Familiar Clause Takes a Toll

It takes a big magnifying glass to go over toll-road agreements. That’s what Riverside County officials discovered recently when they fine-combed a deal that would allow the Orange County Transportation Authority to buy the 91 Express Lanes.

There in the small print appeared language similar to an egregious clause in an earlier agreement involving the toll lanes. That clause can prevent any public improvements to the Riverside Freeway that might affect the toll lanes. In other words, it commits the travesty of tying the public’s hands so taxpayers can’t improve their own transportation system.

The ironic part is that OCTA wants to buy the lanes to overcome the old clause that Caltrans agreed to several years ago, so Orange and Riverside counties can make the needed improvements. The legislation allowing the purchase actually bans non-compete clauses.

So what’s this wording in the new purchase deal that would keep Caltrans from interfering with OCTA’s ability to bring in toll revenue? Though OCTA denies it, this clearly looks like non-compete language. Caltrans improvements to nearby roadways could pull people off the toll roads and thus interfere with OCTA’s income.

What happened is that the OCTA ran into the same problems other toll-road owners have experienced: Investors want some guarantees the toll road will bring them good returns. They don’t want better freeways for the public interfering with revenue.

That’s an understandable way to get toll roads financed, but it’s not good public policy. Even the less-restrictive non-compete clauses for Orange County’s other toll roads fail to serve the public’s best interest. Those clauses would force the state to repay toll-road agencies for any losses incurred because of publicly financed freeway improvements. It’s not the job of California motorists and taxpayers to provide warranties for bond investors.

Riverside County officials want anything that looks like a non-compete clause removed from the purchase deal. If not, they’ll stall the buyout.

That no-improvements clause created hellish conditions for Riverside County commuters. If roads between the two counties aren’t improved, the Orange County economy will pay a steep price as well, as employers move plants closer to their workers.

Both sides want this to work out and probably will find a solution. But it took Riverside County’s careful look at the deal to uncover the troubling language, and that shouldn’t have happened. Good for them for getting out that magnifying glass.