OCTA Could See Big Savings

The Orange County Transportation Authority could save as much as $12 million over the next 26 years under a plan, approved in concept Monday, to refinance millions of dollars in outstanding toll-road bonds.

“The staff still has to come back to the board with [specifics]; all the details need to be worked out,” said Michael Litschi, a spokesman for the OCTA.

Kirk Avila, the authority’s treasurer and public finance manager, agreed: “With today’s authorization, the OCTA will continue with its finance team to structure a recommended course of action.”

At issue is about $135 million in taxable bond debt inherited from the previous owner of the 91 Express Lanes, a 10-mile automated toll road along the Riverside Freeway that the OCTA purchased from the California Private Transportation Co. in January.

Because the OCTA is a government agency, Avila said, it is eligible for tax-exempt securities at a rate of about 4.60% instead of the 7.63% the previous owner paid. As a result, he said, the transportation agency could save $10 million to $12 million over the remaining life of the bonds.

“We won’t know for sure until we get the numbers,” Avila said.

Initially, he said, a portion of the annual savings would be used to repay the agency the $84 million -- mostly in bus operating and commuter rail endowment funds -- it put up for the $207.5-million toll-road purchase. As a result, he said, the reimbursement would be achieved more quickly than expected, in about nine years instead of the projected 17.

“What will happen,” Avila said, “is that each year a saving will exist. Hopefully, we can pay ourselves back sooner and then, once we have paid ourselves back, the [extra] funds can be used for improvement projects.”

In addition, he said, a recent restructuring of tolls, including some increases, could further shorten the bond repayment schedule, which now stretches to 2028.

A consultant, Avila said, is expected to present a report in late August or early September containing, among other things, a “model to determine whether or not the new fees will affect the repayment schedule.”

One option in the refinancing process, he said, is to extend that schedule for two years -- to 2030 -- when the roll road is slated to be returned to the state’s control. Such an extension, Avila said, would provide “a little more flexibility” to the OCTA in maintaining the road.

OCTA staff, he said, are expected to present a recommended plan in October.