Transportation, United States
Tolling to Stay Afloat
Toll financing helps WSDOT build SR 520 floating bridge replacement
Built in the 1960s, Seattle's old SR 520 floating bridge spanned Lake Washington to connect Seattle to its eastern suburbs and Microsoft’s headquarters. With time, it had become vulnerable to windstorms and earthquakes, had limited capacity, and no access for pedestrians and bicyclists. The Washington State Department of Transportation (WSDOT) wanted to replace the bridge to help ensure safety and expand and improve access for more vehicles and modes. However, funding the $4.56 billion full-corridor project was a big challenge. WSDOT found a portion of the solution through toll financing.
In 2009, WSDOT hired CDM Smith to perform an investment grade traffic and revenue (T&R) study to forecast traffic volumes and revenue for pre-completion—when the existing bridge would be tolled before tolls transferred to the replacement bridge—as well as post completion through 2056, the expected bond duration. CDM Smith’s study was completed in August 2011, the first bonds were sold in October, and the all-electronic tolling facility opened before year’s end. WSDOT implemented variable tolling, where tolls change based on time-of-day and day-of-week, on the existing bridge (and, later, on the new bridge). The new 1.44-mile replacement SR 520 Bridge—the longest floating bridge in the world—opened to traffic in April 2016.
Unlike similar toll forecasting projects, the SR 520 replacement required extensive coordination between agencies. While WSDOT owned and operated the bridge, the governor-appointed Washington State Transportation Commission was responsible for setting toll rates in the state. To satisfy federal Transportation Infrastructure Finance and Innovation Act (TIFIA), loan and additional bond requirements, WSDOT retained CDM Smith to provide updated yearly forecasts based on actual bridge tolling data, changes in toll rates and updated construction schedules. CDM Smith helped WSDOT coordinate with the commission to adjust the rates annually. Because WSDOT cannot issue bonds, CDM Smith also worked closely with the Office of the State Treasurer to resolve any concerns from their bond advisors and fiscal consultants.
The toll-funded replacement main bridge span, which cost roughly $1 billion, is 130 feet longer than its predecessor and significantly stronger, rated to last for 75 years. It includes three lanes in each direction, one of which will accommodate high-occupancy vehicles (HOV) and transit, as well as a multi-use path for bike and pedestrian traffic. Bolstered by the accurate traffic and revenue forecasts and close coordination with local agencies, WSDOT was able to fund the SR 520 project and deliver safe travel for users of all modes for years to come.