Texas Toll Authority Forced to Raise Toll Rates to Meet Debt Obligation

Some interesting excerpts (the bold emphasis is ours) from the article "North Texas Tollway Authority Raising Rates on All Three Roads," by Michael A. Lindenberger, Dallas Morning News, 8/15/09:

". . . North Texas Tollway Authority board members voted 8-1 to support the toll increase, which staff had insisted was necessary to satisfy agreements NTTA struck with creditors who have lent the agency about $6 billion.

'This organization lives off of borrowed money,' said board member Gary Base of Collin County, who leads the finance committee and supported the increase. 'This is not money that we have. And we as a board have fiduciary responsibility to these debt holders.'

. . . NTTA guaranteed that rates will continue to rise, approving a measure that would trigger automatic 6 percent rate increases every two years -- without the need for another board vote.

So why the sudden rush to raise rates again, and by so much? NTTA officials at first billed the increase as a necessary response to keep lenders happy. NTTA owes some $6 billion, and its bond covenants require its revenues be at least 1.5 times the agency's soaring debt payments. Without a rate increase, NTTA's revenues would fall below that level soon.

That's because traffic has not lived up to projections on its newest road, Rayburn Tollway (State Highway 121), and because traffic elsewhere is also lagging expectations. In addition, NTTA is having trouble collecting tolls owed on its all-electronic toll roads, and fewer customers are signing up for TollTags than NTTA had hoped."

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