Cities support toll road merger

Alicia Robinson

City leaders are backing a plan to merge operations of the San

Joaquin Hills Toll Road with the Eastern and Foothill toll roads that

they hope will keep tolls from skyrocketing.

The transportation corridor agencies that oversee the toll roads

plan to move forward with the merger in early 2004.

The plan will save the San Joaquin Hills Toll Road from financial

crisis but will extend the debt obligations of Foothill and Eastern

toll roads. It has the approval of the state controller’s office,

which performed an audit at the request of Assemblyman Lou Correa

(D-Santa Ana.)

“We’ve been working very hard on putting the merger together,”

said Costa Mesa Mayor Gary Monahan, a board member of the toll road’s

governing agency. “I believe this merger will happen very shortly and

will be a very good thing.”

The Eastern and Foothill toll roads run from the Riverside Freeway

to Irvine and Rancho Santa Margarita, and the San Joaquin Hills Toll

Road runs from Newport Beach to the Santa Ana Freeway in San Juan

Capistrano.

The San Joaquin Hills Toll Road needs financial help because its

revenues were overestimated, Monahan said. The projections were

inaccurate because when they were made at least 10 years ago, the

county had no other toll roads to compare with, and many cities went

into a no-growth or slow-growth atmosphere shortly after the toll

road opened in 1996, he said.

Without the merger, the San Joaquin Hills Toll Road will be unable

to meet its debt obligations by 2005 and could begin defaulting on

its bonds in 2012, according to the transportation corridor agencies.

“If that happens, we lose local control of the toll road,” said

Gary Adams, a Newport Beach councilman and member of the San Joaquin

Hills Transportation Corridor Agency board.

The board has tried to keep toll costs down, but that might not be

possible if the road defaults on its debt, Monahan said.

“The first thing you would have would probably be a doubling of

the tolls,” he said.

While consolidating the two toll roads’ operations will mean

collecting tolls for a few years longer than planned, it would

probably mean more stability to the tolls over time, Adams said.

The merger will also allow the boards to restructure their debts

at current low interest rates, he said. The agencies would form one

board and issue $4 billion in bonds to cover the restructured debts.

“If no consolidation happens and there’s no other viable

alternative that’s found, debt for the San Joaquin Hills Toll Road

would extend out to 2062,” said Clare Climaco, spokeswoman for the

toll roads’ governing agencies. “It’s a lot longer than was

originally anticipated.”

If the toll roads’ debts are combined, they should be paid off by

2044, Climaco said. Once the debt is retired, tolls will no longer be

charged.

The boards that govern the toll roads could make a decision in

late January to move forward with the merger, Climaco said.

“Commuters who use the road every day, they’re not going to see

any change,” she said.