Press coverage on Prop 11, establishment ready to accept crumbs

Link to article here.

Prop 11 stirs eminent domain debate

10/17/2009

By KELLEY SHANNON  / Associated Press

A proposition banning governments from taking Texans’ property for private development is last on the Nov. 3 ballot but is getting ample attention from the Republican candidates for governor, farmers and anti-toll road activists.

Prop 11 would ban state government from taking private property and giving it to a private developer to boost the local tax base, its supporters say. Property could still be seized if it’s used by the government or the public at large or to eliminate “urban blight,” according to the proposed language approved by two-thirds margins in the Texas House and Senate.

The proposed constitutional amendment, one of 11 on the November ballot, also would limit the Legislature’s authority in granting eminent domain power in the future.

With early voting beginning Monday, Gov. Rick Perry is on the same side as the Texas Farm Bureau and his Republican primary opponent, U.S. Sen. Kay Bailey Hutchison, in promoting the proposition even though the Farm Bureau and Perry have been at odds over private property rights in connection with Perry’s now-dead plan to build a Trans-Texas Corridor toll road across the state.

For Perry, it’s a chance to cast himself as a protector of private property before the March primary.

“I hope you’ll work with us. We’re going to be very actively engaged in drawing attention to Proposition 11,” Perry told the Texas Association of Realtors last week. He said the proposed amendment would require public “ownership, use and enjoyment” of property.

“So they can’t turn and hand it over to somebody in the private sector,” he said.

Look for Perry to campaign for the proposition this coming week.

Hutchison also plans to promote it at campaign events. She recently won the farm bureau’s endorsement after opposing Perry’s Trans-Texas Corridor, which would have seized private farm and ranch land for government use. Prop 11 wouldn’t stop governments from seizing property for public roads.

Hutchison said Prop 11 is an important step toward protecting private property rights and “is the beginning of Texas’ badly needed eminent domain reform that I will help finish as governor.”

Agriculture Commissioner Todd Staples and a long list of state officials are taking part in a campaign to win passage of the proposition.

Opposing Prop 11 is Texans Uniting for Reform and Freedom, a property rights, anti-toll road group. The proposed amendment leaves loopholes for seizing property for economic development and does not address questions like diminished access to land that remains after an eminent domain seizure or relocation assistance for people displaced from their land, said Terri Hall, founder and director of TURF.

“I think it’s wide open for lots of chicanery,” Hall said. “They can take your land for who knows what (reason).”

The Texas Farm Bureau’s 421,000 members want even tougher eminent domain laws, including one to address diminished access, and got crossways with Perry over his 2007 veto of a bill that rural property owners said would have protected them from eminent domain for private uses.

Perry said he rejected the measure because it was loaded up with “personal interest legislation” and high costs for taxpayers. He said he didn’t like that the bill would have expanded damages a landowner could recover to include reduced access to property when other nearby property is condemned — that provision the farm bureau still wants.

Much of the November ballot proposition is already in Texas law, but adding it to the state constitution could give it teeth, said farm bureau president Kenneth Dierschke.

“When it comes to safeguards protecting private property, Texas laws have been lacking,” he said. “Texas Farm Bureau has fought for years to enact meaningful reforms of our eminent domain laws, but for years political games have stood in the way.”

The proposition comes as a response to a U.S. Supreme Court decision that allowed government to seize property for economic development projects, not just for public uses like roads. The court ruling allowed states to set their own laws governing such eminent domain.

Prop 11 is the last one listed on the November election ballot, but Republican Rep. Frank Corte of San Antonio, who pushed the proposal, said ballot order won’t deter interested voters.

Texas voter turnout is typically low in an off-year elections in which only propositions are on the statewide ballot. Houston is expected to see a larger turnout than many places because of its open mayor’s race.

Other proposed constitutional amendments would set aside money to develop more top-level research universities; help to establish a Veterans Administration hospital in the Rio Grande Valley; and mandate public access to Texas beaches.

Early voting runs until Oct. 30.

___

On the Net:

Texas Secretary of State’s Office at http://www.sos.state.tx.us

Vote NO on Prop 11, it's counterfeit eminent domain reform

Prop 11 is window dressing for eminent domain reform
By Terri Hall
Express-News/Houston Examiner
Sunday, October 18, 2009
We’ve been down this road before…lawmakers write a convoluted amendment to the Texas Constitution that comes back to haunt us when we find out what politicians will do with it once we leave the polls. Proposition 11 is one of those amendments. We witnessed Governor Rick Perry weaken this legislation all through the 81st Legislature to reduce the amendment to a virtually meaningless attempt at eminent domain reform.

You have to ask yourself, if Rick Perry vetoed REAL eminent domain reform in 2007 (HB 2006), why would Perry stage a photo-op ceremonial signing of this constitutional amendment in front of the Alamo in 2009 when it didn’t even need his signature? Because it’s not genuine eminent domain reform. His show-boating is because he’s running for re-election, and he knows that veto of HB 2006 cost him the Farm Bureau’s endorsement.

Why did Perry veto the bill? Because it would interfere with his Trans Texas Corridor that is slated to gobble-up massive swaths of private property (4 football fields wide, biggest land grab in Texas history) and give it to foreign corporations in sweetheart deals with guaranteed 12-19% annual profits by charging Texans hefty tolls to use what should be a public road!

The logical course of action by the Texas Legislature would have been to dust off HB 2006, introduce the same bill again, and pass it early in the session so the Legislature could override the expected gubernatorial veto. But that’s not what the Legislature did. They allowed Perry and his cronies to use eminent domain reform as a bargaining chip all session long (to re-authorize the controversial contracts called CDAs that sell our Texas highways to foreign companies). Meanwhile, he and the special interests chipped away at the strength of the private property protections originally found in HB 2006.

So Prop 11 is Perry’s fabricated version of eminent domain reform to serve as penance for his veto. But once one examines the language, it’s clear it doesn’t remotely resemble genuine property rights protection as he claims it does.

So many flaws, so little time

What are the flaws of Prop 11? Economic development isn’t defined. Public use isn’t clearly defined nor limited. Good faith negotiations for offers of “adequate compensation” (the current constitutional language) aren’t required. Urban blight isn’t defined, and even though the legislative committees writing the bill couldn’t accurately discern the voluminous entities that currently have eminent domain powers, Prop 11 continues to allow the Legislature the power to grant yet more undefined “entities” the power of eminent domain for “public use,” which Perry ensured still included privatizing Texas roads to benefit foreign entities.

Proposition 11 says: “The constitutional amendment to prohibit the taking, damaging, or destroying of private property for public use unless the action is for the ownership, use, and enjoyment of the property by the State, a political subdivision of the State, the public at large, or entities granted the power of eminent domain under law or for the elimination of urban blight on a particular parcel of property, but not for certain economic development or enhancement of tax revenue purposes, and to limit the legislature’s authority to grant the power of eminent domain to an entity.”

It states property cannot be taken using eminent domain UNLESS it’s for public use for “entities” granted the power of eminent domain OR for the elimination of urban blight, but not for “certain economic development or enhancement of tax revenue purposes.”

The loopholes in that language are so wide you could drive a truck through them! Any true eminent domain reform that would protect us from the Supreme Court Kelo case would include:

– Strong definition of public use limiting eminent domain for ANY economic development and tax enhancement purposes
– Good faith negotiations (prevent entities from low-balling landowners and forcing them to hire expensive lawyers to get fair market value)
– Compensation for diminished access to a landowner’s property
– Limit the granting of eminent domain to any further entities without a vote of the people
– Relocation assistance for displaced landowners
– Ability to buy land back at original cost after 10 years if the State doesn’t use it

State lawmakers could have hit a home run and FINALLY delivered TRUE eminent domain reform. But they let Perry and politics get in the way of protecting YOUR property rights, and as usual, settled for scraps from the master’s table. The authors of the bill even admitted upon final passage that this amendment falls short, and that there’s still a long way to go on eminent domain reform. They expect us to choke down a milquetoast amendment that’s little more than window dressing so that they can claim some level of victory? Thanks, but no thanks!

If Texans vote for this amendment, it’s likely no further private property rights reform will EVER happen, especially if Rick Perry remains the Governor. We must demand protection from the eminent domain abuse that the Kelo case wrought. We’ve been waiting for 3 years, and would have had it in 2007 had Perry not wielded his veto pen. When over half the states have passed laws or changed their constitutions to protect landowners from the eminent domain abuses of Kelo, our politicians have left Texans vulnerable.

Insist on authentic private property protection and vote NO on Prop 11. It’s hazardous to your freedom!

And another one bites the dust…toll roads are unsustainable, folks

Link to article here.

Mississippi DOT stops Jackson Airport Parkway P3 – rating agencies No to investment grade

Mississippi DOT (MsDOT) have announced “suspension” of the procurement process for a private sector concession to build the state’s first tollroad in the modern era – Jackson Airport Parkway. The concession financing depended on federal TIFIA loan support which is only provided if the rating agencies provide an investment grade rating to senior debt.

Three shortlisted potential concessionaires told MsDOT they couldn’t get the needed investment grade ratings for their loan financing, an official told us, so they were not able to make proposals which were formally due next week – Sept 15.

A statement from MsDOT quotes Executive Director Larry L (Butch) Brown as “disappointed” but saying that the parkway “project, like many other greenfield toll road projects, is suffering from general economic weakness and tight credit markets which limit the amount of credit and capital available for new transportation projects.”

Private sector must show savings

Brown is quoted further: “The private sector needs to demonstrate that it can deliver meaningful savings versus a traditional MDOT financing and delivery plan.  For example, unless private sector bidders can genuinely deliver construction cost savings, operational savings, or financing savings, the numbers just don’t work.  In this economy, revenue projections are under pressure and investment grade ratings for the project’s senior debt are difficult to obtain.”

Shortlisted three

Three groups shortlisted to make proposals Sep 15 but unable to raise the capital were:

– Jackson Access Mobility Group (ACS and Dragados)

– Airport Parkway P3 Group (Cintra and Ferrovial)

– Global Via

They are Spain-based international groups active around the world in toll and other concessions.

Znachko

Brenda Znachko, chief financial officer at MsDOT says she gets the impression the rating agencies are generally negative about tollroads at present. She says she thinks the lack of any history of tolling in the state was also a handicap.

Znachko says they are not giving up on the project, but are considering alternatives. They will look at alternative ways of structuring the project as a concession, and also look at public financing using the credit of the state as backing.

She thinks the project is still viable as a tollroad, but it may need to be approached differently. MsDOT is supported by consultants Nossaman lawyers, JP Morgan finance, and URS engineers and traffic and revenue modelers.

MsDOT will take a new plan for advancing the parkway project to state commissioners later this year.

The project is designed to serve the most rapidly growing portion of the state, the eastern edge of the Jackson area. Although it would serve the Airport this by itself was not a major part of the projected traffic for the Parkway – which goes from the central business district east, then splits to make links to the north and south of the airport.

A URS traffic and revenue study produced for MsDOT shows toll revenues for the project at a toll of 18c/mile (11c/km) with a  Jan 2013 opening as 2015 $16m, 2020 $22m, 2025 $39m, 2030 $53m.

Project cost has been put at around $500m. The project consists of 20km, 12 miles of expressway standard road with at least four interchanges. Major structure needed is a bridge over the Pearl River immediately east of the central business district.

The project has alll its environmental permits.

Most of the engineering design is done.

80% of the right of way has been acquired.

There is strong support for the project from the key three cities, and virtually no public opposition.

Znachko has said they are flexible about the scope and staging of the project. They have already deferred a downtown end ‘pitchfork’ feeding three streets as something that can be added at a later date. To start with it would have just one downtown connection. The eastern ends have also been left flexible for staging also.

see http://www.theairportparkway.com/Home.aspx

summary of project:

http://www.tollroadsnews.com/sites/default/files/JAPflyer.pdf

TOLLROADSnews 2009-09-09

More arrogance from state Governors…"let us loot our citizens without interference"

Link to article here. Oh, now I get why Rick Perry is suddenly so fond of states rights…

State guvs to US on P3s: “Bug off, the roads are ours”

Regardless of party, state governors are opposing moves in the US Congress to second guess their arrangements for privatization of roads, toll concessions, or public private partnerships.Apparently without dissent the National Governors Association has adopted a formal ‘Policy Position’ on surface transportation that says that they oppose any federal restrictions on states’ ability to enter into toll concessions or other public-private arrangements.

The draft reauthorization bill produced by the House transportation committee provides for a new federal Office of Public Benefit – a newspeak title right out of Orwell’s 1984. This office would have the power to allow or disallow toll concessions and other public-private arrangements entered into by states.

NGA official policy

The governors take a firm line against the OPB proposal saying in their official policy, and we quote them in full on this subject:

13.2.2 Non-Traditional Financing

“Governors urge the development of flexible, innovative, accountable, and alternative financing mechanisms that support the mobility goals of the states and oppose any federal restrictions on states’ ability to pursue public-private partnership arrangements to address their own infrastructure needs.

“Governors support the removal of federal restrictions on states’ authority to toll federally-aided highways.

“State and local authorities, as the owners and operators of the surface transportation system, must determine the appropriate level of private sector participation in their surface transportation programs.

“Governors oppose any efforts to condition federal financial investment in state surface transportation programs to any mandate for a particular level of private participation.”

Bill stalled

The new transportation bill championed by chairman James Oberstar has made little progress due mostly to lack of funding. Short term extensions are keeping money flowing under the old SAFETEA-LOO formulae.

Oberstar has lost respect among colleagues for his buckpassing on funding this next six year transportation bill. The Obama administration seems to have has other priorities than transportation.

Oberstar’s moves to exercise federal control over P3s at the same time federal financial support is hand-to-mouth over a protracted period seems calculated to exacerbate frustration in state capitals at US Government incompetence in transportation.

see text of National Governors Association policy:

http://www.nga.org/portal/site/nga/menuitem.8358ec82f5b198d18a278110501010a0/?vgnextoid=289a9e2f1b091010VgnVCM1000001a01010aRCRD

TOLLROADSnews 2009-10-06

Cronyism and Rick Perry's Trans Texas Corridor

Link to blog here.

Monday, October 12, 2009

Cronyism and the Corridor

Texas Monthly blog
This is a scary story. The Statesman reported yesterday that Governor Perry is removing Linus Wright, a former Dallas school superintendent, as chair of the board that oversees the $88 billion Teacher Retirement System and will replace him with a current board member who is also a member of Perry’s campaign finance team, Dallas real estate investor R. David Kelly. (Wright succeeded Jim Lee, who was one of three co-chairs of the Perry fundraising apparatus; Lee had resigned in the wake of news reports that he had run up six-figure gambling debts in Las Vegas.)

The removal of Wright occurred just a few days after Perry had announced the death of the Trans-Texas Corridor. The juxtaposition of events reminds me of the old Mark Twain line: “Reports of my death were greatly exaggerated.” The concern is that the governor’s office has installed a crony as chairman who will urge the board to invest retirement system funds in toll roads as a means to pump money into funding-starved TxDOT. Perry appointees who don’t go along–as we have learned in the case of board of regents and the Forensic Science Commission–are likely to find themselves replaced.

I’m not just being an alarmist here. Remember, in the summer of 2008, Perry, Dewhurst, and Craddick signed a letter agreeing to work together to find a way to pay for new roads. An earlier Statesman story about the agreement said:

One prong of the plan would create a Transportation Finance Corporation to allow state investment funds — including the state employee and teacher retirement systems, among others — to directly invest in state transportation projects. Combined, the two state systems manage $135 billion in assets.

But TRS and ERS officials “took a cautious view of investing in state projects in testimony this year before the Senate Finance Committee, saying a mandate to invest in Texas infrastructure could conflict with their duty to find the best return on investment for retirees.”

Toll roads are highly questionable investments. Their success depends entirely on the accuracy of traffic forecasts, which can be influenced by consultants who tell roadbuilders (and pension funds) what they want to hear. The industry newsletter TOLLROADS NEWS reported on October 9 that a major toll road in South Carolina is insolvent and about to default:

US Bank, trustees for the bondholders of Connector 2000 Association, the owner of the Southern Connector tollroad in Greenville South Carolina have issued an official notice that they expect a default Jan 1, 2010 with insufficient funds being available from the pike to make debt service that’s due.

Here’s another story of a toll road that failed to make projections, also from TOLLROADS NEWS. This one is in Jackson, MS. It never even got to the starting gate:

Mississippi DOT (MsDOT) have announced “suspension” of the procurement process for a private sector concession to build the state’s first tollroad in the modern era – Jackson Airport Parkway. The concession financing depended on federal TIFIA loan support which is only provided if the rating agencies provide an investment grade rating to senior debt.

Three shortlisted potential concessionaires told MsDOT they couldn’t get the needed investment grade ratings for their loan financing, an official told us, so they were not able to make proposals which were formally due next week – Sept 15.

A statement from MsDOT quotes Executive Director Larry L (Butch) Brown as “disappointed” but saying that the parkway “project, like many other greenfield toll road projects, is suffering from general economic weakness and tight credit markets which limit the amount of credit and capital available for new transportation projects.”

Brown is quoted further: “The private sector needs to demonstrate that it can deliver meaningful savings versus a traditional MDOT financing and delivery plan. For example, unless private sector bidders can genuinely deliver construction cost savings, operational savings, or financing savings, the numbers just don’t work. In this economy, revenue projections are under pressure and investment grade ratings for the project’s senior debt are difficult to obtain.

Trust funds should be invested conservatively — or, at the very least, in ventures that are medium-risk, not in toll roads and startups related to the governor’s Emerging Technology Fund, which, along with the Texas Enterprise Fund, suffered a $200M decrease in funding as punishment for Perry’s questionable wheeling and dealing. It will be very tempting for the governor to get Kelly to back his pet projects from the Emerging Technology Fund. These startups are likewise high-risk.

I don’t believe for a moment that Perry or TxDOT have given up on the Corridor. This paragraph from a 2008 article in the Star-Telegram is all you need to know:

Speaking on a conference call from Iraq, where he is visiting troops with other governors, Perry said highways that would run parallel to north-south I-35 are still needed. The state’s commitment to building roads is what attracts many companies and jobs to the state, he said.

* * * *

The thing I find most interesting is that Perry removed Wright and replaced him with a crony in the middle of a governor’s race. What does that tell us? I think it says that he is supremely confident and he is going to do whatever he feels like doing and doesn’t care what the media (much less bloggers) are going to say about it. He had to know what people were going to say about his replacement of Wright, especially coming on the heels of his evisceration of the Forensics Commission, and he did not care. Rick Perry is one tough guy. Don’t think I don’t admire that.

Another toll road bites the dust, this time in South Carolina

Link to article here.

Greenville Southern Connector headed for bankruptcy – default likely Jan 1 2010
Posted on Mon, 2009-10-05
Toll Road News

US Bank, trustees for the bondholders of Connector 2000 Association, the owner of the Southern Connector tollroad in Greenville South Carolina have issued an official notice that they expect a default Jan 1, 2010 with insufficient funds being available from the pike to make debt service that’s due. They say the Association concluded that converting the not-for-profit into a for-profit toll concession to avoid default – as occurred with the Pocahontas Parkway in Richmond VA – is not feasible.

In or outside bankruptcy there will be a forced “restructuring” of the bond capital, the US Bank trustees say. Investors will take a hit. (NOTE: US Bank would like us to note that they did not use the word “forced” of the capital restructing, though that’s what we think it is! Also we have corrected the second sentence to reflect that the Association concluded sale to a for-profit concession was infeasible ahead of bankruptcy restructuring, not US Bank – editor 2009-10-07)

South Carolina DOT has already declared “an insolvency Event of Default” in a letter of June 12 which called on the not-for-profit owners to seek a “plan of adjustment.” SCDOT says it reserves the right to terminate the Association’s License Agreement under which the Connector Association operates the tollroad. Macquarie Capital is working for the trustee.

Accountants blast Association

Things may be worse than the official reports. Association accountants Bradshaw Gordon & Clinkscales in a statement accompanying an Update on the association’s financial condition say that accounting standards board (GASB) requirements have not been met, and warn that the effect of the pike’s departure from accounting standards has not been determined.

They say in one passage: “Management has elected to omit substantially all of the disclosures and statements of cash flows required by accounting principles generally accepted in the US….”

Deficiency of $163m

The statement reports as of June 30  liabilities of $322m against assets of $160m for a net deficiency of $163m – comically they report cents as well as individual dollars. The largest liabilities are bonds of $304m but the Association also owes  the state DOT some $8m in unpaid license fees and interest.

Interest ten times operating profit

Toll revenues in the first half of the year were running at barely $5m/yr against operating expenses of $3.2m for an annual operating surplus of just $1.8m. Interest expense was ten times that and net loss was running at $22.8m after interest, depreciation and amortization.

Accumulated deficits are $163m, and they are being added to at about 14%/year.

Toll revenues for the first half of 2009 were running at 4% below year-ago levels, pretty much within the normal range for tollroads around the country. Since then they have been flat or slightly above year ago monthly levels.

Trouble from the get-go, traffic below half forecast

The Connector looked to be in trouble from virtually the day it opened in March 2001.

Traffic had been forecast after ‘ramp-up’ at the end of the first year to be around 28k/day so traffic of 20k was expected in the beginning.

Traffic has always been below half forecast levels, starting at 10k and rising at about expected annual percentage rates, but from the disappointing base.

Eight years after opening traffic is 15k to 16k/day versus 33k forecast when the original financing was done in 1998.

The original traffic studies seem to have been fundamentally flawed.

Law suits on forecasts

Robert Bain – UK-based author of the recent book on toll road forecasting – tells TOLLROADSnews that he has been engaged as an expert witness twice in the last 18 months by lawyers contemplating taking legal action against traffic forecasters for over-optimistic predictions.  Neither engagement resulted in lawsuit to date.  “It’s only a matter of time”, says Bain.

Why forecasts failed

Our analysis is that the Connector (I-185) simply does not serve major commuter flows within the 540k pop metro area. These flows are on a southeast-northwest axis Simpsonville, Mauldin, Greenville and along US276 and I-385. This is mostly to the north and east of the Connector.

The Connector including the toll-free portion of I-185 swings too far south, southwest and west to compete for major internal metro area traffic.

Located to serve development, not to relieve congestion

The pike was loccated to serve new industrial and residential development on the southern and southwest fringe of the area, development which has occurred, but more slowly than the tollroad promoters predicted.

Higher paying truck traffic is tiny. 96% of vehicles are 2 axle.

Slower employment growth than predicted in the area has meant that for the most part the free roads have adequate capacity even for peaktime work trips. The exception is I-385 northbound through Mauldin in the mornings weekdays.

But trips on the Connector are too much longer in distance to be an attractive alternative for most motorists.

Studies show the  Connector corridor generally has good developmental potential still, although portions are handicapped by lack of utilities like sewer.

New Stantec T&R study

A traffic and revenue study by Stantec published in May this year found toll rates were too low to maximize revenues. Toll rates should be increased 50 to 75%, it recommended.

The Association has since gotten SCDOT permission for three 25c toll increases, the first immediately, a second Jan 1 2012 and a third Jan 2016. 25c toll increases could be implemented every four years thereafter. Ramp tolls would be increased proportionately.

Stantec now project toll revenue of $10.2m by 2016 based on 16.3k daily traffic and $20.3m in 2026 based on traffic of 25k/day.

The Stantec report contains no analysis or suggestion as to why the 1990s study was so wrong.

Indeed they don’t even mention the existence of that report.

Maybe the bankruptcy court can exhume it?

Southern Connector website:

http://www.southernconnector.com

BACKGROUND: Greenville Southern Connector is a 2×2 lane expressway with interstate designation I-185. The not-for-profit called Connector 2000 Association was the idea of Bob Farris, a former Federal Highway Administration chief who formed Interwest to develop the project. It entered into a design-build contract with a large local builder Thrift Bros.

26km or 16 miles long the Connector connects the end of an existing free I-185, a southward spur from central Greenville to I-85 the big east-west interstate through the area, to I-385 in the southeast completing a loop or belt route around the southern portion of the metro area. The project has end interchanges with I-85 and I-385 and four intermediate interchanges of a simple diamond design.

The Connector has two mainline toll plazas and two pairs of ramp toll plazas.

The mainline toll plazas have 4 toll lanes each direction. In one direction of traffic the left two lanes are unattended. The far left is highway speed electronic tolling signed for 45mph (72km/hr) while the next lane is coin machine. There are toll collectors in the third and fourth lanes.

On the ramps there is a single unattended lane for transponder or exact change in a coin machine.

Electronic toll collection was introduced as an option when the pike opened in Mar 2001. Brandnamed PalPass (Palmetto Pass) it is an IAG standard Mark IV system, but the Connector has not joined IAG so there are no provisions for interoperability. It has TransCore readers with IAG read capability.

Electronic tolling has not achieved high usage and 75% of transactions are cash, suggesting a lot of occasional use.

34 toll collectors are employed on the pike.

COMMENT: Not-for-profit (NFP) tollroads, a unique manifestation of the 1990s now have a perfect score: two failures out of two.

First Pocahontas Parkway in Richmond VA, now the Southern Connector in Greenville SC.

Although well-intentioned it’s a bad, bad model, which skews all the incentives the wrong way – toward road developers and builders and financial and legal brokers who make their money before the pike opens and leave all the obligations and risks to bondholders.

When all the profit is upfront and there is no skin in the game longterm, it’s only natural that you get too much road built,  at too much expense, where it’s not really needed.

A product of the great financial bubble period, NFP tollroads have their analog in the no-money-down mortgage, where people get more house they can afford and walk away from it when the debt burden proves too great for their income. Hopefully we’ve seen the last of this irresponsible financial structure.

TOLLROADSnews 2009-10-05 BACKGROUND, COMMENT added 2009-10-06 12:00

DFW Connector toll deal DOUBLE TAXES Texans

Link to article here. As a reminder, “managed lanes” means toll lanes that presumably “manage” the flow of traffic by pricing the poor and middle class off public roads in the name of a congestion-free commute for those who can afford the extra tax. What’s even more of an outrage is the fact that stimulus money will be used to build the road, but you won’t be able to drive on it without paying a DOUBLE TAX! So much for stimulus money going to help the economically distressed…

Huge DFW Connector in Dallas has small toll component
Posted on Fri, 2009-10-09

DFW Connector, a huge new expressway complex on the northern and northwestern edge of Dallas Fort Worth International Airport (DFW) will have a small toll component, but construction of the $1.02b project is being financed with tax revenues. Previously known as the TX114/TX121 project, it involves a complete rebuild and expansion of some 13.5km, 8.4 miles of these two expressways centered on where they merge and diverge, including modernization of six interchanges, two of them big 3 and 4 level jobs.

6.4km (4 miles) of the combined roads and TX114 will contain 2×2 toll “managed lanes.”

TxDOT calls the contract for the DFW Connector a “comprehensive development agreement” (CDA), their infinitely elastic Orwellian term covering any arrangement whatever from minor project development consulting and environmental permitting, through regular construction, design-build, through to full blown 50 year DBFO toll concessions.

TxDOT announced they this week “executed a comprehensive development agreement” – actually this one is a plain vanilla design-build contract – for the DFW Connector Oct 6 with North Gate Constructors, a consortium led by Kiewit and Zachry construction companies.

These companies were conditionally awarded the contract back in March while arguments raged about financing and the role of the private sector.

TxDOT announces: “While the DFW Connector is a CDA project, it is being built without private funds.”

(TERMINOLOGY: one benefit of the demise of Trans Texas Corridors, we hoped, would have been the end of their CDAs ‘comprehensive development agreements.’ But sadly this mangled, accursed term lives on at TxDOT – editor)

Funding for the DFW Connector “CDA” is $250m of ARRA ‘stimulus’ funds from the Feds, $107m in bond borrowings, and the rest unspecified “public funds.”

24 lanes wide

It is a magnificent and vast piece of engineering. The heart of DFW Connector is a 4km (2.5mi) stretch of cosigned highways TX114 and TX121 presently 8 main lanes and 4 frontage road lanes (2/4/4/2). The new construction will go to to 13/14 main lanes, 4 toll lanes and 6/7 frontage road lanes (3/6/7/4). That’s an average width of 24 travel lanes, plus 8 breakdown shoulders in each of the four roadways, plus a pair of ‘green’ lanes (bicycles) on the left side of the frontage roads.

The western ends of the project split into TX121 and TX360 south and TX114 north.

At the eastern end the big cosigned 24 lanes connects to the northern entrance to the airport and TX114, I-635 LBJ Freeway and TX121 Sam Rayburn Tollway break off. The sprawling DFW airport complex has forced all these traffic routes together for a distance along its northern periphery in an area named Grapevine.

Present traffic on TX114/TX121 is around 189k veh/day and the $1.02b of improvements are designed to cater for 2030 projected traffic of 359k veh/day.

North Texas Tollway Authority (NTTA) will operate the toll lanes, collecting tolls all-electronically. Revenues will go towards defraying operations and maintenance costs.

TxDOT say traffic volumes and speeds will dictate the tolls within each peak period and the rates will be set to allow speeds of 50mph (80km/hr) or more. Modeling suggests average toll rates of 16c/mile (10c/km) in 2014 when the facility opens rising to 24c/mile (15c/km) in 2029.

Carpoolers may get a discount. Transit buses will go free and trucks will be admitted but at higher tolls relative to axle count.

A later stage will extend work for another 9km (5.6 miles) and bring project cost exclusive of right of way to $1.5b.

TOLLROADSnews 2009-10-09

Editorial: End reliance on toll roads

Link to article here.

Editorial: End reliance on toll roads
October 8, 2009
Dallas Morning News blog
In 2004, Gov. Rick Perry announced his plans to build the Trans Texas Corridor, and in 2009, it cost him an important endorsement from the Texas Farm Bureau. The TTC would have been funded using comprehensive development agreements, a form of privatized toll road arrangement. Opposition to the governor’s plan has been so widespread and heated that five years later, the Texas Department of Transportation has declared the TTC “dead.”

Road privatization offers a hard-to-resist “quick fix” for state politicians. But without adequate public protections, privatization can have hidden costs and big potential downsides. Private infrastructure deals are fraught with problems and often characterized by the same leveraging of debt, conflicts of interest and reckless shifting of risk that triggered the recent financial crisis.

To protect the public, Texas and its local governments should avoid privatization of existing roadways, and allow for private deals to construct new roadways only with the strongest protections to ensure transparency, full value for taxpayers and continued public control of transportation policy.

Melissa Cubria, advocate, Texas Public Interest Research Group, Austin

TxDOT Commish: "I'm the most arrogant"

In case the taxpayers need any more reasons to dump the current leadership at TxDOT, here’s the most blatant one yet. In the Express-News article below about the supposed demise of the Trans Texas Corridor, Commissioner Ted Houghton, ya know, the one who called TURF Board member Hank Gilbert and TURF supporters “bigots” (watch it here) for opposing the sale of Texas roads to foreign corporations in sweetheart deals, accurately claims:

“I am Ted Houghton, the most arrogant commissioner of the most arrogant state agency in the history of the state of Texas.”

Rick Perry is using his Transportation Commission appointee as a diversion from his own arrogance in ramming his Trans Texas Corridor down Texans’ throats. Who better to take the knocks for Perry than his most despised Commissioner who picked up where former Chairman Ric Williamson left off. While the circus was distracting from the real issue of Perry repeatedly wielding his veto pen to benefit his cronies when Texans, through their elected representatives, attempted to shut the TTC down, few understand the technical significance of the method Perry is using to continue TTC-35 despite the announcement.

Rather than simply send a letter to the Federal Highway Administration (FHWA) to close the Trans Texas Corridor file for good, Perry is taking 4-6 months to take public comment (I guess over 10,000 people against at the hearings weren’t enough) and seek a Record of Decision on the project depsite the claim they’re not going to build it. What this does is allow TxDOT to change its mind and come back later to resurrect the project (after the Republican primary perhaps?) at any time.

Also, nowhere does the article below or any of the others we’ve seen question how TxDOT can possibly claim the taxpayers are only out $16 million for environmental work when a State Audit report in 2007 said the taxpayers had already paid $60 million (for engineering, environmental work, and legal fees, and it was found 21 of 32 invoices pulled were mismarked engineering when it was really spent on PR!) for TTC-35 just through 2006.

So, we’re supposed to believe Cintra just walks away from a potential $186 billion deal, for which it paid $3.5 million to develop? Considering Senator John Carona saw to it that a STATE LAW was changed to lift the cap on payments to LOSING BIDDERS earlier this year just so Cintra could get paid $3.6 million for losing its grip on the 121 toll deal in Collin/Denton counties, how can anyone expect us to believe that buried among the 1,000 pages of financial documents and termination clauses in the TTC-35 contract that Cintra is going to get NOTHING but the two segments on SH 130, a loop around Austin, when the State kills the deal? Yeah right! Somewhere there’s a BIG, FAT taxpayer liability looming on the horizon that we’re not going to hear about until AFTER the next election…

The only sure way to be rid of this looting? Dump Rick Perry!

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Link to article here.

Web Posted: 10/08/2009

Money flows on road that went nowhere

By Peggy Fikac – Express-News
AUSTIN — Texas already has spent close to $60 million on the recommended-for-death parallel to Interstate 35 that once was envisioned as part of the Trans-Texas Corridor.

More money — perhaps millions more — will be spent as Texas closes the environmental review process and gets public comment on the recommendation to the federal government, state transportation officials said Wednesday.

They said the planning expenditures weren’t wasted because they can use the information in the future: “It will be our asset. It will be ours,” said Transportation Commissioner Ted Houghton of El Paso.

Critics were quick to call it a waste.

“Texans shouldn’t be forced to pay a tax for (Gov.) Rick Perry’s arrogance in pushing a project that nobody wanted but Rick Perry,” said Joe Pounder, spokesman for U.S. Sen. Kay Bailey Hutchison, who’s challenging Perry for the GOP nod for governor.

The $59.4 million in expenditures that the Texas Transportation Commission reported to lawmakers at the end of fiscal year 2008 went for planning, environmental reviews and engineering studies. The expense was part of $131 million spent on several segments since 2004.

Houghton said in weighing costs, one should consider a separate agreement with Spain-based Cintra and Zachry Construction Corp. of San Antonio.

Their partnership paid the state $25 million for the privilege of building State Highway 130 and collecting tolls on it, Houghton said. He said that infrastructure is worth $1.2 billion.

Any significant effort to address congestion relief on Interstate 35, including financing, now is an open question.

The I-35 parallel was among the last vestiges of the once-ambitious Trans-Texas Corridor championed by Perry as a network of highways, rail lines and utility corridors that would criss-cross Texas and relieve congestion.

The idea relied heavily on public-private partnerships and tollways since highway tax dollars are falling far short of the need.

Opposition from groups including landowners prompted transportation officials earlier this year to drop the Trans-Texas Corridor name and declare they’d scale back the network idea.

Now State Highway 130 in Central Texas and the proposed Interstate 69 from Brownsville to Texarkana are its last remnants.

Democratic candidate for governor Hank Gilbert, noting January’s announcement, said he suspects the demise of the corridor has been slow because there are additional costs associated with it: “Vampires die quicker than Rick Perry’s transportation policy.”

Perry and others have challenged critics to come up with an alternative, workable transportation plan. Hutchison and Gilbert haven’t yet disclosed plans; their campaigns say they will.

Activist Terri Hall of Texans Uniting for Reform and Freedom is among those unconvinced that the Trans-Texas Corridor is dead, noting lawmakers didn’t remove the idea from state law this year, plus the continuation of I-69.

“The Trans-Texas Corridor is not dead until Rick Perry is no longer governor of the state of Texas,” she said.

State officials said they remain committed to expanding Interstate 35 to three lanes each way from Austin to the “Y” in Hillsboro. It’s currently that wide from San Antonio to Austin. They’ve identified some money for the effort, including stimulus money, but still lack $1.5 billion.

Any further effort to create loops around cities, a parallel to I-35 or other congestion relief will be looked at regionally by committees focusing on their area’s segment, Houghton said.

Transportation officials largely blamed themselves for not properly marketing the plan. Houghton, in a reference to the way the agency was portrayed by anti-corridor and anti-toll activists, as well as Hutchison, introduced himself at Wednesday’s news conference this way: “I am Ted Houghton, the most arrogant commissioner of the most arrogant state agency in the history of the state of Texas.”

Five mayors defeat the Trans Texas Corridor

Here’s the REAL reason Rick Perry’s highway department killed the Trans Texas Corridor TTC-35 project after five years of fierce opposition from the people of Texas.

FOR IMMEDIATE RELEASE

October 7, 2009

Contact:  Mae Smith, President/Mayor, 254-657-2460

Mayors Defeat Trans-Texas Corridor and TxDOT

Holland, Texas – Five local mayors took a stand 27 months ago and formed the state’s first sub-regional planning commission to stand up against and stop once and for all the governor’s massive land grab known as the Trans-Texas Corridor. No one thought they could.

Today, the Texas Department of Transportation and the governor announced that the State of Texas has officially killed the project by selecting the “No Build” option under the environmental impact statement study. Selecting that option was exactly what the Eastern Central Texas Sub-Regional Planning Commission (ECTSRPC) forced the Texas Department of Transportation (TxDOT) into choosing.

“Believe me, it wasn’t what they wanted to do, it’s what we forced them to do,” stated Mae Smith, Mayor of Holland and president of the ECTSRPC. The planning commission began a series of what is called coordination meetings in the fall of 2007, by utilizing a little known state statute that forced the behemoth agency to come to Holland, Texas.

TxDOT came to Holland on three different occasions where they were asked to explain why they were going to destroy five towns and their school districts with a 1,200 foot-wide, 146 acre per mile toll road.

“Through coordination, we forced them to our table and then we used the federal NEPA (National Environmental Policy Act) statute to box them in a legal corner out of which they could not escape,” stated Ralph Snyder, a local Holland businessman and board member of the ECTSRPC. “That’s what forced TxDOT to recommend ‘No Build’ to the Federal Highway Administration because we had shown how TxDOT, as the agent of the federal government, had violated the federal statute in at least 29 ways,” Snyder continued.

Fred Grant, president of American Stewards of Liberty, is the originator of the coordination strategy that brought TxDOT to their knees. “Had we not had five courageous mayors who represent a total of 6,000 people stand up to the governor and his rogue state agency, the Trans-Texas Corridor would have destroyed hundreds of thousands of private acres of prime and unique farmland, as well as, the economies of every community it dissected,” stated Grant.

The TTC-35 is just one of the 4,000 miles of toll roads that nine state planning commissions are fighting.

“TxDOT can still continue to build 130, TTC-69, and the Ports-to-Plains toll roads, but defeating the TTC-35 is a major victory for the rural people of Texas.”

To obtain a copy of the petition filed by the ECTSRPC showing the federal violations of TxDOT, please contact American Stewards of Liberty at 512-365-2699.

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Read blog with more on this story here.