Oregon State Treasury


I-5 Bridge Replacement Project

Skip Navigation LinksAbout Treasury > I-5 Bridge Replacement Project


Thank you for taking the time to learn more about the Columbia River bridge replacement project and the Oregon State Treasury’s role, which is to review the financial underpinnings of the project plan.
Legislation passed by the 2013 assembly (HB 2800) sets four triggers before Oregon construction can begin on a proposed new span across the Columbia River connecting Portland and Vancouver, Washington. Those triggers reduce the financial risk to Oregon.The legislation says Oregon is authorized to commit its share of the project cost only after all of these conditions are met.
·       The U.S. Coast Guard has issued a general bridge permit
·       The State of Washington must commit its share of the financing
·       The US Department of Transportation has submitted a Full Funding Grant Agreement application for congressional review. That agreement would authorize federal funds to be expended on the project.
·       The Oregon State Treasury must ensure that the math and projections for the tolling and traffic revenue are sound.
This web page is focused on the Treasury analysis and the information that will be used to make that evaluation. Additional information will be posted as it becomes available.
It is important to note that the analysis process is an independent and detailed review that seeks to determine the expected revenues from tolls on the envisioned bridge. That will be determined through a review of updated traffic and revenue forecasts and a financing-ready forecast know as an “investment grade analysis.” This information is important in determining the financing options for funding the project .
The State Treasurer does not address questions about bridge height, the USCG permit or the aesthetics of the bridge. Any questions about the bridge design or other triggers in HB 2800 should be directed to the CRC project office or the Oregon Department of Transportation. 
The investment grade analysis has been completed and submitted by consultants hired by the project managers. It can be found at the Department of Transportation web site:
What is an investment grade analysis and why is it important?
An investment grade traffic and revenue analysis is a specific level of effort within a broad analysis area of toll revenue forecasting referred to as traffic and revenue analysis. Traffic and revenue analyses develop forecasts of anticipated revenue from tolling through transportation modeling.
The analysis refers to the work of the traffic and revenue forecasters that is required in order to get a rating on the toll bonds and/or federal transportation loans associated with the project. 
At the investment grade level, the traffic and revenue analysis work is developed to provide the specific type, detail, and quality of information used by the credit rating agencies to assign a credit rating for the toll revenue stream as a security for borrowing. The credit rating will affect the cost of borrowing against the toll revenue stream.
It is a technical analysis of the factors related to annual traffic demand, and accounts for various road condition, land use, employment growth patterns, population growth patterns, value of time by trip purpose throughout the Portland Metro area for a 30-year period. 
 It will also develop detailed time-of-use tolling levels, estimate the shift in traffic patterns caused by these tolls, and calculate annual revenue based on these tolls. 
source: CDM Smith 
The work to develop preliminary traffic and revenue forecasts and the investment grade analysis began in October 2012.
·       Develop and validate a preliminary range of toll revenue and capacity (February 2013)
·       Conduct a travel pattern and user stated preference survey (October 2012 – April 2013)
·       Refresh the February 2013 toll revenue report, based on a more refined preliminary traffic model, used to inform deliberations on the toll policy and toll rates for the CRC project (Anticipated July 1, 2013).
·       Prepare a final draft investment grade analysis report (Anticipated December 2013), documenting results from the investment grade traffic and revenue model and investment grade analysis.
131104 Garrett Ltr Nov 4 CRC.pdf 
 Nov. 4, 2013 ODOT Director letter about toll planning.pdf
·       What is the Interstate 5 bridge replacement project?
o   The project, also known as the Columbia River Crossing, includes improvements to five interchanges, replacement of the I-5 Interstate Bridges, extension of light rail to Vancouver, and improving bicycle and pedestrian connections.
·       Who is performing the investment grade analysis?
o   CDM Smith was hired to perform the analysis. The firm is based in Massachusetts and is a global consulting and engineering firm for water, environment, transportation, energy and facilities.
·       What sort of data is being used for the investment grade analysis?
o   The analysis gathers both existing and new information. Data essential to the analysis includes traffic numbers and vehicle classifications, travel patterns, regional trip making behavior, independent socioeconomic forecast, and cargo forecasts.
·       How current is the data being used in the investment grade analysis?
o   The most current data available is being used in the analysis. If available data is not sufficiently current to meet investment grade level standards, specific data gathering and analysis efforts will be conducted. For example, two surveys will be administered and analyzed in 2013 to understand current travel patterns and to develop a current value of time for use within the transportation modeling. Current traffic data including vehicle classification and occupancy data will also be collected. Additionally, an independent socioeconomic analysis will be conducted by EcoNorthwest to result in a baseline socioeconomic scenario independent from those generated by the regional planning organizations. 
·       Will the investment grade analysis determine the level of tolls?
o   No. The final draft investment grade traffic and revenue report expected by the end of 2013 will be based on a baseline toll rate and schedule developed through work with the departments of transportation, the state transportation commissions, and the state treasurer’s offices.
o   Additional work on rate setting will occur in 2014, prior to the implementation of tolls on the facility, and rates will be set by the two state’s transportation commissions to meet the funding requirements.
·       What is “investment grade?”
A rating that indicates that a bond has a relatively low risk of default. Bond rating firms,  such as Standard and Poor's, use different designations to identify a bond's credit quality rating. 'AAA' and 'AA' (high credit quality) and 'A' and 'BBB' (medium credit quality) are considered to be investment grade.

o  Credit ratings for bonds below these designations ('BB','B', 'CCC',etc.) are considered low credit quality, and are also referred to as "junk bonds".

·       Will legislators still need to vote on tolls?
o   In Oregon, the legislature has given the responsibility for setting toll rates and structures to the Oregon Transportation Commission. However, lawmakers will need to approve a toll bonding authorization bill in the 2013 session.
·       How does light rail figure in the investment grade analysis?
o   The preliminary traffic and revenue forecasts and investment grade traffic and revenue analysis are informed by a transportation model which includes the CRC project. While the primary focus of these studies is on the highway traffic on I-5 and toll revenue generated by this traffic, the analyses develop this potential revenue in context of the other options available to potential I-5 users, including light rail and other transit; I-205; combining trips to minimize use of the I-5 bridge; or not crossing the river at all.
·       What is Oregon’s share of the project cost?
  •  UPDATE: Oregon officials are exploring the potential of a scenario in which Oregon takes the full responsibility for the financing of the crossing, after Washington officials opted to not approve their $450 million share of the projected project costs.Oregon will be responsible for toll setting and collection under the revised plan. 
o   Both Oregon and Washington are expected to provide state equity funding through existing or new state funds which may be financed to meet project delivery cash needs. Oregon’s share of state equity for the project is $450 million. In addition, toll-backed borrowing for the project is assumed to be undertaken by both states for the necessary toll funding contribution amount.
·       What happens if the state of Washington or federal funding is not approved?
UPDATE: The Oregon-only proposal would scale back the projected cost of the project by eliminating proposed interchanges on the Washington side of the Columbia River, and if the numbers work, Oregon could still apply for the federal funding without Washington's commitment of equity funding.
o   Oregon House Bill 2800 authorizes $450 million in state funding from Oregon only after several criteria are met. These “triggers” include a commitment of funding from Washington state, as well as the submittal of a New Starts grant by the Federal Transit Administration. If these triggers are not met, Oregon will not provide funding.
·       The Treasurer released an initial review in 2011 that raised questions about the project numbers. What were the bases of those concerns?
o   The primary concerns were related to outdated data and background forecasts including the socioeconomic underpinnings of the forecast. The project subsequently accepted and incorporated the Treasury recommendations.
o   As noted above, new data is being collected and new forecasts are being developed which include addressing the specific concerns of the Treasurer’s review.
·       I have questions about the Interstate 5 bridge project that are not connected to the investment grade analysis. Who should I contact?
o   Information about the Columbia River Crossing project is available on the website www.columbiarivercrossing.org The website includes a list of frequently asked questions and responses accessible here http://columbiarivercrossing.org/ProjectInformation/FAQ.aspx.
o   You may also contact the project office with questions or information requests by phone (866-396-2726) or email (feedback@columbiarivercrossing.org).