DENVER — — Lawmakers will not get the 60-day period they asked for to review a controversial contract with a private firm to operate and maintain the Boulder Turnpike for the next 50 years, Colorado Department of Transportation Director Don Hunt said Thursday.
“The project is too important to delay the close and to accept the risk that would come with a 60-day delay,” Hunt said outside a committee hearing room in the state Capitol shortly after testifying before the Joint Transportation Committee about a public-private partnership agreement CDOT is getting ready to finalize with Plenary Roads Denver.
Hunt said investors are lined up and bond buyers are ready to purchase the debt to finance the road-widening effort on U.S. 36 between Denver and Boulder, in which a managed toll lane will be added to the two general purpose lanes already running in each direction.
To send a signal at this point that the process might not move ahead on schedule, Hunt said, could jeopardize the $425 million project.
“It’s ready to close in the next two weeks,” he said firmly.
But not before a crowd of hundreds turned out in Louisville Thursday night for the second of two town hall meetings on the contract. Turnout was anticipated to be so large that CDOT moved the meeting location to the 128,000-square-foot vacant Sam’s Club building at 550 S. McCaslin Boulevard.
On Wednesday evening in Westminster, a boisterous crowd shouted at and jeered CDOT officials, attacking the agency for striking a deal with Plenary, a multinational six-company consortium. They claimed the deal effectively privatizes the 63-year-old highway and funnels billions of dollars of toll revenues into the coffers of a private entity.
They also criticized CDOT for not revealing details of the contract before it is finalized, and only releasing a summary of it when pressured. CDOT has refused to publicize the entire 600-page contract based on the assertion it contains proprietary financial information.
‘We can do better’
At the state Capitol Thursday, CDOT officials got the chance to defend the contract in front of the joint transportation committee and expound on what they say is the critical role public-private partnerships play in a time of constrained budgets.
They were joined by several prominent former and current public officials — including Boulder Mayor Matt Appelbaum, former Boulder County Commissioner Will Toor and former Broomfield Mayor Pat Quinn — who said the arrangement with Plenary is sound and well structured even if the effort to explain it to the public wasn’t.
Hunt acknowledged that CDOT did not do a good job communicating with the public about what the contract with Plenary means. An online petition, at change.org, requesting that state lawmakers get a chance to review the U.S. 36 contract before it closes had gathered nearly 20,000 signatures as of late Thursday.
“We wouldn’t be here today if we had done a good job on public outreach,” Hunt said. “We can do better.”
He told the committee that public-private partnerships are vital in an economic environment where CDOT has had to fall back to a “maintenance budget” because it’s not getting general funds anymore.
At the same time, he said, the gas tax hasn’t been increased in more than 20 years. CDOT relies on the tax to fund road construction and maintenance projects throughout the state.
“We need use the private sector to leverage projects faster and more efficiently,” Hunt said of public-private partnerships, or P3s.
And improvements to U.S. 36 would have been delayed for 20 years had CDOT, through its subsidiary High-Performance Transportation Enterprise, not been able to cobble together a deal that transfers much of the financing responsibility and project risk to the private sector.
The U.S. 36 Managed Lanes project is the first P3 for CDOT. Approximately $60 billion in transportation P3s have been completed in the United States in the last two decades, according to the National Council of State Legislatures.
Mike Cheroutes, director of the High-Performance Transportation Enterprise, told lawmakers that a lot of misinformation has been put out about the contract with Plenary. He said the document was hammered out over many months, with stakeholders from various state agencies and consultants involved to make sure everyone’s interests are protected.
Cheroutes said U.S. 36 will not belong to Plenary, the firm will not be able to raise toll prices whenever it wants, state employees will not lose their jobs, there is no non-compete clause disallowing CDOT from building other roads near the highway, and taxpayers won’t be harmed if toll revenue projections fall short.
“We have continuing oversight abilities,” he said.
‘Well written’ contract
CDOT got some assistance at the committee hearing from Toor, who for decades has worked on mobility improvement on U.S. 36. The former mayor of Boulder criticized the agency for not sharing details of the contract earlier, but he said the managed lanes project was heavily studied over the last decade and determined to be the best way to relieve congestion in the corridor.
It will provide riders of bus rapid transit a 24-minute savings over a car traveling in the free, general purpose lanes at rush hour between Denver and Boulder by 2035, Toor said.
He also addressed the controversial plan by CDOT to increase the threshold for high-occupancy vehicles starting in 2017 from two occupants to three – known as HOV3. The idea ran up against a lot of resistance among local officials, he said, but in the end it was determined that the priority was to ensure that the managed lanes move quickly, especially when it comes to bus service.
And raising the threshhold for high-occupancy vehicles made the financial math work for the project.
“We didn’t love it but we were willing to support it,” Toor said.
Critics have said moving to HOV3 will dramatically discourage carpooling due to the difficulty of coordinating schedules with a third person.
Toor told the joint committee that he is generally comfortable with what he knows about the agreement between Plenary and the state and said it’s an effective way to move the project forward in the face of what was a glaring “financing gap” to getting the western portion of the road to Boulder completed.
“We don’t want to see the U.S. 36 project stalled, we want to see it completed,” he said.
Appelbaum said government enters into contracts with the private sector all the time, citing a third party’s running of the Dushanbe Tea House in Boulder as an example.
“It’s done in order to make something happen that wouldn’t happen otherwise,” he said.
Compared to a lot of public-private agreements he’s familiar with, Appelbaum said, the one between CDOT and Plenary Roads Denver “is very well written.”
Audrey DeBarros, executive director of 36 Commuting Solutions, said it’s critical that the managed lanes project be completed successfully and bus rapid transit service along the corridor launch in 2016 as planned.
She said the Regional Transportation District has already shown P3 projects — light rail to DIA, the Gold Line to Arvada and the first segment of Northwest Rail to Westminster — to be viable undertakings in the state.
‘Problematic for generations’
But Sen. Matt Jones, D-Louisville, who sits on the committee and is one of 14 legislators who penned a letter to CDOT asking for time to review the contract before it is finalized, said what had been a very open process regarding the planned improvements on U.S. 36 suddenly “veered into quiet land” when it came time to talk about the financing aspects of the project.
He said it’s not even clear to him that CDOT couldn’t have come up with the money for the second phase of the 18-mile project rather than handing over operational control to a private entity.
Jones praised the myriad of local public officials who over the past decade or so put together the plan to reconstruct U.S. 36, but he said the final steps in the process have been messy and unnecessarily so.
“Local officials have done a great job, but it’s this last piece of it that is problematic and it will be problematic for generations,” he said.
Contact Camera Staff Writer John Aguilar at 303-473-1389 or aguilarj@dailycamera.com
