Tuesday, April 08, 2008

"We don't care who builds it as long as it is built."

North Texas Tollway Authority offers $1.2 billion for State Highway 161

Authority says it will step aside if state thinks it can get better offer for Dallas County highway

April 8, 2008

The Dallas Morning News
Copyright 2008

The North Texas Tollway Authority put a $1.2 billion price tag on the State Highway 161 toll road Monday, and said if the state Transportation Department thinks a private firm would pay more, the authority would step aside from the project in return for minor concessions.

The proposal all but guarantees the 10-mile Dallas County highway will be built as a toll road, an outcome that had been in doubt until Monday.

If accepted, the proposal – which NTTA called its "best and final offer" – would involve the authority tentatively agreeing to pay about $860 million in remaining construction costs and to pay the state $298 million upfront to be spent on North Texas road projects.

In return, NTTA would build and operate the toll road in perpetuity. NTTA Chairman Paul Wageman said that NTTA will not sweeten its offer but that it's willing to let the project be developed by a private firm if the state reimburses it for expenses it has incurred on the project and agrees to few other minor requests.

State Transportation Department spokesman Christopher Lippincott said Monday that the agency will have to study the proposal to make certain it satisfies state law. "We'll take a look at it," he said. "If this is a really a take-it-or-leave-it proposal, we may take it and we may leave it."

State transportation officials have said NTTA must assume that its contract would last no more than 52 years – the limit for private toll contracts under state law. NTTA's $1.2 billion price, however, assumes NTTA would be able to keep tolls on Highway 161 forever, giving the state 20 percent of the revenue in year 53 and beyond.

Even if the state accepts NTTA's price tag, the authority would still have the right to opt out of the deal between now and midsummer, when its financial calculations are expected to be complete.

Nevertheless, Monday's proposal was seen as a key breakthrough by North Texas transportation leaders who have fretted for months over stalled negotiations between the state and NTTA.

The toll road is seen as a key reliever route for State Highway 360, and the upfront payments are badly needed by the region for other projects, including the $1.5 billion expansion of the LBJ Freeway later this year.

Highway 161"is so important we just want it to get going," said Tom Hart, city manager for Grand Prairie. "We don't care who builds it as long as it is built."

Regional council

The position of the North Central Texas Council of Governments regional transportation council would probably weigh heavily on a final decision by the Texas Transportation Commission in Austin.

The regional council, which sets transportation policy for North Texas, meets Thursday and is expected to make a recommendation on whether to accept NTTA's offer to move forward using the $1.2 billion price tag. It also could decide to urge the state to reject the value and instead seek private bidders.

"The good thing is that this is going to get the decision in front of the RTC, which is where it needs to be," said regional council chairman Oscar Trevino, who is also mayor of North Richland Hills. "We just have to decide what we are going to do. More than anything, this lets us get a road built."

He said he expects opinions to be split at the council, noting that some think NTTA has undervalued the toll contract.

'A big day'

Michael Morris, transportation director for the council of governments, said legal complexities make evaluating the NTTA position difficult, and declined Monday to say what advice he will have for the transportation council when it meets Thursday.

"NTTA should be congratulated. This is a major step, and a big day," Mr. Morris said.

But he added that TxDOT lawyers first will have to be satisfied that the NTTA proposal meets the legal requirements spelled out in Senate Bill 792, the law passed last year that has essentially given NTTA a veto power over all toll roads proposed for North Texas.

NTTA lawyer Frank Stevenson said the agency is convinced its proposal meets those legal thresholds, but TxDOT said it is still studying the matter.

Before voting Monday, several members of the NTTA board of directors said the process imposed by the Legislature – though it was intended to empower NTTA – had led to a sloppy and ineffective process.

"This process is flawed, and a horrible way for supposed partners to reach an agreement," said NTTA board member David Denison of Lewisville.

Mr. Trevino agreed, and said no matter what happens with the Highway 161 project, it's clear the Legislature needs to review rules for toll roads when it meets again next year.

"That's the good news," Mr. Trevino said. "We are all in agreement that we need a new process."

Last year's law that empowered NTTA in toll road negotiations also created a commission to study the state's use of private toll road developers in the future. The panel is charged with making suggestions for changes, and Mr. Trevino and others said Monday that they expect the process under which NTTA and TxDOT have been negotiating to be modified or scrapped as well.

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