Public-Private Toll Road Fight: Priorities Clash

While high-ranking state and local officials are busy battling the proposed sale of the 91 Express Lanes to a nonprofit group, little attention has been paid to concessions made two months ago by Caltrans officials, which made such a sale possible.

In agreeing to delay planned road improvements for at least six years or until traffic on the heavily traveled Riverside Freeway increases 53%, critics argue, Caltrans guaranteed decades more gridlock on a stretch now traveled each day by more than 220,000 vehicles.

“You have to get to the point where traffic is absolutely stopped and people are agonizing and not getting home to their families?” said Kay Ceniceros, a former Riverside County supervisor and Transportation Commission chairwoman. “These people are being held hostage.”

State and local officials this week halted the proposed sale of the money-losing toll lanes by a private company eager to ditch them four years into a 35-year lease.

Concerns raised by the state treasurer and attorney general, among others, include whether the company, the California Private Transportation Co., had too close a relationship with the nonprofit group of local businessmen trying to buy the lanes for about $225 million.

But beyond the attempts to sell the project are significant questions about the wisdom of the policy that made the Express Lanes possible in the first place.

Critics now say that the grand experiment in privatizing state roads has done more harm than good. And the law that allowed it to happen, they say, created a fundamental conflict of interest between the state’s obligation to maintain and improve its freeways and a private company’s need to recoup its investment and make a profit.

That point was made clear when Caltrans attempted to add auxiliary lanes parallel to the toll lanes to make the road safer. The California Private Transportation Co. sued in March, saying that would cut into its ability to make money.

“This is an issue of public safety vs. private profit,” said Caltrans spokeswoman Deborah Harris, when the lawsuit was filed. “Basically, we are trying to improve the safety in that area because we have noticed there is an unusual pattern of accidents because of dense traffic.”

But Caltrans backed off on the improvements as part of a legal settlement with the California Private Transportation Co. That settlement was key to the 91 Express Lanes getting an investment-grade bond rating needed for a sale to NewTrac, the Irvine-based nonprofit.

The nonprofit planned to sell up to $274 million in state-backed bonds this week, before a barrage of criticism and a threatened lawsuit from Riverside County transportation commissioners delayed the sale.

Toll lane officials say that without their investment, the extra lanes would not exist. They also say their lawsuit was necessary because Caltrans’ plan to improve the Riverside Freeway violated their contract for the road and would have drastically damaged their business.

The proposed sale, they say, will benefit the public by returning $9 million in planning funds to Orange County transit officials. If the lanes make more than enough money to meet debt payments, NewTrac could return as much as $6 million each year to both Riverside and Orange counties for transportation needs.

Even some of those who are critical of the deal, such as Robert A. Wolf, state transportation undersecretary during the Wilson administration, say they still believe private roads make sense.

Wolf said he felt it would be wrong to “second-guess” the franchise agreements entered into by Caltrans, saying that investors would not have been attracted to the private project if Caltrans had been free to add more of its own lanes.

“Anybody who drives that corridor knows even if you aren’t in the toll lanes paying these tolls, you are going more freely because others are [paying],” he said. “Is it better than it would be without the lanes? Of course it is.”

Others feel differently. State Atty. Gen. Bill Lockyer, who as a state senator was a chief opponent of the original 1989 legislation that gave the project the go-ahead, said the private roads were bad policy from the start.

“It was a gimmick to try to claim you were against taxes while you still found a way to levy a fee against motorists,” Lockyer said. “It was a short-term benefit versus long-term injury to public road and highway construction, and we’re already seeing the effects.”

Private roads--long a pet project of economists and transportation experts--got the green light in an era of down-scaled government and shrinking tax funds for new road construction.

The idea was particularly popular with Orange County transportation planners desperate in 1989 for any way to add capacity to an overtaxed freeway system that had seen minimal improvements for more than a decade.

Orange County officials pursued, and were granted, two of the four pilot projects that got the Legislature’s approval--the 91 Express Lanes and a toll road extension of the Orange Freeway along the Santa Ana River still on the drawing board.

Two other projects, approved for Northern California, never got the consent of local officials.

Monte Ward, head of special projects at the Orange County Transportation Authority, said that at the time the legislation was approved, private roads had one main appeal: They had the chance to be built.

“For a long period of time we went with very little, if any, construction or improvements on Orange County freeways while there was tremendous growth,” Ward said. “Orange County clearly encouraged toll roads both private and public, because they didn’t have other options. The state wasn’t investing in its highways at the time, certainly not in Orange County.”

For Robert Poole of the Reason Foundation, a public policy think tank in Los Angeles, the 91 Express Lanes have been an important opportunity to see theory in practice.

“I think they are working as a transportation solution,” said Poole, who said the private road with its innovative pricing system designed to charge more money when congestion is worst has attracted worldwide attention and praise. “It demonstrated that there is a demand for congestion relief that people are willing to pay for. None of us knew that it would work.”

But Poole said it still remains to be seen whether state officials who put the deal together did so at too high a price to the commuting public.

“It was a trade-off, obviously,” he said. “It was a fairly risky thing to try to attract private funds at private risk to build these roads. There was an attempt to strike a balance. We know a little better now.”

* TOLL LANES’ FATE

Local agency will form committee to join any talks on status of 91 Express Lanes. B4