CHICAGO - The Illinois State Toll Highway Authority unveiled a preliminary 2015 budget Wednesday that relies on as much as $800 million of toll-backed borrowing to support $1.6 billion in capital spending.
The capital is to fund the fourth year of the agency's 15-year, $12 billion capital program as well as $311 million in annual maintenance and operations on the 286-mile system. Projects planned in 2015 include the ongoing rebuilding of Interstate 90 and ongoing work on a western access to O'Hare International Airport.
"Our 2015 tentative budget commits the most capital funds in the agency's history and next year is expected to be our biggest construction year ever," authority executive director Kristi Lafleur said in a statement.
The authority projects an increase in revenues to $1.17 billion, almost all from tolls, next year from $1.02 billion this year, primarily due to a truck toll rate increase previously approved by the authority board in 2008.
No additional details were provided on the timing of the $800 million of new debt.
The authority said it's holding down operating expenses with more than $1.2 million in savings from various initiatives including the rebidding of collection agency fees and the use of a more efficient back office system.
The authority this spring sold $450 million of new money revenue bonds to support its capital program. The $12 billion Move Illinois program relies on another $4.15 billion of borrowing. The authority expects to sell about $1.7 billion between 2015 and 2016 and $2 billion tentatively through 2022, according to its last offering statement. The remaining cost of the program is paid with toll revenues on a pay-as-you-go basis.
The program aims to reduce congestion and pollution, expand the more than 50-year-old system, improve roads, and create jobs and economic development. It is spending $8 billion for improvements to existing roads and $4 billion for new and expanded roadways.
At the time of the spring sale, all three rating agencies affirmed the authority's double-A-minus ratings and stable outlooks.
To support the program, the board adopted a one-time 87% increase in passenger tolls that took effect in 2012 and a 60% increase in commercial vehicle tolls that will be phased in and then adjusted annually based on inflation in 2018.
The authority said it expects average annual traffic growth of about 1.5% in the coming years.
Rating agencies have described the authority's significant addition of debt to support both the capital program and additional debt service reserve funding, as well as managing a big program, as a challenge, but said they are offset by other positive factors.
The credit also benefits from rapid debt amortization as required by Illinois statute; forecasted over two times debt service coverage ratios including all planned debt; maintenance of strong liquidity level and slightly better than forecasted financial results for fiscal 2013.
