Recently, the Northwest Parkway Highway Authority entered into a long-term lease with an international consortium (headed by Brisa, a Portuguese firm) selected from 11 different proposals to operate and maintain the Northwest Parkway. The Authority is a local government entity, comprised of Weld County, the City of Lafayette, and the City and County of Broomfield. The Authority was originally created by these local governments because of the financial inability of the State and Federal governments to fund regional transportation needs -- a situation that continues today.
The fact is that the growing population on the Front Range is straining the regional road system, while at the same time there are fewer and fewer dollars available to build additional capacity needed to serve that need. Absent new dollars to fund additional capacity in our transportation system, the situation will only worsen. Regional population forecasts show another million people living on the Front Range in the next 20 years.
One financing alternative to meet our transportation needs is a tax increase at either the local or state level. In addition to the usual challenges of getting any tax measure approved, there is the additional issue of competition for any additional revenue generated. The Colorado Department of Transportation shows a need for an additional $65 billion just to meet state road needs. With such overwhelming demand for any new revenues throughout Colorado, it is not clear how well northern Jefferson County would fare.
The other alternative is user fees -- in other words, tolls. Toll roads do not depend on tax dollars to construct or maintain and no driver is compelled to use a toll road. The lease between Brisa and the Authority is an example of private financing for public infrastructure that has long been used in Europe and Latin America, and increasingly is being used in the United States.
Toll roads have long been used in Colorado to build transportation infrastructure--- in the 1880s, private companies constructed roads throughout the state and charged tolls to recoup the costs of construction and operation. In the 1950s and '60s, the Denver-Boulder turnpike (now U.S. 36) was operated as a toll road. More recently, E-470 and the Northwest Parkway are examples of toll roads built by local Public Highway Authorities to deal with regional traffic issues that CDOT has been unable to financially respond to. The construction of HOV lanes on U.S. 36 and I-25 by CDOT has allowed drivers an option to the congested conditions often present during rush hour. All of these are examples of non-tax revenues that have already been used to build new capacity for our road system here in Colorado.
Absent a new regional highway in northwest Arvada, our local streets will end up being used by regional traffic seeking to move between the end of the Northwest Parkway and C-470. Completing the beltway is the obvious solution to this problem -- a goal that the city council has long supported. Two overriding concerns have been developing appropriate land-use planning to ensure the road will not adversely impact existing neighborhoods, and identifying a financing mechanism to build the road that does not depend on support from city's budget.
As shown in our Comprehensive Plan, the alignment of the beltway through Arvada will be to the north and west of our existing neighborhoods and well away from them. The route will largely go through open space or lands acquired by the City for water utility purposes, thus ensuring the road serves regional traffic needs rather than fueling development. One interchange will be in the Jefferson Center area to the west of Indiana and State Highway 72; this is an area annexed to the City in the 1980's and has long been identified in our Comprehensive Plan for development irrespective of any regional highway. Unlike other some other neighboring communities, Arvada has both recognized the need for the eventual completion of the beltway and has made land use decisions to ensure that our community will remain cohesive rather than be divided.
The lease for the Northwest Parkway has provided a new financing possibility that does not depend on tax increases or a public financing commitment in order to construct, operate and maintain regional transportation infrastructure. The terms of the lease are quite favorable to the local governments, and hence, to the taxpayers:
1. Brisa must operate and maintain the Parkway at its own expense and in accordance with the standards established by the Authority, including maintenance, repair, and rehabilitation. Brisa must also expand the Parkway an additional lane in each direction at its own expense once certain capacity levels are reached. Brisa must also retain an independent engineer approved by the Authority to monitor compliance with these provisions and periodically report to the Authority
2. Local law enforcement will continue to be provided by the local governments under a contract for services. Emergency vehicles will always have unimpeded access to the Parkway for emergency management and homeland security purposes.
3. Brisa must maintain risk and property insurance for the full replacement cost of the Parkway as presently constructed and as may be improved in the future. In addition, Brisa must carry adequate levels of insurance for general commercial liability, builder's risk, professional liability, pollution legal liability, railroad protective liability, and worker's compensation.
4. The Authority will receive $263,000 annually (adjusted annually for inflation) to cover the costs of monitoring Brisa and compliance with the terms of the lease.
5. Brisa may initially raise tolls to $3 one way for the length of the Parkway, between now and Dec. 31, 2009, a fee increase the Authority was already planning to implement. Thereafter for the balance of the lease, tolls may not annually rise more than either:two percent, an inflation factor, or the percentage rise in per capita purchasing power, whichever is greater.
6. Should Brisa ever default on the terms of the lease and fail to cure the default, the Authority can terminate the lease and take back the Parkway without any compensation to Brisa.
7. Brisa also agreed to contribute $40 million to extend the Northwest Parkway toU.S. 36, and agreed to contribute an additional $60 million to extend the Northwest Parkway to Highway 93 south of West 64th Avenue should such extensions occur before 2021.
Clearly, the opportunity to work with the private sector to develop regional roads is a significant opportunity to achieve a long-held city priority and one that as Mayor, I intend to actively pursue in concert with other interested local governments. The lack of a beltway will inevitably lead to increased traffic on our local roads, to the detriment of our residents and our neighborhoods. Arvada taxpayers should not be burdened by having to pay for the expansion and maintenance of our local streets to serve regional traffic needs. The Arvada City Council and I will take the lead in developing the partnerships needed to finance and construct the next portion of the beltway.