Dollars & sense
Making the case for a new bridge.

Introduction:

Renewal of the Johnson Street Bridge, whether by refurbishment or replacement, is essential to maintaining the safety and viability of an important piece of the city’s essential transportation infrastructure. That imperative, at least, is clear in the city’s condition assessment report.  Delcan, our engineering consultants, did not recommend the “do nothing” option.

The need for action is immediate to the extent that planning and follow through for a project of any significant magnitude will take at least a year or two.  Delcan, working in late 2008, suggested that work on the bridge complete within three years to avert potential failures of critical electrical and mechanical infrastructure and to address the accelerating deterioration of the bridge foundation and resultant increased vulnerability to seismic events.

One of the problems with the johnsonstreetbridge.org campaign has been their suggestion from the outset that a “do nothing” option is viable and that the bridge can survive with a fresh coat of paint alone.  They haven’t clearly distanced themselves from that position but it does need to be put to rest.

Both bridge engineers invited to Victoria to support the preservation campaign dismissed seismic work as unnecessary, citing often irrelevant or misguided rationale for this course of action.  There are several good counterpoints to this option, but one in particular should give anyone pause to consider the implications of this strategy.  Their experience, relative to this discussion, has been in Portland, where 8 bridges cross the Willamette River connecting the city’s southeast neighbourhoods to downtown.  Their choice to forego seismic work was deliberate and a risk mitigated by various redundancies.  Some of their bridges will have been seismically upgraded and in the event of a catastrophic failure of any single bridge, several other options will still be available.

We have two bridges and not much backup should the Johnson Street Bridge fail.  This is not just critical in the aftermath of an earthquake, but more importantly in the longer term, as any damage or collapse would have to be remedied to restore the crossing and return the city to normalcy.

For council, this has always been our starting point – that the seismic work prescribed in the Delcan report is a requirement, not an option, that must, and has, informed our selection of the new bridge option.

Refurbishment:
There are no guarantees that the cost of refurbishing the Johnson Street Bridge will be more cost effective or even cheaper than building a new bridge.  Engineering analysis of conditions and the potential exposure to cost escalation and other liabilities suggest in fact, that preserving the old bridge may be more costly than replacing it.

Relying solely on the Delcan condition assessment and order of magnitude estimates for both refurbishment and replacement costs ignores the homework the city has done, and critics should be doing, on the costs associated with the options available to council.

The Delcan report estimated refurbishment at $23.6 million and replacement at $35 million, a much narrower spread than is informing the current public debate.  Both figures are useful in context. The foundation for council’s decision has always used those numbers as a starting point, but the evaluation and costing of a more complete and comprehensive project is what frames the practical alternatives we have before us.

Unfortunately, some of those signing counter-petitions may have done so on the premise that the cheapest possible option (without seismic work) is still on the table, and that the essential repairs we face can be deferred at least long enough to make sure it is the next generation, not their own, who will have to replace the bridge, and at whatever cost.  Certainly, I have heard this directly from some of those I have talked to about the project.

The city has done due diligence on both options.  We have do our homework on the new bridge to get firmer cost estimates, to incorporate an expanded scope to take advantage of realignment opportunities and to enhance the levels of service proposed for bicycle and pedestrian traffic.  That work, predictably, has nearly doubled initial cost estimates.

Some of those campaigning to save the old bridge are still quoting the $23 million figure in promoting this option to the public.  While this may seem intuitive and cost containment on a defined set of works may well be plausible, the city has, despite protests to the contrary, also done more homework on refurbishment options and now estimates those costs at $57 million.  It isn’t just the higher contingencies calculated to provide a cushion against potentially unforeseen deficiencies, but also the many scope changes suggested by critics.

The higher figure includes scope changes such as:

Capital cost estimates for refurbishment do not account for ongoing maintenance, estimated at about twice that of a new bridge.  It does not account for interest cost differentials between various loan options (CMHC funding is 1% below funding available from the Municipal Finance Authority).  And it does not evaluate external costs and potential municipal liabilities.  (A more extensive discussion on the issues of municipal liability are covered in a separate paper.)

The risk of cost escalation is realistic with refurbishment.  Two other Strauss bridges have exposed deficiencies during recent restoration projects that have escalated costs and created unforeseen problems that we will do well do appreciate.  The city’s assessment report also looked at the 4th Street Bridge in San Francisco, where scope changes and other problems drove costs up from $17 million on estimate to $55 million on completion.  To be fair, containing costs to estimates may be plausible, but realistically, the city has to also plan for the worst-case scenario.

It should be noted also that the interest costs on borrowing for our share of bridge costs (beyond the $21 million from the federal government’s Build Canada Fund), is at historically low rates.  We will not see rates this low again.  Financing for the bridge is about as cheap as we are ever likely to get.

Preserving the bridge would not qualify for the lower cost financing.  The longer time frame needed to do restoration work reaches beyond the expiry date of the CMHC funding, even if it does meet the more generous timelines available under the Build Canada program. 

Nevertheless, that funding is not available for a refurbishment project.  While critics suggest it is an eligible project, funding agencies have done their own due diligence, talked to our engineers and our consulting engineers and decided that replacement was the right project.  Demonstrating eligibility does not guarantee a grant, as we saw with the provincial funding programs we applied for.

Bridges and external costs