Ryan Releases Tollway Report; Calls for Refinancing Bonds
FOR IMMEDIATE RELEASE
March 30, 2000
SPRINGFIELD - Governor George H. Ryan today released a comprehensive study of the restructuring of the Illinois tollway system, but said that the first critical step toward meaningful reform of the Toll Highway Authority must be a refinancing of the agency's bonds.
In the interim, Ryan said the state would redouble its efforts to promote and expand the use of the tollway's "I-PASS" electronic collection system, a move that will reduce traffic congestion by moving vehicles swiftly through toll plazas. The I-PASS system, which eliminates the need for motorists to stop to pay a toll, is currently being used by 25% of cars using the tollway. By increasing the number of cars using I-PASS and expanding the program to include trucks, Ryan believes that congestion could be reduced significantly.
Ryan called on the General Assembly to restructure the Authority's bonded indebtedness this spring in order to eliminate restrictions in the bond agreements that sharply limit the Toll Authority's ability to change its operations.
In particular, the current bond agreements limit the Authority's power to close down toll plazas or to waive the payment of tolls during construction or peak usage when the plazas contribute to traffic tie-ups.
"This report contains more than 100 pages of analysis, options and suggestions to make the tollway more user-friendly and efficient and that's my long-term goal. This report will form the basis of the Toll Authority's future," Ryan said. "But, before we can proceed with any of the 22 options outlined here, we must give the Authority and the state more flexibility in operating the system. That starts with refinancing the bonds."
The report, written by Toll Highway Authority Executive Director Thomas Cuculich, notes that the current tollway bonds are set up under a "trust indenture" contract with bondholders that requires a specific level of performance by the Toll Authority, especially with regard to the amount of revenue the system collects. The trust indenture is designed to protect the bondholders and to make sure that the tollway system remains economically viable.
The trust indenture tightly restricts the Authority's ability to grant "free passage" at toll plazas, even if toll collections add to traffic congestion problems. The trust indenture also prevents the Toll Authority from closing down any toll plazas if those changes cost the Authority more than $2.8 million in net revenue each year. The current net revenue of the Authority is $189 million. This "cap" in the trust indenture effectively prevents the Authority from closing down more than one or two small toll plazas.
"Unless the tollway bonds are refinanced and these restrictions lifted, we can't even think of restructuring the system to make it more user-friendly," Ryan added.
Legislation necessary to accomplish the refinancing will be introduced this legislative session, and would pledge the full faith of the State of Illinois as additional security to the $354 million currently being collected from toll revenue. With this additional pledge a less restrictive trust indenture could be written that would give the Tollway Authority the necessary flexibility to operate and reform the current system.