F IN A N C IA L P L A N A N N U A L UP D A T E · 2020. 8. 16. · F IN A N C IA L P L A N A N N U A L UP D A T E AS OF DECEMBER 1, 201 F ina nc ial P lan as R eq uir ed b y Secti

Annual Financial Report, 2014I-94 Jackson Freeway Modernization ProjectJackson County, Michigan

I-94 Modernization ProjectI-96 to Conner Avenue

City of Detroit, Wayne County, Michigan

FINANCIAL PLAN ANNUAL UPDATE AS OF DECEMBER 1, 2019

Financial Plan as Required by Section 106(h)(i) of Title 23, United States Code

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I-94 Financial Plan Annual Update 2019 I

TABLE OF CONTENTS

TABLE OF CONTENTS ................................................................................................................................ I

FIGURES ..................................................................................................................................................... III

TABLES ....................................................................................................................................................... IV

APPENDICES ............................................................................................................................................... V

EXECUTIVE SUMMARY PLAN OVERVIEW ............................................................................................... 1

THE PROJECT ............................................................................................................................................. 1

PROJECT SPONSOR, PARTNERS, AND MANAGEMENT ....................................................................... 2

FINANCIAL PLAN ANNUAL UPDATE SUMMARY .................................................................................... 2

CONCLUSION .............................................................................................................................................. 9

CHAPTER 1 - PROJECT DESCRIPTION .................................................................................................. 10

PROJECT DESCRIPTION .......................................................................................................................... 10

PROJECT SPONSOR, PARTNERS, AND MANAGEMENT ..................................................................... 14

PROJECT MANAGEMENT AND OVERSIGHT ......................................................................................... 14

OVERVIEW OF ACTIVITIES AND PROJECT SCHEDULE ...................................................................... 15

CHAPTER 2 - PROJECT SCHEDULE ....................................................................................................... 17

INTRODUCTION ......................................................................................................................................... 17

PROJECT DESCRIPTION/PHASING ........................................................................................................ 17

IMPLEMENTATION RESPONSIBILITY ..................................................................................................... 17

SUMMARY PROJECT SCHEDULE ........................................................................................................... 18

STATUS OF PERMITS AND APPROVALS .............................................................................................. 22

CHAPTER 3 - PROJECT COST................................................................................................................. 23

INTRODUCTION ......................................................................................................................................... 23

COST ESTIMATE OVERVIEW................................................................................................................... 23

COST ESTIMATING METHODOLOGIES AND KEY ASSUMPTIONS HISTORY .................................... 24

FHWA MAJOR PROJECTS CER .............................................................................................................. 24

COST ESTIMATING METHODOLOGY ..................................................................................................... 25

BASELINE INFLATION ASSUMPTION ..................................................................................................... 26

COST MANAGEMENT ............................................................................................................................... 27

PRESENTATION OF PROJECT BY MAJOR SEGMENTS ...................................................................... 28

ADVANCED BRIDGES .............................................................................................................................. 28

PROJECT SEGMENTS .............................................................................................................................. 31

COSTS TO DATE ....................................................................................................................................... 34

ACTUAL AND FUTURE EXPENDITURES ................................................................................................ 34

COSTS TO COMPLETE BY SEGMENT AND PROJECT ELEMENT ....................................................... 36

I-94 Financial Plan Annual Update 2019 II

COST MANAGEMENT RESPONSIBILITY ................................................................................................ 38

CHAPTER 4 - PROJECT FUNDING .......................................................................................................... 40

INTRODUCTION ......................................................................................................................................... 40

PROJECT PLAN OF FINANCE ................................................................................................................. 40

PROJECT FUNDING .................................................................................................................................. 40

FEDERAL FUNDING .................................................................................................................................. 42

STATE FUNDING ....................................................................................................................................... 42

LOCAL FUNDING ...................................................................................................................................... 43

FISCAL CONSTRAINT OF PROJECT IN RELATION TO MICHIGAN’S STATE TRANSPORTATION PROGRAM.................................................................................................................................................. 43

POTENTIAL ALTERNATIVE FUNDING APPROACHES ......................................................................... 45

KEY REVENUE-RELATED ASSUMPTIONS, RISKS, AND MITIGATIONS ............................................. 46

CHAPTER 5 - FINANCING ISSUES .......................................................................................................... 47

INTRODUCTION ......................................................................................................................................... 47

PLAN OF FINANCE ................................................................................................................................... 47

CHAPTER 6 - PROJECT CASH FLOW ..................................................................................................... 48

INTRODUCTION ......................................................................................................................................... 48

SOURCES AND USES OF FUNDS ........................................................................................................... 48

PLANNING FOR CASH FLOW .................................................................................................................. 50

TECHNICAL ASPECTS OF CASH MANAGEMENT ................................................................................. 53

INTERACTIONS WITH STATE TRANSPORTATION PROGRAMS, BUDGETS, AND OTHER PROJECTS ................................................................................................................................................. 54

CHAPTER 7 – PUBLIC-PRIVATE PARTNERSHIP ASSESSMENT......................................................... 56

CHAPTER 8 - RISK AND RESPONSE STRATEGIES .............................................................................. 57

INTRODUCTION ......................................................................................................................................... 57

RISK AND RESPONSE STRATEGIES ...................................................................................................... 57

FUNDING RISKS AND MITIGATION STRATEGIES ................................................................................ 65

MITIGATION STRATEGIES ....................................................................................................................... 66

CHAPTER 9 - ANNUAL UPDATE CYCLE ................................................................................................ 67

INTRODUCTION ......................................................................................................................................... 67

FPAUS ........................................................................................................................................................ 67

CHAPTER 10 - SUMMARY OF COST CHANGES SINCE LAST YEAR’S FINANCIAL PLAN ............... 68

INTRODUCTION ......................................................................................................................................... 68

CHAPTER 11 - COST AND FUNDING TRENDS SINCE IFP .................................................................... 73

INTRODUCTION ......................................................................................................................................... 73

CHAPTER 12 - SUMMARY OF SCHEDULE CHANGES SINCE LAST YEAR’S FINANCIAL PLAN ..... 77

INTRODUCTION ......................................................................................................................................... 77

CHAPTER 13 - SCHEDULE TRENDS SINCE IFP .................................................................................... 78

I-94 Financial Plan Annual Update 2019 III

INTRODUCTION ......................................................................................................................................... 78

GLOSSARY ................................................................................................................................................ 79

FIGURES FIGURE ES-1: PROJECT MAP ......................................................................................................................... 2

FIGURE ES-2: PROJECT SCHEDULE OVERVIEW ............................................................................................... 4

FIGURE ES-3: TOTAL PROJECT ANNUAL CASH FLOW (YOE DOLLARS, IN MILLIONS) ........................................ 7

FIGURE ES-4: TOTAL PROJECT SOURCES OF FUNDS ....................................................................................... 7

FIGURE ES-5: TOTAL PROJECT USES OF FUNDS ............................................................................................. 8

FIGURE 1-1: PROJECT LOCATION MAP .......................................................................................................... 11

FIGURE 1-2: MAINLINE CROSS SECTION ........................................................................................................ 12

FIGURE 1-3: PROJECT HISTORY TIMELINE ..................................................................................................... 15

FIGURE 1-4: PROJECT SCHEDULE OVERVIEW BY SEGMENT AND ELEMENT ..................................................... 16

FIGURE 2-1: SUMMARY PROJECT SCHEDULE BY SEGMENT AND ELEMENT ...................................................... 20

FIGURE 2-2: SUMMARY PROJECT SCHEDULE ADVANCED BRIDGES PHASE 1 .................................................. 20

FIGURE 2-3: SUMMARY PROJECT SCHEDULE ADVANCED BRIDGES PHASE 2 .................................................. 21

FIGURE 2-4: SUMMARY PROJECT SCHEDULE SEGMENT 3 .............................................................................. 21



FIGURE 3-1: EXPENDITURES TO DATE BY FY (YOE DOLLARS, IN MILLIONS) .................................................... 35

FIGURE 3-2: FUTURE EXPENDITURES BY FY (YOE DOLLARS, IN MILLIONS) ..................................................... 35

FIGURE 4-1: TOTAL PROJECT SOURCES OF FUNDS ....................................................................................... 41

FIGURE 4-2: SEMCOG RTP (MDOT EXCERPT) ........................................................................................... 44

FIGURE 4-3: SEMCOG TIP (MDOT EXCERPT) ............................................................................................. 45

FIGURE 6-1: SOURCES AND USES OF FUNDS - TOTAL PROJECT ..................................................................... 48

FIGURE 6-2: PROJECT COSTS BY SEGMENT .................................................................................................. 49

FIGURE 6-3: CUMULATIVE OBLIGATIONS AND BUDGETS (YOE DOLLARS, IN MILLIONS).................................... 50

FIGURE 6-4: PROJECT CASH FLOW BY SEGMENT (YOE DOLLARS, IN MILLIONS) ............................................. 51

FIGURE 6-5: COMPARISON OF PROJECT CASH FLOW BY SEGMENT - IFP VERSUS FPAU 2019 (YOE DOLLARS,

IN MILLIONS) ......................................................................................................................................... 52

FIGURE 6-6: FUNDING AVAILABLE FOR PROGRAM (YOE DOLLARS, IN MILLIONS) ............................................ 54

FIGURE 6-7: ANNUAL PROJECT OBLIGATIONS, CASH NEEDS, AND FUNDING AVAILABLE FOR PROGRAM (YOE

DOLLARS, IN MILLIONS) ......................................................................................................................... 55

FIGURE 11-1: CUMULATIVE COST CURVE IFP VERSUS ACTUAL ..................................................................... 76

I-94 Financial Plan Annual Update 2019 IV

TABLES TABLE ES-1: PROJECT COST ESTIMATE, BY SEGMENT (YOE DOLLARS, IN MILLIONS) ....................................... 5

TABLE ES-2: PROJECT COSTS TO DATE (YOE DOLLARS, IN MILLIONS) ............................................................ 5

TABLE ES-3: SUMMARY PROJECT FUNDING BY SOURCE (YOE DOLLARS, IN MILLIONS) .................................... 6

TABLE 2-1: REQUIRED PERMITS AND STATUS................................................................................................ 22

TABLE 3-1: MAIN/SIGMA PROJECT/PROGRAM CROSSWALK ....................................................................... 28

TABLE 3-2: PROJECT COST ESTIMATE BY SEGMENT (YOE DOLLARS, IN MILLIONS)......................................... 28

TABLE 3-3: PROJECT COST ESTIMATE FOR ADVANCED BRIDGES PHASE 1 (YOE DOLLARS, IN MILLIONS) ........ 30

TABLE 3-4: PROJECT COST ESTIMATE FOR ADVANCED BRIDGES PHASE 2 (YOE DOLLARS, IN MILLIONS) ........ 31

TABLE 3-5: PROJECT COST ESTIMATE FOR SEGMENT 3 (YOE DOLLARS, IN MILLIONS) .................................... 32



TABLE 3-8: PROJECT ESTIMATE COSTS TO COMPLETE BY SEGMENT AND PROJECT ELEMENT (YOE DOLLARS, IN

MILLIONS) ............................................................................................................................................. 36

TABLE 3-9: ADVANCED BRIDGES PHASE 1 COSTS TO COMPLETE (YOE DOLLARS, IN MILLIONS) ..................... 36

TABLE 3-10: ADVANCED BRIDGES PHASE 2 COSTS TO COMPLETE (YOE DOLLARS, IN MILLIONS) ................... 36

TABLE 3-11: SEGMENT 3 COSTS TO COMPLETE (YOE DOLLARS, IN MILLIONS) ............................................... 37



TABLE 4-1: SUMMARY TOTAL PROJECT FUNDING BY SOURCE (YOE DOLLARS, IN MILLIONS) .......................... 42

TABLE 6-1: PROJECT OBLIGATIONS AND BUDGETS BY SEGMENT (YOE DOLLARS, IN MILLIONS) ...................... 49

TABLE 6-2: MDOT HISTORICAL CASH FLOW SCHEDULE FOR VENDOR PAYMENTS ......................................... 50

TABLE 6-3: OBLIGATIONS AND BUDGETED FUNDS CASH FLOW ...................................................................... 52

TABLE 6-4: ADVANCE CONSTRUCTION FUNDING ........................................................................................... 53

TABLE 10-1: CHANGES SINCE PRIOR FPAU BY SEGMENT (YOE DOLLARS, IN MILLIONS) ................................ 68

TABLE 10-2: CHANGES SINCE PRIOR FPAU ADVANCED BRIDGES PHASE 1 (YOE DOLLARS, IN MILLIONS) ...... 70

TABLE 10-3: CHANGES SINCE PRIOR FPAU ADVANCED BRIDGES PHASE 2 (YOE DOLLARS, IN MILLIONS) ...... 70

TABLE 10-4: CHANGES SINCE PRIOR FPAU SEGMENT 3 (YOE DOLLARS, IN MILLIONS) .................................. 71



TABLE 11-1: PROJECT COST HISTORY BY SEGMENT SINCE IFP (YOE DOLLARS, IN MILLIONS) ........................ 73

TABLE 11-2: PROJECT COST HISTORY ADVANCED BRIDGES PHASE 1 SINCE IFP (YOE DOLLARS, IN MILLIONS)

............................................................................................................................................................ 74

TABLE 11-3: PROJECT COST HISTORY ADVANCED BRIDGES PHASE 2 SINCE IFP (YOE DOLLARS, IN MILLIONS)

............................................................................................................................................................ 74

TABLE 11-4: PROJECT COST HISTORY SEGMENT 3 SINCE IFP (YOE DOLLARS, IN MILLIONS) .......................... 75

I-94 Financial Plan Annual Update 2019 V

TABLE 11-5: PROJECT COST HISTORY BY SEGMENT SINCE IFP AND PRIOR FPAU (YOE DOLLARS, IN MILLIONS)

............................................................................................................................................................ 75

APPENDICES

APPENDIX A: DETAILED PROJECT SCHEDULE

APPENDIX B: EXPENDED BY SEGMENT

APPENDIX C: YOE SEGMENT SUMMARY

APPENDIX D: OBLIGATED AND BUDGETED FUNDS CASH FLOW

APPENDIX E: BASELINE COST ESTIMATE

APPENDIX F: CONCEPTUAL BASE PLANS

APPENDIX G: CONSTRUCTION PACKAGES

I-94 Financial Plan Annual Update 2019 1

EXECUTIVE SUMMARY PLAN OVERVIEW This document serves as the sixth Financial Plan Annual Update (FPAU) to the I-94 Ford Freeway Modernization Project (the Project) Initial Financial Plan (IFP) which was approved by the Federal Highway Administration (FHWA) on March 5, 2014. Contained in this document are cost estimates, expenditure data, revenue reimbursements, schedule detail, and funding information as of December 1, 2019.

THE PROJECT The Project involves the complete reconstruction of 6.7 miles of I-94 in the City of Detroit, with widening from three lanes in each direction to four lanes in each direction. The Project includes the construction of continuous service roads along the mainline, new major interchanges, new bridges over I-94, and a new drainage system. In December 2005, the FHWA issued a Record of Decision (ROD), which identified the preferred alternative in the Final Environmental Impact Statement (FEIS) as the selected alternative. (See Figure ES-1 below.) A Notice of Intent (NOI) was published in the Federal Register in July 2017, announcing Michigan Department of Transportation’s (MDOT) plan to prepare a Supplemental Environmental Impact Statement (SEIS). The SEIS study proposed design modification changes identified as part of the ongoing stakeholder engagement meetings. New local street connections were studied under the SEIS. The draft SEIS took two years to complete. The draft SEIS was completed in August 2019. MDOT posted the document for a 45-day public and agency review and comment period on September 13, 2019. Comments provided during the public comment period and at the MDOT public hearing held on October 10, 2019 have been received and are being addressed as part of final SEIS preparations. This document will summarize public and agency involvement, describe mitigation measures that will be incorporated into the Project, and document compliance with all other applicable environmental laws and executive orders. ROD is anticipated in June 2020. The construction schedule for the Project, as described in this FPAU, spans approximately 20 years.


Figure ES-1: Project Map

PROJECT SPONSOR, PARTNERS, AND MANAGEMENT MDOT is the Project Sponsor. The overall management of the Project will be the responsibility of MDOT.

FINANCIAL PLAN ANNUAL UPDATE SUMMARY This document is submitted as the sixth FPAU for the Project, updated to reflect changes as of December 1, 2019. It is submitted by MDOT, as required by Section 106 of Title 23 of the United States Code (23 U.S.C. 106(h) and (i) and is consistent with the Major Project Financial Plan Guidance issued by FHWA on December 18, 2014. This plan provides detailed cost estimates to complete the Project as well as estimates of financial resources to fully fund the Project through its duration. Each of the chapters in the FPAU have been updated to reflect any changes that have occurred since the approval of the IFP. Discussions on the reasons and trends associated with the updates are included. The effect of changes to cost estimates, costs to complete, funding, and cash flow are clearly described with amounts shown graphically.


The FPAU demonstrates the State of Michigan’s (SOM) commitment to complete the Project, as well as sound financial planning for Major Projects, as defined by Section 106 of Title 23 and modified by Section 1305 (b) of the Transportation Equity Act for the 21st Century, Section 1904 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, and Moving Ahead for Progress in the 21st Century Act Public Law 112-141. The following documents were used as a basis to develop the FPAU: Technical Memorandum titled I-94 Detailed Engineering Report (DER), Conceptual Base Plan Design Opinion of Probable Cost, the FHWA Cost Estimate Review (CER), and the Updated FHWA CER (CER II). Within the FPAU, the following topics are addressed (by chapter):

• Chapter 1: Project Description - This chapter provides an overview of the Project and the individual segments which together make up the Project, describes the management plan, and provides a history of the Project to date including a review of the status of all ongoing activities.

• Chapter 2: Project Schedule - This chapter provides information on the planned schedule for implementation of all the Project elements and establishes the Project completion date as September 2033. The schedules reported in the IFP and each previous annual update are included. Based on the planned project delivery approach, Advanced Bridges Phase 1 and Advanced Bridges Phase 2 are currently under construction and the freeway corridor will be completed in three segments consisting of five packages over a 15-year period. Scheduled first, and currently underway, is Advanced Bridges Phase 1, followed by Advanced Bridges Phase 2, Segment 3, then Segment 2, and finally Segment 1. See Appendix A for a detailed project schedule and Appendix G for a list of construction packages. The schedule of Advanced Bridges has changed due to extensive stakeholder engagement and to incorporate the City of Detroit’s requested modifications.


Figure ES-2: Project Schedule Overview

CON - Construction. NEPA - National Environmental Policy Act anticipated completion June 2020

• Chapter 3: Project Cost - This chapter provides a detailed description of the cost elements of the Project and provides current estimates of those costs. It also summarizes the costs incurred as of the sixth anniversary date of December 1, 2019 and provides detail on key cost related assumptions. The same fiscal year (FY), October 1 to September 30, is used by both the federal and state governments.

The total baseline estimated cost for the Project was $1,976.7 million in FY 2014 dollars. The baseline as presented in the IFP in projected year of expenditure (YOE) cost, as inflated to year of letting, was $2,913.4 million (See Appendix E.) The updated projected YOE estimate, inflated to year of letting, is $3,273.3 million. The updated estimate is $359.9 million, or 12.35 percent more than reported in the IFP and $315.0 million, or 10.65 percent more than reported in the prior year. The reasons for the changes in cost estimate from the IFP and the prior FPAU, for each package, are discussed in greater detail in Chapter 10. Table ES-1 provides an overview of the Project costs. These costs are presented in YOE dollars based on the current project schedule, current cost estimates, and reasonable estimates of inflation.

Fiscal Year

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

Utility

Utility

Segment 2

Design pre-SEIS

*NEPA

CON

Segment 3

Design pre-SEIS

CON

*NEPA

Design

Design

ROW

ROW

Advanced Bridges 1 ROW

ROW

Design

Construction

Design

Advanced Bridges 2

CON

Risk & Opportunitites

Segment 1

Design pre-SEIS

*NEPA

Construction

Design

ROW


Table ES-1: Project Cost Estimate, by Segment (YOE dollars, in millions)

Line items may not add to total due to rounding

MDOT will continuously monitor and adjust the cost estimate based on new project specific information, as well as information on economic conditions that may affect the Project costs. For purposes of this FPAU, unless otherwise noted, the YOE estimate is calculated to the year of the respective individual contract lettings.

Costs to date of $157.5 million, or 4.8 percent of the current total project cost estimate, have been expended through December 1, 2019. Table ES-2: Project Costs to Date (YOE dollars, in millions)


• Chapter 4: Project Funding - This chapter reviews MDOT’s overall plan of finance for the Project, describes in detail the planned sources of funds, and reviews the funding plan in the context of the SOM’s overall transportation program and available resources. The planned sources of funds in this chapter are shown in year of obligation. As currently conceived, and for the purposes of this FPAU, the Project is funded with traditional federal and state sources. See Table ES-3 for a summary of funding planned for the Project. Federal funds are from various federal-aid programs including, Advance Construction (AC), Accelerated Innovative Deployment (AID) Demonstration Grant, Bridge Program (BRIDGE), Interstate Maintenance (IM) Program, National Highway Performance Program (NHPP), National Highway System (NHS),

SegmentIFP

2013

FPAU

2014

FPAU

2015

FPAU

2016

FPAU

2017

FPAU

2018

FPAU

2019

Net

Increase

Since Prior

Year

Net

Increase/

(Decrease)

Since IFP

Advanced Bridges Phase 1 $166.3 $169.4 $174.1 $202.1 $185.5 $222.0 $223.4 $1.4 $57.1

Advanced Bridges Phase 2 - - - - 180.5 184.6 215.6 31.0 215.6

Segment 3 951.8 951.8 957.3 960.3 787.3 756.4 956.6 200.2 4.8

Segment 2 498.0 498.0 498.0 498.0 498.9 498.0 503.5 5.5 5.5

Segment 1 1,297.3 1,297.3 1,297.3 1,297.3 1,297.3 1,297.3 1,374.3 77.0 77.0

Grand Total $2,913.4 $2,916.5 $2,926.7 $2,957.8 $2,949.5 $2,958.3 $3,273.3 $315.0 $359.9

Percentage Increase/(Decrease) 0.11% 0.35% 1.06% -0.28% 0.29% 10.65% 10.65% 12.35%

Fiscal Year Actual Expenditures to Date

2010 $ -

2011 0.1

2012 0.2

2013 1.0

2014 0.5

2015 13.7

2016 25.6

2017 15.0

2018 41.0

2019 60.4

Total Costs to Date $157.5


Strategic Highway Research Program (SHRP), and Surface Transportation Block Grant (STBG). State Transportation Funds are from the SOM restricted fund for transportation purposes as provided for in Michigan Public Act 51 of 1951, here after described as the State Trunkline Fund. Local funds from the City of Detroit were used in expended portions of the Project. According to legislation affecting Michigan Public Act 51 of 1951, as amended by Public Act 459 of 2016, the City of Detroit is no longer required to provide local matching funds for capital construction or reconstruction costs on portions of the Project that are on the limited access highway. At this time, current and future funding is anticipated to be from federal and state sources only. The $157.5 million of expenditures were funded with federal, state, and local funds of $90.9 million with $66.6 million federal funds obligated, but not yet received, by MDOT.

Table ES-3: Summary Project Funding by Source (YOE dollars, in millions)

Line items may not add to total due to rounding. State expenditures to become federal expenditures upon conversion.

• Chapter 5: Financing Issues - This chapter discusses MDOT’s plan to fund the Project from program budgets. Financing with debt, including revenue bonds or Grant Anticipation Revenue Vehicle (GARVEE) bonds, is not being considered at this time.

• Chapter 6: Project Cash Flow - This chapter provides a summary of the annual cash flow needs for the Project and demonstrates that sufficient cash will be available to fund obligations and expenditures based on the project schedule, consistent with the fiscally constrained State Transportation Improvement Plan (STIP), Transportation Improvement Plan (TIP) and Metropolitan Long-Range

Expended

Unexpended

Obligations Budgeted Total

Aggregate of all federal-aid programs $29.2 $76.1 $2,413.4 $2,518.7

29.2 76.1 2,413.4 2,518.7

*Advance Construction 39.5 127.4 - 166.9

39.5 127.4 - 166.9

State Transportation Fund 21.7 16.4 549.1 587.2

State General Fund - - - -

21.7 16.4 549.1 587.2

City of Detroit 0.5 - - 0.5

0.5 - - 0.5

GRAND TOTAL $90.9 $219.9 $2,962.5 $3,273.3

Subtotal State

Funding Source

Federal

Subtotal Federal

Subtotal Advance Construction

State

Local

Subtotal Local


Transportation Plan. Project cash needs are shown by year in Figure ES-3. The planned sources and uses of funds at the summary level are shown in Figure ES-4 and Figure ES-5.

Figure ES-3: Total Project Annual Cash Flow (YOE dollars, in millions)

Figure ES-4: Total Project Sources of Funds


Figure ES-5: Total Project Uses of Funds

• Chapter 7: Public Private Partnership Assessment - At the current time, MDOT may enter into a public-private partnership agreement for projects of this magnitude and duration under the authority of SOM’s legislation, PA 250 of 2010. Currently, MDOT does not have legislative authority to toll roadways, including additions to existing roadways.

• Chapter 8: Risk and Response Strategies - This chapter discusses the risks, opportunities, responses, and mitigation strategies which have been identified for this Project during a comprehensive review held for this purpose. Any additional risks, opportunities, responses, and mitigation strategies discovered during the CER are also presented. The monetary impact of risks and opportunities is provided as the ongoing management of the funds MDOT reserved for these risks.

• Chapter 9: Annual Update Cycle - This chapter establishes MDOT’s proposed annual submission dates and reporting periods. MDOT has selected the anniversary date method to establish the date for which data will be refreshed for annual updates. The anniversary date is December 1. Column headers, throughout this document, refer to data as of each annual period December 1 to November 30. MDOT will provide annual updates using current data as of each December 1, until all construction work is complete and accepted by MDOT. Each FPAU will be submitted within three months of the December 1 anniversary date in accordance with Major Project requirements. Circumstances can change and alternatives may present themselves as superior to the baseline plan, as articulated in this document. Future annual updates will account for any such revisions to the Project’s financial plan.


• Chapter 10: Summary of Cost Changes Since Last Year’s Financial Plan - This chapter includes a listing of changes that have reduced or increased the cost of the Project since last year’s FPAU. A discussion of the primary reasons, actions taken to monitor and control cost growth, and any scope changes that have contributed to the changes are included.

• Chapter 11: Cost and Funding Trends Since Initial Financial Plan - This chapter identifies any trends that impacted project costs and funding since the IFP. Discussions include the probable reason(s) for trends and assessments of the implications for the remainder of the Project.

• Chapter 12: Summary of Schedule Changes Since Last Year’s Financial Plan - This chapter includes a listing of changes, if any, that have caused the completion date for the Project, and/or funded phase, to change since the last annual update. The primary reasons for the change, actions taken to monitor and control schedule growth, and any scope changes that have contributed to changes are discussed.

• Chapter 13: Schedule Trends Since Initial Financial Plan - This chapter discusses any trends that have impacted the project schedule, probable reasons, and implications for the remainder of the Project.

CONCLUSION This FPAU creates a record of planned expenditures and funding sources secured for the Project and documents sources of funding through project completion. The presentation of this FPAU is based upon currently available information and MDOT is fully prepared to complete the Project on schedule and in accordance with the projected funding requirements.


CHAPTER 1 - PROJECT DESCRIPTION

PROJECT DESCRIPTION The Project involves the complete reconstruction of 6.7 miles of I-94 in the City of Detroit, with widening from three lanes in each direction to four lanes in each direction. The Project includes the construction of continuous service roads along the mainline, new major interchanges, new bridges over I-94, and a new drainage system. In December 2005, the FHWA issued a ROD, which identified the preferred alternative in the FEIS as the selected alternative. A NOI was published in the Federal Register in July 2017, announcing MDOT’s plan to prepare the SEIS. The SEIS studied proposed design modification changes identified as part of the ongoing stakeholder engagement meetings. New local street connections are being studied under the SEIS. The draft SEIS has been completed and MDOT posted the document for a 45-day public and agency review and comment period on September 13, 2019. The 45-day comment period, from September 13 to October 28, included two public hearings, focusing on design modifications described in the draft SEIS. After circulation of the draft SEIS and consideration of the comments received, a final SEIS will be prepared. This document will summarize public and agency involvement, describe mitigation measures that will be incorporated into the Project, and document compliance with all other applicable environmental laws and executive orders. ROD is anticipated in June 2020. The remaining construction schedule for the Project, as described in this FPAU, spans approximately 15 years. Additional details can be found on the Project websites at http://www.michigan.gov/mdot/0,4616,7-151-9621_11058_53088_53115---,00.html and http://i94detroit.org/. The Project begins just east of the I-94/I-96 Interchange, includes the I-94/M-10, and I-94/I-75 freeway-to-freeway interchanges, and ends just east of the I-94/Conner Avenue Interchange. The Project scope includes:

• Construction of an additional lane in each direction along I-94 (total of four through lanes in each direction)

• Reconstruction of the two freeway-to-freeway interchanges

• Reconstruction of various interchanges

• Removal and/or replacement of several pedestrian, railroad, and vehicle bridges

• Construction of continuous service drives along the corridor and through the interchanges

http://www.michigan.gov/mdot/0,4616,7-151-9621_11058_53088_53115---,00.htmlhttp://i94detroit.org/


The focus of the proposed modifications studied under the SEIS include:

• Better use of existing city streets instead of building new, continuous service drives

• Modification of the interchange configuration at I-94/M-10 and I-94/I-75, along with local ramp access on I-94, M-10, and I-75

• Improvement of local connectivity with the addition of proposed local connections across I-94, M-10, and I-75

• Addition of Complete Streets Bridges to provide multi-modal access for cars, bikes, and pedestrians

Figure 1-1: Project Location Map

Because of the proposed interchange improvements at M-10 and I-75, the study limits include portions of these limited-access highways. On M-10, the Project limits extend from Pallister Avenue in the north to Martin Luther King Boulevard in the south, and on I-75 from East Grand Boulevard in the north to Warren Avenue in the south. The existing mainline is a below-grade, six-lane facility with three travel lanes in each direction. I-94 from I-96 to Conner Avenue is in an area of dense urban development with closely spaced interchanges. These interchanges serve numerous major traffic generators and provide access to Detroit’s central business district. The Project area includes two major freeway-to-freeway interchanges, eight interchanges with local


streets, equating to ten interchanges in less than seven miles. There are 67 bridges that cross I-94 between East Grand Boulevard and Conner Avenue. A discontinuous series of service roads provide linkage to local streets. Figure 1-2: Mainline Cross Section

Due to its size and complexity, the Project was initially separated into four separate segments. The Project was subsequently separated into five separate segments with the addition of Advanced Bridges Phase 2. These five segments were previously expected to be broken down into 21 separate construction packages which will now consist of 5 separate construction packages. Each segment is briefly described below.

• Advanced Bridges Phase 1


• Segment 3 - Russell Street to east of Conner Avenue

• Segment 2 - Cass Avenue to Russell Street including the I-75 interchange

• Segment 1 - East of I-96 to Cass Avenue including the M-10 interchange


Early Preliminary Engineering The consultant firm, Parsons Brinkerhoff, performed the Early Preliminary Engineering (EPE) for the entire project from September 1994 to December 2005. The consultant firm, CH2M Hill, developed the engineer’s detailed cost estimate as transmitted to MDOT on June 8, 2010. The total cost of the EPE Phase was $21 million. Expenses were incurred between FY 1994 and FY 2010 to complete the Feasibility Study, Environmental Clearance Documents, and the DER. Advanced Bridges Phases 1 and 2 There are 67 bridges included in the entire project. MDOT has identified 21 of these bridges along the corridor for reconstruction or replacement as part of Advanced Bridges Phases 1 and 2. Based on the prioritization of state of good repair and critical need, the bridge on Van Dyke Street was determined to be in greatest need of replacement. FHWA authorized the construction during March 2011 under the designation of operational independence and non-concurrent construction. This bridge project is no longer part of the greater project for purposes of this FPAU and is not discussed in this document. Authorization for additional critical bridges with priority for scheduling and funding was moved forward to Advanced Bridges Phases 1 and 2. Advanced Bridges are being designed and constructed. Right-of-way (ROW) and Utility work is being performed throughout the corridor. Advanced Bridges Phase 1 includes 14 bridges. The Woodward Avenue and Trumbull Avenue Bridges over I-94 were constructed in 2016 and 2017, respectively. The Chene Street and Gratiot Avenue Bridges over I-94 were constructed in 2018. The Helen Street, Rohns Street, and Springfield Avenue pedestrian bridges were demolished in 2018. The next phase of Advanced Bridges Phase 1 construction includes an additional seven structures which are scheduled to be constructed between 2019 and 2022. Replacement of Advanced Bridges Phase 1 structures over I-94 are as follows: Second Avenue, Brush Street, Concord Avenue, French Road, Cass Avenue, Grand River Avenue; and demolition of the Third Street Bridge over I-94. The next phase of Advanced Bridges construction, Phase 2, includes an additional eight structures which are scheduled to be constructed between 2020 and 2023. Replacement of Advanced Bridges Phase 2 structures over I-94 are as follows: Mount Elliott Street, East Grand Boulevard, Milwaukee Avenue over I-75, Cadillac Avenue, Frontenac Street, Burns Street, and two Conrail Railroad Bridges over I-94. Segment 3 Segment 3, Package 1 encompasses the reconstruction of I-94 from Russell Street to Frontenac Street. This package includes WB I-94 from I-75 through Chene Street, the WB I-94 to NB I-75 ramp, mainline I-94 from St. Aubin Street to Frontenac Street, rehabilitation of the Dequindre Bridge, vicinity streets, and all remaining rehabilitation work. Segment 3, Package 2 encompasses the reconstruction of I-94 from Frontenac


Street to Barrett Avenue. This package includes the Gratiot Avenue ramps and vicinity streets, as well as Eastbound (EB) I-94 from Frontenac Street to Norcross Street, rehabilitation of the pump station, temporary widening, and reconstruction of WB I-94 from Frontenac Street to Conner Avenue. Segment 2 Segment 2 is the I-94/I-75 Interchange work, structures, and I-75 rehabilitation. Segment 2 Package 3 includes the reconstruction of I-94 between Cass Avenue and I-75, the I-94 and I-75 ramps and service drives from Brush Street to Russell Street, I-94 from Second Avenue to Russell Street, including the M-10 NB to I-94 EB ramps, in addition to rehabilitation of I-75. Segment 1 Segment 1 Package 4 includes the reconstruction of I-94 from I-96 to Trumbull Avenue, including cross streets, service drives and local bridges. Segment 1 Package 5 includes reconfiguration of the I-94/M-10 Interchange as well as reconstruction of remaining freeway and service drive, as well as local street rehabilitation work and rehabilitation of pump stations.

PROJECT SPONSOR, PARTNERS, AND MANAGEMENT The sole project sponsor is MDOT, who also has management and oversight responsibility. FHWA and the City of Detroit are cost sharing partners to the extent required by current legislation. MDOT is a separate state agency within the government of the SOM. MDOT is funded with dedicated revenue sources, with a total annual State Road and Bridge and Maintenance budget of $2.246 billion. MDOT owns, operates, and maintains approximately 10,000 miles of Trunkline. The proposed project is well within the capabilities of MDOT to manage successfully.

PROJECT MANAGEMENT AND OVERSIGHT MDOT will oversee all project activities from the Preliminary Engineering (PE) and environmental phases, through final construction. To assist with this endeavor, MDOT will retain an Owners Representative (OR). Contractual agreements will not transfer the overall responsibility of project oversight to the Consultant. MDOT is also responsible for developing the Project Management Plan (PMP) to prescribe the Project management and oversight method, including scope, schedule, cost oversight, and cost containment procedures. Due to the complexity of the Project, MDOT oversight will be exercised by MDOT’s Leadership Team, which is comprised of the Director of MDOT, the Chief Operations Officer, and the Directors of the various bureaus within MDOT.


MDOT’s Senior Project Manager is Terry Stepanski, P.E. It is the role and responsibility of the Senior Project Manager to provide overall administration, coordination, and technical oversight to the Project. Various levels of support staff and teams have been established with roles and responsibilities accountable to the Senior Project Manager. The specific roles and responsibilities are defined in the PMP.

OVERVIEW OF ACTIVITIES AND PROJECT SCHEDULE Figure 1-3: Project History Timeline

Figure 1-4 presents an overview of the Project schedule by segment and element. Project schedule is discussed more fully in Chapter 2.


Figure 1-4: Project Schedule Overview by Segment and Element

NEPA anticipated completion June 2020

Fiscal Year

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

Utility

Utility

Segment 2

Design pre-SEIS

*NEPA

CON

Segment 3

Design pre-SEIS

CON

*NEPA

Design

Design

ROW

ROW


ROW

Design

Construction

Design

Advanced Bridges 2

CON


Segment 1

Design pre-SEIS

*NEPA

Construction

Design

ROW


CHAPTER 2 - PROJECT SCHEDULE

INTRODUCTION This chapter provides information on the planned schedules for implementation of all segments and elements of the Project, and displays the schedules reported in the IFP and each previous Annual Update. This chapter also provides major milestones for completing the Project, establishes an overall completion date, corrects the definition of completion date as the date of final acceptance, provides additional information regarding the assignment of implementation responsibilities, and provides a summary of the status of necessary permits and approvals.

PROJECT DESCRIPTION/PHASING As detailed in Chapter 1 of this FPAU, the Project is being implemented to rehabilitate 6.7 miles of the I-94 corridor and 67 bridges from the I-96 Interchange to Connor Avenue. The Project is comprised of the following five segments, listed in order of anticipated completion below:



• Segment 3 - Russell Street to east of Conner Avenue

• Segment 2 - Cass Avenue to Russell Street including the I-75 interchange

• Segment 1 - East of I-96 to Cass Avenue including the M-10 interchange

Given the structure of the Project as outlined above, it is clear the coordination of design and construction sequencing among the various segments will be critical. Such sequencing also could have a significant impact on overall costs and financing requirements.

IMPLEMENTATION RESPONSIBILITY Due to the magnitude of the Project, MDOT oversight will be exercised by MDOT’s Leadership Team, which is comprised of the Director of MDOT, the Chief Operations Officer, and the Directors of the various bureaus within MDOT. MDOT’s Senior Project Manager is Terry Stepanski, P.E. It is the role and responsibility of the Senior Project Manager to provide overall administration, coordination, and technical oversight to the Project. Various support staff and teams have been established with roles and responsibilities accountable to the Senior Project Manager. The specific roles and responsibilities are defined in the PMP. MDOT is using an OR for the Project due to the complexities and duration the Project in an established urban area of this magnitude. The OR serves as an extension of the Senior Project Manager and assists with project design, management, cost, schedule, and quality.


Moving the Project from concept to completion is very complex. Managing the process is accomplished with several tools and software applications, such as MDOT’s use of Planisware Proprietary Program/Project Management software and Primavera for scheduling and budget. MDOT’s proprietary software Field Manager is used to capture actual costs by activity as they are incurred. Additional information about the implementation strategy and management responsibilities can be found in the PMP for the Project.

SUMMARY PROJECT SCHEDULE The delivery of the Project consists of various design, ROW, and construction schedules with lettings planned throughout the future years. A summary schedule is shown below based on the letting schedules of the five construction packages, the design and ROW required, and the anticipated duration of each phase. Comparison of Current FPAU Schedule To IFP and Last Year’s FPAU Schedules In FPAUs prior to FY 2016, seven bridges were scheduled to be let in FY 2017 and two bridges in FY 2018. After careful review of utilities, ROW, mobility, packaging, lead time of materials, and additional stakeholder engagement efforts with the staff at the City of Detroit, a new packaging plan, and letting schedule was developed to accommodate network tied arches to clear span the freeway. As of the FPAU FY 2016, the packaging plan had six bridges to be let in FY 2017 and three bridges to be let in FY 2018. As of the FPAU 2018, the packaging plan had 14 bridges to be let in FY 2018 as Advanced Bridges Phase 1 and eight to be let in FY 2019 as Advanced Bridges Phase 2. As of the FPAU 2019, the packaging plan has three bridges to be let in FY 2020 as Advanced Bridges Phase 1. The packaging plan has three bridges to be let in FY 2020 and five to be let in FY 2021 as Advanced Bridges Phase 2. The Woodward Avenue and Trumbull Avenue Bridges over I-94 were successfully let as part of the Advanced Bridges Phase 1. The Woodward Avenue Bridge over I-94 was expedited to accommodate the M-1 Rail Project and was completed in 2016. The Trumbull Avenue Bridge over I-94 was not originally an Advanced Bridge but, because of the critical condition of the bridge found during inspection was identified for priority replacement and completed in 2017. The Chene Street and Gratiot Avenue Bridges over I-94 were constructed as part of Advanced Bridges Phase I. Three pedestrian bridges, Helen Street, Rohns Street, and Springfield Street were demolished as part of Advanced Bridges Phase 1. At the November 26, 2018 Program Project Review Board meeting, MDOT obtained approval to advance corridor-wide ROW opportunity buys and risk-based engineering to expedite overall project completion by a minimum of four years. MDOT has evaluated the expedited schedule. The 2019 FPAU delivery plan removed the $200.0 million, alternating year funding constraint with 19 original design and construction packages. The current delivery plan uses five larger construction packages to accelerate program


completion from 2036 to 2033. The durations of the five design and construction packages are based on feedback from past industry outreach regarding size of packages and typical/historical construction durations for similar-size packages. These project schedule modifications and associated changes in project build-out costs have been incorporated into the 2019 FPAU. The proposed update to the program delivery plan in this 2019 FPAU includes other changes to the work phasing. ROW acquisitions have been reallocated from a per-package focus aligned with final design to a corridor-wide focus anticipated to be complete before the first final design package begins. Timing of five revised design and construction packages have been adjusted to eliminate periods of no work on the corridor, meaning there are no gaps between construction packages. Current FPAU Schedule Currently, the overall completion date for the Project is September 2033. Final acceptance for each package is estimated to be one year after construction completion. The forecasted letting and “open to traffic” dates for each segment have not been affected by the rescheduling of the bridges and are listed below:

• Advanced Bridges Phase 1 last letting FY 2021 with open to traffic in September 2023.

• Advanced Bridges Phase 2 last letting FY 2021 with open to traffic in September 2023.

• Segment 3 last letting FY 2023 with open to traffic in September 2027.




Figure 2-1: Summary Project Schedule by Segment and Element


For purposes of the summary schedules shown below, the design element includes the OR contracts and all PE. A complete detailed project schedule is provided as Appendix A. Individual summary project schedules for each segment are shown below. Figure 2-2: Summary Project Schedule Advanced Bridges Phase 1

Fiscal Year

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

Utility

Utility

Segment 2

Design pre-SEIS

*NEPA

CON

Segment 3

Design pre-SEIS

CON

*NEPA

Design

Design

ROW

ROW


ROW

Design

Construction

Design

Advanced Bridges 2

CON


Segment 1

Design pre-SEIS

*NEPA

Construction

Design

ROW

Fiscal Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Utility

Owners Rep Contract

AB Segment Wide Design Support

Risks & Opportunities

Design

Opportunity Buys (ROW)

Trumbull Ave

Woodward Ave

#1 Gratiot Ave, Chene St, & Pedestrian

Bridge Removal (Helen, Rohns &

Springfield)

#2 Second Ave and Brush St

#3 Concord St and French Rd

#15 Cass Ave, Grand River Ave, & Third

Street (Removal)


Design

ROW

CON

CON

Design

CON

Design

Design

Design

ROW

ROW

ROW

ROW

CON

CON

ROW

CON

Design

Design


Figure 2-3: Summary Project Schedule Advanced Bridges Phase 2

Figure 2-4: Summary Project Schedule Segment 3






Fiscal Year 2017 2018 2019 2020 2021 2022 2023

Utility

Owners Rep Contract

Opportunity Buys (ROW)

Small Business Supplemental Design


Opportunity Buys ROW

Design

Design

#2 Cadillac/Frontenac/Burns

#3 Conrail X01 of 82025/Conrail X02 of

82024CON

ROW


#1 Mt. Elliott/E Grand/MilwaukeeCON

ROW

ROW

Design

CON

Design

Design

Fiscal Year 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027


*NEPA

Design pre-SEIS

Package #1

Design pre-SEIS


*NEPA

Package #2

CON

CON

Design

Design

ROW

ROW

Fiscal Year 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

CON

Design pre-SEIS


*NEPA

Design

ROWPackage #3

Fiscal Year 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

CON

Design


Package #4

Package #5

Design pre-SEIS

Design pre-SEIS

CON


*NEPA

*NEPA

Design

ROW

ROW


STATUS OF PERMITS AND APPROVALS At this time, permits are expected to be issued in a timely manner, posing no risk to project completion, scope, or cost. Chapter 8, Risk and Response Strategies will further discuss early and frequent communication and coordination with the permitting agencies and will facilitate the permitting processes. Permits required in the FEIS are outlined below in Table 2-1. Table 2-1: Required Permits and Status

EGLE - Michigan Department of Environment, Great Lakes, and Energy. USFWS - U.S. Fish and Wildlife Service. EPA - Environmental Protection Agency

Regulating Agency Permit Name Status

EGLE, USFWS, EPA Endangered Species (16 USC 1538) Not expected to be required

MDOT, County Drain Commission Soil Erosion (Part 91 of 451) If required

EGLE Solid Waste Disposal Permits If required

EGLE Air Quality Permit If required

EGLEMichigan Public Act 451, 55 (Air

Pollution Control)Application in process

EGLEPart 41 Wastewater Construction

PermitPending


CHAPTER 3 - PROJECT COST

INTRODUCTION This chapter provides a detailed description of the cost elements of the Project and provides current estimates of those costs. The cost estimate for the IFP and each previous financial plan are displayed. It also summarizes the costs incurred to date and provides detail on key cost related assumptions. Federal FY and state FY are the same, therefore, FY means October 1 to September 30.

COST ESTIMATE OVERVIEW The current cost estimate is based on FY 2014-unit prices, updated, adjusted, and inflated to reflect YOE costs and the current project schedule. Future updates will be performed for all segments as segment specific activities continue to proceed and will be reflected in future FPAU. As of December 1, 2014, the first annual update total estimated cost of the Project was $2,916.5 million in YOE dollars. This represented a $3.1 million increase, or 0.11 percent difference from the IFP. The increase was due to rescheduling the order in which the bridges in the Advanced Bridges Phase were to be reconstructed and the related changes in cost estimates as the design for this phase advanced. As of December 1, 2015, the second annual update, the total project cost was estimated to be $2,926.7 million. This increase of an additional $10.2 million was for 11 design support contracts to be issued to small businesses in the Detroit area ($4 million) and to increase work items for the OR for Segment 3 ($6.2 million). The total net increase from the IFP to December 1, 2015 was $13.3 million, or 0.46 percent. As of December 1, 2016, the anniversary date of the third annual update, the total project cost was estimated to be $2,957.8 million. This was an increase of $44.4 million, or 1.52 percent since the IFP. This was an increase of $31 million, or 1.06 percent since the last FPAU. This increase of an additional $31 million is a result of the decision to clear span the freeway with the use of a network tied arch. As of December 1, 2017, the anniversary date of the fourth annual update, the total project cost was estimated to be $2,949.5 million. This is an increase of $36.1 million, or 1.24 percent since the IFP. This was a decrease of $8.2 million, or 0.28 percent since the last FPAU. This decrease of $8.2 million is a result of the advancement of seven bridges from Segment 3 to Advanced Bridges Phase 2. As of December 1, 2018, the anniversary date of the fifth annual update, the total project cost was estimated to be $2,958.3 million. This is an increase of $44.8 million,


or 1.54 percent since the IFP. This was an increase of $8.7 million, or 0.29 percent since the last FPAU. This increase of $8.7 million is a result of additional funding requirements for Advanced Bridges Phase 1, particularly the Second Avenue Bridge as well as Advanced Bridges Phase 2, particularly the Conrail Railroad X01-82024 Bridge. Costs to date and costs to complete by segment are included in Appendix C. As of December 1, 2019, the anniversary date of the sixth annual update, the total project cost is estimated to be $3,273.3 million. This is an increase of $359.9 million, or 12.35 percent since the IFP. This was an increase of $315.0 million, or 10.65 percent since the last FPAU. This increase of $315.0 million is a result of an update to the program delivery plan and the completion of an updated conceptual cost estimate for the corridor as part of the draft SEIS. It includes repackaging the design and construction packages to align with feedback from past industry outreach regarding size of packages and typical/historical construction duration for similar size packages. In place of the original 19 design and construction packages, the revised delivery plan uses five larger construction packages to permit the accelerated completion of the program.

COST ESTIMATING METHODOLOGIES AND KEY ASSUMPTIONS HISTORY A Technical Memorandum titled “I-94 Detailed Engineering Report Conceptual Base Plan Design Opinion of Probable Cost”, was used as the basis to develop the IFP. The DER was developed by CH2M Hill. The base estimated cost for the Project was $1,976.7 million in FY 2014 dollars, or $2,913.4 million in YOE. (See Appendix E.) The DER report provides for a low to high range of costs. The lower and higher ends of the variance are unlikely to occur. As the Project progresses to final design, the range should become narrower.

FHWA MAJOR PROJECTS CER The FHWA Major Projects Team performed the initial CER on the Project April 25-29, 2011. The purpose of the CER was to verify the accuracy and reasonableness of the current project total cost estimate and project schedule, and to develop a probability range for the cost estimate that represents the Project’s current stage of development. The Senior Project Manager, together with subject matter experts from MDOT and CH2M Hill, discussed and supported the design, schedule, and unit prices used to estimate the Project. The following documents were reviewed: Project Cost Estimate Spreadsheet, Project Schedule, Project Risks, draft IFP, draft PMP, Accelerated Construction Technology Transfer Workshop Report and the I-94 DER Opinion of Probable Cost. Over 25 cost and schedule risks were identified and quantified. Unit prices, current and anticipated market conditions, and influences on inflation were


discussed. In addition, many opportunities to reduce costs were identified and discussed. The 35 percent contingency used in the Project cost estimate was replaced with actual dollar values for uncertainties related to base variability, quantity and unit cost variability, and schedule and market risks. The total value of the uncertainties was determined to be $105 million and is referred to as Risks and Opportunities. A Monte Carlo analysis was then used to model a probable cost range for the Project. The FHWA recommended MDOT fund the Project at the 70 percent probability range. The resulting derived cost estimate at the 70 percent confidence level in YOE dollars increased MDOT’s estimate to $2,840.1 million, a 3.8 percent increase when compared to the detailed cost estimate initially developed of $2,735.1 million in YOE dollars. The CER was updated in November 2013. The CER II Team used the previously adjusted base estimate of $1,652 million. The adjusted base estimate includes the $105 million of risks and opportunities added from the initial CER. As a result of the CER II additional adjustments of $97 million were made with the most significant being added costs for mobilization ($50 million), construction change order risks ($30 million), and utilities ($5 million). The CER II Team’s probabilistic risk at the 70 percent range resulted in a total cost, in YOE dollars, of $2,912.7 million. MDOT, taking a slightly different approach, added the net estimate changes to the DER and inflated the 25 individual construction packages to year of letting. MDOT’s initial YOE estimate was $2,913.4 million. Independent from the CER II and MDOT estimates, the consulting firm of HNTB reviewed and created a cost estimate. HNTB was present during the CER II. HNTB has collaborated with MDOT for many innovative contracting workshops on the Project, including the I-94 Practical Design Workshop, MDOT Success Management Workshop, and Strategic Highway Research Program Workshops (SHRP2 R10). HNTB’s independent estimate of the Project using the full build out schedule presented in the IFP was also consistent with the CER and MDOT totals. A Draft SEIS has been completed for the Project. ROD is anticipated in June 2020. MDOT plans to hold another CER after the ROD.

COST ESTIMATING METHODOLOGY The baseline cost estimate was analyzed and brought up to date by comparing actual unit prices paid for similar work in the Detroit Metro Region to those unit prices used in the cost estimate for the IFP. The unit price analysis was performed by MDOT’s internal Specifications and Estimates Section. Many unit prices increased due to inflation; however, a few unit prices remained the same, and some decreased which was reflective of the region’s economy. Overall, actual inflation was commensurate with the rates used to develop the IFP, therefore, only the construction packages for the


Advanced Bridges Phases were updated and Segments 3, 2, and 1 remained unchanged.

BASELINE INFLATION ASSUMPTION The work to be performed in Advanced Bridges Phases 1 and 2 involve both typical replacement bridge and demolition work as well as a unique network tied arch structure at Second Avenue. The network tied arch structure had an initial cost increase but provides many long-term benefits cited in the Structure Study recommendation including: an aesthetically pleasing community connector structure, avoidance of excessive settlement risk between substructure units for the two-span option, future median pier, avoidance of constructability issues with the future median pier and foundation work and user delay cost savings estimated at $2 million by the elimination of interim/final median pier construction that would have required additional freeway traffic closures/detours. Costs as shown in the IFP and all updates include inflation, meaning costs are shown at the amount MDOT expects the construction contract amounts to be at award. Inflation for future segments is applied at three percent annually to ROW purchases, design, construction, construction engineering, and utilities for the three construction packages in Segments 3 and 2. These packages will be designed and built between FY 2023 and FY 2029. Inflation for all elements within Segment 1 is calculated at the same three percent rate. This rate is used for Segment 1 due to economic influences discussed in the updated CER II. Segment 1 will be designed and built from FY 2030 - FY 2033. The three percent inflation rate is still a relevant average rate based on an internal analysis of assorted pay items. This higher rate is commensurate with the Consumer Price Index rate for the region. MDOT will continue to monitor market conditions and adjust the inflation rates as appropriate. Adjustments for inflation will be reflected in the annual updates to the FPAU. The cost estimate to complete the Project is broken down by segment. It is typical to accumulate costs incurred for EPE. As this element was completed in FY 2010, it is not discussed below, nor is the associated cost included in the presentation of cost estimate. The costs for each project segment are broken down further into Major Project elements as follows:

• Preliminary Engineering Road and Bridge - Development of plans, specifications, and estimates necessary to let the Project for construction.

• Right-of-Way - Total costs to purchase ROW including appraisals, administration, management, and acquisition of required ROW.


• Construction - Total estimated cost to construct the Project including clearing, drainage, guardrail, and other removals; earthwork; pavement and base materials; drainage and erosion control; structures; maintenance of traffic (MOT); sidewalk, curb and gutter, and other miscellaneous items of construction; and mobilization.

o Construction Contingencies - The Association for the Advancement of Cost Estimating International defines contingency as "a specific provision for unforeseeable elements of cost within the defined project scope; particularly important where previous experience relating estimates and actual costs has shown unforeseeable events which will increase costs are likely to occur." The base cost estimate includes a contingency of 25 percent for structures and 25 percent for the roadway and all other items.

o Miscellaneous and Incidentals - Various project related activities such as sidewalks, curb and gutter, freeway lighting and landscaping, handling of hazardous materials, wetlands, and cultural resources mitigation as well as historic mitigation of sensitive historic properties.

• Construction Engineering - Engineering services required throughout the

construction of the Project.

• Utilities - All public and private utility relocation and new utility construction such as telephone, electric, gas, fiber optics, water, sewer, and storm drainage.

• Owners Representative - MDOT is planning to use an OR for the Project due to the complexities and duration of a modernization project in an established urban area of this magnitude. The OR will serve as an extension of the Senior Project Manager and will assist with project design, management, cost, schedule, and quality.

• Global Risks and Opportunities - The initial CER disclosed many global risks and opportunities for the roadway segments of the Project. MDOT chose to manage the value of those risks and opportunities as a separate element.

COST MANAGEMENT MDOT has ongoing responsibility for the oversight of project costs and utilizes the SOM accounting system as described below. As of October 1, 2017, the SOM transitioned from the Michigan Administrative Information Network (MAIN) accounting system to the Statewide Integrated Governmental Management Applications (SIGMA) accounting system. What were previously considered “Phases” in MAIN for each Job Number (JN) have now been incorporated into the last two to four characters of the SIGMA “Program Number.” MDOT systems refer to jobs by “JN” while SIGMA refers to JNs as “Programs.” The Program suffixes are as follows:


Costs for each JN have been broken down into the following Program suffixes: Table 3-1: MAIN/SIGMA Project/Program Crosswalk

PRESENTATION OF PROJECT BY MAJOR SEGMENTS Table 3-2 provides an overview of the Project costs by segment, presenting a comparison of the current FPAU 2019 to the IFP and prior FPAUs. Amounts are shown in YOE. The IFP and FPAUs are a combination of actual costs to date and projected costs to complete. There is a cumulative net increase of $359.9 million since the IFP and an increase of $315.0 million since the prior FPAU. Chapter 10 will discuss these cost changes in detail. Table 3-2: Project Cost Estimate by Segment (YOE dollars, in millions)


ADVANCED BRIDGES Advanced Bridges Phase 1 Advanced Bridges Phase 1 of the Project includes 14 bridges, which MDOT has determined to be in most need of replacement. The following 11 bridges have been identified for replacement: Trumbull Avenue, Woodward Avenue, Chene Street, Gratiot Avenue, Second Avenue, Cass Avenue, Brush Street, Mount Elliott Street, Concord Avenue, French Road, and Cadillac Avenue. The following three pedestrian bridges over I-94 have been added to the Advanced Bridges Phase 1 and have been identified for demolition: Helen Street, Rohns Street, and Springfield Avenue. Seven of the 14 bridges are within the same footprint as Segment 3. The PE for Advanced Bridges Phase 1 began in FY 2010 with the design of the Gratiot Avenue

Prior to 10/01/17 Beginning 10/01/17

MAIN

Project Phases

SIGMA

Program Suffix Description

SCOP Scope

NI Non-Infrastructure

OPS Operations

“_” Phase EPE Early Preliminary Engineering

C Phase PE Preliminary Engineering

D Phase PES Preliminary Engineering - Structure

B Phase ROW Right of Way

Z Phase UTL Utility

A Phase CON Construction

SegmentIFP

2013

FPAU

2014

FPAU

2015

FPAU

2016

FPAU

2017

FPAU

2018

FPAU

2019

Net

Increase

Since Prior

Year

Net

Increase/

(Decrease)

Since IFP

Advanced Bridges Phase 1 $166.3 $169.4 $174.1 $202.1 $185.5 $222.0 $223.4 $1.4 $57.1

Advanced Bridges Phase 2 - - - - 180.5 184.6 215.6 31.0 215.6

Segment 3 951.8 951.8 957.3 960.3 787.3 756.4 956.6 200.2 4.8

Segment 2 498.0 498.0 498.0 498.0 498.9 498.0 503.5 5.5 5.5

Segment 1 1,297.3 1,297.3 1,297.3 1,297.3 1,297.3 1,297.3 1,374.3 77.0 77.0

Grand Total $2,913.4 $2,916.5 $2,926.7 $2,957.8 $2,949.5 $2,958.3 $3,273.3 $315.0 $359.9

Percentage Increase/(Decrease) 0.11% 0.35% 1.06% -0.28% 0.29% 10.65% 10.65% 12.35%


Bridge. Construction of the Woodward Avenue Bridge began in FY 2014. The Woodward Avenue and Trumbull Avenue Bridges over I-94 were successfully let as part of the Advanced Bridges Phase 1. The Woodward Avenue Bridge over I-94 was expedited to accommodate the M-1 Rail Project. The Trumbull Avenue Bridge over I-94 was not originally an Advanced Bridge, but due to the critical condition of the bridge during inspection, it was identified for priority replacement. The Woodward Avenue Bridge was completed in 2016 and the Trumbull Avenue Bridge was completed in 2017. The Gratiot Avenue Bridge opened to traffic in late 2018. As part of Advanced Bridges Phase 1, the Chene Street and Gratiot Avenue Bridges over I-94 were constructed in 2018 and the Helen Street, Rohns Street, and Springfield Avenue pedestrian bridges were demolished in 2018. The Brush Street, Concord Street, and French Road Bridge reconstruction projects are underway as of the 2019 FPAU. The next Advanced Bridges construction phase will continue in FY 2020 - FY 2021. This phase also includes $41,500 of expenditures against the grant from the Strategic Highway Research Program for SHRP2 R10. The grant was used for a complex project management workshop and for the development of the Major PMP. Table 3-3 provides an overview of Advanced Bridges Phase 1 of the Project. These costs are presented in YOE dollars based on the current project letting schedule, current cost estimates, and reasonable estimates of inflation. The table shows the change from the IFP. This phase increased $57.1 million since the IFP when compared to the FPAU 2019 cost estimate. The increase of $3.1 million seen during FY 2014 resulted from rescheduling the order of bridge work. The $4.7 million added during FY 2015 was for design contracts, and the $28 million increase shown in FY 2016 was due mainly to the decision to clear span the freeway using network tied arches, and increased superstructure/substructure and construction costs. The decrease of $16.6 million in FY 2017 was due to new and more precise cost estimates becoming available as the beginning of the construction phase neared. The $36.7 million added during FY 2018 was due in large part to a cost estimate increase for the Second Avenue Bridge. The Mount Elliott Street Bridge has a reduced cost from what was originally planned as the cost of ROW and utility phases was also included in the construction phase. The increase of $1.4 million in FY 2019 was due to increased costs and shifting the Mt. Elliott Street and Cadillac Avenue Bridge reconstructions from Advanced Bridges Phase 1 to Advanced Bridges Phase 2 and shifting the Grand River Avenue Bridge reconstruction from Advanced Bridges Phase 2 to Advanced Bridges Phase 1. Chapter 10 provides a more detailed discussion of these cost changes.


Table 3-3: Project Cost Estimate for Advanced Bridges Phase 1 (YOE dollars, in millions)


Advanced Bridges Phase 2 Due to the significant changes MDOT proposed to make to the Project, FHWA determined that those changes must be studied by completing a SEIS, which delayed the road reconstruction originally planned for Segment 3. However, FHWA allowed portions of the Project to move forward to subsequent phases (design, ROW acquisition, construction) if those portions are in conformance with the current approved plan and will also accommodate the proposed modifications. MDOT chose to move forward and meet the FHWA criteria by designing and constructing seven additional advanced bridges as part of Advanced Bridges Phase 2, which allowed the structures portion of the former Segment 3, Package 1 to be advanced. MDOT’s Program/Project Review Board approved shifting of $20 million of ROW, $35.3 million of PE funding, and $150.5 million of construction funds from the I-94 Segment 3, Package 1 to fund the design and construction of the Advanced Bridges Phase 2. Design and construction of those bridges moved forward while MDOT completed the draft SEIS. If approved, following the completion of the draft SEIS, MDOT can proceed with the modified conceptual plan for the rest of the Project. Advanced Bridges Phase 2 of the Project previously included eight bridges, which were advanced from Segment 3, Package 1 including the following structures over I-94: Grand River Avenue, East Grand Boulevard, Milwaukee Avenue over I-75, Frontenac Street, Burns Street, two crossings for Conrail Railroad, and removal of the Third Street Bridge. For the 2019 FPAU period the Grand River Avenue Bridge is reassigned from Advanced Bridged Phase 2 to Advanced Bridges Phase 1, and the Mt. Elliott Street and Cadillac Avenue Bridges over I-94 have been reassigned from Advanced Bridges Phase 1 to Advanced Bridges Phase 2. Table 3-4 provides an overview of Advanced Bridges Phase 2 of the Project. These costs are presented in YOE dollars based on the current project letting schedule, current cost estimates, and reasonable estimates of inflation. The table shows the change from the IFP. This phase was added to the Project during the 2017 FPAU review period and therefore increased $180.5 million since the IFP.

IFP FPAU FPAU FPAU FPAU FPAU FPAU

2013 2014 2015 2016 2017 2018 2019

#1 Gratiot & Chene $22.4 $27.5 $26.3 $28.5 $30.9 $33.0

#1 Pedestrian Bridge Removal - - - - 0.4 0.5

#2 Second and Brush 30.4 24.6 23.9 34.7 34.7 45.3 53.3 22.9

#3 Concord 9.2 9.0 8.6 9.3 8.1 10.4

#3 French 9.3 10.7 10.1 12.7 10.0 13.9

#15 Cass 15.2 12.3 11.9 17.4 17.3 22.7

#15 Third Street Bridge Removal (transfer from ABP2) - - - - - -

#15 Grand River Avenue (transfer from ABP2) - - - - - -

Woodward 15.1 14.1 14.1 14.1 16.3 13.6 13.5 (1.6)

Trumbull 6.8 7.1 11.8 11.8 9.8 10.5 9.9 3.1

Owners Representative Contract 15.0 13.5 18.2 24.2 24.2 28.5 26.4 11.4

Opportunity Buys (ROW) 12.0 12.5 9.1 9.1 8.9 9.0 13.5 1.5

AB Segment Wide Design Support - - 4.1 4.1 4.1 5.8 5.7 5.7

Mt. Elliott (transfer to ABP2) 22.7 29.0 27.3 21.7 19.8 22.3 - (22.7)

Cadillac (transfer to ABP2) 8.3 9.2 8.9 14.7 0.9 6.5 - (8.3)

Grand Total $166.3 $169.4 $174.1 $202.1 $185.5 $222.0 $223.4 $57.1

Annual Increase/(Decrease) 3.1 4.7 28.0 (16.6) 36.5 1.4

Percentage Annual Increase/(Decrease) 1.84% 2.78% 16.09% -8.19% 19.68% 0.63% 34.28%

23.0 4.6

40.5 25.3

Advanced Bridges Phase 1 by PackageNet Increase/

(Decrease) Since

IFP

$37.6 $15.2


The $4.1 million added during FY 2018 was due in large part to a cost estimate increase for the Conrail Railroad X01-82024 Bridge. The $215.6 million increase in FY 2019 from the IFP is due in large part to shifting the Mt. Elliott Street and Cadillac Avenue Bridge reconstructions from Advanced Bridges Phase 1 to Advanced Bridges Phase 2 and shifting the Grand River Avenue Bridge reconstruction from Advanced Bridges Phase 2 to Advanced Bridges Phase 1. Chapter 10 provides a more detailed discussion on these cost increases and the reasons for the addition of this phase to the Project. Table 3-4: Project Cost Estimate for Advanced Bridges Phase 2 (YOE dollars, in millions)


PROJECT SEGMENTS Segment 3 Segment 3 is the longest and least complex segment within the corridor; therefore, it was determined to schedule the Project from east to west after completing the Advanced Bridges. This segment previously consisted of bridge replacement and freeway reconstruction and widening as well as the reconstruction of service roads. During the 2018 FPAU period, the decision was made to replace the Segment 3 Package 1 bridge replacement with Advanced Bridges Phase 2. At that time, Advanced Bridges Phase 2 consisted of bridge replacement for the following structures over I-94: Grand River Avenue, East Grand Boulevard, Frontenac Street, Burns Street, two crossings for Conrail Railroad, and Milwaukee Avenue over I-75. As of the 2019 FPAU, Segment 3 consists of two design and construction packages. The first package includes the reconstruction of I-94 between Russell Street and Frontenac Street. This package also includes the Dequindre Bridge and the WB I-94 to NB I-75 ramp. The second design and construction package includes the reconstruction of I-94 between Frontenac Street and Barrett Avenue as well as all remaining rehabilitation work. Segment 3 is scheduled for design beginning in FY 2021. PE and acquisitions of ROW, outside of Opportunity Buy acquisitions, will begi