CAMPO debates loan to boost MoPac managed lane project

The negotiating has begun on what benefits CAMPO might reap from loaning $130 million to help the Central Texas Regional Mobility Authority move forward with construction of managed lanes on MoPac Expressway.

 

CAMPO’s Transportation Policy Board is in a quandary. TxDOT has proposed a windfall of state and federal funds that will present the region with an additional $136 million to obligate by the end of September. The catch is that the projects must be “shovel ready,” and nothing in the region qualifies. Projects on Interstate 35, the region’s biggest priority, are still at least three years away.

 

With that in mind, CAMPO has three options to pursue, all of which either defer or loan the money to others, with the goal of getting the region repaid in a fashion that will allow local jurisdictions to spend money as projects are ready to build.

 

CAMPO Executive Director Maureen McCoy has recommended CAMPO loan the money to CTRMA, which would use the funding to get MoPac’s managed lane construction underway. Such a loan, based on federal toll financing loans, would shave between $20 and $25 million off the project price tag.

 

All that would be fine if members of the CAMPO board didn’t think they could get better terms on the loan, which CTRMA Executive Director Mike Heiligenstein acknowledged and accepted. McCoy, in fact, described the CTRMA proposal as a “first offer.”

 

“I think everything is on the table,” Heiligenstein told the board at Monday night’s meeting. “We’re willing to sit down and go through whatever terms and conditions you want to talk about.”

 

And talk they did. The loan proposed by the CTRMA, based on popular federal Transportation Infrastructure Finance and Innovation Act or TIFIA loans, has a number of pro-infrastructure aspects to it: a four-year ramp up period before the loan is repaid; payments based on projected profits on the road project; and a 22-year term at a 3.5 percent interest rate.

 

Members of the Transportation Policy Board wanted more. Commissioner Sarah Eckhardt called the TIFIA-lite proposal “a slow boat” and suggested that the board consider a model that would put CAMPO in the driver’s seat. If CAMPO funded $130 million of a $200 million project, it would make sense that the entity might be viewed as the senior investor on the project, an investor with a much more rapid payback or more benefits.

 

Eckhardt also suggested that the proceeds of the project could possibly roll into the construction of a managed lane on Interstate 35, and the proceeds of that project could be generated sooner for the numerous improvements and upgrades needed along the region’s main corridor.

 

Rural members on the board wanted expenditures that could benefit counties across the region. Commissioner Cynthia Long of Williamson County, prompted by a question from Mayor Pro Tem Sheryl Cole, said she supported a regional approach to using the money but noted a need to recognize real sacrifice.

 

“We’ve spent a half a billion dollars in Williamson County on the state highway system,” Long said. “The recognition needs to be there that some of these dollars come back… We shouldn’t continue to penalize those who take care of themselves.”

 

Heiligenstein noted that $130 million would not go far when it came to larger projects in region or as he described it “a couple of connections to Ben White.” This project could be on the ground and making money sooner than most.

 

Georgetown Mayor George Garver, however, appeared to express the sentiments of many on the board when he said that giving the CTRMA a sweet deal was not necessarily the best deal for CAMPO.

 

“To eliminate those benefits we could get from this by giving it to the CTRMA… We’re not even going to see our first payment until 2021… I don’t think it’s going to endear us to the taxpayers whom we serve,” Garver said. “I would like to suggest some language that talks about the payback in a more concrete and mandatory manner instead of saying when we have these monies at some future date. I am troubled, very frankly, in the way in which we’re moving because there has to be a better answer.”

 

A final proposal on how to spend the money, with or without the CTRMA, must be voted on by the board in June. The funds must be obligated by Sept. 28.