Jan 2012 , Vol. VI, No.1

Don't Let Tunnel Improvements Take a "Toll" on your Cost of Doing Business

The Virginia department of transportation (“VDOT”) recently announced plans to begin construction later this year on the Midtown Tunnel/Downtown Tunnel/MLK extension project, which, among other things, will create a new midtown tunnel tube and rehabilitate the existing midtown and downtown tunnels.  When construction begins, tolls will be imposed at both the midtown and downtown tunnels.  One unintended result of the tunnel improvements will be increased costs of performing construction work in Hampton Roads.  However, awareness of and planning for the following potential impacts can minimize the burden the new Hampton Roads tolls take on your construction business:

Tolls Themselves:  VDOT announced the tolls will be as follows:  for cars, $1.59 during off-peak hours and $1.84 during peak hours; and for trucks, $4.77 during off-peak hours and $7.36 during peak hours.  Therefore, if your business is located in Norfolk and you have a job in Portsmouth, the cost of driving a single company truck to the jobsite could be $14.72 per day.  The daily per-truck rate, multiplied for numerous trucks over numerous days, could increase project costs substantially.  If you bid jobs now that later will involve traveling through the Midtown or Downtown tunnels once the tolls are imposed, consider the additional cost of: tolls themselves; scheduling work to avoid tolled routes during peak hours; or additional mileage and time necessary to avoid tolled routes altogether, and factor these extra costs into your bid.

E-ZPass Required:  So as not to increase congestion at the Midtown and Downtown Tunnels, the new tolls will be collected by E-ZPass (i.e., cash will not be accepted).  Vehicles not equipped with E-ZPass will be invoiced for the tolls, and charged an additional fee, which under Virginia law can be as high as two times the base toll rate.  Imagine your $14.72 per day, per truck toll escalating to $44.16 without an E-ZPass!  Although VDOT has not yet announced the invoice fee for these particular tolled routes, the cost of using the Midtown or Downtown Tunnel nonetheless will be higher without an E-ZPass.  To minimize the impact the new tolls have on your business, take steps now to acquire E-ZPass for your company vehicles.  E-ZPass Virginia offers commercial business accounts for multi-vehicle fleets.  For more information on or to apply for an E-ZPass commercial business account, visit:  https://www.ezpassva.com/CreateAccount/CreateAccountHome.aspx.

Effect on Labor Force:  Be aware that tolls might affect your employees’ ability to get to and from work.  For an 8-hour per day minimum wage worker who commutes daily through the Midtown or Downtown Tunnel, tolls will eat up almost 5.5% of gross wages if the worker commutes during “non-peak” hours, and over 6.3% of gross wages if the worker commutes during “peak” hours.  Consider stipends for workers to help defray the cost of tolls or, when possible, alternate work times to alleviate commuting during the hours when tolls are highest.

Tolls in Hampton Roads may be unavoidable, but planning and preparation can help minimize the impact these tolls take on your construction operations.

Authored by attorney Gretchen Ostroff, these articles are meant to bring awareness to these topics and are not intended to be used as legal advice.
For more information, contact Mike at 757-446-8626 or Bill Franczek at 757-446-8600.
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