State transportation officials apply for $174 million loan to help ...

A few weeks after a state audit criticized transportation officials for failing to collect hundreds of thousands of toll violations on Louisiana Highway 1, the Louisiana Department of Transportation and Development said Friday they will be applying federal officials for a $174 million loan to help pay for a toll bridge plagued by toll collection problems since the system was implemented in 2009.

Department Undersecretary Michael Bridges told members of the Louisiana Transportation Authority the loan would consolidate ?existing bonds and federal loans used to pay for an expansive roadway project that raised flood-prone roadway from Port Fourchon to Golden Meadow. Bridges said it was the solution they came up with after federal officials denied a request to delay their loan payments until December 2016.?

"They said it was only going to aggravate the situation," Bridges said.

The new rural infrastructure loan will carry half of the treasury interest rate, Bridges said. Additionally, the existing toll schedule, which has built-in increases every five years, will provide 1.3 times the debt service coverage.?

$140 million of the $371 million used to fund the project is paid for by bonds and loans granted under the Transportation Infrastructure Finance and Innovation Act. But slower truck traffic and repercussions from the 2010 oil spill have translated into less toll revenue to pay off the bonds, Bridges said.

"Toll revenue cannot be used for anything else. It can only be used for debt service," he said

Six-axle trucks currently pay a $12 toll while cars pay $2.50.?

?To make up for the lost revenue, Bridges said the toll would have to increase by over 100 percent in 2013 to make the debt service coverage.

The department is still negotiating with the TIFIA office on the loan, he said. But if negotiations are successful, it allows them "to move forward with a solid credit and...not have to do the onerous increase to the toll schedule."

Earlier in December, legislative auditors reported the authority, which manages the bridge, has been allowing an unknown number of drivers to bypass the tolls without paying and failing to collect fees from out-of-state violators.

Officials said there's no way of knowing how much money has vanished as a result of the oversight, but it could be as much as 30 percent of the collection rate was lost due to the incomplete toll system.

The tolls that were collected were not enough to achieve the debt coverage requirements in 2010. To make the coverage, the toll would have to increase by 108 percent in 2013, Bridges said.

The panel passed a resolution, recommended by the transportation department, curbing excessive toll increases above the built-in 20 percent climb scheduled for Jan 1.

In 2013, under a scheduled toll increase, truck tolls jump to $15 and car fees rise to $3.?

"We're going to negotiate a long term restructuring of the debt so that the larger increase will not have to be implemented," Bridges said, adding he'd like to get it done by summer of 2013.

The authority also approved a resolution allowing the department to seek additional funds from the legislature if they find improved toll collections and an increase in traffic aren't enough to cover their debt.

"We're hoping that the traffic recovers because the national economy is picking up. Offshore activity is picking up. So, if traffic picks up then we won't be short," Bridges said. "But what that gives us is time to restructure the debt."

Assistant Transportation Secretary Rhett Desselle told the panel the toll system is currently stable and "accurately capturing and reporting the revenue."

"Right now our average toll collections have gone up to over 98 percent on average," he said.

They've also started sending toll violation notices to drivers with Texas and Mississippi license plates, which Desselle says accounts for most out-of-state toll violators.?

Source: http://www.nola.com/politics/index.ssf/2012/12/state_transportation_officials_1.html

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