August 3, 2015

Garrett Damrath, Chief Environmental Planner

Division of Environmental Planner
Department of Transportation, District 7
100 S. Main St., MS-16A
Los Angeles, CA 90012
Re: Draft Environmental Impact Report/Environmental Impact Statement SR 710 North Study
Dear Mr. Damrath:
Please find attached my comments on the Draft Environmental Impact Report/Environmental
Impact Statement SR 710 North Study (DEIR/S) issued by the Los Angeles County Metropolitan
Transportation Authority (METRO) in March 2015.
According to NEPA sec. 1502.23, because the Cost Benefit Analysis is being used as a decisionmaking tool, it is also subject to comment during the NEPA DEIS review process. Therefore, I have
also attached my previous comments on Analysis of Costs and Benefits for SR 710 North Study.
Based on an evaluation by my staff, these comments serve to note deficiencies in the DEIR/S and
areas of Non-Compliance with CEQA and NEPA. I trust that these comments will be given full
consideration and responded to by METRO and Caltrans in the final EIR/S. Thank you for your
consideration.
Sincerely,

CAROL LIU
Senator
25th District
CC:

Phillip Washington, Chief Executive Officer, Los Angeles County Metropolitan

Transportation Authority
Bryan Pennington, Executive Director, Engineering and Construction
Malcom Dougherty, Director, California Department of Transportation

Comments on Draft Environmental Impact Report/

Environmental Impact Statement SR 710 North Study

Senator Carol Liu, SD25

A. Determining Standards of Significance

Under CEQA Section 15064.7, [e]ach public agency is encouraged to develop and publish
thresholds of significance that the agency uses in the determination of significance of
environmental effects. These thresholds must be a clear performance level supported by peer
review.
The DEIR/S chooses in many cases to not identify or publish significance thresholds. Without a
threshold of significance, the appropriate mitigation has no context and neither policymakers nor
the public can be assured that significant environmental impacts will be avoided. The following
technical appendices would be greatly improved by adopting and publishing standards of
significance:
Air Quality Assessment Report (thresholds for operation and construction emissions)
Preliminary Geotechnical Report (thresholds for groundwater depletion)
Water Quality Assessment Report (quantitative allowances of pollutant concentrations)

B. Air Quality Assessment Report (AQAR)

B-1.

Omission of hot spot analysis:

Under CEQA SEC. 93.123 (b)(1), the Freeway Tunnel Alternatives that allow truck traffic
require Hot Spot analysis. METRO claims that it will complete this analysis if one of the
tunnel options is selected as the preferred alternative. Postponing this analysis, however,
skews the presentation of the alternatives in the EIR, eroding its use as a policymaking
tool.
Furthermore, the phrasing in section 5.2.1.2 suggests that such an analysis would not be
conducted in an objective manner:
If the Freeway Tunnel Alternative with either the singlebore or dualbore design
variation is identified as the preferred alternative, a quantitative PM hotspot analysis
will be conducted to demonstrate that the project would not delay attainment of or
worsen existing violation of or cause an exceedance of the PM 2.5 or PM 10 national
ambient air quality standards and meets conformity requirements.
A quantitative PM hot-spot analysis should be conducted to determine whether or not the
project would cause exceedances. Claiming that an analysis demonstrates a nonexceedance suggests that METRO already knows the result of the analysis. If this is true,
then they have voided CEQA by omitting important information. And if they do not know
the result, this expression of confidence is misleading to policymakers. As is, the
treatment of hot spot analysis in the DEIR/S could constitute a prejudicial abuse of
discretion, and therefore Noncompliance with CEQA sec. 21005.

Page 1 of 5

August 3, 2015

Comments on Draft Environmental Impact Report/

Environmental Impact Statement SR 710 North Study

B-2.

Senator Carol Liu, SD25

The AQAR fails to identify the 30 cases where construction emissions are
expected to exceed SCAQMD thresholds:

The AQAR promises that [t]he project will also comply with all SCAQMD
requirements (Page 5-15, AQAR). To this end, the predicted operational emissions are
presented with SCAQMD thresholds. One would expect that the predicted construction
emissions would also be presented with SCAQMD thresholds. Curiously, these thresholds
which are readily available on the SCAQMD website are not included in AQAR Vol.
II, Appendix A: Construction Emission Calculations. What is most troubling is that the
AQAR seems to imply that the SCAQMD allowances are being used as CEQA thresholds,
without ever adopting them in a legally binding way. This misleads both policymakers
and the public.
Appendix A of this comment letter contains a list of all of the construction phases for each
alternative that would lead to one or more exceedances of SCAQMD construction
thresholds. All told there are 30 predicted exceedances of SCAQMD across the 5
suggested alternatives. If METRO were to adopt SCAQMD allowances as significance
thresholds under CEQA, these emissions would constitute significant unmitigated
impacts, and thus violations of CEQA.
If METRO for some reason used different standards of significance for construction
emissions, we urge them to publish these standards. Either way, the final EIR/S should
remove the erroneous claim that [t]he project will also comply with all SCAQMD
requirements (Page 5-15, AQAR).
B-3.

Dual-bore tunnel construction emissions are not listed in AQAR Vol. II,
Appendix A: Construction Emission Calculations:

The construction emissions are not published for the Dual-Bore Tunnel, nor is their
absence noted or explained. These calculations must be included in the final EIR/S. These
emissions calculations are likely to predict exceedances of SCAQMD thresholds, given
the emissions calculations for the Single-Bore Tunnel.
B-4.

Inadequate analysis of Sensitive Receptors:

Identification of and measures for minimizing the impacts on sensitive receptors is

postponed until after a preferred alternative is selected. The number of affected sensitive
receptors, however, could vary greatly from alternative to alternative, so postponing their
inclusion may affect the selection of a preferred alternative. It is unclear why sensitive
receptors were identified in some technical appendices, like Groundborne Noise and
Vibrational Impacts, and not in others. At the very least, sensitive receptors with respect
to air pollution should be listed for each alternative in the AQAR to demonstrate that
METRO has given this component its due diligence, and to suggest further consideration
of this topic by decision makers beyond what is listed in Sec. 2.4 of the AQAR.

Page 2 of 5

August 3, 2015

Comments on Draft Environmental Impact Report/

Environmental Impact Statement SR 710 North Study

B-5.

Senator Carol Liu, SD25

The DEIR/S should disclose the amounts of water expected during construction:

According to AQAR Table 6.1, the following construction measures call for water use:
Backfilling, Clearing and Grubbing, Clearing Forms, Crushing, Cut and
Fill, Demolition, Disturbed Soil, Earth-Moving Activities,
Importing/Exporting Bulk Materials, Landscaping, Road Shoulder
Maintenance, Screening, Stockpiles/Bulk Material Handling, Trenching,
Truck Loading, Turf Overseeing (15 total).
Sec. 1502.9 of NEPA (c)(1) prompts agencies to prepare supplements to either draft or
final environmental impact statements if (ii) There are significant new circumstances or
information relevant to environmental concerns and bearing on the proposed action or its
impacts. Californias worst drought on record is certainly relevant to environmental
concern, so the DEIR/S should make an effort to report the expected water use during the
construction of each alternative.

C. Preliminary Geotechnical Report (PGR)

C-1.

Suggested mitigation for groundwater leakage is inadequate under CEQA:

The PGR acknowledges that a tunnel alternative would bore through a known
groundwater barrier (The Raymond Fault), but does not adequately discuss the
environmental significance of this action, or the specifics behind avoiding serious
environmental harm. Section 11.5 of the PGR only states that [s]pecial care would have
to be exercised when tunneling through a fault zone that has a substantial difference in
groundwater on opposite sides of the fault.
CEQA Sec. 15126.4 states that mitigation measures should be fully enforceable through
permit conditions, agreements, or other legally binding instruments. Mitigation measures
should be specific enough that they can be written into contract. It would be difficult to
hold a construction contractor liable for failing to exercise special care during tunnel
boring, meaning that the lead agency could be forced to pay any resulting damages, and
therefore incur significant cost overruns.
As noted earlier, instead of simply noting a potential environmental impact, the EIR
should first adopt a threshold of environmental significance for impacting groundwater
perhaps changes in the level of groundwater basins, or leakage rates out of the Raymond
Basin. Both CEQA Appendix G, and the LA CEQA Threshold Guide contain suggestions
for choosing adequate groundwater impact thresholds. The EIR should then determine
whether or not tunneling is expected to create changes that surpass these thresholds, and if
they do, the EIR should propose specific, enforceable mitigation.

Page 3 of 5

August 3, 2015

Comments on Draft Environmental Impact Report/

Environmental Impact Statement SR 710 North Study

C-2.

Senator Carol Liu, SD25

Adoption of a less robust tunnel design:

Sec. 11.8.1.3 of the PGR, Design Considerations for Active Faults, explains how a tunnel
vault filled with crushable material would accommodate fault movement. This section
then states that a steel segmental lining was instead selected due to risk, cost, and
schedule implications, but fails to explain how this substitution will affect the ability of
the tunnel to withstand fault movements. The PGR cites CH2M HILL and Jacobs
Associates as having conducted an analysis that led to their recommendation of the
segmented lining. This analysis should be included in an appendix (or if they are already
included in an appendix, properly referenced), as this information is immediately relevant
to the review process.

D. Water Quality Assessment Report (WQAR)

D-1.

Deferred mitigation of water quality does not adequately inform policymakers as

to the potential pollution impacts:

The Water Quality Assessment Report notes that construction and operation of the five
proposed alternatives would require adoption of Best Management Practices (BMPs) and
development of General Construction Plans (GCP). Therefore, claims the WQAR, there
is a low potential for construction or operation of the five alternatives to adversely
affect the downstream substrate. This effectively defers determination and mitigation of
significant impacts to later stages.
While mitigation can be (under certain circumstances) deferred to later stages,
determination of significant impacts cannot be deferred, according to page xlvi of 2014
CEQA Statutes and Guidelines. Under CEQA, the DEIR/S cannot simply claim that any
potentially significant impacts will be addressed in general construction or stormwater
pollution plans. These significant impacts need to be outlined in the DEIR/S to allow
decision makers to compare the impacts of approving the proposed project with the
impacts of not approving the proposed project (CEQA Sec. 15126.6 (e)(1) Consideration
and Discussion of Alternatives to the Proposed Project).
As in cases above, this determination of significance is made much more rigorous by
adopting thresholds of significance, most appropriately quantitative measures of pollutant
levels. While the DEIR/S can choose between mitigation measures for an exceedance of a
threshold at a later date, the DEIR/S cannot defer its main responsibility outlining the
expected environmental impacts for each proposed project.

E. Transportation Technical Report (TTR)

E-1.

Calculations using recession years lead to underestimate of truck traffic:

Section 3.4.2 of the TTR states that the SCAG model predicts a 10% increase in truck
traffic for the region between 2008 and 2012, but Caltrans/PeMS data showed a regional
Page 4 of 5

August 3, 2015

Comments on Draft Environmental Impact Report/

Environmental Impact Statement SR 710 North Study

Senator Carol Liu, SD25

decrease in trucks, so the model was adjusted to match these data. What the TTR fails to
mention is that these data were collected during the Great Recession. Port activity and
truck traffic are highly cyclical, and as expected, truck traffic increased again after 2012.
Using 2008 to 2012 to calibrate the truck traffic model is akin to using 2008 to 2011 to
project US GDP or to using 1997 to 1998 to project California rainfall expectations. The
following data are from the 2014 Traffic Census, as published on the Caltrans Website.
These values represent all traffic (annual changes in total truck traffic are not published by
Caltrans).

At the very least, Section 3.4.2 should discuss the significance of adjusting the model.
Using recession years to calibrate the SCAG model could very well lead the Air Quality
Assessment Report to underestimate truck-related emissions. Time savings calculations
also depend on the SCAG model output, so could also be affected by this adjustment. It is
possible that these adjustments do not change the conclusions in the time savings or air
quality calculations, but the lack of discussion about how this potentially erroneous
calibration impacts other sections constitutes a troubling lack of transparency, and if
ignored, a violation of CEQA sec. 21005.
E-2.

The Transportation Technical Report does not address induced demand:

Because the air quality calculations rely heavily on VMT, the DEIR/S should address the
possible impacts of induced traffic demand. Failing to do so would constitute a violation
of NEPA Sec. 1502.22, Incomplete or Unavailable Information, which requires the
agency authoring the EIS to acknowledge instances where the information informing the
EIS is lacking.
There is a significant body of literature indicating that capacity improvement projects lead
to increases in VMT by way of induced demand. As road capacity increases, the price of
driving (which includes commute times, safety, etc.) is reduced, thereby making driving a
more attractive option and causing increases in per-capita VMT. For example, in Impact
of Highway Capacity and Induced Travel on Passenger Vehicle Use and Greenhouse Gas
Emissions, Susan Handy of UC Davis and Marlon G. Boarnet of USC claim the best
estimate for the long-run effect of highway capacity on VMT is an elasticity close to 1.0,
implying that in congested metropolitan areas, adding new capacity to the existing system
of limited-access highways is unlikely to reduce congestion or associated GHG in the
long-run.
Page 5 of 5

August 3, 2015

Comments on Draft Environmental Impact Report/

Environmental Impact Statement SR 710 North Study

Senator Carol Liu, SD25

Appendix A
SCAQMD Construction Threshold Exceedances:
This appendix is a list of instances where the expected construction emissions, as reported in
AQAR Appendix A: Construction Emission Calculations exceed SCAQMD construction
emission thresholds of significance.
Construction Phase (Contaminant Exceedances)
TSM/TDM Phase 0 (NOx)
TSM/TDM Phase 1 (NOx)
TSM/TDM Phase 2 (NOx)
TSM/TDM Phase 3 (NOx)
TSM/TDM Phase 4 (NOx)
BRT Phase 1 (NOx)
BRT Phase 2 (NOx)
BRT Phase 3 (NOx)
BRT Phase 4 (NOx)
BRT Phase 5 (NOx)
LRT Staging Area (NOx)
LRT Aerial Structure (NOx)
LRT At Grade Structure (NOx)
LRT Tunnel Work (NOx)
LRT Above Grade Construction (NOx)
LRT Construction Rail Tracks (NOx)
LRT South Portal Earth Work (NOx, CO, ROC)
LRT South Portal Bridge Construction (NOx)
LRT North Portal Tunnel Prep Work (NOx)
LRT North Portal Earth Work (NOx)
LRT North Portal Bridge (NOx)
SB Tunnel South Portal Earth Work (NOx, CO)
SB South Portal Bridge (NOx)
SB Tunnel South Portal Prep (NOx)
SB Tunnel North Portal Earth Work (NOx, PM2.5, CO, VOC)

Page A-1 of 1

August 5, 2015

July 7, 2015
Phillip A. Washington
Chief Executive Officer
Los Angeles County Metropolitan Transportation Authority
One Gateway Plaza
Los Angeles, CA 90012-2952
Re: Analysis of Costs and Benefits for the SR 710 North Study Alternatives
Dear Mr. Washington:
Please find attached my comments on the Analysis of Costs and Benefits for the
State Route 710 North Study Alternatives (CBA) issued by the Los Angeles
County Transportation Authority (METRO) on June 19, 2015.
I offer these comments based on a preliminary review conducted by my staff.
The comments note deficiencies in the CBA and areas of non-compliance with the
National Environmental Policy Act implementing regulation Sec. 1502.23.
I trust that these and the comments of all interested parties will be given full
consideration and will be responded to by METRO and Caltrans in the EIR/EIS
and ultimate project decision-making processes.
Sincerely,

CAROL LIU
Senator
25th District
CC: Bryan Pennington, Executive Director, Engineering and Construction
Malcolm Dougherty, Director of the California Department of Transportation

Comments on Analysis of
Costs and Benefits for SR710 North Study

Senator Carol Liu, SD25

According to Sec. 1502.23 of the National Environmental Policy Act (NEPA), If a cost-benefit
analysis relevant to the choice among environmentally different alternatives is being considered
for the proposed action, it shall be incorporated by reference or appended to the statement as an
aid in evaluating the environmental consequences. The CBA executive summary states that
The CBA will be considered in conjunction with the information provided in Table 2.15
(Summary of Alternatives and Impacts) during the identification of the Preferred Alternative
(CBA ES-1). Therefore, the CBA should be subject to the same NEPA regulations as the EIS,
namely, the CBA should rigorously explore and objectively evaluate all reasonable
alternatives (NEPA Sec. 1502.14(a)). It is my understanding that the CBA should be an
objective document to be used as a tool by policymakers during the decision-making process. In
the following pages I highlight areas where the CBA fails in these regards.

Overview:
The CBA adopts the Lifecycle Benefit-Cost Analysis Model (Cal-B/C) as a tool for evaluating
the 5 proposed SR 710 plans. The CBA, however, skips several steps included in the Cal-B/C
version 5.0 (Cal-B/C template) available on the Caltrans website. This renders the results section
incomplete and misleading. Additionally, the sensitivity analysis is discounted as
inconsequential, when it contains important results. Lastly, the CBA fails to tailor the Cal-B/C
model to address community concerns regarding the proposed projects, including health care
costs, seismic risks, aquifer contamination, and funding sources.

CBA Omissions:
1) According to the Cal-B/C template available on the Caltrans website, the cost benefit
analysis should present the net present value1, return on investment, and benefit/cost
ratio for the proposed projects. The CBA reports only the net present value (NPV), and
omits the two other financial indicators.
Instead of including these figures, the CBA provides a cursory comment about investment
returns on page 2: In general, a positive NPV indicates a better return on an investment. The
Freeway Tunnel Alternative (single-bore variation) has the highest NPV as shown below in
Table 1. From this, the reader might assume that the single-bore tunnel also has the highest
ROI and benefit/cost ratio. In fact, the TSM/TDM has the highest ROI at 4.35% per year (see
below). The single-bore tunnel has a ROI of 2.81 to 2.90%, and the BRT has an ROI of
2.76%. Omitting the ROI and benefit/cost ratio data makes the single-bore tunnel option
appear comparatively more financially attractive. All three financial indicators should be
presented in the Table 1: Cost-Benefit Analysis Summary for the SR-710 North Study to put

Net Present Value is the present value of future benefits of a transaction (discounted according to interest rate and
opportunity costs), minus the costs of the transaction.

Page 1 of 4

July 6, 2015

Comments on Analysis of
Costs and Benefits for SR710 North Study

Senator Carol Liu, SD25

the NPV figures in context and to address Metros stated goal of maximizing the cost
efficiency of public investments (CBA ES-1).

TSM/TDM
Freeway Tunnel
Single Bore
Freeway tunnel
Dual Bore
BRT
LRT

Table 1: Full Results, as per Cal-B/C

Present
Present Value Net
Benefit/Cost
Value of
of Benefits
Present
Ratio (Omitted
Costs
($ million)
Value
from CBA)
($ million)
($ million)
255
599
344
1.35
1487 to
0.74 to 0.80
1951 to 1997 3429 to 3587
1590

Annual Return On
Investment (Omitted
from CBA)
4.35 %
2.81 to 2.90 %

3227 to 3374

3377 to 3733

-37 to 506

-0.01 to 0.16

-0.06 to 0.73 %

510
2163

879
1293

369
-870

0.72
-0.40

2.76 %
-2.54 %

2) The CBA fails to address the costs of mitigation activities, despite the fact that
mitigation is listed as a cost input in the Cal-B/C template.
A cost figure should be attached to each proposed mitigation listed in the DEIR/S Table ES1, Summary of Potential Environmental Impacts of the Build Alternatives and Measures
Addressing Those Topics. It is possible that these figures were included in the construction
costs, but they should be laid out explicitly as suggested by the Cal-B/C template. Similarly,
if building plans do not call for any mitigation activities, this should be noted in the CBA.
The failure of the CBA to address mitigation costs makes the environmental analysis section
unsatisfactory.

Discounted Sensitivity Analysis:

1) The CBA concludes that the sensitivity analysis results are inconsequential; however
many of the results have significant impacts on both ROI and NPV.
The CBA claims that [e]ven under the most pessimistic scenarios, the range of values does
not change the general comparisons. The sensitivity ranges are often relatively small and/or
in the same direction (CBA 4-1). This statement glosses over the fact that the magnitude of
the NPV changes significantly under some sensitivity analyses, implying significant changes
in ROI.
Table 5 of Appendix A identifies 17 cases where results in the sensitivity analysis lead to
significant changes in both ROI and NPV that is, annual ROI changed by more than 0.75%,
and NPV changed by more than $250 million. To put these figures into context, the average
NPV for the 5 projects is $322 million, and the average annual ROI for the projects is 1.56%.
Page 2 of 4

July 6, 2015

Comments on Analysis of
Costs and Benefits for SR710 North Study

Senator Carol Liu, SD25

Table 2 shows one such scenario, where a 7% discount rate is used instead of the 4% rate
used elsewhere in the CBA. Adopting a 7% discount rate causes the sing-bore tunnel NPV to
drop from $1487 million to $397 million, and the ROI for the single-bore tunnel to drop from
2.81% to 0.93%. It is irresponsible to dismiss a three-fold reduction in the ROI and an NPV
decrease of over $1 billion as relatively small.

TSM/TDM
Freeway Tunnel
Single Bore
(Toll, No Trucks)
Freeway tunnel
Dual Bore
(No Toll)
BRT
LRT

Table 2: Discount Rate Sensitivity Analysis Results

Present Value
Net Present
Benefit/Cost
of Costs
Value
Ratio
($ million)
($ million)
($ million)
255
223
0.87
1951
397
0.20

Annual Return
on Investment
($ million)
3.19 %
0.93 %

3227

-783

-0.24

-1.36 %

510
2163

244
-853

0.48
-0.39

1.48 %
-2.48 %

Table 2: The NPV column uses the CBA estimates for a 7% discount rate (CBA Table 4-1). This leads to
significant changes in ROI. The CBA, however, does not calculate ROI, so the effects of the sensitivity analysis
are understated.

2) The Sensitivity Analysis does not take into account cumulative effects.
The results of each sensitivity analysis should not be considered in a vacuum. What happens
in the likely scenario that several parameter values are not exactly equal to those used to
estimate costs? The CBA should model, or at very least discuss, this possibility.
3) The Sensitivity Analysis should include per-mile tunneling costs.
As construction represents the majority of costs for the projects that involve tunneling $5.5,
$3, and $2.2 billion for the dual-bore, single-bore and LRT alternatives, respectively
tunneling costs per mile should be included in the sensitivity analysis. The Sepulveda Pass
project uses a figure of $1 billion per mile tunneled to inform construction costs twice the
number used for the SR 710. If the CBA were to adopt this figure, the single-bore tunnels
purported $1.5 billion NPV would be reduced to nearly zero. If there are technological or
geological reasons why one METRO tunneling project would cost twice that of another
project per mile, these reasons should be noted in the CBA.

Page 3 of 4

July 6, 2015

Comments on Analysis of
Costs and Benefits for SR710 North Study

Senator Carol Liu, SD25

Limitations of the Cal-B/C:

1) Cal-B/C does not discuss sources of funding.
While the Cal-B/C model does not require this, funding has been a central issue in the
SR 710 debate. According to metro.net, [t]he SR 710 Gap Closure project was identified as
a high-potential candidate for delivery as a P3 project. Currently, the CBA counts tolls as
transfer payments which are a redistribution of income in the study area, and therefore do
not influence costs or benefits. Because a private partner would be entitled to toll revenues,
these payments could no longer be considered as transfer payments if the private partner is
not in L.A. County. This could have significant impacts on the NPV of the projects,
depending on the private partners investment and profit margins. The CBA should at the
very least provide an outline of a P3 contract to show that Metro has addressed these issues.
It is also important to discuss how using Measure R (and potentially R 2.0) funds on the
SR 710 project would affect funding for transportation projects elsewhere in L.A. County.
2) This CBA should do more to model low probability, high-cost events.
Examples of these events include earthquakes, leakage between the Raymond and San
Gabriel Aquifers, and harder-than-expected sediment along the tunnel course. This is not a
case of Metro not following the guidelines of Cal-B/C, but rather incompatibility between
Cal-B/C and the proposed projects. It is imperative to include these possibilities to reflect the
inherent risk of large construction projects like the freeway tunnel and LRT alternatives.
Metro is using a document designed for road construction and should tailor it to address the
nuances of the proposed projects.
3) Cal-B/C does not take into account health care costs.
Exhibit 3-10 of the CBA clearly shows that all tunnel options will cause increases in
emissions. The CBA should be extended to examine health carerelated costs that may arise
from reduction in air quality both in communities adjacent to construction areas and the
region as a whole.
4) Cal-B/C does not take into account business interruption litigations.
The Cal-B/C model does not consider business interruption litigation when calculating costs.
An effort should be made to determine the extent to which this type of litigation may increase
project costs.

Page 4 of 4

July 6, 2015

Appendix A to Comments on Analysis of Costs and Benefits for SR710 North Study

Senator Carol Liu, SD25

Appendix A: Tables 1-5 investigate the significance of figures listed in Table 4-1 of the CBA, NPV Sensitivity Analysis. We use a
threshold of 0.75% net change in annual ROI and $250 million change in NPV as significance standards. To put these figures into
context, the average NPV for the 5 projects is $322 Million, and the Average annual ROI for the projects is 1.56%. If Metro takes
issue with these standards, we urge them to adopt their own significance standards.
Table 1: NPV Sensitivity Analysis (Table 4-1 CBA)
All figures are in millions of dollars, save annual ROI, which is a percent.
Base
NPV
TSM/TDM
Single Bore (Toll)
Single Bore (Toll, No Trucks)
Single Bore (Toll, Express Bus)
Dual Bore (No Toll)
Dual Bore (No Toll, No Trucks)
Dual Bore (Toll)
BRT (ELA to Pasadena)
LRT (ELA to Pasadena)

Cost

Base
ROI

Operating
Costs

Tunnel
Life

VMT
Reduction

Air
Quality

Discount
Rate

Annualization

Value of Time

343

255

4.35

Lower

318

343

309

325

223

294

343

343

255

4.35

Upper

356

343

343

343

343

343

561

1524

1979

2.90

Lower

1250

1140

1159

1524

428

1298

1524

1524

1979

2.90

Upper

1662

1524

1524

1543

1524

1524

3022

1447

1951

2.81

Lower

1205

1093

1165

1477

397

1258

1477

1447

1951

2.81

Upper

1613

1477

1477

1497

1477

1477

2946

1590

1997

2.97

Lower

1313

1205

1267

1590

466

1355

1590

1590

1997

2.97

Upper

1728

1590

1590

1601

1590

1590

3095

75

3273

0.11

Lower

-391

-618

-261

75

-783

-111

75

75

3273

0.11

Upper

308

75

75

92

75

75

1358

506

3227

0.73

Lower

45

-188

191

506

-533

283

506

506

3227

0.73

Upper

737

506

506

506

506

506

1947

-37

3374

-0.06

Lower

-513

-730

-328

-37

-851

-222

-37

-37

3374

-0.06

Upper

201

-37

-37

-37

-37

1410

369

510

2.76

Lower

318

369

332

348

224

316

369

369

510

2.76

Upper

394

369

369

369

369

369

516

-869

2163

-2.54

Lower

-1110

-869

-1219

-880

-853

-902

-869

-869

2163

-2.54

Upper

-749

-869

-869

-869

-869

-869

-813

Page A-1 of 5

July 7, 2015

Appendix A to Comments on Analysis of Costs and Benefits for SR710 North Study

Senator Carol Liu, SD25

Table 2: Annual ROI Sensitivity Analysis

Cell values represent the annual ROI, in percent, for a given sensitivity analysis. Values were calculated using NPV data from Appendix Table 1.

TSM/TDM
Single Bore (Toll)
Single Bore (Toll, No Trucks)
Single Bore (Toll, Express Bus)
Dual Bore (No Toll)
Dual Bore (No Toll, No Trucks)
Dual Bore (Toll)
BRT (ELA to Pasadena)
LRT (ELA to Pasadena)

Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper

Operating
Tunnel
VMT
Air
Discount
Value of
Costs
Life
Reduction Quality
Rate
Annualization Time
4.13
4.35
4.05
4.19
3.19
3.91
4.35
4.47
4.35
4.35
4.35
4.35
4.35
5.99
2.48
2.30
2.33
2.90
0.98
2.55
2.90
3.10
2.90
2.90
2.92
2.90
2.90
4.74
2.43
2.25
2.37
2.86
0.93
2.52
2.86
3.06
2.86
2.86
2.89
2.86
2.86
4.71
2.56
2.39
2.49
2.97
1.05
2.62
2.97
3.17
2.97
2.97
2.99
2.97
2.97
4.79
-0.63
-1.04
-0.41
0.11
-1.36
-0.17
0.11
0.45
0.11
0.11
0.14
0.11
0.11
1.75
0.07
-0.30
0.29
0.73
-0.90
0.42
0.73
1.03
0.73
0.73
0.73
0.73
0.73
2.39
-0.82
-1.21
-0.51
-0.06
-1.44
-0.34
-0.06
0.29
-0.06
-0.06
0.01
-0.06
-0.06
1.76
2.45
2.76
2.54
2.64
1.84
2.44
2.76
2.90
2.76
2.76
2.76
2.76
2.76
3.56
-3.54
-2.54
-4.06
-2.58
-2.48
-2.66
-2.54
-2.10
-2.54
-2.54
-2.54
-2.54
-2.54
-2.33

Page A-2 of 5

July 7, 2015

Appendix A to Comments on Analysis of Costs and Benefits for SR710 North Study

Senator Carol Liu, SD25

Appendix Table 3: Significant Changes in ROI

Each cell is the change in annual ROI from the base value. Colored cells indicate changes of over 0.75% in Annual ROI. Green cells (dark gray) indicate a positive
change; pink cells (light gray) indicate a negative change.

TSM/TDM
Single Bore (Toll)
Single Bore (Toll, No Trucks)
Single Bore (Toll, Express Bus)
Dual Bore (No Toll)
Dual Bore (No Toll, No Trucks)
Dual Bore (Toll)
BRT (ELA to Pasadena)
LRT (ELA to Pasadena)

Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper

Operating Costs
-0.22
0.11
-0.42
0.20
-0.38
0.25
-0.41
0.19
-0.75
0.34
-0.66
0.30
-0.77
0.34
-0.31
0.14
-1.00
0.43

Tunnel
Discount
Value of
Life
VMT Reduction Air Quality
Rate
Annualization
Time
0.00
-0.30
-0.16
-1.16
-0.45
0.00
0.00
0.00
0.00
0.00
0.00
1.63
-0.60
-0.56
0.00
-1.91
-0.34
0.00
0.00
0.00
0.03
0.00
0.00
1.85
-0.56
-0.44
0.05
-1.88
-0.29
0.05
0.05
0.05
0.08
0.05
0.05
1.90
-0.58
-0.48
0.00
-1.92
-0.35
0.00
0.00
0.00
0.02
0.00
0.00
1.82
-1.15
-0.53
0.00
-1.47
-0.29
0.00
0.00
0.00
0.03
0.00
0.00
1.64
-1.03
-0.44
0.00
-1.63
-0.31
0.00
0.00
0.00
0.00
0.00
0.00
1.66
-1.16
-0.45
0.00
-1.39
-0.28
0.00
0.00
0.00
0.07
0.00
0.00
1.82
0.00
-0.22
-0.12
-0.92
-0.32
0.00
0.00
0.00
0.00
0.00
0.00
0.80
0.00
-1.52
-0.04
0.06
-0.13
0.00
0.00
0.00
0.00
0.00
0.00
0.21

Page A-3 of 5

July 7, 2015

Appendix A to Comments on Analysis of Costs and Benefits for SR710 North Study

Senator Carol Liu, SD25

Appendix Table 4: Significant Changes in NPV

The cell value is the change in NPV, in millions of dollars, from the base value. Colored cells indicate changes of more than $250 Million. Green cells (dark gray)
indicate a positive change; pink cells (light gray) indicate a negative change.

TSM/TDM
Single Bore (Toll)
Single Bore (Toll, No Trucks)
Single Bore (Toll, Express Bus)
Dual Bore (No Toll)
Dual Bore (No Toll, No Trucks)
Dual Bore (Toll)
BRT (ELA to Pasadena)
LRT (ELA to Pasadena)

Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper
Lower
Upper

Operating
Costs
-25
13
-274
138
-242
166
-277
138
-466
233
-461
231
-476
238
-51
25
-241
120

Page A-4 of 5

Tunnel
Life
0
0
-384
0
-354
30
-385
0
-693
0
-694
0
-693
0
0
0
0
0

VMT
Reduction
-34
0
-365
0
-282
30
-323
0
-336
0
-315
0
-291
0
-37
0
-350
0

Air
Quality
-18
0
0
19
30
50
0
11
0
17
0
0
0
44
-21
0
-11
0

Discount
Value
Rate
Annualization of Time
-120
-49
0
0
0
218
-1096
-226
0
0
0
1498
-1050
-189
30
30
30
1499
-1124
-235
0
0
0
1505
-858
-186
0
0
0
1283
-1039
-223
0
0
0
1441
-814
-185
0
0
0
1447
-145
-53
0
0
0
147
16
-33
0
0
0
56

July 7, 2015

Appendix A to Comments on Analysis of Costs and Benefits for SR710 North Study

Senator Carol Liu, SD25

Appendix Table 5: Significance of Sensitivity Analysis.

Colored squares indicate scenarios that lead to a net change in annual ROI of over 0.75% and a change in NPV of over $250 million. Of the 63 scenarios studies,
17 lead to significant changes in both annual ROI and NPV (colored cells). Green cells (dark gray) indicate a positive change; pink cells (light gray) indicate a
negative change. Cells labeled ns were not significant in at least one of the categories.

TSM/TDM
Single Bore (Toll)
Single Bore (Toll, No Trucks)
Single Bore (Toll, Express Bus)
Dual Bore (No Toll)
Dual Bore (No Toll, No Trucks)
Dual Bore (Toll)
BRT (ELA to Pasadena)
LRT (ELA to Pasadena)

Operating Costs
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
-476.00
ns
ns
ns
ns
ns

Tunnel Life
ns
ns
ns
ns
ns
ns
ns
ns
-693.00
ns
-694.00
ns
-693.00
ns
ns
ns
ns
ns

Page A-5 of 5

VMT Reduction
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
-350.00
ns

Air Quality
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns

Discount Rate
ns
ns
-1096.00
ns
-1050.00
ns
-1124.00
ns
-858.00
ns
-1039.00
ns
-814.00
ns
ns
ns
ns
ns

Annualization
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns
ns

Value of
Time
ns
ns
ns
1498.00
ns
1499.00
ns
1505.00
ns
1283.00
ns
1441.00
ns
1447.00
ns
ns
ns
ns

July 7, 2015