Every journey starts with a single step and mine ended 1,200 miles later, when I moved my home base from Seattle to Orange County to become chief executive officer of The Transportation Corridor Agencies (TCA).
I joined TCA five months ago for the unique opportunity to collaborate with two boards of directors comprised entirely of elected officials and because I see The Toll Roads as a critical – but often overlooked and undervalued – lifeline for regional mobility in Southern California that gives drivers an express choice.
State Routes 73, 133, 241 and 261 are not just Orange County roads, they are Southern California roads that are critical for people traveling to and from Los Angeles, San Diego and the Inland Empire. Roughly 80 percent of the trips that pass through our Windy Ridge Mainline Toll Plaza are made by people who reside outside of Orange County and 40 percent of TCA FasTrak® accounts belong to out-of-county drivers.
TCA’s history is unique, inspired and full of firsts. Our public joint powers agencies were formed in 1986 to plan, finance, construct and operate The Toll Roads – 51 miles of roadway representing the largest network of toll roads in the state. Built with virtually no taxpayer dollars, The Toll Roads were funded through the sale of bonds to private and institutional investors, and supplemented with development impact fees. The bonds can only be repaid with tolls and development impact fees and since the bonds are not backed by the government, taxpayers will never be liable for repaying the debt. We are responsible borrowers who have never missed a bond payment and have always had fully-funded debt service reserves.
Going forward, we will focus on improving our customer service; focusing on our customers who make a choice every time they drive The Toll Roads. We will listen and do everything we can to attract more drivers to The Toll Roads because it is better for everyone on every road.
We will improve connectivity. Direct connections from the 241 Toll Road to the 91 Express Lanes and from the median of the 405 freeway to the 73 Toll Road will further advance regional mobility and benefit all residents and commuters.
We will work diligently to find an alternative to Interstate 5 going south through South Orange County. Today’s congestion in South Orange County is bad enough. It will get worse with the addition of 55,000 new residents in the Rancho Mission Viejo development. We need to find solutions that all interested parties can support.
And, finally, in 2014 we will eliminate the need to stop and pay at toll booths. We will give all drivers the experience of non-stop driving, leading to more time savings and more predictability.
In my first 100 days, I met with employees, board members, supporters, opponents, the media and our customers. I will continue listening, meeting, seeking, working, exploring, planning, learning and mapping out the future of TCA and The Toll Roads. I hope that you’ll join me on the ride. Our goal: to relieve traffic in both the short term and long term.
Born and raised in Orange County, FasTrak® celebrated its 20th birthday today. Two decades ago, FasTrak was launched by the Transportation Corridor Agencies (TCA) for use on the first 3.2-mile portion of the 241 Toll Road. FasTrak — California’s first and only electronic toll collection system — is now used by five different tolling agencies and more than 3.2 million drivers throughout the state on every tolled bridge, lane, road and structure. TCA alone has more than 863,000 transponders in circulation belonging to 427,505 FasTrak accounts.
As part of the birthday festivities, TCA honored Trabuco Canyon resident Brian Clifton, who has the distinction of being the first FasTrak customer. Clifton opened the very first FasTrak account in August 1993, two months before the road was opened and he continues to drive The Toll Roads on a daily basis.
“It’s been 20 years and my family and I still use FasTrak all the time,” said Brian Clifton. “For us, it has become a way of life and the time savings are critical for getting us to our jobs and the important events throughout Southern California. I can’t imagine what my life would be like without FasTrak and The Toll Roads.”
“When TCA opened the first FasTrak system in the state, our hope was to transform the lives of harried Southern California drivers by using cutting edge technology to save them their most precious commodity: time,” said Orange County Supervisor Patricia Bates, who served on the San Joaquin Hills Transportation Corridor Agency Board of Directors 20 years ago and is a current board member. “We are beyond pleased to see that drivers throughout California see the value of FasTrak, which has become an indispensable part of their daily lives.”
At its meeting last week, the Foothill/Eastern Transportation Corridor Agency (F/ETCA) Board of Directors approved a plan to issue toll road refunding revenue bonds totaling $2.3 billion, which will allow for the refinancing of current bond obligations. The Board also approved amendments to a Cooperative Agreement between the F/ETCA and Caltrans. These actions w
ill allow the F/ETCA to restructure its debt and lower annual debt payments.
“Easing traffic congestion is our top priority. Our actions today will help us take the steps necessary to ensure that our finances will be sound and we can continue offering Southern California commuters a safe and reliable toll road choice that saves them valuable time,” said Lisa Bartlett, chairwoman of the F/ETCA and Dana Point’s mayor pro tem.
Neil Peterson, CEO of the Transportation Corridor Agencies, outlined three reasons for approving the Cooperative Agreement and refinancing during the meeting:
1) The refinancing will put the agency’s finances in order;
2) lowering annual debt payments will provide cash flow for important projects such as the State Route 241 to 91 Express Lanes direct connector; and
3) lower payments will provide for pricing flexibility to allow the agency to partner with regional transportation organizations to improve mobility through increasing use of the toll road system.
“The more people who choose to drive on The Toll Roads, means less congestion on free alternatives. Less congestion improves mobility and traffic circulation for everybody in the region,” said Peterson. “The refinancing plan is similar to refinancing your home mortgage. The current market situation will allow us to lower our annual debt service growth rate, lower annual payments and reduce the maximum annual payment.”
A refinancing plan was approved in June, but it was not executed because negotiations on the ultimate language in the Cooperative Agreement was not finalized until last week. The Cooperative Agreement amendment that will allow the F/ETCA to collect tolls until 2053 is required to issue the refinance bonds. Since June, interest rates have risen to a level that would not allow the agency to improve its finances. In the past few weeks, interest rates have fallen. That — coupled with some modifications to the original plan — makes refinancing economically prudent.
“Today’s decision is good news for business. It is important to an efficient and effective movement of people and goods that California’s transportation systems are fiscally sound. With a region’s mobility comes a more predictable economic recovery,” said Lucy Dunn, president and CEO of the Orange County Business Council.
One important aspect of TCA’s refinancing program is the use of short-term, fixed-rate Rate Reset Bonds (RRBs), which gives the agency maximum flexibility as interest rates change. RRBs have been used by many other issuers, including the State of California, the University of California and, recently, Grand Parkway toll road in Texas. The refinancing will lower the annual debt growth rate to 3.6 to 3.75 percent instead of the current 4.4 percent rate on existing debt.
The Board’s actions come as ridership is increasing on the routes operated by the F/ETCA – State Routes 133, 241 and 261. For the first three months in the fiscal year that began in June, traffic has increased two percent compared to the similar period in 2012 and revenue is up by more than seven percent.
Ridership is beginning to grow after U.S. toll roads saw a significant decline in traffic because of the Great Recession.
“Subject to market conditions and interest rates, the plan is to sell the bonds before Thanksgiving and close the transaction in early December,” said Chief Financial Officer Amy Potter.