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Even with $3 tolls, Caltrans faces a shortfall

July 26, 2004 Reposted from the San Francisco Chronicle
  By Phillip Matier & Andrew Ross


Those of you just getting used to those new $3 bridge tolls, hang onto your
hats -- another toll increase could be just around the corner.

Expected cost overruns from construction of the Bay Bridge's new eastern
span and other bridge retrofit projects have left the state Department of
Transportation hundreds of millions short. One agency source predicted the
figure could be in the $2 billion range.

"You didn't hear it from me . . . but the political reality is the Bay Area
is going to have to raise tolls to pay for it,'' said one Bay Area
transportation expert following Caltrans' troubles. "I don't know how else
they can do it.''

"It's a big mess,'' concedes Jeremiah Hallisey, a member of the state
Transportation Commission, which oversees Caltrans and has asked for a full
financial accounting of the bridge work.

Hallisey said the commission is still awaiting a briefing from Caltrans,
but he's already saying a toll hike may be among the few available

"That's a possibility,'' Hallisey said. Just as quickly, however, he said a
gas tax hike for the nine Bay Area counties was also a possibility.

Randell Iwasaki, who just stepped up in the last week as interim director
of Caltrans, said his staff was scrambling to get a handle on the unfinished
work and declined to put a cost estimate on it.

"The minute we find out where we stand,'' he said, "if we have to, we will
go to the Legislature. We are going to do whatever it takes to do the

In any event, time is running short for a solution. Friday is the deadline
for Caltrans either to either accept or reject the lone bid submitted for
the new Bay Bridge eastern section's soaring single-tower suspension span.

That bid, you may recall, came in at either $1.8 billion or $1.4 billion
-- the cheaper price depending on whether the contractor can secure a
waiver to use foreign steel.

In either case, however, the bid is at least double the $740 million that
Caltrans has left in its construction kitty to pay for the job.

Deadline or no, uncertainty over how to pay for the added costs prompted
Caltrans on Friday to send the contractor a letter requesting a 60-day
extension on the decision.

"So we got ourself some time to finish the numbers crunching,'' Iwasaki

But even with a delay, no one is betting that the cost will go down.

"Not with the building boom in China buying up every bit of available
steel,'' said state Sen. Don Perata, D-Oakland.

And the Bay Bridge isn't Caltrans' only problem. The agency is also facing
hundreds of millions of dollars in cost overruns to complete retrofitting
work on the Benicia and Richmond-San Rafael bridges. The $5.1 billion that
the state Legislature authorized for retrofitting the state's seven toll
bridges ran out a while back.

So now it's back to Sacramento and legislators preoccupied with the budget
battle. It will be up to them to come up with a new funding package before
the current session ends in late August if they want to keep the Bay Bridge
and other projects on track without further costly delays.

But with money in short supply, and Northern and Southern California
interests in competition, few besides Perata hold out hope that anyone
outside the Bay Area will end up paying for the Bay Bridge overruns.

"Los Angeles is not going to pay for it,'' says our transportation expert.
"The political realities are that the Bay Area is going to have to raise
tolls to pay for it.''

The big question now is, with this being an election year, who in the
Legislature is willing to carry a controversial new toll hike or other
transportation spending measure?

The betting is that one of the soon-to-be termed-out legislators will get
the short straw.


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