TOLLWAY BOARDS VOTE TO PURSUE ANALYSIS OF ACQUISITION
Higher revenue projections and low interest rates create opportunity to save money and retire toll road debt early
IRVINE, Calif. (April 13, 2007) – The Boards of the Transportation Corridor Agencies voted unanimously to pursue analysis of acquisition, a transaction that would join the two existing agencies under one new entity and enable the agencies to operate more efficiently.
A financial ad hoc committee of board members and team of consultants spent more than a year looking at financial options with the goals of examining opportunities to finance Foothill-South cost effectively and speed debt retirement. In August 2006 the Boards approved a contract with Vollmer Associates to update a 2003 Traffic and Revenue Study as part of the analysis. Results of the recalibrated model showed an average annual revenue increase of 14 percent for the Foothill/Eastern Toll Road and a 20 percent increase on the San Joaquin Hills Toll Road. The Ad Hoc Committee concluded that an acquisition now would provide the most benefit and cost savings. click here to view Toll Revenue Projections
“Our goal is to complete the system and turn over The Toll Roads to the public as soon as possible,” said Carmen Cave, chairwoman of the San Joaquin Hills Transportation Corridor Agency. “This solution gives us the opportunity to save both the agencies and the motoring public money and provide mobility.”
Acquisition would involve creating a new Toll Road System entity that would then acquire the San Joaquin Hills and Foothill/Eastern Transportation Corridor Agencies. The new entity, a joint powers authority, could then finance the completion of the 241 Toll Road after all of the environmental approvals for that project are obtained.
“Interest rates have moved favorably since the Boards last considered acquisition,” said Chief Financial Officer Mary Lou Woods. “Long-term borrowing rates are lower and short-term reinvestment rates are higher, offering a potential opportunity to realize savings for the agencies, retire debt sooner, and finance Foothill-South from a stronger position.”
As the first step in the formal acquisition analysis, the Boards approved a contract for a comprehensive update to the traffic and revenue study. The study will take up to six months to complete and will include updated traffic and revenue projections, development impact fee projections and socioeconomic information.
A final vote on whether or not to proceed with an acquisition could take place in late 2007 or early 2008.
ABOUT TCA
The Toll Roads are operated by the Foothill/Eastern and San Joaquin Hills Transportation Corridor Agencies (TCA), joint powers authorities formed in 1986 to plan, finance, construct, and operate Orange County's 67-mile public toll road system. Fifty-one miles of the system are complete, including the San Joaquin Hills (73) Toll Road from Newport Beach to San Juan Capistrano; and the Foothill (241) and Eastern (241, 261, and 133) Toll Roads from the 91 Freeway to south Orange County.
The Foothill/Eastern Transportation Corridor Agency (F/ETCA) manages the 241, 261, and 133 Toll Roads. F/ETCA Member Agencies consist of the cities of Anaheim, Dana Point, Irvine, Lake Forest, Mission Viejo, Orange, Rancho Santa Margarita, San Clemente, San Juan Capistrano, Santa Ana, Tustin, Yorba Linda, County of Orange 3rd, 4th and 5th Districts. Officials each member agency are appointed to serve on the agency's Board of Directors. The Board makes major decisions about construction, administration, and finances affecting The Toll Roads.
