Toni Nelson, Capistrano Beach
I read Councilman Joe Muller’s guest opinion, “The Time Has Come for OCTA and TCA to Work Together” with alarm. The Transportation Corridor Agencies (TCA) was formed to build two toll roads, pay off the associated debt, return free roads to taxpayers and go out of business. Instead, this agency has grown not only its huge debt but its sphere of influence, now horning in on a role that Orange County Transportation Authority (OCTA) is perfectly equipped to handle itself.
Muller thinks he’s found a perfect solution by having the two agencies “share the same staff.” Only in Orange County could we come up with a “solution” billed as “smaller government,” where not one, but two organizations will be running a project. Five of OCTA’s directors are already directors at the TCA, a notoriously inefficient agency that has cost taxpayers billions as we pay for the same roads over and over again.
Mr. Muller says he’d like to hear “ideas on how to make government more efficient, transparent and effective.” How about explaining how a debt of $3.3 billion at completion of the two toll roads has grown to $4.9 billion in 2019, even after 20 years of principal and interest payments? Why did TCA directors refinance with capital appreciation bonds, which cause unpaid interest to be added to principal? Why will a debt burden that was supposed to be paid off in 2033 (San Juan Hills TCA) and 2040 (Foothill/Eastern TCA) cost an additional $11 billion to retire and won’t be paid off until 2050 and 2053, if then? Why are developer fees $4,000-$6,000 for a new single family residence in South OC and tolls are almost $9 one way on the 73? Even then, TCA’s documents assert that “there can be no assurances that the toll rates that are established will produce sufficient toll revenues to permit the payment of debt service.”
The TCA is now facing a devastating reduction in toll revenue due to the pandemic. It will likely face a serious cash flow problem, the need to sell investments in a declining market and the virtual certainty of operating outside its debt covenants. Perhaps its CEO was wise to leave the agency now, just as pension liabilities have been fully funded but TCA’s fiscal viability becomes even more uncertain.
TCA has been criticized for liberally sprinkling lucrative consulting contracts and political donations through surrogates and their PACs, ensuring that compliant officials are elected and appointed to its board. Let’s hope that with the current crisis, board members will at last be ready to ask some tough questions and rein in this agency before it collapses under a mountain of debt.
All taxpayers should be chilled by the fact that FETCA Board Chair, Christina Shea, was quoted recently in the Orange County Register as saying, “We would want to have free roads, but understanding the revenue, I don’t foresee it being ever free.” Look out, taxpayers, because no one at the TCA seems to be looking out for you.