LOS ANGELES — The Columbia River Crossing Project could be financially feasible, as long as certain conditions are met, according to an Oregon State Treasury official.

In an internal memo last week to State Treasurer Ted Wheeler, Laura Lockwood-McCall, director of the treasurer's debt management division said that while critical legal and operational issues remain unresolved, the project is "financially viable at current interest rates, even under the most pessimistic toll revenue assumptions" as long as all of a list of seven conditions are met.

These include a permit granted by the Coast Guard by Sept. 30, an opinion from the Oregon Department of Justice stating it is legal for Oregon to enter into an agreement with Washington, and an enacted agreement between the two states as well as an electronic toll enforcement agreement. Currently, the crossing is not tolled.

In addition, the source of operating funds to pay for rail services into Vancouver must be identified, Oregon must retain exclusive control over setting the toll rates, and the project must secure federal funding.

The goal of the project is to replace the existing Interstate 5 bridges over the Columbia River, built in 1917 and 1958. But plans have sparked controversy, particularly from the Washington side where there hasn't been much enthusiasm for Oregon's insistence that the bridge incorporate tracks for Portland's light rail.

The project needs an $850 million grant from Congress to TriMet, Portland's public transit system, for light rail. It also needs a $900 million Transportation Infrastructure Finance and Innovation Act loan from the Federal Highway Administration by the summer of 2014.

"Given both the uncertainty of the timing and the amount of the TIFIA loan, as well as the direction of future interest rates, the State needs to be prepared to either scale back or delay some of the latter phases of the revised CRC project and/or identify additional sources of funding as the project unfolds over the next decade," Lockwood-McCall wrote in the memo.

Some of the latter phases include a Marine Drive interchange and the demolition of the old bridge. Additional funding could include increased equity contributions or an upward adjustment to toll rates.

For the project to move forward, Wheeler must approve an investment-grade analysis to protect bondholders and taxpayers from undue risk in replacing the bridge.

The internal memo, dated Sept. 3, is among status updates Wheeler has requested as data is provided to the Debt Management Division, according to James Sinks, a spokesperson for the Treasurer. He said they are not offering any analysis of the new data at this time.

The project has been in the works since 2005 and aims to lower crashes and congestion and address freight immobility, limited transit options, and earthquake risk on Interstate 5.

Funding has been estimated at around $3.4 billion and has been expected to come from the federal government, tolls, and the states of Washington and Oregon. However, Washington's Senate failed in June to authorize a contribution of matching funds for the project.

In August a plan was proposed that would reduce the total cost to $2.75 billion, avoiding the need for Washington's immediate contribution by eliminating many of the freeway interchange improvements proposed for the Washington side of the River.

According to the memo, current potential sources of funding include: $68.4 million of Oregon Department of Transportation appropriations, $381.6 million of Oregon general obligation bonds, the $850 million grant to TriMet, $892.4 from the TIFIA loan, $229.6 million from tolling, and $149.3 million from toll revenue bonds.

With the $107.8 million of Washington and Oregon DOT appropriations to date, that brings the total estimated project budget, as of Sept. 2, to $2.68 billion.

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