Toll-Free Texas!

TollFree Texas graphic 300

Citizen Lobby Day

Monday, March 23, 2015
9:00 AM to 4:00 PM

Location: Texas State Capitol
Address: 1100 Congress Avenue
              Austin, TX 78701
(meet on the South Capitol steps)

Go to the TURF Registration Page to Register…

Your freedom to travel is at risk!

Gathering on South Capitol stepsConcerned citizens from across the state will gather in Austin to interact with lawmakers on transportation-related issues. We’ve seen a massive increase in our cost to drive through tolls, handing control of our public roads to private foreign corporations, and  unsustainable debt sweep the state, with more to come unless we make our voices heard.

This is a day when CITIZEN lobbyists come to the Capitol to advocate on what matters to grassroots Texans — like getting an affordable, pro-taxpayer transportation policy in place.

Lots of activities planned:

  • a press conference,
  • have our group recognized from the House and Senate floor,
  • visit offices and speak to legislators,
  • lawmakers address TURF group in special Q&A,
  • and a special visit from Governor Greg Abbott!

Go to the TURF Registration Page to Register…

Be prepared…

  • The public parking garage east of the Capitol is at 12th Street and San Jacinto. If that garage is full another is located north of the Capitol at 18th Street and Congress at the Texas History Museum. Both cost $8/day.
  • Get the t-shirt!Bring money for lunch. We plan to eat together in the Members Lounge where we’ll hear from some special guests. For a box lunch from Jason’s Deli, the cost is $10. You MUST RSVP by Monday, March 16 to reserve your lunch, otherwise plan on getting lunch in the Capitol Grill (wait times in the food lines can exceed 20 minutes).
  • Bring a notebook to take notes (optional). Fliers, maps and materials supplied by TURF.
  • T-shirts with our message will be available. Suggested donation $15. Please reserve your t-shirt ASAP.

Citizen lobyists being oriented

We need you!

We need a HUGE crowd to show up to talk to legislators about transportation. There are already some very bad proposals being pushed by special interests (more tolls in the hands of private corporations), and without a grassroots revolt, it’ll sail through without a whimper of opposition. Plan to come and have others join you.

If you’re interested in coordinating a carpool,
contact Terri Hall or call (210) 275-0640.

Go to the TURF Registration Page to Register…

Commissioners Approve Tolls for Northside of San Antonio

Reaffirm tolls on US 281, I-10 despite more road money coming to fix non-toll

(San Antonio, TX – Tuesday, January 17, 2015) Today, Bexar County commissioners passed a resolution brought by Kevin Wolff to ‘reaffirm’ what’s been dubbed the $825 million ‘Super Toll Plan’ for toll lanes on US 281 (from Loop 1604 to the county line) and I-10 (from Loop 1604 to Boerne), and the initial non-toll expansion of Loop 1604 W (though tolls are coming from Bandera Rd. to I-35).
County Judge Nelson Wolff, Commissioners Paul Elizondo, Chico Rodriguez,and Kevin Wolff, voted to adopt the resolution, with anti-toll newcomer Commissioner Tommy Calvert abstaining, despite public opposition and additional non-toll road funding coming from Prop 1 as well as $1.2 billion from ending gas tax diversions that’s coming in the new budget soon be adopted by the Texas legislature.
Every member of the court took turns saying they were opposed to toll roads. Judge Wolff noted $200 million in local tax dollars have gone into funding state highway projects and implored the legislature to do its job to properly fund roads. Yet, in the end, all but one voted in favor of adopting the toll plan, promising, yet again, to remove the toll lanes if new funding comes from the legislature.
“It’s political double speak to say you oppose toll roads then vote to adopt them, especially when you know new funding is coming,” argues Terri Hall, Founder/Director of TURF and Texans for Toll-free Highways.
Judge Wolff, Commissioner Wolff, and board members of the Alamo Area Metropolitan Planning Organization (AAMPO) have previously promised to turn planned toll lanes back into free lanes on projects like US 281 when new funding became available. When running for re-election in a tight race, Nelson Wolff even sent a letter to the Transportation Commission asking to turn toll lanes back to free lanes on US 281 if Prop 1 passed. Prop 1 passed with 81% of the vote last November, but the first round of Prop 1 funds were sent elsewhere. So were Prop 12 funds, stimulus funds, and the streetcar funds that were taken from roads.
The commissioners’ move is not only premature, but totally out of step with Governor Greg Abbott’s vision laid out in his state of the state speech given today in a joint session of the Texas legislature, where Abbott promised to secure $4 billion more per year in road funding without tolls, and even declared transportation an emergency item to expedite it.
“The trail of broken promises that culminated in today’s vote is causing many to question whether the voters were lied to. Knowing that Prop 1 will add $1 billion a year in new road funds with more coming from the Texas legislature, the timing of this action couldn’t be more dubious. Who votes to re-affirm toll plans now, when Texas voters sent new leadership to Austin promising no more tolls and when the legislature is in the process of getting new funds to prevent tolls?” questions Hall. “Two new transportation commissioners are also coming, one a prominent San Antonian, Bruce Bugg, so at the very least, the commissioners should have waited to see what the legislature and the new commissioners do before they reaffirm the old regime’s toll roads.”
Suspicious timing, old guard being replaced
Former Governor Rick Perry’s Transportation Commission Chairman Ted Houghton is being replaced in just a few short weeks by an appointee of incoming Governor Abbott, who campaigned against toll roads. Houghton and Perry have made it their mission to impose tolls all over Bexar County, and they’ve been unsuccessful due to citizen resistance.
Hall emphasized the suspicious timing, “With passage of this resolution, the Commissioners are attempting to thwart the efforts by Abbott, Lt. Governor Dan Patrick, and the Texas legislature to fix the road funding shortfall without more tolls, and hence get Bexar County freeways fixed toll-free as promised.”
What’ll cost? $8-$10 a day
The published toll rates of the toll authority, the Alamo Regional Mobility Authority, range from 17 cents a mile – 50 cents a mile. The plan will impose ‘congestion tolling,’ to ensure drivers pay the maximum to use the toll lanes during peak hours (when everyone actually has to get to work).
So these new toll taxes will average $8-10 day or over $2,000 a year in new taxes just to get to work. That’s per driver, it’ll be thousands more per household. Those who can’t afford to pay tolls will be second class citizens on congested alternatives.
The more congestion on the roadway, the more you pay. These ‘managed’ lanes will be HOV-transit toll lanes giving special access to buses with exclusive direct connect ramps from inside the toll lanes to the $15 million dollar Via transit centers outside the tollway.
Public meetings
In addition, the Bexar County Strategic Mobility Plan will add tolls to Loop 1604 (from Bandera Rd. to I-35 at the Forum). Two public meetings on that project are scheduled for March 4 and 5. Another public hearing to add toll lanes to the I-35 corridor (from 410 S. to FM 1103 in Schertz) will take place next week, Thursday, February 26, at Morgan’s Wonderland.
Last month, the AAMPO transportation plan just added $605 million in TOLL ‘managed lanes’ on:
I-10 (from 410 to SH 130)
Hwy 151 (from 410 to 1604)
I-37/US 281 (from SE to downtown)
I-10 (from Boerne Stage Rd to Boerne)
This is in addition to the existing toll projects on:
US 281 (from Loop 1604 to Bexar County line)
Loop 1604 (from Bandera Rd to I-35, eventually the whole loop)
I-10 (from Loop 1604 to Boerne Stage Rd.)
I-35 (from downtown to Loop 1604, & eventually to the county line)

SAN ANTONIO RESIDENTS: URGENT! Call Wolff NOW!

Bexar County Commissioner Kevin Wolff is bringing a resolution to a vote on Tuesday, February 17 (see Item #69, on page 13 of the Commissioners Court Agenda) to reaffirm that he wants to impose toll taxes to drive US 281 (from Loop 1604 to the county line) and I-10 (from Loop 1604 to Boerne), and Loop 1604 (from Bandera Rd. to I-35 at the Forum).

Call Kevin Wolff‘s office NOW at (210) 335-2613 to urge him to pull down his resolution and use the new road money from Prop 1 (avg. $1 billion/yr) and the money coming shortly in the next budget to be adopted by the Texas Legislature (at least $1.2 billion) to fix these freeways without TOLLS!  View the plan here.

What will it cost me?
The published toll rates range from 17 cents a mile – 50 cents a mile. Wolff and his fellow commissioners along with his Dad, County Judge Nelson Wolff, will impose ‘congestion tolling,’ to ensure you pay the maximum to use the toll lanes during peak hours (when everyone actually has to get to work).

So these new toll taxes will average $8-10 day or over $2,000 a year in new taxes just to get to work. The more congestion on the roadway, the more you pay. In fact, the toll rate rises in real time to purposely knock cars out of the toll lanes if the speed drops below 50 MPH in the toll lanes, which is almost guaranteed behind a bus (these will be HOV-toll transit lanes, also called ‘managed lanes’)!

What’s the plan?
View the plan here.

On US 281, today there are 5-6 freeway lanes from Loop 1604 to Stone Oak Pkwy. When they’re done, there will still be just 6 lanes of highway, BUT, one existing freeway lane in the center will be converted into a HOV-toll transit lane (think bus lane, you’ll be paying a toll to drive slow behind buses, also called ‘managed lanes’ to hide the word ’toll’). No new highway lanes will be added at all, yet the toll authority (Alamo RMA) is conducting a half a million dollar ad campaign that tells commuters the toll road will DOUBLE existing capacity. All they’re adding are access roads, not highway lanes. So they’re counting the new frontage roads as ‘doubling your capacity.’

These HOV-toll lanes have NO ACCESS to Loop 1604 (on either proposed toll project) so if you need to get on 1604, you’ll be stuck in the congested general purpose lanes. On US 281, there’s also no exit for any local traffic until Stone Oak Pkwy, so commuters cannot access all those neighborhoods from the toll lanes, leaving more cars on the congested freeway.

North of Stone Oak Pkwy on US 281 there are 4 existing freeway lanes today. When they’re done with the freeway-tollway conversion, every single free lane will be converted into a toll lane. Commuters will have NO free highway option on the northern stretch of US 281 (from Stone Oak Pkwy. to the Bexar County line).

On I-10 and Loop 1604, the plan is to add two new HOV-toll transit lane each direction (although some documents only show one new lane on I-10). At Loop 1604 & I-10, the new direct connect interchange ramps will NOT be accessible to anyone other than those paying tolls. In both the I-10 & US 281 corridors, buses will have very expensive, exclusive direct connect ramps into/out of the toll lanes to Via’s park-n-ride transit centers in the Hill Country (where few will ever carpool or get on a bus). On US 281, the toll lanes do not connect to Loop 1604, and you’ll be paying a toll to get stuck behind a bus. If I-10 is one lane and not two, you’ll be paying a toll to get stuck behind a bus there, too.

Why now?
While both Wolffs have consistently voted to toll our area freeways, why are they voting to ‘reaffirm’ something they already did? Because former Gov. Rick Perry’s Transportation Commission Chairman Ted Houghton is being replaced in just a few short weeks by incoming Governor Greg Abbott who campaigned against toll roads. Houghton and Perry have made it their mission to impose tolls all over Bexar County, and they’ve been  unsuccessful due to citizen resistance. If the Commissioners pass this resolution, they’re attempting to thwart the efforts by Governor Abbott and the Texas legislature to fix the road funding shortfall without more tolls and hence get Bexar County freeways fixed toll-free as promised.

Bait & Switch – Broken promises
Sadly, when Nelson Wolff was running for re-election he sent a letter to the Transportation Commission to ask for Prop 1 money to be used to fix US 281 without tolls, now that he won re-election, he’s reneged on his promise and is voting to keep tolls on US 281.

TAKE ACTION
Call Kevin Wolff’s office NOW at (210) 335-2613 to tell him to pull down his resolution and use the new road money from Prop 1 (avg. $1 billion/yr) and the money coming shortly in the next budget to be adopted by the Texas Legislature (at least $1.2 billion) to fix these freeways without TOLLS!

 

For more history, go here:
SA officials unveil $825 million toll plan
Board reneges on promise to fix 281, 1604 without tolls
Wolff flip-flops: ‘You can fry me for it later’

Blacklands Corridor – NE Gateway Tollway

blacklands-header_02

The people have spoken and their will is clear – they do not want the proposed private Blacklands Tollway-Northeast Gateway corridor through Rockwall to Greenville in east Dallas. Nearly 1,500 people packed the theater to put their opposition on the record.

Private Northeast Gateway tollway near Dallas draws angry crowd (public meeting in Rockwall on Monday, September 22, 2014)

Is the NE Gateway a truly private road? See the Dangers of the Northeast Gateway Tollway (PDF) flyer.


Sign the petition

to oppose the proposed Blacklands Corridor Tollway/Northeast Gateway project.


Submit public comments

Public comments due by October 2, 2014 to jstout@nctcog.org

Be sure to include your full name and address with your comments.

Since this is being submitted electronically, be sure to ask for confirmation of receipt of your comments by NCTCOG.

State that you want the ‘no build’ option.

Feel free to give reasons whether it’s the use of eminent domain by a private company, the traffic counts don’t justify it, you’d rather see expansion of I-30, or other vital points, the main thing is to get the ’no build’ option on the official record. It comes into play later for potential legal challenges.


Schedule of meetings

Texas Turnpike Corporation (TTC) has scheduled 10 informal public information meetings starting September 25th and going through October 7th. Warning: Whatever they say does NOT count on the official record. This is designed to promote their own propaganda and possibly make concessions that could change later.
See details on the TTC web site…

Please remember according to the NCTCOG, RTC and TXDOT presentations, discussions, and paperwork this project is called the Blacklands Corridor Toll Road. The TTC/Public Werks is using the name “Northeast Gateway” (maybe trying to cause confusion with another project called “South Gateway”).


Action Item

One of the best ways to stop this tollway dead in its tracks is to get local cities and counties to pass resolutions opposing it. The City of Rockwall already passed one and put it in the official record September 22 at the Rockwall public meeting.

Ask your city/county to pass one immediately. You can use the resolution passed by City of Rockwall (PDF) as an example.


Related Documents

Local Grassroots Coordinator

Bryan Slaton, 469-585-2686, or by email


 

Salzman: The Pitfalls of P3s

Link to article here.

Read Randy Salzman’s entire expose on P3s in the June/July 2014 Issue of Thinking Highways here.

Salzman’s work is most comprehensive look at the dangers of P3s to date. It’s a must read for citizens and policymakers alike.

A “Model” Scheme?
Thursday, 14 August 2014 00:00 By Randy Salzman, Thinking Highways | News Analysis

With about two-thirds of America’s new transportation construction “public-private-partnerships,” design-build P3s have been highly praised over the last decade. Contractors, politicians and financiers have been claiming that tiny slivers of private money bring efficiency to the formerly public process of highway building, spurring innovation and freeing taxpayer dollars for other key needs. But as Randy Salzman discovers, it’s not without its problems

In the media, congress and across the political world, promoters pushing design-build public-private partnerships (P3s) are still claiming that private innovation is saving taxpayer money, creating good jobs and easing congestion.

In wanting to institute an “Infrastructure Bank” to address America’s “crumbling highway infrastructure,” even President Obama, using New York’s Tappan Zee Bridge as a backdrop, recently encouraged P3 construction with a US$302 billion plan. The president had apparently not read Congressional Budget Office research into P3s, nor heard the Tappan Zee contractor speak at a congressional hearing.

In March, Fluor’s senior vice president Richard Fierce bragged that his company was saving taxpayers US$1.7 billion on the new bridge across the Hudson until one congressman offhandedly remarked that he’d heard the Tappan Zee project would cost US$5 billion, not US$3.1 billion as the contractor had claimed.

“That may include work outside our present contract,” Fluor’s VP replied.

Design-build is in effect “cost plus,” tailor-made for expensive change orders once construction is underway when no politician can dare pull the plug on runaway spending. P3s are even more geared for lining the pockets of financiers; hence foreign money is flooding into US highway projects today. The costs and risks, it is consistently claimed, are dumped on the privates but the reality is much more complex and, according to the Congressional Budget Office (CBO), at best delays taxpayer pain. There is little, if any, long-term savings for citizens, the CBO notes, and the tiny amounts of private equity serve primarily to get construction underway quicker.

“There’s a set of financial interests who have really learned how to mine the tax code,” P3 supporter Doug Koelemay, Virginia’s new director of Public-Private Partnerships, frowns.

The Very Model of a Modern Major PPP?
Virginia’s 1995 Public-Private Transportation Act is held up as the “model” by contractors and financiers, especially as it was implemented at break-neck speed during Governor Bob McDonnell’s administration. In four years, the number of Virginia P3s skyrocketed to 22 and with the Commonwealth signing over US$6 billion in P3s during 2012 alone, Infrastructure Investor magazine named McDonnell “man of the year” and called the state’s legal consultant, Allen and Overy, the world’s best law firm twice. Does any magazine for investors venerate hard bargainers for taxpayers?

“A great deal of the media praising public private partnerships in transportation projects comes from sources that have a self-interest in promoting them,” says Jack Trammell, now a candidate for Virginia’ 7th Congressional District. “A major factor motivating me to run for office is what I think should be a national concern about this trend away from transparency and toward greater taxpayer risk in such projects.”

In the past, even Virginia’s Commonwealth Transportation Board (CTB) never saw P3 contracts, only being allowed up-down votes on the total taxpayer bill, which consistently put 95+ per cent of all costs on state and federal taxpayers. The privates put up tiny bits of equity, though they imply more because they borrow dollars from Uncle Sam that they likely will not pay back and they sell bonds that Uncle Sam guarantees and which will cost taxpayers when the P3 goes bankrupt – as they almost inevitably do – about 15 years down the road.

It is a “win-win-win” for private money and contractors but for unaware taxpayers it could be the biggest scheme ever in Virginia – and potentially US – history. Is getting a highway or other transportation infrastructure, which may or may not be needed, returned to we taxpayers just when it’s beginning to need maintenance worth the fact that we’ve left virtually all construction costs, all risk, all financing costs and 10-15 years of tolls to the next generation of taxpayers?

A Clean Slate?
Secretary Layne has been shaken by what he’s found in a hard look at a couple of former transportation secretary Sean Connaughton’s P3 contracts. For example, although neither the Virginia Department of Transportation nor the Corp of Engineers ever indicated they could mitigate 480 acres of wetlands – and hence issue a construction permit – Virginia has paid 460 Mobility Partners almost US$300m and is on the hook for another US$900m for a highway that will likely never be built.

With that sort of issue possible in 21 other projects, Layne has ordered a “scrub” of all past P3s to find, for example, non-competitive clauses which prevent Virginia from improving nearby roads without having to pay toll operators for potential lost income. Whether the Commonwealth can get out of some of these disturbing contract stipulations is still up in the air.
We asked Secretary Layne if there was “anything criminal” in what he’s learned.

His hesitant reply, “I don’t think so,” was echoed by Koelemay but, still, the new administration has asked two CTB members to lead an inquiry and highlight better contracting methods. Regardless, “even if some of these ‘improvements’ (P3 projects) are desperately needed,” as Trammell puts it, “we shouldn’t get them at the cost of transparency and accountability to taxpayers.”

Trammell believes financiers can hide in plain sight because the terms of these contracts – often over 700 pages – are so complicated that even after studying the issue for more than a year, he can’t put all of the pieces together. How, he asks, could the general public, reporters without finance degrees or part-time bureaucrats like the Commonwealth Transportation Board understand this complexity? Especially when they don’t hear it.

“You did get a ‘high level briefing’ on the benefits of the [460] project,” Layne explained to CTB members in March, “but you were not privy to the [460] contract, the contract terms, the payments schedule, the risk being taken or any terms.”

CTB members were subdued with one thanking Layne for promising greater openness: “I have been very uncomfortable on a couple of projects we had (under Connaughton). I didn’t have the data I needed to make a decision at the same time I was asked to vote. Don’t ask me to do something without giving me the information I needed.” Another was shocked that “we allocated money yet we had no authority in approving the project?”

Only Jim Rich, later fired by McDonnell and Connaughton over his staunch opposition to fiscal irrationality, stood up and questioned financing and risk management when Connaughton brought rapid-fire P3s before the CTB over the past four years.

Layne, who served as head bond salesman for the 460 “Commonwealth Connector” and still supports the project, assures there will be “competition and transparency” in future P3 contracts. As secretary of transportation today, he said his prime “fiduciary responsibility” is to taxpayers, not bond holders, as it was when he ran the bond operation for the now-suspended 55-mile “Connector.”

Layne and Koelemay indicate the Commonwealth’s representatives in past P3, Connaughton and Tony Kinn, the original Virginia public-private-partnership office director, were outclassed and, due to ideological considerations and trapped by promises to do “something” about congestion, couldn’t just walk away from the table. They may not have realized their legal consultants were conflicted by work for private infrastructure bond sellers.

Media coverage of P3s over the past decade, furthermore, has been overwhelmingly positive, consistently following the contractor line that private innovation is offsetting significant amounts of expense, improving projects and freeing public dollars for other activities. However, the Congressional Budget Office indicates P3s provide little, if any, financial benefit to taxpayers.

“The cost of financing a highway project privately is roughly equal to the cost of financing it publicly after factoring in the costs associated with the risk of losses from the project, which taxpayers ultimately bear, and the financial transfers made by the federal government to states and localities,” the CBO’s Microeconomic Studies director told congress in March. “Any remaining difference between the costs of public versus private financing for a project will stem from the effects of incentives and conditions established in the contracts that govern public-private partnerships.”

In that congressional hearing, Boston’s Michael Capuano reminded congressmen that “people stole money” in prior equivalents of design-build P3s, and that’s why the highway construction paradigm became “inefficiency intended to avoid malfeasance.”

“We need to remember the potential downfalls before we go too far down the road too quickly and want to be conscious of not opening up the barn door,” he cautioned.

Washington, DC shadow congresswoman Eleanor Norton was more specific: “I wonder if it’s (P3) an equitable or fair deal for the public? There’s a very high level of public funding and a low level of private risk. The rundown of figures amaze me and I’m trying to find out what the real advantage here is of the public-private-partnership.”

Read the rest of the article here.

Cintra files bankruptcy on Indiana Toll Road, is SH 130 next?

Link to article here.

Cintra, Macquarie file bankruptcy on Indiana Toll Road
By Terri Hall
Examiner.com
September 23, 2014

Yesterday, the two private, foreign corporations that tookover the Indiana Toll Road in 2006 filed for Chapter 11 bankruptcy. Former Indiana Governor Mitch Daniels sold it to Spanish infrastructure company Cintra and Australia-based Macquarie in a $3.8 billion, 75-year lease that raised eyebrows around the world.

Few thought a road could fetch so much money. It set off a chain reaction of state governments clamoring for quick cash to shore-up shrinking highway funding. Indiana used the money to build other highway projects, forcing Indiana Toll Road users to pay for other road expansion they don’t use. The state has long since spent the money in the short-term, but now the tollway is in long-term trouble.

When Cintra and Macquarie acquired the tollway, they immediately doubled the toll rates. The troubled road has failed to attract enough traffic to repay its $5.8 billion in debt still owed on the project. It shouldn’t surprise anyone that the road is in bankruptcy when they’ve doubled the cost to use it. In a true market approach, if not enough customers are buying your product, you lower the price, not increase it. The hedge fund and distressed debt investors that now own about 80% of the debt have agreed to allow Cintra and Macquarie to restructure their debt or dupe another company into buying it.

Former Penn State Professor Ellen Dannin explains how these companies cash-in even when they go bankrupt in Randy Salzman’s article on public private partnerships (or P3s) in Thinking Highways. She documents how these companies never intend to pay back the debt, but simply ‘mine the the code.’ The corporations first create a separate entity, usually with the road’s name in the title like Cintra and Macquarie did here with their Indiana Toll Road Concession Company, in order to protect the parent company from losses.

They structure the deals to be extremely long leases so that they can depreciate the road as an asset on their taxes. They put very little of their own money at risk as the equity (a mere $800 million out of a total $3.8 billion), and allow the private bond investors and/or taxpayers to take on the risk for the vast majority of its debt. The companies get their own equity back with some profit in just a few short years of collecting tolls. This leaves the other investors to the take the actual losses just about when the road is going to go bankrupt, and often when the road is also in need of major maintenance or rehabilitation.

Is the Texas SH 130 next?
The Indiana Toll Road was already in trouble when Cintra’s Texas State Highway 130 opened in 2012. The tollway was a brand new road, as opposed to an existing tollway, and the only stretch of the controversial international trade corridor known as the Trans Texas Corridor TTC-35 to ever be built. It was intended to serve as an alternative to the perpetually congested NAFTA superhighway Interstate 35. But it, too, is not attracting the level of projected traffic to keep it financially solvent.

Moody’s downgraded Cintra’s debt to junk bond status last year. In June, Cintra failed to make its full debt service payment, placing its SH 130 Concession Company in ‘technical default.’ But this time, Cintra and its minority partner San Antonio-based Zachry American Infrastructure used a $430 million federal TIFIA loan as part of the $1.3 billion debt package, which is backed by the U.S. taxpayer. If the traffic fails to show up (only half of the projected traffic has materialized) and the tollway goes belly-up, the taxpayers go down with the ship.

On Cintra’s two other P3s in Texas, the debt-risk picture gets even more bleak for taxpayers. On the Interstate 635 contract in Dallas, the total project cost was $2.6 billion with $2 billion of that price tag coming from the taxpayers. Cintra landed an $850 million TIFIA loan, $615 million in Private Activity Bonds (also a federal program, special tax-exempt bonds just for these toll road deals), and $490 million in gas taxes from Texas taxpayers.

On the project called the North Tarrant Express in Ft. Worth, Cintra snagged 7 different stretches of highway in one bid. They snagged the development rights which gave Cintra the right of first refusal on all of them under two ‘best value’ bidding procurements (see here and here).

Out of a total cost of $3.7 billion for the projects, $2.8 billion came from the taxpayer: $1.2 billion in TIFIA loans, $673 million in PABs, and nearly $1 billion in other unspecified ‘public funds.’ Segment 3B was 100% funded by taxpayers. All told, $1 billion in just gasoline taxes alone went into the I-635 and North Tarrant Express projects, yet Texans will still be charged a hefty toll (up to 95 cents a mile) to use it.

Cronyism infects P3s
It’s no coincidence the first three Texas P3s went to Cintra. With direct ties to Governor Rick Perry’s office, Cintra’s lobbyist Dan Shelley worked for Cintra, became the chief legislative liaison for Perry in 2005 when he secured the development rights to the Trans Texas Corridor for his former employer, then went back to work for Cintra.

The rest, as they say, is history. Cintra had the rest of its P3s in the bag thanks to Rick Perry’s personal branch of cronyism. Perry gave a keynote address to the International Bridge Tunnel, and Turnpike Association’s annual conference last week in Austin, telling attendees from 18 different countries that, “You have come to what I would suggest is the mecca of innovation on transportation infrastructure.”

Cronyism and putting taxpayers on the hook for private corporations’ losses isn’t ‘innovative,’ it’s a rip-off as old as politics itself. So all eyes will be on Cintra’s SH 130 this December when its next debt service payment is due – both the December payment along with the remainder of its June payment. Perry’s highway department is already supplying the second round of subsidies for the failing tollway by offering another $32 million in public money to allow trucks to use the tollway for the same rate as autos. The first round of subsidies did net an increase in truck traffic, however, as soon as the subsidies stopped, the uptick in truck traffic did, too. The Texas Department of Transportation (TxDOT) is only too happy to keep the subsidies coming since they have a revenue sharing agreement with Cintra.

But absent a major uptick in traffic, even with TxDOT help, the tollway is headed for bankruptcy. TxDOT put it on life support likely long enough for Cintra to at least re-coup its own meager equity of $210 million. However, any further subsidies or bailouts are just putting off the inevitable. Failure to pay its next debt service payment will land Cintra-Zachry in bankruptcy just as Perry’s presidential hopes will kick into high gear. This time, the nation will be watching.

________________________________________________________________________

Link to article here.

9/24/2014

Indiana Toll Road Declares Bankruptcy
Spanish-Australian consortium behind the Indiana Toll Road cannot pay its $6 billion in debt obligations.
The Newspaper.com

Indiana Toll RoadPublic-private transportation partnerships continue to fail around the world. The Spanish-Australian consortium that runs the Indiana Toll Road became the latest casualty seeking Chapter 11 protection in the US Bankruptcy Court for the Northern District of Illinois. On Tuesday, Judge Pamela S. Hollis began hearing the case.

This was supposed to be a model deal for other states to follow. In 2006, then-Governor Mitch Daniels (R) leased the 157-mile Indiana Toll Road to Cintra and Macquarie Bank, operating as the ITR Concession Company, in return for an up-front payment of $3.8 billion. Daniels promised to use that money to build new roads over ten years under a program he called “Major Moves,” while the consortium was allowed to charge motorists steadily rising tolls until the year 2081.

The consortium came up with the cash by borrowing $4.1 billion off the prospect of a “guaranteed” stream of future toll returns. Revenue projections proved to be unrealistic and the consortium was unable to turn a profit.

“The global economic recession and actions undertaken by the United States and various European governments in response thereto have driven interest rates down to historic lows, creating a substantial net obligation under the debtors’ interest rate hedging obligations,” consortium CEO Fernando Redondo told the court in a filing on Sunday. “As a result, absent a restructuring, the debtors will not have sufficient cash flows to service their funded debt obligations… and operate the toll road in a prudent manner.”

Motorists paid $196 million to use the road last year while the consortium owed $193 million in debt service payments. This left just $3 million to cover the cost of 244 employees, maintenance, capital upgrades and related expenses. Reserves were exhausted in December, and the consortium missed a $102 million interest payment in June. With interest, the consortium’s total debt obligation now stands at $6 billion.

The promise of the Major Moves Fund also failed to deliver. The $2.6 billion fund was supposed to have been set aside from the $3.8 billion payment to the state government. It was to grow by 5.25 percent annually from investments. That did not happen, and the money ran dry in 2013, though tolling will continue for at least another 69 years.

The toll road’s failure is not necessarily unexpected or unwanted for the companies involved. Australia’s Macquarie Bank, which indirectly owns half of the consortium, is known as the “millionaire’s factory” with a knack for turning profits from flipping assets and collecting management fees, according to a lawsuit filed in New York (view case).

Such failures are common. The 91 freeway high occupancy toll lanes in Orange County, California was one of the first modern toll projects to go belly up, with the county taxpayers in 2003 paying for more than the original cost of construction to buy out the project. San Diego’s South Bay Expressway went bankrupt in 2010 and was also bought out by county government. California’s Foothill-Eastern Transportation Corridor Agency, which runs the 241, 261 and 133 toll roads in Orange County, has been teetering on the edge of default despite $1.7 billion in subsidies from the taxpayer. The agency in charge of the road refinanced in December, extending the tolling period out to the year 2053.

In South Carolina, the Greenville Southern Connector went bankrupt in 2010. Transurban, the Australian company that runs the Pocahontas Parkway in Richmond, Virginia, wrote down the toll road as having a value of $0 in 2012.

In Australia, the operator of the Clem7 toll road went bankrupt last year, joining the Airportlink toll road, the Lane Cove Tunnel and the Cross City Tunnel. In Spain, ten toll concessions, including the Madrid-Toledo highway, became insolvent in 2012. The Spanish government provided more than a billion euros in bailout money to the tolling firms Abertis, Acciona, ACS, Bankia, Cintra, OHL and Sacyr Vallehermoso.

Munoz’ ties to 281 toll road create trail of corruption

Link to article here. Update: Munoz & team did snag the contract.

Munoz’ ties to 281 toll road create trail of corruption
By Terri Hall
Examiner.com
September 17, 2014

The Express-News reported yesterday that Henry Munoz is angling to get a piece of the US 281 toll project in San Antonio by seeking a 5-year engineering contract with the Alamo Regional Mobility Authority (RMA). The trouble stems from his sordid history of buying and manipulating local politicians, and he’s particularly adept at it when it comes to transportation. He’s set-up his own company to now profit from the project he helped fashion while a public official.

Munoz is a former member of the Texas Turnpike Authority and a former Texas Transportation Commissioner, who resigned from the agency under a cloud of scandal for his staff abusing the state travel program and for providing inside information to a Mexican construction company in exchange for lavish accommodations, travel, and other personal pay-offs. Nearly a decade later, Munoz was appointed to the Alamo RMA and served as its Finance Committee Chair. He bolted when Texans Uniting for Reform and Freedom (TURF) successfully sued to halt the US 281 project in 2008. It was just no fun for him to be there anymore. No money to snag for the foreseeable future.

In December 2008, Bexar County Judge Nelson Wolff appointed him as Chairman of the Board for both Via Metropolitan Transit and the Advanced Transportation District, or ATD, (which oversees the portion of local sales tax dedicated to transportation projects – half goes to transit, half to roads). The RMA immediately attempted a hostile takeover of Via (cloaked as a merger but the idea was concocted by Wolff and Munoz) to get itself on life support, since its seed money from the city ($500,000) and county ($750,000) had run out. It had no ongoing revenues to cover its operating expenses absent any toll projects.

With roughly $40 million in debt on the RMA’s books, many Via board members balked at the merger, and before the state laws could be changed to allow the merger, President Obama came to the rescue and bailed out the RMA with his stimulus program. With a project now in hand, the RMA dropped Via like a hot potato and ran merrily on its way to build the southern ramps of the 281/1604 interchange. But the bad blood between the two agencies lingered. It didn’t take long for the RMA to get too big for its britches, and Bexar County took over the operations of its recalcitrant child in June of 2012.

But it wasn’t until 2012 that Munoz made his move to get back in the toll road game. When TxDOT announced a $2 billion surplus (due to cost under runs and infusion of federal money), San Antonio received $146 million in unexpected funding. TURF asked for the funds to go to one of the region’s top most congested roads, US 281, especially since it had $100 million in gas taxes yanked from the project in 2008 (without TxDOT or the local Metropolitan Planning Organization, MPO, ever accounting for where it went).

The MPO and the Bexar County Commissioners passed unanimous resolutions to use the funds, along with $100 million in ATD sales tax revenues, to fix both US 281 and Loop 1604 West without tolls. But TxDOT quickly went to work in both public and private meetings to assure any deal still contained tolls on US 281. Munoz seized the opportunity to get back at the RMA since ATD dollars were involved, and the Via/ATD Board passed a resolution to bar the RMA from controlling the toll revenues. In a back room deal with TxDOT, Munoz, and Wolff, Munoz also insisted the deal include a Via Park-N-Ride transit center ($12 million) and an exclusive ramp (also over $10 million) into and out of the inside toll lanes on 281 for its buses and park-n-ride customers, which in the Stone Oak area is scant at best.

Fast forward to January of 2014. Once again, TxDOT, Wolff, and Munoz hatched a back room deal to hand over 29 miles of TxDOT highways to city and county taxpayers in an $825 million toll road package that now included adding toll lanes to I-10 (outside Loop 1604) and free expansion on Loop 1604 West. Munoz, a powerful ally and penultimate fundraiser for Democrats, as well as a high-powered bundler for Obama, was sure to protect fellow Democrats’ districts from tolling, while slapping toll taxes on the largely Republican north side.

Apparently, after the now defunct unpopular streetcar plan went south, Munoz got the hankering to cash-in on the US 281 toll road deal he helped fashion, and decided to let the ATD Board relinquish control of the toll revenues. Perhaps knowing the backlash to his name being attached to the engineering teams vying for the 281 toll contract would come, he wanted to soften the obvious tie to his Via/ATD Board Chair activities and this project. At its board meeting in August, the RMA officially ceded the project back to TxDOT, but retained the rights to the toll revenues.

Fraught with red flags

The obvious red flags are these:
1) Munoz & Co. is not even an engineering firm; it’s an architecture firm. How can an architecture firm qualify as part of a team for a civil engineering contract? Clearly Pape Dawson and AECOM are seeking to cash-in on Munoz’ connections to local officials and even to the RMA board itself. Indeed, Munoz has strong ties to three current RMA board members. The first, Reynaldo Diaz, served on the RMA board with Munoz. The second, Gavino Ramos, is a former Via board member that served at the same time as Munoz, and the third, Ramiro Cavazos, is the CEO of the Hispanic Chamber of Commerce who led a business coalition to advocate for Munoz’ street car plan.

2) The US 281 toll project does not have final clearance from the Federal Highway Administration. The final configuration of the road is still in doubt, too. Judge Wolff and Texas State Senator Donna Campbell sent a letter to the Texas Transportation Commission requesting that if Prop 1 passes in November, that some of those funds be used to replace some of the toll lanes planned for the 281 toll project with more free lanes. So how can an engineering contract be issued for a project where the design is still up in the air and for a project that has not received final approval from the feds yet?

The only explanation is corruption. This deal is rigged in favor of Munoz’ team from start to finish. Munoz was a key player in orchestrating the 281 toll road as a public official, and he’s now stealthily positioned himself to profit from it. He has a string of bad deals fraught with abuses in this town (San Antonio ISD bond program and the Museo Alameda project to name a few), and the US 281 toll project may be next among them.