San Joaquin Hills Toll May Decrease During Off-Hours

The $2 charge on the San Joaquin Hills toll road could drop during weekends and evenings to entice more riders to the road, where traffic is running about 43% behind its anticipated use.

A ridership study released this week shows the road will not carry as many cars as was predicted in 1992, when those projections were used to sell $1.4 billion in construction bonds. The bonds were sold anticipating 94,500 a day by April 1997; the road is handling about 54,000 cars daily.

The Transportation Corridor Agencies board will vote Sept. 11 on a $1.2-billion refinancing package that takes into account the more modest projections. The original prediction of 236,000 vehicles daily using the 15-mile highway by 2032 has been dropped to about 206,000 cars a day.

Lower interest rates to pay off the new bonds would allow the board to consider ridership enticements like free days and dropping tolls during non-commute hours, said Lisa Telles, public affairs officer for the TCA.

“With the current financing, our cushion is so tight, we couldn’t adjust the tolls,” Telles said Wednesday. “With new financing, we’ll have an opportunity to do some things with the tolls to see if it makes a difference [in revenue]. The board is definitely interested in looking at that.”

Officials at the TCA haven’t said how much tolls could drop. Lowering tolls during peak commute hours isn’t being considered, Telles said.

A controversy erupted in June over possible bond refinancing when TCA staff asked board members to sign a “confidentiality certificate” to prevent them from speaking publicly on the subject and closed meetings were held.

Wednesday, Supervisor Todd Spitzer, a member of the tollway board, said approval of the refinancing package next week should be contingent on tolls that drop during non-peak times.

“We need to use the most effective price to accommodate demand at any given time so we maximize the use of the toll road,” he said.

The new ridership study was based on daily usage since the first stretch of the highway opened in April 1996. It also factored in more accurate economic information, including the effects of the county’s 1994 bankruptcy and the recession in Southern California that didn’t end until 1996, Telles said.

The new study was done by Wilber Smith Associates, the same company that produced the inflated estimates in 1992. Edward J. Regan, a company representative, told the tollway board last month that the skewed projections shouldn’t hurt the bond repayment schedule and that the county’s recovering economy should spur more use in coming months. Bond repayment is scheduled to begin in March 1999.

Spitzer, the only board member to question Wilber Smith’s traffic projections, said he isn’t satisfied with the explanation of why the numbers were so far off.

“I’m expecting to get the answers before I vote on this,” he said.

Telles said the company’s projections for the Foothill-Eastern tollway, completed for bond financing in 1995, are only 4% less than current ridership.

If the refinancing package is approved, the board hopes to sell the bonds at interest rates between 6% and 6.5%. That would compare with current rates that range from 5% to 9%, and would save about $30 million in the long run, Telles said.

Several things have happened to make refinancing attractive: low interest rates, more solid ridership projections and the settlement of five environmental lawsuits that threatened completion of the project in 1992. This week, two rating agencies--Moody’s and Standard & Poor’s--gave the new bonds an investment-grade rating.

“We would have been doing this anyway,” Telles said. “It only makes sense to refinance when interest rates are down.”

The San Joaquin Hills tollway, which runs from Newport Beach to San Juan Capistrano, has been controversial since its inception, mostly because of opposition by environmentalists. The road cut through some of the most pristine coastal land in Orange County, opening it to increased development.

The first indication that the road wasn’t performing as well as projected came in May, when the tollway agency reported that it was receiving only 51% of anticipated revenue. A March report on the shortfall blamed confusing road signs, the addition of car-pool lanes on the nearby Santa Ana Freeway and a longer-than-expected time for drivers to become familiar with the new road.