"Thirty seven toll projects, 18 of them slated to come under foreign control using controversial private toll contracts called CDA's"

MPO rams 37 toll projects down San Antonians’ throats

Eye-popping 37 toll projects appear in MPO’s new plan, 18 to come under foreign control

Taxpayers’ revolt ahead of Monday vote

12/3/09

Texans Uniting for Reform and Freedom
Copyright 2009

(San Antonio, TX ) While San Antonians were enjoying turkey and counting their blessings this Thanksgiving, their politicians were scurrying to load-up the Metropolitan Planning Organization’s (MPO) long-range plan with no less than 37 toll projects, 18 of them slated to come under foreign control using controversial private toll contracts called Comprehensive Development Agreements (or CDAs).

The grassroots defeated CDAs during a special called session of the Texas legislature in July, yet the MPO plugged these now illegal contracts into its plan anyway, apparently following TxDOT’s playbook of using it as a means to get CDAs re-authorized over the LOUD OPPOSITION of Texans in the next legislative session in 2011.

TURF has alerted the grassroots to urge the MPO to:

1) REMOVE toll roads and CDAs from its plans.

2) Use traditional gas tax funding NOT privatizing and tolling Texas roads as its source of funding for these projects.

3) NOT VOTE for ANY plan with toll projects and CDAs in it.

“We’ve been warning San Antonians for years that Rick Perry has made his toll tax policy so expansive, they won’t be able to escape it. The MPO’s list of 37 toll projects shows how out of touch our politicians are with the economic realities of their constituents. It’s clear this about more than getting projects built, it’s an all-out assault on our freedom to travel by making it unaffordable to drive. I haven’t met a single Texan outside the Capitol that thinks it’s a good idea to cede control of our Texas roads to foreign companies,” observes Terri Hall, Founder/Director of TURF.

As an example of just what a taxpayer disaster it is to hand control of our public roads to private, foreign toll operators using CDAs, drivers on a road operated by Spain-based Cintra (who has won three Texas contracts already) in Canada receive their first bill totaling thousands of dollars in fines years after they supposedly took the tollway. The government has no power to step-in and protect motorists from runaway taxation nor disputed toll fines.

A recent article in the Toronto Star chronicles the nightmare:

“’We, as a government, have no control over that, as a result of the (Mike) Harris government’s deal,’ to lease the toll road to a private consortium for 99 years and include a provision in the contract forcing the transportation ministry to deny new plates to anyone who doesn’t pay the 407 whatever it demands, said Bradley.

“The 407 ‘negotiated a deal that was very favourable to them and they covered all the aspects of the deal that they would want,’ said Bradley.

“Many readers said they think the 407 deliberately holds back invoices on unpaid balances to allow interest charges to grow, but Bradley noted that it “is responsible for establishing its own business practices, and under its deal … it has the right to set and collect tolls and administration fees and interest.”

Here’s what some of these CDA deals involve:

• In Texas, they can last up to 52 years

• Charge oppressively high toll rates, like 75 cents PER MILE (like the deals in DFW) which on average will mean $3,000 a year in new taxes on driving

• Grant foreign companies the right to levy taxes, the power to take away drivers licenses or car/license plate registration

• Removes rights of due process for toll violations and fines

• Non-compete agreements that guarantee congestion on the free routes

• Guaranteed annual profits (so they can raise the toll rates to whatever price needed so they always get their guaranteed level of profit)

• Massive taxpayer subsidies (so it’s a double and even triple tax scenario) yet all the profits leave Texas

• Toll companies write off the depreciation of the “asset” on their taxes (then spin it off to another subsidiary company and start the depreciation all over again)

• Exemption from alternative minimum taxes and often special use of tax-exempt public bonds

• Little to no actual risk transfer

• Slower speed limits on free routes and higher speed limits on the tollways to drive more traffic to the toll roads (financial incentive given to TxDOT for driving more traffic to the tollways)

A sample list of toll projects on the docket:

-Hwy 90 (from 410 to 211)
- I-10 (from 410 to county line)
- Loop 1604 (just about the entire loop, not just the north half)
- 281 (from 1604 to Comal County line)
- I-37 (from 410 south to Atascosa County line)
- Bandera Rd (from 410 to 1604 still appears despite amendment to remove it)
- interchange at I-10 & 1604
- interchange at 281 & 1604 (northbound ramps)
- interchange at 1604 & 151
- interchange at 1604 & 90
- interchange at 1604 & 1-35
- interchange at I-35 & 410
- Kelly Pkwy/Spur 371 (US 90 to SH 16)
- ALL of I-35 (from Atascosa to Comal County line)

© 2009 TURF: www.texasturf.org

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"As CAMPO chairman, Watson presided over a controversial vote in 2007 authorizing five more toll roads in Central Texas. "

Watson stepping down as CAMPO chair

Senator, other legislators likely to leave transportation planning board in the coming months.

12/3/09

By Ben Wear
Austin American-Statesman
Copyright 2009

State Sen. Kirk Watson, whose dual roles as chairman of the Capital Area Metropolitan Planning Organization board and vice chairman of the Senate transportation committee have made him something of a Central Texas transportation czar, will step down as CAMPO chair next month.

Then, some months later, Watson, an Austin Democrat, and fellow CAMPO board members state Reps. Eddie Rodriguez, D-Austin, and Diana Maldonaldo, D-Round Rock, likely will leave the 20-member board. Watson, in a Nov. 30 letter to his fellow CAMPO board members, said eliminating legislators from the board "would make CAMPO more what it's meant to be — a locally driven group that is closest to the needs of the region and its communities."

The service of legislators on the boards of metropolitan planning organizations, federally mandated agencies that oversee transportation planning for metropolitan areas, has been an issue for years. The CAMPO board, in fact, included as many as 10 legislators in the years before Watson took over in January 2007. One of Watson's first moves after assuming the chairmanship was to change the board's membership and jettison most of those legislative spots.

Metropolitan planning organizations' main duty sounds arcane: preparing and approving 25-year transportation plans and then updating them. But the role is critical: Any transportation project using federal funds, which almost all projects do, must be in the approved plans. CAMPO, in other words, doesn't build roads or rail, but no one else can without its go-ahead.

The boards of some planning organizations in Texas have no legislators on them, instead seating a mix of county commissioners, city council members, transit agency staff and Texas Department of Transportation representatives.

As CAMPO chairman, Watson presided over a controversial vote in 2007 authorizing five more toll roads in Central Texas. None of those projects have been built, and only one — an expansion of U.S. 290 East — is poised to happen anytime soon.

The board in 2008 hired a new executive director, Joe Cantalupo, who has gotten high marks for his leadership.

Watson helped create a "transit working group" of CAMPO board members and members of the public to examine proposed transit projects and steered it away from rushed approval of an Austin streetcar plan and toward a more rigorous process to analyze such proposals.

Watson, in his letter, said he will step down as chairman after the board's Jan. 11 meeting. He and the other legislators likely would stay on as board members for some months as the board membership is rejiggered to include voting members from Bastrop and Caldwell counties. The board currently has members from Travis, Williamson and Hays counties.

bwear@statesman.com; 445-3698

© 2009 Austin American-Statesman: www.statesman.com

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Cintra's North Tarrant Express toll taxes are expected to be "well above those charged by ordinary toll roads.”

Texas At It Again With Tollway P3

12/1/09

By Richard Williamson
The Bond Buyer
Copyright 2009

DALLAS — A team of developers will receive the proceeds of $400 million of private-activity bonds this month to finance one of the most ambitious public-private toll operations in Texas: a $2 billion project known as the North Tarrant Express.

The tax-exempt PABs will be issued by the Texas Private Activity Bond Surface Transportation Corp. The PABs were approved by the U.S. Department of Transportation last year as part of a $15 billion authorization under the Safe, Accountable, Flexible, Efficient Transportation Equity Act: a Legacy for Users. In early November, SAFETEA-LU was extended by Congress through Dec. 18.

“When we get the proceeds, they’re going to be loaned to the developer, and the only pledge coming back to repay that is going to be the payments from the developer that will be generated from the toll revenues,” said James Bass, chief financial officer of the Texas Department of Transportation. The creation of the nonprofit issuer allowed the bonds to be tax-exempt while separating the debt from any backing by the state.

“Even though it’s clear in all the documents, we just wanted to separate and not confuse the market or other people that the [Texas Transportation Commission] or the state of Texas was in any way responsible for this debt,” Bass said. “So we set up a separate corporation, separate name to hopefully make that even more clear than the documents themselves make that.”

Financing of the North Tarrant Express is designed to transfer risk to the private partnership, and that risk is reflected in bond ratings slightly above investment grade. Fitch Ratings pegs the NTE bonds at BBB-minus, while Moody’s Investors Service rates them at Baa2. Ratings from Standard & Poor’s have not been released.

Construction of the NTE by a consortium known as North Tarrant Express Mobility Partners is expected to begin early next year. NTE Mobility Partners will hold a 52-year concession from TxDOT to design, build, finance, operate, and maintain the first two segments of the NTE. Cintra holds a 57% ownership stake in the partnership, with 33% indirectly owned by Meridiam Infrastructure Finance, and 10% owned by the Dallas Police and Fire Pension System.

“Primary risks for the transaction include the limited amount of meaningful history for this type of asset class and uncertainty associated with toll rates given the highly demand-driven nature of toll rates,” Fitch analysts wrote. “The presence of free alternative competing GPLs [general purpose lanes] directly next to the managed lanes, along with uncertainty relating to the current economic recession could materially impact the congestion on the general purpose lanes.”
The NTE is one of more than $12 billion worth of P3 projects planned in the Dallas-Fort Worth area, according to Carlos Ugarte, head of U.S. business development for Cintra.

“In the next three to five years, the Dallas-Fort Worth area is going to see $12 billion of construction, with only $1 billion of public money,” Ugarte said. “I think in 2011 [state leaders] will see this remarkable success, and I see a very great future for P3 finance in Texas.” Cintra and its private partners will contribute about $420 million to the NTE, with $570 million coming from TxDOT.

Bass said about $288 million of private-activity bonds will also be used for the redevelopment of Interstate 635, a loop around Dallas that is also known as Lyndon B. Johnson Freeway.

The combination of public and private financing has allowed the Texas Department of Transportation to apply its resources to other projects in the state. But local leaders in North Texas have also complained that their region is getting short shrift in terms of tax funding for construction.

At last month’s meeting of the Texas Transportation Commission, North Texas leaders complained about the region receiving only $126 million in bond proceeds for road projects while most of the $2 billion that was allocated went to other state projects, primarily the widening of Interstate 35 south of Dallas and Fort Worth.

TTC commissioners said they are only following the state Legislature’s guidance in spending the so-called Proposition 12 bond funds, approved by voters statewide in 2007. Lawmakers directed that the Prop. 12 bonds be used on non-toll projects.

The region’s heavy reliance on P3 projects is designed to accelerate construction in the rapidly growing “Metroplex” as Texas continues to struggle with funding formulas for its highways amid declining fuel-tax revenue.

“The financing for the project is really using all available tools,” Bass said. “This is a project that the region has been looking at for 20-plus years. Looking at it through the traditional gas-tax allocation process, it would likely be another 20 years that the region would continue to look at it.”

In addition to the PABs, federal transportation officials have also approved a $650 million Transportation Infrastructure Finance and Innovation Act loan.

The rating agencies also rated the TIFIA loan, with Moody’s setting a lower Baa3 and Fitch rating the loan at BBB-minus, the same as the bonds.

The project includes 13 miles of managed toll lanes in the median of the existing untolled Interstate Highway 820 and State Highway 183, running east-west from the intersection with of IH 820 Interstate 35 north of Forth Worth. The toll lanes will carry traffic towards Dallas-Fort Worth International Airport.

Engineers expect the project to ease save time for drivers on the heavily travelled route.
The concessionaire will be allowed to set tolls, subject only to the requirement that traffic continue to flow freely, and it expects to vary toll rates throughout the day depending on traffic conditions in order to maximize revenues. The project will have a fully electronic open-road tolling system allowing traffic to enter and exit the managed lanes without passing through any toll booths.

Mandatory debt service coverage is projected to rise rapidly, from 1.2 times in the first year of operations to 3.5 times by the fourth year as traffic reaches full volume.

“Lenders will benefit from strong structural protections, including cash-funded debt service and major maintenance reserves,” Fitch analysts noted. “This helps to mitigate the high degree of uncertainty surrounding the willingness of users to pay the rates upon which the sponsors’ forecasts are based — which are well above those charged by ordinary toll roads.”

© 2009 The Bond Buyer: www.bondbuyer.com

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Rick Perry's 'pay-to-play' sponsors include toll-road consulting giant HNTB

Perry pulling in big bucks from Austin political interests

11/30/09

By Wayne Slater
Dallas Morning News
Copyright 2009

While Rick Perry is bashing rival Kay Bailey Hutchison for palling around with special interests in Washington, he’s doing just fine collecting big bucks from special interests back here at home.

It’ll be a couple of months before Perry and Hutchison file their next campaign reports covering the second half of 2009. But here’s a sneak preview, based on some early filings by political action committees that suggest Perry has been replenishing his campaign account with the help of various interests representing everything from real estate and toll roads to liquor and horse racing. Most are groups that have business before the state - and some have endorsed the incumbent Perry for reelection.

For example, Perry got $50,000 in September from the Texas Realtors political action committee. He got $35,000 from the state homebuilders PAC and $25,000 from the politically well-connected Hillco lobby shop, whose big giver is Houston homebuilder Bob Perry.

Other big-dollar checks Rick Perry has received since July: $25,000 from the Texas Apartment Association, $10,000 from the nursing home industry, $25,000 from Houston horse and dog racing executive Charles Hurwitz’s PAC, $25,000 from the optometrists and $25,000 from the BG Distribution wine and beer wholesalers. Although highway administrators have declared Perry’s Trans-Texas Corridor project dead, the governor continues to collect from toll-road interests — $25,000 from the political action committee for Houston construction executive James Dannenbaum and $22,000 from toll consulting giant HNTB Holdings.

As for Hutchison, only a handful of political action committee contributions since July have shown up so far in filings with the Texas Ethics Commission. They include $50,000 from the AT&T PAC, $20,000 from the state architects committee and $30,000 from Valero Energy.

The candidates will file their full reports in January covering all contributions — both from individuals and special-interest PACs raised from July through December 31.

© 2009 Dallas Morning News: www.dallasnews.com

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