"Drivers, pull out your wallets. "
By MICHAEL A. LINDENBERGER
The Dallas Morning News
Drivers, pull out your wallets.
Toll roads in North Texas are about to get much more expensive if North Texas Tollway Authority board members accept a plan to be discussed at a meeting today.
By Sept. 1, toll rates would jump 32 percent, as the NTTA scrambles to find new revenue in the face of badly slumping traffic figures.
North Texans' apparent reluctance to mix a recession with toll charges has led to about 11 percent less revenue than projected for the NTTA in the first four months of 2009. Looking ahead, the authority said Monday that means about $30 million less revenue in 2009. In turn, that will prompt significant postponements of maintenance and other projects, Chief Financial Officer Janice Davis said.
The NTTA had expected to borrow against that $30 million to fund about $108 million in preventive maintenance and other projects – all of which have been canceled, Davis said.
Among other cuts, the NTTA will postpone for at least one year a $35 million traffic and revenue study for the Trinity toll road.
That will delay design work on the controversial toll road, but Davis said work there was already going to stop temporarily, thanks to concerns about the Trinity River levees. The city of Dallas announced this month it will spend $29 million and more than two years studying the levees, which the U.S. Army Corps of Engineers has said are inadequate.
If the NTTA board approves the higher toll rates, drivers would pay about 14.5 cents per mile instead of 11 cents, and the NTTA could expect about $52 million more dollars per year, Davis said. In addition, rates would go up about 5.5 percent every other July 1.
But the rate increases – which would include Dallas North Tollway, Bush Turnpike and the State Highway 121 Tollway – are about more than boosting revenue for its own sake.
The NTTA owes bondholders billions of dollars, largely as a result of the $3.2 billion it paid for the Highway 121 toll contract in 2007. Those bondholders have been promised that revenue will stay far above debt-service obligations. If the NTTA doesn't do so, bondholders can force the agency to increase rates.
Davis said she is optimistic that the action will prevent ratings agencies from lowering the NTTA's bond rating.
"Traffic on our system is projected to be down about 9.8 percent" this year, Davis said. "I think what the market looks for is decisive action to fix the problem. They realize we are not going to recover the losses by a toll increase within one year. They are looking more for action by the board that shows it is willing to do what is necessary to keep our system solvent."
But the same steps taken to respond to declining traffic could make the NTTA's problem worse, according to some drivers who said Monday that higher rates will cause them to avoid toll roads.
"If they raise rates, I will keep my Toll Tag, but I probably won't use it as often," said Plano resident Bethany Anderson, who said she spends about $30 a month on tolls by using toll roads when traffic is bad. "Every little bit helps when you look to see what you can cut, especially as gas prices ratchet back up. ... I'm gonna need to see the NTTA's plan for a teleporter before I want to pay more in tolls."
Davis said staff has considered the potential for further traffic declines as a result of the rate increases. "But we think the additional revenue brought in will be sufficient" to compensate, she said.
The NTTA is not unique in confronting steadily declining traffic numbers. Over the past 18 months, Americans have simply begun driving less – prompting what the Federal Highway Administration has called among the longest sustained reduction in miles driven in U.S. history. As part of this trend, toll roads across America have seen revenues fall as well.
But the NTTA is especially vulnerable, thanks to an extraordinary amount of debt. When the Regional Transportation Council voted in the summer of 2007 to award the Highway 121 contract to the NTTA, it did so on the assumption that this fast-growing region would continue to see extraordinary population growth.
That growth has slowed in the recession, and high gas prices have helped persuade some North Texans to avoid toll roads.
As a result, traffic is 19 percent below projections for Highway 121, now called the Sam Rayburn Tollway.
The problem for the NTTA, said Davis, is that with traffic down so far so soon into the 52-year contract, there is little chance to ever catch back up, even with higher toll rates.
"When you have to retreat from your base year, then you are starting from a lower base. So while your growth may recover, you never recover what you have given up to that lower base line. It does become a significant number as you extend it out into the future."
Increase toll rates across the system 32 percent, from 11 cents per mile to 14.5 cents.
Postpone $82.5 million in capital improvement projects, including an already announced one-year delay in electronic tolling on the Dallas North Tollway.
Postpone spending $35 million for a full traffic and revenue study for the Trinity tollway for one year, maybe more. The study is essential for any further design work beyond that being completed now by consultants.
|Month|| Toll |
|DALLAS NORTH TOLLWAY|
PRESIDENT GEORGE BUSH TURNPIKE
SAM RAYBURN TOLLWAY (State Highway 121)
|Traffic so far this year has been 18.76 percent below NTTA projections.|