BIKE: Cold Hard Slap Of Reality On Toll Roads

[Roger Baker]

On Feb 23, 2005, at 2:30 PM, Mike Dahmus wrote:

> "Its true that the bonds are insured and also have the padding of $66 
> million in federal TIFIA loans that take the default hit first. But 
> thats still not enough to take away the enormous risk of default due 
> to peak oil and soaring fuel prices. Another risk is that the 
> projected sprawl growth will not materialize where the CTRMA board has 
> its land investments, and which the roads are designed to enhance."
>
> I'm going to break my own rule and respond (sort-of) to Roger, since 
> this meme appears to have spread far and wide.
>
> FOLKS: THERE IS ENOUGH TRAFFIC _____TODAY______ to pay off those bonds 
> with tolls.
>
> TODAY.


That sort of speculation is easy for (toll road supporter) Mike Dahmus 
to make because he doesn't bother to document his opinions.

So I'll provide the documentation. Here's what the traffic and revenue 
consultant says in the official statement regarding investor risks on 
US 183A.
Note that a lot of future sprawl growth must develop just as the road 
lobby envisions. The bonds are the road lobby's way of locking in these 
trends now:

"Operating Risks  When completed, the 2005 Project will be a new toll 
facility having no independent operating  history.  Accordingly, the 
operations of the 2005 Project to generate Revenues in amounts 
sufficient to  pay debt service on the Series 2005 Obligations when due 
will be subject to the risks inherent in the  establishment of any new 
toll facilities.  The ability to repay the Series 2005 Obligations will 
be  dependent on the volume of traffic that utilizes the 2005 Project 
and the ability of the Authority and its  vendor’s computer systems to 
accurately process data.  Revenues to be generated through such use 
will be  influenced by numerous factors, including, among others, the 
ability to manage toll evasion; the ability to  control expenses; the 
availability of adequately-trained personnel; population, employment 
and income  trends within the region; the congestion on alternative 
freeways, highways, and streets; time savings  experienced by utilizing 
the 2005 Project; the toll rates; the availability and price of fuel; 
and the  construction of new or improved competitive roadways or other 
transit facilities...

Vollmer has represented to the Authority that the basic assumptions for 
the revenue estimates and  revenue forecasts in the Traffic and Revenue 
Report are as follows:  1.  The 2005 Project will be open to traffic at 
the times set out in the Traffic and Revenue  Report. 2.  The 2005 
Project will be constructed as set out in the Traffic and Revenue 
Report with  respect to mainline lanes, frontage roads (or lack 
thereof), interchange locations, and connections to the  local/regional 
highway network.  3.  The 2005 Project will function as an integral 
part of the regional highway network  requiring directional and 
trailblazing signage to facilitate access to the 2005 Project along 
with its timely  inclusion on commonly used State, local and regional 
highway maps.  4.  The toll collection plans and rates for the 2005 
Project described in the Traffic and  Revenue Report including the 
Authority’s toll policy, will be implemented as proposed, including a 
toll  discount of ten percent (10%) for transponder users (electronic 
toll collection), the N minus 1 toll  structure for multi-axle vehicles 
(a rate structure for which a multi-axle vehicle pays a multiple of the 
  two-axle-vehicle toll rate equal to the number of axles on the 
multi-axle vehicle minus one) and periodic  toll increases through 
2045.  5.  Transponder market shares for the 2005 Project will occur as 
forecast in the Traffic and  Revenue Report.  6.  The traffic mix using 
the 2005 Project will result in a toll multiplier (for 
revenueestimation purposes) for trucks with 3+ axles of 2.5 times the 
passenger car rate.  7.  The socioeconomic growth discussed in the 
Traffic and Revenue Report will occur as  forecast. 8.  The highway 
network improvements discussed in the Traffic and Revenue Report will 
be  constructed as planned.  9.  Drivers’ perceived rate of inflation 
will continue at 3.0 percent annually (compounded)  during the forecast 
period through 2047.  10.  2005 Project traffic during the early years 
of operation will ramp up as formulated in the  Traffic and Revenue 
Report.  11.  The 2005 Project will be efficiently maintained and 
operated, but even under the most  efficient operation, there will be 
some toll evasion and revenue “leakage” that have been deducted from  
the model-produced traffic and revenue forecasts (after ramp-up) 
discussed in the Traffic and Revenue  Report.
12.  Motor fuel will remain in adequate supply during the forecast 
period, and motor fuel  prices (i.e., the average price for regular 
gasoline) in the foreseeable future will not increase above the  1980 
peak, which, if adjusted for inflation, in current dollars would not be 
more than  $3.00 per gallon.  13.  Federal and State fuel tax increases 
will not increase to the extent that, together with fuel  price 
increases, pump prices exceed $3.00 per gallon.  14.  No radical change 
in travel modes, which would drastically curtail motor vehicle use, is  
expected during the forecast period.  15.  In the long term, generally 
normal economic conditions will prevail in the State and the  United 
States, and there will not occur a major depression, national emergency 
or prolonged fuel  shortage..."

>
> There doesn't have to be ANY MORE DEVELOPMENT out there to provide 
> enough traffic to keep these roads full. These corridors have enough 
> cars travelling through them RIGHT NOW to fill up 2 or 3 toll lanes in 
> the primary direction of travel during rush hour with packed frontage 
> roads left over, which is pretty much all they need to shoot for in 
> order for them to be an unqualified success financially.
>
> Remember: these toll roads are freeway additions to roads whch, today, 
> have very very heavy traffic. These aren't Southwest Parkway 
> analogues. The only one which even remotely worries me is US 183 East, 
> and even then the airport traffic will probably make up the difference 
> (airport travellers are the least likely to care about spending a 
> couple of bucks if the free alternative is unreliable).
>
> Ironically, the three 'old' toll roads (US 183A, SH 45N, and SH 130) 
> which supposedly are in much better shape are the three LEAST LIKELY 
> to generate enough cars to pay off the bonds -- especially SH 130. (SH 
> 45N probably will; US 183A MIGHT but might not, I doubt SH 130 ever 
> will).
>
> And finally, remember: the choice in the REAL WORLD was NEVER "toll 
> roads vs. no roads". As Patrick finally observed today, the cocoon 
> most of you live in in Central Austin is a very different world from 
> the one most suburbanites experience, and there's a lot more of them 
> than there are of you. All of these roadway expansions would have 
> happened AS FREE ROADS, JUST A LITTLE LATER ON.

Where is the proof? This is what TxDOT keeps saying, but it amounts to 
self-serving speculation. To me the best indication that something is 
wrong with the plan is that the road lobby is trying to get billions of 
dollars worth to roads, under contract -- NOW -- to serve sprawl growth 
30 years from now, using borrowed money from Wall Street. Isn't that a 
pretty good tip-off as to the real agenda? But why aren't the CAMPO 
politicians trying to contract the infrastructure to handle bicycle 
needs thirty years in the future using the same logic?

>
> I don't know about you, but the prospect that Circle C Jerks have to 
> pay a toll to drive into the center-city every day is an unqualified 
> GOOD THING. Because the alternative was NOT that they don't keep 
> building out there (because they and we both know TXDOT's gonna build 
> them freeways either way).

If you don't know much about the toll roads (and peak oil), you might 
possibly come to a similar conclusion as Mike Dahmus. The truth is that 
the city of Austin will according to CAMPO have to spend approximately 
$2.5 billion dollars (money that it doesn't have) widening arterials, 
mostly inside Austin and throughout the central city to handle the 
traffic related to and generated by and associated with the toll roads. 
This amount is shown on page 183 of the new CAMPO 2030 Plan. Page G-7 
indicates Austin will need to have a $400 million road bond election in 
2006, next year, to fund such costs. So much for toll roads that pay 
for themselves.

Yet even if all these roads are widened and we do everything in the 
entire $22 billion plan, the CAMPO planners STILL predict heavy 
congestion throughout central Austin (see map 2.3 of the 2030 Plan) 
!!!!!!!  -- Roger Baker

>
> - MD