~Airoyo Verdun August 3, 2015 Garrett Damrath, Chief Environmental Planner Division of Environmental Planning Department of Transportation, District 7 100 S. Main St., MS-16A_ Los Angeles, CA 90012 Re: Draft Environmental Impact Report/Environmental Impact Statement (DIER/EIS) SR 710 North Study Dear Mr. Damrath: ‘The Arroyo Verdugo Subregion consists of the cities of Burbank, Glendale, La Caitada Flintridge, Pasadena and South Pasadena. At its meeting of June 29, 2015, the Arroyo Verdugo Steering Committee (with the City of Burbank abstaining) directed that I transmit this comment letter to you on behalf of the Subregion. This letter addresses the sufficiency of the DEIR/S as well as the Cost-Benefit Analysis as follows: THE DEIR/S IS FLAWED: The Purpose and Need statement inaccurately defines that transportation needs of the region and restricts the poorly designed alternatives to a narrow corridor. © The Purpose and Need statement should be supported by factual evidence, reflecting the baseline conditions of the study area, justifying the need for a project and allow for a range of reasonable and sustainable alternatives. The Project’s primary alternative, the Freeway Tunnel Alternative, does not address the region’s transportation needs. The region lacks east-west transportation facilities in the San Gabriel Valley, not north-south facilities. © Approximately, 90% of motorists would receive no travel-time savings, or their travel time would worsen, with the Freeway Tunnel Alternative. © The few who would benefit from the Project would receive a travel-time savings of approximately 2.5 minutes. © These nominal changes do not justify the Freeway Tunnel Alternative’s $5.6 billion price tag. * Even if the Freeway Tunnel Alternative were the appropriate solution, the tunnel design is entirely unprecedented. No tunnel of the size proposed — 60 foot diameter — has ever been attempted anywhere in the world, © The lead agencies for the Project should have considered a more innovative, multimodal alternative that combined mass transit, bikeways, and new parks.© The 5-Cities Alliance, in conjunction with other organizations and stakeholders (including the National Trust for Historic Preservation and Natural Resources Defense Council, and numerous community leaders), developed a “Beyond the 710” alternative. © The “Beyond the 710” alternative accurately identifies the current mobility challenges and addresses those challenges with holistic 21st-Century strategies for connecting people to their destinations. © The “Beyond the 710” alternative would use transit and “great streets” to sustainably grow communities, invest in the existing transit network, and improve quality of life in the San Gabriel Valley. ‘THE DEIR/S DOES NOT COMPLY WITH STATE AND FEDERAL ENVIRONMENTAL, LAWS © Our attomeys, along with technical experts, have conducted an extensive review of the DEIR/S. * They determined that the DEIR/S fundamentally fails to comply with the requirements of the California Environmental Quality Act and the National Environmental Policy Act. and Pu Health Although California has stringent air pollution standards designed to protect public health, the DEIR/S does not analyze the Project’s compliance with these state standards. co The DEIR/S only discusses whether the Project would violate the more lenient federal air quality standards. © The Project would result in a substantial increased risk of cancer, but the DEIR/S hides this disturbing information, © The main body of the DEIRYS states the Project would cause a net decrease in cancer risk. © Buried in the DEIR/S’s technical appendix is information that the Project would actually increase cancer risk by a staggering 149 in 1 million. « Note: The South Coast Air Quality Management District considers 10 in 1 million to be the threshold for a significant cancer risk. ‘© Hiding this info on health risk in an appendix is unlawful (violates CEQA). Climate Change © The DEIR/S’s claim that the Project would result in a net reduction in greenhouse gas emissions (which cause climate change) defies common sense. © The Project would cause a substantial increase in vehicular travel. Studies, including those conducted by the California Air Resources Board, clearly demonstrate that increased highway capacity — such as that resulting from the Freeway Tunnel Alternative — increases vehicular travel and greenhouse gas emissions in the long run. Burbank + Glendale + La Caflada Hintridge + Pasadena + South Pasadena 1827 Foothill Boulevard « La Coftade Fiintridge, CA 9101 Phone: 818-790-8880 + Fox: 818-790-7536 « Email: awison@lcf.ca.gov«The DEIR/S addresses greenhouse gas emissions only over the short term (the next 15 years); it does not acknowledge that any reductions in greenhouse gas emissions would not be sustained. ° ° Califor ate policy, as reflected in Governor Schwarzenegger’s Executive Order S-3-05 (“EO”), requires reducing greenhouse gas emissions to 80 percent below 1990 levels by 2050, so as to avoid catastrophic climate impacts. Had the DEIR/S conducted the appropriate analysis, it would have determined that, the Project’s greenhouse gas emissions rise after 2035, in violation of EO. ‘Transportation © The Alliance’s transportation experts have determined the Freeway Tunnel Alternative’s operation would significantly worsen traffic congestion in certain locations, yet the DEIR fails to evaluate these areas. ° ° E.g., the Freeway Tunnel Altemative will cause heavy traffic on 1-210 from SR 710 to I-5, but the DEIR/S does not analyze transportation impacts any farther north than La Cafiada Flintridge. The DEIR/S also fails to analyze the traffic effects on: I-5 north of I-210; the I- 210/1-5 interchange; SR-710 south of SR 60; and the SR 710/1-10 interchange. © The DEIR’S does not analyze the effect that construction phase of the Freeway Tunnel Altemative would have on nearby freeways, streets and intersections, ° ° ° Construction is expected take 5 years, and could go longer. Construction would likely wreak havoc during commute hours, with freeway ramp closures, and blocked street lanes. Neither Metro nor Caltrans have a good track record of managing traffic during these long construction projects. «The DEIR/S admits that traffic noise would increase as a result of the Freeway Tunnel Altemnative’s operation, yet it restricts its noise analysis to the residences’ exterior (i... backyards and patios). ° ° Interior noise levels can ruin the peace and tranquility of a home, Because the DEIRYS did not examine the Project’s noise impacts inside homes, it failed to consider necessary mitigation, such as double-paned windows and other building retrofits ‘* The DEIR’S never evaluates the noise impacts from the construction phase of the Project. ° ° ° Construction is expected take 5 years, and could go longer. Construction equipment would operate immediately adjacent to residences, businesses, open space, and parks, Because the DEIR/S provides no information re the type, severity or duration of these noise impacts, it also does not provide any mitigation to protect residents. Burbank + Glendale « Lo Caftads Fintidge « Pasadena + South Pasadena 1327 Foothill Boulevard + La Cahada Flintridge, CA 91011 Phone: 818-790-8880 + Fax: 818-790-7536 « Email: awilson@icf.ca.govSeismic Impacts © The Freeway Tunnel Alternative alignment would cross multiple earthquake faults —a risky circumstance, © Many areas above the alignment of the Freeway Tunnel Alternative are occupied with residences, businesses and roads. © The Alliance’s geologist advised that the DEIR must rely on accurate, state-of-the-art methodology to identify potential “fault rupture offset.” A fault rupture offset is ground movement along an earthquake fault, measured from one side of the fault to the other. Against all reason, the DEIR/S uses an outdated “fault rupture offset” methodology. ©. Itrelies ona study from 1994, and ignored a more recent, 2008 study. © The 1994 study substantially underestimates the amount of fault offset that would ‘occur in the event of an earthquake, © By relying on outdated methodology, the DEIR/S greatly underestimates the risk of damage to the tunnel(s) from an earthquake. © The DEIR’S also improperly relies on seismic design criteria used to construct bridges rather than tunnels. The Alliance’s geologist explains: “There is no sound scientific basis for Caltrans’ reliance on design criteria for bridges in analyzing and developing mitigation for impacts to massive, deeply seated tunnels like those proposed by the Project.” Groundwater ‘© The DEIR/S failed to evaluate the Project’s impact on important groundwater resources. ‘The Freeway Tunnel Alternative alignment is located above two groundwater basins: the Raymond Basin and the Main San Gabriel Basin, © The Raymond Fault acts as a natural subsurface dam, holding back water in the Raymond Basin on the north from water in the San Gabriel Basin on the south. ©. The Project could perforate this groundwater barrier, as a result of tunnel construction or an earthquake. Breaking the barrier would allow groundwater to flow from the Raymond Basin into the San Gabriel Basin. © A perforation of the subsurface dam could have devastating impacts, including the loss of a significant volume of the City of Pasadena’s water supply. © The DEIR/S does not address this extraordinarily serious threat or propose any effective mitigation, © The EIRYS vaguely proposes to take “special care” when tunneling through a fault zone. © Italso proposes the use of grout and rubberized gaskets to protect groundwater resources. The Alliance’s expert hydrologist advises that this scheme is wholly insufficient. ‘umulative Impacts © State and federal law require the lead agency to assess the combined impact of a proposed project together with that of other projects in the region — for all relevant impacts areas (eg. air quality, noise, traffic, groundwater). Burbank + Glendale « La Cafada Fintridge + Pasadena + South Pasadena 1827 Foothill Boulevard + La Caftade Fiinridge, CA 91011 Phone: 818-790-8880 « Fax: 818-790-7536 « Email: awilson@icf.ca.gov© The DEIRYS identifies 40 “cumulative” projects, but it does not actually assess the potential for these projects, together with the SR 710 Project, to result in cumulative environmental effects. © The DEIR/S does not mention whole categories of potential cumulative impacts. Eg, the DEIR/S never studies the potential for the Project, together with other cumulative projects, to deplete water supplies. © Inone major omission, the DEIR/S mentions the massive Devil’s Gate Reservoir Project but fails to adequately analyze the effects of this Project together with the SR 710 Project. The following comments reflect a preliminary assessment of the Cost Benefit Analysis, which was only recently released. The Subregion reserves the right to amend these or any other comments contained in this letter. THE COST BENEFIT ANALYSIS (CBA) IS FLAWED: ‘Timing of the Release of the Cost / Benefit Analysis Metro/Caltrans and the consultants indicated that the cost benefit analysis (CBA) would be released concomitantly with the DEIR/EIS, which was released on March 6. But in fact the CBA was not released until the week of June 15, more than three months late. The effect is to severely limit the period for public review of the CBA, and inhibit comment. This line is found in Metros draft cover memo to the Metro Board re the CBA: “a CBA is not circulated for public comments.” From this, it would certainly seem that Metro/Caltrans had little if any initial interest in receiving public input on this critically important component of the study. “Employment Benefits” as a Project Benefit On pages 3.3-49 through 3.3-56 of the DEIR/EIS, there is a discussion about employment earings that would be created with each of the study alternatives. Of course, these figures are largest with the most impactful alternatives, the LRT alternative and the six freeway tunnel variations. In the CBA, the consultants acknowledge that “construction and permanent employment impacts are not always included (as a benefit) in a cost-benefit evaluation”. This may be an understatement. In Caltrans’ Life-Cycle Benefit/Cost Analysis Model User Guide, there appears to be no guidance on how to include employment impacts as a benefit, nor any reference to this factor whatsoever. The consultants elected to include them anyway, at 40% of the estimated discounted value, based on UK and German “appraisal guidance”. The effect of this is to neutralize 40% of the discounted employment (labor) costs of each of the alternatives, by offsetting that portion with what appears to be a manufactured “benefit”. The result is that the most impactful projects (ic., most costly due to a high labor component) appear relatively more attractive than they would have, had 40% of employment costs not been considered a “benefit”. But “employment costs”, at least in this case, are simply not benefits; they are costs and costs only, These costs relate to the construction, operation and maintenance of each of the alternatives. ‘They are inherent to the projects themselves, not incremental, just as all of the project construction Burbank « Glendale « La Caftada Flintridge « Pasadena + South Pasadena 1327 Foothill Boulevard + La Cahada Flintridge, CA 91011 Phone: 818-790-8880 « Fax: 818-790-7536 » Email: awilson@icf.ca.govand right-of-way costs are. Considering any portion of project-specific costs, including, employment costs, as an offsetting project benefit is inappropriate. Further, the CBA should be used to measure impacts that are confined to the Study Area. While Metro/Caltrans have used in the DEIRJEIS a flexible interpretation of the boundaries of Study Area (in itself improper), surely that interpretation cannot be so flexible that areas far from the construction sites, where some prospective employees would likely live, could possibly be included. The highly impactful tunnel projects would likely attract workers from all over Southern California and beyond — clearly outside of any reasonable definition of the Study Area. Therefore, even if one could accept the farfetched notion that some portion of employment earnings should be considered a project benefit, some unknown and potentially very large portion of those earnings would undoubtedly be accumulated outside of the Study Area, and should be ineligible for inclusion as a benefit. Further, the consultants note that only 40% of employment wages were included as “benefits” in the CBA. This does not seem possible. For example, the consultants claim that the discounted value of “employment benefits” in the Dual Bore Tunnel No Toll option is $1.38 billion. That figure is 40% of $3.45 billion. The entire present value of the cost of the Dual Bore Tunnel No Toll option is “only” $3.23 billion, obviously less than the $3.45 billion. How is it possible that discounted employment costs could exceed the entire discounted cost of the project? “Residual Value” as a Project Benefit The consultants included another unusual factor as a project benefit: residual values for each of the alternatives. These are determinations of values that reflect a life beyond the 20-year time horizon used in the CBA calculations. The consultants assume a 100-year life for the freeway and LRT tunnels (a 50-year life was assumed in one of the sensitivity analyses attached to the CBA). They included as a benefit to these projects 80% of the discounted value of those options. This equates to $770 million for the single bore freeway tunnel options, $1,387 million for the dual bore freeway tunnel options, and $249 million for the LRT option. Obviously, these are hugely favorable to the discounted benefits calculations for these alternatives. And yet, in the User Guide for Caltrans’ Life-Cycle Benefit/Cost Analysis Model, there appears to be no guidance on including “residual value” as a benefit factor in calculating NPVs and CBAs. In fact, there appears to be no mention of “residual value” whatsoever. “Residual value” implies some sort of monetized salvageable value, such as the sale of a used car or piece of equipment. These tunnels are not likely to be salvaged by or sold to anyone other than the original owner. Further, there appears to be no mention of the corresponding “residual costs” of each of the alternatives, those operations and maintenance costs that would also stretch beyond the 20-year mark. According to Table 2-3, those costs in 2012 dollars would range from $45 million to $68 million annually for the tunnel alternatives. Why would the purported residual “benefit” be included in the analysis, but not the ongoing costs? Itis not clear why the CBA couldn’t have been calculated for various time horizons, to and including 100 years. This would have been the more appropriate method by which the useful life of each of the alternatives could have been monetized. The so-called “simple” method the consultants actually used, which for the purpose of determining the NPVs essentially reduces the costs of the tunnel alternatives only, appears improper, given that the User Guide seems to make no mention of this or any other method regarding residual values. Burbank « Glendale + La Caftada Flintridge + Pasadena + South Pasadena 1827 Foothil Boulevard + La Coftada Flintridge, CA 91011 Phone: 818-790-8880 « Fax: 818-790-7536 + Email: awilson@icf.ca.govIncompatibility with the DEIR/EIS Purpose and Need Statement By incorporating “employment benefits” and “residual value” as benefits into the NPV determination, the consultants have strayed outside the Purpose and Need Statement of the DEIRVEIS. The benefits used in the CBA should be limited to those directly related to the factors identified in the Purpose and Need Statement. This inclusion as benefits of previously unidentified irposes and needs (increasing employment earnings and creating an asset with salvageable value) improper. Express Bus Influence on Single Bore Freeway Tunnel, Toll, Express Bus Variation To what extent does the Single Bore Freeway Tunnel, Toll, Express Bus alternative benefit from the inclusion of the Express Bus? What portion of that would have been achieved with the dramatically less costly BRT alternative instead of the Freeway Tunnel? Discount Rate and the Cost of Capital Ostensibly, the use of a consistent discount rate for each of the alternatives is proper. However, this does not recognize that sufficient funding opportunities may be limited for the tunnel and LRT alternatives, due to the sheer magnitude of the costs of those alternatives. It is quite conceivable that sufficient funding would be scarce and would come at a higher cost of capital for the State, in which case higher discount rates should be used in the CBAs for the tunnel and LRT alternatives. If so, the effect would be to reduce both the discounted costs and discounted benefits of those alternatives, producing smaller or more deeply negative NPVs. Recalculation of the Net Present Values Caltrans’ Life-Cycle Benefit/Cost Analysis Model User Guide articulates four areas of benefits to be considered when conducting cost / benefit analyses. These are: + Travel time savings (reduced travel time and new trips) + Vehicle operating cost savings (fuel and non-fuel operating cost reductions) + Accident cost savings (safety benefits) + Emission reductions (air quality and greenhouse gas benefits). “Employment benefits” and “residual value” do not appear in this list. When the dubious “employment benefits” and “residual value” are removed as “benefits” from the Net Present Value determinations, very different results are produced. The inclusion of these two specious “benefits” wildly advantage the various tunnel options, and so not surprisingly their exclusion severely disadvantages those options relative to non-tunnel alternatives. This effect is so severe that only one of the tunnel options manages to produce a positive Net Present Value, and that is only a paltry $12 million — paltry at least in relation to the altemative’s $1.59 billion Present Value of Costs. The negative Net Present Values produced by six of the seven tunnel options are as great as $2.8 billion. The lone positive Net Present Value, of $12 million, is produced by the Freeway Single Bore Tunnel, Toll, Express Bus alternative. It seems reasonable that this option benefits from the inclusion of the Express Bus. Logically, benefits related to the dramatically less costly Express Bus would also be seen in the Bus Rapid Transit Option. Burbank + Glendale « La Cafiade Flintridge « Pasadena + South Pasadena 1327 Foothill Boulevard + La Canada Fintridge, CA 91011 Phone: 818-790-8880 + Fox: 818-790-7536 + Email: awilson@ict.ce.gov‘The Net Present Value calculations, excluding as benefits “employment benefits” and “residual value”, are shown below: Net Present Values Recalculated Excluding “Employment Benefits” and “Residual Value” as Benefits (S millions) Consultant et Ererat Determination |Consultant — {Value Consultant jon |EX¢luding . Determination |! Present Determination |e mployment Alternative . Value of of “Residual of Net Present rn Benefits” and “Employment |Value”asa [0 Value peeaee ‘Residual jenefits” asa | Benefit ° eect, Value” as | Benefits TSM/TDM. $344 $80 0 $264 Single Bore Freeway Tunnel $1,524 $808 $770 ($54) (Toll) Single Bore Freeway Tunnel $1,478 $808 $770 (S100) (Toll, No Trucks) ‘Single Bore Freeway Tunnel $1,590 $808 $770 si2 (Toll, Express Bus) Dual Bore Freeway Tunnel $75 $1,380 $1,387 ($2,692) (No Toll) ‘Dual Bore Freeway Tunnel (No Toll, No $506 $1,380 $1,387 (82,261) Trucks) Dual Bore Freeway Tunnel ($37) $1,380 $1,387 ($2,804) (Toll) BRT $369 $159 0 $210 LRT ($870) $714 | $249 ($1,833) Regarding the tunnel alternatives, the enormous differences between these recalculated results and the consultants’ results are due only to the exclusion of the two dubious and unqualified “benefits” from the Net Present Value calculations. The most dramatic differences occur in the Dual Bore Freeway Tunnel options, where benefits are reduced by $2.77 billion, and result in negative Net Present Values of between $2.26 billion and $2.80 billion. Because of the sheer magnitude of these differences, the consultants at the very least should perform a supplemental analysis, excluding the dubious “employment benefits” and “residual value” as benefits in the calculations. Better yet, the Net Present Value calculations containing the dubious “benefits” should be discarded, and the methodology abandoned. Burbank + Glendale « Lo Caftada Fintridge + Pasadena + South Pasadena 1327 Foothill Boulevard + La Cafiada Fiintridge, CA 9101 1 Phone: 818-790-8880 « Fax: 818-790-7536 + Email: awilson@ct.ca.gov‘An interesting way to interpret these data is to consider a return on investment approach. The Net Present Value as a return on the Present Value of Costs can be determined and likened to an implied retum on investment for each alternative. These returns can then be compared. This analysis produces these results: Implied Return on Investment Yet Present Value . Present Value of (adjusted per Implied Return on Altemative Costs ($ millions) as table) Pe - G millions) TSM/TDM $255 $264 103.5% Single Bore Freeway Tunnel $1,979 ($54) (2.7%) (Toll) Single Bore Freeway Tunnel $1,951 ($100) 6.1%) (Toll, No Trucks) Single Bore Freeway Tunnel $1,997 si2 0.6% (Toll, Express Bus) ‘Dual Bore Freeway 7 Tunnel (No Toll) $3,273 ($2,692) (82.2%) Dual Bore Freeway ‘Tunnel (No Toll, No $3,227 (82,261) (70.1%) Trucks) 7 ‘Dual Bore Freeway : Ean $3,374 (82,804) (83.1%) BRT 3510 $210 H2% LRT 32,163 1.833) 4.7%) Obviously, the only meaningfully attractive returns are produced by the TSM/TDM and Bus Rapid Transit alternatives. Not coincidentally, these are the two options that offer the lowest. present value of costs, strongly suggesting that relatively low-cost alternatives are more likely to produce positive returns. It is plain that the Life-Cycle Benefit/Cost Analysis Model has been manipulated by the consultants, as manifested by the inclusion of two very large but unqualified “benefits” in the calculations. Even the consultants acknowledge that inclusion of “employment benefits” in this ‘way is unusual. It may be cynical to conclude that the purpose of this manipulation was to provide massive but poorly qualified advantages to the tunnel alternatives relative to the other alternatives. But it should certainly be understandable how that conclusion could be easily reached. In any case, this manipulation serves to prove that the only way the freeway tunnel options could at least in theory be meaningfully cost effective would be if the associated costs were billions of dollars less than projected, The illusion of select tunnel cost-effectiveness has been fabricated by the consultants. They have done this through manipulation of the CBA model by offsetting billions of dollars of projected costs with contrived "benefit" factors, the types of which are neither Burbank» Glendale » La Coftade Fintiidge « Pasadena « South Pasadena 1327 Foothill Boulevard = La CaAiada Flintridge, CA 91011 Phone: 818-790-8880 + Fax: 818-790-7836 + Email: awisson@icf.ca.govprescribed nor even mentioned in Caltrans’ own Lit Guide, 'yele Benefit/Cost Analysis Model User ‘The Cost Benefit Analysis should be performed once more, this time with faithful adherence to the methods prescribed in the Model’s User Guide. This more conventional approach will eliminate from the calculations the inclusion of the deceptive and specious “employment benefits” and “residual value” benefits, the inclusion of which in the current CBA has so distortedly advantaged the tunnel alternatives. This more conventional approach will show that the only alternatives that promise to provide meaningful benefits, attractive retums, and relatively low costs are the TSM/TDM and Bus Rapid Transit alternatives. ‘Thank you for your consideration of our comments. We formally request that these comments be entered into the administrative record and that after careful consideration and study, Caltrans provide a direct response to the Arroyo Verdugo Steering Committee. If you have any questions or comments please contact Ann Wilson, Executive Director, at awilson@lcf.ca.gov or (818)790-8880. Sincerely, MWe A Sea Marina Khubesrian, M.D. Chair - Arroyo Verdugo Steering Committee ce; Governor Jerry Brown Secretary Brian P. Kelly, California State Transportation Agency Will Kempton, Executive Director, California Transportation Commission The Honorable Carol Liu, Senator, 25th District ‘The Honorable Chris Holden, Assembly Member, 41st District Metro Board Connected Cities and Communities 5-Cities Alliance Arroyo Verdugo Steering Committee Burbank + Glendale « La Cafioda Flintridge + Pasadena + South Pasadena 1327 Foothill Boulevard + La Cafiada Fintriage, CA 91011 Phone: 818-790-8880 « Fax: 818-790-7536 + Email: awison@icf.ca.gov