appendix a crc financial plan

8/7/2019 Appendix a CRC Financial Plan

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Costs, Benefits andFinancial Feasibility

Preliminary Results

June 17, 2010



Analysis Components

2



Agenda

• Cost and schedule estimates from latest CEVP• Assumptions

• Key cost and schedule risks

• Summary of results

• Project Worthiness

• Modeling assumptions

• Summary of results

• Financial Feasibility Analysis

• Tolling Analysis:• Modeling assumptions

• Traffic and revenue projections

• Key risks and issues• Financial Model

• Modeling assumptions

• Financial feasibility

3



Scenarios under Consideration

LPA (Full Build)• New crossing over Columbia River

• I-5 highway improvements,including 7 interchanges, north

and south of river• Extension of light rail from Expo

Center in Portland to Clark Collegein Vancouver, with associatedtransit improvements

• Bicycle and pedestrian

improvements throughout projectcorridor

• System and demandmanagement, including toll

LPA Phase 1

• Most project elements built inPhase 1

• Some construction deferred:

• I-5 braided on- and off-ramps at Victory Boulevard

• Marine Drive interchange flyover

• Northern half of the I-5/SR 500interchange

• New crossing striped for 10highway lanes rather than 12

4



Cost Risk Assessment Objectives

Encouraging pro-activity and early planning

Building confidence and credibility in project’s plansand estimates

Developing targeted mitigation strategies for allanticipated threats

Better allocation of risks and identification of projectdelivery methods

Ensuring transparency, integrity, and accountabilitythroughout the life-cycle of the project

Maximizing the Likelihood of Meeting On-Time, On-Budget Goals



Cost Estimate Validation Process (CEVP)

• Process overview:

• Review of base schedule and base cost estimates

• Quantification of uncertainties

• Identification and quantification of project-type risks

• Events occurring in planning, design, bidding, construction and changed conditions• Political, management continuity and “Acts of God” generally not considered

• Identification of mitigation strategies

• Risk tracking and updates

• Outcomes:

• A “snapshot in time” • Probability distributions for project completion date and project cost

• Ranking of quantified risks

6



Project Flowchart, LPA Full Build

7



Base Cost

Estimates

# DESCRIPTION LPA FULL BUILD LPA Phase 1

1 Prepare & Publish FEIS $3,000,000 $3,000,000

2 PE - Highway and Columbia River Bridges $45,930,366 $41,372,990

3 FTA Pre-PE Review $862,236 $862,236

5 Transit Modeling and 15% PE $2,586,708 $2,586,708

6 Pre-ROD Environmental Permitting $9,725,455 $8,965,892

7 Review for ROD $600,000 $600,0009a ROW - Highway and Columbia River Bridges $77,894,270 $77,894,270

9b Agreements $200,000 $200,000

10a PS&E - Highway and Columbia River Bridges $103,264,187 $94,130,309

10b PS&E - Transit $20,392,172 $20,392,172

11 ROW - Transit $31,345,260 $31,345,260

12a PE - Transit $5,173,415 $5,173,415

13 Post-ROD Environmental Permitting $9,725,455 $8,965,892

14 A/B/A - Bridges and SR 14 & Hayden Island Interchanges $4,500,000 $4,500,000

15 Construction - Columbia River Bridges $521,864,398 $496,986,647

16 Construction - SR 14 Interchange, Stage 1 to 3 $187,708,200 $186,978,653

17 Construction - Hayden Island Interchange, Stage 1 to 3 $227,359,733 $204,343,675

18 Advertise/Bid/Award - Transit $1,500,000 $1,500,000

19 Procurement - LRVs $84,162,400 $84,162,400

20 Construction - Transit, Oregon $105,027,492 $105,106,549

21 Construction - Transit, Washington $236,674,435 $236,852,586

22 Advertise/Bid/Award - Marine Drive Interchange $1,500,000 $1,500,000

23 Advertise/Bid/Award - Mill Plain Interchange $1,500,000 $1,500,000

24 Advertise/Bid/Award - Fourth Plain Interchange $1,500,000 $1,500,000

25 Advertise/Bid/Award - SR 500 Interchange $1,500,000 $0

26 Construction - Columbia River Bridges $57,984,933 $55,220,739

28 A/B/A - Demolish Existing Columbia River Bridges $500,000 $500,00029 Construction - SR 14 Interchange, Stage 4 to 7 $143,559,194 $142,829,647

30a Construction - Hayden Island Interchange, Stage 4 to 7 $172,886,815 $155,749,677

31 Construction - Marine Drive Interchange $262,116,682 $234,979,929

32 Construction - Mill Plain Interchange $44,341,605 $44,224,400

33 Construction - Fourth Plain Interchange $79,611,308 $79,400,877

34 Construction - SR 500 Interchange $79,048,170 $5,367,548

35 Construction - Columbia River Bridges, LRT $7,352,295 $7,352,295

36 Construction - Demolish Existing Columbia River Bridges $49,789,739 $49,789,739

37 Construction - Transit, Burn $2,636,667 $2,636,667

TOTAL PROJECT BASE COST $2,585,323,590 $2,398,471,172

8



Build-Up of LPA Phase 1 Cost Curve

9

LPA Phase 1 Scenario Costs by Category and Probability of NOT Exceeding (Millions $'s)

Cost Curve Build-UpCategory

Effect 10% 20% 30% 40% 50% 60% 70% 80% 90%

Base Cost EstimateProject Base Costwithout Risk or

Escalation$2,398 $2,398 $2,398 $2,398 $2,398 $2,398 $2,398 $2,398 $2,398

Base Costs + Budget UncertaintyBase Costs Budget

Uncertainty Effect

$1,971 $2,106 $2,210 $2,297 $2,376 $2,452 $2,534 $2,631 $2,758

Base Costs + Budget Uncertainty+ Escalation (Base Schedule)

Escalation Effect toBase Schedule

$2,281 $2,438 $2,558 $2,660 $2,751 $2,840 $2,935 $3,048 $3,195

Base Costs + Budget Uncertainty+ Escalation (Risk Adjusted

Schedule)

Escalation Effectdue to Schedule

Event Risks$2,309 $2,471 $2,595 $2,699 $2,789 $2,877 $2,977 $3,087 $3,240


Schedule) + Event Risks

Cost Impact due toCost Event Risks

$2,532 $2,690 $2,811 $2,918 $3,016 $3,109 $3,205 $3,322 $3,479

Base Costs + Budget Uncertainty+ Escalation (Risk AdjustedSchedule) + Event Risks + Additional Support Costs

Cost Impact due to Additional Support

Costs due toExtended Overhead

Costs

$2,604 $2,763 $2,883 $2,992 $3,088 $3,184 $3,283 $3,400 $3,554



Probabilistic LPA Phase 1 Cost

10



Build-Up of LPA Full Build Cost Curve

11

LPA Scenario Costs by Category and Probability of NOT Exceeding (Millions $'s)

Cost Curve Build-UpCategory

Effect 10% 20% 30% 40% 50% 60% 70% 80% 90%

Base Cost EstimateProject Base Costwithout Risk or

Escalation$2,585 $2,585 $2,585 $2,585 $2,585 $2,585 $2,585 $2,585 $2,585

Base Costs + Budget UncertaintyBase Costs Budget

Uncertainty Effect

$2,119 $2,265 $2,378 $2,472 $2,557 $2,640 $2,728 $2,833 $2,969

Base Costs + Budget Uncertainty+ Escalation (Base Schedule)

Escalation Effect toBase Schedule

$2,453 $2,623 $2,754 $2,864 $2,963 $3,059 $3,162 $3,283 $3,442


Schedule)

Escalation Effectdue to Schedule

Event Risks$2,483 $2,657 $2,792 $2,905 $3,003 $3,099 $3,206 $3,324 $3,489


Schedule) + Event Risks

Cost Impact due toCost Event Risks

$2,708 $2,877 $3,008 $3,128 $3,228 $3,330 $3,434 $3,558 $3,723

Base Costs + Budget Uncertainty+ Escalation (Risk AdjustedSchedule) + Event Risks + Additional Support Costs

Cost Impact due to Additional Support

Costs due toExtended Overhead

Costs

$2,775 $2,943 $3,072 $3,190 $3,295 $3,400 $3,503 $3,626 $3,793



Probabilistic LPA Full Build Cost

12



Tornado Chart – Top Risks Impacting Cost

Estimates – LPA Scenario

13

Notes: The numbers in parentheses following the risk description identify which flow chart activities each risk can affect.

Costs presented are the average or expected value impacts, these values compare closely to 50

th

percentile costs.

Principal Cost Risks



Probabilistic LPA Phase 1 Completion Date

14



Probabilistic LPA Full Build Completion Date

15



Tornado Chart – Top Risks Impacting

Schedule Estimates – LPA Scenario

16

Notes: The numbers in parentheses following the risk description identify which flow chart activities each risk can affect.Delays presented are the average or expected value impacts, these values compare closely to 50th percentile delays.

Principal Schedule Risks



Summary of CEVP Results

17

Scenario

Total Cost (millions of YOE dollars)

Lower 10% Median60%

Likelihood90%

Likelihood

LPA Phase 1 $2,604 $3,088 $3,184 $3,554

LPA Full Build $2,775 $3,295 $3,400 $3,793

Scenario

Completion Date

Lower 10% Median60%

Likelihood

90%

Likelihood

LPA Phase 1 Jun-2019 Feb-2020 Apr-2020 Jan-2021

LPA Full Build Oct-2019 May-2020 July-2020 Feb-2021

Financial Model

Inputs



Project

WorthinessCost Benefit Analysis

18



Measuring Project Objectives

• The CRC project is focused on addressing6 problems identified in the I-5 corridorwhile meeting community needs andminimizing impacts:

• Safety and vulnerability to collisions

• Growing travel demand and congestion

• Impaired freight movement

• Limited public transportation operation,

connectivity and reliability• Substandard pedestrian and bicycle

facilities

• Seismic vulnerability

19



Benefit-Cost Analysis Principles

• Evaluates the effects of a project or policy on people’squality of life (social welfare)

• Considers a net increase in welfare as a good thing, even

if some groups within society lose out

• Focuses on “monetized” costs and benefits

• not all effects can be quantified

• not all quantifiable effects can be monetized

• Benefits and costs are measured by how individuals valuethem (willingness-to-pay)

20



Categories and Distribution of Benefits

CATEGORY

OF BENEFITS

DISTRIBUTION OF BENEFITS

Transit Customer Benefits Highway User BenefitsCommunity and

Neighborhood Benefits

CongestionManagementBenefits

Value of travel time savings to transit users.

Value of travel time savings to highway users.

Value of improvements in region-wide reductions in vehicle operating costs and improvements in air quality and transportation safety.

MobilityBenefits

Value of transit to low income users as an alternative to less affordable or unaffordable transportation.

Value of cross-sector benefits and burdens on home-based social services.

Value of reduced pockets of structural unemployment and improved welfare-to-work mobility.

CommunityDevelopmentBenefits

Value of transit-oriented development, including shorter trip lengths and lower auto dependence.

Value of neighborhood economic development and amenity in relation to both residential and mixed use land uses.

Value reduced auto- dependence and lower total vehicle miles of travel.



Average Speed and Travel Time Savings for Auto Trips along I-5

22

Average Auto Speed in Peak Period(miles per hour) 2020 2030 2040

Base 24.2 21.7 15.4

LPA Full Build 34.2 29.8 21.2

LPA Phase 1 34.2 29.8 21.2

Average Time Savings per Auto Trip in Peak

Period (minutes)

2020 2030 2040

LPA Full Build 11.7 12.1 17.3

LPA Phase 1 11.6 12.0 17.2

Average Time Savings per Auto Trip ($2009) 2020 2030 2040

LPA Full Build $2.86 $2.95 $4.23

LPA Phase 1 $2.85 $2.94 $4.22

Note: The Average trip length is 16.1 miles , and the value of time is $18. Value of Time is based on the 2005 Oregon DOT study, The Value of Travel-Time: Estimates of the Hourly Value of Time for Vehicles in Oregon.



Average Saving per Driver (Commuter)

using the New Columbia River Crossing

23

Note: All monetary values are expressed in 2009 dollars. * Assuming 500 one-way commuting trips per year.

LPA Full Build

Average Savingper One-Way Trip

Annual Savingper Commuter *

In 2020 In 2040 In 2020 In 2040

Out-of-Pocket Cost Saving(fuel, oil, vehicle depreciation, etc.)

$0.51 $0.62 $257 $311

Travel Time Saving(at average value of time)

$2.86 $4.23 $1,428 $2,114

Total Saving $3.37 $4.85 $1,685 $2,425



Average Saving per Low-Income Rider

24

2020 2040

Number of Low Income Ridersduring Peak Period, trips/day 1,810 3,210

Average Annual Saving in TransportationCosts per Low Income Household, $/year *

$1,880 $4,510

Note: All monetary values are expressed in 2009 dollars. * Assuming 500 one-way commuting trips per year.



Expected Uplift in Property Values

25

ResidentialProperties

CommercialProperties

Estimated Number of Properties in Vicinity of LRT Stations (within 3 blocks) 2,450 1,950

Average Increase in Property Value Due toTransit, $ per property

$10,740 $83,260

Average Percentage Increase in Property Value

+7% +18%



Summary of BCA Output

26

Categories of Benefits & Costs LPA Full Build LPA Phase 1

Affordable Mobility Value to Low Income Households $128.4 $136.4

Cross Sector Benefits $8.6 $8.6Total Affordable Mobility $137.0 $145.0Economic Development

Residential Development $26.2 $26.2Commercial Development $161.8 $161.8

Total Economic Development $188.0 $188.0Congestion Management

Travel Time Savings $2,365.8 $2,357.8 Accident Cost Savings $470.5 $472.7

Vehicle Operating Cost Savings $368.5 $344.8Emission Cost Savings $11.3 $11.8Total Congestion Management $3,216.1 $3,187.1Salvage Value $574.7 $538.8Bridge Lift Time Savings $94.4 $94.4Grand Total Benefits $4,210.2 $4,153.3

Project CostsCapital Costs $2,258.1 $2,117.1Operation and Maintenance Costs -$67.3 -$67.3

Disruption Costs $44.6 $44.2Total Project Costs $2,235.4 $2,094.0

Net Present Value $1,974.9 $2,059.4Benefit/Cost Ratio 1.9 2.0Internal Rate of Return, % 4.36% 4.46%

Mean Expected outcomes over 30 years of operation; 2.8% real discount rate Note: All monetary values are expressed in millions of 2009 dollars



Net Present Value

27

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

($4,000.0) ($2,000.0) $0.0 $2,000.0 $4,000.0 $6,000.0 $8,000.0 $10,000.0

P r o b a b i l i t y

o f N o t E x c e e d i n g

Net Present Value, Millions of 2009 Dollars

LPA LPA Phase 1

Over 80%probability of

breaking even



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

(2.00) (1.00) 0.00 1.00 2.00 3.00 4.00 5.00 6.00

P r o b a b i l i t y o

f N o t E x c e e d i n g

Benefit-Cost Ratio

LPA LPA Phase 1

Benefit/Cost Ratio

28

Over 80%probability of

breaking even



Financial Feasibility Analysis



Financial Analysis and Planning

• Project Revenues

• Toll Bond Proceeds

• Federal Discretionary Highway Funds

• Oregon and Washington Highway Funds• FTA Section 5309 New Starts Funds

• Project Costs:

• Capital Costs (CEVP©)• O&M Costs

30



Tolling Analysis Assumptions(December 2009)

• New bridge would open for toll revenue operations on July 1, 2018

• Ramp-up factor of 85% applied in first year and 95% applied in second year

• with both I-5 and I-205 tolled: 95% in first year and 97.5% in second

• 100% electronic toll collection, with no cash alternative:

• user account (transponder) or license plate list-based payment (pay-by-plate)

• transponder penetration starts at 71% and increases 2% per year to 85% max

• pay-by-plate surcharge to recover cost:

• $1.22 per transaction (in 2018 $) if I-5 only tolled

• $1.15 (in 2018 $) per transaction if I-5 and I-205 tolled

• Gross revenue reduced by 4.5% in first year and 3.45% every year thereafterto account for bank card / credit card fees

• 5% of tolls uncollectable (e.g., violations, delinquent accounts)

31



• Traffic projections developed for two years only

• 2015 and 2030

• Intermediate years obtained by linear interpolation

• Use of two modeling approaches

• METRO regional travel demand model

• Post-processing model

• Toll modeled as “equivalent” increase in travel time• Value of time held constant in real terms between 2015

and 2030

32

Toll Modeling Assumptions(December 2009)



Alternative Tolling Scenarios(December 2009)

• For all scenarios:

• Tolls are in $2006

• Tolls are for vehicles withtransponders or registeredlicense plates

• Medium and large trucks paytolls 2X and 4X passenger cartoll rates, respectively

• Surcharge for “pay-by-plate”,where applicable

• Tolls increase by 2.5% peryear (constant in real terms)

33

Source: 3.0-Rep-AF3007-10-01-01.toll_scenario_funding_report.pdf



Toll Elasticities

34

Estimated Implied Elasticities by Scenario

Tolling of I-5 Only Elasticity

Lower than DEIS Toll Rates on I-5 Bridge Only Base case

Flat Toll Rate on I-5 Bridge Only -0.28

DEIS With Additional Price Points -0.52

1.5*DEIS Tolls Rates on I-5 Only -0.38

2*DEIS on I-5 Only -0.35

3*DEIS on I-5 Only -0.32

DEIS Rates on I-5 and I-205 Bridges 0.00

Tolling of I-5 and I-205

Lower than DEIS Toll Rates on I-5 and I-205 Bridges Base case

DEIS Toll Rates on I-5 Bridge and Lower I-205 Toll -0.20

User Input % Deviation from peak DEIS Toll 0.00

* Using Post-Processing Model Data

Bridge and Tunnel Elasticities From Other Studies

Toll Road / Type of Toll Road Elasticity Low High Source

Bridges-0.15 -0.31

Wuestefel and Regan (1981), 16 Tolled infrastructures in U.S.

(roads, dridges, and tunnels)

Bridge - Peak -0.21 -0.36

Bridge - Off-Peak -0.14 -0.29

Bridges-0.05 -0.15

Harvey(1994), Golden Gate Bridge, San Francisco Bay Bridge,

and Everett Turnpike in New Hampshire (U.S.)

Bridges and Tunnels

-0.25 -0.01 -0.50

Hirschman, McNight, Paaswell, Pucher, and Berechman (1995),

Six bridges and two tunnels in the New York City area, U.S.

Henry Hudson Bridge - Passenger Cars -0.50

Verrazano Bridge - Passenger Cars -0.10

Brooklyn Battery - Tunnel - Light Trucks -0.54

Queens Midtown Tunnel - Light Trucks -0.45

Triboro Manhattan Plaza - Light Trucks -0.07

White-Stone Bridge - Light Trucks -0.13

Throg's Neck Bridge - Light Trucks -0.12

Verrazano Bridge - Light Trucks -0.17

Brooklyn Battery - Tunnel - Heavy Trucks -0.60

Hirschman, McNight, Pucher (1994), Bridge and tunnel toll

elasticities in New York

White (1984), quoted in Oum et al. (1992), Bridge in

Southampton, UK



Summary of Traffic & Revenue Projections

35

Toll Scenario

In 2015 In 2030

I-5 Volume

I-205 Volume

TotalRevenue

I-5 Volume

I-205 Volume

TotalRevenue

T o l l i n g

I - 5

O n l y

DEIS Toll Rate 133.4 205.6 $337.0 170.6 234.6 $625.4

Lower than DEIS Toll Rate 143.6 198.6 $293.5 180.4 227.6 $533.4

Flat Toll Rate 129.8 201.4 $329.5 166.2 229.6 $609.9

Additional Price Points 126.2 210.4 $356.0 163.4 239.2 $668.0

1.5*DEIS Toll Rate 105.6 220.0 $395.4 142.0 247.4 $773.8

2*DEIS Toll Rate 80.6 231.0 $397.7 116.2 257.4 $837.9

3*DEIS Toll Rate 41.4 243.6 $288.3 74.8 269.0 $783.2

T o l l i n g

I - 5

a n d

I - 2 0

5 DEIS Toll Rate 174.0 148.2 $802.9 210.2 178.0 $1401.9

Lower than DEIS Toll Rate 176.4 151.0 $652.6 213.0 181.2 $1139.1

Lower I-205 Toll 167.0 157.8 $731.1 203.2 188.0 $1,277.0

Source: Columbia River Crossing, Description of Revised Toll Model and Traffic and Gross Revenue Projections for Tolling Scenarios, January 2010.Notes: Traffic in thousands of trips; toll revenues in thousands of dollars. Traffic estimates from METRO’s Regional Travel Demand Model.



Revenue Projections

36



Financial Feasibility



Financial Planning Framework

38

60% CostEstimates a

PNSFederalFunding

ODOT

Funding90% CostEstimates

New StartsFederalFunding

WSDOTFunding

VariousTolling

Scenarios

Project

Schedule

Financial Feasibility(i.e. shortage/Surplus,

Debt Service Coverage)

Potential Revenues



Allocated Funds

39

Existing Funds By Source (In Millions)

ODOTFunding

JTA $30.0

WDOTFunding

TPA $50.0

Federal InterstateMaintenance

$1.0 FY 2010 IMD Funds $2.0

FY09 IMD Funds $3.3 FY 2009 IMD Funds $1.3

FY08 IMD Funds $0.7 SAFETEA-LU $9.5

FY07 IMD: Corridors of the Future

$15.0State MatchingFunds

$0.1

SAFETEA-LU $5.6 Federal Earmarks $5.0

OTIA III $5.0

ODOT $4.6

H.J. Res 2 $1.3

EARMARK Bill 3058 $0.8

Total $67.3 $67.9



Scenarios Considered in the Financial Model

40

Source: 3.0-Rep-AF3007-10-01-01.toll_scenario_funding_report.pdfNote: * Tolls are in 2010 dollars (growing at 2.5% annually). For example, a $2.00 in 2006 dollars is $2.21 in 2010.The range reflects the lowest and highest rates per time of the day.

DescriptionToll

Collection

1A DEIS tolls $1.10 / $2.21 Each Way

1B Lower than DEIS $1.10 / $1.66 Each Way

1C Fixed-rate equivalent to DEIS tolls (flat toll) Each Way

1D Additional Price Points $1.10 / $2.76 Each Way

1E 1.5 X DEIS tolls $1.66 / $3.31 Each Way

One-way Toll

Rate Range *

T o l l s o n I - 5 O n l y

$1.82

Scenarios



Finance Plan Implementation Schedule

41

Activity Date

Start Right-of-Way Acquisition January-11

Washington Legislative Approval Committing State Funds June-11

Washington Legislative Approval Authorizing Tolling for the CRC Project June-11

Oregon Legislative Approval Committing State Funds June-11

Federal Transportation Reauthorization Enacted making Highway Discretionary Funds Available (1) October-11Bridge Construction Contract Executed September-12

FTA Approval of Full Funding Grant Agreement Committing Section 5309 New Starts Funds (2) September-13

New Bridge Fully Open/Start Tolling July-18

Light Rail Construction Complete/Service Starts September-18(1) Highway discretionary funding may come in form of a congressional earmark and/or approval of an administrative programfor which the CRC project is eligible.

(2) Assumes sufficient local funding commitments are in place to secure FTA approval to enter Final Design in November 2011.



Expenditure Plan(December 2009)

42

Phase I: MediumThrough

20102011 2012 2013 2014 2015 2016 2017 2018 2019 TOTAL

Highway AA, DEIS, Eng.

Construction$93.5 $33.9 $121.3 $210.3 $445.9 $485.6 $453.8 $232.1 $213.4 $70.8 $2,360.6

Transit PE, Design and

Construction$5.9 $7.5 $12.8 $21.0 $74.8 $234.5 $223.5 $168.5 $37.9 $786.4

Total Design and Construction $99.4 $41.4 $134.1 $231.3 $520.7 $720.1 $677.3 $400.6 $251.3 $70.8 $3,147.0

Phase I: HighThrough

20102011 2012 2013 2014 2015 2016 2017 2018 2019 TOTAL

Highway AA, DEIS, Eng.

Construction$98.1 $38.7 $136.7 $235.6 $499.5 $543.9 $508.3 $260.4 $239.5 $79.6 $2,640.3

Transit PE, Design and

Construction$6.6 $8.4 $14.3 $23.5 $83.6 $262.3 $250.0 $188.5 $42.4 $879.6

Total Design and Construction $104.7 $47.1 $151.0 $259.1 $583.1 $806.2 $758.3 $448.9 $281.9 $79.6 $3,519.9



Anticipated Funding - Phase 1 In Millions of Dollars (December 2009)

43

New Starts Assumes full FTA New Starts request granted.CRC may fulfill FTA local match requirements using local highwayexpenditures, per Congressional action.

$850

Projects of National Significance Additional funding above and beyond existing allocations. Assumedlikely based on scope of CRC project and historical success in

securing Federal discretionary funding.

$400

Additional WSDOT/ODOT Funding$50M in existing funding, $90M in total allocations, less $40Mexpended. Assumes additional funding generated from both DOTs.

$750-$850

Pre-Completion Toll Proceeds

Assumes pre-completion tolling of I-5, generating about $40M peryear for 5 years.

$0-$200

Bond Proceeds $803-$1,466



• Interim financing money is used to fund cash-flow needs before bonds are issued starting

in 2015 to replace it.• Adds to total financing cost, but is necessary to bridge gap between early expenditures on

construction (and related interest on borrowings) and later receipt of project revenues.

• Bonds are issued in five consecutive years (2015-2019) and repayment of principal canstart as early as 2020.

• IRS requires a “reasonable expectation” that bond proceeds be spent within three to five years, soa series of issuances is likely to be required. Multiple closing may add to total financing costs.

• Sinking fund payments are mandatory and there is no return on these reserve funds. DebtService structure with repayment of principal is recommended to reduce interest payments.

• Interest costs can be managed through the issuance of “serialized” bonds with principal andinterest payments in each year.

• Target debt service coverage ratio (DSCR) of at least 1.25.

• DSCR of 1.25 on median traffic forecast for a Brownfield facility considered moderate assumption.

• All scenarios tested using 90% cost estimate (high estimate) and 60% toll revenueestimate (low estimate).

• Interest rate assumptions are: 6% on bonds and 7% on interim financing. Bondunderwriting costs are assumed to be 6.5% of the issue amount.

44

Analytical Assumptions



Scenario 1A: DEIS Toll Rates on I-5LPA Phase I Option

45

Capital Cost (In Millions of US$) Phase I: 60% Phase I: 90% Phase I: 60% Phase I: 90%

Construction & Design $3,147 $3,520 $3,147 $3,520

Finance Interim Costs $90 $80 $90 $80

Total Cost $3,237 $3,600 $3,237 $3,600

Revenue Source (In Millions of US$)Net Toll Bond Proceeds $803 $1,166 $1,103 $1,466

Pre-Completion Toll Revenues $200 $200 $0 $0

Interim Financing

Federal: Discretionary Highway: Existing $44 $44 $44 $44

Federal: Discretionary Highway: Addition $400 $400 $400 $400

ODOT/WSDOT Highway Funds: Existing $90 $90 $90 $90

ODOT/WSDOT Highway Funds: Additiona $850 $850 $750 $750

FTA Section 5309 New Starts $850 $850 $850 $850

Total Revenues $3,237 $3,600 $3,237 $3,600

Pre-completion Tolling No Pre-completion Tolling



46

Capital Cost (In Millions of US$) Phase I: 60% Phase I: 90% Phase I: 60% Phase I: 90%

Construction & Design $3,399 $3,797 $3,399 $3,797

Finance Interim Costs $90 $80 $90 $80

Total Cost $3,489 $3,877 $3,489 $3,877

Revenue Source (In Millions of US$) Pre-completion Tolling No Pre-completion Tolling

Net Toll Bond Proceeds $805 $1,193 $1,105 $1,493

Pre-Completion Toll Revenues $200 $200 $0 $0

Interim Financing

Federal: Discretionary Highway: Existing $44 $44 $44 $44

Federal: Discretionary Highway:

Additional $500 $500 $500 $500

ODOT/WSDOT Highway Funds: Existing $90 $90 $90 $90ODOT/WSDOT Highway Funds:

Additional $1,000 $1,000 $900 $900

FTA Section 5309 New Starts $850 $850 $850 $850

Total Revenues $3,489 $3,877 $3,489 $3,877

Scenario 1A: DEIS Toll Rates on I-5LPA Full Build Option



Debt Service Coverage Ratio: Tolling I-5 atDEIS Toll Rate (LPA Phase I Option)

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-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

2 0 1 5

2 0 1 6

2 0 1 7

2 0 1 8

2 0 1 9

2 0 2 0

2 0 2 1

2 0 2 2

2 0 2 3

2 0 2 4

2 0 2 5

2 0 2 6

2 0 2 7

2 0 2 8

2 0 2 9

2 0 3 0



Summary of Capital Finance Plan Scenarios

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LPA Phase I Option LPA Full Build

Revenue Source Medium High Medium HighFed. Discretionary Highway:

Existing $44 $44 $44 $44

Fed. Discretionary Highway:

Additional $400 $400 $500 $500

ODOT/WSDOT: Existing $90 $90 $90 $90

ODOT/WSDOT: Additional

$750.0 -

$850.0

$750.0 -

$850.0

$901.5 -

$1,001.5

$926.7 -

$1,026.7

Post Completion Toll Bond

Proceeds

$803.0 -

$1,103.0

$1,166.2 -

$1,466.2

$803.0 -

$1,103.0

$1,166.2 -

$1,466.2

Pre-Completion Toll

Revenues $0.0 - $200.0 $0.0 - $200.0 $0.0 - $200.0 $0.0 - $200.0

Section 5309 New Start

Funds $850 $850 $850 $850

Total Revenues $3,237 $3,600 $3,489 $3,877



Implementation Components

• WSDOT, ODOT, C-TRAN, and TriMet must enter into agreements.

• Legislative/administrative approval of the ODOT and WSDOT fundingcontributions must be secured.

• Legislative approval to toll the I-5 bridge must be obtained.

• An earmark of federal discretionary highway funds would be sought inthe upcoming transportation reauthorization bill.

• C-TRAN district voter approval for high capacity transit system andfinance plan.

• Information of an updated New Starts rating to be submitted to FTA,and a Final Design application to be approved by FTA.

• A toll agreement between the 2 DOTs and FHWA must be executed.• A finance plan must be submitted to FTA and FHWA in compliancewith its requirements for Major Projects.

• FTA must approve and execute a Full Funding Grant Agreement.

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Conclusion

• The project is financially feasible based on the fundingsources assumptions

• The toll revenues are shown to be adequate to cover mostof the cost including insurance, issuance, and O&M costs

• Besides toll revenues, the financial plan mainly relies onfederal sources that are unique to the project such as NewStarts and Project of National Significance and thereforedoesn’t have an effect on other local projects

• The toll rates and the exact amount of funding from varioussources will be updated over time

• The finance plan will be continuously updated based on theproject progress and how the implementation issues areaddressed

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appendix a crc financial plan

Documents