Without a proposed $2.2-billion bond sale to refinance its debt, a major Orange County tollway could eventually default on its bond payments, according to a report released Wednesday.
The analysis by the state treasurer's office supports plans by the Transportation Corridor Agencies to restructure the debt at lower interest on the Foothill-Eastern toll road, which is failing to live up to ridership and revenue projections.
"We are pleased with the outcome of the study," said Lisa Telles, communications director for the corridor agency. "It says that the plan we have been working on is good for residents, commuters and the state."
The Foothill-Eastern includes the 133 Toll Road in central Orange County as well as the 241 and 261 tollways from Yorba Linda to Rancho Santa Margarita. They are part of the 51 miles of toll roads operated by the Transportation Corridor Agencies. Ridership and revenue for the corridor have now fallen substantially below forecasts at a time when its debt payments have been rising.
Last month, TCA board members approved the restructuring—a move designed to shore up the Foothill-Eastern's sagging finances but add 13 more years of toll collection, meaning that the corridor would not be paid off and become free to motorists until 2053.
The bonds cannot be sold, however, until Caltrans, which maintains the Foothill-Eastern, signs off on a revised cooperative agreement with the TCA. If the refinancing proceeds, it is estimated that the extension of the toll period could cost motorists an additional $6.5 billion.
The California Debt and Investment Advisory Commission, a unit overseen by state Treasurer Bill Lockyer, reviewed the TCA's refinance plan partly at the urging of former Orange County Assemblywoman Marilyn Brewer. In a letter to Lockyer last year, Brewer questioned whether the debt-laden toll road agency was "viable as a going concern."
The review determined that the planned restructuring of the Foothill-Eastern's debt was in the public interest. Based on current traffic and revenue estimates, the report concluded that the corridor was unlikely to meet its debt obligations unless the corridor was refinanced.
The commission recommended that the TCA set aside a portion of the savings from the restructuring so it could retire early some of the bonds that mature between 2040 and 2053. Such a move, the report stated, could reduce the extension of the tolling period and strengthen the corridor's financial condition.
The study further recommended that the TCA not spend additional money to build two controversial highway projects until Caltrans can review their feasibility and approve them. The measure is designed to ensure that the toll road agency can continue to pay Caltrans for road maintenance until 2053.
They include the $200 million Tesoro Extension that would lengthen the Foothill tollway 5.5 miles from Rancho Margarita to San Juan Capistrano and the Foothill South extension that would run 16 miles to the 5 Freeway south of San Clemente.
In June, local water quality regulators denied the Tesoro project a discharge permit, effectively halting it for now. Federal and state decisions several years ago stopped the Foothill South project that would have gone through popular San Onofre State Beach Park in north San Diego County.
dan.weikel@latimes.com
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