Consultant: Toll bridge system will cost less to run
A firm hired by the Kentucky Transportation Cabinet also anticipates more traffic and toll revenue, giving Kentucky hundreds of millions of dollars in leftover cash.
LOUISVILLE, Ky. (WDRB) – It will cost significantly less to operate the all-electronic toll system on Louisville-area bridges, according to estimates from a Kentucky Transportation Cabinet consultant.
And even before tolling starts, the fees charged to drivers are expected to take in more money than previously thought -- an extra $364 million by 2058.
The revised figures mean Kentucky stands to have $407 million more “excess cash in total” after paying off debt on construction bonds and tolling expenses, according to documents made public this summer.
Orlando, Fla.-based PFM Group presented its forecast at a meeting last month of the Kentucky Public Transportation Infrastructure Authority, a largely governor-appointed board that oversees the financing of the state’s share of the Ohio River Bridges Project.
PFM and its subcontractors advised Kentucky as it issued bonds for the downtown part of the bridges project. Their updated work – done before PFM’s $4 million contract with the state expired June 30 -- anticipates more traffic, increased toll revenue and low rates of uncollected tolls.
The new, more bullish forecast is a contrast to results from some other toll roads that have failed to meet projections.
In May, Washington State’s auditor released a report showing that all-electronic toll roads there have collected 94 percent of tolls, but officials plan to recoup only $37 million of $96 million in outstanding fees and penalties.
Elsewhere, the Alliance for Toll-Free Interstates has tracked studies showing cases in which toll revenue and traffic estimates were overly optimistic.
On the Louisville-Southern Indiana project, it’s now expected to cost Kentucky $227.7 million to operate the RiverLink toll system, which will charge drivers to cross the Interstate 65 Kennedy and Lincoln bridges, and an upriver crossing between Prospect, Ky., and Utica, Ind., starting later this year.
That estimate is down from previous costs of $445.1 million. The anticipated savings are a result of how tolls will be collected and monitored, said Megan McLain, the Kentucky Transportation Cabinet’s innovative finance manager.
At first, she said, plans called for a call center and back-office operation to be built “from scratch.” But after only getting one bid on an earlier proposal, officials sought an existing facility instead.
“The cost wasn’t the reason that we went that way,” McLain said. “It was about time and risk – and the risk that we avoided by tapping into something that we knew already worked. But the cost was an added benefit to that.”
Workers in Austin, Texas will collect data, process tolls and handle most customer service issues. While the states say that arrangement will save money, two Louisville lawmakers in the Kentucky General Assembly have questioned why the jobs aren’t being located here.
The forecasts predicting more traffic using the toll bridges didn’t change a Wall Street credit agency’s opinion on Kentucky’s debt. Last month, Fitch Ratings kept its “BBB-“ rating on the bonds – the firm’s lowest investment-grade designation.
Fitch analysts wrote on July 20 that their ratings reflect existing traffic levels in the Louisville area, while also noting the “inherent uncertainty as to the level of demand with introduction of tolls.”
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