405 Toll Lanes. A Taxpayer Bailout for the Failed 73 San Joaquin Hills Toll Road?


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The Voice of OC has published a long and extremely significant Community Editorial by Jack Eidt on the proposed Toll Lanes for the 405.

That article goes into great detail about just how badly the 73 San Joaquin Hills toll road has failed, and gives ammunition to the comments that Council Member Gary Monahan and Mayor Eric Bever made before Costa Mesa voted to oppose the proposed conversion of the 405 from a Freeway to a Toll Road. Both Monahan and Bever questioned the motivations of county leaders and the Directors of the San Joaquin Hills Transportation Corridor Agency, who voted to support the Toll Lanes on the 405 to feed new customers into their insolvent experiment.

The biggest beneficiaries of the proposed Toll lanes on the 405 will be the bondholders who own the $2.1 billion in toll road debt, a debt that keeps growing every single year as the 73 fails to generate enough revenue to pay back that debt. The second biggest beneficiaries will be the developer and ideologue who sold us this boondoggle and refuse to admit that their 15-year experiment has failed dramatically.

The proposed toll lanes on the 405 deliver new customers to the 73 toll lanes so that drivers who can pay a $20  peak hour toll will be able to cruise at high speeds from the 605 all the way to San Clemente, while taxpayer who funded the toll lanes watch from the grid-locked freeway.

Here’s an extended excerpt from the piece at the Voice of OC, which continues to lead while the dead tree media misses the underlying story.

73 Toll Road: Developer-Politician Created, Empty and Insolvent

Look at the financial statements for the 73 toll road and you will see that total debt continues to grow as the toll road fails to come anywhere close to the projected usage.

By the middle of 2011, traffic on the toll roads was only 42.5% of the projected volume, which had anticipated almost 60 million annual trips, and instead was stagnating below 25 million annual trips. As tolls have continued to rise, drivers have chosen to return to the freeways, so we have 5.5 million fewer trips per year on this failed experiment than in 2007.

In 2003, total debt was $1.69 billion, with all bonds scheduled to be paid off by 2036. By June 2011, the total debt had increased by $390 million, with a total debt now close to $2.1 billion.

Because of the number of cars using the road and the below-projections revenue, the toll road agency has been unable to meet its bond payment schedules. Instead it keeps refinancing, increasing and extending the debt. Now the bonds are not scheduled to be paid off for another six years until 2042.

Also the bleeding 73 toll road received a cash transfusion of $30 million a year for four years for a total of $120 million in a dubious transfer from the Foothill/Eastern toll roads, which have not been hemorrhaging cash as badly as the 73.

That money was called a prepayment for future losses that the 73 would allegedly suffer to its revenue when the State Route 241 Foothill south extension was completed. Now that the 241 South is, for now, dead, that $120 million is another obligation that needs to be repaid some day in the distant future.

Meanwhile, debt still piles up, as the San Joaquin toll road agency plunges further into the red every year instead of paying down the bonds.

The 2012 agency budget pays $32 million of principal on existing debt but adds $55.7 million in new, additional debt.

It more resembles a Ponzi scheme than “creative” transportation financing, with the driving public left with the tab.

Will new toll lanes on the 405 be more like the 91 express lanes, where some evidence exists that toll lanes actually increase throughput? Or will they be closer to the dismal failure of the 73 toll road?

Do Orange County Taxpayers really want to see $1.3 billion in Measure M funds, over $400 in sales taxes for every man, woman, and child in Orange County, diverted from the promised Freeway lanes to a plan that bails out the failed South County toll road experiment?

If OCTA wants to take this case for changing Measure M to the voters, instead of hiding behind an elaborate, fake PR campaign, let’s start talking about the relationship between the new toll lanes and the existing toll roads.

As Deepthroat whispered, “Follow the money.

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AND NOW, somebody has created the excellent…

No 405 Tolls.Com!

E-mail ALL the OCTA Board Members by clicking HERE.

 


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