BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1175 (Torlakson)
Hearing Date: 08/24/2009 Amended: 08/19/2009
Consultant: Mark McKenzie Policy Vote: T&H 9-2
_________________________________________________________________
____
BILL SUMMARY: AB 1175 would add the Dumbarton and Antioch
Bridges into the Toll Bridge Seismic Retrofit Program (TBSRP)
and authorize the Bay Area Toll Authority (BATA) to
administratively increase bridge tolls for the purposes of
completing these seismic retrofit improvements, to meet bonding
obligations, and for other uses.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Transfer of contingencyUnknown foregone revenue, potentially
inSpecial*
the tens of millions, in 2013-14
Caltrans/CTC: TBPOC Annual costs of up to $700 annually for
Special**
continued participation in the Oversight
Committee, beginning in 2013-14
Bridge seismic retrofits $950,000 to retrofit the
Antioch and Special**
Dumbarton bridges
Potential mandate unknown, probably minor,
reimbursableGeneral
mandate costs (see staff comments)
____________
* State Highway Account, Motor Vehicle Account by specified
formula.
** Bay Area Toll Account (bridge toll revenues)
_________________________________________________________________
____
STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
The Antioch Bridge was built in 1978 and the Dumbarton Bridge in
1982. These bridges met seismic standards established after the
1971 Sylmar earthquake in Southern California and were
relatively new when the state Toll Bridge Seismic Retrofit
Program was established; neither bridge was included in the
program. Due to findings from subsequent quakes, however,
including Loma Prieta in 1989, Northridge in 1994 and Kobe
(Japan) in 1995, seismic standards now are much higher. A
two-year evaluation conducted by BATA and Caltrans and completed
in December 2008 shows both bridges are seismically deficient by
current standards. The estimated cost of retrofitting both
bridges is $950 million - $637 million for the Dumbarton Bridge
and $313 million for the Antioch Bridge. The current retrofit
strategy for the Dumbarton Bridge includes superstructure and
deck modifications, strengthening of over-land approach slab
structures, and additional structural upgrades. Retrofit work
on the Antioch Bridge includes relatively minor modifications to
the approach structure on Sherman Island, addition of isolation
bearings, and hinge retrofits. Complete plans and
specifications are expected by the end of the year and
advertisement is planned for 2010. The funding source for these
projects is unknown at this time.
Page 2
AB 1175 (Torlakson)
The current TBSRP, established in the wake of the Loma Prieta
earthquake, includes the following state-owned toll bridges:
Benicia-Martinez, Carquinez, Richmond-San Rafael, San
Francisco-Oakland Bay, and San Mateo-Hayward. BATA manages and
invests revenues from all seven bay area toll bridges to fund
the day-to-day operations, facilities maintenance,
administration, and long-term capital improvement and
rehabilitation of the bridges. The long-term capital projects
are funded by Regional Measure (RM) 1 and RM 2, approved by
voters in the seven counties served by the toll bridges. Each
of these regional measures increased the toll by one dollar to
fund the construction of two new bridges and other
transportation projects in the toll bridge corridors. The TBSRP
is also subject to project management and reporting provisions
enacted by AB 144 (Hancock), Chapter 71 of 2005. These
oversight functions are handled by the Toll Bridge Program
Oversight Committee (TBPOC), which is comprised of the executive
director of BATA, the director of Caltrans, and the executive
director of the California Transportation Commission (CTC). The
committee reports quarterly to the Legislature and the CTC.
AB 1175 would add the Antioch and Dumbarton Bridges to the
TBSRP, including all project management and oversight
provisions. This bill would also:
Direct the State Controller to collect unpaid bridge tolls,
high-occupancy toll (HOT) lane fees, and any relevant
interest, penalties, fines, or other charges from money owed a
person or entity from state income tax refunds or State
Lottery winnings.
Transfer all cost overrun savings remaining upon completion of
the existing TBSRP to the Bay Area Toll Account for
expenditure on the Antioch and Dumbarton Bridge seismic
retrofit projects. Current law requires any remaining funds
be returned to the state and BATA, pursuant to a specified
formula.
Require BATA to provide all other funds to complete seismic
safety retrofit projects on these two bridges.
Authorize BATA to increase the amount of tolls collected on
the seven state-owned San Francisco Bay Area toll bridges in
order to fund the Antioch and Dumbarton projects, to meet bond
obligations, and to meet other statutory obligations. BATA
could raise tolls after holding a public hearing an providing
30 days notice to the Legislature.
Authorize BATA to vary the toll structure on each bridge,
provide for a cash-based account for toll payment, and provide
a discount for high-occupancy vehicle lanes. The bill
prohibits BATA from reducing tolls to encourage electronic
toll payment.
Continuously appropriate funds paid to Caltrans by BATA for
planning, design, construction, operation, maintenance,
repair, replacement, rehabilitation, and seismic retrofit of
state-owned toll bridges pursuant to the TBSRP or other
programs.
Eliminate the three-year time constraint for use of $20
million in RM 2 funds for TransLink, a smart card system for
use on Bay Area transit systems.
Authorize BATA to contribute to the Metropolitan
Transportation Commission (MTC), without limitations, in the
form of personnel services, office space, and funding.
Require BATA to contract with an independent entity with
specified privacy expertise to conduct a review and analysis
of privacy issues associated with its electronic toll payment
collection system, and report to the Legislature by January
31, 2011.
Page 3
AB 1175 (Torlakson)
The TBPOC reports, in its Second Quarter 2009 Project Progress
and Financial Update, that the current TBSRP continues to
encounter cost and schedule challenges, including steel
fabrication challenges and project progress issues. Of the
original $900 million contingency that was built into the TBSRP,
$689.7 million remains. While it is expected that the reserve
will continue to decline based upon schedule and cost
uncertainty, the risk management process forecasts that there is
a 50% probability that about $85 million of the contingency
funding will remain when the current TBSRP is complete at the
end of 2013. Under existing law, the remaining funds would be
shared between the state and BATA based on a statutory formula.
The state portion of these funds would be split between the
State Highway Account, Motor Vehicle Account, and State Highway
Operations and Protection Program (SHOPP) funds, as specified.
This bill would instead require any remaining reserve funds to
be transferred to the Bay Area Toll Account for use on Antioch
and Dumbarton Bridge seismic retrofit projects, resulting in
foregone revenues of potentially tens of millions of dollars to
specified state funds.
The latest TBPOC quarterly report also indicates that program
costs related to the functions, support, and monthly and
quarterly reporting of the TBPOC from July 1, 2005 through June
30, 2009 totaled $6.5 million, of which $2.8 million is
attributable to CTC and Caltrans expenses. By including the
Dumbarton and Antioch Bridges into the TBSRP, these expenses are
expected to continue beyond 2013-14. Based on the historical
costs related to the TBPOC, staff estimates Caltrans and CTC
expenses would continue at approximately $700,000 annually until
the completion of the Dumbarton and Antioch Bridge seismic
retrofit projects. Staff notes that costs incurred by CTC and
Caltrans are reimbursed from bridge toll revenues.
This bill would create substantial pressures on bridge toll
revenues by adding the Dumbarton and Antioch Bridges to the
TBSRP and continuing the oversight functions of the TBPOC. The
bill does provide authority to BATA to increase the tolls and
vary the toll amounts on each bridge. Staff notes that Fitch
Ratings, while noting very strong overall credit quality,
recently adjusted the rating outlook on BATA toll bridge revenue
bonds from stable to negative, noting the likely addition of
$950 million in capital needs associated with the inclusion of
the Antioch and Dumbarton Bridges into the TBSRP, and the
potential to fund other non-system needs, such as a regional
plan to construct and operate a HOT lane network (as envisioned
in AB 744 (Torrico), which is scheduled for hearing in this
Committee). Considering these pressures, it is conceivable that
BATA would seek to raise bridge tolls in the near term.
AB 1175 also requires BATA to contract with an independent
entity to conduct a study on privacy issues related to current
forms of electronic toll payment collection systems and report
to the Legislature's transportation policy committees by January
31, 2011. This new duty would impose a reimbursable
state-mandated local program. Costs associated with this study
are unknown, but potentially in the range of $50,000 to
$100,000. Since this new duty would be imposed on the sponsors
of the bill, staff recommends that the bill be amended to
include "local request disclaimer" language, if BATA agrees to
provide written assurance that it will not seek reimbursement
for any costs associated with the mandated reporting
requirement.