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Forecast Stays Sunny for One O.C. Toll Road

The Foothill-Eastern highway is seen as financially sound for decades -- unlike the San Joaquin Hills, its sister turnpike.

August 07, 2003|Dan Weikel | Times Staff Writer

In stark contrast to the ailing San Joaquin Hills toll road in west Orange County, toll revenue for its sister highway will be in line with earnings predicted when the road was refinanced four years ago, new studies show.

The updated projections disclosed Wednesday by the Transportation Corridor Agencies indicate that the 35-mile Foothill-Eastern tollway in east Orange County should remain financially sound for decades.

The study by Vollmer Associates, a consulting firm hired by the TCA, predicts that toll revenue will be about $131.4 million for fiscal year 2010-11, slightly less than the $133.4 million estimated in 1999 by Wilbur Smith & Associates. For fiscal year 2025-26, projections are $264.4 million and $287.1 million, respectively.

"There are some differences at the end of the period, but the differences are modest given 25 years of forecasts," said Gerald Nielsten of Vollmer Associates.

A related study, by PB Consult Inc., also shows that developer fees paid to the TCA to help fund the Foothill-Eastern toll road will total $561 million by 2020, far greater than the $492 million predicted in 1999.

The agency is revising its traffic and revenue forecasts to help determine if the Foothill-Eastern should be merged with the struggling San Joaquin Hills tollway. The merger includes a proposal to refinance the total debt of both roads, about $4 billion, at lower interest.

The San Joaquin Hills has been plagued by lower-than-expected traffic and revenue for several years, a situation that is expected to worsen. If nothing is done, the TCA faces a possible default in 2012 on roughly $1.5 billion in bonds sold to build the highway.

Though administered by one agency, the Foothill-Eastern and the San Joaquin Hills are financed separately and governed by their own boards of directors.

The question remains whether the financial strength of the Foothill-Eastern combined with a refinance package at today's favorable interest rates would prevent a default on San Joaquin Hills bonds.

TCA officials say the Foothill-Eastern will meet its financial obligations, but it is unclear how much surplus revenue it will have.

In revised projections released Tuesday by the TCA, the San Joaquin Hills will earn less than half the toll revenue predicted when the highway was refinanced six years ago. The TCA also is expecting developer fees for the San Joaquin Hills to decline from $139 million to $133 million from 2003 to 2020.

TCA officials were concerned that decisions by the Irvine Co. to dramatically scale back residential and commercial construction in east Orange County would have a similar impact on the future financial performance of the Foothill-Eastern.

But the new projections indicate that Irvine Co. development plans will be offset by growth in other parts of the region.

Traffic consultants said the TCA could enhance revenue from both toll roads by raising rates in some cases beyond scheduled increases. Board members will vote next week on toll increases that are expected to generate about $3.2 million.

If approved, rates for cash-paying motorists on the San Joaquin Hills road would increase to $3.50 from $3 at the main toll plaza. Rates for drivers using FasTrak would rise to $3 from $2.75. FasTrak is an electronic billing system.

On the Foothill-Eastern system, which includes a short stretch of California Highway 133, tolls would increase to $2 from $1.75 at the Tomato Springs toll plaza for cash-paying drivers; FasTrak tolls would climb to $1.75 from $1.50.

Starting in October, the new rates would be charged to northbound motorists on the San Joaquin Hills and the Foothill-Eastern system between 7 a.m. and 9 a.m., and to southbound drivers between 4 p.m. and 7 p.m.

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