December 5, 2019 - From the November, 2019 issue

The Role for Roads: TCA's Historic 241/91 Collaboration to Improve Inland Empire/Orange County Regional Mobility

Beset by the challenges created by establishing a network of transit access, residents of the Inland Empire—the fastest growing region in Southern California for over two decades—continue to rely heavily on automobile transportation for their daily commute. TPR spoke with Mike Kraman, CEO of the Transportation Corridor Agencies of Orange County responsible for the 241/91 connector development, TCA spokesperson Kit Cole, and Tom Sotolong time environmental activist and advisor to TCA,  on issues of congestion pricing and mobility with respect to their endeavors in the region.


Mike Kraman

“[TCA is] a joint powers authority, so we're a government agency, but we're structured in that we use private investments to build the roads; it's like a public-public-private partnership." —Tom Soto

Mike, update our readers on the work TCA is doing on the 91/241 Corridor involving to both plan and build new transportation infrastructure to relieve Orange County/inland Empire traffic congestion.  

Mike Kraman: TCA—the Transportation Corridor Agencies—has been pursuing a project to build an express connector that would connect the north end of the 241 toll road into the RCTC (Riverside County Transportation Commission)/OCTA (Orange County Transportation Authority) express lanes to and from the east. It's a really important project because with RCTC’s recently completed extension of the Express Lanes to I-15, this is a real opportunity to leverage those improvements by allowing the 241 drivers to connect directly in to those 91 Express Lanes. 

The interesting thing about the project is that it’s connecting two different toll facilities—which hasn't happened before in the state—and also involves the 91 corridor, an extremely congested corridor and one of the busiest freeways in the nation. The demand on that corridor is driven by housing in the Inland Empire, and connecting folks buying those houses to jobs in the coastal counties and Orange County, in particular. 

We've had to work carefully on all aspects of the project—technical, operational and policy—since the 241/91 connector project involves a lot of players, OCTA, RCTC, and two districts of Caltrans—districts 8 and 12, as well as our Agency. 

LA County Metro and its $100 billion investments in rail, rapid buses, and smart city last mile mobility solutions receives much attention from Southern California’s transportation policymakers’, often overshadowing other critical regional congestion relief projects. How difficult has it been to attract high level attention to the work of the Corridor Transportation Agency of Orange County? 

Mike Kraman: All of the types of projects that you described are important  and the LA Metro work is critically important to the region. But, so many folks in Southern California are still using their cars to get from home to work. The 241/91 Express Lanes Connection project  will provide a little bit of relief to those people. One of the things about this being a toll project is that it will have fully dynamic pricing. As demand goes up, the price will go up in order to keep these different roads congestion free; it allows for more cars to come through the corridor when you’re maintaining a  free flow of traffic.

We're pretty excited about this opportunity and the benefits that it has to the people making that trip from Riverside to Orange County. That's a trip where the project will help  reduce congestion and provide time savings and it also gives additional choices to all the drivers in the corridor. The people using the express lanes and The Toll Roads will benefit, as will folks using the  general purpose lanes on the 91.  There can be a lot of weaving right now where the 241 North and the 91 East come together. We hope this project will  reduce some of that weaving, which will help throughput and safety for drivers on the 241 and the 91. 

Given the significance and complexity of TCA’s work, please elaborate on how the express corridor project is being funded?

Mike Kraman: Absolutely. For the 241/91 express connector, TCA will fund 100 percent of that project from our discretionary funds.

And the revenues from the tolls, if not needed to repay bondholders, will go where?

Mike Kraman: The revenues from the toll would go to paying back the money we will take from TCA’s discretionary funds. In other words, we will borrow money from ourselves, pay ourselves back with toll revenues and then any excess would be reinvested into operation and maintenance of both the 91 and the 241 corridors.

Tom, given you have built a career in the financing of cleantech and done so with many successes, share why you have turned your attention to and invested your time in this Orange County transportation corridor project? 

Tom Soto: In the early days, it wasn't as though TCA and toll roads overall were not without controversy. I think that there was a meaningful opinion out there that suggested that congestion pricing and toll lanes were regressive. As we've moved into a new era of compliance that we absolutely must adhere to, with respect to greenhouse gases. Knowing that 40 percent of greenhouse gases are sourced back to mobile sources, we need to come up with more innovative approaches to urban planning and built-out landscapes like we have in Southern California. 

TCA started as an isolated, one-off model. In the 20+ years since The Toll Roads were financed and built, it has graduated to become an example of efficiency on using toll lanes and congestion pricing as a means of congestion reduction. Less congestion, less greenhouse gases, less carbon, less emissions, as well as an improvement in quality of life is what The Toll Roads are about. 

With the success that LA has had with toll lanes on the 10 freeway and I-110 in particular, many of the opponents of that initial plan seem to be supportive, or at least now neutral in supporting the tolling, for example, in downtown LA. The precursor to that and the proving out of that model really was done by TCA successfully and in spades. Beyond that, I think that there is a quality of life improvement that we've seen as a result of not just TCA scaling to become what it is now, but also how the region has become more mobile. The economics have shifted from one set of areas—i.e. from the aerospace industry in the South Bay to the Inland Empire and Orange County—and the need for those economics to be followed by jobs and those who are employed, and therefore they have to travel. 

Toll Roads gives opportunity for more time for folks to be with their families, with their friends, and with their community. Simply put, there's less congestion as a result of very meticulous, mathematically-driven planning that goes on in tolling agencies across the state.  None of that happens without the type of leadership that you have sitting around the phone with folks like Kit Cole, Mike Kraman, Mike Chesney, and in particular Valerie McFall who I just have tremendous respect for. She's the head of compliance and regulatory, and she understands the value of what the TCA is doing. All of the team does, but she in particular is the spearhead in terms of the SCAG process, the SIT process, and meeting regional mobility planning demands. 

The SCAG or AQMD process has an impact on Orange County, as well as  a regional effect on our ability to be more efficient and have increased mobility as the region scales and jobs move around the region. Southern California is the 12th largest economy in the world now, and unless we see some types of innovations like this, many of us are going to be stuck behind the wheel and that’s bad for the economy. Toll roads help improve not just mobility, but improve economics around Southern California.

At a time when the federal government seems incapable of agreeing on a bipartisan infrastructure investment plan to fund critical transportation projects like those being planned by the TCA, speak to  the evolving role – to replace federal support - of regional governmental transportation agencies. 

Mike Kraman: The genesis of TCA was due to a lack of state and federal funding at a time when we need a significant  expansion of our major highways but there was no way to fund   it. Orange County took on a bold experiment, using development impact fees to cover about 9 percent of the cost of the system, and the remainder of the cost was financed by Wall Street. We borrowed about $4.5 billion from Wall Street to finance these roads, and we're paying that back with total revenue. Over the last 20 years, we’ve had some moments where our revenue was a challenge, for example, when the economy is down, fewer people take toll roads.  

However, we have always made every debt payment. Once we came out of the Great Recession, we're in a period of seven straight years of traffic and revenue growth on the road, and our credit rating basically went from non-investment grade (for a period during the recession) to now where we have an A- rating. It's been a phenomenal success story in terms of the way we were able to deliver the infrastructure that people could start using; we went through growing pains over our first 20 years, to be sure, but  now  our finances are rock solid; the future looks bright; demand has never been higher; revenue is keeping pace with our debt commitment; and were able to look at delivering a project like the 241/91 without incurring additional debt. 

Elaborate on the advantages and challenges of regionally planning & funding transportation infrastructure , given not all essential decision-making interests are aligned typically at the regional level.

Kit Cole: Transportation planning, is by nature, a distributed responsibility.  There are different levels and responsibilities at each level.  TCA has the authority – given by the California Legislature - to plan, design, finance, construct and operate bridges and thoroughfares in Orange County.

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We work well with our partner agencies, including Caltrans, RCTC, OCTA and the County of Orange Public Works Department.

Collectively, all of our agencies working together and using our different funding sources – federal, state, local sales taxes and tolls - we can move projects such as the 241/91 connector forward

As public agencies working for the public good, all involved agencies  saw the importance of this 241/91 connector and the 91 corridor itself. There's only so many improvements that can happen in that corridor because on one side you have the Santa Ana river, and the other side you have some very hilly terrain. There's not a lot of options to make additional improvements in that area, so by making this connector—the first one in the state where we’re working with multiple jurisdictions—it brings a lot of relief to the many commuters that travel in and out of Orange County every day for jobs. 

At end the day, we were all able to come together and see the benefit and most immediate relief that this would bring to the traveling public. We can't sit around and wait for dollars to come to this county or state from the federal government, so we've had to look at being creative with our own resources. Luckily for the residents of Orange County, Riverside, and others, there is an opportunity with our agency to be able to fund a project like this and the taxpayer  is not on the hook to have to repay back any of the dollars that TCA has used on any of his projects. 

Given the level of rancor that we have politically these days, having government agencies come together for the good of the public is definitely noteworthy. 

The $64 dollar question: Is this 91-complex project replicable? given that your coordination challenge also had to align two distinct Caltrans Districts —districts 8 and 12.

Mike Kraman: We rely on our history and the success of the ability to deliver transportation infrastructure in Orange County. If we look back, the basic system was delivered by Caltrans using state and federal resources. The County has been able to deliver our major arterial system in concert with both state dollars as well as developer impact dollars. But, as we started to see Orange County surge ahead in the quality of the infrastructure we were able to deliver, we also put our local shoulders to the wheel and started he Toll Roads to deliver this 51-mile network of major freeways in the county that otherwise wouldn't be here. And with the passage of Orange County’s Measure M, we now have billions of dollars to reinvest to keep pace with the demands here in Orange County.

This partnership and the success that we have is why we all have such faith in working together to deliver it. There's not really another county that can say they have an agency like TCA, so that actually gives more options and more ability to meet the challenges we've had in the past, we currently have, and will have in the future here in Orange County. 

Elaborate: Is the TCA model truly replicable around the state, or, what has to happen for it to be replicable?

Mike Kraman: We're a joint powers authority, so we're a government agency but we're structured in that we use private investments to build the roads; it's like a public-public-private partnership. It's replicable because it does not rely on state, federal, or taxpayer dollars to make it work. Penciling out the economics of building the infrastructure and then using the toll revenue to build, operate, and maintain it.

It's not the answer to all of our woes - it's one of the tools in the toolbox. From our experience and our history, we know better how to define what those opportunities are. The tolled express lane systems on the existing freeways is certainly an outgrowth of that. It provides congestion relief, which then generates the revenue to maintain and pay back for the infrastructure costs. 

I absolutely feel it's replicable, but it's not a panacea. It doesn't work for every situation, but it's an important tool in the toolbox going forward to that could be applied elsewhere.

To conclude: Orange County has become a globally recognized leader in sanitation and water reclamation and now as well,  is becoming a leader on building transportation infrastructure. What is in the water of Orange County that might explain such success? 

Mike Kraman: I love what we've done in recycled water and in the protection of groundwater. Now, here in Orange County, we don’t think about how much water we have, but how many times we can reuse the same water over again. We've always been innovative here, and maybe it is in the water!

We're proud to be part of that, and proud that our infrastructure here meets the challenges that we have. We’re the sixth most populated county in the country. That number of people trying to move around the county creates challenges and so we've had to be innovative.

Tom Soto: Orange County really demands open space, and one of the key factors with TCA is they have an extraordinary mitigation plan with habitat corridors, environmental restoration, and it is a beacon that others have followed. I don't want to leave this conversation without my highlighting some of the things that have gone on to ensure that open space remain dignified in that area. 

Valarie McFall: We're very proud of the more than 2,000 acres of open space that we've acquired, restored and preserved in perpetuity as part of our mitigation efforts.

All of our properties that we have purchased, restored, and managed were done on a very large scale. Not only were they unique properties, they were done with a vision of how they all connect to one another. They basically go from the mountains to the sea, provide wildlife corridors, and provide sanctuaries for animals that are threatened and endangered. 

We work with universities, like UC Davis, to ensure different populations of animals, such mountain lions, are able to continue and thrive here in Orange County. From the smallest animals up to the largest mammals like the mountain lion, we take great pride in making sure all of our sites are resilient—which is a popular terminology in the mainstream—but that has always been our key focus. 

We first started restoring our properties in the 1990s and were the first agency to agency to participate in both the state and federal process that set aside over 38,000 acres of open space. TCA proudly contributed a large portion of the main endowment to oversee the management of those lands, in addition to the 2,200 acres we have today under management

We don’t only plan and build  transportation projects.  We also make sure those projects are e environmentally sensitive to the areas surrounding them.  TCA more than  compensates for any impacts associated with the roadway. We have a long history of building successful projects and protecting the environment at the same time.

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