The launch of all-electronic tolling on the Highway 520 bridge cost the project $40 million in uncollected revenues during nine months of delay, according to a state performance audit released Friday.
The report says “unclear roles and inadequate policies” plagued the state Department of Transportation (DOT)’s implementation in 2010-11 while bids and specifications were being arranged for what was the nation’s most technically sophisticated tollway.
Since Dec. 29, 2011, drivers have been charged a toll while crossing the bridge at highway speed, instead of having to stop and pay cash. Most use a pre-paid “Good to Go” account and a windshield-mounted transponder; others pay online or are mailed a bill after bridge-mounted cameras photograph their license plates.
Of the five companies that tendered proposals to operate the new system, none scored above 350 on the DOT’s 1,000-point scale, based on price, technical expertise and other criteria. Yet the state went ahead, even though the point system didn’t place enough weight on “high-risk” issues such as accounting, auditors say. Washington state demanded that each trip and dollar be counted separately for each of the Highway 520, Tacoma Narrows and Highway 167 toll corridors — a far more stringent goal than in other states.
“Had WSDOT weighted high risk areas and better incorporated the advice of its risk experts, the process could have resulted in the selection of a different vendor,” the report says.
The winning toll contractor, Texas-based Electronic Transaction Consultants (ETC), dramatically underbid, which should have been a warning sign, the audit says. But the state toll team, under pressure from lawmakers and a federal deadline, didn’t comprehend the huge gap in technology between what ETC had delivered in other states, and the cutting-edge system expected here. The failure rate for complex information-technology startups is close to 50 percent, the 31-page audit mentions in passing.
The DOT eventually brought in outside experts to give advice, and decided to withhold at least $2.3 million in payments from ETC’s $23 million contract as a penalty for taking so long to prepare new tolling software.
Since tolling began, Washington state and ETC have met their goals for revenue and technical accuracy on the 520 bridge, though other problems emerged. Drivers avoiding the bridge have caused congestion, notably in downtown Bellevue approaching the toll-free I-90 bridge; and drivers who didn’t receive or failed to pay toll bills have racked up large debts because of DOT’s harsh civil penalty of $40 per unpaid crossing.
A summary from the report:
In a response letter, DOT says it will work to streamline its tolling projects, but says the audit covered only one facet, while others went smoother. The 520 tolls have brought in $67 million to date, and income is on track to support $1 billion in construction bonds, the agency says. And the state didn’t really lose $40 million — that money stream was simply shifted out several months, causing no long-term damage to the finance plan or to taxpayers — says the letter, co-signed by new Transportation Secretary Lynn Peterson.
Only four states use all-electronic tolling, the audit says. Washington’s struggles are closely watched in the U.S. toll industry as momentum builds at the state and federal levels to expand the programs, or even to develop multistate toll passes.