Troubled Tollway to Get Financial Review

Operators of the San Joaquin Hills toll road Thursday agreed to hire an independent consultant to study the highway’s economic problems and determine how to keep the coastal Orange County turnpike solvent.

The tollway’s board of directors unanimously approved a proposal by chairwoman Linda Lindholm to hire an outside firm to complete a financial analysis of the 15-mile highway that runs from Newport Beach to San Juan Capistrano.

“I would like a second set of eyes for our board,” Lindholm said. “We need to take some positive steps to improve the economic future for Highway 73. The financial news is not good right now.”

The measure grants board members the power to create a hiring committee and seek proposals from national transportation consultants with experience in toll road financing. The contract amount is not to exceed $50,000, and whoever is hired will answer to the board of directors.

Lindholm, a Laguna Niguel councilwoman, called for an independent analysis after Fitch IBCA, a Wall Street ratings agency, downgraded to junk status about $1 billion of the $1.8 billion in bonds sold to finance the San Joaquin Hills tollway.

Board members also are concerned about a chronic failure of the highway to meet revenue and traffic projections since it opened in 1996. Tollway figures show the gap between projected and actual performance is widening.

Though they acknowledged that the road’s financial problems are serious, board members said the situation is not critical. They noted that traffic continues to grow on the tollway and the corridor agency has the resources to cover its interest payments until 2007.

“This should not be construed to mean there’s a crisis,” said board member William S. Craycraft, who is the mayor of Mission Viejo. “I applaud and support the review. Maybe it should have been done sooner.”

Toll road officials said the turnpike has $140 million in cash reserves, the ability to raise tolls and a $12-million federal line of credit that has not been tapped. They noted that two other Wall Street ratings agencies have not lowered their assessments of the tollway’s bonds to junk status.