Originally published on Wednesday, January 24, 2018, this article by Patrick Mulvihill describes the Port’s most recent efforts related to replacement of the Hood River/White Salmon Interstate Bridge, including a work session of the Port Commission that took place on January 18 focused on procurement options. The Port welcomed Lowell Clary, a former senior public official delivering traditional and public-private parnterships, or “P3” projects from Florida; Phillipe Rapin, a P3 expert with extensive international experience; and David Klinges, a finance expert on traditional and P3 project financing.
To read the article on the Hood River News site, click here.

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Base toll rate moves to $2, BreezeBy to $1
HOOD RIVER, OR – The Port of Hood River Board of Commissioners approved a bridge toll rate increase on December 5, 2017 following two public hearings and a series of presentations to local municipalities on both sides of the river. Citing the need to plan for up to $51 million in repairs and capital upgrades to the existing bridge in the next fifteen years while at the same time completing required pre-development steps that precede construction of a replacement bridge, the Commission voted unanimously to increase the toll and set the effective date at February 1, 2018. The Commission dedicated 100% of the new toll revenue to the Port’s Bridge Repair & Replacement Fund.
Base toll rates for passenger vehicles will double for cash-paying customers, going from $1.00 to $2.00 per crossing. Bridge users that have signed up for the Port’s prepaid tolling system, BreezeBy, will have a relatively modest increase, with their per crossing rate going from $0.80 cents to $1.00 for two-axle vehicles. Toll rates depend on vehicle class with large trucks, RVs, and trailers paying $3.00 per axle for cash, $2.00 per axle on BreezeBy.

CASH PAYMENTS
BREEZEBY

Vehicle Class
Toll
Vehicle Class
Toll

Class 0 – Motorcycles
$1.00
Class 0 – Motorcycles
$0.75

Class 1 – Passenger Cars & Pickups
$2.00
Class 1 – Passenger Cars & Pickups
$1.00

Class 2+ – Large trucks, RVs, Trailers, Busses – PER AXLE
$3.00
Class 2+ – Large trucks, RVs, Trailers, Busses – PER AXLE
$2.00

The Port has implemented a new online BreezeBy customer account management system that enables customers to open an account online and receive their transponders in the mail, avoiding the need to visit the Port offices during business hours. There are no fees open an account, and each household receives one transponder for free. After that, each additional transponder is $5.00. The Port anticipates significant new demand for new BreezeBy accounts as a result of the toll increase, but customers should still expect to receive their new transponders in the mail within 2-3 business days, depending on the volume of orders.
Information and registration is available at https://portofhoodriver.com.
For more information, contact the Port via email to porthr@gorge.net or visit the Port office at 1000 E. Port Marina Drive in Hood River. Spanish language customer services are now available.
 
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Public work session to feature expert panel discussion on procurement options
HOOD RIVER, OR – The Port of Hood River will hold a special work session to discuss various elements of the Hood River/White Salmon Bridge replacement project on Thursday, January 18, 2018 beginning at 1:30PM, in the Port conference room located at 1000 E. Port Marina Drive in Hood River.
The five-member elected Port Board of Commissioners has identified replacement of the bridge as a top priority. Oregon House Bill 2750, signed by Governor Brown in August 2017, authorized $5 million in state funding for completion of the Final Environmental Impact Statement (FEIS) and other pre-development tasks required as next steps to replacement. Since then, the Port has hired Kevin Greenwood as the Bridge Replacement Project Director and entered into an Interlocal Agreement with the Southwest Washington Regional Transportation Commission (RTC) authorizing the RTC to manage the search for an engineering firm to complete the FEIS. The FEIS process is expected to take 2-3 years.
House Bill 2750 also clarified the Port’s authority to enter into public-private partnerships to finance and construct the new bridge, once Administrative Rules, substantially similar to those governing ODOT’s Innovative Partnerships Program, are in place. Those rules are currently in draft form and are expected to be adopted by the Commission in March of 2018. The purpose of the January 18 work session is for the Commission to take an in-depth look at project delivery options, including public-private partnerships, and hear from a panel of experts on typical timelines, model projects, and recommendations for the Hood River/White Salmon bridge project specifically.
The panel of experts will include Lowell Clary, President, Clary Consulting Company; Phillippe Rapin, VP, Alternative Delivery Advisory at Mott MacDonald; and David Klinges, Managing Director at Piper Jaffray. The panel will discuss bridge replacement procurement options, public-private partnerships generally, traditional project delivery options and typical timelines, and other aspects of the project.
Mr. Clary has over 30 years of experience in transportation policy, administration, finance, toll road and managed-lane project development. Clary Consulting provides advisory services to governmental and private sector clients on developing transportation projects including funding options, toll projects, public-private partnerships, and transportation finance. Mr. Clary served as the Assistant Secretary of Florida Department of Transportation and led the development of the public-private partnership program and value pricing lanes in Florida.
Mr. Klinges has worked for Piper Jaffray for seven years following a 25-year career at Lehman Brothers Holdings Inc. and Bear Stearns Companies Inc. While at Bear Stearns, Mr. Klinges led the firm’s public private ventures group, which focused on the private delivery of public infrastructure projects. In this capacity, he led the advisory and banking effort that resulted in successful initial capital markets financing of numerous transportation projects
Mr. Rapin has been with Mott MacDonald group since 2006 and is currently Vice President providing public-private partnership and procurement advisory services in the US. His experience includes over fifty public-private partnership transactions globally, ranging from $50 million – $5 billion. Mr. Rapin has expertise preparing the procurement documentation throughout the RFI, market sounding, RFQ and RFP process, the evaluation criteria and negotiations until financial close. His post financial close expertise comes via the implementation of contracts during the construction and operational phase of the projects.
The work session will feature presentations and an in-depth Q&A session with the panelists as well as summary recommendations. For more information, contact the Port of Hood River via email to porthr@gorge.net.

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HOOD RIVER, OR – Kevin Greenwood joined the Port of Hood River staff on January 2 as the Project Director for the Hood River/White Salmon Bridge Replacement Project. Greenwood formerly worked from 2014-2017 as the General Manager of the Port of Newport, which has $92 million in assets and an annual operating budget of $14 million. The Port of Newport hosts a NOAA Marine Operation Center and international terminal as well as two large marinas with a total of 650 commercial and recreational boat slips.
During his service in Newport, Mr. Greenwood wrote a successful TIGER grant for construction of an international terminal shipping facility and led lobbying efforts in Salem and Washington DC to advocate on behalf of infrastructure funding. Prior to that he served has General Manager of the Port of Garibaldi, where he wrote several successful grants for repair of the Tillamook Bay Commercial Avenue wharf including from the TIGER, ConnectOregon, and U.S. Commerce Department programs. Mr. Greenwood also served as City Administrator for the City of Garibaldi and is a past President of the Oregon Public Ports Association. He holds an MPA in Rural Development from Portland State University and a BA in English and Political Science from University of Washington.
This is a new staff position at the Port of Hood River, with responsibility to play a lead role in efforts to replace the aging Hood River Interstate Bridge. Originally constructed in 1924, the mile-long span is publicly owned and critical to the economy of the Columbia River Gorge region, linking more than 28 communities and hundreds of businesses on both sides of the Columbia River. Due to its age and deficiencies, the Bridge must be replaced to continue its vital role in the regional freight network. However, because the facility is located in two states, owned and operated by the Port of Hood River, and costly to reconstruct, replacement efforts require extraordinary cooperation between state, federal, and local agencies.
“The Port Commission is committed to replacing the bridge as quickly as possible while continuing to ensure the safe operation of the existing bridge,” says Port Executive Director Michael McElwee. “Kevin will play a vital role in moving the project forward, most immediately by directing the completion of the tasks required by the Oregon legislature via HB2750 and HB2017. This work will be primarily focused on the completion of the required Final Environmental Impact Statement which will require participation and collaboration from federal, state, regional and local authorities. Kevin is a well-known and respected professional in these arenas and we are lucky to have him onboard.”
“I’m excited to be working with Michael McElwee and the Port Commission on this critically important capital project,” Greenwood said. “I have the utmost respect for Michael’s leadership and look forward to collaborating with him and his staff.”
Mr. Greenwood will present his first project update to the Port Commission during their next meeting on Tuesday, January 9, beginning at 5:00 p.m. in the Port conference room located at 1000 E. Port Marina Drive in Hood River. On Thursday, January 18, Mr. Greenwood will convene a panel of experts for a special work session of the Commission, exploring public-private partnership funding models, federal requirements for project permitting and funding, typical timelines and processes, as well as other aspects of the bridge replacement project. These are both public meetings.
For more information, contact the Port of Hood River via email to porthr@gorge.net.

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Originally published in the Hood River News on December 13, 2017, this OpEd article by Port director Michael McElwee describes recent and near term steps for bridge replacement, as well as the complexities of consideration of proposals submitted by private parties.
Replacing the Hood River/White Salmon Interstate Bridge, spanning a federal waterway, connecting two states, and likely costing over $250 million is a complex and risky undertaking. Recent letters to the editor reflect the understandable desire to replace the bridge, and do it quickly. The port shares this objective. But for a project of this complexity and risk, quick must be coupled with smart. Readers should know some of the key steps underway now and the challenges ahead — the “WHATs” of bridge replacement efforts now underway.

Michael McElwee

• HB 2750 was signed by the governor in August. It conveyed certain new authorities to the port. One is the authority to develop a new bridge through a Public Private Partnership, or “P3.” A P3 allocates project responsibility and risk to a private business. In return, private investors or lenders receive a dedicated, long-term revenue stream. A P3 is primarily a business transaction that results in a revenue-generating asset, here a toll bridge. Private parties may seek to control it for 50-100 years. These deals have worked well in some U.S. communities, and been disastrous in others. The terms of a P3 business transaction are extensive and must be diligently and responsibly negotiated to protect long-term public interest.
• Among others, HB 2750 came with the specific requirement that the port have detailed rules in place, like those governing Oregon Department of Transportation (ODOT), prescribing how P3 proposals will be considered. The port has prepared a draft of these rules and they will be considered for adoption by the port commission, after public hearings, in early 2018. If the port were to consider an unsolicited P3 proposal before adoption of the rules we would violate a specific statutory requirement. And premature consideration of proposal might result in its future disqualification due to objections from future proposers who responsibly submit after the rules are in place. The decision to return a premature proposal unopened fulfilled our obligation to the Oregon legislature and, ironically, may have helped to assure that same proposal is eligible for consideration in the future.
• Whether the replacement bridge is a P3 or not, a lengthy and expensive Final Environmental Impact Statement (FEIS) will be required. The 2017 Transportation Funding Package allocated $5 million to the port for this task. The funding agreement for this allocation is not yet finalized. It must be in place before an engineering firm can be selected and work can begin on the FEIS. Start to finish, the FEIS effort is expected to take about three years. Could it be completed more quickly or at less cost? Not likely. An FEIS is intended to thoroughly examine all operational, societal, and environmental factors of a large project and address its impacts. Its timeframe is dictated by tasks required under federal law. The benefit of a completed FEIS? It results in regulatory clarity and permitting certainty. Importantly, this helps to reduce project risk, likely resulting in more favorable P3 business terms, if that is determined to be the best way forward.
• The port must be adequately staffed to manage the FEIS and assess project financing and delivery alternatives. The right mix of professional expertise must be assembled to responsibly manage the multitude of contracts, public outreach, and administrative steps associated with the FEIS. The hiring process for a dedicated project manager will conclude next month. The port must also have access to the legal and financial expertise required to thoroughly analyze P3 proposals and, potentially, carry out contract negotiations. For such a significant and complex project, a P3 due diligence process might incur up to $2 million in legal costs alone. Such a commitment is necessary to ensure that the public interest is protected.
• The bridge touches two states. An even more extensive legislative effort may be required in Washington to ensure that a replacement project is possible. Projects that impact the state highway system must be approved by the legislature, and specific approval for a P3 project may be necessary. The next realistic opportunity to obtain legislative authorities for this project will be in the 2019 session, regardless of whether the project is publicly or privately funded.
The actions of the 2017 Oregon legislature were essential for a replacement bridge. Receipt of a pre-mature proposal from a private firm is encouraging. And the port now has funding to complete the FEIS and other pre-development steps. The natural inclination is to assume that bridge replacement can occur very soon. It cannot. Every expert we have consulted with counsels a methodical, diligent effort as the best chance for success. Taking this path will result in more project certainty and reduced construction and financing risk. That means a better business transaction under a P3 approach, or lower bids under a publicly-funded model, depending upon the approach chosen.
Finally, the current bridge is owned and managed by the Port of Hood River, a public agency. It will likely not be so in the future. All project steps that will take place over the next few years will occur in a manner that is transparent to the public and with the full participation of local governments and stakeholders on both sides of the river. The decisions made, including future ownership, toll setting authority, and financing responsibilities will have a profound impact on our region for many years. That means communities on both sides of the river need to be part of it.
I am personally available to answer questions, listen to ideas, and explain the many WHATs of this complex project, the best I can, to anyone who is interested. I can be reached via email at mmcelwee@portofhoodriver.com or phone at 541-386-1138.
 

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