Toll-Road Foes to State Case in Sacramento

Critics of the proposed sale of the 91 Express Lanes say you need only look at the number of cars on the toll road to see its fundamental flaw: While the Riverside Freeway has ample congestion, too few drivers seem willing to pay to escape gridlock.

But that reality contrasts sharply with the ridership predictions of traffic consultants hired by the private company trying to unload the money-losing venture.

Nagging questions about these key ridership projections will be among the issues raised today in Sacramento when a delegation of officials from Orange and Riverside counties meets with Gov. Gray Davis and Atty. General Bill Lockyer, or their top staff members.

The group plans to ask state officials to squelch the deal and then take over the toll road, opening the lanes for all to use.

“We need to find out what this road is worth, acquire it and put it back in the public domain,” said Riverside County Supervisor Bob Buster, who is leading the delegation.

At issue, Buster and others say, is whether traffic consultants used inflated numbers to generate projections for future use.

Potential investors raised concerns about those projections during a Dec. 3 teleconference with officials representing the California Private Transportation Co., the current owners of the toll road, and the nonprofit group, NewTrac, which wants to buy the lanes.

During that meeting, some investors demanded to know why the numbers used for traffic projections didn’t match the actual number of cars using the road.

“I’m looking at toll revenues and I’m trying to understand it. I’m looking at the numbers and I can’t seem to figure out how you got there,” said Steve Willson, a financial advisor with Municipal Credit Advice. “I’m looking at the toll revenue projections in ’98 and ’99 and see a 16% drop in revenues in the last three to four months.”

The ability of the toll road to attract new customers has been pivotal in the debate over the value of the private lanes to the Irvine-based nonprofit. Critics have demanded to know how the $225-million purchase price was determined and whether factors other than the ridership projections were considered.

State Treasurer Phil Angelides abruptly halted the bond sale Wednesday.

Officials for the toll road’s owners and NewTrac must decide this week whether to scrap the sale. Wall Street analysts say that without revised sale plans, they will rescind their current bond ratings. For more than two weeks, NewTrac has been besieged by questions over conflicts of interest and failure to disclose key information to the state and federal governments.

Ridership has declined 36% since a peak of more than 27,553 cars a day in July 1998. However, traffic consultants for the toll road’s owner say traffic will swell by 3,000 cars a day, with more and more motorists using the toll lanes on weekends and other off-peak hours.

Observers of the road’s performance over the four years it has been open say it has consistently failed to meet projections set by this same firm, falling about 5 million trips short each year.

“The toll road hasn’t gained the traffic that they estimated,” said G.J. “Pete” Fielding, a UC Irvine professor who was an early supporter of private road building. “They didn’t get the forecasts accurate. What they didn’t understand, really, was people’s dislike of paying to take a road and their willingness to sit in traffic instead.”

During the Dec. 3 teleconference with investors, the general manager of the Express Lanes, Greg Hulsizer, and NewTrac’s president, Gary Hausdorfer, were unable to fully satisfy investors’ concerns about what some said were “too rosy” projections.

Neither Hausdorfer nor Hulsizer have returned calls seeking comment.

The toll road’s managers said the drop in riders could be attributed to the unexpected early opening of the Eastern Toll Road in October 1998.

Some investors, however, said that didn’t explain why the actual numbers of cars taking the road didn’t jibe with some of the figures being used in the bond documents. For example, one table in the documents shows an average of 25,500 cars a day on the road in 1998, while the actual ridership figures indicate only slightly more than 23,000 cars a day took the road.

And recent business has also been lagging. One investor pointed out that the road would need to see a 39% jump in business the final three months of this year--figures that the road’s managers have not released--just to make their current projections.

“I’m just trying to understand how this all works, because it’s very confusing to me,” said financial consultant Willson during the teleconference.

Local officials say there is nothing confusing about the impact of the private toll road on commuters.

“Why is this group allowed to perch there like a leech and use this public right of way?” asked Buster. “Why are we putting business interests ahead of convenience for our commuters? Is this a way to run our transportation system?”