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LOUISVILLE, KY. — The Ohio River Bridges Project could be paid for with local commuter tolls in the $1 range, with local commuter tolls of 75 cents for regular users of the bridges, according to a new report. The Bridges Coalition, a private nonprofit group that supports the Ohio River Bridges Project, submitted the findings of its own independent financial analysis to the Louisville and Southern Indiana Bridges Authority, which is developing the financing plan to build two new bridges and replace Spaghetti Junction with a more modern, functional interchange.

“We’re already paying a high price in terms of unsafe bridges, excess vehicle miles traveled, pollution and time lost due to traffic delays,” said David Nicklies, chairman of the Bridges Coalition. “This study is intended to present the options of what it will take to build the bridges cost effectively and with the lowest toll rates possible.”

Nicklies said the Bridges Project addresses the region’s traffic and safety challenges caused by a cross-river highway network that is overcapacity, structurally deficient, and rated one of the nation’s worst bottlenecks.

Of the funding scenarios tested, the lowest toll rates result from combining state or federal funding with revenue collected from tolls on East End, I-64, and I-65 bridges — and pairing that with a design/build construction approach. The study assumes design/build cost savings for the Bridges Project at about 10 percent, or $410 million, which is comparable to the experience of previous design/build projects.

The study tested a range of potential state and federal funding to the project, ranging from $840 million (Kentucky has already appropriated $420 million) to $1.926 billion (based on the projection included in the Louisville-Southern Indiana Bridges Authority’s financial demonstration submitted to KIPDA in July 2010). Similar to how down payments reduce the cost to borrow money for a new home or car, the study found that for every $1 in up-front investment of state and federal funding, the Bridges Project would save $1.50 to $2.50 in interest expenses later.

The study utilized a tiered tolling structure that allows for local commuters — those who cross a bridge at least 50 times in 45 days — to pay a lower toll. With commuter-toll rates of 75 cents, the various financing scenarios include non-commuter passenger vehicle tolls of between $1.25 and $2, depending on the amount of state or federal funding and whether a design/build approach is applied. The study found that by employing a system-wide toll approach (including East End, I-64, and I-65 bridges) the base toll rate could be up to 75 cents less than tolling only two cross-river routes.

“No one likes tolls, but the fact is, they are needed as a piece of the funding plan to fix our dangerously overcapacity and crumbling infrastructure. Whether you travel the north-south corridor or the east-west corridor, everyone who uses the new system will benefit from it being safer and more efficient, and our community will gain thousands upon thousands of jobs,” Nicklies said.

The financing scenarios in the study are based on completing the East End bridge first, and opening it in 2016 with tolling also beginning that year. The bi-state Bridges Authority, the appointed body developing the finance plan for the Bridges Project, has said it would focus on electronic, no-stop tolling as opposed to toll booths.

The study was conducted by the Arlington, Va.-based transportation consulting practice of AECOM, which specializes in financial planning for major public-infrastructure projects. The financing scenarios were based on paying for the project using a conservative mix of available public project funding, loan sources, and 30-year bonds. Costs for future maintenance and repairs of the bridges and interchanges, as well as operations of the tolling systems, are included in the funding scenarios.

Nathan Macek, consulting manager with AECOM said that if interest rates were to increase, the toll rates resulting from the analysis also would increase. “For each percentage point increase in interest rates, toll rates would need to increase approximately 25 cents,” Macek said.

Nicklies said the bond market and construction environment create a favorable environment for funding the Bridges Project. “We’re seeing record low interest rates and construction bids around the country coming in 20 percent under budget,” Nicklies said. “Delay will increase the overall cost of the project and result in higher tolls.”

A link to the full study is available at www.thebridgescoalition.com.