DALLAS — The Central Texas Turnpike System, which operates three tollways in the Austin area, is counting on higher subsidies from the state after revenues fell $100 million short of covering debt and operating costs, officials said.
The turnpike system is a division of the Texas Department of Transportation, which issues debt under the name of the governing Texas Transportation Commission.
TxDOT reported this month that subsidies from fuel taxes and other sources would run 70% higher than anticipated four years ago. Officials blame the current economic slump for a 6% drop in toll revenue since September. In addition to less traffic, the system is seeing delayed development along the three corridors, Texas 130, Loop 1, and Texas 45 North.
At $50 million per year, expenses for the toll system are almost double the projections in a 2002 preliminary official statement. The cost of collecting tolls is estimated at $30 million.
With $1.3 billion of outstanding bonds, debt service represents the largest outlay for the system. Of $63 million in debt payments, $44 million went to bondholders and $19 million to the federal government for $900 million borrowed under a transportation loan program. Debt service is expected to climb to $489 million in 2042 as revenues increase.
As a start-up toll-road system, The CTTS carries ratings of BBB-plus from Standard & Poor’s and Baa1 from Moody’s Investors Service on its first-tier revenue bonds.
The ratings were affirmed in January with stable outlooks.
“A significant traffic or revenue decrease below forecast could lead us to lower the rating,” said Standard & Poor’s analyst Todd Spence. “We do not anticipate increasing the rating during the forecast period.”
Moody’s considers CTTS’ strong legal covenants as a positive credit factor. A rate stabilization fund of $10 million is required along with a 1.5 times debt service ratio for additional first-tier bonds. The current balance on the rate stabilization fund is $67.8 million.
The Central Texas Turnpike System,, which began operations in 2003, is one of two toll road operators in the Austin area. The Central Texas Regional Mobility Authority operates the 183A toll road in Williamson County and is extending the 183A project and the $426 million US 290 East project. The CTRMA, created in 2003, was the state’s first regional mobility authority.
While TxDOT now operates toll systems elsewhere in the state, CTTS was its first. In 2002, the system issued $2.2 billion of bonds to get the system built. The first section of the system opened in October 2006.