Monday, November 19, 2007

North Central Texas Council of Governments (NCTCOG) : 'A toll road for SH 161 is the only option.'

Texas Toll Road in Flux

Interagency Dispute Could Halt Big Project


by Richard Williamson
The Bond Buyer
Copyright 2007

DALLAS — An interagency dispute could kill one of the largest toll projects in north Texas, as state transit officials warn of dramatic cutbacks in new construction.

Facing immediate peril is the $1 billion extension of State Highway 161 between Dallas and Fort Worth as a turnpike under the supervision of the North Texas Tollway Authority.

To build SH 161 as a high-speed tollway with access roads, the NTTA and the Texas Department of Transportation have to agree on terms.

At last week’s meeting of the Texas Transportation Commission, which oversees TxDOT, chairman Ric Williamson gave the NTTA a Dec. 21 deadline for reaching agreement with TxDOT engineers. Without an agreement, plans for a tollway would die, he said.

NTTA officials said there were too many issues to resolve to reach agreement by that date.

The pressure to reach an agreement comes as the NTTA develops financing and construction plans for the largest toll project in Texas, the $5 billion State Highway 121 north of Dallas. The authority today is scheduled to issue up to $3.75 billion of bond anticipation notes to provide an upfront payment to regional governments for the right to build SH 121.

While SH 121 is in a developing area of Collin and Denton counties surrounded by vacant land, SH 161 runs through some of the most heavily developed areas of Dallas and Tarrant counties, including the suburbs of Irving, Grand Prairie, and Arlington.

SH 161 is expected to be a major thoroughfare linking the affluent northern suburbs of Dallas to the area near the Dallas Cowboys’ new stadium under construction in Arlington to the south. Currently, SH 161 reaches only as far as U.S. 183 in Irving, site of the Cowboys’ current Texas Stadium several miles north of the Arlington site. The Cowboys begin play at the new stadium in 2009 and will host the 2011 Super Bowl.

If it is not built as a toll road, the SH 161 expansion could go forward as freeway financed by bonds backed by gas-tax revenues.

“On the surface, that sounds fine,” said Lara Rodriguez, spokeswoman for the North Central Texas Council of Governments. “But if it is built as a gas-tax road, that takes away from other projects in the Dallas-Fort Worth area, and that would be a huge blow to transportation projects in the region. A toll road is really the only option.”

The state has no money to spend on SH 161 and would have to use $600 million from the $3.3 billion up-front payment that the NTTA is paying to the Regional Transportation Commission for the right to build SH 121, Williamson said.

“We have 90% of the engineering plans ready and are ready to proceed as early as next summer,” said TxDOT spokesman Bill Compton.

Local governments in the region have already begun clamoring for a share of the upfront payment for local projects.

Under SB 792, signed into law by Gov. Rick Perry last summer, regional toll authorities have first rights to toll projects. But if they cannot reach agreement, TxDOT has the right to build the road itself.

The dispute between TxDOT and the NTTA involves a market valuation process mandated by SB 792. SH 161 is seen as the first test of that process.

Under the new law, the two agencies have to agree on terms for determining the value of a proposed toll project. The actual study would be conducted by a third party. But reaching an agreement on the valuation is potentially time consuming.

In order to shape the valuation, the NTTA says it needs access to TxDOT’s software for the complex calculations over a 50-year timeframe. TxDOT regional engineer Bill Hale said the software is proprietary and not open to the NTTA’s inspection.

At last week’s TTC meeting, TxDOT deputy executive director Steve Simmons outlined ideas for spending reductions to meet budget constraints, including cutting consulting engineering budget by 57%, or about $250 million.

Another possibility is trimming the budget for right-of-way purchases from $500 million to $275 million or reducing the agency’s budget by half in fiscal 2009.

Despite the availability of more than $9 billion through two new debt funds and a $3.3 billion check soon to come from the North Texas Tollway Authority, the agency is barely meeting its daily and monthly cash-flow needs.

© 2007 The Bond Buyer:

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