OHSU, city to split annual tram cost 85-15; city's bill to be paid by fares, parking revenue
The public will pay to ride the Portland aerial tram, but the exact fare has yet to be set.
City Commissioner Sam Adams hopes the fare will be easily affordable but said it also must be enough to help offset annual operating costs of more than $1.7 million a year in 2007 and $1.2 million a year for the next four years.
'People need to think of the tram as part of the city's transportation infrastructure, like the Portland streetcar and TriMet's light-rail system. People pay to ride them, even though the fares don't pay the full costs,' said Adams, who is in charge of the Portland Office of Transportation, which owns the tram.
Adams said he is open to having a low fare on weekends to encourage tourism and sightseeing.
The tram will connect the South Waterfront urban renewal area to Oregon Health and Science University's facilities on Marquam Hill. Transportation officials predict that 85 percent of all passengers will be OHSU employees and patients.
As a result, the City Council has approved an Intergovernmental Agreement with OHSU requiring OHSU to pay 85 percent of the annual operating costs.
The agreement requires the city to pay the remaining 15 percent through the fares and parking revenue generated within the South Waterfront area.
'All transit systems are subsidized. The users never pay all of the operating costs,' Adams said. 'In this case, the operating subsidies will come from parking revenues.'
OHSU also has agreed to pay the tram transit costs for all military veterans receiving treatment at the Portland Veterans Affairs Medical Center on Marquam Hill.
The council approved the agreement on June 7. It calls for the exact public fare to be set by a seven-member Executive Management Committee made up of three city officials, three OHSU officials and one member of the public selected by the other six.
Although the council approved the agreement a month ago, the committee has yet to meet. Adams said he wanted to postpone setting the fare until the tram was fully funded and construction was far enough along to ensure it would be completed on schedule in late December.
The agreement was approved as the project entered its most visible stages - the completion of the intermediate tower and the stringing of aerial cables between the two passenger loading stations at each end of the tram route.
Workers finished installing the third section of the stark, angular tower early Thursday. Standing 196 feet high and weighing 560,000 pounds, it is visible to motorists on Interstate 5 and Southwest Macadam Avenue traveling past the South Waterfront urban renewal area along the west bank of the Willamette River.
The unique tower was designed by Sarah Graham of the Swiss-American architectural firm Angelli/Graham/Pfenninger/Scholl. She was selected as a result of a public design competition intended to produce a distinctive tower instead of a traditional tram support structure.
The tower will be completed next Wednesday when two large metal 'saddle' structures that hold the track and haul cables will be installed near the top of it. Pockets built into the sides of the tower will then be filled with extra-dense concrete to increase its rigidity and stability.
'This is the first major new facility in Portland in a decade and it is located along the I-5 freeway, where millions of eyes will see it. It was important that the tower be an icon for the city - and I think it will be,' Adams said.
Construction costs capped
When it is finished, the tram will be capable of 13 trips per hour during peak hours - about one trip every 4 1/2 minutes. It is scheduled to operate 18 hours a day, 365 days a year. Transportation officials expect the tram will carry 1,540 people a day during the first five years of operation and 5,510 by 2030.
The completion of the intermediate tower will be a major step in the construction of the tram, which has endured months of controversy as cost estimates more than tripled, from $15 million to more than $50 million.
City and OHSU officials cited many factors for the increase, including unrealistically low original estimates, the unique design of the tower, OHSU's unexpected redesign of the upper passenger station and unanticipated increases in the costs of steel and concrete.
After weeks of negotiations among the city, OHSU and area property owners, in April the council approved a final contract amendment that capped total construction cost payments at $57 million. The contractors building the tram agreed to absorb any cost overruns if the final costs exceed that amount.
Under the amendment approved by the council April 12, the city will pay $8.5 million in urban renewal funds toward the project through the Portland Development Commission, the city's urban renewal agency. OHSU will pay the majority of the project costs, $40.2 million. Area property owners will pay $6.1 million.
The tram's operating budget was not included in that amendment, however. It is being developed separately by the transportation office, which is negotiating an operating agreement with Doppelmayr, a Swiss company that operates several trams in Europe.
Doppelmayr is one of two private companies building the tram. It is providing all of the components to move passengers between South Waterfront and Marquam Hill, including the large wheels on top of the intermediate tower.
The current operating budget projects annual tram costs for the first five years. It predicts the tram will cost more than $7.6 million to operate through 2011. If the 15 percent-85 percent split is used all five years, the public will pay more than $1.1 million of the costs while OHSU will pay $6.5 million.
Cables set to be strung
Portlanders living along the tram route soon will see signs of the project's progress. The tower already is visible from Southwest Gibbs Street, which the tram gondolas will pass over on their way to and from Marquam Hill.
Over the next few weeks, the street's residents will see metal frame scaffolds erected at all intersections, including Southwest Macadam Avenue, I-5 and Southwest Terwilliger Boulevard. They will be used by workers to string the tram cables over the route without closing the freeway or any other roads.
'We can't close any of the roads for this project,' said Art Pierce, the city transportation official who is managing the contract.
'If we were building the tram in the mountains, we could use a helicopter to string the cable along the route. If the helicopter dropped the cable, it would only hurt some trees.'
The tram is driven by large electric motors in the basement of the lower tram station, located just north of OHSU's first South Waterfront building. The basement holds backup diesel generators to keep the tram running in case of power outages. The operating budget includes $15,000 a year to cover two weeks of shuttle service per year in case the tram is not working during normal hours.