January 31, 2012 @ 1:57pm | Amy Igloi
I was appointed by Governor Gregoire to the Tacoma Narrows Bridge Citizen’s Advisory Committee (CAC) in 2010, and would like to offer some insight as a committee member.
Fact: We need to find an additional $25 million in toll revenues for Fiscal 2013 (July 1, 2012-June 30, 2013). 40 percent of this increase is due to bonds coming due. This is one of ten bonds that were taken to construct the bridge because of the “just in time” construction and bond schedule, which saved taxpayers millions of dollars in interest. Also, the first installment of deferred sales tax is due next year (the agreement was to start paying the $57 million in sales tax over a span of 10 years working out to about $5.7 million per year). In addition, the bridge has been sort of living on its reserves for the past few years and we have a contractual obligation to have 12.5 percent in reserves, which was set by the Treasurer, otherwise we will be in default of our bonds contract. (Note: the Treasurer is telling WSDOT they must have 25 percent in reserves on the 520 Bridge.)
People frequently ask why do we need to increase tolls during such a challenging economic time? The debt schedule was written such that these bonds would increase over the first 17 years. Increased steps in toll rates were anticipated to meet these debt payments. We are obligated to make payments to bond holders and do not have an option to refinance. Traffic and revenues are flat due to the recession and at the current tolls rates we will fall behind on payments in Fiscal ‘13. In the past, WSDOT and the CAC agreed to defer rate increases and continue using some of the reserve funds but that is no longer an option. Senator Derek Kilmer said he is looking into some other refinancing options, but the likelihood of any other solutions coming to fruition is slim. Note: the current Good To Go rate of $2.75 is substantially below the original projection of $4 tolls for all drivers by 2010.
Senator Kilmer said a bill was introduced to extend the deferred sales tax — Bill 6073. The relief this bill would have on tolls is roughly a $0.40 savings each time a toll is paid. Frankly, I am not sure how likely it is this bill will pass since Washington State is facing a $1.5 billion deficit and another very tough legislative session.
There is some discussion of whether the 12.5 percent reserve requirement is unnecessary or too high. I don’t want to get into that debate because it doesn’t serve any purpose right now. Before construction began, these details had been written and agreed upon and I don’t see that it is a negotiable point, so many years later.
Some of my thoughts on the tolls:
I have some serious concerns about raising toll rates but all the data we’re seeing says it must be so. I attended my first meeting late 2010 and I feel like I’ve been appointed to be one of the captains of the sinking Titanic. When I’m reading articles from the Seattle Times that 520 with its new tolls (set at $3.50 with Good To Go and $5 without a state issued pass) saw 40 percent fewer vehicles than normal on January 3, (http://seattletimes.nwsource.com/html/localnews/2017153722_tolling04m.html) and 20-25 percent increase in traffic on I-90, it deeply concerns me. Seattle traffic was about 10 percent down and feedback shows more people are finding alternatives to paying the tolls.
As a local restaurateur, a Port Orchard resident and someone who frequently utilizes the bridge, I look at this problem more from a tourism perspective. If people from the Pierce County/King County side are looking for alternatives to paying the toll, they have many to choose from. They can choose to stay in Tacoma, Seattle or venture to other areas in the greater Puget Sound region for shopping, dining and entertainment needs. That’s going to hurt commerce on the Peninsula. AND then CAC and WSDOT will have to meet again to raise toll rates to make up for lost revenue — which is a bad downward cycle to get into.
I want to reiterate to everyone the CAC is looking at all the details closely. WSDOT has been very helpful and working diligently to get us all the information we request so we can make the most informed recommendation possible. Unfortunately, the biggest dilemma here is finding how we can do the least amount of harm while making general assumptions on how raising the toll rates will impact revenues and how those changes will affect our ability to meet our financial obligations on the bridge. I would like to remind everyone that the CAC is an advisory board with no specific powers than to give recommendations to WSDOT and in the end they have the final say. To the best of my knowledge, there has only been one instance the final decision WSDOT made was against the CAC’s recommendation.
I’d like to extend my gratitude to our 26th district legislators Senator Derek Kilmer, Representative Larry Seaquist and Representative Jan Angel who have followed this issue very closely on our behalf. They attend these meetings frequently and offer much insight and advice on the legislative processes. This Bill 6073 may provide some relief but while I’m hopeful, I am not banking that it will pass.
Our next meeting is Feb. 8 at the Gig Harbor Civic Center. There will be a WSDOT open house from 5:30-6:30 p.m. with the CAC meeting and public hearing beginning promptly at 6:30. There will be another meeting Feb. 22, place TBD and another meeting, if necessary, on March 9. If you have any questions feel free to email me at amysonthebay@yahoo.com.
Fact: We need to find an additional $25 million in toll revenues for Fiscal 2013 (July 1, 2012-June 30, 2013). 40 percent of this increase is due to bonds coming due. This is one of ten bonds that were taken to construct the bridge because of the “just in time” construction and bond schedule, which saved taxpayers millions of dollars in interest. Also, the first installment of deferred sales tax is due next year (the agreement was to start paying the $57 million in sales tax over a span of 10 years working out to about $5.7 million per year). In addition, the bridge has been sort of living on its reserves for the past few years and we have a contractual obligation to have 12.5 percent in reserves, which was set by the Treasurer, otherwise we will be in default of our bonds contract. (Note: the Treasurer is telling WSDOT they must have 25 percent in reserves on the 520 Bridge.)
People frequently ask why do we need to increase tolls during such a challenging economic time? The debt schedule was written such that these bonds would increase over the first 17 years. Increased steps in toll rates were anticipated to meet these debt payments. We are obligated to make payments to bond holders and do not have an option to refinance. Traffic and revenues are flat due to the recession and at the current tolls rates we will fall behind on payments in Fiscal ‘13. In the past, WSDOT and the CAC agreed to defer rate increases and continue using some of the reserve funds but that is no longer an option. Senator Derek Kilmer said he is looking into some other refinancing options, but the likelihood of any other solutions coming to fruition is slim. Note: the current Good To Go rate of $2.75 is substantially below the original projection of $4 tolls for all drivers by 2010.
Senator Kilmer said a bill was introduced to extend the deferred sales tax — Bill 6073. The relief this bill would have on tolls is roughly a $0.40 savings each time a toll is paid. Frankly, I am not sure how likely it is this bill will pass since Washington State is facing a $1.5 billion deficit and another very tough legislative session.
There is some discussion of whether the 12.5 percent reserve requirement is unnecessary or too high. I don’t want to get into that debate because it doesn’t serve any purpose right now. Before construction began, these details had been written and agreed upon and I don’t see that it is a negotiable point, so many years later.
Some of my thoughts on the tolls:
I have some serious concerns about raising toll rates but all the data we’re seeing says it must be so. I attended my first meeting late 2010 and I feel like I’ve been appointed to be one of the captains of the sinking Titanic. When I’m reading articles from the Seattle Times that 520 with its new tolls (set at $3.50 with Good To Go and $5 without a state issued pass) saw 40 percent fewer vehicles than normal on January 3, (http://seattletimes.nwsource.com/html/localnews/2017153722_tolling04m.html) and 20-25 percent increase in traffic on I-90, it deeply concerns me. Seattle traffic was about 10 percent down and feedback shows more people are finding alternatives to paying the tolls.
As a local restaurateur, a Port Orchard resident and someone who frequently utilizes the bridge, I look at this problem more from a tourism perspective. If people from the Pierce County/King County side are looking for alternatives to paying the toll, they have many to choose from. They can choose to stay in Tacoma, Seattle or venture to other areas in the greater Puget Sound region for shopping, dining and entertainment needs. That’s going to hurt commerce on the Peninsula. AND then CAC and WSDOT will have to meet again to raise toll rates to make up for lost revenue — which is a bad downward cycle to get into.
I want to reiterate to everyone the CAC is looking at all the details closely. WSDOT has been very helpful and working diligently to get us all the information we request so we can make the most informed recommendation possible. Unfortunately, the biggest dilemma here is finding how we can do the least amount of harm while making general assumptions on how raising the toll rates will impact revenues and how those changes will affect our ability to meet our financial obligations on the bridge. I would like to remind everyone that the CAC is an advisory board with no specific powers than to give recommendations to WSDOT and in the end they have the final say. To the best of my knowledge, there has only been one instance the final decision WSDOT made was against the CAC’s recommendation.
I’d like to extend my gratitude to our 26th district legislators Senator Derek Kilmer, Representative Larry Seaquist and Representative Jan Angel who have followed this issue very closely on our behalf. They attend these meetings frequently and offer much insight and advice on the legislative processes. This Bill 6073 may provide some relief but while I’m hopeful, I am not banking that it will pass.
Our next meeting is Feb. 8 at the Gig Harbor Civic Center. There will be a WSDOT open house from 5:30-6:30 p.m. with the CAC meeting and public hearing beginning promptly at 6:30. There will be another meeting Feb. 22, place TBD and another meeting, if necessary, on March 9. If you have any questions feel free to email me at amysonthebay@yahoo.com.
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