Transportation Corridor Agencies August Board Meeting Highlights
Highlights from the August 9 Joint San Joaquin Hills and Foothill/Eastern Transportation Corridor Agencies Board Meetings is provided below.
IRVINE, Calif. - August 09, 2018
73 Toll Road Bonds Upgraded to “A-” By S&P Global Ratings
At the August Board Meeting, Amy Potter, chief financial officer, announced that Standard & Poor’s Global Ratings (S&P) upgraded senior-lien bonds issued to pay for construction of the 73 Toll Road to “A-.” The strong performance of the 73 Toll Road – with transactions and revenue exceeding projections and financially responsible policies from the Transportation Corridor Agencies (TCA) Boards of Directors – contributed to the upgraded ratings from S&P.
“This is a really important moment to acknowledge,” said TCA Director and 3rd District Supervisor Todd Spitzer. “This is simply outstanding. It continues to reemphasize our story and how important The Toll Roads network is in Orange County and how our County could not exist without this network.”
“The credit rating increase is a significant milestone for the Agency and it is a reflection of hard work and fiscal stewardship by staff but also strong governance of the Board,” said TCA Director and 5th District Supervisor Lisa Bartlett. “We always want to strive to improve mobility in Orange County and the rating increase is a testament to the good work of staff, Agency and Board. This provides long term value and benefit to The Toll Roads of the service we provide to the community.”
To fund construction of The Toll Roads, TCA issued toll revenue bonds to private investors. In 2013 and 2014, the bond debt was refinanced to take advantage of historically low interest rates and establish debt structures that align with The Toll Roads’ actual historic revenue growth. Since the refinancings, annual transactions have grown more than 20 percent to 101 million in Fiscal Year 2018 and annual toll revenues have grown more than 40 percent to $380 million. The revenue has exceeded projections and cash reserves have grown to $1.1 billion filling required reserve funds and providing flexibility to weather economic downturns, and contribute to improved mobility in the region.
All three major credit rating agencies – S&P, Moody’s and Fitch – rate both Agencies as investment grade. Moody’s also upgraded the San Joaquin Hills Transportation Corridor Agency’s (SJHTCA) to Baa2 and revised the Foothill Eastern Transportation Corridor Agency’s (F/ETCA) outlook from stable to positive.
The Toll Roads’ FasTrak® Monthly Account Fees Will Be Eliminated with the Introduction of New Transponder Technology
At the August Board Meeting, Samuel Johnson, chief operations officer, provided an overview of California’s change to new technology for electronic toll collection. Beginning July 2019, TCA will be issuing new sticker tags to collect tolls electronically on Orange County’s 51-miles of toll roads. FasTrak transponders will be able to take the form of a Band-Aid sized sticker that can be simply adhered to the inside of a vehicle windshield. With introduction of this new technology, The Toll Roads will be passing the cost savings to its FasTrak accountholders by eliminating the monthly account maintenance fee.
Along with receiving an overview of the account simplification changes and hearing the first reading of the revised toll administration and enforcement of toll violations ordinance, the Boards of Directors also voted to approve:
A three-year contract, plus two one-year options, with both Neology and Kapsch, as the official suppliers of 6C compliant transponders on an as-needed basis. Staff anticipates procuring three million sticker tags in FY19 as part of the initial rollout of the new technology and account simplification.
A 16-month contract with S. Groner and Associates Inc. to manage the communication of the changes, benefits and create anticipation for the delivery of new sticker tags to TCA’s 1.3 million accountholders.
Traffic Microsimulation Modeling Approved for 73, 133, 241 and 261 Toll Roads
At their joint meeting on August 9, the TCA Boards of Directors approved a task order for Stantec to develop a system-wide traffic microsimulation model to assist with forecasting future improvements on State Routes 73, 133, 241 and 261. With more than 330,000 average daily trips on The Toll Roads, a recent system-wide level of service (LOS) study showed that a handful of segments on or near The Toll Roads’ system operated at a reduced LOS E or F during peak periods. Future traffic conditions projected in 2035 indicate that up to 16 percent of The Toll Roads’ system will be operating at less-than-optimal conditions if future improvements are not made. The scope of work for this task order includes identifying specific areas of traffic congestion on The Toll Roads and creating a toll and revenue model to understand the effects of congestion management pricing as a potential tool to balance traffic congestion.
The Toll Roads Reach Traffic and Revenue Milestones in July 2018
Transactions and revenue increased in July for both Agencies, compared to July 2017. Transactions increased by 1.9 percent and revenue increased by 4.3 percent for the 73 Toll Road. On the 133, 241 and 261 Toll Roads, transactions increased by 1.5 percent and revenue increased by 4.2 percent. July 2018 also set a record of reaching an all-time high of toll revenue in a month, reaching nearly $29 million. And on Sunday, July 15, the 73 Toll Road reached a record high of transactions for a Sunday.
Outgoing Board Chair Recognition
SJHTCA Alternate Melody Carruth was honored at the August board meeting for her leadership as SJHTCA Chairwoman from October 2017 to February 2018. Under her leadership, the Agency’s bonds were upgraded, online payment processes were improved for drivers without an account, TCA reached the milestones of 1 million accountholders and record setting transactions days on The Toll Roads. The Agency thanked her for her leadership and professionalism and specifically, for her creative idea to invite plein air artists to the Upper Chiquita Canyon Conservation Area to paint the gorgeous landscapes TCA preserves and protects.