Link to article here.

NTTA leaders fear Dallas area’s toll road push moving too fast
Monday, December 28, 2009
By MICHAEL A. LINDENBERGER / The Dallas Morning News

As the Dallas area rushes forward in pursuit of more toll roads, warnings that it may be doing so at its own peril have been emanating from an unexpected corner: the top leaders of the North Texas Tollway Authority.

Even as the NTTA enters the final weeks of negotiations that all sides expect will conclude by Feb. 28 with a multibillion-dollar deal to build two new giant toll projects in Dallas and Tarrant counties, the agency’s two top board members have been warning that the region may be moving too fast on toll roads.

“People are going to realize that every new road in the metroplex is going to be a toll road,” NTTA vice chairman Victor Vandergriff said at a recent meeting of the NTTA board.

He was only exaggerating a little.

The Regional Transportation Council approves a 25-year plan for area transportation projects every five years – and the current plan has included a map with precious few free roads. Roads paid for with taxes have emerged as something of a luxury, one that the RTC no longer sees as affordable, given the rising needs and insufficient funds from Austin and Washington.

A new plan is in the works now, and officials say it could shift away from tolls.

But for now, tolls are fast becoming the dominant way local officials hope to move Dallas area residents from one place to another.

The NTTA already manages three major toll roads – the Sam Rayburn Tollway, the Bush Turnpike, and its oldest and still most lucrative, the Dallas North Tollway – and is collecting tolls on the first stages of a fourth, State Highway 161 in Dallas County.

Over the next six weeks or so, NTTA is expected to reach an agreement with the state Department of Transportation to complete Highway 161 and build the Southwest Parkway and Chisholm Trail toll roads in Tarrant County. A major expansion of the Bush Turnpike is under way now, and officials in Dallas continue to hope that NTTA will build the Trinity Parkway near downtown. State officials have said they want to add new tolled lanes to Interstate 35 between Dallas to Denton, as a means to pay for the expansion of that highway.

In addition, two major private toll roads, the region’s first, are expected to begin construction during the next 18 months. The Spanish toll road developer Cintra has teamed with other investors to rebuild LBJ Freeway in Dallas and Interstate 820 and State Highway 183 in Tarrant County, and will add what will probably be the costliest toll lanes in Texas on each.

Both toll projects are expected to be completed by 2016 or sooner.

“Even our free roads will soon have a toll component,” Vandergriff said.

Both Vandergriff and NTTA chairman Paul Wageman, who has also voiced reservations about the extent of tolling in Dallas, say toll roads are essential as Texas tries to keep traffic moving in the fifth-largest metropolitan area in the U.S.

But they worry that adding too many tolls, too quickly, could erode the one thing that makes them such a valuable tool in the first place: the willingness of drivers to pay their tolls.

“I do have concerns … that the public will only tolerate a certain amount of tolling,” Wageman told reporters at a news briefing in Arlington earlier this month. “We understand that to get the roads built, there is going to be a tolling component [to help pay for them]. But we are concerned because ultimately we must have public receptivity to tolling. We do not want to be in a position where that receptivity goes away, as that ultimately affects the business we are in.”

Toll roads remain a daily trade-off for hundreds of thousands of NTTA customers, who pay to save valuable time getting to work or the airport or to a meeting after school.

But will they remain popular, in the face of rising rates and as they spread to every corner of the region?

Vandergriff and Wageman voiced their worries separately this month as negotiations over Southwest Parkway and Highway 161 accelerated and brought into focus the debt required to build those roads, on top of the $7 billion NTTA already owes.

All that debt will be paid for by tolls – and if the tolls don’t produce enough revenue to satisfy bondholders, the rates would probably have to jump, just as they did earlier this year when NTTA increased rates by about 23 percent.

But raising rates will only work if enough drivers are willing to pay the higher rates to offset those who abandon the toll roads.

Already, some drivers have begun shunning the turnpikes.

Nathan Maxfield, a 35-year-old Web designer, used the Dallas North Tollway when he lived in Frisco and worked in Addison. But he began cutting back even before he moved to Plano.

In September, he started a Facebook group called People Against the NTTA.

Only about 60 others have joined his group, but Maxfield said frustration with NTTA’s rates is a common theme among his friends and colleagues.

“It was just the rising costs, and toll roads were just spreading everywhere you looked,” Maxfield said, explaining why he created the group. “It seemed like pretty soon, we wouldn’t be able to get anywhere without paying a toll.”

The North Central Texas Council of Governments is seeking input on how to shape the region’s transportation network over the next 25 years and will literally redraw the map that for the past five years has shown nearly every new road as a toll road.

If the map for the so-called 2035 Plan is to look any different from the 2030 Plan, it will likely require a mix of new taxes, new approaches, and more rail.

Michael Morris, transportation director for the council of governments, just completed a series of public hearings, and written suggestions are encouraged. Send them to mobilityplan@nctcog.org.

Toll prices in Tarrant will vary based on traffic conditions

Posted Sunday, Dec. 27, 2009

By GORDON DICKSON

gdickson@star-telegram.com

Toll lanes are coming back to the Fort Worth area after more than a three-decade absence, with a few new and expensive wrinkles.

Tarrant County hasn’t had a toll road, unless you count the Dallas/Fort Worth Airport entrance, since the Dallas-Fort Worth Turnpike was converted into a freeway (now Interstate 30) in 1977.

But more toll lanes are on the way in the western Metroplex within four years. Examples include the high-occupancy vehicle lanes under construction on I-30 in Arlington, Loop 820 in north Fort Worth, Haltom City and North Richland Hills and Texas 114/121 in Grapevine.

Tolls could go as high as 75 cents per mile when congestion is at its worst. That would be more than five times higher than the average 14.5 cents per mile that motorists currently pay on Dallas-area toll roads. It’s a concept called value pricing, a way to limit traffic on the toll lanes and squeeze more revenue from motorists to pay for roads.

Supporters of value pricing, which also drops the price of tolls when traffic is light, say motorists will have a choice — stay on the crowded main lanes, or pay their way out.

“While there will be dynamic pricing, there will still be the general-purpose lanes, and in most places we’re adding frontage roads,” said Amanda Wilson, spokeswoman for the North Central Texas Council of Governments.

Where the tolls will be

Several years ago, the Regional Transportation Council set a ceiling of 75 cents per mile on variably priced toll lanes.

The lanes would operate electronically, without toll booths. Users could prepay with a TollTag, a windshield-mounted device that sensors read as a car travels on the road. Or, for cars without a TollTag, a camera system would take a picture of the license plate and mail the registered owner a bill.

Examples of projects:

In Arlington, high-occupancy vehicle lanes on Interstate 30 could be converted to toll-managed lanes by 2011. Toll rates haven’t been set.

In 2004, the Federal Highway Administration selected I-30 as a “value pricing pilot project,” which allowed it to get around a federal law banning new tolls on interstates. The transportation council was awarded $472,000 in federal funds to plan and design the lanes from Arlington to Dallas. Single-occupant cars would pay the full toll, while carpoolers, motorcyclists and buses could use the lanes free or at a discount.

The lanes currently end at Baird Farm Road/Legends Way in Arlington but eventually would be extended to Oakland Boulevard in east Fort Worth.

In Northeast Tarrant County, a development team led by Spain-based Cintra plans to rebuild Loop 820 and Airport Freeway beginning next year. The work on the North Tarrant Express project is expected to take four years.

Existing lanes would remain free, but tolls on two managed lanes in each direction would range from $1.20 to $6.50 each way for a 13-mile trip — 9 to 50 cents per mile.

In Grapevine, developer NorthGate Constructors plans to rebuild seven highways collectively known as the DFW Connector — including two managed lanes in each direction on Texas 114/121. Exact rates haven’t been disclosed, but drivers can expect to pay an average of 64 cents for a four-mile trip beginning in 2014, and 96 cents by 2029.

Southwest Parkway

In Fort Worth, the North Texas Tollway Authority is developing Southwest Parkway, a 28-mile toll road from downtown to Cleburne. The first eight miles, from I-30 to Dirks Road, are scheduled to be under construction next year.

Although Southwest Parkway won’t be a variable-price road, it is expected that the toll rate will be 20 cents per mile by 2013, compared with the 16 cents motorists are expected to be charged on Dallas-area tollways. The tollway authority approved toll rates this year that will gradually increase through 2018, with Southwest Parkway always 4 cents higher than the standard rate.

Fort Worth officials agreed several years ago to the higher rate on Southwest Parkway to offset the cost of additional bridge work and landscaping, as well as an expected loss of revenue from keeping the speed limit no higher than 50 mph in central Fort Worth.

Elsewhere

Value-priced toll roads are increasingly being used by metro areas to limit traffic on toll roads and to generate new revenue sources for roads.

In Houston, local officials recently approved new tiers of pricing on the Katy Freeway toll lanes — $1 each way during light traffic, and $2 to $4 during peak periods.

In Southern California, the 91 Express Lanes project has been around since 1995, allowing travelers on the Riverside Freeway to pay their way around traffic — up to $9.90 for a 10-mile trip during the busiest hour of the week, 4 p.m. Thursdays.

The road has become such a part of the L.A. streetscape that gift cards are even sold on the official Web site, www.91expresslanes.com.

Can it be long before cards like that are stocking stuffers in Fort Worth?

Link to Dallas Morning News article here.

Dallas area may be first to see state’s new plan to fund toll roads
Monday, November 23, 2009
By MICHAEL A. LINDENBERGER / The Dallas Morning News
AUSTIN – Lawmakers might have left the Capitol earlier this year without getting much done when it comes to transportation. But they were clear on one point: They wanted the Texas Department of Transportation out of the business of building privately financed toll roads.

The Texas Legislature beat back attempts to extend the authority for so-called comprehensive development agreements – 50-year contracts with private companies that agree to build roads in return for toll revenue – and the department’s ability to enter into the contracts expired Aug. 31.

But less than six months later, state highway bosses may have found a loophole. And the Dallas area, already home to more toll roads than anywhere in Texas, probably is the place where they will try it first.

Last week in Austin, Texas Transportation Commission members told staff to submit plans by January for how to fast-track a roughly $4 billion expansion of Interstate 35E between Dallas and Denton. Officials say the project is a prime candidate for a new kind of financing that they concede looks a lot like the private toll deals ruled out by the Legislature.

“We’ve got to use all of these innovative ways of building highways or we won’t be building,” said commission member Ted Houghton of El Paso in an interview Friday. “It’s a fact of life. If you want us to build roads, then we are going to move forward using these kinds of tools.”

The tool in question is called pass-through toll financing, and is different, though not very, from the private toll deals lawmakers have put on ice.

Here’s how it works: A private company, usually backed by a group of banks and other investors, agrees to use its own money to build a state road, usually with the help of at least some tax dollars. In return for the new road, Texas promises to make payments to the firm based on the level of traffic it attracts. The more vehicles that “pass through,” the bigger the payment the private company will receive.

Officials say such deals involving big toll roads could last 30 years or more. So far, though, pass-through financing has only been a way for Texas to pay for a handful of smaller free roads. The per-vehicle payments simply pay back the investment by the private company, or in some cases a local government, and are not passed on to drivers in the form of tolls.

But that’s set to change, as highway officials eye using pass-through financing to deliver big toll projects in North Texas and elsewhere. Doing so will require some changes in the department’s rules, but is entirely within the department’s authority, said John Barton, assistant executive director of the Department of Transportation.

First up? Most likely the expansion of I-35E into a mixed road with both tolled lanes and free lanes, much like the LBJ Freeway will be once the Spanish firm Cintra rebuilds it over the next five or six years.

The department had planned to rebuild I-35E as a privately financed toll road using a comprehensive development agreement until the Legislature failed to extend the law that made that possible. Now it sees its choices as either delaying the work for a decade or more, or using the pass-through financing to get construction started in as soon as two to three years.

Though the deals are structured differently – in a pass-through deal, private firms take on less risk, and state payments are subject to a cap set by contract – they will come across as very similar to drivers, and to many others who opposed the deals known as comprehensive development agreements, or CDAs.

“These deals look very much like a CDA, and I want to make sure you understand that,” executive director Amadeo Saenz of the Transportation Department told a Senate hearing in El Paso this month. “We’re getting a lot of push from Denton and Dallas County [to complete more projects there]. I want to be forthright and maybe say, ‘Be careful what you are asking for.’ If you look at a private pass-through model project, it is very similar to a CDA. You are using a private firm to bring equity to the project.”

Sen. John Carona, R-Dallas, took that in stride, conceding that the agency had been woefully underfunded by the Legislature in recent years, and had to explore all of its options. But he lashed out at Houghton when he said the department also would be willing to shop a major Tarrant County toll project to private investors, if only the North Texas Tollway Authority first would relinquish its rights to the road.

“The community is not at all excited about you coming in and building toll roads,” Carona said. “NTTA builds our toll roads. … We don’t want you running toll operations in North Texas. The Legislature has been very clear.”

Houghton said Friday, “That’s fine. That’s a choice they can make.” The trouble, he said, is that NTTA doesn’t have the money to build the $1.8 billion toll project, known as the Southwest Parkway/Chisholm Trail project.

NTTA has confirmed it could need $1 billion in tax dollars or other help to keep its promise to build that road.

If that’s the case, Houghton said, why not let the state take it on, and see what kind of deal it could strike with a private firm that would compete for the opportunity?

“Competition does amazing things,” Houghton said. “It really causes the people across the table to sharpen their pencils.”

Instead, Carona wants TxDOT to guarantee NTTA’s loans to help it lower its costs, something the department has already offered to do on another area toll road, State Highway 161.

“I get the impression that you don’t want to work with NTTA,” Carona told Houghton in El Paso.

Houghton replied that his agency wants NTTA to flourish, but that guaranteeing both loans could cost the state as much as $40 million a year for many years to come.

On Friday, he said the department will not backstop the loans on both projects.

“NTTA has some decisions to make,” he said. If it wants the credit enhancement on Southwest Parkway, then it can’t have it on State Highway 161, he said. In the end, if NTTA can’t afford to do Southwest Parkway, then it should let it go, he said.

Transportation Commissioner Bill Meadows of Fort Worth, a powerful advocate for the Southwest Parkway project, said Friday that negotiations over how to structure the credit enhancement have resumed in earnest, and could be headed for a breakthrough.

If the negotiations fall through and NTTA can’t build the Southwest Parkway, then TxDOT will consider using pass-through financing to find a private partner who can, but only with NTTA’s permission, he said. “We’ll have to put every option on the table. This isn’t easy. It’s a billion-dollar hole they are trying to fill.”

No matter what happens with the long-running talks with NTTA, Saenz said his agency is determined to seek new solutions for Interstate 35E. And he is meeting with lawmakers to give advance warning that the department is proceeding with a new way of building privately financed toll roads

“I brought this up in El Paso and said it last month in Fort Worth. I don’t want to get beat up on this, but I am getting a lot of pressure … to move this project forward,” Saenz said. “I am a problem solver, and we do have a way to get these projects done.”

Under a comprehensive development agreement:

•A private firm enters into an agreement with the state to use its money, possibly with some public involvement, to build a road.•In exchange, the firm gains the right to collect tolls on that road for as long as 50 years.

•Deals can involve large upfront payments to the state for the right to collect tolls.

•The company shoulders the risk of profit or loss based on the accuracy of traffic projections, construction-cost estimates and other factors.

Under a pass-through financing deal:

•A private firm enters into an agreement with the state to use its money, possibly with some public involvement, to build a road.•Deals typically are for shorter periods of time than CDAs – 20 to 30 years as opposed to 50.

•The state agrees to pay the private firm for each vehicle that uses the road, within a maximum and minimum range.

•The state receives toll revenues, which are used to make pass-through payments.

•The state retains most of the risk.

•The deal can be used for free or toll roads.

Some private toll roads in Texas:

LBJ FREEWAY: It’s a free road now, but Spanish road firm Cintra will begin rebuilding it as a mix of free lanes and tolled lanes beginning mid-2011 or sooner. The $2.1 billion project will take five years, but once completed, drivers will have a choice: Sit in traffic on the free lanes or pay tolls that could reach $1 a mile to take the tolled lanes.

NORTH TARRANT EXPRESS: Another hybrid project, the state of Texas committed hundreds of millions of dollars toward this $2 billion effort. But the work will be done by a team led by Cintra, which will cover the rest of the costs, and collect tolls for 50 years. Construction begins next year and the highway will open by 2015.

INTERSTATE 35E: Not yet a toll project, but with the Transportation Department strapped, the only way this highway will be widened anytime soon will be if toll lanes are added. State officials say the only way it will be able to afford to build it anytime soon will be to partner with a private firm. Once funding is resolved, construction could begin within two to three years.

STATE HIGHWAY 130: In Austin, Cintra paid $25 million upfront as part of a deal struck in 2007 that gives it the right to build and operate a 40-mile stretch of the highway from Austin to Interstate 10 near San Antonio. The state gets a cut of the tolls and avoids costs estimated at well over $1.5 billion. Construction is under way and the road could open as soon as 2012.