Friday, June 15, 2012

TOP STORY >> Are bells tolling for North Belt?

Leader staff writer

A Denver toll road could be an example of what is needed to build the $1.43 billion North Belt Freeway, which the state doesn’t have in its coffers or coming from the federal government, making tolls a possible solution.

Dan Christopherson, a spokesman for the east-bound I-470 Public Highway Authority in Denver, calls toll roads the wave of the future and the only way to finance major highway construction without state and federal funding.

The history of Denver’s East I-470 is much like central Arkansas’ North Belt. In Denver, the west side of the interstate was built first with public funding, but then money ran out and the only way the east side was ever going to get built was as a toll road.

Here, the southern portion of the I-440 loop is complete, but there is no money to complete the 13-mile northern section from the bean fields between Sherwood and Jacksonville west to Hwy. 107, Camp Robinson and then connecting to I-40 near I-430.

Many commuters use Denver’s East I-470 as a way to get to and from the airport at a charge of about $10 per trip.

Christopherson admits very few drivers go from one end of the toll highway to the other because of the expense, about $20. But they use segments of it. The toll collection became digital in 2009, and now cameras are used to take pictures of license plates and send out bills.

Financially, the toll authority is above water but has had to raise the toll every year since 2009 and will be deeply in debt for at least the next 25 to 30 years.

Christopherson said a number of hurdles had to be cleared for E-470 to come to fruition and the same would be true for North Belt.

First, the state legislature would have to approve a toll authority or commission much like it did for the lottery commission and give it authority to tax, collect and spend funds, to buy and condemn property as necessary.

When Denver’s original E-470 Authority was created, no state statute existed to grant the authority the combination of powers and revenue sources it needed to build the highway. Through E-470’s initiative and lobbying efforts, the needed legislation was enacted by the state legislature about a year later. This measure, the Public Highway Authority Act, set the framework under which an E-470 financing plan could be developed, giving the authority the power to do everything needed to plan, design, finance, construct and operate E-470.

Secondly, all the counties and municipalities that the North Belt would run through would have to come together under this commission and work as a unit. In the Denver area that was three counties and five cities. Here it would, as a minimum be Pulaski County, Jacksonville, Sherwood, Camp Robinson and North Little Rock.

The third issue faced by the E-470 Authority before construction could even start was finding a financial institution or group of banks to fund the $722 million in bonds needs to construction the 47-mile stretch of roadway. The final cost ended up being $1.23 billion.

Christopherson explained that to get access to the bond money the authority had show means or income of paying the money back, and it couldn’t use the toll money as collateral as there was none.

The solution was a 1988 election to consider a $10 per vehicle motor vehicle registration fee. A majority of voters approved the additional registration fee designated for E-470 and collection began in 1989.

In 1980, Gov. Bill Clinton increase vehicle registration fees in Arkansas and was voted out of office because of it.

Glen Bolick of the Arkansas State Highway Department said the average cost for a mile of interstate runs between $7 and $11 million, meaning up to $1.43 billion would be needed to construct the North Belt.

The E-470 Authority has refinanced its bonds at least three times and currently carries a debt of $1.23 billion, which is scheduled to be paid off by 2041.

In its financial report for 2011, the E-470 Public Highway Authority said traffic use rose to 52.1 million vehicles, making 2011 the third-straight year of traffic growth.

The toll collections for the Denver loop hit $107.7 million for 2011, which was enough to cover $65.2 million debt service payments and $14.5 million in repairs, resurfacing and safety improvements.

But the debt cost will rise $6.5 million a year until 2020, when it levels off at $125 million annually until final maturity in 2041, unless traffic and rates continue to increase the authority could have problems covering its debt payments.

According to Bolick, about 50,000 vehicles come through Jacksonville on Hwy. 67/167 and that increases to about 72,000 daily at the McCain Mall exit or around 22 million vehicles a year. Would that be enough to cover debt payments for North Belt’s completion?