Perry's office sees no toll moratorium at all

06/03/2007

Patrick Driscoll, San Antonio Express-News

Now that legislators have gone home and trumpeted how they passed a bill to freeze private financing of toll roads, the governor's office has some bubble-busting news.

There isn't much of a moratorium in Senate Bill 792.

"Of any kind, that we can tell," said Robert Black, spokesman for Gov. Rick Perry. "Unless there was something screwy that happened."

Actually, there were plenty of screwy machinations in the Legislature as lawmakers hammered out bills to rein in tolling powers of the Texas Department of Transportation.

Slapping a two-year moratorium on privatization contracts started out simple. But skittish lawmakers carved out exceptions in their backyards, and Perry fought to keep a loophole for his cherished multibillion-dollar cross-state network called the Trans-Texas Corridor.

By the time the plotting and jawboning ended a week ago, nearly every toll road project in line for a concession contract with a private developer had been exempted from the ban.

"The governor didn't appreciate the hypocrisy of it," Black said. "These guys were going to run around and say we did a two-year moratorium, when in fact they didn't."

And that's just what legislators did say as Perry's staff began combing the bill line by line to make sure there were no surprises. The bill was still pending late last week.

"The moratorium is the wind in the sails of this session's transportation reforms," crowed Sen. Robert Nichols, R-Jacksonville, a rookie senator who served on the Texas Transportation Commission and filed the original moratorium bill.

In or out?

Black didn't realize it, but at least one toll-road project is covered by the moratorium — U.S. 281 in San Antonio.

Sen. Jeff Wentworth, R-San Antonio, added language to make sure the 7-mile project was in the moratorium because he, like other lawmakers, was deluged with calls and e-mails from angry constituents who live near the highway.

"The overwhelming majority of my folks say they don't want this right now," he said. "We need to pause, take a deep breath, look at all our options, all of us get better informed about our options, and then proceed two years from now."

But Wentworth was willing to go only so far.

After Rep. Joe Farias, D-San Antonio, tacked on an amendment to stick Loop 1604 into the moratorium, an aide said a lobbyist dropped by to say the "powers that be" wouldn't let that stand. At Perry's insistence, a House-Senate committee later stripped out the amendment.

So Rep. David Leibowitz, D-San Antonio, got a clarification read into the House record that says Loop 1604 would effectively be in the moratorium, even without the specific language.

The next day, Wentworth got his own clarification on the Senate floor, saying Loop 1604 would not be in the moratorium.

Either way, there's a question on whether a proposed private concession for 40 miles of Loop 1604 could proceed without U.S. 281, since both are part of a bid process already under way and restarting would be out of the question under SB 792.

TxDOT won't comment.

But Bill Thornton, chairman of the Alamo Regional Mobility Authority, which is helping negotiate the concession, said it's time to take another look at financing toll roads without seeking private dollars. The bill wouldn't stop that.

"Why should we look for a concessionaire if we can do it ourselves?" he said. "The attraction of immediate money requires a return on investment to the concessionaire, whereas in government we're not looking to make a profit."

TxDOT's pursuit of a concession for U.S. 281 and Loop 1604 rang alarms for Thornton and some other San Antonio leaders two years ago, and the scuffle ended with state officials giving their word that local officials would have the final say-so.

SB 792 would chisel that gentlemen's agreement into law, giving local governments and agencies first dibs on developing toll projects and the ability to use state rights of way.

However, with Perry and TxDOT helping craft the bill in the waning days of the session, a provision was slipped in that gives the state a way to control how high toll rates can be set and how fast they can be raised for locally owned toll roads.

The provision would require market valuations to gauge how much money a toll road could bring in, including what motorists are willing to pay, and earmarking the profits to other area projects. State and local officials must agree on the terms or forfeit the toll plan.

"I'm uncomfortable with it," Thornton said of the mandate. "Government is not here to make a profit, government is here to provide a service."

Toll critics are in rare agreement with Thornton, at least to some extent, on the issue.

"SB 792 means the highest possible tolls," said Terri Hall of San Antonio Toll Party. "This policy has never had a public debate before it was adopted."

Corridor loophole

Another cloud hanging over SB 792 has to do with whether the moratorium includes the Trans-Texas Corridor leg that will parallel Interstate 35.

A concession was signed in 2005 with Cintra of Spain and Zachry Construction Co. of San Antonio to draw up a development plan. Separate contracts would spin off of the plan to construct individual segments.

TxDOT officials recently said the agency might be ready to move forward with a rail project within two years.

Worried that the construction contracts might slip through the moratorium on new concessions, Rep. Lois Kolkhorst, R-Brenham, added an amendment to plug the potential loophole. But Perry balked, threatening to veto the bill.

The House-Senate compromise committee agreed to take the amendment out.

After talking to lawyers and Perry's office, Kolkhorst said she believes in her heart that there is a moratorium on the corridor contracts, according to reports. If TxDOT wants to play with words, she said, the matter could be settled in court.

"It's a strong bill with or without the amendment," she said.

Black said Kolkhorst was told that work couldn't start on corridor projects within two years anyway because environmental studies won't be finished.

But Kolkhorst may not have known that SB 792 would still allow construction contracts to be signed, though work wouldn't begin until after the studies are completed, he said.

"She kind of got her hat handed to her," Black said.