyler’s Bill to Prohibit Non-Compete Agreements

Should "congestion guarantees" for toll road investors be legal? (Photo by Flickr user Joming Lau.)


Among the many problems with privately financed toll roads is the frequent inclusion of congestion guarantees. The investors often insist that local governments take steps to increase congestion on local roads in order to push traffic onto the tolled roads in order to boost toll revenues. It’s a great deal for the investors but often a lousy deal for local residents. The agreement between the Northwest Parkway Public Highway Authority and Brisa (the Spanish company that bought out the Northwest Parkway, saving it from bankruptcy), for instance, requires Broomfield to compensate Brisa for any revenue lost as a result of Broomfield building or improving local roads within its own city boundaries. If they build or improve a road that gives their local traffic any sort of improved alternative to the Northwest Parkway, they’ll have to pay Brisa for every vehicle that uses it even if improving or building that road would have been good for Broomfield residents. And because the agreements often last decades (99 years in Broomfield’s case), communities with congestion guarantees are often saddled with restrictions like these for generations.

Golden’s representative in the Colorado State House, Max Tyler, introduced a bill this session to prohibit the use of “non-compete agreements,” which is one of way creating a congestion guarantee. As Representative Tyler explained in his newsletter, “For the proposed Jefferson Parkway, for example, this bill would have made sure that local governments would still have the option of improving Highway 93, as well as Indiana and McIntyre.” Despite his best efforts, however, the Republicans on the Transportation Committee voted against the bill and it died on a party line vote. Jefferson County opposed the bill.

Toll Roads Hit Speedbumps

The Washington Times a couple of weeks ago published an editorial (“Freeways are the solution to congestion”) sharply criticizing toll roads because of their dependence on maintaining congestion on nearby roads. Toll roads often depend, in other words, on congestion guarantees: commitments by local governments to keep local roads so heavily congested that drivers are forced to take the new privately-financed highways and large tolls for the privilege. The Jefferson Parkway’s plan, before ever signing a contract, already includes crippling the northern portion of Indiana in order to force those drivers onto the new toll road. The Times observes: “Toll roads get away with this conduct because they are state-sanctioned monopolies, not free-market operations.”

In a separate editorial just a week earlier (“The Trouble With Tolls”), the Times also criticized the tendency of toll road boosters – true here in Colorado – to overstate revenue and traffic projections:

It turns out that estimates based on rosy scenarios are the norm in the world of tolling schemes. A Texas Department of Transportation study completed last year found that a majority of toll-road projects overestimated traffic levels in the first five years by at least 20 percent to 30 percent. Because public transportation agencies generally cut deals with private tolling companies behind closed doors, such detailed forecasts are not available for public review until long after the contract is signed.

It isn’t always the case that that tolling requires congestion guarantees. When you have an existing corridor that is currently highly congested, you can use tolls to manage that congestion by creating incentives for people to drive at non-peak hours or use alternate transportation modes. For that work, however, you have to actually provide other alternatives. I-70 is the best local example: variable-priced tolling (where the cost is based on how congested the road is at the time you choose to travel) could help reduce the insane weekend congestion we now experience it if we also build a high-speed transit option, giving skiers and weekenders and everyone else who travels on the corridor a good alternative to driving their own car.

Bad News Abounds for Toll Roads

The operator of the Northwest Parkway near Denver lost $22.6 million last year according to Brisa Full Year 2009 Results, suffering a 12.6% decline in average daily traffic. Earlier this year, yet another major U.S. toll road went belly up. The privately-financed but publicly-owned toll highway in South Carolina known as the Southern Connector toll highway defaulted on its bonds. And just last week San Diego’s South Bay Expressway filed for bankruptcy. According to TollRoadsNews.com, “Traffic and revenue forecasts underlying the financing plan for the SBE projected 60k vehicles/day in 2009 whereas traffic was in fact 23k/day, or 38% of forecast level. Toll revenue in 2008 was $22m or 70% of the forecast $31m. In 2009 toll revenue was $21m, about half of the $42m forecast.”

NW Parkway Bonds Take Another Dive

In case you missed it, the Northwest Parkway’s bonds were downgraded again last week. The Northwest Parkway has about $420 million in outstanding bonds, and Fitch Ratings downgraded these bonds to CCC+ (from BB-) with a “negative” rating outlook. As Fitch Ratings explains it, a CCC rating “means that default is a real possibility and capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic conditions.”

Northwest Corridor Update

Yesterday, I and a number of other Golden City Councilors met with the county commissioners, Transporation Commissioner Joe Jehn, and several CDOT staffers to look for areas of agreement.

My view on the proposed superhighway through Golden is straightforward:  No six- or eight-lane superhighway.  I support transporation improvements in the Northwest Quadrant but only under seven conditions:

  1. No more than four lanes through Golden.
  2. No tolling through Golden.
  3. A speed limit of 45 mph by design (i.e., the roadway must rely on a “serpentine” parkway design, or something comparable, that keeps vehicle speeds low).
  4. Substantial noise mitigation, with a noise limit of 55 db through Golden.
  5. Grade-separated intersections (i.e., on and off ramps instead of traffic lights).
  6. Improved connections between neighborhoods on both sides of the highway (along 93 and Highway 6).
  7. A commitment, with funding, to make appropriate improvements on other north-south arterials in the region, like Indiana and McIntyre.

County Commissioner Kevin McCasky made clear that he (and presumably the entire County Commission) was willing to settle on four lanes so long as we reserve the rights of way for two additional lanes should the need ever arise, and he seemed open to all of the other concerns.  A small step, to be sure, but it is movement in the right direction.  As the funding picture becomes bleaker, and as new revelations about the sorry financial state of the existing Northwest Parkway come to light almost weekly, I think we’ll see an increasing interest on the part of the county and state to make something work.  I’m in no rush at all to make a deal . . . we’ll take a deal when it offers us everything we need.

I also want to be clear that I think a new, large superhighway through what is now largely open space in northern Jefferson County is a terrible idea, especially given that the traffic numbers don’t support it, but my first obligation is to ensuring that whatever happen in Golden be done in a way that improves traffic flow and improves the quality of life here through reduced noise, air pollution, and traffic congestion.

The Denver Post ran a story this morning (“Golden: Toll road won’t fly”) about yesterday’s meeting, and I found a YourHub post entitled Demand Accountability for Foibles of NW Parkway” that might be of interest as well.

Jeffco Candidate Forum on Transportation Issues: Sept. 25

In case you hadn’t already heard, Plan Jeffco, CINQ, and a host of other groups are hosting a Jefferson County Candidate’s Forum on Transportation issues on Monday, September 25 from 6 p.m. – 9:30 p.m. The invited candidates include folks running in gubernatorial, county commission, congressional, and state legislative races. Issues on the agenda include the proposed superhighway through Golden, the I-70 mountain corridor, proposed toll lanes on C-470, and mass transit issues. You can also read the candidates’ responses to PLAN Jeffco’s transportation questionnaire on the PLAN Jeffco web site [although I can't find it on their site, so if anyone has the direct link please post it as a comment to this blog post]. Some of the confirmed participants include Ed Perlmutter and Rick O’Donnell (running in the 7th Congressional District, which includes Golden) and Kathy Hartman and Dave Auburn (running for County Commission in Jeffco).

The forum is at the American Mountaineering Center (710 Tenth Street) in Golden. Admission is free.

Northwest Parkway in the News

In case you didn’t notice, there was a lot of newsprint over the last several days on the Northwest Parkway and its continued struggle to remain solvent, including a good letter to the editor by Rob Medina in today’s Denver Post:

Denver Post – August 29, 2006: Investors explore leasing NW Parkway.

Denver Post – August 29, 2006: Troubled parkway looks to sell.

Denver Post editorial – August 29, 2006: Lease plan may aid Northwest Parkway.

Rocky Mountain News – August 29, 2006: Money-losing toll road seeks partner.

Rocky Mountain News – August 29, 2006: Northwest toll road seeks private operator.

Denver Post – August 30, 2006: Northwest Parkway for lease.

Rocky Mountain News – August 30, 2006: Debt figure doesn’t count millions in interest.

Rocky Mountain News – August 30, 2006: Toll road looks for debt help.

Rocky Mountain News – August 30, 2006: Blake: Bailing out NW Parkway.

Rocky Mountain News editorial – September 2, 2006: Parkway in a bind.

Denver Post – September 5, 2006: Letters to the Editor.

The Toll Road Fight Heats Up (Again)

If you haven’t yet seen the most recent Denver Post articles on toll roads, they are worth checking out. Today's was called "No 2-Way Street". The others so far include "Roads to Riches: Paved With Bad Projections" and "Northwest Parkway: Has Roots in Suspect Mergings". They do a good job of exposing the pattern of financial failure and community impacts of so many toll roads about the country.

Incidentally, you'll find two good posts on the Denver Post stories in Daily Kos and unbossed.

As for our own fight, the Denver Regional Council of Governments (DRCOG) will soon be making some critical decisions that will have a considerable effect on our fight to protect Golden from the Owens-Norton Billion Dollar Boondoggle. I represent Golden on the Board and have spent lots of energy building relationships with other board members, especially trying to illuminate how so many of us – Douglas County, Aurora, communities on the I-70 mountain corridor – are fighting exactly the same fight: challenging CDOT’s arrogant view that they should be able to build whatever they want wherever they want without regard for actual effects on transportation and the impacts to local communities.

The upcoming Colorado Municipal League conference in late June is an important opportunity to cement these relationships with elected representatives from other communities and ensure that we succeed in our collective fight to force CDOT to consider the needs of local communities in their decisions. I will be there.

DRCOG Annual Retreat

Diane Chesbro and I attended the annual board retreat of the Denver Regional Council of Governments this weekend (Friday evening and Saturday).  I serve on the board and Diane is Golden's board alternate.  The board, as you may know, is made up of one elected representative from each of the cities and counties in the region.  One of the more interesting discussions had to do with finding funding for key transportation needs in the Denver Metro region.  One of the more popular ideas is the creation of a Denver Metro Regional Transportation Authority (RTA).  This would basically be a special district created for the purpose of imposing a new tax specifically to raise money for transportation projects.  Of course the residents of the special district area would have to vote in favor of creating the RTA, and Jefferson County residents don't seem especially supportive of new taxes (except for open space).

That said, if the proponents could clearly identify the specific projects to be funded and if the voters thought those projects were important enough maybe they would approve it.  Of course our major concern in Golden would be ensuring that none of these funds could be used for the superhighway, but I think I would also want to see a reasonable proportion of the funding allocated to transit projects (additional light rail stations, improved bus service, and the like).

Other ideas discussed by the DRCOG board included increasing the state gas tax, creating some sort of "miles traveled" tax, improving Colorado's share of the federal transportation pie (or getting more earmarks for key Colorado projects), and tolling.  It will be very interesting to see which of these ideas get the most traction and how they begin to take shape.  My role on the DRCOG board is to both promote good regional solutions to regional challenges like transportation but also to ensure that Golden's interests are protected.

The Jefferson County Commissioners, incidentally, are considering doing a county-wide RTA.  I believe they will soon be asking Golden City Council for our support.  I don't have a position on it yet, but can say definitively I would not support an RTA that didn't include a legally-binding assurance that the funds could not be used for the superhighway.

Toll Road Bill Soars Thru Committee

SoapBlox reports on the hearing yesterday at the State Capitol on Representative Pommer’s bill requiring toll roads to go through the same sort of environmental review, mitigation funding, and planning that other kinds of highways must go through. CINQ worked hard to organize some turnout and bunches of folks came out in support of the bill. It sounds like went pretty well: the House Transportation and Energy Committee (on which our very own Rep. Gwyn Green sits) unanimously passed the bill. I believe the bill now heads to the House floor.

While the bill wouldn’t outright ban the use of eminent domain by private tolling authorities to build toll roads, it at least forces proponents to go through the same process as everyone else. More importantly, because Rep. Pommer took the time to negotiate with the Governor at some length on the bill language, the Governor might just be willing to sign it (unlike last year’s bill, which he vetoed).

The Rocky Mountain News reported on it today as well.