Benefit-Cost Analysis

Transcription

1 Benefit-Cost Analysis 1

2 Summary of Results Current Status/Baseline & Problem to be Addressed Roadway Maintenance Boston Mills Road, a major access road for the park, is in poor condition, resulting in high annual maintenace costs. The road's narrow, gravel shoulders do not accommodate multimodal use, and pose safety hazards to bicyclists and pedestrians. Landslide Repair Five active landslides need to be stabilized. Currently pose safety hazards; negative environmental effects; dirty storm water runoff; and damage to roads and infrastructure. Change to Baseline/Alternatives Type of Impacts Population Affected by Impacts Economic Benefits Summary of Results Page Reference in BCA Rebuild Boston Mills Road, including adding wider, paved shoulders designed to accommodate cyclists and pedestrians safely, and replacing/renovating 31 degraded road drainage culverts. New road design would also incorporate traffic calming design elements. Project would stabilize and repair five landslides. This would improve safety, lead to environmental benefits, and save costs. Near certainty of two road-closing landslides within the next 6 years if no repairs are made. These would create additional vehicle travel due to diverted traffic. Boston Mills Road s Project would replace bridge and Two bridges (one a free-span structure and culvert, puting them in accordance with the other a culvert road crossing) need to be bridge safety regulations, and replaced to stay in accordance with state eliminating ongoing maintenance costs and federal bridge safety regulations. (and associated road closures) for 20 Currently pose safety hazards and require years. temporary road closures to complete ongoing, periodic maintenance - creating additional vehicle travel due to diverted traffic CVNP Visitor Enhancements Substantial changes needed to accommodate growing visitation rates and improve access. * Impacts not included in cost-benefit analysis due to lack of suitable data with which to quantify them. Significantly reduced annual road maintenance costs. Improved safety for cyclists and pedestrians.* Reduced road-closure time and related value-of-time, vehicle operation and emission costs due to additional vehicle travel Reduced road-closure time and related value-of-time, vehicle operation and emission costs due to additional vehicle travel. Project would build pedestrian bridge, Enhanced visitor create new parking, restore natural experience/better park features of area, provide new, accessibility, and improved relocated, full-service train station, safety* create a bus and RV designated area, and provide safe pedestrian and cyclist circulation. These improvements would improve accessibility to the park and visitor safety. Cost savings to public agencies responsible for ongoing road maintenance, and the taxpayers who fund them. Reduced injuries to cyclists and pedestrians.* Annual maintenance cost savings over the 50-year life of Boston Mills Road. Time savings and vehicle operating Monetized value of cost savings to all drivers using Boston reduced travel times and Mills Road, including commercial emissions; reduced vehicles. vehicle operating costs Time savings and vehicle operating cost savings to all drivers using Boston Mills Road, including commercial vehicles. Enhanced park experience for visitors.* Monetized value of reduced travel times and emissions; reduced vehicle operating costs Benefit/Cost Ratio: 3% discount rate 7% discount rate Benefit/Cost Ratio: 3% discount rate 7% discount rate Benefit/Cost 3% discount 7% discount rate Page 3 Page 4 Page 8 N/A N/A N/A 2

3 Methodology The benefit-cost analysis focused on the components of the project for which benefits were able to be quantified and monetized. The following aspects of the TIGER proposal are included in this analysis. These aspects are described in more detail in prior sections of this proposal: Rebuild and improve Boston Mills Road, including safety and traffic-calming measures and replacement of 31 culverts; Proactively repair existing and potential landslide areas along Boston Mills Road; and Replace the Boston Mills Road over the Cuyahoga River, and replace the culvert under Boston Mills Road in the vicinity of the intersection of I-80 and I-271. For the purposes of this analysis, the costs and benefits were measured for a 50 year time frame ( ). TIGER project funding is assumed to be procured in the baseline year (2016); to account for contracting, permitting and other normal project start-up logistics, TIGER project work is assumed to begin in All future benefits and costs are discounted to present values at 7% and 3% discount rates, per OMB Circulars A-4 and A As explained in the text of this analysis, we believe all benefits estimates to be conservative. The benefit-cost analysis addressed selection criteria for which data were available to support analyses: State of Good Repair: The analysis evaluated the cost of making up-front investments to repairing and improving Boston Mills Road, replacing the two bridges on the road, and repairing/stabilizing the existing landslide areas along the road, versus the costs of continuing to do periodic maintenance, and responding to repairs as needed. Environmental Sustainability: The proposed bridge and landslide repair projects and their nobuild alternatives would all involve temporary closures of Boston Mills Road, during which time traffic would need to detour around the road, resulting in additional vehicle-miles of travel. The benefit-cost analysis estimated and compared the costs of emissions associated with this additional travel both CO 2 and non-co 2 for the TIGER and no-build scenarios. Economic Competitiveness: The additional vehicle travel stemming from the road closures associated with the bridge and landslide repairs would also impose value-of-time and vehicle operating costs on drivers. The benefit-cost analysis compared these cost impacts in the TIGER and no-build scenarios. Other benefits stemming from the proposed improvements are likely to occur, but data are unavailable to measure their monetary value. These benefits include: Safety: The proposed improvements include adding road shoulders and designated paths to accommodate cyclists and pedestrians, and traffic calming measures. Both of these improvements can reasonably be expected to enhance safety, particularly since cycling activity in the park has been increasing in recent years, and is expected to continue growing. The proposed road improvements thus represent an important upgrade that will enable the park to accommodate, and indeed encourage, increased cycling and walking, while improving safety

4 The costs of these measures are included in the project costs analyzed in the benefit-cost analysis, but because no data are available to estimate expected future safety benefits, such benefits are not included in the analysis. Water Quality: Existing landslides along Boston Mills road add sediment to storm water runoff, which contributes to water-quality issues in streams and the Cuyahoga River. Repairing the landslides proactively, rather than waiting for them to collapse and require repair, will eliminate the sediment issue now, rather than in the future. Applicable data on the economic impacts of stream sedimentation are unavailable, however, so this benefit was not included in the analysis. Analysis Description The following sections describe how the benefit-cost analysis was conducted, and discuss the components of the project for which benefits were able to be quantified. In each case, the element(s) proposed as part of the TIGER grant application are referred to as the TIGER proposal and the alternative scenario is referred to as the no-build scenario. Boston Mills Road and Improvements This portion of the benefit-cost analysis compares the TIGER proposal repairs and improvements to Boston Mills Road with the no-build scenario. Road repairs and improvements to Boston Mills Road include the upgrade of gravel shoulders to five foot asphalt shoulders, widening, repairing and resurfacing roadways, and widening shoulders for bicycle and pedestrian travel. The Summit County Engineer s Office assumes that the 31 culverts noted in the project description will be repaired or replaced as the road is rebuilt so those costs and benefits are included in this analysis as well. The impacts of this project component would be maintenance cost savings and safety benefits. Safety data for this park are not available, so this analysis only quantifies maintenance costs. The benefit-cost analysis therefore compares the present value of the projected maintenance cost savings over the expected life of the road (50 years), with the up-front costs of the TIGER proposal road repairs and improvements. 4

5 Existing annual maintenance costs for Boston Mills Road are $687,000. This relatively high annual cost is largely due to the poor condition of the existing road. Engineering estimates for annual maintenance costs following the TIGER proposal road repairs and upgrades are $40,000. Implementing the TIGER proposal road repairs would result in net annual cost savings of $647,000 through Road rebuilding and ongoing maintenance can be accomplished without closing Boston Mills Road. Based on discussions with the Summit County Engineer s Office, any secondary cost impacts due to traffic disruption during road repairs are assumed to be identical for both scenarios and are therefore excluded from the analysis. The annual maintenance cost savings for the fifty year analysis period were calculated and discounted at the 3 percent and 7 percent rates to identify aggregate maintenance cost savings in 2016 dollars. A summary of these savings is provided in the table below. 3% Discount Rate 7% Discount Rate Maintenance Cost Savings $ 16,019,002 $ 8,324,410 Cost of TIGER Proposal $ 6,383,863 $ 5,915,486 Benefit-Cost Ratio As noted earlier, the TIGER proposal for road repairs and maintenance are also expected to produce safety benefits; however, these are not captured in this analysis. The cost estimate, however, includes costs associated with these safety improvements (e.g., shoulders for cyclists) and traffic calming measures. Therefore, the analysis likely under-estimates total benefits. Landslide This section of the benefit-cost analysis calculates and compares benefits and costs for the landslide stabilization component of the TIGER proposal to the no-build scenario. The TIGER proposal would proactively and permanently repair all five existing and potential landslide areas along Boston Mills 5

6 Road. The no-build scenario would permanently repair landslides as needed, after they occur. Based on discussions with the Summit County Engineer s Office, the analysis assumes that repairs in both scenarios are permanent, and that any incidental maintenance is equivalent in both scenarios. In both the TIGER and no-build scenarios, Boston Mills Road would need to be closed temporarily, forcing traffic to detour. This would create additional delay, vehicle operating costs, air pollution and CO 2 emissions. The TIGER proposal for landslide stabilization will generate benefits to users in the form of travel time savings, vehicle operating cost savings, reduced emissions (non-co 2 ), and reduced social cost of carbon. Because of the highly unstable condition of several hillsides along the road, the Summit County Engineer s Office predicts the near certainty of a landslide occurring before 2018 and a second landslide before 2022 if no repairs are made. Additional landslides could occur after 2022, but to be conservative the analysis of the no-build scenario includes only two anticipated landslides and extends only through According to the Summit County Engineer s Office, the TIGER proposal would entail a single, oneyear (365 days) road closure, while the no-build scenario includes two road closures one in 2018 for a full year (365 days) and the second in 2022 for 8 months (240 days). Based on these road closure durations, the analysis estimated additional vehicle-miles of travel (VMT) caused by the TIGER proposal and no-build scenarios. The analysis relies on several assumptions based on information provided by the Summit County Engineers Office, including: The shortest available detour route is 10.3 miles; the baseline average daily traffic volumes on Boston Mills Road are 3,000 cars 6

7 and 100 trucks; the annual traffic growth factor is.25% (non-compounding). 2 The analysis applied the annual growth factor to the baseline to produce estimated average daily traffic volumes for future years of the analysis. The additional vehicle miles of travel for the TIGER proposal were calculated to be 11.7 million miles, and the no-build scenario is 19.5 million miles (11.7 million miles in 2018, and 7.8 million miles in 2022). Using these VMT estimates, the cost-benefit analysis calculates the following costs (results summarized below): Value of Time Costs: Using a travel speed of 40 MPH (the posted speed limit on the roads involved), the analysis calculates additional hours of travel for cars and trucks, and then applies the following hourly values of time, per the 2016 TIGER Benefit-Cost Resource Guide 3, to calculate total value-of-time cost impacts. - Cars: $12.50 / hour (local personal travel) - Trucks $25.80 / hour (truck drivers) Vehicle Operating Costs: The analysis uses data from the American Automobile Association s Your Driving Costs For cars, the analysis uses the composite average for sedans at 15,000 annual miles. This value excludes SUVs and light trucks, and therefore under-estimates costs (and the benefits of avoided these costs). For trucks, the analysis uses the large sedan value at 15,000 miles. Given the narrow, curving nature of the roads in the park, the analysis assumes that the trucks involved are single-unit vehicles, not tractor-trailers. Even so, this value may under-estimate actual truck operating costs (and the benefits of avoiding these costs). Non-CO 2 Emissions Costs: The analysis applies per-mile emissions cost values from the Federal Highway Administration s Highway Economics Requirements System (HERS) model, state version. 5 The analysis uses values for cars and single-unit trucks operating on rural unrestricted roads at 40 MPH. The most recent HERS values available are expressed in 2012 dollars. The analysis adjusts those values to 2015 by multiplying them by the ratio of annual average Consumer Price Indices for 2012 and 2015 (the most recent year for which CPI data are available). 6 The resulting adjusted, baseline per-mile emissions cost values used in the analysis are: - Cars: $.0116 per mile - Trucks: $.0904 per mile 2 Summit County Engineers Office. This is the annual traffic growth rate the Office routinely uses in its project planning The HERS methodology can be found at: although the cost-benefit analysis used the most recent values available (2012), provided by USDOT. 6 and 7

8 Following the HERS methodology, the benefit-cost analysis applies estimated annual rates of decrease to the baseline per-mile emissions costs. Calculated based on historical HERS data through , these rates are: - Cars: 1.6% annual decrease in emission costs - Trucks: 3.2% annual decrease in emission costs Based on the estimated additional daily VMT, the analysis applies the costs and decrease factors to calculate additional daily emissions costs through 2022: Daily Emissions Costs (Non-CO 2 ) Emissions costs / mile cars $ $ $ Emissions costs / mile trucks $ $ $ Daily Emissions Costs: Cars $ 354 $ $ 326 Daily Emissions Costs: Trucks $ 90 $ $ 75 Total Emissions cost per day $ 444 $ $ 401 These daily values are used to calculate estimated costs for the TIGER and no-build scenarios based on the number of days of road closure, by year, for each scenario. The aggregate emissions costs are discounted to the baseline year at 3% and 7% discount rates. CO 2 Emissions Costs: The benefit-cost analysis estimates CO 2 -related social costs as follows: - Estimated daily VMT values are converted to gallons of fuel consumed by applying the following fuel-economy values, supplied by the Federal Highway Administration 8 : Cars: 23.4 MPG Single-unit trucks: 7.3 MPG The FHWA derives these values by dividing total VMT for a given year by total taxable fuel sales for that year. Consequently, these values provide a more accurate measure of the true fuel economy of vehicles in operation in any given year than do estimates built up from fuel economy test data for the various model years comprising the fleet in any given calendar year. Because the landslide repair component of the benefit-cost analysis extends only to the year 2022, the fuel economy values are not increased to reflect the most recent CAFE standards, slated to be in effect fully by By contrast, as is explained in the next section, the bridge replacement component of the benefit-cost analysis extends out to the year 2066, and therefore does adjust future-year fuel economy values to try to reflect the new CAFE standards. - Fuel consumption values are converted to pounds of CO 2 using values from the Energy Information Agency 9 : Gasoline: pounds CO 2 per gallon Diesel fuel: pounds CO 2 per gallon. 7 Data provided by USDOT

9 The analysis assumed that the truck fleet involved consists of 50 percent dieselpowered vehicles and 50 percent gasoline-powered vehicles. Therefore, the CO 2 - pounds-per-gallon value used for trucks in the analysis is Pounds of CO 2 are converted to metric tons (2, pounds per metric ton). - Daily Social costs of Carbon (SCC) per unit metric ton of CO 2 are estimated using the 3% SCC values for each year provided in the 2016 TIGER Benefit-Cost Resource Guide. The Resource Guide provides SCC values through For years beyond 2050, the analysis uses the 3% SCC values for Finally, the daily 3% SCC values are used to calculate estimated costs for the TIGER and no-build scenarios based on the number of days of road closure, by year, for each scenario. Present values of all future-year CO 2 costs are calculated using a 3% discount rate. Landslide repair costs for both scenarios are expressed in 2016 dollars. Future year costs and benefits are discounted at 7% and 3% discount rates (CO2 costs discounted only at 3% rate). Aggregate savings and cost for the landslide repairs are: 3% Discount Rate 7% Discount Rate Landslide repair cost savings $ 1,602,072 $ 1,539,831 Time savings $ 2,110,704 $ 1,679,376 Vehicle operating cost savings $ 3,755,662 $ 2,988,183 Reduced emissions $ 80,645 $ 64,165 Reduced social cost of carbon $ 144,767 $ 144,767 TOTAL Cost Savings $ 7,693,850 $ 6,416,322 Cost of TIGER Proposal $ 3,633,707 $ 3,367,106 Benefit-Cost Ratio Replacement The benefit-cost analysis compares the TIGER proposal to replace and then maintain the Boston Mills Road bridge across the Cuyahoga River, as well as to replace the culvert under Boston Mills Road in the vicinity of the intersection of I-80 and I-271, with the no-build scenario that would entail periodic maintenance on both pieces of infrastructure. The no-build scenario includes bridge repairs every 5 years beginning in 2019, repairing the culvert in 2036, and replacing the bridge deck in In the TIGER proposal, routine bridge maintenance would begin 20 years after construction of the new bridge, and would follow the same schedule as the no-build scenario. In both scenarios, once replaced/repaired, the culvert would require no additional maintenance for the duration of the analysis period. 9

10 The analysis of the TIGER proposal does not include closure of Boston Mills Road for construction of the new bridge. This is because bridge construction is assumed to be coordinated with the TIGER proposal landslide repairs (described above), for which the road would already be closed for 1 year. Subsequent repairs to the bridge under both the TIGER proposal and the no-build scenario would require brief road closures, the impacts of which are captured in the analysis. Anticipated future maintenance schedules and costs are provided by the Summit County Engineer s Office. All anticipated future maintenance costs are expressed in 2016 dollars and discounted to present values as appropriate. The anticipated future repair schedules for the two scenarios are: TIGER Proposal No-Build New Deck Culvert Repair New Deck The analytic approach used to estimate the road closure impacts of the bridge scenarios is identical to the approach used to estimate the road closure impacts of the landslide repairs, except in one respect. Because the bridge replacement analysis extends 50 years into the future, it attempts to account for rising vehicle fuel-economy performance beginning after 2025, when new CAFE fuel-economy standards will be in effect. This is done to avoid over-estimating the CO 2 impacts in future years (non-co 2 emission 10

11 cost values already apply factors for annual cost decreases). The adjusted fuel-economy values are developed as follows: For the years , the analysis uses current fuel economy values for cars and single-unit trucks (24.3 MPG and 7.3 MPG, respectively). Beginning in the year 2025, fuel-economy values are adjusted upward annually for 15 years. This is the current expected lifetime of new vehicles in the US fleet, and represents a reasonable proxy for the number of years it will take the vehicle fleet to fully comply with the 2025 CAFE standards. 10 In reality, complete turnover of the vehicle fleet takes longer than this, but the analysis is deliberately conservative: it transitions the fleet to higher fuel efficiency levels more quickly, to avoid over-estimating future CO 2 emissions. Because newer vehicles are driven more intensively than older ones (95% of fleet total VMT is accounted for by vehicles that are age 20 or younger), it is reasonable to assume that the percentage of annual VMT, (and therefore annual CO 2 emissions) generated by vehicles complying with the new 2025 CAFE standards will, in fact, change at a faster rate than the overall fleet turnover rate. Thus, the analysis transitions the fuel economy of cars from the current fleet average of 23.4 MPG in the year 2025, to the new CAFE standard of 49 MPG in the year This equates to an annual compound rate of change of 1.05%. The analysis uses this same rate of change to transition the truck fuel economy from 7.3 MPG in 2025 to 15.3 MPG in This may be too rapid a rate of change for single-unit trucks, depending on the fleet turnover rate for such vehicles, but it is a conservative approach that avoids over-estimating future CO 2 emissions. The aggregate, discounted savings and costs for the bridge replacement proposal are: 3% Discount Rate 7% Discount Rate maintenance cost savings $ 171,503 $ 120,856 Time savings $ 479,111 $ 370,135 Vehicle operating cost savings $ 852,502 $ 658,597 Reduced emissions $ 19,072 $ 12,494 Reduced social cost of carbon $ 19,482 $ 19,482 TOTAL COST SAVINGS $ 1,541,669 $ 1,181,563 Cost of TIGER Proposal $ 2,243,378 $ 2,078,784 Benefit-Cost Ratio Compared with the no-build scenario, the TIGER proposal would deliver net savings on long-term maintenance costs, time costs, vehicle operating costs, emissions costs, and social costs of carbon. Although the total cost of replacing both bridges is larger than those savings, replacing the bridges is necessary to keep them in accordance with state and federal bridge safety regulations. 10 Expected vehicle lifetime calculated by USDOT using the 2009 National Personal Transportation Survey ( and vehicle registration data supplied by R.L. Polk. 11