Tollway Financing Caution Urged as Cost Estimate Rises
The estimated cost of building the San Joaquin Hills tollway has increased $76 million since last summer, according to figures in a new, independent financial report that recommends a cautious financing plan to ensure completion of the project.
The report, a draft of which was obtained Monday by The Times, now projects the cost at $541 million, compared to $465 million estimated by county officials in August, 1988. At least part of the increase resulted from delays in preparing environmental studies for the project, the draft said. But it does not address whether the higher price tag will pose problems for construction of the 14-mile, eight-lane tollway.
Instead, the report analyzes the feasibility of the project’s financing and debt-repayment plans. Those plans are generally sound as long as financing is done in careful phases and no unforeseen problems arise, according to the financial report, which was prepared by the private consulting firm of Fieldman, Rolapp & Associates.
But the report cautioned that the San Joaquin Hills Transportation Corridor Agency “should not obligate itself for the entire construction project” until it knows the entire cost of the project and when construction will be completed.
Last year, individual members of the California Transportation Commission enthusiastically endorsed a one-phase financing plan for the project. The CTC had requested the feasibility report as a condition of committing state and federal funds to the San Joaquin Hills tollway, one of three being planned in the county. Bruce Nestande, a former county supervisor and commission member who pressed for the report, said Monday that he had not had a chance to read the report and could make no immediate comment.
John Meyer, executive director of the Orange County Transportation Corridor Agencies, the county body that supervises the tollway projects, could not be reached. The report is scheduled to be discussed publicly for the first time Thursday by the San Joaquin Hills Transportation Corridor Agency.
Steady Rise in Costs
Planning for the San Joaquin Hills highway has been under way since 1976, when it was added to Orange County’s master roadway plan. The tollway will run from an area near John Wayne Airport to Interstate 5 in San Juan Capistrano, and is to be paid for with a combination of federal and state money, developer fees and driver tolls.
The estimated cost of the project has been rising steadily over the last year, largely because of delays in getting approval for environmental studies, which are required by the state. The first environmental studies done for the project are useless because they were for a regular freeway. When the toll concept was introduced out of financial necessity, new issues were introduced and new studies had to be prepared. The environmental studies now are more than a year behind the original schedule.
The Fieldman-Rolapp report asserts that $46.5 million in state money that has not yet been obtained is crucial to the project.
The current financing plan, according to the report, was adopted last month and calls for bonds to be issued in two stages instead of one. One-phase financing, it said, could lead to “substantial underfunding of the project.”