CDOT Rolls Out New Tools to Meet Growth Needs
Take a growing population, add a shrinking budget and aging infrastructure, then toss in daily traffic jams plus a few snowstorms, rock slides and floods. That's the recipe of challenges that annually confronts the Colorado Dept. of Transportation, ENR Mountain States' 2015 Colorado Owner of the Year.
The 3,000-member agency is fighting back with innovative strategies that include adding more tolled express lanes on major freeways, seeking out public-private partnerships (P3s) for developing and maintaining roadways, creating a new emphasis on operations to squeeze more capacity out of existing highways and bridges and piloting an aggressive cash-management approach that has freed up funds for new construction.
"I think that, overall, CDOT's done a great job being innovative, and they've had to," says Tony Milo, executive director of the Colorado Contractors Association, a group that includes most of the state's largest heavy/highway contractors. "For a long time, Colorado has underinvested in its highway system, and CDOT has done a wonderful job of doing more with less and finding innovative ways to fund these projects."
CDOT had $742 million in projects underway in 2014, making it one of the busiest builders in the state. Major initiatives include the $497-million, multi-modal expansion of U.S. Highway 36; $98 million for six new bridges along U.S. Highway 6; and the expansion of I-70 west of Denver ($72 million for eastbound peak-period shoulder lanes and $55 million for wider westbound tunnels). It's not just the volume of construction that makes CDOT stand apart but the agency's new approach to projects.
Consider P3s, which first entered the CDOT equation on the U.S. 36 project. The highway's new tolled express lanes, which should be operating in the spring of 2016, are expected eventually to collect tens of millions of dollars annually as some drivers opt to pay up to a proposed $7.60 fee per trip to avoid congestion in the free lanes.
But the revenue from the tolls won't flow to CDOT. Instead, it will go to Plenary Roads Denver, the P3 concessionaire that has worked with the agency to design, build and finance the project and will operate and maintain it under a 50-year contract with the state. If toll revenue greatly exceeds expectations, Plenary Roads Denver will share it with CDOT.
Although the U.S. 36 project initially aroused controversy with a public unfamiliar with P3s, CDOT officials view the new express lanes as offering an option for drivers while creating shorter, more predictable commute times. CDOT spokeswomen Megan Castle and Rebecca White say much of the early public opposition to the U.S. 36 project stemmed from misconceptions that the highway would consist entirely of toll lanes. To avoid similar misinformation about CDOT's planned huge expansion of I-70 east of I-25, Castle and White say the department is working to inform the public up front about the project, especially through town-hall meetings and telephone conferences that have involved thousands of citizens phoning in from throughout the Denver metro area.
Josh Laipply, CDOT chief engineer, notes that an often overlooked benefit of P3s is the shifting of project and maintenance risks from the state to the private concessionaire. Not only could toll revenue fall short of projections, but the contractor also might encounter hazardous materials during construction, which increases costs. With an all-in-one P3 such as the U.S. 36 project, the private sector builds that risk into a fixed price, rather than CDOT facing potentially expensive unknowns. Finally, taking on the maintenance obligations gives the concessionaire an added incentive to build a high-quality project from the outset. "The P3 isn't all about money," Laipply says. "It's all about risk."
CDOT's innovations come at a time when the agency's budget has shrunk from around $1.7 billion in prerecession 2007 to approximately $1.2 billion today. Federal funds make up more than 40% of the budget, with Colorado's 22-cent-a-gallon state fuel tax contributing around 35% of the agency's annual income, while revenue from the state's FASTER program makes up approximately 16%. An additional 3% comes through federal and state mass-transit funds.
With a growing population putting additional cars on the roads, higher-mileage vehicles crimping gas-tax returns and a limited appetite among Coloradans for more taxes, CDOT's executives are feeling pinched.
"We've identified almost an $800-million-a-year shortfall where there are projects and things that we could do to help deal with that growth," says Shailen Bhatt, the agency's executive director since February. "But we just don't have the funding."
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