Friday, August 29, 2008

"Betting in favor of polluting the Edwards Aquifer and paving the Hill Country.”

U.S. 281 tollway is seen as a road to $2.1 billion


Patrick Driscoll
San Antonio Express-News
Copyright 2008

At 17 cents a mile, and rising steadily each year, the tolls for driving on U.S. 281 will add up fast.

Motorists could pay $2.1 billion over 37 years to use the 8-mile stretch of tolled express lanes expected to open by 2012, according to a recent traffic and revenue report needed to sell bonds for the project.

That averages almost $57 million a year, an eighth of the $472 million needed upfront to design, buy land and rebuild U.S. 281 into a tollway with nontoll frontage roads.

Bottom line, according to Moody's Investors Service, the project is a sound investment for bond buyers, Alamo Regional Mobility Authority Director Terry Brechtel said.

“It's conservative,” she said. “So we feel good about it.”

The money would trickle in at first, with toll lanes fetching just $8 million the first year, says the report by consultant URS. But as waves of people and jobs migrate north of Loop 1604 and traffic increasingly chokes area roads, drivers will warm to the idea of paying to double their speeds, analysts predict.

Toll traffic could swell five times over by 2048, when about $1.3 billion in bonds, loans and interest would be paid off. Also, the 17-cent-per-mile fee should rise to about 48 cents by then, while trucks would be paying almost triple the rate.

By the time today's teens get around to eyeing retirement four decades from now, the U.S. 281 tollway might be on track to rake in $120 million a year.

Startup and debt costs aren't the only outlays needed.

Expenses to collect tolls and pay staff would eat 18 percent, or $427 million, of revenues, a recent HNTB Corp. engineering report says. Maintenance would add another $170 million.

The biggest risks to money flows would be a major slowdown in population growth, which feeds traffic congestion, or political backlash that reigns in annual toll-rate increases, the URS report says.

If San Antonio's population and job growth falls 14 percent below forecasts — which, to be safe, URS set lower than 1990s trends — the toll road could lose more than a fourth of earnings. A recession stopping growth along the corridor for five years could slice revenues more than a tenth.

Robust growth and perpetually escalating toll rates are much of what activists fear.

A pending federal lawsuit challenges a state environmental study for not seriously considering how the toll road would spur growth over recharge areas of the Edwards Aquifer or financially harm residents.

Yet, the URS report confirms that healthy traffic and revenues rely on such growth, said Bill Bunch of Save Our Springs Alliance, which is representing two area groups.

“If you are projecting decades of substantial traffic growth along U.S. 281 and then taking on debt based on those projections, then you are basically betting in favor of polluting the aquifer and paving the Hill Country,” he said.

Another looming concern involves record-high gas prices, which the URS report doesn't specifically address.

Most experts agree that global oil production is peaking now or will in a few decades, and that the age of cheap energy is over. But how adjustments play out with alternatives, including public transit and fuel-efficient cars, is less certain.

After seeing the URS report, Brechtel requested a close look at gas-price impacts.

“I said, ‘Thank you very much, I want a specific gas-price analysis,'” she said.

With high gas prices pushing Americans to drive less this year, most U.S. toll roads lost 2 percent to 10 percent of traffic, Fitch Ratings said in a report last week. Texas losses are under 5 percent.

The trouble could last one or two years, Fitch said. If pressures continue, and policymakers start funneling more money to transit and more people begin shunning suburbs to live in urban cores, toll roads will face even bigger problems.

“The question is whether the current trend will continue for a longer period,” the report states.

Portions © 2008 KENS 5 and the San Antonio

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