C-470 express lane use lags, prompting $4 million loan to cover costs

A C-470 vehicle heading west between Santa Fe Drive and Lucent Boulevard at Highlands Ranch on August 18, 2022. (Photo credit: Helen H. Richardson/Denver Post)

The Colorado Department of Transportation plans to issue a $4 million loan to the Toll Monitoring Division to cover the revenue shortfall next year due to lower-than-expected C-470 express lane utilization.

The funding will cover $3.7 million in projected overage costs to operate and maintain express lanes through June 2024, according to documents prepared ahead of a Transportation Commission vote to finalize the deal later this week. will do. These toll lanes opened on the west side of Interstate 25 almost three years ago, early in the pandemic, as part of a $276 million expansion of the C-470 through communities in the suburbs south of Denver.

Changes in traffic and commuting patterns, especially among office workers who are more likely to work from home, have failed to meet C-470 express lane utilization and revenue projections.

The Denver Post reported last year that the C-470 express lanes were among the most affected lanes by the pandemic, while traffic and toll revenues were higher on the toll corridor of Interstate 25 in the northern suburbs. He reportedly recovered quickly.

C-470 express lane usage has increased significantly. But tolls and fines brought in about $1 million a month last year, well short of the $1.5 million level expected in the corridor’s third year of operation.

“We’re fine when it comes to debt (payments). We just haven’t delivered on the income we promised for all our obligations,” said Nick Farber, outgoing director of the Colorado Transportation and Investment Office (CTIO). . The CDOT Enterprise division oversees the ever-growing express lane network.

The CTIO and CDOT characterize the new assistance as “preliminary financing,” but it’s necessary to ensure the state doesn’t violate the terms of the federal loan and revenue bond that covered about half the cost of the C-470 project. Faber said the CTIO has failed to meet the cost-sharing requirement because toll revenue has been lower than expected.

To date, the CTIO’s project reserves and surplus account have covered the expense gap, but the surplus balance is now only $1.2 million.

The loan is expected to be approved by the CTIO Board on Wednesday and by the Transportation Commission on Thursday. This is an interest-only loan with an annual interest rate of 3.5% until maturity in 40 years, but can be prepaid.

CDOT spokesman Matt Inzeo said no other highway corridors directly overseen by the state needed similar relief.

The pandemic has also disrupted the finances of Plenary Rose Denver, a private CDOT partner that manages a busy highway along Highway 36 that connects to downtown via Interstate 25. increase.

Plenary was still operating at a loss in the first three months of 2023, according to a recent financial disclosure.Fitch Rating maintaining a stable outlook However, when it comes to project debt.

“Denver Highway continues to honor loan commitments despite reduced express lane traffic along U.S. Route 36 and Central Interstate 25 since 2021,” spokesman Gill said. Rudowski said in a statement to the Post on Monday.

As for the C-470, it’s unclear if the corridor will need more support in a year’s time.

Contractors will soon begin working on new traffic and revenue projections to understand the new normal. Revenues may also increase from planned upgrades to toll collection equipment, which is expected to lead to fewer missed vehicles, as well as future express lane safety enhancement programs.