DS8 Population Growth of Orlando and Surrounding Counties Results in Traffic Congestion Fast growth in the population of the city of Orlando and surrounding counties, Orange County in particular, has resulted in insurmountable traffic congestion. The county has few places to turn for extra money for road improvements except to new taxes. County officials have said that the money they receive from current taxes is insufficient to widen over-crowded roads, improve roads that dont meet modern standards, and pave dirt roads. State residents now pay 12 cents in taxes on every gallon of gas. Four cents of that goes to the federal government, 4 cents to the state, 3 cents to the county in which the tax is collected, and 1 cent to the cities. The county commissioner has suggested that the county get the money by tacking an extra penny-a-gallon tax onto gasoline, bringing the total federal and state gas tax to 13 cents a gallon. This would add about $2.6 million a year to the road-construction budget. The extra money would have a significant impact. With the additional revenue, the county could sell a $24 million bond issue. It would then have the option of spreading that amount among many smaller projects or concentrating on a major project. Assuming that voters would approve a higher gas tax, the county engineers were asked to prepare a priority list outlining which roads would be improved with the extra money. The road engineers also computed the possible public benefits associated with each road-construction project; they accounted for possible reduction in travel time, a reduction in the accident rate, land appreciation, and savings in operating costs of vehicles. District Project Type of Improvement Construction Cost Annual Annual O&M Benefits I 27th Street Four-lane $980,000 $9,800 $313,600 Holden Avenue Four-lanc 3,500,000 35,000 850,000 Forest City Road Four-lane 2,800,000 28,000 672,000 Fairbanks Avenue Four-lane 1,400,000 14,000 490,000 11 Oak Ridge Road Realign 2,380,000 47,600 523,600 University Blvd Four-lane 5,040,000 100,800 1,310,400 Hiawassee Road Four-lane 2,520,000 50,400 831,600 Lake Avenue Four-lane 4,900,000 98,000 1,021,000 E Apopka-Ocoee Road Realign 1,365,000 20,475 245,700 Kaley Avenue Four-lane 2,800,000 56,000 980,000 Apoka-Vineland Rd Two-lane 1,170,000 17,550 292,000 Washington Street Four-lane 1,120,000 16,800 358,400 IV Mercy Drive Four-lane 2,800,000 56,000 980,000 Apopka Road Reconstruct 1,690,000 33,800 507,000 Old Dixie Highway Widen 975,000 15,900 273,000 Old Apopka Road Widen 1,462,500 29.250 424.200 Assume a 20-year planning horizon and an interest rate of 10%. Which projects would be considered for funding in (a) and (b)? (a) Due to political pressure, each district will have the same amount of funding, say $6 million. (b) The funding will be based on tourist traffic volumes. Districts I and II combined will get $15 million, and Districts III and IV combined will get $9 million. It is desirable to have at least one four-lane project from each district.