News and Tribune

Bridges Project

September 5, 2013

Delay in bridges tolling rates could cost commuters millions more

A vote on toll resolution for bridges project expected within weeks

JEFFERSONVILLE — Target rates for tolls have been set for about a year, but it will be a bit longer before the public knows what they will actually have to pay to cross the Ohio River.

Indiana officials asked to delay the approval of the toll rates that were expected to be set at a meeting held Thursday morning, which if not acted upon soon could add millions of dollars to Kentucky’s financing cost — and would eventually be passed along to toll payers.

Kentucky Transportation Secretary Mike Hancock was caught off-guard when Indiana Finance Authority Director Kendra York requested the removal of the item that dealt with tolling during the first of two meetings held. The tolling resolution was subsequently removed from the second meeting also held Thursday.

“We were prepared to talk about this,” Hancock said during the first meeting. “To remove [the resolutions] they are very important pieces of our issues to satisfy the tolling part of this project and to address the financial limitations for Kentucky’s sake. We were at least hoping to have a discussion.”

He said later that the impact of the delay is a concern, because interest rates could be higher and impact toll rates if the Ohio River Bridges Project Joint Board continue to delay the decision.

“I would like to make sure we as a body understand the importance of moving forward on the tolling body resolution at some point very, very soon because delays in that process could create increases in interest rates for Kentucky’s financing,” Hancock said. “It could result in potentially higher toll rates if we don’t address that very, very soon.”

Indiana Department of Transportation Spokesman Will Wingfield said the delay is to allow Indiana to update the development agreement signed last year.

“We had to basically draft these interlocal agreements to sort of set the basis for how everything is working, but that all was done before the procurement, before we had the traffic and revenue study, before a lot of these developments occurred,” he said. “Now that we’re a year into it, now that we’ve made a lot of progress, it needs to be updated.”

He added Indiana was not able to get the update ironed out in time for Thursday’s meeting, hence the delay.

Last week, the Kentucky Public Transportation Infrastructure Authority received the final report for its traffic and revenue study. According to the news release sent out with the study, the information returned, and the initial toll rates, provide the essential information that financial investors will need when Kentucky sells bonds this fall to complete its financing and is also necessary to seek federal Transportation Infrastructure Finance and Innovation Act —TIFIA— loan financing.

The all-electronic tolling that the project planners will employ would use either an electronic transponder or video camera that takes a picture of the vehicles license plate to collect the toll rate for crossing the bridge.

While the toll rates long-targeted for the project remained the same in the authority’s report, changes were made last week to the rates for those drivers who do not have transponders or who have not signed up with a pre-paid account.

In addition to a $1 toll rate each way for frequent commuters, $2 for cars, $5 for box and panel trucks and $10 for tractor trailers remained in effect for those with transponders.

However, the study assumed higher rates for motorists who don’t use transponders, but who have pre-paid accounts at $3 for cars, $6 for medium trucks and $11 for heavy trucks. For motorists who don’t register and establish accounts, the assumed rates were even higher at $4 for cars, $7 for medium trucks and $12 for heavy trucks.

In addition, “to keep pace with inflation, the study assumed that the rates will increase by 2.5 percent annually,” according to the release.

Wingfield said the delay was not a reflection of the changes presented in the traffic and revenue study released last week. He added that there are no changes on the table for revenue collection or the 50-50 split between the two states for tolls collected.

After the two brief meetings, which saw the board ratify its bylaws, approve working with Computer Aid, Inc., who will serve as electronic toll advisor, and set a regular meeting schedule, Hancock again addressed the delay, but assured a tolling agreement would be reached soon.

“We’re going to get this done,” Hancock said. “It was a bit of a surprise to learn we weren’t going through this today. It’s a huge deal for all of us really. As interest rates go up, obviously over a 35-year term of a financing deal, that amounts to serious money. Whether that amounts to millions, I’m quite sure it probably is.”

He said that “unequivocally” within the next few weeks a tolling resolution should be passed.

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