Action Alert- Eyes on the TX Leg: Carona's SB404 Extending CDAs on Toll Roads sent to House Calendar for Vote

Research by Martha Estes - May 19, 2009
Source: Texas Legislature On-Line
House Cmte. Report sent to Calendars 05/19/2009
The HOUSE Transportation Cmte. reported on SB 404 by Carona.
Caption: Relating to the authority of certain toll project entities to enter into a comprehensive development agreement
It will probably appear on a HOUSE calendar very soon.
An analysis is offered below from TLO.

BILL ANALYSIS C.S.S.B. 404 By: Carona
Transportation Committee Report (Substituted)

BACKGROUND AND PURPOSE

H.B. 3588, Acts of the 78th Legislature, Regular Session, 2003, changes the structure of Texas transportation infrastructure financing by allowing public-private partnerships as a means for developing transportation infrastructure through comprehensive development agreements (CDAs). Chapters 223 and 370, Transportation Code, authorize the use of CDAs; however, the authority provided for under these chapters expires in August 2009. With limited means of funding transportation projects, CDAs are a necessary tool for providing financing for future transportation infrastructure.

C.S.S.B. 404 extends that the authority of the Texas Department of Transportation or a regional mobility authority to enter into comprehensive development agreements, for an additional four years.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.S.B. 404 amends the Transportation Code to postpone from August 31, 2009, to August 31, 2013, the expiration date for the authority of the Texas Department of Transportation or a regional mobility authority to enter into comprehensive development agreements and to postpone from August 31, 2011, to August 31, 2015, the expiration date with respect to certain exempted projects. The bill specifies that its provisions take effect only if S.B. 17 or another similar bill of the 81st Legislature, Regular Session, 2009, relating to the design, development, financing, construction, and operation of certain toll projects, including the determination of the primacy process for local toll project entities, becomes law.

EFFECTIVE DATE

Except as otherwise provided, September 1, 2009.

COMPARISON OF ORIGINAL AND SUBSTITUTE

C.S.S.B. 404 postpones the expiration dates relating to the authority of the Texas Department of Transportation or a regional mobility authority to enter into comprehensive development agreements for four years, rather than six years as in the original.

Texas House of Representatives Deliberations on Transportation

By Vince Leibowitz - Capitol Annex - Friday, April 17, 2008

[DFWRCC is posting the excerpts of Vince's live blogging/tweeting from yesterday's Texas House of Representatives debates and votes pertaining to transportation. Please visit Capitol Annex for Vince's play-by-play report on Texas House deliberations on Education and Criminal Justice.]
12:52 we’re back after a brief break.

12:56 amendment by Lon Burnam would require TXDoT to notify the Legislative Budget Board and each member of the Legislature of each waiver it intends to make that would waive any requirement of a toll?road entity to compensate property owners affected by projects. The notice would be required to be delivered to the LBB and each legislator at least 30 days prior to date on which the waiver would take effect.

12:57 amendment is temporarily withdrawn. Now to page 2 of supplemental packet no clue what that is. Unemployment fund amendnent. It is adopted.

1:00 a.m. Amendment by Guillen mandates that TxDOT adopt rules to allocate funds under general provisions of funding for public transportation in which the total amount appropriated for the Formula program is less the 90% and the Discretionary program is less than 10%. A provision is required to ensure that the specified programs do not receive less than allocated. Adopted.

1:02 a.m. Amendment by Davis of Dallas affirms that the Legislature’s intent is for the Texas Transportation Commission to approve funding projects that are geographically balanced across the state.

1:03 amendment by Frost would prohibit TXDoT from entering into contracts for any toll-related project that contains non?compete clauses.

1:06 Amendment by Burnam would require TXDoT to notify the Legislative Budget Board and each member of the Legislature of each waiver it intends to make that would waive any requirement of a toll?road entity to compensate property owners affected by projects. The notice would be required to be delivered to the LBB and each legislator at least 30 days prior to date on which the waiver would take effect. Acceptable to author. Has an amendment to Amendment.

1:08 Amendment by Darby would would decrease TWC General Revenue Dedicated
authority by $3,443,800 in FY 2010 and $2,405,179 in FY 2011. It would then increase Federal Funds authority in TWC Federal Account No. 5026 by $3,443,800 in FY 2010 and by $2,405,179 in FY 2011.

adopted

109: Amendment by Madden temp w/d’d.

1:09 Amendment by David that would prohibit funds appropriated to TXDoT in the budget from being used to contract with a foreign entity if the term of the contract is longer than 25 years.

Join us for a Grassroots Tax Revolt on Lobby Day March 3!

Tell your lawmakers face to face that we want our freeways fixed and to keep them FREE of additional toll taxes!
Lobby Day to Stop Toll Roads & the TTC
Tuesday, March 3
Meet at the South Capitol entrance at 9 AM

DFW carpool location announced!
We plan to have our group introduced from the House floor sometime between 10 & 10:30 AM, then you can spend time with your legislators to voice your concerns, do lunch at the Capitol Grill, and hear from some of our "Good Guy" legislators between 3:00 PM - 5:00 PM before heading home.

If you or your group are interested in carpooling, please let us know meeting times and locations so we can publicize it!
It's clear the Legislature is waffling on being tough on TxDOT and bringing much needed resolution on toll road policies and the Trans Texas Corridor. From wanting to raid public employee retirement funds to finance risky, leveraged toll projects, and to hand over our highway system to foreign toll operators, to allowing the conversion of existing freeways into tollways and looking the other way when our wreckless highway department engages in lobbying with taxpayer money, TEXANS must STAND-UP and demand that these irresponsible practices come to an END! We'll have t-shirts for folks to wear (suggested donation $10) so we can communicate our message around the Capitol.

Carpool info

DFW carpool location - David Smith, Coordinator - If you would like to carpool or are in need of a ride, call or email me ASAP as I will either be leaving Monday evening or Tuesday morning early, depending on those coming with me. Plan on meeting at the Corner Market at Lover's Lane and Greenville Avenue where you can leave your cars. Park at your own risk, but it is a well-traveled intersection and a nice area.
Email: davidadriansmith@hotmail.com or Cell # 940-595-185

2

San Antonio carpool location:

Park Hills Baptist Church parking lot at 7:00 AM (just inside Loop 1604 on west side of 281). Sudie Sartor, Coordinator - (210) 488-5412

Texas Transportation Commission Chairman Williamson dies

By Ben Wear - Austin American Statesman - Sunday, December 30, 2007

Ric Williamson, the Texas Transportation Commission chairman and a take-no-prisoners advocate for his friend Rick Perry’s toll road policy, has died.

Williamson, 55, who had been on the commission since 2001 and its chairman since January 2004, died of a heart attack, said state Sen. Mike Krusee, chairman of the House Transportation Committee. It was not clear today if Williamson died late Saturday night or early Sunday.

Williamson, a Weatherford resident, had served in the Texas House for 14 years, leaving in 1999. Williamson dominated discussion of Texas transportation policy for most of this decade, holding forth at commission meetings in a curiously ornate but still straight-forward style that sometimes infuriated opponents of the toll road policy. Williamson, in particular, was four-square behind granting private companies long-term leases to finance, build and operate publicly owned toll roads, an approach that he said would raise billions for other roads but that others feared gave away too much control of public assets.

Texas Monthly in a June article had called him “the most hated person in Texas, public enemy number one to a million or more people.” In that same article, Williamson told writer Paul Burka, “I’ve had two heart attacks, and I’m trying to avoid the third one, which the doctors tell me will be fatal.”People could question Williamson’s policy stands and his approach - and plenty of Texas legislators did just that over the past year - but no one could question the horsepower of the intellect behind those policies.

“Ric was the smartest and most far-sighted person I’d ever seen in public life,” said Krusee. “I learned so much whenever I was around Ric, and I don’t just mean transportation policy.”

Transportation Department executive director Amadeo Saenz issued this statement this afternoon:

“Ric Williamson was a visionary. As a member and chairman of the Texas Transportation Commission, he brought passion and focus to meeting many of the challenges facing Texas today and for generations to come. The entire TxDOT family will miss his dedication and his leadership. At this time, our thoughts are with his wife, children and grandchildren.”

Read more

Sen. Lloyd Doggett faces off with Fed. Transportation Secretary Peters over Trans Texas Corridor and "Sell back to toll" Fed. Hwys

Thanks to Terri Hall of T.U.R.F. for forwarding this transcript
October 25, 2007 - U. S. House Budget Committee Holds Hearing on Surface Transportation Investment

DOGGETT:
Well, thank you, Mr. Chairman.
And thank you, Madam Secretary, for your testimony and your service. I must say that I'm a bit surprised by your use of the term "tax and spend," because, of course, as you know from your long career, the tax-and-spend approach had its origin under Dwight David Eisenhower, who felt that the National Interstate and Defense Highways Act should be paid for as you go, and that the pay-as-you-go approach was the appropriate one as the Highway Revenue Act was enacted at the same time in 1956.
It is true that in the last seven years on everything this administration has preferred a borrow-and-spend approach for all of our national needs. But it would seem to me that the more fiscally responsible one is to pay for our highways as we
determine we need them.
Now, there is an alternative model that Texas has really been pioneering with. And as you know, we have a governor in Texas who seems to have never met a highway that he didn't think he could toll. If he had his way, we would have toll roads blossoming in Texas like the wild flowers in the spring.
I have some concerns about the fact that the administration in its budget proposal really seems to want to incentivize more toll roads such as by its proposal to tax and spend for grants for high- tech electronic toll booths that would encourage states to use that means of finance.
Let me ask you if you support the requirement that no tolling occur on federal highways in the state of Texas or anywhere else.

PETERS:
Congressman, I'd be happy to answer your question. The answer is no, the administration does not support that provision, and let me explain why.

DOGGETT:
Well, because my time is short, and I'll give you an opportunity to elaborate at the end -- but do you support prohibiting states from buying back federal highways that the taxpayers have already paid for in order to toll those highways?

PETERS:
Congressman, we prefer to let states make those decisions, and I think one of the fundamental problems that we have today is that decision-making in too many
cases has been moved away from state and local government and decisions are being made at the federal level.

DOGGETT:
Well, I guess the concern is that these highways were paid for with federal tax dollars. You're proposing in your budget to encourage the states to toll more highways, and you've just indicated by your answers that you do not support restricting tolls on federal taxpayer-financed highways, and that approve of the practice of the states coming and buying back highways taxpayers have already paid for and tolling them.
And I find that to be very problematic and something that I'm hearing from many people in Texas is not the way to go. And the partner to the tollway on every highway that the taxpayers have already paid for in Texas is, of course, the very controversial Trans-Texas Corridor, where the same governor is proposing to take swaths of land as wide as 10 miles that would separate someone's century-owned farm or ranch home from their pastures and their field.
This has been a very secretive process. As you know, the House has also passed bipartisan language concerning the Trans-Texas Corridor.
Is there any federal money of any type going into the planning of the Trans-Texas Corridor at present?

PETERS:
Congressman, I will have to check on that. I know at one time there was, but let me check on that and get back to you.

DOGGETT:
All right. The approach of doing so much of this in secret and treating our farmers and ranchers as just so much road kill when it comes to participation in the process is one that I know bothered not only me -- bothers not only me but bothers members on both sides of the aisle here.
That's why the House overwhelmingly approved legislation directed to the so-called NAFTA superhighway. I know the administration doesn't concede there is such a highway.
But as relates to participation in working groups concerning the Trans-Texas Corridor and the NAFTA superhighway, if it's to extend beyond Texas, does the
administration support the amendment that the House overwhelmingly approved in that regard?

PETERS:
Congressman, I would say that we have not taken a position on that issue yet, but let me explain...

DOGGETT:
Well, we passed it a long time ago. Do you plan to take a position as this measure moves through conference one way or the other? Do you object to the restrictions that the House approved by a vote of 362-63 in July concerning this matter?

PETERS:
Congressman, we believe that state governments should have much more latitude than they have today to make decisions.

DOGGETT:
So it sounds to me like you want to give them the authority to have a secretive process, to build a 10-mile-wide highway, tearing up farms and ranches and rural communities where these people will not even be able to access the tollway, perhaps built by a foreign firm -- that as long as that's the state decision, you're content to let them do whatever they want to do?
I think we have some responsibility with federal tax dollars to try to safeguard property rights and involve the public in participation in these decisions.
Let me just close, because I can see my time is up, and I know the vote is under way, by also commenting about what you call your dirty little secret on earmarks.
It is not a dirty little secret that both of the federal transportation authorization acts were approved by Republican Congresses with Republican
chairs, that the so-called Bridge to Nowhere was the project -- a totally Republican project.
There is not one earmark in either of these transportation acts that would be there if this administration and the Republican leadership had wanted to cut them out.
Why is it that the administration has been so quiet for so long and has not done anything about these earmarks until the fact that we now finally have a Democratic Congress?

PETERS:
Well, Congressman, let me take two answers. First of all, with all respect, you misinterpreted my comments about the Trans- Texas Corridor.
Second, there is no NAFTA superhighway. There is no NAFTA superhighway at all. And we certainly believe in public disclosure as projects are developed.
This administration also has a long record, a long, long record, in speaking out against earmarks, speaking out against using the public's money in a way that is not publicly disclosed. And we will continue to stand behind that opposition.

DOGGETT:
Just specifically on the NAFTA superhighway, then, is there anything, since you believe in letting the states do essentially whatever they want in this area,
to prevent the Trans-Texas Corridor, when it goes from Mexico to the Oklahoma border, from being connected to an Oklahoma Trans-Oklahoma Corridor, and then a Kansas Trans-Kansas Corridor, all the way up to the Canadian border?

PETERS:
Congressman, there are restrictions about connecting to interstate highways, access points to interstate highways. Any time that a road accesses or intersects with an interstate highway, that does have to be approved.

DOGGETT:
But you are putting money into -- you have put money in the past into the Trans-Texas Corridor.

PETERS:
As I said sir, I will research that and get back to you.

DOGGETT:
I think you said you had done it in the past. You weren't sure if you were doing it now.

PETERS:
I said I thought we had, sir.

DOGGETT:
And you said that I have not correctly interpreted your comments about the Trans-Texas Corridor. Would you just elaborate on what your position is on the Trans-Texas Corridor?

PETERS:
I would be happy to, sir. We believe that there should be a full disclosure process, a process that involves not only the potential users of a highway but those who are affected by the highway. This is required by the National Environmental Protection Act.

And those types of processes, those open public processes, where the public has an opportunity to participate in decision-making, is absolutely something that we do support.

DOGGETT:
Thank you very much.
Thank you, Mr. Chairman.
Thank you, Madam Secretary.

T.U.R.F. files lawsuit to stop TxDOT's ad campaign!

By Terri Hall - T.U.R.F.- Sept. 20, 2007
Lawsuit filed to STOP TxDOT’s illegal lobbying
TURF Founder seeks temporary restraining order to halt public relations campaign

Thursday, September 20, 2007 – TURF Founder Terri Hall has filed a petition for a temporary restraining order against the Texas Department of Transportation (TxDOT) in Travis County District Court and the case is scheduled to come before visiting Judge Bill Bender at 3 PM.

The petition also seeks injunctive relief, including Temporary Restraining Order against Steven E. Simmons, P.E. Individually and as Interim Executive Director of the Texas Department of Transportation and Coby Chase, Individually and as Director of the Texas Department of Transportation Government and Public Affairs Division. This lawsuit is brought pursuant to § 37, Texas Civil Practice and Remedies Code. TxDOT’s expenditure of public funds for the Keep Texas Moving campaign is illegal, and an injunction prohibiting any further illegal expenditures in this regard.TxDOT has violated § 556.004 of the Texas Government Code by directing the expenditure of public funds for political advocacy in support of toll roads and the Trans Texas Corridor, and have openly indicated TxDOT’s intention to directly lobby the United States Congress in favor of additional toll road programs.

On August 22, 2007, TURF filed a formal complaint with Travis County District Attorney Ronnie Earle to investigate TxDOT’s illegal lobbying and asked him to prosecute TxDOT for criminal wrongdoing. See the formal complaint here. Today’s petition seeks immediate injunctive relief in a civil proceeding.“Between TxDOT’s PR campaign, report to Congress asking that all limitations on tolling be lifted including buying back existing interstates, and Chairman Ric Williamson’s recent trip to D.C. lobbying for the same, it’s clear they’ve not only crossed the line into illegal lobbying, but they leaped over it,” says Hall.

TxDOT’s report to Congress, Forward Momentum, ignited a category 5 blowback that prompted Senator Kay Bailey Hutchison and U.S. Representatives Charlie Gonzalez,and Ciro Rodriguez to file legislation (S 2019 and HR 3510) to halt the tolling of existing interstates and to prohibit TxDOT from buying back interstates for the purpose of tolling them (read more here). TxDOT’s actions also prompted Rep. Rodriguez to call for a House Transportation and Infrastructure Committee hearing on converting interstates to tollways and on TxDOT’s ad campaign (read more here.).

The report and ad campaign have been the topic of many editorials across Texas, including the Houston Chronicle (read more here.) and Express-News, and even TV newsrooms are weighing in with the General Manager of KSAT 12 TV in San Antonio giving a scathing review of the ad campaign read more here.

“The citizens of Texas are fed-up with TxDOT’s blatant disregard for the public’s disdain of toll roads and their infinite attempts to cram toll roads down our throats using TAXPAYER MONEY to do it! It’s high time someone puts a stop to it!” Hall admonished.

View petition and affidavits:
Petition
Terri Hall’s affidavit
Bill Barker’s affidavit

Non-toll Solutions - A&M Study says no need to raise gas tax or impose tolls

A&M expert: Don’t need to raise gas tax at all
SAN ANTONIO TOLL PARTY
See the Texas Monthly blog entry by reporter Paul Burka here.
See Burka’s His Way or the Highway article blasting privatizing our public highways and the non-competes in these CDA contracts here
Also, to view the video of David Ellis, of the Texas Transportation Institute at Texas A&M, giving this testimony before the Study Commission on Transportation Financing. The Commission’s co-presiding officers are Senator Carona and Representative Krusee. The entire hearing can be viewed here. Ellis flat out says we don’t need to raise the gas tax nor do we need this shift to toll financing, view condensed testimony here.

Link to TTI report for the Governor’s Business Council directly here.


NOT NECESSARY TO TOLL, A&M EXPERT SAYS
By Paul Burka - Texas Monthly blog - TUESDAY, DECEMBER 05, 2006

Few things are duller than a committee meeting in the interim between legislative sessions. Witnesses drone on about policy choices involving arcane issues. Some of the committees exist only for a short duration and will vanish once the legislative session begins in January. The media almost never shows up for these meetings, which explains why the November 28 meeting of the Study Commission on Transportation Financing received virtually no attention. But a few minutes into the hearing, David Ellis, a co-author of a report by the Texas Transportation Institute (TTI) at Texas A&M, dropped a bombshell on the commission. He said that Texas could finance its highway needs without toll roads. The headline for this post is based on Ellis’s testimony. I have not come across any mainstream media reports of Ellis’s remarks.

Ellis provided the committee with some background on transportation policy. The demand for new and expanded roads in the state’s eight largest metro areas is increasing much faster than TxDot can build them. Over the next 25 years, the population of these areas is projected to increase by 2.8% per year, employment by by 2.3%, vehicles by 2.7%, and daily miles drive by 3%. Over the same period, the number of lane miles that can be built with currently available funding will increase by just .25% per year. Tx-Dot estimates that the state will need an additional $68 billion over the next 25 years to improve mobility. The TTI’s estimate is slightly lower, $66.2 billion. Two-thirds of the needed new construction will be in the state road system, or some $44+ billion; the remainder represents improvements to local roads.

The money for highway construction comes from three sources: vehicle registration fees, the state gasoline (more properly, motor fuels) tax, and reimbursements from the federal gasoline tax, of which Texas sends more revenue to Washington than it gets back. Of these sources, the one that matters the most is the motor fuels tax. But the tax has been losing ground to inflation in recent years.

Now, here is the crucial part of Ellis’s testimony: There are scenarios under which roads can be financed:

1. Raise the motor fuels tax, currently 20 cents per gallon, to 51 cents. Interestingly, a Tx-Dot engineer had previously told the committee that the motor fuels tax would have to be raised to $1.40 per gallon to pay for the needed new construction. Needless to say, the Legislature is not going to raise the tax by 31 cents, much less a buck twenty.

2. Raise the motor fuels tax by 8 cents and index it to inflation, using not the consumer price index, but a special highway construction index. The rate of inflation has been 1/2% to 1 1/2 percent per year.

3. Don’t raise the gasoline tax at all. Instead, index it and put the incremental revenue in the mobility fund, where it can be used to pay off bonds. And here’s the bombshell: “Under this scenario,” Ellis said, ” it wouldn’t be necessary to toll as a means of financing, although that’s certainly an option.”

The cat is out of the bag now. Tolls aren’t the only way to pay for new roads. Will the Legislature allow Tx-Dot to go forward with its mammoth toll road plan, or will lawmakers devise a solution that will allow revenue to be used to build free roads?

Despite threats from the feds, TxDOT forced to abandon Cintra bid for Hwy 121

by Terri Hall - T.U.R.F. - Saturday, 25 August 2007
Link to article here.
[NOTE BY FAITH CHATHAM - The author of the Toll Roads News article has close ties with international toll interest and consistently writes biased reports favoring Cintra.]
State Highway 121 was wrested from the grip of a foreign company, Cintra, and it's now in the hands of the North Texas Toll Authority (NTTA), despite threats of sanctions from the Federal Highway Administration (FHWA). Talk about brazen! However, 16 miles of this 26 mile project are already built and PAID FOR WITH GAS TAXES (it's INEXCUSABLE that it's now converted to a toll road!). To make things worse, SB 792 allows even our public tolling entities to charge the HIGHEST POSSIBLE TOLLS! The FHWA's behavior, repeated threat letters of withholding our federal highway revenue, then backing off thanks to Senator Kay Bailey Hutchison, then threats of sanctions, it's clear the Bush Administration is a wholly-owned subsidiary of corporate hogs at the trough!

The FHWA is charged with protecting the public interest, and not only have they flouted that responsibility, they rabidly PROMOTED a foreign interest OVER the public's, ON OUR DIME! James Rae at the FHWA let the cat out of the bag a few months ago, that the FHWA, Texas Transportation Commission, Perry, and Bush truly believe in state run capitalism (which is really fascism). This is beyond appalling...this has to be a criminal dereliction of duty!

Texas officials say they were forced to abort the Cintra concession
Toll Road News - August 23, 2007
Texas officials have revealed that in the past few days they discussed with the FHWA canceling the past approval of NTTA taking over SH121, together with canceling the Cintra concession. They got an assurance the cancelations would get Texas back in compliance with federal procurement law. They have sent us copies of two letters on the SH121 crisis both dated Tuesday Aug 21 TxDOT-FHWA, and FHWA-TxDOT.The first TxDOT-FHWA letter responds to Richard Capka's blistering Aug 16 attack on Texas' handling of the SH121 procurement which he cited as clear violations of federal law and regulations. See report.

Addressed to Janice Brown, FHWA rep in Austin TX the letter is signed by TxDOT deputy Amadeo Saenz and foreshadows actions taken today by the governing Texas Transportation Commission (TTC). It says they will consider canceling the Cintra procurement and canceling the decision (called a minute order) previously approving NTTA for SH121.

The letter then says: "We request FHWA concurrence that (these) actions...will be sufficient to bring TxDOT into compliance with federal law and not be subject to (sanctions)..."

The letter adds that further FHWA action on environmental clearance of SH121 is "critically needed" to move forward on SH121. See TxDOT-FHWA letter here.

The response from FHWA rep Brown to TxDOT's Saenz says that the two proposed cancellations would indeed bring TxDOT into compliance with federal law and remove the basis for federal sanctions. It also says FHWA is working for "timely completion" of the environmental review. See FHWA's Brown's letter here.

TxDOT unpersuaded NTTA bid better but decision was local

Texas officials say it was their assessment Cintra provided the sounder proposal but that they had agreed to devolve responsibility to the Dallas-Ft Worth area council of governments' Regional Transportation Council (RTC) which preferred the late proposal by the North Texas Tollway Authority (NTTA). Under Texas law SB792 they say they are required to defer to the RTC despite their doubts about the choice of NTTA's proposal.

At the Texas Transportation Council meeting today the two cancellations were made:

Agenda item 8a passed as a new minute order notes that a RFQ for SH121 was issued March 2005 and after shortlisting a formal RFP was issued mid Aug 2006. Feb 28 the commission "conditionally awarded" the concession or comprehensive development agreement to Cintra.

However the instructions to proposers authorized TxDOT to suspend or terminate concession contract negotiations at any time - providing for cancellation of the procurement.

The resolution passed today says simply: "The commission has determined that it is in the best interest of the state to terminate the CDA negotiations with Cintra..." and "It is therefore ordered that the procurement... is canceled." See text of 8a here.

Agenda item 8b outlines the origins of the NTTA move with the RTC asking on Mar 26 if NTTA wanted to top the Cintra bid. NTTA submitted a huge document (almost entirely fluff and puff - TRnews) May 18, but the RTC accepted it. June 28 the TTC set the RTC to negotiate some substance with NTTA giving them 60 days to produce a project agreement plus another 45 days for financial close. Text of 8b here.

Today's minute order cancels those requirements giving the parties more time, saying environmental clearance is likely to take longer than the 60 days. The department has to come back to the commission with additional agreements to enable NTTA to take over SH121 for a period of up to 50 years.

Deal not done until the money arrives

Texas officials say the deal is far from done yet. One official said he has doubts that NTTA can come through with the financing promised the RTC. They think NTTA has stretched its borrowing power to, and perhaps beyond, prudent limits.

But caught between FHWA protests and the RTC-NTTA, and the requirements of SB792 they say they had no other alternative.

The officials say the RTC has taken a gamble with NTTA now that the Cintra procurement has been cancelled.

"If the NTTA doesn't come through it is back to square one. We have to start a procurement all over again."

We were given the bids by the three finalists in the procurement won by Cintra in February, socalled Form Ks. Cintra's offer more than doubled the next from Skanska with Macquarie a bit further behind in third place. See table nearby.

Cintra says accept TTC decision
José Lopez, Cintra’s Austin-based director issued a statement after the Commission meeting:

"While we believe our proposal – with its guarantee of $7.3 billion in new and additional revenue to the Metroplex for SH121 and other transportation projects – was the better option for the state and Dallas-Fort Worth, we respect the commission’s decision.

We want to thank the commissioners and the staff at TxDOT for the time and consideration they have devoted to this issue. We know they are working diligently to address the serious mobility challenges facing Texans, and we wish them, NTTA and the Regional Transportation Council only the best as they move forward with SH 121 for North Texas drivers.

"...we look forward to continuing our work in Texas, the U.S. and around the world assisting officials meet the increasing demands on infrastructure by improving roadways, relieving congestion and enhancing driver safety in the most cost-effective and efficient ways possible."

Agreement reached NTTA, Regional Council and Dallas District TxDOT

NTTA, the regional council and Dallas District of TxDOT say they have finalized an interagency project agreement for SH121. Jorge Figueredo the new executive director of NTTA signed the draft agreement and submitted it to TxDOT. After it is signed by the executive director of TxDOT NTTA will have 45 days to financial close and delivery to TxDOT of over $3.3b - $2,500m plus $833m representing 49 future annual payments. In return they get a 50 year lease of SH121 and the rights to the toll proceeds in a kind of public sector concession.

Bill Hale of TxDOT Dallas office and Michael Morris of the RTC said in statements today that fuel tax funds are not doing the job of generating revenues needed. They see monetization of toll projects like SH121 as the only way to build needed new roads.

SH121 is 42km (26mi) long running northeast-southwest in the northern part of the greater Dallas area from US75 toward Dallas Ft Worth Airport. It crosses the Dallas North Tollway at about its midpoint and somewhat parallels the Pres Geo Bush Turnpike some miles to its north. It runs through Collin, Denton and Dallas counties.

SH121 is being built as a 12 lane highway with 2x3 toll lanes in the center as expressway and a pair of 3-lane one-way frontage roadways on either side which hit cross streets at signals. Slip lanes will connect the toll expressway roadways with the frontage roadways for access and egress from the tolled lanes in a common Texas configuration.

Tolling will be all-electronic at highway speed - no cash collection.

The vast passions and political energy invested in controlling SH121 should give it a place in tollroad history.

Pennsylvania Political War Over Planned Tolls on I-80

By SEAN D. HAMILL - The New York Times -August 26, 2007
BROOKVILLE, Pa., Aug. 23 — Anthony Foote spends a lot of time driving his Kenworth T-600 truck on Interstate 80 in Pennsylvania. He prefers it to the state’s other east-west highway, the Interstate 76 turnpike, which can cost him $140 in tolls.

So the news that the state plans to impose tolls on I-80 was as upsetting to Mr. Foote as finding an ugly scratch in the purple paint on his rig.

“I hate paying tolls,” he said. “It eats up my profit. If this goes through, you’ll have a lot of truckers avoiding Pennsylvania — including me.”

Pennsylvania officials plan to build up to 10 toll areas along the 311-mile stretch of Interstate 80 in the next three years to help pay for road, bridge and mass transit projects and subsidies.

The move has sparked a political war between the bipartisan coalition of state legislators who approved the plan and two Republican congressmen who say it is a “shell game,” taking revenue from rural Pennsylvania to bail out the state’s urban areas.

“It’s absolutely horrendous for my district,” said one of them, Representative John E. Peterson, whose Fifth Congressional District covers about half of I-80 in north central Pennsylvania. “Every major bill like this should be measured by whether this will make people less likely to come here. And if this stays active, we’ll never get another distribution center or similar business again in my district.”

Paying for new roads with tolls, or adding tolls to sections of older urban roads, is common across the country. But experts say that imposing tolls on an entire interstate highway that had been free may be unprecedented, in part because the federal government typically bans tolls on highways paid for with federal money, as I-80 was.

“I haven’t heard of another one,” said Bernard Weinstein, director of the Center for Economic Development and Research at the University of North Texas, which has done a half dozen studies on the impact of toll roads. “But I think most states will eventually have to move to the user principle. Tolls are going to be the wave of the future.”

Pennsylvania’s plan is to generate about $950 million a year through the sale of bonds backed by tollway revenue and other state sources over the first 10 years, with about $500 million going to road and bridge projects throughout the state, and the remaining $450 million going to subsidize mass transit in Philadelphia, Pittsburgh and other cities.

State officials say that about 70 percent of the 21 million vehicles that travel I-80 annually are from out of state, and 40 percent are commercial trucks.

After the State Legislature and Gov. Edward G. Rendell, a Democrat, included the toll plan in their July budget deal, Mr. Peterson and Representative Phil English surprised state officials on July 24 by quietly slipping an amendment into the House’s version of the federal transportation bill to prevent it.

But hardly anyone outside of Mr. English and Mr. Peterson’s offices believe it will still be there after the House-Senate conference committee meets on the transportation bill. Pennsylvania’s senators, Bob Casey and Arlen Specter, have both said they do not want to interfere in the state’s decision-making and will not help the two congressmen.

Even so, Mr. English and Mr. Peterson are not giving up, and they believe they have public opinion, and federal law, on their side.

The plan requires the approval of the Federal Highway Administration, a process that state officials hope will be completed in a year. Under a program called the Interstate System Reconstruction and Rehabilitation Pilot Program, states can add tolls to interstates paid for with federal money.

“It will fly only if the Federal Highway Administration decides it will fly,” said Mr. English, whose Third Congressional District covers about 30 miles of the western edge of I-80. “And this plan doesn’t fit the pilot program as proposed by Congress.”

Mr. English argues that the pilot program was intended to let states use new toll revenue for road maintenance and improvements, not mass transit.

But Joseph G. Brimmeier, chief executive for the Pennsylvania Turnpike Commission, said he was confident Pennsylvania’s program would pass muster.

“We put together a package that helps solve the funding crisis in Pennsylvania for the next 50 years,” he said. “It solves the crisis without raising one cent of taxes. And here we are four weeks into this debate, and I don’t hear any plans from them to help solve these problems.”

Both Mr. English and Mr. Peterson said they liked the financing idea that Governor Rendell first proposed: leasing Interstate 76 to a private company to generate revenue. But state officials could not garner support for it, and the tolling plan, which includes raising rates on the rest of the existing tollway system as well, was approved instead.

Mr. Brimmeier said what upsets him the most about the representative’s efforts is that they “try to pit one part of Pennsylvania against another.”

When asked about the toll plan, many drivers on I-80 sounded resigned.

“I’d have to pay it, and I’d still go on 80, but I wouldn’t be happy about it,” said Dawn Toporcer, a fourth-grade teacher from Lordstown, Ohio, who was shopping with her two daughters for school at the Prime Outlets at Grove City, a regional outlet mall on Interstate 79, about three miles south of I-80.

Grove City was specifically chosen as the site for the mall 15 years ago because of its location near the intersection of the two interstates, said Michelle Czerwinski, a mall spokeswoman. The mall attracts millions of customers who get there by traveling I-80, and imposing tolls on the highway would hurt, she said.

“It’s just going to be a negative,” Ms. Czerwinski said. “Any kind of toll plan would slow down the traffic.”

See photos and map in THE NEW YORK TIMES

Macquarie Bank model cannot last: Chanos and Mark Colvin on Australian Radio National

Read article or listen online
By Stephen Long - PM - Wednesday, May 30, 2007
MARK COLVIN: Jim Chanos was the first big US investor to expose Enron as a fraud.

Tonight, he's told PM why he thinks that Macquarie Bank is a 'house of cards'.

Macquarie's staff have made billions by buying assets around the world and spinning them off into funds and trusts controlled by the bank. The bank collects fees all along the line.

But Mr Chanos says this economic model can't last. His key concern is that the Macquarie Bank funds pay their shareholders not out of income they earn, but from borrowed money.

They continually revalue their assets, then borrow against the asset values to fund payments to investors.

He also says the structure encourages serial overpaying for assets, and that Macquarie is relying more and more on unsustainable self-dealing between the bank and its funds to make money.

This report from our Economics Correspondent Stephen Long.

STEPHEN LONG: Jim Chanos has made a fortune picking stocks that are ripe for a tumble.

He was the first big investor to say Enron was a fraud.

He's not saying there are crooks at Macquarie Bank. Simply, that the model that's made the bank billions is unsustainable.

JIM CHANOS: I guess the heart of our criticism of the bank is the model itself, this so-called Macquarie model.

STEPHEN LONG: The Macquarie model is now world famous. The bank scours the world buying assets, everything from toll roads to bowling alleys, and selling them into separate trusts that the bank controls.

This generates triple fees for Macquarie Bank: one for the up-front purchase; a second for selling the assets into the trust; then ongoing management and performance fees from the funds.

There's been much discussion in Australia about whether this raises a conflict of interest.

Jim Chanos' critique is more fundamental.

JIM CHANOS: The underlying economics, in my opinion, are flawed. Being the top bidder for these assets and then flipping them into the trusts leads to an unsustainable economic engine at the trust level. And when that breaks down all of the fees and whatever's being paid begin to break down.

STEPHEN LONG: Macquarie's funds pay their investors out of borrowed money and that's one of Jim Chanos' key concerns.

They revalue the assets they own then borrows money against the re-valuations to fund the payments to investors, a strategy that could founder when, inevitably, the period of cheap credit and asset price inflation comes to an end.

JIM CHANOS: And this is the real crux of the problem on an ongoing basis. If you look at the financial accounts of the trusts you'll see that in almost all the cases the companies are using Australian re-valuation accounting which is legal under GAAP (Generally Agreed Accounting Principles) in your country to write up the value of the assets annually and put that through operating income and into equity.

STEPHEN LONG: And your worry then is that the payments to the stockholders are being funded essentially by debt and re-valuation not out of income.

JIM CHANOS: Re-valuating and borrowing against that stream. So you need willing lenders, you need a credit environment that looks the other way, or you need a credit environment where the people lending are just lending on reputation and not numbers.

STEPHEN LONG: The man who blew the lid on Enron has other concerns, too. He says the fee structure encourages serial overpaying for assets because Macquarie gets fees based on the size of the assets it spins into its trusts.

He says the Macquarie model relies increasingly on unsustainable self-dealing between Macquarie and its funds.

And then there's the huge levels of debt and leverage.

JIM CHANOS: Capital gains alone in the fiscal year 2007, the year ending March 2007, capital gains alone of Macquarie flipping these types of assets into the trusts and elsewhere accounted for half, roughly half, of the pre-tax income of the bank. And that alone should be enough to call into question the quality of earnings.

STEPHEN LONG: If we came to the end of this extraordinary period we've been in, of cheap credit and escalating asset prices, asset price inflation, where would that lead Macquarie in terms of those capital gains?

JIM CHANOS: Well, I think that they would be greatly diminished or non-existent.

STEPHEN LONG: Although they're perfectly legal and transparent, Jim Chanos says the techniques Macquarie Bank uses have some similarities to those used by Enron.

JIM CHANOS: Let's just say, Stephen, I'm apparently not the first one to make those observations. That's exactly what they appear to be doing.

STEPHEN LONG: Macquarie Bank's boss Allan Moss says short of complete disaster, people will keep driving on toll roads no matter what.

Jim Chanos says that misses the point.

JIM CHANOS: All I would tell your listeners, Stephen, is simply just go in to the trusts, financial statements, and simply extract out the asset re-valuation number which is basically management's guess as to how much, what the asset's worth and just see what the cash flows look like if you take that out.

In many cases the cash flows are diminished or actually go negative. That's the simple litmus test to the Macquarie model.

STEPHEN LONG: Well, Jim Chanos, how concerned should we be that pension funds in Australia are major investors in the Macquarie Bank trusts?

JIM CHANOS: Well, if I was a pensioneer, in your country and my pension fund accounts owned some of these trusts, I would urge the managers to look at the financial accounts closely and not just look at the yield they're getting but look at how that yield is being received.

Is it actually from the economic output of the assets or is it from asset re-valuation which is simply writing up the paper value of the assets and borrowing the money against it.

These pension funds, which are answerable to the pensioneers in your country, if they're comfortable with that, well, great. If I was a pensioneer I wouldn't be.

STEPHEN LONG: Plenty of people disagree. Brian Johnson of JPMorgan is Australia's top rating banking analyst. He says Jim Chanos will join a long line of people who've lost money betting against Macquarie.

BRIAN JOHNSON: A lot of money is being lost basically shorting Macquarie Bank over the years. And while the model is certainly not without risk, the fact is the size of this potential market is absolutely massive.

STEPHEN LONG: So take your pick. Macquarie is either poised to run the world or heading for trouble.

MARK COLVIN: Stephen Long.

We were told Macquarie Bank's Chief Financial Officer, Greg Ward, would respond to Stephen Long's story, but he is yet to call.

Toll road proponents say motorists can and should pay more

By Terri Hall - Texans Uniting for Reform (TURF) - Monday, July 23, 2007
We warned the Texas Legislature this would happen if they passed that "compromise" bill, SB 792, that Rick Perry rammed through in the last weeks of the 80th session. TxDOT would use these new market-based tolls to rob us blind and them come back for more...without accountability, without representation. Toll taxes, especially market-based tolls, are runaway taxation without representation, and it's the POLITICIANS WHO ALLOWED THIS TO HAPPEN that will pay dearly!

When people can scarcely fill their tank with gas at $3/gallon, it boggles the mind to think there's a stitch of validity to this argument that motorists can and should pay the highest possible tolls. The bond buyers in an investment grade toll viability study for 183A in Austin said toll roads are no longer viable at $3 a gallon for gas. So from whence shall the toll money come? Short of taking food off the table and shoes off our children's feet, there's only so much the family budget can pay toward transportation before other necessities suffer. These are the same politicians who fail to fix runaway annual appraisals that lead to out of control property tax rates that, in turn, have caused every major Texas city to be in the top 10 for foreclosures in the country! Mad yet? Read on and then VOTE THE BUMS OUT!

Jaime Castillo: Toll road proponents: Motorists can — and should — pay more
San Antonio Express-News - 07/22/2007

They say you don't kill the messenger, but can you at least throttle him?

The "him" in this instance is Dye Management Group Inc., which recently completed a draft audit on toll roads for the Texas Transportation Commission.

After taking a look at existing toll rates of 10 to 15 cents a mile in Dallas, Houston and Austin, the firm determined that local toll authorities aren't charging drivers enough.

The logic — a term that should be used loosely — is that motorists can and will pay more, which would bring in more cash for the state's yawning road needs.

"Tolls charged by local authorities are lower than studies indicate that their customers would be willing to pay," the audit reads. "As a result, congestion goals will not be met."

Translation: "If you want to raise funds for other projects, keep jacking up the toll price until drivers cry 'uncle,' and then back it off a penny or two."

As reported by Express-News transportation writer Patrick Driscoll, the audit "mirrors much of what officials have been saying for years."

Hope Andrade, a transportation commission member from San Antonio, told Driscoll:

"It just confirms the emergency situation that we're in. We can no longer support toll rates that are not market value."

If this were part of a political handbook on winning support for toll roads from a skeptical public, charging "market value" — or as much as you can get — on tollways would be relegated to the section titled: "How to lose even more support in 30 seconds or less."

And this isn't the fault of people like Andrade, either. State and federal lawmakers continually saddle transportation officials with a losing poker hand.

In the last 16 years, the state's population — and construction costs — have grown exponentially. Yet, the gas tax — the primary source of highway funding — has been frozen since 1991.

And not only has it remained static in an ever-changing world, state lawmakers can't keep their hands off of it either.

Continuing its long-running budgetary shell game, the Legislature's latest two-year budget will see one-tenth, or $1.6 billion, of the highway fund diverted from building and maintaining roads.

With fiscal constraint apparently off the table, raising the gas tax must be looked at seriously. While difficult with gasoline prices hovering around $3 a gallon, it could be done if the entire state leadership — the governor, lieutenant governor and House speaker — supported the change.

That way, lawmakers, who already quietly concede that the gas tax is too low, could stick their necks out and not fear being singled out as the pigeons that supported higher taxes.

The alternative is to unnecessarily gouge those who will use toll roads. If the recommendations by Dye Management Group are the guide, toll riders will soon have the privilege of paying the highest tolls possible and paying the 20-cent-a-gallon gas tax.

A recent trip to the car dealer landed me in a shuttle van with several other car-less souls.

The shuttle van driver, exasperated by a 15-minute wait to go a couple of miles on U.S. 281 North, said to no one in particular:

"This almost makes you want to see toll roads."

To which, a homeowner who lives near the intersection of 281 and Bulverde Road blurted out:

"I don't care what they do as long as they do something soon."

With that kind of captive — and infuriated — audience, state and local transportation officials are banking that they will get their way eventually.

But it still doesn't make it right.

TxDOT Hearings Scheduled on Transfer of SH 121 from State to NTTA

The Texas Department of Transportation (TxDOT) will conduct two public hearings to receive comments from interested persons concerning the proposed removal from the state highway system and transfer to the North Texas Tollway Authority (NTTA) of a segment of State Highway 121.
The segment is located from just east of Business 121 to the west side of FM 2281, a distance of 7.39 miles, in Dallas and Denton counties. The non-tolled area is just south of the existing SH 121 Tollway currently being run by TxDOT since its opening last year.
TxDOT‚s meetings will be on Tuesday, August 7, 2007 at 6:00 p.m., at Coppell Middle School - North, 120 Neches Trace, Coppell, Texas 75019 and Thursday August 9, 2007, at 6:00 p.m., at City of Lewisville, City Hall Council Chamber, 151 West Church Street, Lewisville, Texas 75057,
State law authorizes TxDOT to lease, sell, or transfer a toll project or system that is part of the state highway system, including a nontolled state highway or a segment of a nontolled state highway converted to a toll project, to a governmental entity that has the authority to operate a tolled highway. In North Texas that agency is the NTTA.
Descriptions, maps and drawings showing the proposed portion of State Highway 121 to be transferred and other information concerning the proposed transfer are on file and available for public inspection and copying by contacting Bill Compton, P.E., Texas Department of Transportation, 4777 E. US Hwy 80, Mesquite, TX 75150-6643, telephone 214-319-4489.

Double edged sword of private infrastructure financing

By Faith Chatham - July 24, 2007

Crossposted on EPLURIBUS MEDIA

Many lawmakers and local/regional governmental officals erupted in glee at the prospect of transferring financing of public infrastructure projects to private equity partners. The traditional group of public works hogs at the public money bins jumped cartwheels anticipating funding to flow more rapidly out of other pockets into theirs. Governor Rick Perry spent Texan's hard earned tax money to fly to Europe to court potential European and Australian partners. TxDOT repeated the same old lies: "There is no way to finance roads without tolls."  

To the public CDAs or Private Public Partnerships for toll roads is presented as being financed by private partners. When we look up close and get real personal and examine specific projects however, the facade doesn't hold up to scrunity. For example, Cintra, if awarded SH 121, would have invested about the same amount of money which Texas taxpayers have already invested in the project (state, federal dollars and local governments investment in right of way). The Federal Government would also loan the private partner additional fund and faciliate borrowing of billions of dollars of tax exempt money from other private lenders. A key phrase to note is tax exempt. That is another way of saying that the tax liabilty will be passed from these lenders to the rest of the taxpayers. Taxes never go away when they are "exempted". They are merely passed along to the next guy up (or more probably) down the ladder!

I've made a number of inquiries about these US government faciliated loans which the changes to U.S. Law allows to enable private equity partners to utilize on public works (highway toll roads) projects. I want to fully understand who holds the bag if the project fails and the "borrower" defaults on the loan. What happens if there isn't the anticipated traffic on a toll road? If the U.S. Government faciliates these tax exempt bonds for the private partner (such as Macquarie or Cintra), does the US Government (i.e. U.S. Taxpayer) stand behind the loan as is the case when a bank forecloses on an FHA home loan or a VA home loan or a Federal Guaranteed Student Loan?

I've asked this question to numerous engineers and officials at TxDOT and RTC meetings and to date have yet to have anyone show me in writing where the US Government isn't standing behind these loans. If a private partner is going to make the profit I think the private equity firm should take the risk. However, I am suspicious.  There is a rush across the pond to court American lawmakers and acquire toll road deals. Is one of the edges of the sword that somewhere there are clauses buried in those mountains of fineprint and legalize which transfer the risk to the taxpayers?

Examining Australian sources, another edge to the sword emerges.  Most of these equity firms are borrowing from retirement funds. The retirement accounts of working men and women and retirees from all over this nation are invested in bonds and stocks.  John L. Goldberg, in "The Fatal Flaw in the Financing of Private Road Infrastructure in Australia" wrote a paper last year which analyzes the cash flow of four private public road infrastructure projects in Australia and probability of solvency/insolvency.

Goldman wrote:

The repayment of debt is clearly on the minds of the toll road owners and operators as revealed by the recent release of a draft prospectus for the so-called Sydney Roads Group (Macquarie Infrastructure Group, 2006). This group consists of three existing toll roads, the M4, M5 and Eastern Distributor. The financial arrangements are similar to those of the M2. In February 2009, the debt of the M4, currently at about $57.6 m must be paid. The method of doing this is said to involve the use of reserves and a securitization arrangement (Alles, 1999) involving the M4 and M5. This means that future cash flow receivables and/or the asset value of the M5 is to be used as collateral for a new financial structure for refinancing. It should be noted that the M5 has a debt of $515m which has to be repaid or refinanced by June 2010. But in the final prospectus, serious doubts have now been raised about the ability to repay the debt or refinance it on

favourable terms (MIG, 2006).

He concludes that the private investors are using various public private road projects as collateral for other projects, creating a " financial house of cards".  Macquaire and Cintra are partners in many projects around the world and have bid on numerous projects in Texas and the DFW area. They are presented to citizens as private partners who will take the responsiblity for risk from the government and taxpayer in exchange for tolls. Citizens' protest that the cost for tolls is higher than those projected if citizens finance road construction with gas tax and public bond financing the old fashioned traditional way goes are unheeded by lawmakers and transportation policy gurus and state and US DOT bureaucrats.

Goldman analyzed their business methodology in Australia and reported:

The data in the financial models attempt to portray the best possible outcome for the consortiums promoting the projects using for example, unrealistic traffic projections, and creative accounting. Despite this attempt the probability of financial failure has been shown to be 100% in every case, in the sense that cash flow will be insufficient to amortize debt. Not only do the models specify unattainable rates of return to investors but the true financial position of the projects is being masked by financial engineering leading to increased debt out of which equity dividends are being paid. Such an approach is unlikely to be sustainable, but may nevertheless lead institutional investors and others to erroneously believe in the long term outcome portrayed by the promoters.

Why does this matter?  It matters because citizens deserve to be able to trust the reliability of financial institutions. It matters because retirement accounts are being invested in bonds to finance private equity firms share of investment in public private partnerships for toll roads (and toll bridges and other infrastructure). If the cards begin to fall, and the toll road private investor public partnership CDA financial house crumbles, then as each card will take down an adjacent investor and that one will take down the next. If the model used to predict traffic, fees, maintenance costs for a 50 year toll road project are faulty and the private equity partner does not get the anticipated return on investment, everyone who loaned money on the project will lose. It is very likely that much of those loans will be held by retirement funds! Ouch! When you lose your retirement account, it is difficult for many people to recoup before they are out of the job market. I know. My 401K account dried up a few years ago when utility. telops stocks switched from reliable investments to swindles!

With retirement account investment in private public infrastructure equity partnership (toll roads) we may see scandals which reek of the hot sultry days of Enron investigations and energy sector manipulation which cost trusting investors and employees their life savings and retirement incomes. As the energy grid spread from state to state, we are watching a network of toll corridors spread throughout the North American continent, attracting international partners who are not totally without controversy in their home countries.

Possible remedies

Protection for retirees who invest in PPP/CDAs presents a classic catch-22. Private partnership who claim to remove the risk from taxpayers on infrastructure projects in return for receiving tolls (retrn on investment) should not have their loans guaranteed by the US Government.  That is unfair to taxpayers!

Goldberg pointed out:

Recent statements about the use of securitization as a means of debt amortization are unconvincing. In the event of corporate collapse, and in the absence of government guarantees, the trust/company structure of these projects will be used to claim limited liability for the entire structure. But such a claim may be rejected by a court, leaving investors liable.

That brings me back to my original quest. Are there guarantees written into these volumes of contracts, bills, agreements, which transfers the risk from the private partner to the U.S. taxpayer?  If you know where the guarantee is that the US Government will not back the tax exempt bonds they faciliate for private partners in public infrastructure projects, please share that with me. I need to see it in writing and be able to verify the source.  There are too many inconsistencies in what transportation engineers and TxDOT and regional transporation policy boys have told me about toll roads, CDAs and the benefit to the public for me to really rely on what they tell me without being able to evaluate it and verify it. This is an instance when if it isn't on paper, published in government documents within the public domain then it is probably more urban legend than reality.

Additional articles on these topics are posted on Grassroots News U Can Use

NTTA on road to more tolls - North Texas Tollway Authority set to expand vision, role with new projects

By MICHAEL A. LINDENBERGER - The Dallas Morning News - Sunday, July 22, 2007
The North Texas Tollway Authority's second decade promises to be nothing like its first.

Today, at age 10, NTTA is promising to expand its focus beyond Dallas and Collin counties to mesh with state and local plans that will radically increase the number of toll roads in North Texas.

As a result, the authority is poised to exert more influence than ever before over the way North Texas drivers get from one place to another.

"I call it the maturing of the NTTA," said Michael Morris, transportation director for the North Central Texas Council of Governments. "Ten years ago, the NTTA's attitude may have been, 'We'll do a few projects, but we're not interested in managed lanes, or electronic toll roads. We basically build these big fat cash lanes.' " But that's changing fast, Mr. Morris said.

In addition to building the 26-mile State Highway 121 toll road, NTTA has been asked to build or operate at least five other toll roads, and will partner in several other "priced" projects such as pay-to-use HOV lanes.

Critics: Change needed
Critics caution, however, that as NTTA plays a bigger role in solving transportation problems, it will need to do a better job of paying attention to the whole region.

"I have nothing against them, except for their history," said Denton City Council member Pete Kamp, who said NTTA has long ignored Denton and Tarrant counties. "They are telling us that they are now going to be, and I trust them to be, good to their word. But in the past they've simply been in Dallas and Collin counties."

Bill Hale, the engineer in charge of the Dallas district of the Texas Department of Transportation, said North Texas' transportation solutions have long depended on pooling resources from the state, the region's elected officials and the toll authority. "It's a three-legged stool, and everyone has a role to play," he said.

If that's true, NTTA's leg is about to get a lot stronger, as Mr. Hale conceded in an interview last week.

And that means it will be under more scrutiny, said Mike Nowels, a former Regional Transportation Council member from Lewisville. Answerable only to an independent board of directors, the authority has had too little oversight, he said.

"Does the Dallas North Tollway from [Interstate] 635 south into Dallas, is it really up to standards? Is it anywhere close?" Mr. Nowels asked. "Why hasn't the tollway authority invested in fixing it? It's gridlock every morning and gridlock every evening – and it's been that way for 20 years."

Optimism
NTTA officials and Mr. Morris said negotiations over Highway 121 are well ahead of schedule. An agreement is expected to be ready before the Texas Transportation Commission meets in Sugar Land on Thursday – a month before the deadline.

If the deadline is not met, the contract will go to Cintra, the Spanish firm that won preliminary approval in February to build the road.

Many of the Regional Transportation Council members who voted to let Cintra keep the contract said they now think NTTA will do a good job.

Mesquite City Council member John Heiman Jr. said many of the "no" votes were cast in opposition to the way NTTA was allowed to make a late bid after Cintra had been named the preliminary winner.

"I didn't vote against the NTTA; I was simply opposed to the process. It was awful," Mr. Heiman said.

Most RTC members have put the differences over Highway 121 behind them and are focused on building the region's badly needed roads, he said.

"There is so much need – and I am not talking about wants, I am talking basic needs of transportation – we're going to need a big head of steam to get it all done," Mr. Heiman said.

Mr. Morris said NTTA must be given the support it needs to live up to its commitments on Highway 121 and other roads it has promised to help build.

"We want them to succeed," Mr. Morris said. "We're going to do everything we can to assist them."

NTTA chairman Paul Wageman said board members have benefited from criticism.

"I think it has been very instructive, and we're changing," Mr. Wageman said. "We're having to grow and adapt to a changing environment. Perhaps we were a little slow to adapt to that as a board, but the board is now fully focused on our road ahead."

That path ahead, he said, includes an increased focus on communities in Tarrant and Denton counties who have long felt ignored by NTTA.

Higher tolls ahead

Still, what has changed most of all is not NTTA, but the way local officials and transportation planners have so enthusiastically embraced tolling as a road-building strategy.

That would have been hard to imagine in June 1997, when the Legislature voted to create NTTA.

Former Dallas County Judge Lee Jackson helped lead the charge to persuade lawmakers to dissolve the Texas Turnpike Authority and replace it with NTTA.

At the time, the authority's only job was to maintain the Dallas North Tollway and collect millions of dollars in tolls. In time, it used those funds and others to build the President George Bush Turnpike, and has since embarked on a handful of other, smaller projects.

But Mr. Jackson, chancellor of the University of North Texas system since 2002, said the philosophy about the role of toll roads in the highway system a decade ago barely resembles what has emerged since the Highway 121 debate began.

"When the NTTA was formed, the idea was that every toll road would be built and operated to the lowest possible cost to the drivers," Mr. Jackson said. "The idea was to set the smallest possible toll rates."

These days, the idea is to set the toll rates high enough to create a rich revenue stream that can be used as collateral for massive upfront loans from banks or bondholders.

In the Highway 121 case, for example, NTTA has promised to pay the state $3.3 billion in cash to help finance a stream of other North Texas projects. The money will come from the sale of bonds secured by future toll revenue that exceeds what is needed to build and operate Highway 121 in Denton and Collin counties.

"Obviously money talks," Mr. Jackson said. Still, he said the new approach is necessary because of the paucity of funds from more traditional sources such as state and federal gas taxes.

Mr. Morris agreed.

"We're in such a financial crisis when it comes to transportation that the gas taxes are basically paying for the maintenance of the roads we already have," Mr. Morris said. "Ten years from now the only improvements we will be able to make will be the ones that are paid for by toll roads."

Fairness of toll rate
Some local leaders say they can stomach the increasing number of toll roads. But they say it's wrong to abandon the old policy of keeping toll rates as low as possible.
Frisco City Manager George Purefoy is among them. It's bad enough, he said, that Frisco's two main avenues to the rest of the Dallas-Fort Worth area – Highway 121 and Dallas North Tollway – both will be tolled.

But what's worse, he said, is that Frisco drivers will be paying artificially high rates just so NTTA can borrow the billions it has promised to pay upfront. He says the higher toll rates amount to an extra tax on drivers unlikely to use the roads on which the extra money is spent.

"Everyone wants to keep focusing on how much money the region is getting from this project, and no one seems to care how much more drivers are going to have to pay," he said. "Our drivers are going to have to pay a toll, an extra tax and then the gas tax, too."

The Frisco City Council is considering filing suit to try to block the toll road, Mayor Mike Simpson said, but no decision has been made.

Last week, Mr. Morris said that legal threat could make it more difficult for NTTA to close the Highway 121 deal within the deadline.

In the meantime, drivers may need to get used to paying higher tolls – a price transportation officials such as Mr. Morris said is needed if residents want to ease the congestion that continues to clog North Texas roads.

Read more

TxDOT’s Sunset Review Kick-Off Party & Media Blitz

tKeeping An Eye on Williamson County - Friday, July 20, 2007
In what looks like a media blitz to show that TxDOT was right all along, and to justify it’s continuing existence in relation to it’s upcoming Sunset review, TxDOT this week is holding it’s Texas Transportation Forum toll-gasm conference.

Much of the focus has been on a draft report of a soon to be released “independent” report - TxDOT paid $3.5 million for the report - that says:

Texas needs more toll roads, and drivers should pay more to use them, an external audit of the Texas Department of Transportation suggested Wednesday.

(Kuff’s response):
I like that “priced to reflect the value - including the time saved” line. Because, of course, if you keep your toll roads expensive enough to guarantee that they’re never crowded, then it’s a self-perpetuating justification. Better yet, if you ensure that the remaining non-toll roads are sufficiently decrepit and jammed up, you’ll also have a built-in reason to keep raising tolls in the future. What more could a local toll road authority want?

A TxDOT paid for “independent” audit that reaffirms TxDOT’s toll every road stance. That’s just a happy coincidence for TxDOT I’m sure. Although the forum is billed as a chance to, “Experience the vision. Share your ideas. Join the conversation. Keep Texas moving”, in reality it appears to be more a way to bring lawmakers and those who make money off of government transportation deals together:

…the need for toll financing and other alternatives to gasoline taxes is a major theme of the conference that brought together public officials and private contractors from across the state.

The audience that packed the Hilton ballroom found in each chair a Texas Department of Transportation brochure titled “TxDot: Open for Business — A Guide to Accelerating Transportation Projects.” [.PDF]

The booklet explains various strategies approved by the Legislature in 2003 to supplement tax revenue with toll financing, public-private partnerships and regional mobility authorities.

The conference coincided with the release of an audit by TxDOT, suggesting the state’s best chance for keeping up is to build more toll roads with higher fees.

Now the report, as Move It! explains, has one point that may be worth further exploration. It’s a plan based on making ALL drivers pay a user fee based on vehicle miles traveled:

A long-term answer is to switch from a tax on gas to a tax on how much people drive, called a vehicle miles traveled charge or VMT charge. Oregon finished testing such a system in March and a report is due this summer.

“Texas needs to lay the ground work to move to a VMT charge over the next 20 years,” the report says. (see Oregon Test [.PDF]).

The technology for the implementation may still be a little ways off but this has the potential to be a fair, broad-based tax that charges drivers for the amount of driving they do.

One last thing. Gov. Perry was quoted as saying this:

And the fuel tax “has problems on its face,” he said. Unlike toll roads, which typically have a free alternative, fuel taxes are paid by all drivers, and hit rural residents hardest.

“The boys out in Lubbock, Odessa and Marfa really don’t see the benefit in it for them,” he said.

When Gov. Perry runs around the state telling Texans that we have to build the Trans-Texas Corridor, and take away precious farmland and family legacies, he says it must be done to benefit all of Texas. The “conservative” staple excuse of using economic development as the reason when it benefits their cause. But in those sentences he’s refuting that statement by saying that toll roads only benefit urban/suburban Texans. Which is it governor? Either our highways are built for the benefit of ALL Texans and should be funded by ALL Texans or they shouldn’t. You can’t have it both ways.

Again I’ll refer you back to EOW’s earlier post on the “independent” audit, It’s Not The Size Of The Shorfall, It’s How It’s Made Up That Matters. No matter how we want to slice it, the ultimate question is, How do Texans want to pay to make up for the disrepair and neglect our state leaders, and ultimately ourselves, have allowed our transportation infrastructure to fall into in this state? EOW believes the best way to do this is in the fairest, and most broad-based, way possible, which at this time happens to be raising and indexing the gas tax.

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Perry reiterates toll road support

Governor tells builders the need for road funds will overcome critics
By RAD SALLEE - Houston Chronicle - July 19, 2007


AUSTIN — Gov. Rick Perry told road builders at the Texas Transportation Forum here Thursday that he stands firm in his support for toll roads and public-private partnerships despite some setbacks in the past legislative session.

"When you have big dreams," he said, people tell you, "You can't get there from here. But I assure you we can get there from here, and we're going to get there together."

Perry said traditional sources of road funding — "a trickle of federal funds and a gas tax that few legislators would even think of raising" — aren't nearly enough to meet the state's needs.

"There isn't even enough money to maintain our current system," he said.

And the fuel tax "has problems on its face," he said. Unlike toll roads, which typically have a free alternative, fuel taxes are paid by all drivers, and hit rural residents hardest.

"The boys out in Lubbock, Odessa and Marfa really don't see the benefit
in it for them," he said.

"If we don't build roads with innovative financing and tolls, roads are not going to be built in our state," he said.

Driving the private sector

Perry said even the prospect of the state contracting with the private sector to build and operate toll roads is paying off.

"Projects that local toll road authorities would not have bid on a few years ago are now attracting very strong interest because private companies are now competing to build those same projects," he said.

This was an apparent reference to the North Texas Tollway Authority's offer to pay the state $3.3 billion to build and operate for profit in a 50-year lease, a segment of Texas 121 in the Dallas area. The offer topped a previous $2.8 billion bid from the Spanish firm Cintra.

"They may never say it," Perry said of lawmakers opposed to such long-term public-private toll partnerships, "but the Legislature admitted we were on the right track.

"While they were calling for a moratorium on toll roads, on one hand, they were insisting on toll road projects in their own districts because their constituents wanted to see things moving. They wanted to see those roads built."
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Governor emphasis on tollways, private road-builders has generated urban and rural unrest

By Ben Wear - AMERICAN-STATESMAN STAFF - Sunday, August 20, 2006
Excerpts from a long story last year on Perry's transportation policy.
Perry, with his famously well-coiffed look and perfectly tailored suits, surely doesn't look the part of a revolutionary, and he rejects that characterization. But he acknowledges that transportation is the area where he made the most "wide-sweeping" changes.

Perry declared the gasoline tax a lame duck, dismissing talk of raising it. Perry and his allies decreed that all new road projects would be evaluated for tolls. They contemplated slapping tolls on existing roads, then backed off after a public outcry.

Perry in early 2002 outlined what seemed to be a pie-in-the-sky plan for 4,000 miles of rural toll roads called the Trans-Texas Corridor. After hearing people scoff for more than two years, Perry introduced some Spaniards who said they'd spend $7.2 billion on the first 300-mile piece, including a $1.2 billion payment to the state. And Perry's Department of Transportation declared Texas "open for business," inviting private companies — foreign or domestic — to privately finance and operate the next generation of Texas expressways and railroads.

"What is happening in Texas on public-private partnerships is being watched by every state in the union and several foreign countries," Perry said during a late July interview in his Capitol office.

"When I parachuted in here on Dec. 21, 2000, I inherited a state that had huge infrastructure challenges."


Gas tax not enough


Evaluating just how huge that challenge was — is it a crisis or just an emerging problem? — has involved an escalating war of statistics over the past couple of years.

The state's population has increased more than 20 percent since 1990 and annual miles traveled on the state's roads have gone up about 50 percent. Meanwhile, the Texas highway system, with increasing maintenance costs and more expensive urban construction needs, grew only 4 percent during that decade and a half.

The inescapable conclusion to be drawn from those numbers, one borne out by most people's experience behind the wheel, is that Texas roads are more congested than they were 15 years ago.

The state Transportation Department's budget, meanwhile, has tripled since 1990, including an 80 percent jump from the budget Perry inherited from George W. Bush to this year's $7.7 billion spending plan.
Perry and his people say that's still not nearly enough to deal with the state's transportation needs now or, especially, in the future. Using figures gleaned by asking local transportation planners what they would build if money were no object, they say the state will have $86 billion in unmet transportation needs over the next 25 years. [NOTE: Perry's Governor's Taskforce on Transportation later revised this down to a $44 billion shortfall.]

They say the only way to close that gap, to extinguish the blaze, as it were, is to put tolls on every road you can and recruit private capital to build as many new toll roads as possible. Increasing the state gasoline tax, frozen at 20 cents a gallon since 1991, is not an option, Perry and his fellow GOP legislative leaders say, particularly with unleaded gas selling for close to $3 a gallon. But that was already his position when gas was selling for well under $2 a gallon.

...A few cents, in Perry's view, would be irrelevant. Each penny raises about $100 million in a year, or enough for one fair-sized freeway interchange with flyover bridges. So a 20-cent increase, which would give Texas the highest gas tax of any state, would bring in an extra $2 billion a year. Perry says that wouldn't be nearly enough to return Texas' transportation system to its former lofty status among states, particularly as hybrid vehicles and other improvements from Detroit increase gas efficiency and cause gas tax revenue to sag.

A 20-cents-a-gallon increase in the tax would cost the average driver about $100 a year. That's much less than a driver regularly commuting on a toll road would pay. The U.S. 183-A tollway due to open next year (in Austin) will cost $2 for one trip through, or about $1,000 a year for a five-day-a-week commuter.
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NTTA proposes having 121 built by 2012

By Danny Gallagher, Staff Writer - Plano Star - Sunday, June 03, 2007

The proposal for the North Texas Tollway Authority submitted Friday to the Regional Transportation Council said it can have State Highway 121 built in five years.

The 1,000-plus-page proposal, released by the NTTA on Friday, proposes splitting the construction of the roadway into four segments and completing the entire project by 2012 if the state awards the NTTA the construction project.

Construction would take place between Denton Creek and Hillcrest Road, Hillcrest Road and Watter’s Road, Watter’s Road and east of the U.S. 75 intersection and the Dallas North Tollway and the SH 121 interchange. The total design phase for the project would take place between July 1, 2007, and Feb. 20, 2008, and the total construction phase would take place between Nov. 9, 2007, and March 20, 2012, according to the proposal.

The NTTA would also continue to maintain and inspect the road for the next 50 years. They would conduct annual inspections every September until 2057, and handle maintenance procedures on the roadway such as joint sealing, “moderate” pavement repair, overlay, sign refurbishing, pavement markings, and landscaping and irrigation management, according to the proposal.

Financing for the project remained the same as earlier estimates stated in presentations given to the RTC and at NTTA board meetings. NTTA said financing the project as part of the Dallas North Tollway system would include an upfront payment of $2.5 billion at the financial close and $833 million in guaranteed payments for a total of $3.3 billion.

The NTTA also said it would be able to provide a lower overall cost, and greater flexibility to respond to “shifting needs, priorities and requirements that should arise over the next 50 years,” according to the proposal. They also included several offers such as a board resolution that adopts the Texas Department of Transportation/RTC toll policy as the maximum rate for SH 121, an agreement to fund an escrow with $75 million upon acceptance of the proposal, and a commitment from a “AAA-rated” financial institution to provide $3.5 billion to ensure a financial close.

It also reiterated earlier claims that it would be able to keep the funds in local pockets.

“Every penny of cash flow generated from the SH 121 project for the next 50 years will remain in North Texas to fund regional mobility needs,” the report said

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Dallas County Residents - Didn't get to sign the Trinity Toll Road Petition - It's not too late

During the May 12th election, Dallas citizens many Dallas citizens signed petitions opposing the plans for the TRINITY TOLL ROAD. If you are a registered voter in Dallas County, you have opportunity to sign the petition. The cut-off date is June 29.

Trinity Vote, A Community Movement to Reclaim the Trinity River Project, includes simple instructions for citizens to collect signatures from their neighbors, co-workers, and relatives.

Instructions and all necessary materials are supplied on the Trinity Vote website.
Volunteers are urged to download the petition and collect signature. If you want to sign the petition but do not want to collect signatures, you can go by the Trinity Vote Office: Turley Law Center, Suite 100
(Central Expwy. at University Blvd.)
Sign the petition or get your petitions notarized!

TRINITYVOTE OFFICE HOURS
Monday, May 28 - Sunday, June 3
Monday: Closed (Memorial Day Holiday)
Tuesday: 11am - 1pm
Wednesday: 3pm - 7pm
Thursday: 11am - 4:30pm
Friday: 11am - 1pm
Sunday: 9am - noon

OTHER LOCATIONS TO SIGN THE PETITION:
Office of Ron Patterson - 814 W. Davis - Every Monday - Friday: 9am - 5pm

DOWNLOAD THE PETITION

The Trinity River Project has changed dramatically from the plan approved by Dallas voters in 1998. The magnificent urban park, complete with lakes and promenades, is nowhere to be seen. A high-speed, limited access toll road is planned to be built within what was supposed to be our Central Park.

The toll road is more than $600 million over budget. Due to safety concerns, it has recently been moved even farther into the park, further reducing parkland and lakes.

Given these significant changes, we believe Dallas voters deserve the opportunity to vote on whether we want a toll road in the Downtown Trinity Park.

We are TrinityVote, a broad-based coalition of Dallas residents who believe that our Trinity River Project is off-course and needs to get back on track.

Our coalition includes neighborhood residents, developers, environmentalists, urban planners, architects, and others who believe that putting a toll road in our park will irreparably destroy the opportunity to create an incredible signature park on the edge of Downtown Dallas.

Join us. Help us reclaim the Trinity River Project.

Read more http://www.trinityvote.com/faq.asp

Action Alert on SB 792 by David Van Os

The Trans-Texas Corridor moratorium bill needs YOU
David Van Os - Texas Kaos
A few days ago it looked like the people of Texas were going to get a two-year moratorium on the TTC monstrosity. It looked like overwhelming numbers of legislators in both the House and the Senate had heard the voices of the people. It looked like our House members and Senators were going to get us breathing room in which to continue to spread information and education to our fellow Texans about the intolerable scar Dictator Perry and his campaign contributors want to rip across the face of our state. Read more