Toll Road Bonds Go on Sale Next Week : Transportation: San Joaquin Hills tollway agency will be enabled to put contractor to work by end of March. Environmentalists still hope to block project.

The agency overseeing Orange County’s embattled San Joaquin Hills tollway project hopes to sell $1.1 billion in tax-exempt revenue bonds next week in the county’s biggest-ever financing of a public works project.

Officials at the San Joaquin Hills Transportation Corridor Agency said the bond sale will allow it to tell the contractor, California Corridor Constructors, to begin work by the end of March. Actual bulldozing on one of the state’s first toll roads since before World War I is not expected until April or May.

The U.S. Fish and Wildlife Service has a March 17 deadline for deciding whether to list the California gnatcatcher, a rare bird in the tollway’s path, as an endangered species. Worried that grading of the bird’s habitat along the tollway will begin before March 17, environmentalists are pressing tollway officials to hold off and give advance warning to allow for court action.

Tollway officials said they already have agreed to give advance warning to the Fish and Wildlife Service but stressed Thursday that only core sampling and path marking will take place before the March 17 deadline.

The 17.5-mile tollway, scheduled for completion in early 1996, would extend California 73 from near John Wayne Airport to Interstate 5 near San Juan Capistrano. A trip on the full length of the tollway is expected to cost motorists $2 in 1997, with an increase to $2.25 two years later. But for the first time, tollway officials said Thursday that they may consider charging more during rush hour congestion than during less-traveled periods of the day.

The project has provoked numerous, unresolved environmental lawsuits filed by critics who contend that the road will devastate some of the county’s last remaining wildlife habitats. The lawsuits are mentioned as one of several “risk factors” in a preliminary offering statement to investors earlier this week.

The legal risk, according to the official statement and tollway officials, is that the courts might delay the project beyond its scheduled opening day, thus delaying interest payments to bond purchasers. But officials said they have covered the risk with a reserve fund equal to two years’ worth of payments to investors.

The planned bond sale was boosted this week by a “BBB” rating issued by Fitch Investors Service of New York on all but $100 million in bonds. That $100 million will remain unrated and has “junk bond” status. However, many public works projects in Orange County have been successfully financed that way.

The higher grade for the larger sum is expected to provide investors with a rate of return exceeding 7.5%, which means lower interest costs than a junk-bond rating.

“This is a great time (for tollway officials) to lock up rates,” said Wally Kreutzen, the tollway agency’s finance chief, referring to recent drops in interest rates in the bond market.

Kreutzen said Orange County investors will be given preference when placing orders with brokers for the bonds, but Kreutzen and Tom Bradshaw of First Boston Corp., the lead underwriter, expect almost all of the bonds to be purchased by mutual funds and other large institutional investors.

If the bonds are not sold within a few days of the first offering, Kreutzen and Bradshaw said, a team of underwriters will purchase them and hold them as unsold inventory.

Critical to the bond sale are new ridership projections--revised downward to account for the poor economy and lower employment growth rates--that show the road will nevertheless recover enough toll revenue to pay off investors.

The projections, prepared by Connecticut-based Wilbur Smith Associates, once indicated daily traffic on the tollway of about 150,000 vehicles by the year 2010. That figure has been reduced to 120,000 vehicles, with an average trip length of about 10 miles.