Fares Jump in July for 1 Tollway

Higher tolls at ramps on the San Joaquin Hills toll road will go into effect July 10, after a unanimous vote Thursday by the toll road board. The higher tolls--which will double at some locations--are part of a plan to raise revenue on the financially troubled road, where ridership still lags far behind projections.

The fare hike is the latest in a concerted effort to shore up finances on the road, which took a hit earlier this year when the major Wall Street ratings agencies warned investors that its financial prognosis had turned from positive to negative.

Before those warnings, toll road officials took the extraordinary step of setting aside nearly $40 million in savings to guarantee that they could fulfill promises made to investors for at least the next seven years.

That move bought much-needed time, and road officials have been working since then to find untapped revenue sources. Wanting to leave no stone unturned, board members recently voted to seek an “agent” for the toll roads, comparing the road’s potential for commercial endorsements and corporate partnerships to Michael Jordan’s.

Even with the varied efforts, road officials now say they question whether they can find enough new revenue or riders, or some combination of both, to keep the road’s finances in the black. Road officials say the low ridership on the San Joaquin Hills toll road recently led board members to deny a cost-of-living increase for Wally Kreutzen, the agency’s chief executive officer.

The gulf between the road’s usage projections and reality is substantial. For the current fiscal year, which closes at the end of the month, traffic consultants projected about $58 million in revenue. Actual fiscal year-to-date revenue is about $38.5 million.

“The financial model built for the San Joaquin Hills toll road was clearly not realistic,” said county Supervisor Todd Spitzer, who chairs the road’s board of directors. Spitzer is now calling for the state to use some of its multibillion-dollar budget surplus to buy out toll roads, which he says locals were forced to build after the state abdicated its responsibility to construct new roads.

Without any outside help, Spitzer said, San Joaquin Hills toll road officials face the monumental task of increasing revenue nearly 50% in the next next seven years.

“It’s my responsibility to do everything in my power to make sure these roads work,” said Spitzer, who sits on the toll road board as part of his role as a county supervisor. “Even at the end of all these efforts, though, I still have serious doubts that they will work.”

When the road was refinanced with $1.4 billion in bonds more than two years ago, investors were promised that $1.30 would be taken in for every $1 the agency had to repay. While toll road officials say the road is not in danger of failing to pay its debts, they acknowledge that they won’t be able to meet the cushion--known as debt coverage--promised investors if current trends continue.

For the road’s regular users, the bottom line is higher tolls sooner than planned. In the case of the ramp toll hike, for instance, Bonita Canyon Drive will jump from a quarter to 50 cents, which wasn’t supposed to happen until 2011.

George Peavy, a San Clemente resident and regular user of the road, said he and other loyal customers have already felt the squeeze.

“Instead of finding more people to take the road, they ask us to pay more,” said Peavy, who drives the entire length of the toll road at least three round trips weekly. “It concerns me, the amount tolls are going up and how poorly it reflects their projections.”

Boosting rates at the road’s five ramps, which are paid manually with coins or debited from a FasTrak account, should generate an extra $2.3 million to $4 million a year, according to road officials. For example, drivers using the Newport Coast Drive ramp would pay $1 instead of 50 cents; those using the El Toro Road ramp would see their toll jump from a $1 to $1.50.

The latest hike is another in a series of ways the agencies have tried to make money. Last year, road officials began charging low-use transponder customers a $1 monthly fee. And earlier this year, they reduced the hours of toll takers at many of the ramp booths and installed change-making machines.

For now, the toll at the mainline plaza for the entire 15-mile road will remain $2.25. But the ramp hikes are a sign of higher fares to come. Toll road officials hope to bring so-called “value pricing” in yet another effort to generate more money. Value pricing--in place on the privately operated 91 Express toll lanes--charges motorists higher fees during rush hours.

Officials have said they would like to see it in place by next summer on all toll roads in Orange County, including the Eastern and Foothill tollways. The roads are scheduled to be turned into freeways when the $3-billion debt is paid off.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Dig Deeper

San Joaquin Hills toll road ramp fees will go up starting July 10:

*--*

Ramp Current Toll With Increase Bonita Canyon Drive $0.25 $0.50 Newport Coast Drive $0.50 $1.00 El Toro Road $1.00 $1.50 Aliso Creek Road $0.75 $1.25 La Paz Road $0.50 $0.75

*--*

Source: Transportation Corridor Agency