Is P.T. Barnum Right on the CRC Boondoggle?

Evan Manvel

“There’s a sucker born every minute.” – P.T. Barnum

First off, to all Oregon legislators, including those I completely disagree with – thank you for your service. Oregon’s citizen legislature system pays a pittance to our elected officials. It requires a huge time commitment, commuting or living in Salem for months on end, dealing with constant public exposure, hearing from angry citizens, and having to constantly campaign to keep your job. Thank you for being willing to put up with all that for minimal compensation and not nearly enough gratitude.

As part of the deal, our system more or less requires citizen legislators to delegate a huge amount of research and knowledge to others, including lobbyists, agency staff, and other representatives. As legislators come and go, institutional memory sits in the hands of a few. And those few can control the perception of reality – which can be a dangerous problem.

As you consider the Columbia River Crossing highway mega-project, perhaps the most expensive single public works project in state history, you’d do well to go beyond the claims of the lobbyists and agency staff and study the record on transportation mega-projects.

A few low lights:

• The costs of ODOT’s mega-projects explode. ODOT’s largest current project, the Highway 20-Eddyville project, is a poster child of incompetence. It is currently expected to cost nearly $400,000,000, more than three times its original $110 million budget, and be seven years late. ODOT’s most recent completed large project, the Grand Avenue Viaduct in Portland, came in at $98 million, more than three times its $31 million budget. The Newberg-Dundee Bypass has seen its cost projections nearly quadruple, and remains un-built. (Meanwhile, ODOT is broke and laying off staff.)

• WSDOT has had major problems itself. WSDOT helped push the Seattle tunnel project to approval, then discovered the $400,000,000 in projected tolling revenue was based on nothing but irrational hope. To fill the financing hole, WSDOT took $200,000,000 from sorely-needed bridge maintenance funds, and are now trying to find the remaining $200,000,000. WSDOT’s new floating 520 bridge has leaking pontoons, undermining the structural integrity of the bridge. First rule of floating bridges: make sure they stay afloat. WSDOT tried to cover up the problem, but has been ordered by courts to release documents. And the Tacoma Narrows Bridge has seen traffic continue to fall, despite rosy toll revenue projections, resulting in an effort to backload the debt and increase the toll.

• This isn’t unique – as McClatchy recently reported, the highway lobby has continued to push expansions we can’t afford, even as current roads crumble – in what McClatchy calls a “politically driven road-building binge.” Los Angeles’ most famous toll road has raised rates at least twelve times since 1996 and has been forced to refinance, adding six more years of debt to the project.

• A definitive review of mega-projects is Oxford University’s Bent Flyvbjerg’s, who found 90% of mega-projects go over budget, by an average of about a third (over $1,000,000,000 on a project the size of the CRC boondoggle).

In short: mega-projects are remarkably complex, with much higher costs and much lower benefits than proponents let people believe. Optimism trumps reality when approving the projects, and then reality bites back – hard.

Perhaps most relevant is the CRC project’s own record of huge cost overruns – the

project’s inability to get tasks done on time and anywhere near on budget.

The CRC is several years behind schedule. Project managers stubbornly stuck by their plans to build a never-before tried bridge design, until finally forced to change it. Managers failed to adequately consider river navigability, leading to the ongoing fiasco with the U.S. Coast Guard. Even the CRC’s hand-picked Independent Review Panel found, in impressively tortured bureaucratic language, “Questions about the reasonableness of investment in the CRC… because unresolved issues remain to the south [near 405 and the Rose Quarter] threaten the viability of the project.” Translation: absent a money tree, the CRC is an unreasonable investment.

Last October Tiffany Couch, a forensic accountant, found huge problems with the project’s expenses, even before construction. Some excerpts from her memo detailing gross cost overruns:

• “Through June 2012, David Evans and Associates has been awarded $131.2 million on a ‘Maximum Amount Payable’ contract of $50 million.”

• “We previously questioned contracting practices that allowed for consideration of only a single vendor for the $50 million original contract.”

• “It is my professional opinion that the magnitude of these accounting and contracting irregularities is significant enough to warrant investigation by an agency of appropriate jurisdiction.”

• “We have not been presented with a single Task Order Amendment that has been denied by the CRC project office. In our years of experience reviewing contracts and change orders we find this to be an anomaly; especially on a contract of this size.”

• “What specific processes and procedures will the CRC project office do differently to guarantee that its current track record of 150% cost overruns will not be incurred on a $3.5 billion project?”

Legislators: when you hear ODOT has figured out a way to pay for the dysfunctional CRC boondoggle, don’t let wishful thinking blind you to the record demonstrating otherwise.

ODOT and the highway lobby are hoping you are inexperienced and naïve, and that you lack the courage to break out of the abusive cycle of mismanagement and incompetence.

When you are asked to vote for bills to fund the CRC mega-project, with promises this project will work, will cost “only” $3,500,000,000, won’t run into construction hurdles, or won’t result in huge cost overruns, simply remember the record. Recall Edmond Burke’s warning: “Those who cannot remember the past are condemned to repeat it.”

This isn’t some far-off past that has changed over the decades. These are the most recent mega-projects ODOT and WSDOT have worked on and failed on.

Ask yourselves whether ODOT and the highway industry lobbyists have earned your trust with their record. Think about whether they’re living by P.T. Barnum’s motto, and counting on you to be the latest sucker.

Because if you sign that promissory note on behalf of Oregonians, putting a huge burden of debt on the next two generations for a mega-project that, oh, by the way, won’t solve the problem, there’s no turning back.

Again, thank you for your service. We're all counting on you.

Disclaimer: I’ve done some paid work in the past against the costly, risky CRC blank check boondoggle for various groups. I now live on the other side of the Columbia River. I speak only for myself. And yes, there’s debate about the attribution of the sucker quote.

By Evan Manvel Feb. 10, 2013