Parkways starting process on bonds, single-fee E-ZPass

West Virginia Parkways Authority General Manager Greg Barr said the agency is getting the ball rolling on the process to sell bonds to finance roads projects.

In a Parkways meeting earlier this week, Barr said the board selected members of the working group so they can get to work on the bond project.

"Ultimately this will be a culmination of all efforts from this working group, engineers and consultants," he said. "When the bonds are sold, at that time, we will be able to implement the new single-fee program and the new toll rate structure.

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Capital building in Charleston West Virginia with a statue of Abraham Lincoln in front. Lincoln created the state of West Virginia by proclamation and it was formally admitted on June 20, 1863.

This is part of Governor Jim Justice's roads project. Earlier this year, the governor signed into law two bills -- Senate Bill 1003 and Senate Bill 1006.

The first bill gives Parkways the ability to issue revenue bonds to finance roads projects. Bonds connected to toll revenue are for projects in 10 southern West Virginia counties contiguous to the turnpike.

Barr said the $500 million in bonds can be generated from leveraging revenues of the West Virginia turnpike. He said this money can be deposited in a special state road construction account that the Secretary of Transportation can direct to be used for roads and bridge projects in these 10 counties -- Raleigh, Fayette, Wyoming, Mercer, Kanawha, Greenbrier, Monroe, Summers, McDowell and Nicholas.

Senate Bill 1006 increases money in the State Road Fund. It increased the Division of Motor Vehicle fees, the privilege tax for purchasing a car and increased the minimum average of wholesale gas.

Legislation also includes the governor's single-fee discount program for passenger cars. Justice has said in the past that he wants the program to cost $8 a year and be available to all West Virginians and out-of-state residents for unlimited use of the turnpike and any future toll roads.

The legislation was written with the fee ranging from $8 to a max of $25; it also specifies that the authority could charge the customer for the cost of the transponder and the cost to issue the transponder.

A resolution passed at the board meeting designates several professionals on board to assist with selling the bonds to move forward with that single-fee program. The board hired CDM Smith as traffic engineers, Barr said.

The firm will conduct a traffic and revenue study, which will tell the authority how much revenue it can expect to generate with the new single-fee program and help their financial advisers, Public Resources Advisory Group, calculate the size of the bonds that can be sold, he explained.

"Another feature of the study is building in scenarios for any changes that can be required in the toll structure to support the finding of additional bonds to help improve the roads in southern West Virginia," Barr said. "It's all a pretty big process."

He said there will also be surveys of patrons and analyses of toll history, revenue history and transaction history.

The target date for completing those analyses is by Dec. 1, he said.

"Traffic engineers and consulting engineers are developing schedules that show this for 25-30 years in the future," he said. "This will forecast what potential revenues will be, what capital needs will be so the net revenue is available for the debt service can be calculated. Once we know that number, then we can take to the bond market."

He said before that happens, Parkways will have public meetings in every county bordering the turnpike. Parkways will meet with their board after the meetings and take into consideration comments and feedback to arrive at a final scenario for adjusted tolls and take that to the rating agencies.

"Then, they market the bonds for us," he said. "They price the interest rates and sell the bonds to major investors through the world and we get money to put into the special state road account to help build projects in southern West Virginia and put people to work. We want to get all that done yesterday but there are certain restraints. The reality is there is a lot of work that needs to get done. This is going to take time. So, the sooner we do it, the better for West Virginia and possibly for the interest rates as well."

He said he expects the soonest the single-fee program to be available to the public is sometime after the first of next year. However, he said it's hard to tell.

"We cannot make that available until we finalize this whole process to see which scenario of tolling and change in the rate structure we're going to adopt," he said. "Then, once we sell the bonds, we'll time the increase in rates to meet that before or soon after the bond sale.

In the meantime, Barr stressed that tolls will remain the same as they are now, as will the E-ZPass program. He also stressed that the vote in October on the referendum has nothing to do with tolls or the toll bonds.

In October, people will vote on whether to approve the issuance of $1.6 billion of state bonds to build and upgrade the state's roads and bridges.

"I don't want anyone to think that a vote for or against that referendum has any impact whatsoever on the toll revenue bonds we're doing," he said.

Tribune Content Agency
Infrastructure Transportation industry West Virginia
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