Wednesday, July 20, 2005

"As far as TxDOT is concerned, we're not concerned about this project. It's moving forward."

Spiraling cost puts tollway alliance on shaky ground

A marriage of convenience to pay for Southwest Parkway may be breaking up.

By Gordon Dickson Staff Writer

Fort Worth Star-Telegram Copyright 2005

In 1998, three agencies agreed to split the costs of the proposed toll road -- a rare positive step after decades of failed attempts to build it. The city of Fort Worth, the Texas Department of Transportation and the North Texas Tollway Authority believed they needed one another.

But the cost of the project has since quadrupled, and some people at the Plano-based tollway authority no longer want to spend their money on a project so far away from Dallas-area toll roads.

On the other side of the aisle, Fort Worth and the state Transportation Department insist that the road must be built as planned with intricate walls and attractive bridges. They won't accept cost-cutting measures that change the road's aesthetics.

Sentiments are growing on both sides that it might be best to remove the tollway authority from the partnership. The topic is scheduled to be discussed at this morning's tollway board meeting in Plano.

"If the North Texas Tollway Authority determines that it is not feasible to build their portion of the project, then we will find another way," said Maribel Chavez, Fort Worth district engineer for the Transportation Department.

New options are available to pay for toll roads because of recent changes in state law, and North Texas cities don't need to rely upon a tollway authority, she said. It's now legal to turn over a project to the private sector, to seek help from the state's in-house turnpike authority or to form a county-level mobility authority and borrow the money.

Those options might be a better long-term deal for Tarrant County. In 20 to 40 years, after construction bonds are paid off, tolls collected on Southwest Parkway could be used for other Tarrant County transportation needs -- perhaps another road or mass transit.

Finding a new partner to share the costs wouldn't necessarily delay the project. The scheduled 2009 opening date is already viewed as overly optimistic, and 2010 is more likely.

But, Chavez said, "As far as TxDOT is concerned, we're not concerned about this project. It's moving forward."

Spiraling costs

The eight-mile road from downtown to southwest Fort Worth will cost $825 million, nearly triple the previous forecast, according to the latest estimate the tollway authority released in June.

Critics say the authority waited years too long to divulge that cost.

The price includes an estimated $379 million to be paid by Fort Worth, the Transportation Department and the Regional Transportation Council, an organization of local governments that disperses federal grants.

But the source of friction is the remaining $446 million, which represents the tollway authority's share of the project. The figure is more than five times higher than the tollway authority's original estimate in 1997, just before the agencies became partners.

Tollway officials say there's no way they can raise that much money from toll collections on Southwest Parkway -- even over 40 years. The road can generate only about one-third of the money needed based upon expected traffic counts.

That leaves a $291 million deficit, according to an ongoing revenue study.

Some other source of funding must be found, tollway authority members say. Perhaps the toll rate on Southwest Parkway could be set higher than on Dallas-area roads. Maybe the construction could be delayed or built in phases.

Or the rest of the Metroplex tollway system -- including the Dallas North Tollway and President George Bush Turnpike -- could absorb the costs. But that wouldn't be fair to drivers who use them, Dallas-area leaders say.

Although amenities such as landscaping and a 50 mph design speed limit have driven up Southwest Parkway's costs, Dallas-area drivers are stuck with toll roads built for speed, not beauty.

"If they can't get the Southwest Parkway project to somewhat function on its own ... Dallas County would be much better off pulling out of that project," Dallas County Judge Margaret Keliher said. "Fort Worth ought to be sensitive to the fact that we're not going to be able to increase tolls for the people already driving on the toll roads to put fluff on the Southwest Parkway project."

Without warning

Fort Worth area officials say they have been upfront about their high expectations.

During years of negotiations, they said, no one at the tollway authority warned that amenities might harm the project.

"It feels like somebody is out to kill the project, or make it impossible to build," said former Fort Worth Mayor Kenneth Barr, who was recently named to an advisory board overseeing a major state tollway project.

"This community agreed to make a major concession in allowing this to be built as a tollway. Now, to see these costs moved around in such a wide swing, it just doesn't make sense."

In 1997, the tollway authority commissioned a study that projected its costs for Southwest Parkway would be $80 million, including excavation, contingencies, utility adjustments and the construction of main lanes, bridges and toll plazas.

The total cost was estimated at $178 million.

At that time, it was expected to be a four-lane road with partial interchanges at Interstates 20 and 30.

Two years later, the I-20 and I-30 interchanges were upgraded, retaining walls and toll plaza areas were added, and the tollway authority's costs swelled to nearly $132 million.

In 2001, a separate estimate put the costs at slightly less, $120 million.

Since the initial estimates, the planned roadway has been expanded to six lanes, expensive traffic sensors have been added and the tollway authority has decided to build a Tarrant County maintenance office and satellite administration.

So it shouldn't be a surprise that the budget got bigger.

But the tollway authority staff decided not to put pencil to paper on those costs until the conclusion of a series of Fort Worth neighborhood meetings, during which skeptical residents were assured that Southwest Parkway would blend in nicely with their homes.

But in December, after the tollway authority approved Fort Worth's plan for the road, tollway board member Paul Wageman of Plano began demanding details of the associated costs.

Tollway staff members hadn't done an estimate in years, but they guessed that the amenity costs would be no more than $18 million.

Wageman pressed. So the tollway authority's new executive director, Allan Rutter, who took the helm in April, made an accurate estimate one of his first tasks. The amenities, Rutter determined, would cost a whopping $65 million.

But that's not the only place the costs went up.

A review of current and previous cost estimates, and traffic and revenue projections for Southwest Parkway shows that, until June, the tollway authority had failed to calculate at least $228 million in seemingly obvious expenses.

Among them:

• $112 million for engineering, legal fees, construction management and utility relocations.

• $35 million for toll plazas, a maintenance facility and traffic sensors.

• $64 million for unexpected costs.

• $17 million for mobilization of construction equipment onto the job site.

Tollway officials now acknowledge that they made a mistake in not giving Fort Worth officials, the public and their own board of directors a clearer picture of the costs.

"I'll be the first to admit we didn't take sufficient time to work with our other project partners on what the numbers mean and how we're going to talk about what this means for the project," Rutter said.

But Wageman isn't satisfied. He and board member Bill Meadows of Fort Worth are demanding an independent investigation into what went wrong. The issue is expected to be discussed this morning during the tollway authority's monthly board meeting in Plano.

"Was it incompetence or malfeasance? I'm not sure. But we were given a revised number that we used as a basis to vote on," said Wageman, who noted that the tollway board was told in December that the revised estimate for Southwest Parkway was $300 million. "If I had known the real costs, I never would have voted for it."

Still compatible?

Within 60 days, Rutter said, the tollway board will be presented with a list of perhaps three dozen funding options not only for Southwest Parkway, but also for six other long-term projects in the Dallas area.

Dropping out of the Southwest Parkway partnership is one option.

Another option may be for the tollway authority to bring in its own private funding partner, Rutter said.

"All of the options will be difficult and unpopular decisions," he said.

Fort Worth Councilwoman Wendy Davis, who as chairwoman of the Regional Transportation Council oversees road planning in 16 North Texas counties, is open to the idea of divorcing the tollway authority from Southwest Parkway.

But she is concerned about the quality of a successor. One reason that the tollway authority was an appealing partner in 1998, she said, was the agency's reputation for high-quality road work, efficiency and the ability to build projects fast.

Even so, the bitter funding dispute may have created irreconcilable differences.

"We lose credibility with the public and the community when we say, 'This is the number the project will cost,' and then there's a fourfold increase," she said.


Southwest Parkway

Here are answers to common Southwest Parkway questions.

Question: Why did Southwest Parkway construction costs soar to $825 million? The previous estimate was only $300 million.

Answer: The two figures aren't really comparable. The $300 million was a round figure used by the Texas Department of Transportation during a federally mandated environmental review. It's based on the amount of federal money expected to be used in the project.

However, it's easy to understand why the public was confused. Previous cost estimates for the entire project, including the costs of converting it from a freeway to a toll road project, were much lower than $300 million.

Q: What makes Southwest Parkway a tough sell to the North Texas Tollway Authority?

A: Southwest Parkway would be separate from the rest of the Metroplex tollway system, so the tollway authority would have to build a satellite office and maintenance shop in Tarrant County. In addition, it's not as cost-effective as other roads in the tollway system. It would cost more because of its amenities yet handle far less traffic than Dallas-area roads.

Q: Isn't the North Texas Tollway Authority contractually bound to follow through on its 1998 agreement to share the cost of Southwest Parkway?

A: The tollway authority's participation in the project is contingent upon it being financially feasible, according to the agreement. A feasibility study is in progress.

Q: What if the tollway authority says the parkway is not feasible as currently planned?

A: A key new question arises: Will the tollway authority walk away and let the city of Fort Worth and the state Transportation Department try to find a new partner, or stay and try to force the other partners to scale it back?

Tollway authority officials say they've already invested $10 million or more in the project, and were counting upon Southwest Parkway to become part of their regionwide revenue flow. They may ask for a refund.

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