DALLAS - A year after tripling its debt load, the North Texas Tollway Authority is trimming 2009 revenue projections by $25 million, or 7%, due to worsening economic conditions, the authority said.
At the same time, NTTA executive director Jorge Figueredo has quit his job so he can spend more time with his family.
The NTTA board last week named Janice Davis, the authority's current chief financial officer, as acting executive director until a permanent replacement is found.
Although Figueredo was executive director at the Plano-based NTTA for a year and a half, his family remained in Orlando. In order to see his family more often, he said he had to move back to Florida.
"The difficulties of being separated from my family in Florida have been more of a burden than I ever anticipated," Figueredo said in his resignation statement to the NTTA board of directors.
During Figueredo's tenure, the NTTA agreed to borrow $3.5 billion to build the controversial State Highway 121 project that had previously been awarded to private developer Cintra-JPMorgan. The authority began borrowing just as the credit markets began seizing up, but it managed to complete long-term financing this year amidst unprecedented market turmoil.
The NTTA took a hit to its credit rating for the 121 project, but remained in the low A-category with Moody's Investors Service and Standard & Poor's. The authority dropped Fitch Ratings when that agency lowered its senior debt to BBB-plus.
While still in the process of financing SH 121, the Figueredo-led NTTA agreed to another $1.1 billion project, State Highway 161, whose debt would be financed independently of the agency's other turnpikes.
Now, those system-wide tolls are expected to fall by $25 million, forcing budget cuts.
"Organizations across the country, both public and private, are making adjustments as a result of the perilous economic conditions," said deputy executive director Rick Herrington. "However, by cutting the budget across the organization, we are able to keep major mobility projects on schedule, maintain customer service levels, and avoid layoffs."
The initial traffic and revenue projections for 2009 were calculated in July 2008 using trends through June of 2008. Those projections did not take into account the unforeseen pressures in the economy that occurred after July.
With total revenue projected at nearly $293 million, the NTTA plans to operate on a budget of $92 million, or $6 million less than expected. Every department is required to cut costs, but, so far, no layoffs are planned, officials said.
The NTTA's traffic and revenue engineer, Wilbur Smith and Associates, will be working with an independent economist to determine the near-term and long-term traffic and revenue impacts of the economic slowdown, the agency said.
The NTTA system includes the flagship Dallas North Turnpike, the Addison Airport Toll Tunnel, the President George Bush Turnpike, the Mountain Creek Lake Bridge, and the Lewisville Lake Toll Bridge. Upon completion, SH 121 will be a 26-mile toll road extending in a northeasterly direction and crossing Collin, Dallas, and Denton counties. It is also a primary route to the Dallas-Fort Worth International Airport.
When the turnpike was first considered, construction and housing in Dallas' far northeastern suburbs were booming. In the past year, however, the affluent Denton and Collin county areas have been hard-hit by foreclosures and reduced business activity.
In conferring an A-minus rating on NTTA's senior debt with stable outlook in mid-October, Standard & Poor's cited "demonstrated demand for the system and the favorable demographics that support the tolling of SH 121."
"The stable outlook also reflects the assumption that traffic and revenue will be at, or near, projected levels," analysts wrote.
