“ Caltrans improves mobility across California”
STATE OF CALIFORNI A ------- B USINESS, TRANSPORTATION AND HOUSING AGENCY A RNOLD SCHWARZNEGGER, Governor
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE DIRECTOR
1120 N STREET
P. O. BOX 942873
SACRAMENTO, CA 94273- 00001
PHONE ( 916) 654- 5267
FAX ( 916) 654- 6608
TTY ( 916) 654- 4086
Flex your power!
Be energy efficient!
August 16, 2004
Members of the California Legislature
State Capitol
Sacramento, CA 95814
Dear Members:
In 1997, Senate Bills ( SB) 60 and 226 were signed into law establishing a program and
funding for the seismic retrofit of seven State- owned toll bridges, including replacement
of the San Francisco Oakland Bay Bridge ( SFOBB). Under the provisions of SB 60 and
SB 226, the California Department of Transportation ( Caltrans) was given the
responsibility and authority to implement seismic retrofits on six of the bridges. Under
the statute, responsibility for selecting the final design for the SFOBB was placed with
the Metropolitan Transportation Commission ( MTC), with Caltrans responsible for
constructing the selected design.
In 2001, Assembly Bill ( AB) 1171 provided a refinancing of the Toll Bridge Seismic
Retrofit Program in response to the necessity for additional funding. Two major factors
resulted in this need. First, more than two years of delay in the selection of the final
design for the SFOBB resulted in dramatic cost increases for that project. Second, the
strong economy and boom in construction combined to increase construction costs
significantly and it was determined that the original estimate was significantly
understated because it failed to include customary project and program contingencies
and inflationary escalators associated with major capital programs.
Under section 188.5 of the Streets and Highway Code, the Legislature provided a
specified amount of funding for the seismic safety retrofit of the seven State- owned toll
bridges. Subdivision ( d) of section 188.5 requires Caltrans to report to the Legislature
when it has determined that the potential actual costs will exceed the amounts identified
in section 188.5. This letter and the attached report are intended to meet the statutory
notification requirement.
Members of the California Legislature
August 16, 2004
Page 2
“ Caltrans improves mobility across California”
Since the enactment of AB 1171, just days after the tragic events of September 11, 2001,
several factors beyond the control of the State or MTC have resulted in additional major
increases in funding needs for the program. Caltrans, the MTC, and Bechtel
Corporation reviewed the original estimated costs in 2001, and have now reviewed the
current overall toll bridge seismic retrofit program estimated costs. All parties have
reached consensus on an overall funding shortfall of approximately $ 2.3 billion, plus a
proposed $ 900 million contingency. The cost breakdown by bridge as well as the specific
cost increases are provided in the attached report.
The Seismic Retrofit Program’s Annual Report to the Legislature ( submitted in March
2003) outlined numerous issues and their effects on completing the seismic safety work.
The issues included:
• Due to concerns about terrorism, insurance and bonding costs have dramatically
increased, particularly for large construction projects;
• There have been unprecedented increases in the price of steel. In fact, structural
steel prices have surged 50% since 2001, and 25% during 2004 alone, largely due to
heavy worldwide demand;
• The projects in the program involve unprecedented complexity and enormity of
marine environment construction activities;
• There have been significantly higher than expected needs for technical experts to
resolve complex seismic design issues that arise during large- scale bridge
construction;
• The complexity of the projects has resulted in longer project construction durations
than originally anticipated; and,
• Overall upward trend in construction costs over the last 6- 12 months.
The San Francisco- Oakland Bay Bridge East Span design, originally reflecting an
entirely different proposal estimated at $ 1.1 billion, now has a differing unique design,
selected by the MTC and the people of the Bay Area. It is one of the most complicated
structures in the world. On May 26, 2004, Caltrans received a single bid for construction
of the Self- Anchored Cable Suspension Bridge ( SAS) contract, which is part of the East
Span replacement project for the San Francisco- Oakland Bay Bridge. The
domestic– based bid and the foreign– based bid both substantially exceeded the estimated
contract budget. Caltrans, in conjunction with MTC and the Federal Highway
Administration, is evaluating these bids for responsiveness and reviewing the overall
funding requirements to complete the toll bridge seismic retrofit program.
Members of the California Legislature
August 16, 2004
Page 3
“ Caltrans improves mobility across California”
The Department is making significant progress in retrofitting the State’s bridges. Over
the last ten years the Department has:
• Completed seismic safety work on over 2,000 bridges
• Completed work on five of the seven toll bridges, and completed the San
Francisco– Oakland Bay West Span main suspension bridges retrofit, all within
budget. The bridges are safer and are designed to withstand a significant seismic
event.
• Continued progress with construction on the largest remaining seismic retrofit
projects on the Richmond– San Rafael Bridge and the replacement of the San
Francisco– Oakland Bay Bridge East Span and West Approach.
We are prepared to meet with you and members of your staff immediately upon receipt
of this notification and report to provide specific program cost estimates and details and
to outline potential financial plan solutions.
Sincerely,
( Original signed by )
RANDELL H. IWASAKI
Interim Director
Attachments
Members of the California Legislature
August 16, 2004
Page 4
“ Caltrans improves mobility across California”
SUMMARY OF COST INCREASES
The table below compares the AB 1171 project budgets to the current estimates.
Comparison of AB1171 and August 2004 Cost Estimates
( Dollars in millions)
Bridge AB1171 August 2004
Benicia- Martinez Existing* $ 190 $ 180
Carquinez ( eastbound)** $ 125 $ 115
Richmond- San Rafael $ 665 $ 914
San Mateo- Hayward $ 190 $ 165
Vincent Thomas $ 62 $ 59
San Diego- Coronado $ 105 $ 105
Bay Bridge – West Span $ 700 $ 737
Bay Bridge – New East Span $ 2,600 $ 5,130
Total $ 4,637 $ 7,405
Program Contingency*** $ 448 $ 900
* This seismic retrofit project on I- 680 was separate from the Regional Measure 1 ( RM1) new toll bridge project
currently under construction northbound, which is not part of the Program.
** The westbound I- 80 Carquinez Bridge was replaced by RM1 in 2004.
*** AB1171 authorized the Department to utilize up to $ 448 million of the State Highway Account funds ( using
resources from the Interregional Transportation Improvement Plan, the State Highway Operation Protection Plan, or
federal bridge funds) to mitigate any cost increases above the $ 4.637 billion budgeted Program cost estimate if
needed.