Mobile Bay Bridge


REVIEW OF THE SUPPLEMENTAL DRAFT ENVIRONMENTAL IMPACT STATEMENT FOR THE PROPOSED MOBILE RIVER BRIDGE AND BAYWAY




FINAL REPORT
JULY 2019
Disclosure

My name is David Luckie. I am a citizen of Mobile, Alabama. I am a semi-retired professional economist with more than 30 years of experience conducting, supervising and reviewing large public infrastructure project feasibility studies. My experience ranges from Florida transportation corridors to California beaches and from Louisiana flood protection to dam safety in Ohio and Pennsylvania.

I have not been paid or offered anything of value in exchange for preparation of this review or these comments. The statements contained in this document are mine only and no one has asked me to conduct this review.

I have no financial relationship with any of the parties involved in the preparation of the documents I have reviewed. All documents I have reviewed were published on the Mobile River Bridge website.

To the best of my knowledge I have no conflicts of interest and I am neither opposed nor in favor of the proposed project.

I was first made aware of the availability of the project decision documents by news reports announcing the public meetings in early May 2019. Unfortunately, due to factors beyond my control I was unable to complete a thorough review until July 8, 2019.

Review Summary Statements

The Supplemental Draft Environmental Impact Statement (SDEIS) does not comply with the National Environmental Protection Act (NEPA).

The SDEIS does not present a compelling argument for the expenditure of approximately $2.1 billion to construct a new bridge and Bayway over Mobile River and Mobile Bay.

The SDEIS does not demonstrate economic feasibility—nowhere in the SDEIS or its appendices is there a statement that the proposed project’s benefits equal or exceed its costs.

The SDEIS does not evaluate a full range of reasonable alternatives to the existing and future without condition.

The SDEIS does not identify and address a full range of impacts of the proposed project—both positive and negative.

The SDEIS does not adequately disclose expected costs of the project and unrealistically forecasts construction to be completed by 2025.

Risk and uncertainty associated with project construction costs, project schedule and expected performance of the project are not disclosed or discussed.

The acceptability of the proposed project depends on an incomplete coastal storm risk analysis and a traffic and revenue study that is deeply flawed. The coastal storm risk analysis does not include any examination of storm damages, fully one-half of any risk analysis. The traffic study  uses faulty assumptions and adopts a methodology that is ill-suited to determine consumers’ willingness-to-pay. It arbitrarily and artificially inflates both the costs and revenues for the tolling system and arbitrarily and unreasonably estimates values for revenue leakage.

The public review period for review of these documents was unreasonably short. The bare minimum of 45 days is not enough time for a technical and policy review of more than 1,700 pages—including 244 pages in Volume I of the decision document and 176 pages in the Traffic & Revenue study.

This report identifies 19 issues with enough significance to bring forward here. There are 11 issues with the SDEIS and its appendices. There are eight issues with the Traffic & Revenue Study. Fifteen of the total are of high significance and each is enough to warrant withholding approval until resolution. The remaining issues are of lower significance and are unlikely to affect approval but significant enough to warrant being  addressed.

Specific comments follow.

SDEIS Comments:

Comment 1: The SDEIS may not be the correct designation for the MRB&B decision document because it replaces rather than supplements the alternatives evaluation of the 2014 EIS.

Basis: A Supplemental EIS is normally prepared when there are (a) substantial changes to the proposed action (new alternatives with attendant new impacts) or (b) new information or data revealed about the impacts of originally proposed alternatives (alternatives more or less impactful than previously described).

Implicit in the NEPA guidance on determining what type of document is best suited is the notion that new alternatives will be added to the range of measures previously considered. An SDEIS is an opportunity to reopen a previous plan formulation process using new information. It is not a basis for starting it anew. It is expected that the full range of both old and new alternatives will be given equal consideration.

However, the SDEIS describes a completely new project bearing little resemblance to any of the alternatives considered in the 2014 EIS, which is purportedly being supplemented with this decision document. The key difference between the projects envisioned by the two documents is in the planning frameworks and the seriousness of consideration of alternatives. The 2014 EIS examined alternatives that widened the Bayway, with only token consideration given to total replacement. This SDEIS examines no widening alternatives and only examines total replacement.

The SDEIS does not supplement the 2014 EIS—it replaces it. If this is not the case and ALDOT is convinced that the SDEIS is the proper vehicle to evaluate new information, then the SDEIS should be revised to evaluate the alternatives considered in the 2014 EIS with the same seriousness and willingness to accept them as it does the replacement alternatives.

Without resolution, this issue could halt finalization of the SDEIS.

Comment 2: There is no economic analysis demonstrating that the proposed project produces an economic OR financial benefit that is equal to or greater than the project costs.

Basis: Economic feasibility drives almost all government participation in public infrastructure projects. Transportation, flood/storm risk reduction, navigation, recreation and even many environmental restoration/enhancement projects are expected to produce a measurable output that has a value making it worth the expected cost. In projects with outputs that can be valued monetarily, a benefit cost ratio (BCR) is computed. A project is considered feasible if its BCR is greater than 1.0 to 1.0.

The only feasibility evaluation that attempted to determine a BCR for a new bridge system was conducted in 1997, for which there is only an Executive Summary available for public review. That feasibility study represents at best a reconnaissance level of detail and cannot be used to justify the project proposed by the SDEIS.

The 2014 EIS includes no evaluations of economic feasibility.

This means that there are no recent analyses of project benefits vs project costs available. Neither the public nor decision makers at the local, state or federal levels can understand why this project makes good economic or financial sense. We have no means to measure this project’s worth vis-à-vis the myriad of other competing uses of scarce public resources.

Without resolution, this issue could halt finalization of the SDEIS.

Comment 3: Cumulative impacts to the local or national economy have not been sufficiently addressed. This is a NEPA requirement that has not been met.

Basis: The 2014 EIS is appended by a Martin Associates study that attempts to describe an estimation of economic impacts associated with the various bridge alternatives. None of these alternatives evaluated or included complete replacement of the Bayway, since there were no Bayway replacements given serious consideration in the 2014 EIS.

Additionally, the Martin study only addresses negative impacts and does not estimate potential economic benefits of the project, doesn’t explore project costs and doesn’t mention risk and uncertainty.

The Martin Study also fails to address potential impacts to Mobile-Baldwin County economic interdependence. These two counties are unique in Alabama in that they share proximity to Mobile Bay and the five rivers delta exclusively. The bay and the delta are a primary resource for the economic output and competitiveness of the two counties.

The economic livelihood of Mobile County is closely tied to that of Baldwin County, and vice versa. There are many people who live in Baldwin and commute to Mobile for work. The reverse is true as well. Imposing a toll on Mobile and Baldwin County commuters will have a significant impact on the productivity of both county economies. A toll (or a tax) on Mobile County drivers is a toll (or a tax) on Baldwin County economic output and vice versa. The SDEIS does not address this issue.

Further, the Martin study describes only local impacts and is limited to an unreasonably small number of sectors in the economy. The Martin study does not address impacts to the national economy at all and fails to address impacts to commercial navigation though to Mobile Harbor Ship Channel and Turning Basin. The U.S. Army Corps of Engineers recently completed a study on the feasibility of deepening this project. Yet the SDEIS is silent on how the two projects may interact during construction and/or during maintenance operations of either or both.

The 1997 and 2012 economic evaluations are both too old, too superficial and too incomplete to determine what net economic benefit accrues to the proposed project. The communication of both detrimental and beneficial economic impacts is crucial to gaining local, state, regional and national acceptance of such a large, complex and expensive project.

Without resolution, this issue could halt finalization of the SDEIS.

Comment 4: The alternative formulation and screening process required by NEPA is virtually nonexistent in the SDEIS, and a range of potentially feasible alternatives were not considered.

Basis: General practice in public infrastructure project planning calls for development of a very broad array of alternative plans and then to screen alternatives that don’t meet planning objectives, violate planning constraints or present technical or environmental hurdles too great to overcome. The SDEIS references a screening process conducting in the 2014 EIS.

However, the SDEIS explains that new geotechnical, hydrologic and engineering issues have been identified for the no-build alternative and each of the 2014 EIS’ build alternatives. The iterative process of alternative plan formulation calls for using this new information to restart the screening process to see if the new data affects carry-forward potential of the old alternatives. This was not done. The SDEIS simply scraps the alternatives evaluated in the 2014 EIS.

None of the build alternatives in the 2014 EIS included design/construction of toll systems. None of them called for full-scale replacement of the existing Bayway. All of the build alternatives in the SDEIS call for tolling systems and all call for complete replacement of the existing Bayway.

There is no comparison of modified 2014 EIS alternatives to new alternatives developed in light of the new data.

Alternatives not considered or discussed in the SDEIS include such measures as armoring or retrofit of existing Bayway spans during new construction and build alternatives not requiring any modifications for tolling.

This Comment and Comment 1 are related, but they are not the same. Comment 1 relates to the purpose of an SDEIS and what is expected in reformulation. This comment relates to the conduct of an EIS as if the formulation was started anew.

Without resolution, this issue could halt finalization of the SDEIS.

Comment 5: The evaluation of potential storm surge risk to the existing Bayway in Appendix G is incomplete without a consequence analysis, and storm surge risk is a key factor in the decision to examine only replacement alternatives for the Bayway.

Basis: Rather than focusing only on Bayway replacement, additional alternatives that include armoring and retrofit of an existing and storm-tested structure are required.

The mere existence of probability that a tropical storm or hurricane could affect the existing Bayway is insufficient justification for forgoing evaluation of alternatives that add capacity to the structure. While the coastal engineering analyses in Appendix G show that there is a chance that the Bayway will be overtopped or inundated, there is no discussion of the consequences of inundating events. Merely stating that the existing Bayway is vulnerable to storm urge is not enough to demand its replacement.

Even a storm with the intensity and surge of Hurricane Katrina could leave the unmodified but well-maintained structure intact or cause a damage level that is acceptable given such storms’ very low frequency of occurrence. Damage consequences must be considered in tandem with damage frequency. We cannot design or build away 100% of risk. The SDEIS fails to address the tandem relationship between storm event probability and consequence, and risk cannot be communicated without it.

This risk analysis cannot be done reliably in a qualitative manner. Explicit return frequencies of potentially damaging storms must be disclosed. The potential damages to the affected structures must be estimated, and the full life-cycle cost of the storm damage risk must be shown. Since 100% of risk avoidance is unattainable, some measurable level of risk must be identified as acceptable and it must be made explicit. If the SDEIS states that a structure must be designed to withstand the 100-year event, it must explain why that level of protection is necessary.

Residual risk must also be communicated under current NEPA guidance. The SDEIS does not state the risk that will remain in the as-built condition. There is no discussion of expected project performance. Given the uncertainties associated with a 100-year event, a 100-year storm would still have a probability of causing damage and disruptive effects. These are not acknowledged or discussed. The project performance in the 250- and 500-year events’ risk are not discussed.

Appendix G is thus incomplete and represents only one half of the risk analysis.

Without resolution, this issue could halt finalization of the SDEIS.

Comment 6: The SDEIS contains only top-level construction cost estimates and the costs disclosed lack enough detail to be evaluated for reasonableness and realism.

Basis: Project costs have more than doubled since publication of the 2014 EIS, from $773 million to $2.1 billion, a highly significant escalation. While the shift away from Bayway modification to Bayway replacement can account for some of this increase, the public must be provided with a transparent accounting of costs.  Section 4.4.4 is the only section of the SDEIS that discusses project costs and it does so in only the broadest and briefest terms.

There is no cost appendix to the SDEIS. There is no breakdown of project cost by feature, year, task, etc.  This is an unacceptable lack of full disclosure under any reasonable interpretation of NEPA. The public has had no opportunity to examine the detailed cost estimate of the recommended plan or any of its alternatives.

Public disclosure and review of project costs is necessary under NEPA guidance.

Without resolution, this issue could halt finalization of the SDEIS.

Comment 7: The project schedule is vague and likely unrealistic, with no transparency in how the construction period was developed. There is no planning level schedule or construction plan, and there is no discussion of uncertainty or risks associated with the schedule.

This is a very large marine construction project. Projects of this scale and cost are uncommon. They require the obligation and use of large, specialized pieces of capital equipment and very highly specialized labor for management, supervision and actual construction. These capital and labor resources are often in use to full capacity during peak seasons and have their availability schedules known anywhere from 1-3 years in advance.

Schedule uncertainty can lead to expectations of significant delays in completion, causing unknown impacts and imposing unknown costs to owners, builders and operators.

A project that is over budget is usually off schedule and a project behind schedule is usually over budget. Since it was first examined in the 1990’s, this project has already seen its cost estimate more than double and was anticipated to have already been completed and in full operation by 2020. ALDOT has heroically completed many projects on schedule despite unforeseen setbacks, but the scale of this project will sorely test any plan. The SDEIS is incomplete without a detailed schedule discussion.

Without resolution, this issue could halt finalization of the SDEIS.

Comment 8: The SDEIS incorrectly states that availability of funding affects project viability.

Basis: Section 3.7.2 states: ”[b]ecause of the funding challenges ALDOT and the Federal government are currently experiencing, the project is only viable if the corridor is tolled.”  This is incorrect.  Funding availability has no bearing on economic or financial feasibility. Under NEPA, any economically and/or environmentally feasible alternative is considered viable. The project is either viable regardless of how it’s funded, or it’s not.

Furthermore, there is no evaluation showing that all reasonable non-tolled alternatives are economically infeasible and thus provide no net economic benefit over the no action alternative. The SDEIS does not evaluate tollfree alternatives at all.

Without resolution, this issue could halt finalization of the SDEIS.

Comment 9: The SDEIS references an unpublished ALDOT toll policy and the public cannot review it for reasonableness, fairness or legality.

Basis: The referenced policy has not been published. Or, if it has been published the public was never informed about its existence or given the ability to review it. ALDOT’s authority to establish policies generating income for the state or its contractors is likely to be challenged, as there is a belief only the state legislature may raise revenues.

Without resolution, this issue is unlikely to halt finalization of the SDEIS.

Comment 10: Allowing trucks to use the only tollfree route will increase risk to drivers unwilling or unable to pay tolls.

Basis: Risk is likely to increase by increasing traffic on the only tollfree route and exposing more noncommercial drivers to increased collision risk with large commercial, industrial and potentially hazardous materials transportation.

This has implications for ALDOT’s recent actions to close the Bankhead Tunnel on some weekends to allow for recreational use of the route. With traffic certain to increase on a tollfree route, the recreational use of Bankhead will almost certainly have to end.

Furthermore, this issue has environmental justice implications. Those with the least ability to pay are the populations that will have the greatest increase in risk.

Without resolution, this issue could halt finalization of the SDEIS.

Comment 11: Pedestrian/bicycle facilities do not meet any stated need or purpose in Section 2.0 of the SDEIS. They add significantly to the costs with no discussion of economic benefits or of how these facilities pay for themselves.

Basis: Nowhere in the SDEIS is there a discussion of recreational feature costs or any apparent means with which to offset them through tolls for recreational use. Nor is there any discussion of what economic or financial output is produced by these features, The SDEIS merely states that it is committed to providing them but does not state why they are needed.

Without resolution, this issue is unlikely to halt finalization of the SDEIS.

T&R Study specific comments:

Comment 12: Value of time/willingness to pay is improperly estimated and therefore useless.

Basis: The Traffic and Revenue Study uses a contingent valuation method (CVM) to attempt to reveal consumers’ willingness to pay to avoid congestion.  CVM studies are notoriously difficult to conduct objectively and reliably and are most often used for small-scale projects or for preliminary investigations to determine whether additional investigations are warranted.

One difficulty in conducting a CVM study is attaining a representative sample of the population the analyst intends to model. This study contains no documentation of how the sample size or sample demographics were determined. This study provides no descriptive statistics and does not provide a margin of error for the topline figures or breakdowns by demographic. Accordingly, the reader cannot tell whether the survey’s sample is representative of the population being modeled. One could suspect that the sample was selected because it was most beneficial to the analyst’s desired outcome. Such appearances must be carefully avoided.

Assuming one has a representative sample, it must be surveyed with an unbiased survey instrument that does not lead respondents in any direction (i.e., leading towards favoring or opposing a particular project or alternative). There are numerous sets of examples and guides on designing an unbiased survey instrument, including a comprehensive collection of example questions recommended by the U.S. Office of Management and Budget for use in federal projects that may come before OMB for consideration for inclusion in the President’s budget. This study does not provide copies of the survey instrument, so the public cannot determine whether its questions are biased or unbiased.

Care must be taken in survey administration to screen for strategic bidding in survey responses. Generally (but not always), strategic bidding falls into two categories: the ‘free rider” response and the “altruist” response. The free rider pretends not to value the resource or good/service in the hopes that he/she will get the benefit for free and will place zero or mere token value on it. The altruist values societal benefit more than his own satisfaction and pretends to place greater value on the resource, giving it an inflated value. It is not acceptable to simply assume that the two strategies cancel each other. There is no indication that the T&R Study recognizes the problem of strategic bidding and does not provide assurance that it has been addressed.

There is no evidence that the sample is representative, that the survey is unbiased, or that strategic bidding has been accounted for and addressed.

A travel cost method using actual and forecast travel rates along with published statistics on vehicle operating costs would transparently estimate the actual value of a trip on the existing Bayway and its alternatives. However, no method other than a CVM was contemplated for this study.

Without resolution, this issue could halt finalization of the SDEIS.

Comment 13: Ability to pay is not factored into the value estimates underlying the proposed toll.

Basis: Ability to pay is a driving factor in any successful transaction in a market economy. One must be both willing and able to pay for any product or service. Any analysis of willingness to pay that does not recognize the consumer’s budget constraints will always and everywhere artificially inflate the value of the subject good or service.

As an illustration, consider the homebuyer thinking of a landlocked vs a waterfront dwelling. The waterfront house is certainly more desirable than the same house located inland. But only a limited number of homebuyers can afford the additional costs of the waterfront property. The T&R Study does not account for budget constraints and thus would estimate value as if everyone can afford to live on the beach, lagoon, bay or river.

Our free market economy is full of examples where transactions do not occur even when producers have efficiently priced goods and consumers have the willingness to pay but lack the financial means to complete the purchase.

The only thing that this study does is estimate how much appreciation the window shopper has for the dress or suit just inside the clothing store. This is unrealistic, further rendering the study’s trip value estimate useless.

Without resolution, this issue could halt finalization of the SDEIS.

Comment 14: A tolling regime that does not account for peak demand artificially reduces potential revenue while failing to signal actual trip cost to consumers.

Basis: The proposed tolling plan does not foresee imposing a variable toll rate based on time of day, day of week or season. Imposing a higher toll on a trip taken during peak demand periods leaves a great deal of toll revenues on the table. For example, Friday afternoons between 4:00pm and 6:00pm would generate a significant increase in toll revenue, creating an opportunity to reduce tolls on non-peak travel and consequently reducing the potential impact to the local consumer budget.

Peak load pricing is a common subject in the study of consumer behavior. If a consumer knows that he will pay more for a good or service during peak times, he is likely to alter the timing of his consumption to the point where value lost from off peak consumption is roughly the same as value gained from peak consumption.

A broad array of peak and off-peak toll regimes should be considered, and the ones generating the greatest net revenue with the least local consumer budget should be highlighted, discussed and compared.

Without resolution, this issue could halt finalization of the SDEIS.

Comment 15: Chapters 8-11 use arbitrary and different inflation rates for both system costs and revenues. This artificially distorts the effect of inflation and produces a meaningless comparison of revenues, costs and financial feasibility.

Basis: Expected future cash flows should NEVER be expressed in inflated values. Only constant (real) dollars are meaningful because any rate of growth used to inflate the values would also be used to discount them in a present value calculation. This is a basic concept in economic and financial analysis and the fact that it was abandoned in this study is deeply troubling.

Worse, a different rate of growth is used to inflate toll revenues in Chapter 9 than either the value of time or vehicle operating cost in Chapter 8. Worse still, a different and undisclosed rate is used to inflate future operations and maintenance costs in Chapter 11.

Having at least two and as many of three different inflation rates makes any comparison of cash flows meaningless. It is especially troubling to have toll revenues with a growth rate higher than the growth rate of toll system costs. This could lead to suspicion that the analysis is rigged to favor implementing the project. This appearance must be avoided.

Without resolution, this issue could halt finalization of the SDEIS.

Comment 16: The assumptions regarding historical, existing and expected future traffic patterns and growth do not appear realistic.

Basis: Negative growth in traffic between 2005-2014 assumed to be related to increased gas prices and the 2008-09 financial crisis and recession. This assumption does not address technological growth during this period (eg, iPhone introduced in 2007) and remote work capability. Also, 2004 and 2005 were the years of Hurricanes Ivan and Katrina respectively, which temporarily altered traffic patterns due to recovery efforts (debris management, construction, temp relocations, etc).
Using the 10-year period between 2005-14 thus does not likely reflect the true underlying historical traffic growth. The T&R Study should explore a more detailed economic setting that addresses the effects of back-to-back storm years, reduced traffic flows due to technological growth and other external factors affecting traffic on the I-10 corridor between the AL/FL line and the AL/MS. Line.

Without resolution, this issue is unlikely to halt finalization of the SDEIS.

Comment 17: Toll price elasticity of demand is treated improperly.

Basis: Chapter 10 of the study discusses drivers’ sensitivity to toll price only theoretically and uses assumptions rather than empirical data. There is extensive literature on price elasticities and studies conducted on tolled thoroughfares from around the country. Little of this information was used in this study, if any. It is inexcusable to simply make assumptions based on a review of internally produced synthetic data.

The study then comes up with the conclusion that travel demand is price inelastic. This conclusion is based on supposition rather than observation of actual consumer behavior.

Without resolution, this issue is unlikely to halt finalization of the SDEIS.

Comment 18: The 5% estimate for invalid tags is unrealistically small.

Basis: Alabama drivers are notorious for failure to register and/or keep registration current. Under current Alabama law, any individual may purchase a vehicle without simultaneously being required to purchase liability insurance. Since proof of insurance is required to register the vehicle and purchase a tag, a significant proportion of vehicles in Mobile and Baldwin counties do not have valid tags. While it is beyond the scope of this review to estimate tag and registration noncompliance, the percentage of vehicles with no tags will have a significant effect.

Also, a toll bridge creates an incentive to not register a vehicle or to simply remove tags prior to planned trips. This will affect out-of-state drivers as well, since a vehicle with no tag can originate from any state. There is nothing to prevent a driver from any state from stopping just outside the region, removing the tags, and replacing them once the trip is complete.

This study makes no effort to determine what percentage of the historical, existing or future vehicles in the market area are improperly tagged or simply unregistered. The 5% figure is taken from thin air.
Without resolution, this issue is unlikely halt finalization of the SDEIS.

Comment 19: The T&R Study is silent on risk and uncertainty, key factors in the judgment of the ability of the project to perform as expected economically and financially.

Basis: The word “uncertainty” is used only once in the T&R Study—in the preparer’s disclaimer of any warranty on the study’s projections or estimates. The word “risk” is used in a similar fashion and only once.

A reasonably thorough discussion of the probable impacts of a project’s non-performance is required under NEPA. None of the important variables subject to uncertainty and capable of increasing risk are even identified. What is the probability that future traffic flow will fall short of forecasts? The correct answer is that we are uncertain. What difference between forecast and actual traffic is enough to drive the concessionaire to insolvency? The correct answer is if we don’t know, we had better find out because we are at risk. Here, the study avoids these discussions altogether.

Without resolution, this issue could halt finalization of the SDEIS.

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