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WSDOT reaches settlement with toll vendor ETC

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Date:  Wednesday, July 18, 2012

Contact: Patty Michaud, WSDOT Communications

SEATTLE – Toll vendor Electronic Transaction Consultants (ETC) has agreed to a $6.4 million settlement compensating the state for the damages associated to delays in starting tolling on State Route 520 last year.

“This settlement covers our costs due to the late start of tolling,” said Craig Stone, Toll Division director for the Washington State Department of Transportation. “This was a challenging and complex process that resulted in a fair outcome for everyone, including drivers, taxpayers and the state.”

To reach the settlement, WSDOT evaluated the cost of the delays, which included extra WSDOT and consultant staffing and lost revenue from dismissed or unprocessed Tacoma Narrows Bridge toll infractions.

Stone said the goal of any settlement is to fairly assess responsibility and recoup costs for actual damages.

“This agreement ensures the state and taxpayer are compensated while avoiding what could have been significant litigation costs,” Stone said. “Tacoma Narrows Bridge costs will be recovered and bridge toll payers will be held harmless.”

Narrows Bridge toll payers will bear no costs from the delays, Stone added, and the bridge will continue to benefit from the original contract’s long-term savings in operations costs.

In the agreement, WSDOT will recoup $2.4 million by reducing monthly operational payments to ETC. The majority of that amount depends on WSDOT’s option to extend the contract from 2014 to 2018. This payment reduction is in addition to $1.5 million saved in reduced payments to ETC in 2011. ETC’s original five-year contract with WSDOT was for $23 million.

WSDOT also receives a license for ETC’s software as part of the settlement. The royalty-free license provides access to ETC’s toll-system code, related software and background documents necessary to operate the statewide tolling customer service center and manage the toll-accounting system. Valued by an independent consultant at $4 million, the license provides WSDOT some insurance outside its contract with ETC.

“Having a license to the toll-system software gives us flexibility in the years ahead,” Stone said. “We look forward to continuing our partnership with ETC, but if we decide to change plans in the future, we have the freedom to use their software without them.”

Accessing ETC’s software code was recommended by an expert review panel (ERP) convened by WSDOT last year. The panel conducted a midcourse assessment of ETC’s performance in June 2011 and provided suggestions on how WSDOT could be compensated for the damages due to the delay in starting SR 520 tolling. WSDOT also followed the panel’s recommendation to include more testing in the SR 520 toll schedule, which added to the delay but helped ensure a smooth start when tolling began in December.

“Last year was hard, but we worked through our challenges together and finished with a successful toll launch,” Stone said. “Thanks to everyone’s dedicated efforts, we now have a workable, flexible and expandable system.”

“This settlement represents the closing of a trying chapter in the project,” he said. “We are taking stock of what we learned and shifting our energy toward the future.”

Tolling on SR 520 started Dec. 29, 2011. It is expected to raise $1 billion toward the $4.65 billion SR 520 Bridge Replacement and HOV Program, which includes 12.8 miles of safety and mobility improvements from Interstate 5 in Seattle to State Route 202 in Redmond.

The existing SR 520 floating bridge opened to traffic in 1963 and is vulnerable to sinking during a severe storm after weathering decades of wind and waves. The new bridge will better withstand storms and move more people across the lake with a new transit/HOV lane for buses and carpools in each direction. The target date to open the new bridge to traffic is December 2014.

For more information on tolling, visit wsdot.gov/GoodToGo.


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