Debt-laden tollway authority's 'complex financing' deal with TxDOT "could cost toll-payers up to $100 million in extra interest charges."
By MICHAEL A. LINDENBERGER
The Dallas Morning News
Federal delays in approving a low-cost loan of $423 million to build State Highway 161, tentatively awarded more than a year ago, could cost toll-payers up to $100 million in extra interest charges, officials said Thursday.
“Rome is burning with Nero fiddling nearby,” North Texas Tollway Authority chairman Victor Vandergriff said, adding that delays by the U.S. Department of Transportation were responsible for “untold tens of millions of dollars” in higher interest, plus several million more in fees to lawyers and other advisers.
Federal officials have said the added time is needed because of the complexity of the financing.
In February 2010, the Obama administration tentatively awarded NTTA a special, government-backed loan the authority had requested to speed up construction of Highway 161 in Dallas County.
The news was greeted with excitement at NTTA and in Dallas and Tarrant County, where elected officials immediately said that by reducing its financing costs for the $1.2 billion Highway 161, NTTA would now be able to afford a second toll road as well.
That second road, the Southwest Parkway in Tarrant County, would be the first toll road NTTA has built in Tarrant County. At the time, several board members had said they would not vote to advance either project without finding a way to do both.
Just days after the federal loan was announced, NTTA voted 8-1 to advance Highway 161 and made a tentative agreement to also build Southwest Parkway and the Chisholm Trail project in Tarrant and Johnson counties, where some construction work has already begun.
The approval was hinged not just on the federal loan, but also on a second bit of financial wizardry — a first-of-its-kind deal with the Texas Department of Transportation, in which the state pledged to cover yearly debt payments if NTTA was unable to do so.
It’s that deal with the state, which itself took dozens of meetings to finalize, that has given the federal government pause as it considers granting final approval for the promised loan.
NTTA’s top financial advisers told board members Thursday that only two differences remain to be resolved, and said a deal could be finalized within a week.
Board members said Thursday that without a final approval by the federal government within a week or so, they are prepared to move forward without the loan. While the project has been on hold, interest rates have gone up and made the project as much as $100 million more expensive than anticipated a year ago, officials said.
Moving forward without the loan would add yet more costs, however. It could make building the first road $150 million more expensive, and put NTTA’s ability to do the second road “at significant risk,” Vandergriff said.
NTTA executives said members of Congress had already raised the issue of the loan with Transportation Secretary Ray LaHood.
“Your problem is now with bureaucrats who are going to do it their way, come hell or high water,” said Janice Davis, NTTA chief financial officer.
At issue: The federal government tentatively awarded NTTA a $423 million low cost loan 13 months ago, but has yet to finalize the deal.
At stake: Without the loan, the cost of the Highway 161 toll road could jump $150 million, and put at risk NTTA’s ability to finance Southwest Parkway in Tarrant County.
Waiting: In addition, NTTA owes the Regional Transportation Council $458 million, plus interest, in payments promised as part of the deal that gave NTTA the right to build 161. That money can’t be spent until financing for the road is complete.
© 2011 Dallas Morning News: www.dallasnews.com
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