April 18, 2018
Mayor Kenneth Weise, City of Avondale
April 18, 2018, Meeting Summary
Transportation funding is a complex issue that encompasses current needs, future planning, and the importance of vigilance in managing a limited budget. At our April meeting, we heard several discussions that drove home the need for policy decisions that best address the continued maintenance and future improvement of the system.
Staff informed the TPC that an additional $29.8 million was requested by the Arizona Department of Transportation (ADOT) for a final right-of-way settlement at US-60 and Grand Avenue at Bell Road, and for reconstruction of traffic interchanges at Interstate 17 (I-17), Pinnacle Peak Road and Happy Valley Road. In the first case, TPC members had earlier raised concerns about the high cost of the settlement, but ultimately it was decided that this was a unique situation in the right-of-way acquisition process. In the second request, ADOT told members they underscoped the project but are taking steps to ensure this never happens again.
While both of these requests will move forward, they demonstrate that the region’s main funding source, the half-cent sales tax in Proposition 400, is a finite resource. For every project that needs additional funding, others may have to be reduced or even eliminated.
Addressing cost overruns and ensuring accuracy in the scope of projects is a key component to the integrity of the process, accountability in the system and transparency to our residents.
We also heard a presentation on how transportation funding is lagging behind other major spending areas such as health and education. The gas tax has not been increased since 1991, putting Arizona behind much of the rest of the nation. Finding alternative funding is one of the biggest tasks we have before us, requiring significant collaboration among elected officials, local government staff, business representatives, and the public throughout the region.
As stewards of the public’s trust, we are committed to ensuring a bright and stable future for the region’s transportation needs. I look forward to rolling up our sleeves and getting to work on the policies that will create the next transportation blueprint. I’m confident we are up to the challenge.
Mayor Kenneth Weise
The TPC recommended approval of material cost changes requested by the Arizona Department of Transportation to provide additional funding needed for two projects. The first amount is $10,800,000 for a final right-of-way settlement at US-60 and Grand Avenue at Bell Road, and the second is $19,000,000 for reconstruction of traffic interchanges at Interstate 17 (I-17), Pinnacle Peak Road and Happy Valley Road. The recommendation for approval also includes amendments to the FY 2018-2022 MAG Transportation Improvement Program and 2040 MAG Regional Transportation Plan.
Members noted the significant increase in the requested program amount for the I-17 traffic interchanges at Pinnacle Peak and Happy Valley Roads. Staff noted the reasons include higher earthwork unit costs, missed quantities and unit costs for the replacement structures over I-17, additional quiet pavement needs along the freeway mainline, and greater than originally estimated costs for traffic maintenance required for safety. An ADOT spokesman informed the committee they underscoped the project and controls were being put in place to prevent similar scenarios in the future.
Although the Regional Freeway and Highway Program cash flow indicates the additional funding can be accommodated, TPC members noted there is a strong need to address these kinds of cost overruns. MAG staff will continue to work with ADOT project managers and designers during the design phases to keep the project costs contained to the program amounts approved by the MAG Regional Council. The Program remains funded and all 37 projects identified for construction over the next 12 years remain on schedule for delivery.
The TPC heard an update on a proposed upgrade of lighting on Phoenix-area freeways. The plan includes the conversion of 19,300 lights from high pressure sodium lighting to state-of-the-art Light-Emitting Diode (LED) technology. The scope covers approximately 300 miles of highways throughout the greater Phoenix area, including the Deck Park Tunnel on I-10 through downtown Phoenix. The selected developer will design, build, finance, operate, and maintain the upgraded lighting system. It is anticipated the work would be completed over a two to three year period, with a 15-year maintenance period. At that time, the developer would be required to turn the system back to ADOT.
The total cost of the project is estimated at $168.8 million. Funding would come from the MAG Regional Freeway and Highway Program: $75.2 million through the balance of Proposition 400 funding and $93.4 million from FY 2026 through FY 2035. The new system will not only bring the tunnel up to current standards, but would allow for monitoring and adjusting lighting levels remotely, so the lighting can better adapt to current conditions and make it safer for the traveling public. Other benefits include a shift in risk away from ADOT, and substantial energy consumption and cost-savings of an estimated $1 million annually.
TPC members expressed concerns over rising costs on other projects already in the Program and whether this project is affordable given the limits of Proposition 400 funding.
MAG staff provided an update on the implementation of the Regional Freeway and Highway Program. The program amount is $3.3 billion for 37 projects, with $2.8 billion in construction that runs through 2028. ADOT, with MAG assistance, continues to refine delivery options and scoping of these projects.
Several projects were highlighted throughout the region. In the West Valley, construction will begin on the Fairway Drive traffic interchange on I-10 in September 2018; pre-design work continues on I-17 north of Anthem Way in the North Valley; and construction is scheduled to start in 2021 on the I-10/I-17 split to Loop 202 Pecos Stack in the East Valley.
Staff also noted the importance of continual monitoring of the 37 projects as labor and material costs are rising. MAG is working with ADOT to expand the use of cost risk analysis and re-examining scopes of work to ensure accuracy of program amounts.
The next quarterly update of the program to the TPC will be in June 2018.
MAG staff presented an overview on the status of the Arizona Highway User Revenue Fund (HURF), the primary funding source for street and highway construction, improvements, and maintenance. Fuel taxes make up about one-half of the $1.4 billion of HURF revenue collected during FY 2017. Because the gasoline tax has been fixed at 18 cents per gallon since 1991, revenues have not kept up with the needs due to inflation and significantly improved fuel economy.
Staff noted that general government spending has held constant from 1991 to 2017, with increases in health, education and welfare, but HURF spending has not seen similar rises. For example, health and welfare spending has gone up 109 percent, education 55 percent, but HURF only 11.1 percent. Arizona’s gasoline tax is below the national average, costing hundreds of millions of dollars in lost revenue. With the coming shift to electric vehicles, fuel taxes also will be impacted by rapidly decreasing battery costs and increasing battery performance. Alternatives to the gas tax need to be found to meet ever-growing transportation needs.
MAG staff provided a brief update on state legislative issues of interest. House Bill (HB) 2514 would shift Highway User Revenue Funds (HURF) from Maricopa, Pinal and Pima counties and cities and towns greater than 7,500 in population, to rural areas. The bill could have a $5.5 million negative impact on the MAG region.
Senate Bill (SB) 1147 would allow for the MAG region to go to the Maricopa County Board of Supervisors to approve a ballot for the region’s voters to renew the half-cent sales tax for transportation. Under current statute, MAG would need to seek approval from the state legislature to approach the region’s voters to considering extending the half-cent sales tax. The bill also has provisions for the Pima Association of Governments and rural counties to pursue increases to their respective sales taxes for transportation.
Maricopa Association of Governemnts
302 North 1st Avenue, Suite 300
Phoenix, Arizona 85003
Regional Council Activity Report: a summary of the most recent Regional Council meeting
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