OCTA Starts Study of Merger With Toll Roads

Taking the preliminary steps needed for a merger, the Orange County Transportation Authority has dispatched a high-profile consultant to meet today with executives of the county’s toll road agencies to determine whether it makes sense to join the two bureaucracies.

Dan Miller, who headed a task force that oversaw the merger of two agencies that became the transportation authority in 1990, will be paid $5,000 to identify the potential problems associated with a merger between the authority and the Transportation Corridor Agencies, which are building Orange County’s first toll roads.

The study, due by the end of January, will explore such issues as the toll road agencies’ financial situation, its existing debt, and any legislative or legal problems that may arise from such a merger, Miller said.

“The study will not come to any conclusions about a merger,” said Miller, a former chief of staff to Orange County Supervisor Roger R. Stanton. “It will deal with just the real critical issues that the Orange County Transportation Authority needs to make a decision.”

Several officials have called for an independent study of a merger that gained momentum after a story in The Times in November that disclosed high salaries, bonuses and perks paid to top toll road executives.

Some tollway board members have said they preferred a review that was not funded by the Orange County Transportation Authority to remove any questions of bias. Transportation authority officials, however, said Miller’s study must be completed before an independent review can be undertaken.

The transportation authority already has done some preliminary research into the consolidation matter. An interoffice memo distributed Monday takes note of a 1990 amendment to the government code that allows the succession of “powers, obligations, liabilities and duties” of the toll road agencies to a “comprehensive countywide transportation planning and operating authority” such as the Orange County Transportation Authority.

The authority’s financial chief, Jim Kenan, questioned whether his agency should even consider taking on billions of dollars in toll road debt to be paid with toll revenues once the three roads open later this decade.

“They have $2 billion in debt and no revenue stream,” he said. “Why should we take them on? I see nothing but negatives for us to get involved with the Transportation Corridor Agencies, although it would be helpful to them to be part of us.”

Patricia C. Bates, the mayor of Laguna Niguel and chairwoman of one of the toll road boards, suggested Kenan take a closer look at toll revenue projections and said the only beneficiary of a merger would be the transportation authority.

“I know the OCTA is looking for revenue streams,” Bates said. “I don’t want to be sharing any of these toll revenues for other projects. I want those tolls removed when our roads get built.”

William Woollett, the toll road agencies’ executive director, said he has no problem with studying the issue, but remains unconvinced that the merger is a sound idea.

Woollett said he sees three main problems with consolidation: it turns a single-purpose agency representing 15 cities into a countywide entity; a bigger transportation bureaucracy may sidetrack the toll road agencies main job of building the roads; and the financial restrictions under which the bonds were sold would have to be reviewed.

“The county played with these projects for about 10 years and couldn’t get them started and we were designed to do them and that’s the only thing we do,” he said. “It’s our first priority and we are getting them built.”