Bill to Increase Public Protections in Private Road Deals Vetoed by Governor Hickenlooper

Bi-Partisan SB-197 Also Increased Transparency and Oversight

CoPIRG

Governor Hickenlooper vetoed a bi-partisan bill, SB-197, that would increase transparency and public protections in private road deals. The Legislature passed SB-197 in response to the immense public outcry after Colorado entered into a 50-year deal with a private company to build and manage parts of U.S. 36 including new toll lanes. 

“The Governor made the wrong call,” said Danny Katz, Director of CoPIRG. “SB-197 did a good job addressing concerns after the U.S.36 private road deal about the transparency and oversight of the process, the length of the deal, and concern about clauses that limit future decision making and put taxpayers on the hook.”

After vetoing the bill, the governor signed an Executive Order directing the entity in charge of negotiating private deals in Colorado, the High-Performance Transportation Enterprise (HPTE), to consider transit when pursuing private road deals and to take a small step forward in providing information to the public and decision makers about private road deals.  

CoPIRG highlighted that SB-197 would have added a number of public protections including:

• Increased transparency in private road deals by providing the public clearer information on the costs and alternatives.
• Required public participation opportunities at three key stages in the development of any deal.
• Increased oversight of private road deals by requiring more communication with state legislators and adding Senate confirmation for appointees to the Board of the High-Performance Transportation Enterprise, which is responsible for private road deals.
• Reduced the risks associated with long-term deals by setting the expectation that deals should be no longer than 35 years and would not contain the worst so-called “non-compete” clauses that undermine local decision-making authority and penalize the public if a road is shut down due to weather or an emergency. Any proposal for a deal longer than 35 years or to exempt non-compete clauses would require further public scrutiny through General Assembly approval.

“Colorado does not need to sign away local control and lock taxpayers into deals that last 50, 70 or 100 years in order to pursue private funding to help build and maintain roads,” said Katz. “Instead of making that clear, the Governor’s veto keeps Colorado open to some of the riskiest aspects of private road deals.”

As Colorado decision makers grapple with significant funding challenges for the state’s transportation system, partnerships with private, for-profit companies are increasingly seen as a solution for financing. State transportation officials are actively seeking private financiers to partner with on projects along I-25, I-70 and C-470.

“Private funding should not be seen as a simple “quick fix” to our funding challenges,” said Katz. “Publicly funded projects often provide the best deal for taxpayers. If private funding is pursued, it has to have maximum transparency and public protections in place. We missed an opportunity to do that here.”

CoPIRG released a set of principles in January for how to protect the public interest in any private transportation deal. Among the principles CoPIRG recommended:

• The public should retain control over decisions that affect the broader public interest. Provisions in these deals should not limit the government’s ability to act in the public interest by demanding financial compensation when the government improves neighboring roads or transit systems or needs to shut down a road in extreme weather or emergency. 
• Any deal lasting longer than 30 years must be approached with additional caution due to uncertainty over future conditions and because the risks of a bad deal grow exponentially over time. There are many examples of private road deals across the country that are 35-year or less including the Port of Miami Tunnel in Florida, I-595 in Florida, the South Bay Expressway and SR-91 projects in Southern California. By far the most active region in the world for infrastructure private partnerships has been Europe and EU countries generally limit deals to maximum terms between 21 and 35 years.

“SB-197 enshrined many of these public protections and required a vote of the Legislature if the state wanted to lift them,” said Katz. “Riskier deals and riskier clauses should have to meet greater oversight. The Governor’s veto sends the wrong message and will not build the public’s confidence in private road deals moving forward. Building public confidence is exactly what needed to happen after U.S. 36.”