CC SR 20251021 01 - Toll Road FeasibilityCITY COUNCIL MEETING DATE: 10/21/2025
AGENDA REPORT AGENDA HEADING: Regular Business
AGENDA TITLE:
Consider initiating a toll road feasibility study for maintenance of Palos Verdes
Drive South within the Greater Portuguese Bend Landslide Complex.
RECOMMENDED COUNCIL ACTION:
(1)Receive and file preliminary information on legal, procedural, and regulatory
requirements including a financial feasibility analysis study and potential
unintended consequences of converting a portion of Palos Verdes Drive South into
a toll road; and,
(2)If deemed acceptable, direct Staff to return to the City Council for approval of a
professional services agreement to prepare a feasibility study to consider
converting a portion of Palos Verdes Drive South into a toll road to pay for
maintenance of the road within the Greater Portuguese Bend Landslide Complex.
FISCAL IMPACT: There is no fiscal impact to direct Staff to return with a professional
services agreement (PSA) for a toll road study; however, if the PSA
is approved by the City Council at a future date, a fiscal impact in the
range of $25,000 to $50,000 is expected, and an additional
appropriation will be requested at that time . VR
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Deanna Fraley, PE, Principal Engineer
REVIEWED BY: Ramzi Awwad, Director of Public Works
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
None
BACKGROUND:
On February 4, 2025, at the request of members of the public, the City Council directed
Staff to investigate the feasibility of converting a portion of Palos Verdes Drive South
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(PVDS) into a toll road to pay for the on -going maintenance and repair of roadway
damaged by the Greater Portuguese Bend Landslide Complex (Landslide Complex).
Staff conducted preliminary research and are now presenting for the City Council’s
consideration information on legal requirements, permits and approvals, a financial
feasibility analysis study, and potential unintended consequences of converting a portion
of PVDS into a toll road.
DISCUSSION:
Establishing a toll facility on a public roadway such as a segment of PVDS involves
multiple layers of legal, procedural, and regulatory approvals. The process is primarily
governed by the California Streets and Highways Code and requires coordination among
state, regional, and federal agencies. The following summarizes the key requirements
and approval steps for the City Council’s consideration to determine whether to continue
pursuing the feasibility of a toll road.
Legal, Procedural, and Regulatory Requirements
1. California Transportation Commission
Under Sections 143 and 149.7 of the California Streets and Highways Code, establish ing
a toll facility on a public roadway requires approval from the California Transportation
Commission (CTC). An application for approval must be submitted to the CTC by a
regional transportation agency, defined as a transportation planning agency, county
transportation commission, other local or regional transportation entity designated by
statute as a regional transportation agency, or a joint exercise of powers authority with
the consent of a transportation planning agency or county transportation commission for
the jurisdiction in which the toll facility will be located. In short, the City must partner with
Caltrans or another authorized regional transportation agency to submit an application to
the CTC, on the City’s behalf.
The CTC reviews each proposed toll facility for the following, at a minimum:
• Improves corridor performance by, for example, increasing passenger throughput
or reducing delays for travelers.
• Contained in the constrained portion of a regional transportation plan.
• Evidence of cooperation between the regional transportation agency and Caltrans .
• Complete funding plan.
In addition to the above, there are other minimum requirements the CTC requires such
as entering into agreements for law enforcement to manage emergency vehicle use and
to ensure proper law enforcement for violations on a toll road. Agreements would allow
authorized emergency vehicles ready access to the toll road and to be exempt from tolls.
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There are also necessary procedural steps such as consulting with every local
transportation authority and congestion management agency whose jurisdiction includes
the proposed facility, holding a public hearing, and reimbursing the CTC for the cost to
process the application. If the CTC approves the application, additional agreements are
needed for a local transportation authority to be established and become the lead agency
in building the toll facility, subject to certain requirements.
2. Federal Highway and Administration
PVDS is part of the National Highway System (NHS) which consists of roadways that are
important to the nation’s economy, defense, and mobility. Thus, the Federal Highway
Administration (FHWA) may also have approval authority over any proposal to convert a
portion of PVDS into a toll facility.
Proposals to modify an NHS roadway can only be made by states, in cooperation with
local and regional officials acting through metropolitan planning organizations (MPO)
such as a council of governments (in this case, Southern California Association of
Governments ((SCAG)). Additionally, the modification must be to enhance the national
transportation characteristics of the NHS as well as meet other criteria. In order to move
forward with the toll road proposal on PVDS, the City may need to work through the State
to seek FHWA approval.
3. California Coastal Commission
PVDS is within the boundary of the City’s designated Coastal Zone; therefore, the
California Coastal Commission (Coastal Commission) permit may be required to convert
a portion of PVDS into a toll road.
The City has a Local Coastal Plan (LCP) which identifies PVDS as the primary access
corridor within the Coastal Region (C-3; LCP). According to the City’s LCP, access
corridors provide coastal access to and from activity areas by vehicles, pedestrians, and
bicyclists. Changing the access of PVDS from a public roadway to a tolled roadway may
require a Coastal Development Permit (CDP), the issuance of which, is appealable to the
Coastal Commission. Additionally, changing a portion of PVDS to a toll road may require
an LCP amendment, and may not be supported by the Coastal Commission if considered
deterring public access to the City’s coastal region.
A CDP application may argue that the closure of PVDS due to insufficient funding for
maintenance is a worse condition than keeping PVDS open as a toll road; however, the
decision rests with the Coastal Commission.
Financial Feasibility
The financial feasibility of converting a portion of PVDS into a toll road to fund ongoing
maintenance of PVDS in the Landslide Complex can be analyzed through a consultant
specializing in such work. This would include forecasting toll revenue with three toll
schemes; all travelers will be tolled, only through trips will be tolled, and all travelers will
be tolled but residents will have a discount, or a combination thereof. A feasibility study
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will include an estimate of the cost of operating the toll system and a net revenue estimate
to determine the financial feasibility of a toll road on the City’s coffers.
The cost for an initial financial feasibility analysis is estimated to be in the range of
$25,000 to $50,000. Additional detailed studies would be needed following the initial
study, the cost of which is unknown at this time, but is likely to be orders of magnitude
greater than that of the initial study.
Potential Unintended Consequences
Introduction of a toll on PVDS could result in potential unintended consequence of
diverting travelers onto other roadways. Travelers may choose to avoid the toll road,
opting instead to use other arterials such as Western Avenue, Palos Verdes Drive East,
Hawthorne Boulevard, and Palos Verdes Drive North. This may introduce new congestion
or increase existing congestion on those roadways especially during morning and
afternoon peak hours, while potentially accelerating the wear and tear of these roadways.
Moreover, this could potentially impact travel to and from local schools including UCLA
South Bay when class programs begin. The initial financial feasibility analysis could
include an estimate of diverted traffic as part of the cost of approximately $25,000 to
$50,000.
Additionally, there could be unintended economic impacts of a new toll road. Visitors may
be discouraged by a toll road which may result in fewer visits to destinations such as
Terranea, Trump National Golf Club, and/or Golden Cove Center.
ADDITIONAL INFORMATION:
Staff originally considered that because PVDS is designated as an NHS roadway, grant
funding may be available to repair PVDS. However, FHWA and Caltrans have responded
that the work to keep PVDS open is considered to be maintenance and that grant funding
of NHS roadways excludes maintenance and is only for capital improvements.
CONCLUSION:
When considering converting a portion of PVDS into a toll road to fund maintenance of
PVDS in the Landslide Complex, a feasibility study by a consultant specializing in toll
roads can provide the needed information to determine whether a toll road would be
economically feasible. However, staff recommend that the City Council first consider
legal, procedural, and regulatory requirements, and potential unintended consequences.
If after considering the information presented this evening the City Council determines a
desire to continue pursuing this matter, the City Council may direct Staff to return for
approval of a professional services agreement to conduct an initial feasibility study, which
is estimated to cost in the range of $25,000 to $50,000.
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ALTERNATIVES:
In addition to Staff’s Recommendations, the following alternative actions are available for
the City Council’s consideration:
1. Do not direct Staff to return to the City Council for approval of a professional
services agreement for a feasibility study on converting a portion of Palos Verdes
Drive South into a toll road.
2. Take other action as the Council deems appropriate.
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