Tuesday, November 18, 2008

290 E Finance Plan

This is a detailed explanation by Vince May of what drivers on 290 E might be paying in tolls during the next few years.

290 E Tolling Finance Plan
By Vincent J. May

CTRMA is requesting that CAMPO vote to approve their Finance Plan for building and operating Hwy 290E. Let's look at CTRMA's plan.

CTRMA says that the toll on opening day, which they say will be in 2013, will be "15 to 20 cents per mile" but they also state that this number is in 2007 dollars and that they will increase the toll each year until the road opens by the rate of Consumer Product Inflation (CPI) or the rate of per capita increase in Texas Gross State Product (GSP), whichever is greater. (CAMPO's web site, page 3)

Texas GSP increased by 5.1% in 2005 and regularly outperforms CPI. Let's calculate "20 cents per mile" with 6 years of 5.1% increases, compounded. (Wikipedia)


2014.....2015......2016.. ..2017......2018

The first year that 290E opens we would most likely be paying 27 cents per mile. (CTRMA could choose a lower rate of increase that would yield 24 cents per mile but we already know that they will have to 'borrow' money from the 183A project if 290E tolls are too low, so that is unlikely.)

CTRMA says that the project is 6.2 toll-able miles. By multiplication we see that a one way toll on opening day would be $1.68, or $3.34 per day. If you drive 290E 6 days per week, that's $1,042 per year. But, that's not all. CTRMA is asking for authority to charge 50 cent tolls for use of flyover bridges at the 183 / 290E interchange. Note, when TxDOT was rebuilding 183, they designed the intersection to strongly influence people to use flyovers. E.g., people traveling west on 290E who turn onto northbound 183 can't get on the 183 mainlanes until after they go through the Cameron Rd intersection. Same thing for turning onto southbound 183. You are forced to go through the Springdale light before entering the 183 mainlanes.

Add another $156 dollars per year if you turn onto 183. That's $1,198 dollars per year. More than most 290E residents pay for health care. How do you do that on a fixed income? You don't. You drive the frontage roads. CTRMA has data on how many people it expects to be forced onto the frontage roads but they refuse to surrender this information, even though they paid $1.9 million dollars for it. (CTRMA is in criminal violation of Texas law by withholding the Traffic & Revenue Study.)

SH 130 is only 11 cents per mile. Why would CTRMA want to charge so much for using 290E? There are 2 reasons.

CTRMA proposes to build 290E entirely with borrowed money. Every highway built until now has had input from local funds (City and/or county), state (TxDOT or Mobility funds) and Federal. SH 130, Ben White Blvd, 183A had local, state and federal participation. People who live in East Travis County helped pay for these roads through our property taxes. But, now that TxDOT gets around to building our road, through their fully owned subsidiary, CTRMA, the well is dry. Why, those folks in East Travis are too stupid to know what's happening anyway.

The toll structure on 290E is not designed to pay for 290E. It is intended to generate revenue that will be used as seed money for converting more sections of 290E into more tolled miles. Then they will seed Parmer Lane as a toll road. The Mobility Authority could use our money to build roads in Williamson County. They could build TT-C railroad lines between Manor and Elgin. They will use our money to build utility lines into our neighborhoods. The utilities will be owned by the City of Austin and the city will annex our neighborhoods. Everything is possible when you create a Mobility Authority, instead of a Highway Authority or a Tollway Authority. 'Mobility' subsumes everything that moves, whether it is people in cars or turds in a pipe.

That's how a revenue generating toll road works. Promoters will tell you that your city and county property tax rates will go down if you support tolling. I hope you didn't fall for that one. Taxes always go up and you will probably get annexed and have to pay City of Austin property taxes. In ten years, 2018, a person getting on a tolled 290E at FM 973 would be paying $2,500 per year just to use 290E. (Most economists expect disposable incomes to decline (in constant dollars) over the next 10 years.)


CAMPO is inviting your testimony on the 290E Finance Plan. Here is what I'm going to tell them:

I don't want 290E tolled. I will be happy if you just build one section of the project from 183 to the Manor Flea Market. This can be built for >$125 million, the same amount of subsidy that the City and County combined gave to the owners of the Domain shopping center. It is well known that you all intend to give more subsidies to other shopping center owners so you can just eliminate one of those gifts to pay for East Travis County's pressing road needs. In a few years, after Governor Perry and President Obama have increased the gas taxes, we can start on the next section of 290E.

If you (CAMPO) decide that tolling is the only way to build 290E, then I insist that:
CAMPO follows the traditional formula of local and state participation in financing the project. The object here is to lower the toll so that the maximum number of travelers be able to use 290E. I'm thinking of a 10 cent toll on opening day, with annual increases never exceeding CPI.

There will be no excess revenue generation. Toll money will only be used to retire bonds, pay operation fees, and repay any funds borrowed from 183A. There will be no "refunding" of the bonds which increases the original term of indenture, which will not be greater than 30 years. We do not want to create permanent debt for future generations.

Maintenance costs shall be paid by TxDOT. TxDOT got caught lying about its future revenue needs, by $30 billion dollars. Tell CTRMA to go back and renegotiate with TxDOT to shoulder the maintenance cost. TxDOT should not get a free ride.
The building plan is excessive. I count 8 bridges in 5 miles. Three of these bridges can be deferred for 10 or 20 years until traffic warrants building them. We do not need 4 direct connectors at 183. Two will suffice if TxDOT can be persuaded to improve access to 183 on the frontage roads.

CAMPO should censure CTRMA for devious practices. People in the 290E corridor have been denied access to the 290E Traffic & Revenue Study and other information that is necessary for any citizen in evaluating this project. This reproachful behavior must not be left unanswered.

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