For the second time in four months, the financial condition of Orange County’s Transportation Corridor Agencies (TCA), the public agency that has been trying for years to pave a toll road through San Onofre State Beach, is being called into question. I blogged about state Treasurer Bill Lockyer’s formal inquiry into TCA’s financial viability in December 2012 here.
This time, the Los Angeles Times reports that the Pacific Research Institute, a conservative think tank based in San Francisco, has released a new analysis of TCA's finances that concludes “the operations of these toll roads presently appear to be unsustainable and likely have been unworkable from their inception.” The report explains that TCA’s shaky financial plans and debt structure will make its financial status worse, “likely forcing a default or another restructuring.”
TCA’s roads have already been a huge burden on public funds: subsidies for the original construction, ongoing taxes, state grants, and tax-exempt funds may exceed $1.7 billion, according to the report. With the proposal to refinance its debt, TCA's total debt obligation rises to $11 billion -- a bill that eventually might need to be picked up by taxpayers if TCA ends up defaulting.
The PRI report urges that given TCA's inability to pay back its debt, “[s]pending money on plans to extend the [toll road through San Onofre State Beach] under these conditions is not justifiable and should cease immediately." In fact, even TCA’s current attempts to pay back its debt by refinancing existing bonds is deemed “extremely risky,” and the researchers conclude that “these bonds may in fact never be paid off.”
We agree with the report's recommendations. TCA should immediately put the brakes on its plans to extend the 241. The agency's refinancing plans shouldn't move forward without additional state review. TCA's boards and management should address the shortcomings identified in the report and evaluate alternatives. Caltrans should review its toll road maintenance subsidies, suspend any agreement that prevents improvements to I-5, and shift to coordinating regional traffic in a rational and efficient manner.
Finally, we strongly support the report's recommendation that the state or another third party review TCA's finances and operations and evaluate alternative governance structures and transportation plans. The long series of audaciously reckless actions undertaken by this wayward agency require nothing less.