BRADENTON, Fla. - The Orlando-Orange County Expressway Authority board today will consider increasing tolls in central Florida to protect its bond ratings, bolster debt service coverage, and allow the agency to issue more debt later this year.
The agency is currently complying with required bond debt-service ratios, which are projected to be 1.23 times in fiscal 2010 and 1.36 times in fiscal 2013 without a toll increase, according to Expressway Authority spokeswoman Lindsay Hodges.
Hodges said no discussions have taken place with rating agencies about the need for toll increases, or concerns about debt service coverage. But the authority currently is experiencing a drop in revenue of more than 8% from last year, and agency officials are concerned about the future debt service coverage.
"I think everyone at this point is looking to ensure that we're able to maintain our credit ratings and the financial integrity of the agency," Hodges said yesterday.
The authority, which has approximately $2.13 billion of outstanding bonds, owns and operates 100 miles of toll roads in Orlando and Orange County, where Florida's mega-theme parks are located.
Its debt is rated A by Fitch Ratings and Standard & Poor's, and A1 by Moody's Investors Service.
In the four counties that make up the Orlando metropolitan statistical area, and where much of the workforce for central Florida resides, the unemployment rate was 7.7% as of December, according to a report by Workforce Central Florida.
Hodges said the Expressway Authority believes there's a correlation in the unemployment rate and the downward trend in toll revenues.
And there is concern that a major event, such as a hurricane or something similar to the terrorist attacks in 2001, could exacerbate the effects of the recession on the authority's finances, she said.
The Expressway Authority has not increased tolls since 1990. It has maintained the current toll schedule, and an ambitious work program, because of the region's extraordinary increase in growth and traffic. That growth has stalled largely because of the collapse of Florida's real estate market.
"Now with the downturn, we can't absorb the artificially low toll," Hodges said.
The authority's board will be asked by staff today to implement a 25-cent toll increase beginning April 5, with additional increases every five years tied to the consumer price index.
If the toll increases are put in place, the authority will proceed with plans to issue debt by the fourth quarter of this year.
How much debt will be sold is a question because of continuing volatile bond market conditions, Hodges said.
The agency has a $3.54 billion, 12-year work plan, but it also has four "shovel-ready" road projects estimated to cost $648 million that it wants to advance "to put people to work," she said.
"We don't think the market is there [for the sale of $648 million of debt]," Hodges said. "We'll have to see what the market can handle."