New offers, demands and concerns are surfacing by the week as local policymakers work out the owner/operator arrangement for the express lanes planned for the San Mateo County section of Highway 101.

And the back-and-forth is picking up as a deadline looms that, if not met, will add time and cost to the $514 million project aiming for completion by the middle of 2022.

The owner of the tolling facility gets to implement an equity program if it wants to make the express lanes more affordable for low-income drivers, and it also sets tolling policies. Questions for the future owner include: Should there be a cap for tolls so that they never exceed a certain dollar amount? Should carpools of two people ride free or at a discount and should clean air vehicles such as Teslas also ride free on express lanes?

The decision is up to the City/County Association of Governments and the San Mateo County Transportation Authority, which oversees the county’s sales tax revenue earmarked for transportation. C/CAG is a joint powers authority comprised of board members representing each city and the county that works on quality of life issues such as air quality and transportation, among others. 

Both boards and respective staffers are in the midst of a series of meetings with the Bay Area Infrastructure Financing Authority and must come to a decision by mid-February or else the Managed Lanes project will be delayed and construction costs will rise. BAIFA is a joint powers authority between the Metropolitan Transportation Commission and the Bay Area Toll Authority that manages express lanes elsewhere in the state. 

The Managed Lanes project seeks to build an additional lane on Highway 101 in San Mateo County and then the far left lane in both directions would be converted to an express lane, which is free for buses, carpools of three people or more, motorcycles and potentially clean air vehicles while all other drivers would have to pay a toll to use those lanes. Tolls fluctuate based on traffic volumes — they’re expected to average $1 per mile on Highway 101 in San Mateo County — and surveillance equipment would be installed along the lanes to enforce the rules. Express lanes promise speeds of at least 45 mph in all lanes at all times.

One option is to give ownership and operating duties to BAIFA or to have C/CAG and the TA share ownership while either BAIFA or the Santa Clara Valley Transportation Authority would operate the express lanes. VTA currently manages express lanes in Santa Clara County. 

C/CAG and the TA voted on owner/operator arrangements in November but could not reach a consensus. Both bodies have created an ad hoc committee to work out differences and answer questions. The committee held meetings longer than three hours earlier this month and another is scheduled next week before C/CAG and the TA vote again in February. 

The Belmont city council will address owner/operator options for the Managed Lanes project at its upcoming meeting.

The TA appears ready to vote on the local ownership approach with BAIFA as the operator while C/CAG appears somewhat more divided on the matter. Some members, it seems, are still interested in making BAIFA both the owner and operator, though most have expressed interest for one of the two local control options.

Local control

“Our TA wants ownership [of the express lanes]. We want to control the equity program and any type of discounts,” said TA Chair Don Horsley, also a member of the San Mateo County Board of Supervisors. “The TA said we want local control and we’d go to VTA if we don’t get it [with BAIFA].”

BAIFA currently owns and operates 23 miles of Interstate 680 as of 2017. By 2020, the agency will manage 50 miles of Interstate 880 and by 2022, 11 additional miles of Interstate 680. If BAIFA owns and operates the tolling facility, then it has agreed to cover $50 million worth of construction costs that would be paid back via future toll revenue. Local officials also want BAIFA to cover construction cost overruns if it is the owner.

In a C/CAG staff report containing a summary of the ad hoc meeting between it and TA representatives, a BAIFA representative said it may consider the cost of overrun associated with the toll system equipment. Ostensibly, BAIFA has not agreed to any overruns associated with building the additional lane on Highway 101.

Under the local control ownership model, the TA would advance $50 million in Measure A funds for construction and that money would be paid back from future toll revenue. As for construction cost overruns under the local control approach, the relevant agencies would have to come up with new funding sources.

C/CAG officials also want BAIFA to prioritize the expansion of express lanes into San Francisco. BAIFA has described that project as a priority, but it’s not the agency’s only priority. 

“The San Mateo 101 extension north of I-380 and the I-680 northbound project are of comparable priority and would ideally proceed on parallel tracks,” the BAIFA representative said in a summary of the joint ad hoc meeting. “If San Mateo were to join BAIFA, we could team with San Mateo County on the environmental work for the 101 extension, including joint funding.”

Liabilities

BAIFA has also assured local policymakers that it hasn’t incurred any major liabilities in its first 15 months of express lane operations. The main liabilities to date have been associated with damage to the toll system equipment such as hit-and-run collisions with roadside equipment and cuts in the backhaul fiber, according to the meeting summary.

But that’s not to say that owning a toll facility is without risk. 

In the 1990s, express lanes were installed on the Sunol Grade on Interstate 680, which had the worst congestion in the Bay Area, said Andrew Fremier, BAIFA’s deputy executive director. 

“By the time the lanes opened we were in a recession and operating costs couldn’t be covered for several years,” he said. “A challenge is these express lanes do well in boom economies, but not well in recessions so there is quite a bit of fluctuation.”

That’s because express lanes are optional and drivers choose not to drive on them as much during a recession, but a bridge, for example, doesn’t have that problem because commuters have no other option. 

Still, Fremier suggested express lane owners are only taking on minimal risk. Some C/CAG board members shared that perspective. 

“We get caught up in a lot of this fear ‘oh we’ve got liability’ but historically speaking the evidence in our region and even in L.A. has not shown great liability,” said Board Member Gina Papan, a Millbrae councilwoman. “As far as tort liability, cost overruns and BAIFA’s liability, it’s been very very minimal.” 

Board Member Doug Kim, a Belmont councilman, agreed.

“In terms of operations, a well-designed managed lane has been tested time and time again across the country so I think the risk on the operational side is much lower,” he said, adding that the initial buildout is the “major exposure.” “This thing is going to be a net positive asset for the region and it’s hard to find those kinds of things.”

Challenges

One of the reasons why some C/CAG board members are reticent to partner with VTA and have that agency operate the express lanes is because of VTA’s budget challenges, though a VTA representative has assured C/CAG that its financial woes would not compromise the express lane facility on Highway 101 and revenue from those lanes by law would also have to be reinvested in the corridor.

Once C/CAG and the TA decide on the owner/operator arrangement in February, many decisions will remain. If the local control option is chosen, for example, then the two boards will have to determine exactly how shared ownership will work. One option is creating a joint powers authority. And it appears only so much will be known even by the time decisions are made.

“This has been a fluid process and there’s just not a lot in writing, which gives some of us heartburn because it’s just talk (and it’s changing all the time),” said Kim at a Jan. 10 C/CAG meeting. “I think when we get together in a month we’ll have a few more answers, but I don’t think we’re going to have a ton of definitive statements that one can bank on. We haven’t had them up until now so I wouldn’t hold my breath for that.”

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Note to readers: This story has been changed. C/CAG Chair Maryann Moise Derwin did not urge board members to discuss owner/operator options with their respective city councils. 

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