Secret toll agreements under fire; Collin County officials call for restraint of TxDOT

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Commissioners call for help on S.H. 121
McKinney Courier-Gazette
February 16, 2006

Collin County Commissioners may be forced to reconsider signing a comprehensive development agreement with a private company to build and operate S.H. 121, after their plan for the North Texas Tollway Authority to build and operate the road was overlooked Feb. 9 by regional transportation officials.

On Tuesday, they mulled asking state senators and representatives to draft legislation to limit the Texas Department of Transportation’s ability to force cities and counties to accept CDAs with private companies to operate toll roads.

Last Thursday, the Regional Transportation Council voted to include the NTTA’s proposal among other bids to operate the road from which the Texas Transportation Commission can choose. That means that the NTTA, a non-profit local tolling entity, is competing for the rights to build and manage the road with private, for profit companies, some of which are based outside the country. The Texas Department of Transportation will present competing proposals to the RTC in November.

“Our proposal to use NTTA to build and operate 121 wasn’t rejected, it was just thrown into the mix with the comprehensive development agreements,” said County Commissioner Jack Hatchell. “It’s not going to delay the construction of that facility any further. It’s just a matter of who submits the best bid to do that.” Hatchell also chairs the RTC. In April, he said, TxDOT may release a “shortlist” of three of four possible bid winners.

While the RTC’s decision is disappointing, he said, if TxDOT chooses to draft a CDA with one of the private companies, Collin County may still be allowed to set the toll rate.

“The main goal is to get the thing built in five years, and if we can set the toll rates and rate of inflation, then everything will be on equal footing,” Hatchell said.

However, he said, what is frightening is that the CDAs are fast becoming the norm for toll road projects in Texas. Private firms are well-funded, and like they did Thursday, can offer TxDOT a big cash payment for the rights to operate toll roads.

At the RTC meeting, TxDOT revealed that companies were willing to pay up to $575 million upfront for the rights to S.H. 121. The NTTA proposal would pay $515 million over 50 years and gradually increase over time.

They are so sold on this CDA process. I don’t think they are going to let anybody do a toll road on their own,” Hatchell said. “When they dangle that $575 million in front of people, it really makes a difference.”

That $575 million would immediately add to TxDOT’s coffers for projects in the Dallas District, which includes many of the RTC member counties and cities.

Hatchell said that while the NTTA proposal “is a better deal in the long run,” operating the road through a private firm is seen as a better deal in the short run.

It’s a money-grab,” said County Judge Ron Harris. “We’re really going to have to follow the lead of our legislative delegation because this has kind of gone over what we can do.”

Harris, Hatchell and Hoagland agreed that the county and its citizens should rally their state representatives and ask for legislation re-evaluating the focus of TxDOT and the RTC’s near neighbor, near timeframe policy. TxDOT, they said, swayed the RTCs vote because the department favors CDAs.

“The four cities are absolutely against and our position has always been against CDAs,” said Harris. “There’s no local control, plus they’re going to make a sizeable profit or else they wouldn’t be doing this. I think the money should just stay here with the NTTA.”

The county initially proposed forming a local government corporation to build and run the road, but that idea was rejected by state transportation officials. The county and four cities revoked their support for the LGC after learning that state officials would not approve of it. They instead endorsed the NTTA’s proposal, and county officials were hopeful that their second choice would be accepted.

Harris said that other counties who have used CDAs have reported problems with them. “The problem is I can’t look at anyone here and tell them I’ve seen the documentation and that it’ll work because it’s all done in secret,” he said.

Hoagland said he would not support allowing a private company to build and operate S.H. 121 through a CDA, and called it “another Robin Hood.

When the state sells out to the highest bidder, that automatically translates into the highest tolls for our citizens,” he said. “I think that the Legislature ought to go in and change the focus of TxDOT. That’s what’s going to have to happen. We’re going to have to pass a law saying that’s not the way we finance roads.”

Commissioner Joe Jaynes said that if a private company can keep the toll rates low and allow Collin County to set terms of the agreement, he’d be willing to look at the option.

The county’s stance on S.H. 121 could tarnish its relationship with TxDOT and its neighbors and affect its ability to acquire funding for other projects.

“It’s obvious that Austin wants it. They’re doing it in other areas of the state. There might be some issues with it, but I think looking at those issues might resolve them one way or the other, so at least we have the NTTA proposal in there. With the money up front, if that was to work out, we’d have quicker funding for U.S. 75, 380 West and the Outer Loop,” he said. “I’m not pro-CDA. “I’m just saying let’s compare apples to apples so we can get a clear picture on where we’re headed.”