1. INTRODUCTION 4 2. STRATEGIC APPROACH TO TRANSPORTATION PLANNING REGIONS 13

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2 DISCLAIMER This document is the product of a project financed in part by the U.S. Department of Transportation, Federal Highway Administration (FHWA) and Federal Transit Administration (FTA). The contents of this document reflect the views of the Puerto Rico Department of Transportation and Public Works (DTPW) and the Policy Committee of the Puerto Rico Metropolitan Planning Organization (MPO) for the Transportation Planning Regions Urbanized Areas (TPR-UZAs). The authors are responsible for the facts and accuracy of the data presented herein. The PUERTO RICO 2032 FIVE TRANSPORTATION PLANNING REGIONS-UZAS LONG RANGE TRANSPORTATION PLAN (PR 2032 FIVE TPR-UZAS LRTP) is a revised version of the 2030 Long Range Transportation Plan and the actualizations, for the Five TPR-UZAs identified as: North, East, South East, South and Southwest. This document includes a revised Financial Constraint Analysis (Chapter 3), and revised project lists constructed or in process and programmed for short, intermediate and long range. This 2032 Plan will be submitted for the corresponding approval by the members of the MPO. The Chapter 3: Financial Constraint Analysis was revised based on the financial status of the Department of Transportation and Public Works and the Puerto Rico Highway and Transportation Authority (PRHTA). The content of the PR 2032 FIVE TPR- UZAs LRTP not necessarily reflects the official views or policies of the U.S. Department of Transportation. This report does not constitute a standard, specification, or regulation. [1]

3 1. INTRODUCTION The Context and Importance of the Regional Plans Overview of the TPR and Legal Basis Actualization for Transportation Planning Regions The Vision Actualization of the TPR Population Characteristics STRATEGIC APPROACH TO TRANSPORTATION PLANNING REGIONS Strategies for Integrated Planning Criteria for Transportation Supportive Land Use Planning Policy guidelines Strategies for Public Transportation: Rehabilitate, Expand and Develop Provide Enhanced and Improved Público Service Provide New Inter Community Express Transit Services Policy Guidelines Strategies for Roadway Network: Improve and Maintain Existing Facilities Identify and Program Improvement and Maintenance of Existing Facilities Complete Key Components of the Strategic Roadway System Policy Guidelines Strategies for Non-Motorized Modes In The TPR: Improve, Expand, Maintain, And Extend Improve Pedestrian and Bicycle Facilities Expand Pedestrian and Bike Access Policy Guidelines Strategic Approach for Ports, Airports and Freight Policy Guidelines FINANCIAL CONSTRAINT ANALYSIS Existing Financial Conditions in the Transportation Sector in Puerto Rico The Puerto Rico Highway and Transportation Authority (PRHTA) Sources of PRHTA Revenues Revenue Sources Comprising Dedicated Revenues Gasoline Tax Revenues Diesel Oil Tax Revenues Motor Vehicle License Fee Revenue Toll Revenues Petroleum Tax Revenues 43 [2]

4 3.3 Projections for vs assumptions and tendencies Federal Funds Borrowing Assessment of Current Revenue Sources Forecast Growth in Dedicated Revenues Forecast Growth in Federal Funds Action Plan for Financing the Regional Transportation System 50 TECHNICAL ADDENDUM 53 I. LRTP Technical Approach and Methodology 53 A. Overview of Technical Approach 53 B Network Testing and Analysis 58 D Recommendations 71 E. PR 2032 FIVE TPR-UZAs LRTP 71 [3]

5 1. INTRODUCTION 1.1 THE CONTEXT AND IMPORTANCE OF THE REGIONAL PLANS Transportation systems, interacting with the land use and socioeconomic activity systems determine traffic and transit flows, which in turn determine many aspects of daily life and impact the built and natural environments. The movement of goods and resources, essential to economic activity, occurs in many of the same facilities that serve general traffic and transit operations. Highways, roads and especially local streets, all basic elements of the transportation system, also constitute critical elements of urban public spaces, were people interact and generate social dynamics and a sense of identity and place. This becomes clear when we recognize that the users of roads and streets include not only drivers of automobiles and trucks, but also cyclists and pedestrians. Indeed, the increasingly popular concept of livable communities requires that pedestrian needs be addressed and protected, and transit alternatives developed to ensure that people have the opportunity of going about their daily lives, at the local and regional levels, without being forced to use the automobile. Long term transportation planning aims to address all of these issues in an informed and inclusive participation process that lead serving a vision of the type of community, city, and region which has been adopted by the citizens. The institutions called for to develop transportation system planning include local governments, various agencies and public corporations, and even major transit and freight operators. These various groups must work together to find solution to the transportation problem faced on the island. For that reason, since 1973 the Federal Government has been legislating, through Authorization Acts approved every six years, requirements for a continuous, cooperative and comprehensive transportation planning process. To comply with that requirement, a Metropolitan Planning Organization (MPO) must be organized and designated by Governors and local elected officials for each urbanized area, as defined by the most recent decennial population census. The MPO thus serves as a forum for discussion among the many public and private actors in the region, with the responsibility (among others) of developing long range multimodal transportation plans and short range multimodal transportation improvement programs for implementing them in compliance with all applicable federal and local legislation. The 49 CFR, Chapter Vi, Subpart B- Metropolitan Transportation Planning and Programming establishes that the regulation in 23 CFR part 450, subpart C, shall be followed in complying with the requirements of this subpart 23 CFR part 450, subpart C requires a metropolitan planning organization (MPO) be designated for each urbanized area and that the metropolitan area have a continuing, cooperative and comprehensive transportation planning process that results in plans and programs that consider all transportation modes. These plans and programs shall lead to [4]

6 the development of an integrated intermodal metropolitan transportation system that facilitates the efficient, economic movement of the people and goods. In Puerto Rico there is one MPO for two Transportation Management Areas (TMA) Aguadilla and San Juan. However, there are three Policy Committees. After each new Census urbanized areas has been redefined, all Governors and local officials, since this requirement has been in place, have designated the Commonwealth s Department of Transportation and Public Works (DTPW) as the operating arm of the MPO for all urbanized and metropolitan areas, providing the staff for the MPO. The DTPW, being an umbrella for a number of agencies and public corporations, uses the technical resources of the Puerto Rico Highways and Transportation Authority (PRHTA) to conduct studies and develop plans and programs that are presented for consideration and adoption by the MPO. In considering these plans and programs, and to comply with the federal requirement of providing a forum for achieving consensus, the MPO acts through Policy Committees that include (as voting members) the Mayors of all municipalities included in the urbanized or metropolitan area, as well as the heads of public agencies and corporations with direct responsibilities over land use planning, environmental protection and transit or traffic operations. Three such Policy Committees are currently in operation: one for the San Juan Urbanized Area (SJUA), or San Juan Transportation Management Area (SJTMA): (encompassing 38 [5]

7 municipalities and over 1 million inhabitants), another for the Aguadilla Urbanized Area (AUA) or Aguadilla Transportation Management Area (ATMA): (11 municipalities and over 200,000 inhabitants), and a third for the other nine urbanized areas (UZA: with populations between 50,000 and 200,000), grouped into five Transportation Planning Regions (TPR). These are: North TPR, East TPR, South TPR, South-East TPR and South- West TPR. A Long Range Transportation Plan (LRTP) must be prepared and adopted for each the SJUA, the AUA and each TPR at least every five years, with a 20 year (minimum) planning horizon. Based on these plans, every year the MPO then defines the use of yearly federal funding allocations through a Transportation Improvement Programs (TIP) for the SJTMA, another for the ATMA and another for the UZA s. In general, without an appropriate, actualized LRTP for each region, no federal funds may be programmed for improvements to its transportation system. Currently, Federal Regulations (specifically in 23 CFR, Part 450) require a long range transportation plan actualized in accordance with the cycles defined in (c), for all urbanized areas as defined by the most recent decennial census. In order to continue in compliance with the above mentioned regulations, but even more so, to comply with public transportation policy, this document, PUERTO RICO 2032 FIVE TRANSPORTATION PLANNING REGIONS-UZAS LONG RANGE TRANSPORTATION PLAN (PR 2032 FIVE TPR-UZAS LRTP) actualizes information, analyses, and recommendations made in the document approved on 2006 and 2009, so that both the MPO and the federal government may continue to serve the public interests with programs and projects addressing the needs of the TPR. Currently, these activities are severely curtailed by a major reduction in the revenues and financial capacity of the Authority, as will be discussed in the Financial Constraint Analysis for each region. This further increases the importance of good planning process. Once adopted by the MPO, this Cost Feasible Plan, named PR 2032 FIVE TPR-UZAS LRTP will serve as the actualized to previous 2030 Long Range Transportation Plans for each one of the five TPR-UZAs regions. Along with anticipated amendments, will remain valid and in effect through OVERVIEW OF THE TPR AND LEGAL BASIS As explained in the Introduction, the 2000 Census resulted in new boundary definitions for the Urbanized Areas in Puerto Rico. Some existing urban areas were consolidated, others were subdivided, and new ones were defined. As result, definition of urbanized areas for Puerto Rico greatly expanded the extent of area on the island that is considered by the census bureau to be urbanized, and increased the number of such areas. The 2000 area definitions include areas that are urban in the traditional sense, such as the core population [6]

8 and employment centers and developed areas of cities and towns, areas that are more suburban in nature and adjacent exurban territory as well. The San Juan area in particular covers a considerable extent that is beyond what is considered as the city of San Juan, and includes suburbs, small towns and adjacent areas with little settlement. The San Juan urbanized area definition covers most of the eastern portion of the island. The definition of the urbanized areas of Ponce, the second largest city on Puerto Rico and the largest city on the South, and that of Mayagüez, the third largest city in the western part of the Island, have not been expanded significantly. However, the urbanized area of Aguadilla, a once relatively small town, has been expanded significantly and includes sparsely settled semi-rural areas well beyond the limits of the actual town center. The change in the urbanized area of Aguadilla is so significant that it is now classified as a Transportation Management Area (TMA) and requires its own transportation plan. For purposes of the elaboration of the 2030 Long Range Transportation Plan for Puerto Rico and regions, and based on the 2000 Census data, the DTPW redefined the Transportation Planning Regions; two of them San Juan and Aguadilla classified as Transportation Management Areas (TMAs) and the five remained as Transportation Planning Regions (FIVE TPR-UZAs, for purposes of this document). Transportation Plans for San Juan and Aguadilla are each a separate document. These regions continue valid to for this 2032 Plan. [7]

9 1.2 ACTUALIZATION FOR TRANSPORTATION PLANNING REGIONS As mentioned previously, the San Juan and Aguadilla TMAs plans and their updates were each elaborated in separate documents. For the other five TPRs, separate documents were elaborated. Nevertheless, due to similarities in changes related to the characteristics and facts for these TPRs the actualization for those plans were all incorporated into this document. This document presents an actualization for the five TPRs-UZAs: North, East, South East, South and Southwest THE VISION The vision for the TPR Transportation Plans remains the same from the very beginning of the planning process for the elaboration of the 2030 Long Range Transportation Plan. The Vision was established by analyzing the key factors affecting travel and the expected future conditions. The Vision thus took into consideration, among others, the following issues: Automobile dependency and frequency of use Reducing this problem implies promoting multimodal options, prioritizing functional transit alternatives, developing pedestrian and cycling options, as well as making better use of the existing highway and street facilities. Increasing urban traffic congestion Attacking congestion at its roots means improving coordination of land use and transportation planning; focusing on public transportation; optimizing non-motorized modes (pedestrian, cycling); utilizing congestion management techniques; improving deficient intersections; and controlling illegal parking. Extensive urban sprawl and loss of rural lands - Reducing urban sprawl also involves coordinating transportation improvements with land use planning; applying a regional approach to planning of both public and private transportation; making viable the densification and rehabilitation of urban areas by means of improved transit systems; and minimizing or eliminating road projects that stimulate urban sprawl. Inadequate accesses to ports and airports Addressing this problem implies increasing the capacity of existing seaports and airports; designing complementary installations; improving access to both labor force and freight; and establishing efficient route management programs for freight transportation. Negative transportation impacts on the natural and cultural environments To minimize these impacts several issues must be addressed, such as mitigating negative impacts to environmental, community, and cultural resources in the design, construction, and operation of transportation facilities; constraining the development of transportation facilities, especially roadways in areas identified for conservation; avoiding negative [8]

10 impacts on communities in compliance with local and federal regulations; protecting ecological areas of value; encouraging the use of recycled materials during the construction, operations, and maintenance of transportation facilities; reducing dependency on fuels and non-renewable resources through the promotion of alternative fuel technologies and by providing tax breaks for using recycled materials and alternative fuels; taking measures to reduce negative impacts to places of ecological, historic, cultural, architectural, and agricultural value; and protecting the installed capacity of the transportation system. The combination of these concepts and their discussion in multiple public meetings throughout Puerto Rico resulted in the Vision for 2030; this vision continues valid to this 2032 Plan: the transportation system in Puerto Rico will meet the needs of all sectors of society, providing mobility for all, and easy access to all destinations. The system will promote the efficient use of resources including energy, land, existing facilities, and funding. It will support and protect the natural and man-made environments, respecting the structure of society and cultural resources. It will support economic development strategies. All aspects of the transportation system will be designed to enhance the quality of life and promote safety and security. From this vision statement, a specific set of goals and related objectives were developed. For each goal, a fundamental objective was then defined, followed by more specific objectives that are applicable by mode, geographic scope, or other consideration applicable in the long range plan. In particular, they also guide this Plans Transportation Planning Regions. Goal 1: Address the Transportation Needs of All Sectors of Society by Improving Accessibility, Mobility and Public Involvement FUNDAMENTAL OBJECTIVE: Provide and properly maintain the means to interconnect all destinations and to obtain necessary goods and services - homes, workplaces, recreation, education, and special destinations so that they are accessible at a reasonable cost in time and through convenient modal options, and in ways responsive to the expressed needs and preferences of the population being served Goal 2: Promote a More Efficient Use of Resources, Including Energy, Land, Existing Facilities, and Funding FUNDAMENTAL OBJECTIVE: Focus on conservation of capital, energy, and natural resources in the planning and design of transportation facilities. Goal 3: Protect the Natural and Manmade Environments FUNDAMENTAL OBJECTIVE: Consider the effects of transportation decisions on the social, economic, environmental, developmental, and energy components of the regions, cities, and towns, in adhering to a policy of sustainable development strategies. [9]

11 Goal 4: Support Economic Development Strategies FUNDAMENTAL OBJECTIVE: Design the transportation system in concert with the Commonwealth s important new development and redevelopment strategies, so as to provide opportunities for additional and improved housing, jobs, and goods and services. Goal 5: Promote Transportation Safety and Security FUNDAMENTAL OBJECTIVE: Consider transportation improvements as quality of life enhancements, designed to respect and complement their surroundings and to improve the everyday life of residents, including their safety and security. These Vision and Goals set the guiding structure for the strategic approach used to develop the 2030 LRTP. The strategic approach, as particularized for each mode, will help identify specific projects, within the regions, that appropriately address improvements to the highway system, public transportation, and non-motorized modes (bicycles and pedestrian), as well as improving on safety and expanding freight capacity, as needed ACTUALIZATION OF THE TPR POPULATION CHARACTERISTICS SAN JUAN AND AGUADILLA TMAS AND THE FIVE TPR-UZAS Demand for transportation relates not only to the pattern and extent of land use development, but also to the sheer number of people and the demography, or defining characteristics, of the population. This section looks at population growth, along with a variety of factors expected to affect the need for transportation services of various types throughout the Commonwealth. According to the U.S. Bureau of the Census, the resident population of Rico was 3,808,610 in the year 2000, and, according to the 2030 Island wide LRTP was anticipated to increase by 11.8 percent to 4,257,151 by the year This is an increase of 448,541 persons between 2000 and 2030, which directly translates into increased travel demand for work, school, shopping, and other activities within the Island. The subsequent increase in the demand for consumer goods will also require additional importation services from outside the island. Table 2-1 Population 2000, 2010, 2020, 2030 (and Percent change from year 2000) Location Aguadilla Urbanized Area 358, ,361/ +8.5% 404,875/ +12.8% 411,890/ +14.7% San Juan Urbanizad Area 2,253,130 2,381,381/ +5.7% 2,466,248/ +9.5% 2,519,394/ +10.6% Puerto Rico 3,808,610 4,030,154/ +5.8% 4,172,243/ +9.5% 4,257,151/ +11.8% [10]

12 In the Year 2000 sixty percent (60%) of the Population was located in San Juan TMA (SJ- TMA); eight percent (8%) in the Aguadilla TMA and thirty two percent (32%) was distributed in the remaining TPR. This distribution is responds in great way to the amount of municipalities that are included in each region. Nevertheless, Aguadilla TMA (A-TMA) and South TPR have the same amount of municipalities; the South TPR had 4% more population than A-TMA. For the 2010 this tendency continues; although it is observed that for the South TPR it decreased one percent, whereas for the A-TMA it increases one a percent. Puerto Rico: Transportation Management Regions 2000 Census Population Data A-TMA 8% South 12% North 8% South West 7% SJ-TMA 60% South East 3% East 2% Puerto Rico: Transportation Management Regions 2010 Census Population Data A-TMA 9% South 11% North 8% South West 7% SJ-TMA 60% South East 3% East 2% [11]

13 It is important to emphasize that there is a negative difference between 2000 and 2010 population. According to the 2010 Census, the percent of change in Puerto Rico s population was estimated in The Regions with greater loss in the population were the SJ-TMA with 32,630 and the South TPR with 27,978. It has to be brought out that the South East TPR had a slight increase in population and the North TPR did not suffer any changes in its population. One of the causes for this slight change in population between the regions can be attributed to mobility issues. It is important to emphasize that these population changes and the analyses made on these matters by the Federal Government can result in changes to the Transportation Regions compositions as established. The 2040 Transportation Plan, under development, will take these and other variables under consideration. Puerto Rico: Transportation Management Regions Census Population Differences 5, ,000 South East North A-TMA South West East South SJ-TMA -10,000-7,490-7,641-7,696-15,000-20,000-25,000-30,000-27,978-35,000-32,630 [12]

14 2. STRATEGIC APPROACH TO TRANSPORTATION PLANNING REGIONS The development of the 2030 Puerto Rico LRTP was based upon a strategic planning approach that focused on making those improvements to the transportation system that will enhance the quality of life on the island. This approach continues valid to for the PR 2032 Five TPR-UZAs LRTP; but in the development of 2040 Plan this issue will be attended more thoroughly. This quality of life strategy includes controlling urban sprawl, addressing environmental issues, maintaining rural areas, and promoting sustainability. It recognizes the importance of integrating transportation planning with land use planning and focuses on the maintenance and improvement of existing transportation facilities as a more desirable alternative to major investments in new infrastructure. It emphasizes the role of public transportation and non-motorized modes as alternatives to congestion and pollution, and as a means of providing access that reduces the need for trips by private automobiles. This plan considered among the goals of the MPO the provision of an efficient, safe, fiscally constrained, and sustainable transportation system. The priorities set forth by the MPO with regard to the transportation system (highways, publico service, non-motorized pathways, etc.) that will link the different areas of the TPR, include the access to cargo and passenger ports (both sea and airports), education and employment centers, emergency services, and other facilities. These would require, among other efforts, the completion of the Strategic Highway Network (STRAHNET), the improvement and when necessary, the provision of new accesses and/or connections to that network, and the further integration of the multi-modal transportation system. Among the goals of the present document are the provisions of an efficient, safe, fiscally constrained, and sustainable transportation system. Metropolitan Planning Organizations (MPOs) are required to consider the elements now commonly known as the eight (8) SAFETEA-LU planning factors within their multi-modal long-range transportation plans and programs. These Eight (8) SAFETEA-LU Planning Factors, which are consistent with our goals, are: 1. Support the economic vitality of the Metropolitan Area, especially by enabling global competitiveness, productivity and efficiency. 2. Increase the safety of the transportation system for motorized and non-motorized users. 3. Increase the security of the transportation system for motorized and non-motorized users. 4. Increase the accessibility and mobility options available to people and for freight. [13]

15 5. Protect and enhance the environment, promote energy conservation, improve the quality of life and promote consistency between transportation improvements and state and local planned growth and economic development patterns. 6. Enhance the integration and connectivity of the transportation system, across and between modes, for people and freight. 7. Promote efficient system management and operation. 8. Emphasize the preservation of the existing transportation system. These factors were developed for each TPR and are included as appendices identified as Appendix A (1-5), Eight (8) SAFETEA-LU Planning Factors. The public policy contained in the 2030 Puerto Rico LRTP, also valid for this 2032 Plan, represents a shift in strategy by those responsible for mobility and development in the Commonwealth. While the commitment to complete the STRAHNET remains a priority, there will be very few new major roads constructed in the foreseeable future. Instead, there will be a commitment to the maintenance of existing facilities and improved operation techniques for the current infrastructure, including low cost improvements, protection of the environment and expansion of both existing and planned transit. In concord with the MPO members and in consultation with all interested parties a Public Participation Plan had been developed. It defines the participation process, providing, the reasonable opportunity to be involved in the transportation planning process. The Public Participation Plan also promotes the continued emphasis on public involvement in the implementation of plans, programs, and projects. For more details, see Appendix B. The PR 2032 FIVE TPR-UZAS LRTP provides policy guidelines based on the goals, objectives, and strategies set forth for the 2030 LRTP. The intent is to determine the projected needs of current and future generations and to provide a strategic approach to implementing projects to satisfy these needs, within the fiscal limitations of public agencies responsible for the systems development and maintenance. Others major public policy documents, considered are the following: Objectives and Public Policies of the Land Use Plan for Puerto Rico ( Objetivos y Políticas Públicas del Plan de Uso de Terrenos de Puerto Rico ), 1995 Strategic Model for a New Economy ( Modelo Estratégico para una Nueva Economía ), adopted by the Government of Puerto Rico, September Law No. 550, October 3 rd., 2004 to create the Land Use Plan for the Commonwealth of Puerto Rico Land Use and Transportation Plan for the San Juan Metropolitan Region, adopted by the Puerto Rico Planning Board in 1982, as amended [14]

16 Transportation Plan: Document of Public Policy and Strategy for the Development of the Transportation System of Puerto Rico (DTPW, 1991) Land Use Plans adopted by Municipalities recognized as autonomous by Law No. 81 of August 30 th, 1991 The Safe, Accountable, Flexible and Efficient, Transportation Equity Act a Legacy for Users (SAFETEA-LU), Public Law ; Title 23 United States Code Code of Federal Regulations (CFR) 23, Part 450 and CFR 49, Part 613 The 2030 Puerto Rico LRTP and this 2032 Plan, aims to consider public policy established by these and various other sources, in order to guide the implementation of transportation projects so that they reflect the needs of the community and incorporate all aspects that may affect quality of life. A primary focus of public policy related to transportation is the relationship of transportation projects and land use. Other significant issues include sustainability, intermodalism, connectivity, safety, comfort and aesthetics, environmental justice and transportation management. The Government of Puerto Rico is not alien to the fact that the earth is experiencing a longterm warming trend; human-caused increases in atmospheric greenhouse gases (GHGs) are the accepted predominant reason for this situation. To Puerto Rico s corresponding responsibility in this matter and its commitment is specifically evidenced in the concerted efforts to achieve attainment in the former PM-10 non-attainment area of Guaynabo. There are no, nor has there been any, GHG-related non-attainment area in Puerto Rico. However, the TRP-UZAs has strategies, including its coordination of transportation and land use planning and its endorsement of non-motorized facilities; do serve to reduce GHG emissions. Policy guidelines have been structured to mirror the strategic approach and are incorporated into each. 2.1 STRATEGIES FOR INTEGRATED PLANNING The quality of life strategy emphasizes the critical interrelationship between planning for transportation and land use planning. Well planned communities with compact cores, mixed land uses, walkable environments, and an integrated approach to housing, employment, goods and services, education, recreation, and government, can reduce the need for automobile travel and resist the pressures of sprawl. The redevelopment of core areas and infill of vacant areas can also help to contain the effects of sprawl and reduce the propensity to use the automobile. Cities and towns in which the use of public transportation is encouraged through community planning have a reduced need for [15]

17 automobile use and are thus less affected by congestion, pollution and other problems resulting from automobile dependence. Fostering the interrelationship between transportation planning and land use planning has several important aspects: Support and encourage the definition of a Region-based land use plan for the TPR and specific land use plans for municipalities Encourage the development of a plan for preserving the natural environment Assist local jurisdictions to define land development regulations that require consideration of land use and transportation interrelationships Devise a system of market-based incentives and fiscal measures to bring about the kind of development and redevelopment promoted by public policies An integrated effort to define a desirable future for the TPR involves a coordinated program for land use planning that meets the needs of highly urbanized areas, suburban communities with cohesive identities, smaller towns, and rural communities within the TPR. This coordination should come from the Planning Board, working in concert with local governments and community representatives and the DTPW and PRHTA. It should link land use, environmental, and social concerns with transportation components. Such a coordinated planning process would be based on the transportation that supports the land use planning criteria discussed below. Part of the strategy could be to focus all activities related to transportation planning as a linkage that supports the interconnection and integration of the each TPR with the neighboring San Juan TMA; the Aguadilla TMA; and other TPR, their economic strategies and joint land use planning vision. Notwithstanding their municipal autonomy and different economic activities, (manufacturing, tourism, agriculture, service, etc.), these Regions could coordinate Regional and inter-regional joint efforts in such a way that one Region supports the comparative advantage of the other while receiving benefits from such support. In addition to promoting integration between modes and cooperation between municipalities, an Education Program on transportation should be coordinated with the Department of Education. The goals of the education program would be to promote pedestrian and traffic safety, especially at schools, and improve the effectiveness of the transportation system by providing continuous information to users of all ages. Multiple programs would be needed in order to educate the public, especially through driver education. Promotional materials such as brochures, public service announcements, and [16]

18 training seminars for local government staff will be needed to share information on the program. The primary messages of the public education program will be to: Promote safe interaction and shared use of roadways by cyclists and automobiles Promote pedestrian safety through programs directed at children and youngsters Encourage the use of public transportation Encourage driving behavior that increases highway capacity and safety Promote the advantages of coordinated land use and transportation improvements CRITERIA FOR TRANSPORTATION SUPPORTIVE LAND USE PLANNING In order to move toward a system in which the need for mobility via the individual automobile is reduced, communities that promote less demand for travel by the automobile should be promoted. These communities are planned and designed or have been modified over time to make it easy to meet most daily needs within a relatively compact area. They have considered the interrelationships between walking to nearby destinations and the use of public transportation. This interrelationship should produce a sustainable transportation system that supports good land planning and environmental policies, that supports economic development initiatives, and that enhances safety and security. Land use planning in the TPR that is congruent with the 2030 Puerto Rico LRTP, and for this 2032 Plan, should focus on three interrelated aspects: Reinforce the urban density and mixed uses within the region, thereby reducing transportation demand Limit the extent of sprawl Protect rural, agricultural and environmentally sensitive areas Livable communities integrating walkable communities, bike paths and transit In order to reinforce the urban density and mixed uses of TPR land use decisions, development projects, and transportation infrastructure should promote dense development and redevelopment, mixing uses and following design guidelines that are appropriate to the setting. This emphasis on context-specific design can give communities a more desirable character that helps reduce the desire to escape to the suburban fringe. This context-specific approach should promote a mix of uses, providing housing, employment, goods and services, recreation and public uses in a walkable environment. Where all of these life necessities are close together and easy to access by foot or public transportation, the need for automobile trips is reduced. [17]

19 Specific strategies should be identified to promote infill of areas passed over by the wave of suburbanization and the redevelopment of those parts of the region that have been underdeveloped, or which have deteriorated over the years. This infill can reduce the impetus to go further out into the fringes of the urban zones and can help produce communities that have more internal coherence. Emphasis should be given to providing multiple modes of mobility and access. Public transportation, using públicos, buses and taxis, is an important means of meeting this objective. A continuous and interconnected network of safe and attractive sidewalks and bikeways is equally important. The effectiveness of the public transportation and bicycle and pedestrian systems can be enhanced by controlling on-street parking in core areas. This will make sidewalks and pedestrian street crossings safer and will discourage automobile travel. Parking prices are regulated by the Department of Consumer Affairs, which has resulted in very low price for parking in most areas of the TPR. In areas served by transit, parking prices should be allowed to reflect market value thereby not favoring one mode of transportation more than another. Reinforcing the urban density and mixed uses is directly related to limiting the extent of sprawl. Sprawl may be controlled by changing the prevailing suburban paradigm for building neighborhoods. It may be necessary to redefine the desirable character of future developments to make more compact and integrated communities. Developers and consumers may be influenced to make good decisions, countervailing the trend to suburban-style products, if there are models and examples of good urban development that they can relate to. Sprawl can also be controlled by other means. One is to provide incentives for new development and redevelopment as infill to already built-up areas of cities and towns, replacing deteriorated neighborhoods and inappropriate uses, and by filling in areas that have been bypassed, as discussed above. Another means is avoiding the construction of new roads to serve anticipated developments in outlying areas. This decision to limit the extent and kind of access that will be provided in fringe areas that have been in the process of suburbanizing will depend on determination to resist influences that promote expansion. Directly related to the reinforcement of the urban density and mixed uses in the TPR, and the determination to limit sprawl, is the protection of the Region s rural and environmental areas. It is important to limit the amount and character of transportation improvements that may be programmed to serve such areas. Additionally, the means should be defined to reinforce land development procedures, restricting development in these areas. It will also [18]

20 be necessary to provide these areas with alternative means of access and mobility that do not encourage or allow for development that adversely affects their character POLICY GUIDELINES The regional transportation system must be an interconnected system that promotes multimodalism by linking strategic roadway networks, transit lines, and bicycle and pedestrian facilities with ports, regional and international airports, and urban and suburban activity centers. Transportation projects that focus on multimodalism will be priorities because they incorporate the goals of sustainability and land use compatibility. Listed below are policy guidelines as part of the strategic approach of the integrated planning. Land Use and Development Contribute to achieving the goals of the regional and municipal land use plans Establish processes and standards for the design, construction, and operation of transportation facilities. Coordinate new residential and commercial developments with the planned transportation network to coordinate programming and construction Support land use policies through design and upgrades of roadways and public transportation Include transportation enhancement programs and community improvement projects in the development of a transportation project when applicable Livable and Sustainable Communities Plan parking policies for urban and suburban areas as an integral part of the transportation system and land use plans Provide incentives to only provide minimum parking for new developments Limit parking on public areas when it interrupts the flow of vehicles and affects the safety and movements of pedestrians Identify individual problems for corridors and possible solutions through studies on parking that accompany transportation projects In areas served by transit parking prices should reflect the market value Consensus Building Build consensus on issues of regional land use and transportation planning via the Metropolitan Planning Organization (MPO). Consider all the users that a transportation facility may serve [19]

21 Develop infrastructure that is balanced at the socio-economic level to foster agreeable relationships between the different Regions of the island Promote participation from the private sector in the development and implementation of transportation programs and projects Establish educational services that clearly explain the transportation system to the general public and programs that can be presented in the schools. Environment Include measures to reduce or mitigate negative impacts to environmental, community and cultural resources in the design, construction, and operation of transportation facilities Constrain the development of transportation facilities, especially roadways in areas identified for conservation Avoid negative impacts on communities, in compliance with the Executive Order on Environmental Justice Protect ecological areas of value, such as wetlands, forest, and bodies of water by adapting the design of transportation facilities to fit the setting Encourage the use of recycled materials during the construction, operations, and maintenance of transportation facilities Reduce dependency on fuels and non-renewable resources through the promotion of alternative fuel technologies and by providing tax breaks for using recycled materials and alternative fuels. Take measures to reduce negative impacts to places of ecological, historic, cultural, architectural, and agricultural value as they are considered to be non-renewable resources. Technology Consider technology initiatives that increase mobility and safety in the development of transportation projects Develop public sector capability to provide transportation management Incorporate parking into the overall transportation management Finance Promote transportation investment as an indispensable element of economic development Assign proper programmatic and budgetary consideration to the protection and capacity management of current transportation facilities 2.2 STRATEGIES FOR PUBLIC TRANSPORTATION: REHABILITATE, EXPAND AND DEVELOP [20]

22 The DTPW and the PRHTA promote sustainable cities by encouraging mass transit and transit-oriented development. In Puerto Rico, a densely populated island of 3,435 square miles, 94% of its population lives in urban areas, while in mainland United States this sector represents 79%, according to 2000 Census. The trend of urban sprawl and growth in Puerto Rico urge this integrated vision in developing roads, highways and transit infrastructure for future generations since it have a direct impact in land use and urban development. The DTPW and the PRHTA envision the development of surface transportation as a means to develop better access and mobility infrastructure for people and economic development, in order to build livable and sustainable places around the island. Strategies to enhance public transportation will benefit overall mobility by reducing the demand for roadway improvements, facilitate redevelopment of urbanized areas into more compact and walkable environments, and reduce development pressures on rural and environmental areas. It will also provide enhanced mobility for the substantial number of daily trips made from households with no automobile. Included in the development of all new public transportation projects should be consideration for pedestrian and bicycle access to the facility. The incorporation of these amenities will not only decrease automobile traffic in and around transit stations but will provide for a safer transportation system. This section summarizes strategies and policy guidelines to improve operation and mode integration between transit services PROVIDE ENHANCED AND IMPROVED PÚBLICO SERVICE Puerto Rico has historically benefited from the mobility provided by private operators of an extensive público network. For many residents, especially those without access to an automobile, públicos offer the only mean of mobility and accessibility to schools, employment opportunities, medical care, shopping, social services, and other essential needs. In urban and rural areas across the island, públicos have been a major commuter mode between the barrios and employment centers. Despite the important role that they have played in the past, público service has been declining in recent years and its future as a significant travel mode may be threatened. Increasing auto ownership has led many people to abandon shared riding in favor of driving alone. Costs for público operators have risen, making it more difficult for them to make a profit and maintain their vehicles. Regulations governing operations, routes, frequency of service, and other issues affecting the success of individual operators provide an adverse environment, which may discourage the longevity of the system. However, if público service is allowed to decline and eventually cease to exist, the Island will lose not only a critical segment of its transportation system, but also the only way of mobility for the deprived and for people without auto ownership. [21]

23 In order to strengthen the Públicos system the Commonwealth recently approved Law Number 148 of August 3, This law was created to transfer the regulatory and operation responsibilities of the transportation services provided by Públicos, Local Taxis, as well as some other private transit service providers, from the Public Service Commission to the DTPW. This means that the DTPW will be the only regulatory agency of public transportation in Puerto Rico. Law Number 5 of February 8, 2009 extended the transition period until January, By this date the DTPW will be empowered to elaborate and establish plans to enhance public transportation in all the Municipalities. This process presents an opportunity to reverse the trend of Público service decline in most parts of the Island and offer an integrated service to other modes of transportation. Currently, DTPW is working in the development of new regulations and on a Regulation Office that will offer the services to the Público and Local Taxis providers PROVIDE NEW INTER COMMUNITY EXPRESS TRANSIT SERVICES In the early history, travels in the Island were made by train and later by interurban buses. Also the mobility was provided by private operators of an extensive público network. Train service ended in the 1950s, interurban bus service essentially ended in the 1990s and público service has been declining in recent years. The automobile displaced both of these modes. However, that portion of the population having no access to automobiles and the elderly people is seriously disadvantaged by the lack of interurban transit service. These people may find the means to make short local trips on foot, by bicycle, or by soliciting rides from friends or family having access to automobiles. Nonetheless, there is the need to provide mobility for longer, more significant trips. If the quality of such service is sufficiently high, it could also offer those with auto access an alternative to auto usage for many interurban trips. An expanded and enhanced público system could be one means of providing this service. Another would involve the reestablishment of an Island wide interurban bus system, which could serve express runs between San Juan and Arecibo through PR-22 and PR-2 and other major destinations. Subsidies would be required to initiate this system and keep it running. Well-furnished motor coaches with frequent and reliable schedules could make this an attractive option to traveling long distances by auto POLICY GUIDELINES The following guidelines were developed to promote public transportation: Provide individual municipal agencies with incentives to develop local transit routes in their urban centers Plan the routes to connect with the existing and proposed transportation systems. [22]

24 Emphasize safety and security in the design and operation of transit facilities Give transit preferential treatment on roadway facilities where feasible Utilize mass transportation to promote urban densification and revitalization where applicable Recognize the importance of transportation in social programs such as welfare to work Follow federal regulations from the Americans with Disabilities Act in providing access to users Provide incentives for public transportation to reduce dependency on the automobile 2.3 STRATEGIES FOR ROADWAY NETWORK: : IMPROVE AND MAINTAIN EXISTING FACILITIES The strategic approach to transportation planning, which focuses upon enhancing the quality of life, optimizes the use of existing transportation investments through the improvement and better maintenance of existing facilities, by adding those components that will complete the regional and Island wide Strategic Highway Network (Figure 2-1), and by implementing congestion management strategies. An effective and efficient roadway system is essential to personal mobility. It must also provide effective access to ports and airports and facilitate the distribution of freight by truck throughout this region and to other parts of the island. Public transportation vehicles, such as públicos and buses, depend upon safe and efficient roadways to provide basic mobility to local residents. Figure 2-1 Strategic Highway Network [23]

25 A major focus is roadway maintenance and improvement over new construction. This approach will strengthen the transportation system by improving the current conditions without the impacts of major construction. On-going maintenance programs will limit the need for major repairs in the long run, will provide a more efficient system and increase roadway safety. Additional considerations that guide the quality of life approach to roadway improvements include adopting new standards that address a multi-modal and multi-use perspective. As well, it includes designing improvements that recognize that Puerto Rico s population is ageing and needs safety considerations, such as improved and enlarged signs, and facilities that are designed for the slower reaction time of older drivers IDENTIFY AND PROGRAM IMPROVEMENT AND MAINTENANCE OF EXISTING FACILITIES In Puerto Rico, the ability of the existing roadway network to carry traffic safely and efficiently is impaired by poor or outdated design of many important system components and the cumulative deteriorating effect of limited or deferred maintenance. New commercial development can hinder traffic flow and contribute to congestion. Prior to issuing building permits, a traffic impact analysis should be required. A major thrust of the quality of life strategy to roadways involves the reconstruction and upgrading of problem areas in the roadway system to safe standards, and the upgrading of roadway maintenance throughout the system to ensure that these standards are sustained. Improvements to the existing roadway system that can have a substantial impact on its safety and efficiency include: Identifying critical components that are the most severely impaired by obsolescence and deterioration, and programming and funding their immediate improvement. Identifying, redesigning, and reconstructing problem intersections. Adding technology enhancements to the existing system, including such items as coordinated signal systems and optimized signal timing for major corridors and town centers. Initiating congestion management strategies, such as staggered work hours, carpooling and vanpooling, promoting home-based work, the designation of HOV lanes, and improved incident detection and management. To implement this process significant policy changes will be required. Upgrading critical parts of the existing network to enhance capacity and eliminate bottlenecks. These include grade separations or urban interchanges to relieve severely congested intersections, limited widening of congested arterial sections [24]

26 where adjoining, land use permits, and minor intersection canalization and approach widening to improve safety and capacity. Promoting through Commonwealth and municipal transportation agencies the adoption of pavement preservation programs to extend pavement service life, improve safety, and lower life-cycle costs. Such programs could be coordinated with public sector, highway users, industry groups, and non-profit organizations. Upgrading critical parts of the existing network to enhance capacity and eliminate bottlenecks. Previous plans have identified many proposed improvements to address specific problem points or arterial sections. These improvements include grade separations or urban interchanges to relieve severely congested intersections, limited widening of congested arterial sections where adjoining land use permits, and minor intersection channelization and approach widening to improve safety and capacity. The Immediate Action Program (IAP) was developed with the assistance of local and DTOP regional staff and officials who know where the existing problem areas are located. This PR 2032 Five TPR-UZAs LRTP includes recommendations for an increased and sustained budget dedicated to roadway maintenance to raise the overall safety and quality of service of the roadway system, especially secondary and tertiary routes where maintenance is often inadequate. Also, the TPR focuses upon improvements to existing roadways, rather than the recommendation of new corridors COMPLETE KEY COMPONENTS OF THE STRATEGIC ROADWAY SYSTEM The Commonwealth s Strategic Highway Network is the backbone of the island s transportation system. Through its coastal circumferential and cross-island corridors, this system will soon connect all parts of the island with high-speed, high-capacity expressways. The Commonwealth has followed a policy of operating most of the Strategic Network routes as toll facilities to finance their construction. The Strategic Network is nearing completion, and one of the most significant remaining gaps in the expressway system is the completion of PR-10 (Adjuntas-Utuado section), and the PR-2/22 corridor between Hatillo and Aguadilla 1. However, serious environmental and community impact issues must be resolved before these gaps can be completed. The DTPW/PRHTA is currently exploring ways to reduce potential adverse impacts caused by eliminating these system gaps, particularly by trying 1 This PR-2 corridor, including the proposed extension of PR-22 between Arecibo and Aguadilla, is also a critical part of Puerto Rico s Strategic Highway Network. The proposed extension of PR-22 is currently the subject of a detailed Environmental Impact Study. [25]

27 to work within existing highway rights-of-way and alignments, wherever possible and specially by looking for Public Private Partnerships to provide the necessary investments. Completion of the Strategic Roadway Network within the TPR s, is essential both for island wide and regional reasons. It will also be important to ensure that both long-distance and local/regional traffic needs are reflected in the planning and design of this facility. During the planning of any freeway construction or reconstruction rest/service areas should be considered. The development of safe and effective, high-capacity roadways in these corridors is of critical importance to person and freight mobility and economic vitality throughout the island. Access to Local Communities from the Strategic Highway Network In designing expressways along the principal Island wide corridors, PRHTA includes appropriate interchanges and other road improvements to connect to the local road system in the immediate vicinity. However, there is usually need for further local road improvements, beyond the immediate vicinity of interchanges, in order to complete effective connections to towns and communities not directly served by expressway facilities. During the past decade, therefore, PRHTA has implemented a program to improve these connections to the strategic highway network. Much remains to be done in improving connectivity and accessibility. Efforts must be balanced with land use development control, widespread public transportation improvements, and new services using these roadways. Otherwise, additional highway capacity will likely just promote more urban sprawl and other problems. A broader program of access improvements in communities along important corridors goes beyond those measures required for improving connections to ports, airports, and special development areas. These improvements, tuned to local and regional land use plans and policies, could include limited roadway widening, straightening of alignments, intersection improvements, safety improvements, traffic signalization, and in some cases, special design considerations to address the unique needs of truck, pedestrian, bicycle, and transit traffic, and access to satellite bus/público terminals near the expressway. Such improvements are normally not within the scope of expressway design and construction projects. However, while local in their application, they are essential to effective multimodal functioning of corridor facilities and services. If people cannot readily access corridor facilities and transit, their function and effectiveness is compromised. At present, all of these issues need to be addressed within the constraints of the very serious financial situation of transportation agencies in Puerto Rico, and the economic [26]

28 recession that limits government expending in general. This context requires innovative financing and partnerships, both public-public (between various government levels and entities) and public-private (between public agencies and private businesses) to ensure adequate investment levels in the transportation system, and appropriate maintenance and operation of existing facilities POLICY GUIDELINES The following are the policy guidelines established for the roadway component: Revise current regulations for the construction of roadways to assure that the design serves both the needs of pedestrians and vehicles Design projects in a way that will discourage low density development and/or urban sprawl Conduct traffic impact analysis prior to issuing building permits for new commercial and residential developments in congested areas Consider aesthetic elements related to the urban, suburban or rural characteristics during design Consider the inclusion of rest/service areas in any new construction or reconstruction of the freeways 2.4 STRATEGIES FOR NON-MOTORIZED MODES IN THE TPR: IMPROVE, EXPAND, MAINTAIN, AND EXTEND Non-motorized modes are integrated into the transportation plan to promote the quality of life strategy. Pedestrian and bicycle facilities encourage densification and incorporate land use and mobility by providing access to resources while preserving the environment and enhancing sustainability The quality of life strategy recognizes the importance of improvements to the network of nonmotorized modes pedestrian and bicycle facilities as well as hiking and equestrian trails. It is based on the premise that providing an effective system for walking and bicycling can reduce the need for automobile trips and can increase the effectiveness of public transportation. Additionally, it can reinforce the desirability of interconnected mixed-use development projects of moderate and high density that could result from a new planning model for community building. Improvements to the systems for non-motorized modes can be improved by: Providing for improvement, expansion, and maintenance of existing facilities Planning and funding new facilities Coordination between island wide and local efforts Ensuring that existing and new pedestrian and bicycle facilities are interconnected with public transportation Providing new development guidelines requiring pedestrian and bicycle facilities in future developments [27]

29 Depending of the adoption of non-motorized projects by TPR-UZAs municipalities, these systems should be expanded with the objective of an interconnected system throughout the Regions. At the time of the preparation of the 2030 Puerto Rico LRTP, an island wide bicycle and pedestrian plan was being prepared by the DTPW. While that study has not yet been released for this 2032 Plan, the preliminary recommended actions for the TPR have been made available for inclusion in this document. In the 2040 Plan this issue will be addressed more thoroughly IMPROVE PEDESTRIAN AND BICYCLE FACILITIES There are basically two types of pedestrian and bicycle facilities: Non-motorized environments within urban areas and town centers (e.g. streets and sidewalks) that encourage both pedestrian and bicycle use as a regular means of access and mobility Recreational trails for both bicyclists and walkers that extend through scenic or recreational areas, which may be in both urban and rural settings Within town centers, both sides of streets typically have continuous and interconnected sidewalks, and this is the basic network for pedestrian access throughout these centers. They provide access and mobility independent of automobiles and may enhance access to public transportation. Sidewalks are a reliable and safe mean of mobility when they meet some key criteria. These include facilities that are continuous and interconnected, without obstructions that might require users to step into the path of automobile traffic using the street. They should be wide enough to allow for safe movement for all users including those in wheelchairs; and they should be free of obstructions, including parked cars, dumpsters, utility poles, walls, and fences. Sidewalks should be paved in a continuous and smooth surface that is in good repair. They should be provided with safe and well-marked crosswalks and ramps for wheelchairs at intersections. This may take the form of regularly spaced street trees and awnings, arcades, and other overhead shelters. Sidewalks may invite more frequent use when they are provided with amenities that make the walking experience enjoyable. These include landscaping, attractively designed pavement patterns, street furnishings such as lighting, seating, transit shelters, screening from unsightly or unsafe adjacent uses, and trash receptacles. In hot and sunny climates such as Puerto Rico, shade is an important component. This may take the form of regularly spaced street trees and awnings, arcades, and other overhead shelters. [28]

30 In both urbanized areas and town settings, conflicts with the automobile are an impediment to safe pedestrian and bicycle use. The most frequent conflict is the use of the sidewalk as an informal parking area, blocking pedestrian routes, and necessitating waking in the street. In addition, the narrowness of sidewalks and the street congestion make crossing the street unsafe. Bicycle facilities in urban areas and town centers that are successful allow for safe movement in street traffic through designating separate well-marked bicycle lanes. In town settings, conflicts with the automobile are an impediment to safe pedestrian and bicycle use. The most frequent conflict is the use of the sidewalk as an informal parking area, blocking pedestrian routes, and walking in the street. In addition, the narrowness of the sidewalks and the congestion in the streets make crossing the street unsafe. Successful bicycle facilities in urban areas and town centers allow for safe movement in street traffic through designating separate, well-marked bicycle lanes. Most of the past efforts at designating and developing pedestrian and bicycle facilities have been focused in a few, concerned communities. These efforts include facilities for both recreational and non-recreational purposes, such as commuting, access to transit, and other purposes by identifying projects that support the overall transportation network. This document will promote livability principles among other means by: Providing more transportation choices, safe and reliable alternatives, which in the end could help to reduce dependence on foreign oil, improve air quality, and reduce greenhouse gas emissions, while promoting public health. Enhancing economic competitiveness, through improved access to employment centers, educational opportunities, services, and other basic needs by workers, students, the elderly, and others, as well as expanded business access to markets. Increasing the accountability and effectiveness of all levels of government to plan for future growth as is intended in this PR 2032 FIVE TPR-UZAs LRTP EXPAND PEDESTRIAN AND BIKE ACCESS Two types of pedestrian and/or bicycle facilities could make non-automobile trips more appealing. First, access to public transportation stops and terminals can be improved with continuous sidewalks. By providing good pedestrian access to public transportation, ridership will increase and automobile trips can be reduced. It will also be important to enforce parking and other regulations to ensure that these pedestrian facilities are not blocked. [29]

31 Second, networks of pedestrian/bicycle facilities need to be created to allow pedestrians and bicyclists to take longer trips. Existing trails that are not continuous could be connected together to form part of a pedestrian/bicycle network of paths. Improved pedestrian and bike trails providing access to recreational areas, beaches, and points of interest can be an important incentive for increased tourism. On a smaller scale, urban pedestrian and bicycle networks could be extended into suburban and rural areas, possibly with Commonwealth financial assistance but primarily at the initiative of municipalities. Local governments could solicit help from private developers in the form of land donations or reservations for trails and/or in the construction of trails through their properties POLICY GUIDELINES The Puerto Rico Government Program ( ) includes several strategies related to transportation, energy and environment. It proposes therefore the adoption of green plans that aim for energy conservation, protection and conservation of natural resources as well as for the reduction of its impact on the infrastructure and the environment. It also proposes for an efficient transportation system that reduces the need for the private car and therefore the congestion and pollution by promoting the use of public transportation and other non motorized modes of transportation, in order to enhance the mobility and access in our communities. The Law #132 of the 3 rd of June, 2004 that amends the Law #22 of the 7 th of January, 2000, known as the Law for the Vehicles and Transit of Puerto Rico provides for the conditions that permit and promote the use and enjoyment of the bicycle as an alternative mode of transportation and recreation. The pedestrian and bicycle trails or linear parks proposed are known as green infrastructure. This alternative mode of transportation is the most efficient in short trips and permits the recovery and better use of our public spaces while helping reduce the vehicular congestion, the consumption of fossil fuels and by thus to the enhancement of the air quality. The following guidelines have been established for the non-motorized component for the TPR: Emphasize safety, accessibility and aesthetics in the development of pedestrian and bicycle facilities Provide incentives for non-motorized modes to reduce dependency on the automobile [30]

32 2.5 STRATEGIC APPROACH FOR PORTS, AIRPORTS AND FREIGHT The quality of life strategy focuses on enhancing the capacity of existing ports and airports to provide needed services for the future. It also recognizes the importance of Island wide and international flow of freight for the economy of the Commonwealth and the essential requirement for efficient distribution of goods throughout Puerto Rico. It further recognizes the importance of the role played by airports and ports in the vital tourism industry. The intent of the transportation plan is to focus resources on the improvement of existing facilities that can be adapted to future needs. Planning for Puerto Rico s future freight system should consider the following key assumption, issues, and characteristics, identified or developed through discussions with many public officials and private sector stakeholders. Trucks will remain the mode for freight distribution on the island for the foreseeable future. The possibility of island wide freight and/or passenger rail service appears to be beyond the timeframe of the LRTP. The future feasibility of such service is very likely to depend upon the future emergence of one or more major freight generators or attractors outside the San Juan region that could generate sufficient freight movement to justify the large investment in building a rail system. LRTP recommendations for facilities improvements, capacity expansion, and access improvements at principal ports and airports, as well as general recommendations for improved truck operations on the island s roadway network will be presented in a later section of this report POLICY GUIDELINES Policy statements reflecting the Plan s Ports, Airports and Freight mobility are stated below: Coordinate ground, air and maritime transportation services for freight and passengers Develop and implement master plans for the ports and airports of the island emphasizing, safety, access, efficient intermodal operations and freight movement Coordinate land use near ports with the Planning Board in order to avoid unplanned commercial establishments which could negatively impact port operations and potential expansion/reorganization or the connecting roadway system [31]

33 3. FINANCIAL CONSTRAINT ANALYSIS 3.1 EXISTING FINANCIAL CONDITIONS IN THE TRANSPORTATION SECTOR IN PUERTO RICO Two agencies are responsible for the construction and maintenance of State transportation infrastructure in Puerto Rico, both under the Department of Transportation and Public Works (DTPW). The Puerto Rico Highways and Transportation Authority (PRHTA) handles planning, design and development of all highways, expressways and toll freeways, as well as major reconstructions and even some major transit systems, while the Public Works Directorate (Directoría de Obras Públicas - DOP) repairs and maintains all State highways except the toll freeways and expressways. The contrast between these two entities is very sharp, with PRHTA having several sources of dedicated funds and the DOP being dependent upon annual appropriations from the Legislature. Since almost all of the investment in Puerto Rico s transportation system is by the PRHTA, the resources of this public corporation are the main focus of the analysis. The previously approved San Juan Urbanized Area 2030 LRTP documented a Financial Plan based upon then (2004) reasonable future year funding expectations. This Financial Plan was the basis for the financial constraint analysis shown in all Metropolitan and regional LRTPS approved between late 2004 and early 2006, including the one for this region. Major changes in the general economic scenario, however, resulted in both reduction of revenue tendencies and increased investment and operational costs, compared to the expectations. Particularly during the period of , local and global economic situation worsened, affecting PRHTA s funding capacity, to the degree that PRHTA s outstanding bonds were severely downgraded and bonding markets became inaccessible to the agency. Furthermore, and partly because of said changes, PRHTA suffered a serious budgetary crunch. This budgetary crunch further restricts the financial options that could be considered in this Plan. Nevertheless, PRHTA is evaluating various measures in order to recover and even widen its investment capacity and importance in the transportation system. Those adjustment measures would be considered in future amendments to be proposed on this Plan, but most cannot be yet considered in PRHTA s financial projections at the time of this writing. The following sections describe current expenditures on transportation, existing and potential sources of funding, and finally, projections of anticipated revenues and expenditures through In addition, a comparison between the revenues estimated in the 2004 LRTP projections and the real revenues collected will be presented, in order to better comprehend the present, if temporary, fiscal constraints facing the transportation system in the regions and in Puerto Rico as a whole. [32]

34 3.1.1 THE PUERTO RICO HIGHWAY AND TRANSPORTATION AUTHORITY (PRHTA) PRHTA is responsible for the construction of all state highways in Puerto Rico and, in the case of the toll roads and expressways; it is responsible for both construction and maintenance. PRHTA has several sources of revenue and the ability to issue bond against those sources of revenue. In addition to highway building responsibilities, PRHTA is implementing an Intelligent Transportation System (ITS) traffic control system on the expressways of San Juan and funding numerous other transportation initiatives. Further, PRHTA is a true multimodal agency, with direct responsibilities in metropolitan planning and the development and operation of major transit systems, including the Tren Urbano regional metro and Metrobús (a privately operated bus system). During the past years PRHTA has also paid for the operation of some Metropolitan Bus Authority (MBA) routes and part of MBA s handicapped (paratransit) bus service. PRHTA is the Designated Recipient (DR) of both Federal Transit Administration (FTA) and Federal Highway Administration (FHWA) funding for Puerto Rico, as well as a grantee of both federal agencies. Several PRHTA offices respond directly to the Secretary of Transportation and Public Works and assist him in all his functions and responsibilities, including acting as operating arm and support of the Metropolitan Planning Organization for all of Puerto Rico s urbanized and metropolitan areas. The scope and importance of PRHTA s roles gives further validity to the expectation that current fiscal limitations will be effectively addressed in the near future. As describe above the PRHTA as DR distribute these funds within all Puerto Rico through the planning process and programming federal regulations. The municipalities and agencies that receive funds directly from FTA through the planning process (MPO) are responsible to comply with all the applicable FTA Programs regulations. See Table C-3 for Programs Allocation for Puerto Rico. Also the PRHTA is the operating arm and support of the Metropolitan Planning Organization for all the Puerto Rico urbanized area. The MPO play a vital and continues role identifying projects that can improve the transportation system in all their aspects (road, transit projects, freight etc.) Municipalities and Agency interested in transportation projects submit petitions to be considered finance with federal funds. One of the MPO s primary responsibilities is to revise and endorse these petitions based on the Metropolitan Transportation Plan and Municipalities and Agency priorities. [33]

35 3.2 SOURCES OF PRHTA REVENUES Dedicated revenues are the major source of PRHTA revenues and are derived from the following sources: Gasoline Taxes of 16 Cents per gallon Diesel Oil Taxes of 8 Cents per gallon Annual Motor Vehicle License Fees of $15 per vehicle Highway Tolls Petroleum Products Taxes Federal Funds These revenues, excluding federal funds, have grown from a total of $453.2 million in 1999 to $532.4 million in 2009, representing a $79.2 million increase, equivalent to 17.5%. The annual growth rate during this period averaged a positive rate of 1.62%, in spite of the recent $21.5 million decline in revenues, from $553.9 million in FY2007 to $532.4 million in FY2009, mainly caused by the so-called Great Recession. The growth process of PRHTA revenues was uneven in the decade of fiscal years In the first five fiscal years of this decade ( ) PRHTA revenues increased at a moderate pace of 1.67% annual growth rate. Then, PRHTA revenues remained relatively stable in fiscal year 2005, and then jumped 12.7% in a two-year period, from $491.5 million in fiscal year 2005 to $553.9 million in fiscal year 2007, due to an average increase of about 43% in toll fares in September 2005, and the positive impact of a whole year operation new toll plazas at PR-5 and PR-66. These positive institutional factors offset the negative impact of the recession experienced by the Puerto Rico economy since the second semester of FY2006. The Great Recession intensified significantly after FY2007, affecting all major sources of PRHTA revenues, including toll receipts, gasoline and petroleum products taxes, and causing a drop of $21.5 million in total revenues from fiscal year 2007 to fiscal year Note that the PRHTA, as designated recipient, only receive and pass the federal funds that the Port Authority receives. The PRHTA don t manage the financials that involve the operating and management of the ports, for example the revenues generate from the tourism through the cruise ships REVENUE SOURCES COMPRISING DEDICATED REVENUES Table 3-1 and Figure 3-1 present the general picture of how the trends in Dedicated Revenues of the PRHTA fell short form the 2004 forecasts. Later, the situation of each revenue source will be individually analyzed. [34]

36 TABLE 3-1 PRHTA DEDICATED REVENUES (FY S) Pledge Revenues Gasoline Taxes $ $ $ $ $ $ $ $ $ $ $ Gas Oil and Diesel Oil Taxes $ $ $ $ $ $ $ $ $ $ $ Motor Vehicles Licenses Fees $ $ $ $ $ $ $ $ $ $ $ Toll Receipts $ $ $ $ $ $ $ $ $ $ $ Petroleum Tax $ $ $ $ $ $ $ $ $ $ $ TOTAL $ $ $ $ $ $ $ $ $ $ $ [35]

37 FIGURE 3-1 ACTUAL PRHTA PLEDGED REVENUES 1999 TO 2009 (FY S [36]

38 The performance of individual revenue sources that make up the Dedicated Revenue Sources of PRHTA is analyzed below. Each source is analyzed separately as to its historical trends and growth patterns. Later in this chapter, these and other potential sources of revenue will be analyzed, including projected growth rates and forecasted revenues of each source, in order to identify those revenues which could be considered for funding future transportation improvements. However, considering the negative impact of the Great Recession on PRHTA revenues, we present below a brief analysis of the special characteristics of the current recession. The Great Recession The current global recession is the longest and deepest since the Great Depression of the thirties. However, the recession in Puerto Rico has been substantially more intense and prolonged than the U.S. recession. The recession started in Puerto Rico in the first semester of calendar 2006, almost two years before the U.S. recession commenced in December 2007, according to the National Bureau of Economic Research. In fiscal year 2006, real GNP rose in Puerto Rico only by a meager 0.51%, as compared to a growth of 2.85% in U.S. real GNP. The economy of Puerto Rico entered into a full-blown recession in FY2007, when real GNP declined by -1.16%, while the U.S. real GNP rose by 1.83%, for a differential (U.S. less Puerto Rico growth rates) of 2.99 percentage points. This differential between Puerto Rico and U.S. economic growth increased to 5.65 percentage points in FY2008, when Puerto Rico real GNP dropped by -2.83% while U.S. real GNP increased by 2.82%. In FY2009, which ended June 30, 2009, the U.S. economy suffered a decline of -2.51% in real GNP, as a consequence of the recession that started in December 2007, and intensified since the third quarter of The latest official data of the Planning Board shows that Puerto Rico real GNP contracted by a record -3.74% in FY2009, showing again a differential 1.23 points as compared to U.S. real GNP growth rate. In summary, in the period from fiscal year 2005 to fiscal year 2009, the Puerto Rico economy experienced a decline of -7.1% in real GNP, while in contrast the U.S. economy grew by 5.0%. This is a clear indication of the significant difference not only in the level of per capita income between Puerto Rico and the United States, but also in the dynamics of change in economic activity. The following economic indicators confirm the severity of the Great Recession suffered by the Puerto Rico economy since fiscal year Total employment: In the four-year period between June 2005 and June 2009, total employment, according to the Household Survey, dropped from 1,276,000 to 1,117,000 workers, posting a decline of -159,000 workers or %. Unemployment rate: The unemployment rate has risen significantly during the Great Recession, climbing from an average of 10.6% in fiscal year 2005 to 15.2% in June 2009 and 15.7% in the first seven months of current fiscal year. [37]

39 Manufacturing employment: In the four-year period between June 2005 and June 2009, payroll manufacturing employment declined from 115,000 to 92,100 workers, or % in percentage terms. Sales of automobiles and light trucks: The number of automobiles and light trucks sold decreased from 139,097 in FY2005 to 77,137 in FY2009, a decline of -61,960 vehicles or %. Cement Sales: Total cement sales plunged from 43.9 million bags in FY2005 to 26.5 million bags in FY2009, dropping by million bags or %. There was a dramatic decline in PRHTA revenues evidenced in data available for the period between the fiscal years 2007 and 2009, but is inferred that it has extended beyond into at least FY 2010 as part of the so-called "Great Recession", which has brought reductions in physical investments, exports, goods consumption and loss of productivity, which translate into effects throughout the economic spectrum as seen in the reduction in the expected available local funding (appropriations) for transportation infrastructure (see the projected local funding/appropriations decline (and eventual disappearance) as presented in Tables C-01 and C-2 in Appendix C of the LRTP). Significant in this regard, according to the Puerto Rico Planning Board, is that Puerto Rico had never experienced a recession period of more than two (2) years, let alone more than three (3) as the current one (as experienced around the world). The following is a discussion of the individual revenue sources that make up the Dedicated Revenue Sources of PRHTA. Each source will be discussed separately as to its historical trends and growth patterns. Later in this chapter, these and other potential sources of revenue will be analyzed, including projected growth rates and forecasted revenues in each, in order to identify which sources could be considered for funding future transportation improvements GASOLINE TAX REVENUES Gasoline tax was PRHTA major source of revenue until FY2005. In FY2006, toll receipts surpassed gasoline tax revenues due to the substantial increase in toll fares in September of 2005 and the opening of two new toll plazas in PR-5 and PR-66. Prior to the Great Recession, gasoline tax revenues increased from $168.4 million in fiscal year 1999 to $185.9 million in fiscal year The apparent decline of $2.65 million or 1.4% in fiscal year 2005 over fiscal year 2004 can be explained by institutional factors. First, the figure of gasoline tax revenues for fiscal year 2004 includes $2.78 million in revenues collected during fiscal year 2003 that were not transferred by the Treasury Department to the Authority in that year. Thus, actual collections related to gasoline consumption in fiscal year 2004 amounted to $ million instead of $ million. In addition, the impact of Act #80, approved on March 15, 2004, changing the tax base to volumes measured at 60- degree Fahrenheit, exerted a negative impact on gasoline tax revenues during three and a [38]

40 half month of fiscal year 2004, while it affected collections of this tax during the twelve months of fiscal year Consequently, this Act reduced gasoline tax revenues by about $2.0 million in fiscal year 2005 as compared to only $0.58 million in fiscal year In the absence of those institutional factors, gasoline tax revenues in fiscal year 2005 would have surpassed by 0.84% the level attained in fiscal year 2004, a result more in line with an estimated increase of 1.22% in gasoline consumption. After fiscal year 2005, gasoline tax revenues were negatively affected by two extraordinary events, the Great Recession and a severe energy crisis. In addition to the Great Recession previously analyzed, gasoline prices rose significantly in fiscal years 2006 to The average price of gasoline averaged $2.67 per gallon in that period, surpassing by $0.73 per gallon or 37.6% the average price in fiscal year 2005 ($1.94 per gallon), and reaching a historical high of $3.95 per gallon in June This unprecedented scenario explains while actual gasoline consumption and gasoline tax revenues fell short from their 2004 projections. However, the behavior of gasoline consumption and gasoline tax revenue showed significant resilience to the impact of negative factors, revealing low income and price elasticities. In spite of an extraordinary negative environment, gasoline tax revenues only dropped by 6.1% from fiscal year 2005 ($185.9 million) to fiscal year 2009 ($174.6 million). It is expected that oil prices would be higher than historic average prices in the next years through (this is also valid for this 2032 Plan) therefore affecting both retail gasoline market and tax collection capacity. FIGURE 3-2 GASOLINE TAX REVENUES PROJECTED VS. REAL REVENUES FOR FISCAL YEARS , ,000 $(000s) 100,000 50,000 Forecast (2004) Real Fiscal Years 2 U.S. Department of Energy, International Energy Outlook (IEO) 2009, Report DOE/EIA-0484 (2009), May 27 th, In the IEO2009 reference case, the price of light sweet crude oil in the United States (in real 2007 dollars) rises from $61 per barrel in 2009 to $110 per barrel in 2015 and $130 per barrel in [39]

41 3.2.3 DIESEL OIL TAX REVENUES The 4-cent diesel oil tax is a minor source of revenue for the Authority, which amounted to $13.70 million in fiscal year 2009, only representing 2.6% of total recurrent revenues ($532.4 million). We must underscore that revenues from the diesel oil tax increased sharply in fiscal year 1995, when Act #74, approved on August 12, 1994, eliminated the exemption until then enjoyed by the Electric Power Authority applied to the consumption of the so-called Fuel #2 (Middle distillates), which then became the source of more than 50% of total revenues from this tax. Afterwards, revenues from the diesel oil tax followed an upward path from fiscal year 1995 through fiscal year Then, after fiscal year 2000, collections of this tax were affected by a negative structural change, when the AEE started to buy electricity from private co-generators (Eco-Eléctrica and Applied Energy Systems) using natural gas and coal as fuel. AEE s purchases of electricity from private co-generators caused a reduction in the use of taxable middle distillates (Fuel #2) by the AEE, and consequently in the revenues generated by the diesel oil tax. In addition, the consumption of Fuel #2 by the AEE has historically followed an erratic pattern, since this type of fuel is a lot more expensive than residual fuel oil (Fuel #6). Thus, the AEE have always tried to reduce as much as possible the usage of fuel #2. Figure 3-3 Diesel Oil Tax Revenues Projected vs. Real Revenues for Fiscal Years $(000 s) Forecast (2004) Real Fiscal Years In fiscal years 2003 to 2006, diesel oil tax revenues dropped to levels between $14.5 and $17.0 million. Diesel oil tax revenues rose in fiscal years 2007 and 2008 to levels between $18.0 and $18.5 million, mainly as result of an increase in consumption by the AEE caused by a fire in the Palo Seco generating plant that led to the closing of this facility during the second semester of fiscal year Revenues from the tax on diesel oil dropped again from $18.07 in fiscal year 2008 to $13.70 million in fiscal year 2009, a decline of $4.37 million or 24.2%. This significance decline was mainly due to a lower consumption of [40]

42 taxable Fuel #2 (Middle Distillates) from the Electric Power Authority (AEE), which contributes with more than fifty percent to total diesel tax revenues. The lower consumption of the Fuel #2 by the AEE was caused by the reopening of the Palo Seco generating plant, which fully operated in fiscal year 2009, and the decline of -5.36% in electricity generation caused by recessionary economic conditions, which tend to affect more negatively the demand for high cost Fuel #2. Except for fiscal year 2005, revenues collected during the period did not reach the 2004 projections (Figure 3-2), not only due to an adverse economic environment but mainly to actions taken by the AEE to curtail the use of taxable Fuel #2) MOTOR VEHICLE LICENSE FEE REVENUE Act No. 9 of 1983 increased the Vehicle License Fees by $15.00 and earmarked the revenue from this additional fee to be placed in a special fund for use by PRHTA. However, since its inception in fiscal year 1984, motor license fees have remained as a relatively minor source of revenues for the Authority. In fiscal year 2009, the Authority received $36.30 million on account of the $15 fee per motor vehicle, which represented 6.8% of total dedicated revenues. Revenues from motor vehicle license fees increased steadily from $28.09 million in fiscal year 1999 to $32.49 million in fiscal year 2004, posting an increase of $4.4 million or 15.7%, equivalent to an annual growth rate of 2.95%. These numbers imply that the stock of vehicles in operation rose from 1,873,000 in fiscal year 1999 to 2,166,000 in fiscal year In the period of fiscal years 2004 to 2007, revenues from motor vehicle license fee followed a downward trend, dropping to $31.10 in fiscal year Since the license fee per vehicle transferred to the Authority has remained constant at $15.00 since its inception in 1984, this decline in revenues implies that the total number of vehicles holding a license dropped from 2,166,000 in FY2004 to 2,073,000 in FY2007, a decline of 93,000 motor vehicles in a three-year period. Considering that the sales of new automobiles reached extraordinary high levels in FY2005 and FY2006, the decline in revenues from license fees in the period of fiscal years 2004 to 2007, can only be related to institutional problems in the transferring of funds from the Treasury Department to the Authority, which could have occurred after motor vehicle license fees were allowed to be collected in certain retail gasoline service stations. This hypothesis was confirmed by certain extraordinary payment that the Authority received in fiscal years 2008 and 2009, from previous year collections, which raised revenues from the motor vehicle fees to a record level of $36.30 million in fiscal year Thus, the level of revenues from motor vehicle license fees in fiscal year 2009 surpassed by $8.22 or 29.3% the amount collected in fiscal year 1999 ($28.09 million). This represents an annual growth rate of 2.6% over the decade Finally, although revenues collected between fiscal years 2004 and 2009 fell short from the 2004 projections, as shown in Figure 3-4, the difference was quite minor in fiscal year TOLL REVENUES In fiscal year 1999, toll revenues generated $ million from the operation of 21 toll plazas in three Expressways: 9 plazas in Don Luis A. Ferré Expressway (PR-52); 7 plazas in [41]

43 De Diego Expressway (PR-22); and 5 plazas in PR-53 Expressway. The amount collected in toll plazas represented 25.6% of total dedicated revenues of the Authority in fiscal year 1999 ($ million). In the period of fiscal years 1999 to 2005 toll revenues of those 21 toll plazas followed an ascending path, and the plaza of Martinez Nadal Expressway (PR- 20) entered in full operation in fiscal year In fiscal year 2005, toll revenues of the 22 plazas in operation had increased to $ million, posting an increase of $30.26 million or 26.1% over fiscal year 1999 ($ million), thus growing at an annual rate of 3.9%. In fiscal year 2005, toll revenues were the second source of income for the Authority and accounted for 29.8% of total dedicated revenues ($491.5 million). FIGURE 3-4 MOTOR VEHICLE LICENSE FEE REVENUES PROJECTED VS. REAL REVENUES FOR FISCAL YEARS $(000 s) Forecast (2004) Real Fiscal Years In fiscal year 2006, toll revenues became the major source of revenue for the Authority, due to an average increase of about 43% in toll fares, implemented on September 10, 2005 for the 22 plazas in operation, and the opening of new toll plazas at PR-5 and the Eastern Corridor (PR-66). Toll revenues jumped to $ million in fiscal year 2006, becoming the main source of income of the Authority. Then, toll revenues experienced an additional expansion in fiscal year 2007 to a level of $ million when plazas of PR-5 and PR-66 entered in full operation. Thus, toll revenues increased from $ million in fiscal year 2005 to $ million in fiscal year 2007, posting an extraordinary increase of $73.66 million, equivalent to 50.4%, in a short span of two years. After fiscal year 2007, toll revenues have followed a mild declining trend, mainly caused by these two factors: 1) A decrease in traffic through most toll plazas, due to the negative impact of the Great Recession and the substantial increase in toll fares after September 2005; and 2) The five cent reduction in toll fares of express lanes (Auto-Expreso) that was implemented in July 2007, which had a negative impact on toll receipts of close to $4.0 million in fiscal year Toll revenues dropped to $ million in fiscal year 2009, [42]

44 according to the audited financial statements. However, in fiscal year 2009, the external auditor firm introduced, for the first time, a downward adjustment of $1.46 million in toll receipts for deferred income on account of amounts collected but not yet earned. Thus, toll receipts comparable to the figure of fiscal year 2007 amounted to $207.93, which shows a contraction of $12.02 million or 5.46% in the period from fiscal year 2007 to fiscal year However, about one third of this contraction was caused by the five-cent reduction in express lane fares. We should point out that figures for the first seven months of fiscal year 2010 (July 2009 to January 2010) show a moderate upturn in toll receipts over the same period of fiscal year Finally, due to the negative impact of the Great Recession and the lowering of express lane toll fares, after fiscal year 2005, actual toll receipts have been lower than the amounts projected in 2004 (Figure35). FIGURE3-5TOLL REVENUES Projected vs. Real Revenues for Fiscal Years $(000 s) Forecast (2004) Real Fiscal Years PETROLEUM TAX REVENUES In 1986, the Government of the Commonwealth of Puerto Rico established a special excise tax on non-exempt petroleum products, including gasoline, by Law No. 5 of March 18, 1986, for the purpose of capturing part of the benefits that the Puerto Rican economy was receiving as a result of the substantial drop in the price of crude oil that began at the end of Later, Act #34, dated July 11, 1997, ordered the Treasury Department to transfer an annual amount of $120 million to the Authority, at a rate of $10 million monthly. The transfer of $120 million took place in fiscal years 1998 to In those fiscal years revenues from the petroleum products tax exceeded the $120 million mark, although by only $1.9 million in fiscal year [43]

45 However, since fiscal year 2004, the collection of revenues from the petroleum products tax has been short of the $120 million mark. In view of this situation, the Treasury Secretary issued a ruling determining that the transfer of funds to the Authority would be restricted to the amounts collected from the petroleum tax. The main factor causing the drop in revenues of the petroleum tax in fiscal years 2004 and 2005 was the reduction in the tax rate associated with the increase in crude oil prices. The tax rate of the petroleum tax fluctuates between $3/b and $6/b, but inversely with the price of crude oil. If the price of crude oil is $16.00 or less per barrel in any month, the tax rate reaches the maximum of $6.00 per barrel or cents per gallon. Then, the tax rate drops to $5.00 per barrel, or cents per gallon, when the price of crude oil averages between $16.01 and $24.00 per barrel. The tax rate drops again to $4.00 per barrel, or cents per gallon, when the crude oil price averages from $24.01 to $28.00 per barrel, and reaches a minimum of $3.00 per barrel, or cents per gallon when the price of crude oil exceeds $28.00 per barrel. The following table shows that the tax rate of the petroleum products tax reached very low levels in fiscal years 2004 ($3.16 per barrel) and 2005 ($3.00 per barrel), due to the extreme high in the price of oil. In fiscal year 2005, for the first time since the Authority was receiving funds from the petroleum tax, the tax rate remained fixed at the minimum level of $3.00 per barrel. The enactment of Law 80, dated March 15, 2004, changing the tax base of all petroleum products taxes to volumes measured at 60 degrees Fahrenheit also further reduced the tax rate of the petroleum products tax to $ per ambient barrel, or cents per ambient gallon. The following table shows the data regarding the taxable base, the average tax rate, and total revenues from the tax on petroleum products in the period of fiscal years 1999 to Table 3-2 shows the Total Revenues Tax on Petroleum Products. Data presented in the above table reveals that the decline in the revenues of the petroleum products tax received by the Authority in fiscal years 2004 and 2005 was not caused by a decline in the consumption of petroleum products. On the contrary, the $4.7 million decline in tax revenues from the petroleum tax in fiscal year 2004 occurred in spite of an increase of 4.9% in the tax base, which even exceeded the rise in gasoline consumption (3.9%). The tax rate also dropped by $ or 6% in fiscal year 2005, causing a further decline of $5.0 million in revenues received by the Authority from this tax, also in spite of a 1.9% increase in the tax base. The decline in the petroleum products tax revenues after 2005 is related to a drop in consumption of taxable products caused by the Great Recession and the energy crisis. However, the consumption of taxable petroleum products remained relatively stable between 33.4 and 34.6 million barrels in fiscal years 2006 to 2009, and experienced an increase of 2.0% when gasoline prices drop by 20.0%. [44]

46 3.3 PROJECTIONS FOR VS ASSUMPTIONS AND TENDENCIES As mentioned above, the previously approved San Juan Urbanized Area 2030 LRTP documented a Financial Plan based upon then reasonable future year funding expectations. Major changes in the general economic scenario, however, resulted in both reduction of revenue tendencies and increased investment and operational costs, compared to the expectations. During the period , local and global economic situation worsened, affecting PRHTA s funding capacity. TABLE 3.2 TOTAL REVENUES FROM THE TAX ON PETROLEUM PRODUCTS ( ) Fiscal Year Number of Barrels Taxed (Million) Average Annual Tax Rate ($) Total Revenues Million $ $ $ $ $ $121.9 (a) $ (b) (a) Excludes $11.0 million collected from taxes in arrears paid by a delinquent taxpayer, which was under the protection of the Bankruptcy Court. (b) Tax rate applied to one barrel of petroleum products at ambient temperature, equivalent to $3.00 per barrel measured at 60 degrees F. Two main factors negatively affected the fulfilment of the 2004 projections. First, the global recession, which has been named as the Great Recession, was the most important negative factor affecting the projections developed in The main characteristics of the recession suffered by the Puerto Rican economy were explained above. However, we must again emphasise that the economy of Puerto Rico experienced recessionary conditions [45]

47 since the second semester of fiscal year 2006, even before the commencement of the Great Recession in the United States in December The recession in Puerto Rico has also been substantially more intense and prolonged than the U.S. recession. Thus, in the period from fiscal year 2005 to fiscal year 2009, the Puerto Rican economy experienced a decline of -7.1% in real GNP, while in contrast the U.S. economy grew by 5.0%. FIGURE 3-6 PETROLEUM TAXES REVENUES PROJECTED VS. REAL REVENUES FOR FISCAL YEARS $(000 s) Forecast (2004) Real Fiscal Years The energy crisis was tthe other key factor which negatively affected the projections developed in The renewal of the energy crisis after fiscal year 2004, with unprecedented intensity, not only exerted a significant negative impact upon production levels of the global economy, but also raised the price of gasoline and other petroleum products. As explained above, gasoline prices rose significantly in fiscal years 2006 to The average price of gasoline averaged $2.67 per gallon in that period, surpassing by $0.73 per gallon or 37.6% the average price in fiscal year 2005 ($1.94 per gallon), and reaching a historical high of $3.95 per gallon in June The energy crisis started to develop in fiscal year 2005, after many years of crude oil price stability, when the average price of crude oil (West Texas Intermediate - WTI) rose to $48.80 per barrel, surpassing by $15.03 per barrel, or 44.5% the average price recorded in fiscal year 2004 ($33.77 per barrel). The price of crude oil (WTI) continued to rise in fiscal year 2006, reaching an average of $64.30 per barrel, stabilized in FY2007 at a similar high level ($63.40 per barrel), and then exploded in fiscal year 2008, when the WTI crude oil price averaged $96.84 per barrel, after reaching a record level of $ per barrel in June Although the average price of crude oil dropped to $70.07 per barrel in fiscal year [46]

48 2009, this price level was still more than double the average price of $33.77 per barrel recorded in fiscal year 2005, before the start of the Great Recession in Puerto Rico. The energy crisis negatively affected the revenues of the Authority by contributing to reduce the real income of residents of Puerto Rico, and by increasing the relative price of gasoline, diesel oil and other petroleum products. Excise taxes on these petroleum products earmarked for the Authority amounted to $289.6 million in fiscal year 2009, equivalent to 54.4% of total dedicated revenues. Finally, we must stress that the adverse economic situation is turning around. The U.S. economy has been experiencing a mild recovery since the third quarter of 2009 (first quarter of fiscal year 2010), which has exerted a positive impact on the local economy. Certain key indicators of the Puerto Rican economy have already shown signs of stabilization in the second quarter of fiscal year Another positive sign is that the price of crude oil and oil products is not expected to rise significantly in the near future. In addition, the new government administration is taking various fiscal measures to reduce the fiscal deficit and to stimulate the economy, with a combination of local and Federal economic resources, like the Stimulus Plan Act (Law No. 9 of 2009) and the ARRA funds in excess of six billion dollars that have assigned to Puerto Rico FEDERAL FUNDS In addition to the dedicated revenues, PRHTA receives substantial amounts of Federal funding. Most of this money comes from FHWA and the FTA and is used for capital and maintenance costs of highway and transit projects. The amount of these funds is shown in Table 3-3 shown below. TABLE 3-2 FEDERAL REVENUES FOR FISCAL YEARS Federal Funds (Thousands) Initial Allocations $115,000 $120,000 $135,000 $145,000 $150,000 Total Authorized Federal Funds 2 $79,160 $82,760 3 $110,440 4 $116,110 $120, Federal revenues under SAFETEA-LU; includes FHWA (basic and additional), FTA discretionary funds for Tren Urbano, FTA formula Funds, SIB projects, and prior Federal funds released; 2. Balance after penalties, deductions, and additional funds; 3.Tren Urbano reimbursements not included; 4.Balance after penalties was $108,100 but RABA added $2,340. Source: PRHWA October, BORROWING PRHTA borrows money to pay for the cost of major highway and transit projects such as the construction of PR-10 and Tren Urbano. PRHTA borrows this money by selling bonds [47]

49 which are paid backed by PRHTA s dedicated revenue sources. The cost of paying back these funds is listed below in the section on expenditures ASSESSMENT OF CURRENT REVENUE SOURCES PRHTA is fortunate to have a number of different revenue sources to fund its needs. All sources have a direct relationship with providing transportation services and facilities to the island s population. The three largest sources, the Gasoline Taxes, Toll Revenues and the Petroleum Tax, provide a substantial portion of revenues to PRHTA. These revenue sources represent 88 percent of total dedicated revenues. Analyses of these dedicated revenue sources by expert economic and financial analysts indicate that they are adequate to meet the bonding requirements of PRHTA debt. 3.4 FORECAST GROWTH IN DEDICATED REVENUES The current estimate of dedicated revenues from the Fiscal Year Five Year Plan is listed below. These estimates were used as the basis for projecting annual revenues out until the year 2030 (now until 2032). Growth rates used in the baseline forecast were trended from this five-year forecast and do not account for changes in the Island s, or the United States, overall economic environment. Revenue estimates beginning in 2010 are therefore based on the growth assumptions currently used by PRHTA. Sources of dedicated revenue are forecast to increase to $ million in fiscal year 2014 from a forecast of $ million in fiscal year A portion of this increase is attributed to toll revenues and gasoline taxes. See Table 3-4. TABLE 3-4 FORECAST DEDICATED REVENUES FOR FISCAL YEARS Dedicated Revenues $$ (Millions) Gasoline Taxes $ $ $ $ $ Diesel Oil Taxes $11.00 $11.00 $10.50 $10.00 $10.00 Motor Vehicle License Fees $33.00 $33.25 $33.50 $33.75 $34.00 Toll Revenues 1 $ $ $ $ $ Petroleum Taxes $98.23 $98.78 $99.24 $ $ Total Dedicated Revenues $ $ $ $ $ This total also include East Corridor Toll and AutoExpreso Two measures strongly recommended by PRHTA are accounted on revenue projections presented on Table 5-4. One of them is to eliminate the 5 cents discount granted to users of Autoexpreso, the electronic toll payment system since Such discount was implanted [48]

50 as an incentive to highway users to move out from conventional cash-in-hand payment, but the system has been well accepted and the incentive seems no longer necessary. As mentioned earlier, PRHTA is seriously evaluating other alternatives in order to broaden its financial capacity. Once the measures are approved, the MPO would be amending this LRTP, including this Financial Plan, in order to adjust its programs and priorities FORECAST GROWTH IN FEDERAL FUNDS Sources of federal funds are forecast to increase from $175.3 million in fiscal year 2010 to $292.7 in fiscal year 2012, then decrease from $ in fiscal year 2012 to $ in fiscal year Funds from the American Reinvestment and Reconstruction Act (ARRA) would be exhausted by Fiscal Year TABLE 3-5 FEDERAL FUNDS FOR FISCAL YEARS Federal Funds (Thousands) FHWA $76,087 $126,978 $192,449 $196,057 $155,939 FTA Funds $77,352 $78,125 $78,907 $79,696 $80,493 ARRA Funds * $21,876 $63,541 $21,421 $9,274 $0.885 Total Federal Funds $175,315 $268,644 $292,777 $282,027 $236,432 * ARRA funds obligations were completed during the year The above table shows the reimbursements of ARRAfunded project expenditures. Appendix C (Table C-3) shows the projected FTA funds allocation by section for this PR 2032 FIVE TPR-UZAs LRTP. It is important to mention that PRHTA is the designated recipient, for the FTA funds for Municipalities, Ports Authority and MBA, and these are transfer direct to those mentioned agencies. At this time, fiscal constraint, which is described in Appendix C, relates to all of Puerto Rico. Determination of fiscal constraint for the MPO s long-range transportation plan is 3 Some of the measures are: (1) stabilize the Petroleum Products Tax maximum cap at $6/barrel; (2) Amendments to the Traffic Law fines; (3) Full transfer of traffic violation fines to PRHTA; (4) Full transfer to PRHTA of fines coming from violations of the Weight and Dimension Program for cargo vehicles; (5) Reorganization of PRHTA and creation of an independent mass transit agency. [49]

51 predicated upon the assumption that the MPO s receipt of funding as a percentage of the statewide total will be in accordance with the long-term percentage of Island-wide revenues received by the MPO. 3.5 ACTION PLAN FOR FINANCING THE REGIONAL TRANSPORTATION SYSTEM Transportation infrastructure and operations are sound investments for the future of the Commonwealth. However, public tax funding is limited, so it is very important to spend money wisely, while leveraging the maximum possible benefits. Therefore, the Commonwealth will continue to: Make maximum use of available federal funding to leverage the most out of available local resources Plan and implement projects which promote sustainable development and improve mobility for all Continue to expand opportunities for municipal and private participation in project construction and operation Appendix C of this LRTP contains detailed projections of revenues and capital operating and debt service expenditures through FY 2032 (which is the basis for the cost constrained plans) as well as projected capital, operating and debt service expenditures through the year These projections are based on financial data provided by PRHTA. Based on the analysis of PRHTA projected revenues and capital and operating costs to 2032, reasonably expected revenues available after covering debt services costs will be sufficient to finance short term ( ) recommended projects, which results from all the Metropolitan and Regional LRTPs, as prepared based on an actualized financial projections. See Appendix C, Tables C1-A and C2-A, for a detailed view of the projections of the proportion of revenues and costs assigned to the Transportation Planning Regions- UZAs through This actualization also shows that revenues and projected investment rates will be sufficient to ensure implementation of yearly Transportation Improvement Programs (TIP) and Statewide Transportation Improvement Programs (STIP) corresponding to the expected federal funding allocations for the period, both for new projects and maintenance of the system. [50]

52 PRHTA is currently undertaking a comprehensive financial turnaround program to reduce fiscal deficiencies by adopting different revenue increasing measures and expense and debt reduction initiatives. Revenue increasing measures are supported by new legislation impacting all PRHTA revenue drivers, establishing a more robust collections enforcement efforts targeting Governmental agencies as well as private entities, local appropriations from the Local Stimulus Plan (PEC, by its Spanish acronym) and the introduction of public-private partnerships. With respect to the latter, the Government of Puerto Rico enacted Act 29 in June 8, 2009, known as the Public-Private Partnerships Act ( PPP Act ) to encourage private participation in the development, finance, construction, operations and maintenance of infrastructure in Puerto Rico. The PPP Act also created a dedicated government entity, the PPP Authority, to assist pubic corporations in conducting an efficient and transparent procurement process. PRHTA in collaboration with the PPP Authority have formulated a comprehensive PPP plan for the toll roads system in Puerto Rico. PRHTA will obtain significant benefits with the establishment of PPP s in certain toll roads that include but are not limited to: i) realizing up-front funds can be directed towards debt reduction and accelerated capital improvements, ii) transferring operations and maintenance costs to private operators, iii) hold private operator responsible to implement enhanced maintenance, operations and environmental standards, and iv) establish a mandatory capital improvement program to be completed by the private operator. In addition, the up-front funds can also be used by PRHTA to finance capital improvements outside major toll roads and initiate and finalize major construction projects and works. In exchange for the up-front funds the private operator will be granted a long-term lease or concession agreement for the toll roads. PRHTA and PPP Authority have entered into a Concession Agreement with private company for highways PR-22 and PR-5, which became effective in September Expense reduction initiatives may involve personnel reduction by adopting an early retirement program, implementation of technological resources, outsourcing non essential services and reorganization of process and procedures to gain operational efficiencies. While the turnaround plan is been executed, PRHTA is operating with the support of interim financing from the Government Development Bank, mainly covering all operational expenses. It should further be noticed that the MPO planning work group already selected a specialized consultant team that will assist the development of LRTP s to the year These will be based on actualized socioeconomic, transportation system, travel and financial information. The development of these plans will complete the efforts to bridge [51]

53 these difficult times for PRHTA and all of Puerto Rico, to ensure the continued development and maintenance of the transportation system needed in this and all metropolitan and urbanized areas. See Appendix A and B, for details of the eight planning factors and the public participation process. [52]

54 TECHNICAL ADDENDUM I. LRTP TECHNICAL APPROACH AND METHODOLOGY The 2030 LRTP for the Transportation Planning Regions was the product of an extensive transportation planning process, stretching over nearly two years and involving computerized travel forecasting models to test alternative transportation improvement proposals. The product continues valid for this 2032 Plan. It is important to mention that a 2040 Puerto Rico Long Range Transportation Plan is being developed which includes a new travel demand model for Puerto Rico and each one of the transportation regions. This addendum provides an overview of the technical approach and methodology used in developing that 2030 PR LRTP. It includes a description of both the travel demand models used to estimate future travel and the network analysis process for defining and testing possible future transportation improvements. The revision of the SJ TMA assumed the travel demand analysis of the 2030 PR LRTP. This addendum also provides an overview of the technical approach and methodology used in developing the 2030 PR LRTP. It includes a description of both the travel demand models used to estimate future travel and the network analysis process for defining and testing possible future transportation improvements. A. OVERVIEW OF TECHNICAL APPROACH In the elaboration of the long range transportation plans, three primary models have been developed: A detailed model for the San Juan Region, including 38 municipalities and generally based on the San Juan Transportation Management Area (TMA) as defined by the year 2000 U.S. Census. A detailed model for the Aguadilla Region, including nine municipalities and also generally following the Aguadilla TMA based on the 2000 U.S. Census. An Island wide model that covers all contiguous municipalities. This Island wide model was used for the planning process of the rest of the five planning transportation regions. Although this section focuses on the key technical procedures and techniques used in developing the plan, it must be emphasized that transportation planning is not simply a mechanical process of collecting data, modeling travel, and defining needed improvements. The overall vision for the region and its transportation system strongly influences the nature of possible solutions to travel deficiencies. The vision guiding transportation and land use planning in the San Juan region is sensitive to environmental consequences of [53]

55 transportation investments and seeks to optimize usage of existing transportation facilities. It is cognizant of the role played by the automobile in precipitating urban sprawl and discourages major investments in new roadway corridors that will encourage further sprawl. In subsequent discussions of how the plan was developed, the role played by these and other planning considerations will be noted. The methodology for developing the 2030 PR LRTP built upon the technical approach used in preparing the 1993 San Juan LRTP. The models and techniques used in that earlier plan were overhauled and updated, using detailed travel and demographic data from the 2000 Census, supplemented by roadside travel surveys conducted in August and September of The key technical tool used in developing the LRTP is a set of mathematical models that are designed to estimate and replicate existing travel patterns in the San Juan region. They are then applied to independent forecasts of population and employment, which are the producers of travel, to yield forecasts of future travel in the region. The ability of existing transportation systems to accommodate this future travel is then assessed, and the need for system improvements is identified. Is important to recognize that is the San Juan Region model formed the basis for the development of the Aguadilla Region and Island wide models. The detailed Long Range Transportation Plan model for the San Juan Region (San Juan Region model) represented a major overhaul of the travel model that was originally developed in the early 1990s for the San Juan Regional Transportation Plan (SJRTP). Although there are interrelations between models, is the Island wide model that provides the basic data to elaborate the transportation region plans for the others five regions in Puerto Rico. 1. Overview of the San Juan Travel Model Between 1990 and 1992, a full set of then state-of-the-art and state-of-the-practice travel demand forecasting models was developed and validated for the 12 municipalities composing the San Juan region (Bayamón, Canóvanas, Carolina, Cataño, Dorado, Guaynabo, Loíza, Río Grande, San Juan, Toa Alta, Toa Baja, and Trujillo Alto). The development of the models was initiated in 1990 with the collection of transportation system and travel survey data. The travel model used for the 2030 San Juan TMA long-range transportation plan approved in January 2011 represents a major update to the 1993 travel model. Since no new household survey data were available, much of the new model calibration was based on the original 1990 household survey data. However, the 1990 household data were reexpanded to take advantage of the final 1990 Census data that became available after the original model calibration in In addition, results from the 2000 Census were used for [54]

56 the estimation of demographic and socioeconomic data required as inputs for the travel model. It should further be noted that, after the redevelopment of the San Juan travel demand model, hereby described, its use by specialized consultant teams working in several major transit proposals during 2007 to 2009 resulted in corrections to the databases and some model elements. The following discussion nonetheless continues to reflect the original exercise, since it established or confirmed the basic structure and calibration of the model Zone Structure Based on the results of the 2000 Census, the U.S. Bureau of the Census recommended a large Transportation Management Area (TMA) for the San Juan region that basically covers the eastern one-third of the island. Independently, the DTPW recommended a regionalization scheme that divides Puerto Rico into 12 Planning Regions as illustrated in Figure 3-1. The 13 municipalities included in the existing San Juan travel model comprise the Metro Northeast Planning Region. Four of the Planning Regions -- Metro West, Metro Northeast, Metro South, and Metro East -- almost exactly match the expanded San Juan TMA suggested by the Census Bureau. The area covered by the East Planning Region is identical to the Fajardo Urbanized Area defined by the Census Bureau. The three municipalities comprising the East Planning Region -- Luquillo, Fajardo, and Ceiba -- are physically as close to Old San Juan as municipalities in the Metro West and Metro East Planning Regions. Therefore, the municipalities in the East Planning Region have been included in the PRLRTP travel model for the San Juan TMA. The San Juan TMA model comprises 1,247 TAZs and 33 external stations. [55]

57 1.2 Travel Model Changes In addition to the expansion of the region included in the San Juan travel model, changes to the modeling process were implemented to address issues identified with the original SJRTP travel models: 1. The trip generation process was modified to use auto ownership and household size as explanatory variables rather than income group and household size. Local planners were more confident in their abilities to forecast auto ownership than income level for small areas in the region. Modeled trip purposes were disaggregated to better represent the types of trips made in the San Juan region. The most important change was the subdivision of the general home-based work trip purpose into trips that travel directly from home-towork and those that drop-off children at school on the way to work. Separate trip generation models were developed for each sub-purpose. Socioeconomic sub-models used to estimate households by auto ownership and household size for each TAZ were recalibrated based upon 2000 Census data. The trip generation implementation software was modified to produce trips by auto ownership level for each home-based trip purpose. The trip distribution models were recalibrated to account for the new trip purposes and the expanded study area. In addition, trips were distributed by auto ownership level. In accordance with Federal Transit Administration (FTA) modeling guidelines, trip distribution for trips made by zero-auto households was based on composite impedances that considered MBA 4, público, and shared ride service between TAZs. Distribution of trips from all other households was based upon impedances that considered only auto travel time. The mode choice models were modified to accept home-based trips by auto ownership level as input. The mode choice model constants were recalibrated for each new trip purpose / auto ownership market. Time-of-day of travel models were used for the revised trip purposes. 4 Metropolitan Bus Authority, or MBA, is known in Spanish as Autoridad Metropolitana de Autobuses or AMA. [56]

58 The traffic assignment process was updated to use Highway Capacity Manual 2000 capacity and delay calculations. The traffic assignment process was updated to perform class-based assignments, providing the capability to summarize the numbers of single-occupant vehicles (SOV), HOV, and trucks assigned to each network link. In addition, the three classes of vehicles could be simultaneously assigned to their appropriate sub-networks. For example, HOVs were allowed to use HOV only network link, as well as all network links available to SOVs. A feedback procedure was developed to achieve closure between input speeds used for trip distribution and mode choice and final speeds forecast by the traffic assignment process. 2. Overview of the Aguadilla Model A detailed travel model was developed for the Aguadilla region based upon the San Juan Region model. Since no detailed household-based travel survey data existed for the Aguadilla region, the San Juan Region model described above provided the most appropriate basis for the development of the model for the region. 2.1 Zone Structure The Aguadilla-Isabela-San Sebastián UA, defined by the U.S. Census Bureau, included some small communities in the Utuado and Camuy municipalities while the proposed planning regions, divided the regions along municipality boundaries. The modeling area boundary defined by the North West region provided a more natural break for travel modeling, especially for the collection of existing and forecast of future socioeconomic data. The Aguadilla region model comprises 540 TAZs and 21 external stations. 2.2 Travel Model Changes The San Juan Region model (trip generation rates, trip distribution model parameters, etc.) was applied using the zone structure and network structure for the Aguadilla Region. Trip rates were adjusted and mode choice model constants were modified to ensure that travel by mode (year 2000 traffic counts and público ridership) was reasonably reproduced. 3. Overview of the Island wide Model The third model specially developed for the PRLRTP was the Island wide model. As with the Aguadilla Region model, no detailed household-based travel survey data existed for Puerto Rico outside of the San Juan region. Thus, the San Juan Region model described above provided the most appropriate basis for the development of the Island wide model. However, the validation of the model was aided by the availability of 2000 U.S. Census [57]

59 journey-to-work data and data from the 2003 roadside intercept surveys performed for the PRLRTP. 3.1 Zone Structure Puerto Rico s 76 contiguous municipalities formed the basis for the Island wide model TAZ structure. A number of the municipalities were subdivided into two or more TAZs to provide for better resolution for the model. The resulting Island wide model comprises 110 TAZs. Since the islands of Culebra and Vieques are explicitly included in the Island wide model, there are no external stations. 3.2 Travel Model Changes The San Juan Region model (trip generation rates, trip distribution model parameters, etc.) was applied using the Island wide model zone and network structures. Trip rates were adjusted and mode choice model constants were modified to ensure that travel by mode (year 2000 traffic counts and público ridership) was reasonably reproduced. Trip length frequency distributions for modeled trips passing through roadside survey locations were compared to the roadside survey results for reasonability. Note that results from the Island wide model are also used in the San Juan Region and Aguadilla Region models. Specifically, modeled Island wide vehicle and transit trips to and from the San Juan Region and Aguadilla Region are summarized to produce estimates of internal-external travel for the San Juan and Aguadilla Region models. Likewise, modeled Island wide trips passing through the San Juan and Aguadilla Region models are summarized to produce estimates of external-external travel for those models. B NETWORK TESTING AND ANALYSIS The public transportation and roadway elements of the LRTP were derived from an analytical process of network development, model application, and analysis. The objective of this process was to develop recommended improvements for the LRTP that addressed existing and future transportation problems and were consistent with the plan s focus on improving overall quality of life. The process started with the modeling and analysis of base year conditions to build a foundation for developing the San Juan Urbanized Area 2030 LRTP. The base year essentially represents existing or near existing conditions, and in this case, the year 2000 was established as the base year because of its tie to Census data. Roadway and transit networks were defined to reflect 2000 conditions for those modes, and the updated travel model was used to estimate and assign 2000 travel to the networks. A calibration process assessed how well the models had replicated actual 2000 conditions and appropriate [58]

60 adjustments were made to model parameters. The results of the 2000 modeling and network analysis provided a basis for later comparing travel changes from the 2030 forecasts to base year conditions. The first networks that were defined to reflect future conditions and to which 2030 travel was assigned were the transit and roadway existing-plus-committed (E+C) networks. The DTPW in 2004 provided a description of the planned transportation improvements for which funding was committed, and these projects were coded into the 2000 network. The resulting E+C network represents the transportation infrastructure that would be available to meet future travel demand, if no other transportation improvements were made beyond those for which funds are currently committed. The public transportation E+C incorporated the Tren Urbano, which began operations in June 2005, as well as related público and bus system adjustments and improvements needed to provide access to the transit stations. The roadway E+C included the new PR-66 toll road from Carolina to just east of Río Grande, the first stage of the PR-5 expressway in Bayamón, and a number of other expressway and arterial improvements. Modeled future traffic assigned to the E+C networks was compared to system capacities to determine estimated, future capacity deficiencies or congested locations. The results of the E+C networks analyses produced proposals for new improvements to be tested in subsequent, modified future networks in an effort to relieve as much of the forecasted congestion as possible. In many cases, these improvement proposals reflect projects that have been proposed in the past by the DTPW or by previous studies, but in other cases, potential new solutions were perceived. After analyzing the results of the E+C networks, both the transit and roadway networks were modified to reflect new improvement projects, and the travel model was applied to the new or modified 2030 transit and roadway networks to test those ideas. An analysis of the 2030 networks results determined whether proposed projects had achieved their intended purposes. The capital costs of the resulting improvements were estimated, and overall program costs were compared to projected available transportation revenues to define a financially constrained LRTP. The approach for developing the financial plan is described in Chapter 6. Proposed improvement projects were prioritized according to the benefit they would produce in congestion relief, access/mobility improvement, and contribution to improved quality of life. Application of the revenue constraints to the prioritized improvements yielded a LRTP including only those new projects that can be funded under projected revenues through As noted earlier, priority was given to greater funding of maintenance and operations for transit and roadway networks to maximize the benefits from past infrastructure investments. [59]

61 While the results of this 2030 network analysis produced the recommended actions that are reflected in the LRTP, it is expected that the continuing transportation planning process for the San Juan TMA will work through more iterations of the network modeling process to test new ideas over the coming months and years. In fact, the methodology, technical approach, and public involvement program put in place in the course of developing the San Juan Urbanized Area 2030 LRTP are more important than the plan itself, because that methodology allows the plan to be updated periodically in response to changing conditions in the region. Just as the 1993 San Juan travel model provided the technical foundation for developing the San Juan Urbanized Area 2030 LRTP, the updated model developed over the last few months will provide the foundation for future model updates to reflect demographic changes in the region. 1.1 Public Transportation Network The existing public transportation network serving the island of Puerto Rico consists mostly of público routes that are present in or near the major urban areas throughout the island. The operational characteristics of this mode lead to scheduling uncertainties, which have been taken into account in the calibration of the Island wide Travel Model and is reflected in the travel forecasts. A summary of travel by mode is presented in Table A-1. Also, Table A-1summarizes the forecasts for all trips occurring outside of the San Juan and Aguadilla metropolitan area by all motorized travel modes. Trips originating in or destined to either San Juan or Aguadilla are also included in Table A-1. Finally, trips that begin in Aguadilla and travel to San Juan, or vice versa, are included since those trips travel through the portion of Puerto Rico that is included in the PRLRTP. Approximately 30% of all trips in motorized vehicles made on the island in 2000 have been included in Table A-1. The remaining 70% of the trips in motorized vehicles occurred strictly within the San Juan or Aguadilla regions. Approximately 15% of all person trips were home-based work trips. The home-based other category accounted for almost twothirds (62%) of the total person trips and non-home-based trips accounted for the remaining 23% of person trips in motorized vehicles made by residents of the island. Only about 1% of the total daily person trips made in 2000 (outside of the San Juan and Aguadilla regions) used públicos. Most of the público use could be attributed non-work trips including trips made by children taking the mode to and from school. Very little home-to-work commuting was performed in the region outside of the San Juan and Aguadilla metropolitan areas using this mode. Approximately one-half (49%) of the home-based work trips included two or more individuals per automobile. This can be explained by the tendency of many drivers picking [60]

62 up or dropping off household members on their way to and from work. The table shows that this high level of shared automobile use continued for home-based other trips and non-home-based trips as well. Mode Type TABLE A-1 PERSON TRIPS BY TRAVEL MODE (2000) 5 Home- Based Home- Based Auto Purpose of Trip Non-Home-Based Trips Total Person Trips Drive Alone 213, , ,246 1,284,997 HOV-2 122, , , ,110 HOV-3+ 86, , , ,484 Total Auto 422,789 1,674, ,186 2,736,591 Transit ansit Público 1,294 26,786 1,311 29,391 Total Transit 1,294 26,786 1,311 29,391 Total Person Trips 424,083 1,701, ,497 2,765, Roadway Network The 2000 roadway network is the base year highway network used for the calibration and validation of the Puerto Rico Island wide Travel Model. Vehicle Miles of Travel (VMT) assigned to that network have been summarized to establish a basis for comparison for future travel forecasts (see Table A-2). VMT has been summarized by facility type and area type or, in other words, for various classifications of roadway type and the characterization of land uses through which they traverse. TABLE A-2 ISLANDWIDE VMT BY ROADWAY CLASSIFICATION (2000 BASE) Area Type Facility Type Total Principal Minor Collector Local Urban 303,753 53,405 34,720 14, ,255 Rural 3,904,372 1,273, ,909 51,224 5,888,910 Total 4,208,125 1,326, ,629 65,601 6,295,165 Note: This table excludes the VMT calculated for the Aguadilla and San Juan metropolitan areas. 5 Note: All trips represent average weekday person trips. Trips in which both the origin and destination occur inside of the Aguadilla modeling area or inside of the San Juan modeling area have been excluded from this tabulation. The reader should refer to the respective LRTPs for those regions. [61]

63 As shown in Table A-2,, only 6.5% of the total VMT in Puerto Rico outside of the San Juan and Aguadilla metropolitan areas occurred in urban area types. The estimated urban area VMT has probably been somewhat understated since traffic analysis zones (TAZs) and area types have primarily been defined by municipalities in the Island wide model. As a result, VMT in urban areas such as Mayagüez or Ponce were probably understated due to lack of detail in those regions. Nevertheless, the summaries contained in Table can be used for comparison to travel forecasts for 2030 since the summaries have been produced in a consistent manner. The Table A-2 excludes the VMT for the Aguadilla and San Juan metropolitan areas. The primary reason for this is that the PRLRTP focuses on those po portions rtions of Puerto Rico outside of the San Juan and Aguadilla metropolitan areas. The VMT for those metropolitan areas have been reported in their respective LRTPs. In addition, the level of detail in the Island wide model for the San Juan and Aguadilla re regions gions is less than the level of detail in the regional models for those metropolitan areas. As a result, the VMT for the San Juan and Aguadilla metropolitan areas forecast using the Island wide model are not be as detailed or accurate as the VMT forecastss resulting from the individual regional models. [62]

64 The VMT summarized in Table A-2 for 2000 suggests that most VMT outside of the San Juan and Aguadilla regions is made in rural areas. This should be expected considering the rural nature of much of the island outside of the San Juan and Aguadilla regions. Approximately 67% of all VMT occurred on principal arterials. The VMT reported in Table A-2 has been summarized from the Island wide Travel Model. Travel models such as the Island wide model do not typically include or forecast VMT on local streets or, even, some collector roads. So the 67% of VMT on principal arterials should be viewed in comparison with all major roadways within the region modeled and not simply all roadways. These principal arterials chiefly included the PR-22, PR-2, PR-3, PR-53, PR-52, and PR-10 strategic highways. As illustrated on Figure A-1, the forecast 2000 traffic volumes suggest only a few areas of congestion on the island. This figure displays the volume-to-capacity (V/C) ratios estimated using the Island wide Travel Model for the morning peak period for all roadways included in the 2000 network. Most of the congested facilities are in the northeastern portion of Puerto Rico within the San Juan metropolitan region and, thus, have been considered in the San Juan LRTP. Figure A-1 identifies by numeric reference the highly congested facilities that are in the area covered by the PRLRTP. Those facilities include: PR-342 in Mayagüez PR-303/305 from PR 101 to PR-116 PR-2 through Yauco to Ponce PR-129 between PR-526 and PR-10 PR-140 between PR-143 and PR-605 PR-52 from Ponce to Cayey PR-1 between PR-536 and PR-543 PR-1 between PR-52 and PR-712 PR-642 between PR-140 and PR-641 PR-2 from Quebradillas to Manatí PR-22 from Arecibo to Manatí PR-492/493/653 from PR-130 to PR-129 PR-490/129 from PR-487 to PR-22 PR-132 between PR-382 to PR-387 [63]

65 2. Existing Plus-Committed (E+C) Network: Public Transportation and Roadway Networks An analysis of traffic assigned to the transit and roadway E+C networks reveals the levels of congestion that will result if no further improvements are made to existing transportation facilities beyond those now committed for construction. The definition, testing, and modeling results for the E+C transit and roadway networks are discussed in the following sections. 2.1 E+C Public Transportation Network The 2004 E+C transit network for the island was assumed to reflect no change in public transportation service from the 2000 transit network. Público route configurations and headways remained basically the same as in the 2000 network. A number of short routes and additional operators of existing público routes were identified in an ongoing inventory of público service on the island. The additional público routes were added to the 2000 network after the 2000 travel forecasts had been completed. As presented in the Table A-3, differences from the 2000 transit network and the 2004 E+C transit network are: Mode Type TABLE A-3 PERSON TRIPS BY TRAVEL MODE (2030 E+C) Home-Based Work Trips Purpose of Trip Home-Based Non-Home Other Trips Based Trips Auto Total Person Trips Drive Alone 229, , ,032 1,337,962 HOV-2 130, , , ,825 HOV , , , ,408 Total Auto 479,775 1,572, ,635 2,783,195 Transit Público 36, ,100 51, ,283 Total Transit 36, ,100 51, ,283 Total Person Trips 516,348 1,815, ,246 3,114,478 Note: All trips represent average weekday person trips. Trips in which both the origin and destination occur inside of the Aguadilla modeling area or inside of the San Juan modeling area are excluded from this tabulation. The reader should refer to the respective LRTPs for those regions. Público ridership is forecast to be 331,283 as opposed to the 29,391 passengers forecast for [64]

66 Overall person travel is forecast to rise from 2,765,982 person trips on a typical weekday in 2000 to 3,114,478 in This represents a 13% growth in total travel. The shares of home-based work trips (17%) and non-home-based trips (25%) both increase in 2030 when compared to 2000 and the share of home-based other trips (58%) decreases. 2.2 E+C Roadway Network Several roadway projects were added to the 2000 network to create the 2004 E+C roadway network for Each of the projects has committed funding by the DTPW or other agencies for completion within the next few years. Again, projects within the Aguadilla and San Juan metropolitan regions were excluded from the discussion in this plan and the reader is referred to those specific metropolitan long range plans for further information. The added projects were: New construction of PR-10 as a two-lane roadway between Utuado and Adjuntas. This section of PR-10 will replace the narrow PR-123 facility that winds through the mountainous region, and will improve average travel speed for travel between Arecibo and Ponce. A new 1.4 kilometer bypass will be completed on PR-138 around the south side of Coamo. Realignment of 2.6 kilometers of PR-140 in Utuado to improve travel along the western shores of Lake Caonillas. A new 2.1 kilometer bypass will be completed on PR-180 around the south side of Salinas and will intersect with PR-3 and PR-1 on the east and west ends of the town, respectively. Differences from the 2000 transit network and the 2004 E+C transit network (See TableA- 4): VMT are projected to grow by 4% between 2000 and 2030, increasing from 6.3 million in 2000 to 6.6 million in The 4% growth in VMT can be compared to a 2% growth in person trips made in autos (from 2.74 million trips to 2.78 million trips) between 2000 and [65]

67 TABLE A-4 VEHICLES MILES TRAVE TRAVELED BY ROADWAY CLASSIFICATION (2030 E+C) Facility Type Area Type Total Principal Minor Collector Local Urban 588,796 89,206 47,049 28, ,264 Rural Total 3,693,585 4,282,381 1,364,671 1,453, , ,009 45,911 74,125 5,806,127 6,559,391 N o te : Th i s ta b le e xc lu d e s th e V M T c a lc u la te d fo r th e Ag u a d i lla a n d S a n Ju a n m e t ro p o li ta n a re a s. Traffic forecast shown in Figure A-1 1 indicates that significant lengths of roadway sections will be less congested due to the added roadway improvements. The areas of congestion gestion projected to remain are noted below (the numeral shown illustrates the location on Figure A-2): PR-342 in Mayagüez PR-303/ /305 from PR 101 to PR PR-116 PR-2 from Yauco to Ponce PR-129 from PR-526 to PR--135 PR-140 from PR-143 to PR--605 [66] PR-642 from PR to PR-641 PR PR-2 2 from Quebradillas to Barceloneta PR from Arecibo to Barceloneta PR-490/129 from PR to PR-22 PR PR-132 from PR to PR-387 PR

68 The conclusion from the analysis of the 2030 E+C network reveals that there will continue to be congestion in several corridors and parts of Puerto Rico that will not be mitigated by the improvements included in that network. Based on the experience learned from the 2004 E+C analysis, a revised future network was developed, including both additional roadway and public transportation improvements. C Network Analysis: Public Transportation and Roadway Networks The network analysis consists of the evaluation of E+C network prepared for the 2030 LRTP and the addition of several major transit and roadway components. The assumptions utilized in the coding of this network as well as the output generated by the model runs are described in the following two sections. 1. Public Transportation Network The major transit component added to the 2004 E+C network to form the network was an intercity bus service that would generally loop around the entire island, making stops in most of the larger coastal communities. This bus service would have a set schedule and would operate in a manner similar to that for intercity bus service on the United States mainland. Significant government support would be anticipated to initiate this operation, to make the initial bus purchases, and to establish basic bus stations in each of the larger communities. The buses have been assumed to operate at 30-minute peak and 60-minute off-peak headways during the week. The intercity express bus fare structure is assumed to be $1.00 for boarding, plus 10 cents for each mile traveled. Three specific routes have been envisioned for this intercity bus service. The first route is a circumferential route traveling both clockwise and counterclockwise directions, with terminals at the east and west terminal stations of the Tren Urbano rail service in the San Juan region. This route would travel on the strategic highways encircling the island: PR- 22, PR-2, PR-52, PR-53, and PR-3. The PR-53 roadway has been assumed to be completed between Guayama and Yabucoa as part of the plan roadway improvements. Stops would be made in the major communities along this route. The stops would be several kilometers apart, as a minimum, in order to maintain a high level of service on the route. The second route would also operate bi-directionally between Salinas and Humacao via Caguas using PR-52 and PR-30. The location of the bus station in Caguas would be at the southern terminus of the proposed light rail system between Caguas and San Juan, allowing easy transfer to this light rail system for passengers wishing to travel between the north and south coastlines of the eastern portion of the island. This route would connect with the circumferential route around the island at Salinas and Humacao. [67]

69 The third route would be a bi-directional route on PR-10 between Arecibo and Ponce. This route would provide a north-south public transportation link in the western portion of Puerto Rico. The completion of PR-10 between Utuado and Adjuntas as defined in the E+C network would be a critical prerequisite for this transit route. This route would connect with the circumferential route around the island at Arecibo and Ponce. To complement these proposed intercity bus routes, some of the público routes may need to be rerouted to interface with proposed bus stations, and new public routes may be initiated where they do not exist today. This is most likely the case in the southwestern portion of the island between Mayagüez and Ponce. However, since público changes are under the control of private operators, owners, and the Public Service Commission, only minor modifications to ensure that existing público routes reasonably connected to the intercity bus routes were made to the plan network. While the basic público route system was not modified, the frequency of público service was doubled in accordance with plans proposed by the DTPW. As shown in Table A-5, transit trips are estimated to increase by over 21,000 trips per day for the plan network when compared to forecast based on the E+C network. A weekday total of 352,480 trips, or about 11% of total regional person travel, has been forecast to be made by transit for the plan network. Approximately 11,100 trips are forecast to use the new intercity bus service on a daily basis. Público ridership is also forecast to increase by over 10,000 trips per day. Público boarding would increase by even a greater amount since públicos can be used to access the intercity bus service. Thus, some of the 11,100 person trips forecast to use the intercity bus service might also use públicos to access the bus service. TABLE A-5 PERSON TRIPS BY TRAVEL MODE (2030 PLAN) Mode Type Purpose of Trip Home-Based Work Trips Home-Based Other Trips Non-Home Based Trips Total Person Trips Auto Drive Alone 227, , ,724 1,328,134 HOV-2 127, , , ,128 HOV , , , ,962 Total Auto 472,241 1,556, ,731 2,755,224 Transit Intercity Bus 1,691 8,353 1,059 11,103 Público 40, ,860 57, ,377 Total Transit 42, ,213 58, ,480 Total Person 514,410 1,808, ,829 3,107,704 Trips Notes: All trips represent average weekday person trips. Trips in which both the origin and destination occur inside of the Aguadilla modeling area or inside of the San Juan modeling area are excluded from this tabulation. The reader should refer to the respective LRTPs for those regions. [68]

70 Travel by mode and trip purpose for the region is shown in Table A-6. The total person trips summarized in Table 4-6 are 7,000 fewer for plan network forecast than for the E+C network travel forecast prepared for the 2030 LRTP. There is not actually a decrease in trip making forecast for the Plan. Rather, there is a re-orientation of trip making. Since Tables A-4 and A-5 exclude trips made totally within the San Juan region or totally within the Aguadilla region, the difference in trips suggest that there is slightly less interaction between the portion of the island covered by the Island Wide LRTP and the San Juan and Aguadilla regions. The shares of home-based work, home-based other, and non-homebased trips summarized for the plan travel forecast are almost identical to those summarized for the E+C travel forecast. 2. Roadway Network This 2032 Plan assumed the completion of several strategic highway projects not included in the 2030 E+C network. One of the significant elements in the 2030 Plan is the conversion of PR-2 to an expressway between Mayagüez and Ponce in the southwestern part of the island. Other major improvements are to PR-53 and PR-52 along the southern coastline and PR-3 improvements in the Fajardo and Ceiba municipalities. The specific project included in the 2030 LRTP network that was not included in the 2030 E+C network is mentioned below: PR-2 has a significant number of projects associated with its proposed conversion from a principal arterial to an expressway, primarily between Mayagüez and Ponce along the southwestern portion of Puerto Rico. This project is broken down into many different phases, with work already underway at several intersections between Hormigueros and Sabana Grande, and also in the Peñuelas-Ponce area. The implementation of access management strategies for this upgraded strategic highway will result in fewer interchanges plus the extension of local collector roadways and marginal streets in certain sections of the corridor in order to provide access to properties adjacent to PR-2. The concentration of the conversion effort will be in the Ponce, Peñuelas, San Germán, Hormigueros, and Mayagüez municipalities. The smaller communities of Sabana Grande, Yauco and Guayanilla do not have any PR-2 improvement projects incorporated into the 2030 Plan network. The total length of improved PR-2 exceeds 40 kilometers. As shown in Table A-6, forecast VMT for the 2030 LRTP was 6.37 million miles per day. This represents a decrease of almost 188,000 miles, or about 3%, when compared to the 2030 E+C travel forecast. In comparison, the number of person trips made in automobiles is forecast to decrease by about 28,000 or 1% when the 2030 Plan forecast is compared to the 2030 E+C forecast (see Tables A-5 and A-6). Since, as documented above, transit use for the 2032 Plan was forecast to be about 21,000 greater than for the 2030 E+C, about [69]

71 one-third third of the decrease in VMT can be attributed to the increase in transit use. The remainder of the decrease in VMT must be attributed to improved connectivity in the network, and the resulting reduced circuitry of travel, resulting from the improvements to the roadway network. TABLE A-6 VEHICLES MILES TRAVE TRAVELED BY ROADWAY CLASSIFICATION LRTP (2030 PLAN) Facility Type Area Type Urban Rural Total Principal 568,926 3,529,726 4,098,652 Minor 91,650 1,390,807 1,482,457 Collector 46, , ,305 Total Local 28,021 41,198 69, ,473 5,636,160 6,371,633 N o te : Th i s ta b le e xc lu d e s th e VM T c a lc u la te d f o r t h e Ag u a d il la a n d S a n Ju a n m e t ro p o lita n a re a s. This difference in VMT is reflected as well in comparing forecast AM peak period V/C ratios for the 2030 E+C and 2030 Plan forecasts (Figures A-2 and A-3). 3). In general, it appears that the 2030 Plan forecasts somewhat less congestion across the roadway sys system tem as identified by the V/C ratios, compared to the E+C network, even with the understanding that the 2030 LRTP includes slightly more roadway kilometers. Notable congested roadway segments associated with the 2030 Plan network are described below (with the numerals illustrating the location on (Figure Figure A-3) FIGURE A.3 PLAN V VOLUME TO CAPACITY (V/C) RATIOS-YEAR 2030 [70]

72 PR-342 in Mayagüez PR-2 from Yauco to Ponce PR-129 between PR-526 and PR-135 PR-140 between PR-143 and PR-605 PR-642 between PR-140 and PR-641 PR-2 from PR-638 to Barceloneta PR-22 from Arecibo to Barceloneta PR-490/129 between PR-487 and PR-22 PR-132 between PR-382 and PR-387 D RECOMMENDATIONS Within the overarching context of the vision and strategic implementation plan developed for the future of transportation and land use in the TPR, 2006 update focuses on recommendations for infrastructure projects and services, based on the analysis of transportation needs and extensive public involvement conducted for the Island Wide LRTP. For each of the TPR, recommendations of roadway and transit actions needed immediately ( ); priority was given, if the urgency of these projects were identified. Following these immediate needs, remaining recommendations have been discussed by mode (roadway, transit and non-motorized). Anticipated implementation timeframe for these actions has been categorized into short-term ( ), intermediate term ( ) and long-term ( , , in this 2032 Plan) time periods. These recommendations are categorized by mode type (non-motorized, transit and roadway) and by anticipated timeframe for implementation (immediate, short-term, intermediate-term and long-term). Cost estimates are also provided for each category. For each TPR also project for immediate action also was identified, projects for the improvement of the road system for short term and long term. It is important indicates that the recommendations based on an extensive discussion about some alternatives for evaluation and implementation; this recommendations are related to the different transportation modes. E. PR 2032 FIVE TPR-UZAS LRTP 1. Cost Adjustments and Rescheduling of Pending projects Consideration of increasing construction costs - The February, 2007 amendments to the federal Metropolitan Planning Rules, as well as other guidelines, require that the estimated [71]

73 cost of projects recommended in an 2030 PR LRTP be adjusted according to cost inflation factors applied in accordance to how far in the future the project is recommended for implementation. In accordance with these guides, the 2005 cost estimates that were presented in the March 2006 Plan had to be adjusted with inflation factors that correspond to the proposed staging of the projects. Projects that were included in the March 2006 retain the endorsement of the present 2032 Plan, but their cost estimates were inflated with an averaged 4% annual cost increase, applied according to the new recommended staging of the project. The new staging has been defined as Short Range ( ), Intermediate Range ( ) and Long Range ( ). For the short range the averaged 4% annual increase becomes a factor of 1.34, while the inflated cost estimated for projects in the Intermediate and Long Ranges are the result of multiplying the 2005 cost estimate by 1.54 and 1.80, respectively. Reasonably Expected Resources - This 2032 Plan presents a discussion of the financial resources that, on this date, can be reasonably expected to be available for the implementation of the programs and projects recommended in the March 2006 LRTP and incorporated in this 2032 Plan. This financial exercise, however, had to be conducted in a particularly difficult moment for the Highways and Transportation Authority (PRHTA), the principal investment arm of the Government of Puerto Rico for development and operation of the transportation system. At present, PRHTA s fiscal situation has deteriorated to the point that its investment capacity has been severely curtailed and its outstanding bonds downgraded. This happened because of a continued reduction in the revenue stream, with respect to the 2004 projections in which the March 2006 LRTP was based, resulting from rising petroleum costs and the deep recession affecting Puerto Rico; together with increases in operational and project costs that stressed the resources of the Authority. To correct this situation, the Authority s officials are analyzing and promoting a number of cost-reduction and revenue-enhancing measures that are expected to restitute the agency s bonding capacity within two to three years. The projections presented in Chapter 3 are nonetheless based only in existing PRHTA funding sources and conservative projection assumptions, adjusted to present year values, as required by applicable planning regulations. Those projections indicate a limited investment capacity that would be insufficient to implement the complete list of projects previously included in the March 2006 LRTP, especially after considering project cost increases due to inflation. The resources are sufficient, however, for the continuation of an investment program that permits utilization of the expected stream of federal allocations to the agency, mainly from the Federal Highway Administration (FHWA), and also maintain investment in the highways system s [72]

74 maintenance and operations. The project lists included in the March 2006 LRTP, carried over (adjusted and rescheduled) into this 2032 Plan, thus become candidate projects for the yearly preparation of the Transportation Improvement Programs (TIP), up to the amount made feasible by the actual annual allocations of federal funds. Rescheduling and Conditional Endorsement of Pending Projects - The previous section, in making reference to the fiscal constraint analysis, indicate that the PRHTA, even when basing the projected financial scenario only in existing revenue sources (adjusted for inflation), will permit utilization of the expected stream of federal allocations to the agency, mainly from the Federal Highway Administration (FHWA), and also maintain investment in the highways system s maintenance and operations. Candidate projects for using that federal funding, originally endorsed in the March 2006 LRTP, have been rescheduled and their cost inflated as described above. The resulting project lists for this 2032 Plan was presented in the TPRs-UZAs documents for ARRA Projects and Other Projects endorsed for federal funding requests - At the National level, the depth of the economic recession and financial crisis motivated the federal Administration and Congress to implement a number of programs to stimulate the economy, particularly the American Recovery and Reinvestment Act (ARRA). Puerto Rico has participated in the resulting funding program, with a number of projects for this region, recommended by the LRTP but previously unfunded. In addition to the above, a number of other meritorious but unfunded projects might be endorsed by this LRTP to compete for federal funding, subject to all applicable NEPA and other requirements. Chapter 4 presents in detail the actualization of the project lists for the PR 2032 FIVE TPR- UZAs. [73]