Local leaders want best deal for SH 121

June 13, 2007

BY DANNY GALLAGHER, staff writer, COLONY COURIER-LEADER

Several Collin County leaders said that whether or not the North Texas Tollway Authority was pressured not to bid for the contract to construct State Highway 121 last year, they just want the best deal for State Highway 121.

And most of them believe the NTTA is offering the better deal.

"I don't know what the truth is about whether they were told not to bid or encouraged not to bid, but if they were pressured to enter into this agreement to operate the 121 toll road and not build it and they succumbed to pressure, then shame on them as well as shame on [the Texas Department of Transportation]," State Rep. Jim Jackson, R-Carrollton, said. "It's not having that pressure that's the problem. It's giving into the pressure ... but that's water under the bridge."

Some current and former North Texas Tollway Authority board members said they felt pressured by the Texas Department of Transportation (TxDOT) into not competing for the SH 121 toll project and were unsure about what would happen if they didn't sign a regional protocol agreement in August 2006. The Spanish firm Cintra was awarded a conditional contract in February to build, operate, and maintain 29.5 miles of SH 121 toll lanes from U.S. 75 in McKinney/Allen to the western merge of Business SH 121 in Lewisville/Coppell.

The next stage of the competition for the SH 121 contract will come on Thursday, at a workshop conducted by the Regional Transportation Council in Arlington. Leaders supporting the NTTA are being urged to attend Thursday's session. State Rep. Jodie Laubenberg, R-Parker, said state Sen. Florence Shapiro, R-Plano, had sent a blast e-mail urging attendance, though Laubenberg won't attend. Shapiro was out of the country early this week and could not be reached for comment.

Collin County Commissioner Phyllis Cole, who will attend the SH 121 workshop on Thursday, said it was her "impression" NTTA was under pressure not to compete for the project in the months leading up to the protocol agreement. "At the time, I was watching it very closely and talking with NTTA representatives and saying why are you not bidding on this?" Cole said. "I talked almost daily about the situation, and they were told by TxDOT not to bid. That was my impression."

Cynthia White, Denton County commissioner and RTC Chairwoman, disagreed.

"I don't think there was any pressure going on that I was aware of," White said.

Frisco Mayor Pro Tem Maher Maso said he feels RTC and TxDOT were excluding the public's interests from the project.

"I've never felt that the public was included in this decision," Maso said. "Most of the time I felt like they were being treated as a byproduct; let me clarify that, treated by the outside agencies outside of Frisco, including RTC and TxDOT. I felt that their viewpoints (the public), their opinions, the impact to them has never been really considered. It was all about dollar signs."

Peter Vargas, Allen city manager, said public roads should not be used to maximize private companies' profits.

"I think that the public highways are a necessity," Vargas said. "We all need them to get to our destination points and there shouldn't be a profit motive in that."

Maso said he feels, however, the public is now being given its due consideration.

"I'm happy to see that the public is being given the information that has been withheld from them for so long," Maso said. "Open government is critical to the way our democracy works and I do not feel that this process has met that criteria of open government. I have to say again that NTTA has been a great partner and I'm happy to see them go forward with this bid and I do have concern that they will be stifled by politics and every city in Collin County and Collin County themselves have worked hard to protect the taxpayers' interests. This issue has been forced upon us at times against our will and thus against the people's will ... I've been outspoken since day one on this. I wish the public would get more involved and demand answers."

Plano Councilman Scott Johnson said he believes NTTA has changed as well because of the SH 121 project.

"I think they changed their business model and are seeking roads to build," Johnson said. "They're more realistic in their business model and expectation of traffic and tolls collected. They changed their management structure and they want to be more aggressive - part of it is an attitude change, in my opinion."

After reading Friday's story in The Frisco Enterprise, Frisco City Manager George Purefoy sent by e-mail a memo he addressed to "Collin County citizens" on Jan. 10, 2006. He said Texas Transportation chairman Ric Williamson said at a Dec. 15, 2005, meeting of the Texas Transportation Commission, "It is not in the best interest of the state to turn over a toll road to an agency like NTTA because that agency will attempt to keep the toll rates lower to the citizens (time stamp 12:01:49 p.m. of the meeting). Taking the comments from Chairman Williamson, CDAs are favored by TxDOT because they will not be influenced by local political pressure to keep the toll rates down."

This contrasts with comments Williamson made less than a month earlier to NTTA chairman Paul Wageman, who quoted Williamson as saying that the decision about who would build SH 121 toll lanes should be a regional one, and that he'd be willing to work with the NTTA.

"The bottom line is that roadways such as SH 121 are being earmarked by the commission to basically carry the load for the shortfall in funding from the gasoline tax," Purefoy said in the memo. "Thus, a select group of citizens, in this case the citizens driving SH 121, will be asked to make up the funding gap for what the gasoline tax fails to fund. If a CDA is allowed to control SH 121 and the tolls are set at the market rate to help fund other roadways for which the gasoline tax is insufficient to fund, then this will be tantamount to taxation without representation."

Collin County Commissioner Joe Jaynes, who also will attend Thursday's RTC workshop as Collin County's RTC representative, said last week's story "put it in very clear terms the ordeal we have been going through, but I think the key issue now is to put the past behind us and get the road built.

"Just looking at both proposals. NTTA offers a half a billion right off the bat. Plus there's additional revenues which NTTA will be putting back into region, whereas that CDA with [Cintra Concesiones de Infraestructuras de Transporte] would go into their bank accounts," Jaynes said. "My view is to go in with an open mind and this is probably most important for this county and this generation. Let's go in and keep an open mind and make the best decision ... The bottom line is let's get the road built."

Cintra spokesman David Marguiles, however, said in a written statement that Cintra, as a private company, is taking all the risks and, if the road defaults, the state can re-take control of the road. Marguiles said that, in contrast, the NTTA as a public agency would have to raise tolls to exorbitant levels if revenues weren't raised as expected. Other Cintra-provided material states the opinion that the NTTA could become bankrupt if it undertook SH 121 responsibilities.

Collin County Judge Keith Self, who will not attend Thursday's RTC workshop, wasn't around in the months leading up to the NTTA-TxDOT protocol agreement, but he said he believes the project needs a healthy dose of competition in order to find the best deal to build the road.

"The only thing I want to emphasize is we want a head-to-head, fair competition between Cintra and NTTA and I want people who are experienced at examining $5 billion business deals to be the ones making the analysis," Self said. "I don't think local elected officials are qualified to examine and do analysis on a $5 billion business deal. I want the competition to happen for the best deal to the American taxpayer and, of course, I want Americans to win this competition but the competition needs to be fair."

Laubenberg said when it comes to SH 121, she doesn't "really have a dog in that one, but she's also hopeful the RTC can come up with the best deal for the region.

"I hope we don't get shortchanged in the short run and stuck with a huge toll tax in the future and who can better control that?" Laubenberg said. "We will see."

Steve Polunsky, spokesman for state Sen. John Carona, R-Dallas, said Carona believes NTTA wasn't given an equal opportunity to compete.

"I think Sen. Carona has always felt like NTTA, being the local entity, should have a major role in the toll roads in this area," Polunsky said. "I think he always felt that perhaps NTTA didn't have the full opportunity it should have had and that was his thrust during the session. I think he's very hopeful the RTC will see the merits of the NTTA's proposal. It looks from what we've seen to be an excellent proposal. It keeps revenues local. The one thing RTC has said was they look very favorably on up-front payments to fund some other roads in the area and it looks like the NTTA has met that expectation."

State Sen. Jane Nelson, R-Lewisville, said she believes the NTTA offers the better proposal to build the road.

"When something sounds too good to be true, it usually is," Nelson said. "That is how I feel about the Cintra proposal. They would not be offering billions of up-front dollars unless they intended to make billions more over the 50-year life of these contracts. And I do not want to see our highways turned into a profit center for a foreign company. I have much more faith in the NTTA, which the Legislature created for the sole purpose of managing toll roads in our region."

Cole said the NTTA deal would also give the state and counties more control over the road.

"The members of the NTTA board are appointed by two members of Collin County Commissioners and other members are appointed by other counties," Cole said. "That assures us of retaining local control. If in the future, say 10 years down the road, there are changes that need to be made, we can work through the NTTA locally to rectify the situation or give input on what the tolls ought to be. If that doesn't work, we can go to the Legislature and change it. If we give the project to Cintra, it is their project for 50 years. The Legislature cannot change it."

Coppell City Manager Jim Witt said he believes Coppell will benefit from the bidding for SH 121 whichever way the bidding goes as long as the city still gets the money for the Freeport Parkway extension. The city will receive between $6 and $7 million for the 8-mile extension.

Originally, the extension and projects related to the expansion of SH-121 would be funded by Coppell but as the highway will privately funded as a toll road, Coppell will receive money for Freeport, Witt said.

The local cities will receive money for road extensions no matter what bid is chosen, but Witt said after looking through the bidding proposal of NTTA that he noticed that some of the financing for the project will come from the Royal Bank of Canada.

"There is probably going to be foreign money no matter what," Witt said.

McKinney Mayor Bill Whitfield, who sits on the RTC board and will attend Thursday's workshop, said he wants to look at all the facts on both deals before making his decision on the two proposals.

"We're trying to be as unbiased as we can possibly be," Whitfield said. "We're trying to get facts, which really is the best bid and quite frankly until we get through Thursday, then I think we can go back the following Monday. I feel like it will take all four hours to get through it. Then we'll come back Monday, and vote and accept which ever is best."

Attempts were made to reach State Rep. Ken Paxton (R-McKinney), but phone calls were not returned by press time.

Staff writers Dan Eakin, Tasha Hayton, Katy Moore, Penny Rathbun, Troy Brakefield, and Kevin Bowen contributed to this report.