T.U.R.F. warns that Market Valuation in SB 792 allows backdoor CDAs

YOU’VE BEEN HAD! TXDOT’S GOTCHA IN SB 792
MARKET VALUATION(IE - CONCESSION FEES) WILL BE MANDATORY ON ALL TOLL PROJECTS IF SB 792 PASSES AS WRITTEN! TRADITIONAL TURNPIKES NO LONGER AN OPTION!

In seeking clarification on the implications of “market valuation” on toll projects (Sec. 228.0111), TURF has learned that if SB 792 passes as written, ALL toll projects around the state MUST USE market valuation to establish toll rates and to set toll rate escalation. Traditional turnpikes, where an entity simply sells bonds for the actual cost of building the road and the tolls pay back that debt, WILL BE OFF THE TABLE!

A third party appraiser would determine the market value of the road and that amount, once agreed upon by TxDOT and the tolling entity, would be deposited in subaccounts JUST LIKE A CONCESSION FEE with CDAs! Motorists taking that tollway will then be charged OPPRESSIVELY HIGH TOLLS beyond the cost of building that specific road since the toll rate now has to cover the upfront fee (which is just like a concession fee!).
“Market valuation” is TxDOT and the Governor’s GOTCHA in SB 792. In speaking with many legislators, most DO NOT KNOW THIS and thought market valuation only applied to the buy back provisions or were optional or applied only to certain projects. Senator Robert Nichols added an amendment stating if both the tolling entity and TxDOT CANNOT AGREE on the market value the project cannot move forward. However, most legislators don’t realize this means the PROJECT DIES and cannot go forward USING THE TRADITIONAL TURNPIKE model. So unless your tolling entity can agree with this rogue agency, YOUR PROJECT DIES ALTOGETHER!

Market valuation tolling is like a back door CDA! Do we really have a CDA moratorium when this is the case? Will your constituents back home think YOU VOTED FOR A WIN when they’re going to be charged OPPRESSIVELY HIGH tolls anyway?

We fear this opens another can of worms that will bring regrets similar to HB 3588. Many wanted to “correct the sins of the past” this session in regards to tolling and for having “created a monster” in TxDOT.

Here's what Senator Robert Nichols said about market valuation in the Lone Star Report, May 21, 2007: "For the first time you're having a county toll authority or a regional mobility authority that is going to have to come up with a front end concession, kind of like a private entity. They're going to have to commit to spend those funds. Either to TxDOT or to other projects in that area."

Is getting a compromise bill signed more important than enacting good transportation policy that’s been fully vetted and had the proper public debate? Unleashing yet another monster on the taxpaying public with provisions stuck in a bill at the last minute should cause us all to pause. It’s clear few knew what they were voting on last week. This Legislature needs to step back and focus on getting a good bill passed, not on special session threats or rushing to the finish line empty-handed. May it be said you finished well, and in a way that you won’t regret back home.

Signed,
Terri Hall
Founder/Director
Texans Uniting for Reform & Freedom (TURF) &
San Antonio Toll Party
www.TexasTURF.org