ARLINGTON - A majority of the Regional Transportation Council members expressed a “keep it local” sentiment by an almost 3-to-1 margin Tuesday afternoon in tapping the North Texas Tollway Authority as their preferred builder of State Highway 121.
Twenty-seven members voted for NTTA’s proposal, with 10 members, including Ellis County Commissioner Ron Brown, voting against the local tollway authority.
Losing out to NTTA on the toll road project that will serve Denton and Collin counties was the private sector, foreign-based proposal put forth by Cintra/JPMorgan Fund and supported by RTC and Texas Department of Transportation staff members.
During a four-hour discussion, the RTC’s council members debated a number of issues back and forth, with representatives of the accounting firm PricewaterhouseCooper addressing varying financial aspects of the two proposals. Representatives of Cintra and NTTA also made brief presentations and answered questions left over from a workshop meeting last week.
NTTA board chairman Paul N. Wageman urged support of his agency’s proposal, saying the profits expected to be accrued by private investors under the Cintra proposal — estimated at a minimum of $700-plus million — should instead go to the public’s benefit.
“This is a great project that enhances our ability to do more,” Wageman said, noting the NTTA’s interest in doing other roads envisioned under the RTC’s “2030 Plan.”
As part of the discussion, PricewaterhouseCooper presented a “normalized base case” comparing the two rival proposals. The scenario provided a comparison of NTTA’s upfront payment of $2.4 billion and annual payments of from $600,000 to $700,000 to the RTC, with the Cintra proposal, which would provide a $2.1 billion upfront payment and annual payments of $700,000.
A “public benefit” of from $200,000 to $300,000 would be seen under the scenario from NTTA, according to PricewaterhouseCooper, which noted Cintra would pay $500,000 under an interoperability agreement to NTTA as well as $100,000 in federal taxes.
Adding the figures together, the accounting firm estimated an annual financial value capture of from $3.2 to $3.4 billion for NTTA as compared to $3.4 billion for Cintra.
PricewaterhouseCooper’s representatives, who also provided upside and downside scenarios based on greater than or less than the base numbers used, expressed concerns over a lack of guarantees with the NTTA proposal as well as its not meeting criteria set forth by TxDOT and already agreed to by Cintra.
“The key is for you to understand who carries those risks,” said Arthur Baines, the accounting firm’s representative.
Michael Morris, transportation director for the North Central Texas Council of Governments, presented a summary sheet on the two proposals, saying he felt several risks were higher with the NTTA proposal - and that the risks would be borne by the public under NTTA’s bid as opposed to the private sector under Cintra’s.
Texas Department of Transportation Dallas district engineer Bill Hale, who sits on the RTC board and voted against the NTTA proposal, said it was his understanding the federal highway administration would probably ask for $200 million back that has already been used in a portion of the roadway because regulations had not been followed in the bidding process.
NTTA had entered the bidding process late and after recent state legislative action.
RTC board member Wendy Davis, a Fort Worth City Council member who voted against NTTA, noting the tollway authority “had the benefit of Cintra’s numbers.”
A loss of credibility in the process was among the concerns expressed by Davis, who said the private sector might be driven away from the table as a result of the direction the process had taken.
“We cannot gamble. This body cannot gamble,” said RTC board chairman Cynthia White, a Denton County commissioner who voted against NTTA. White said Cintra’s bid was the one with a guarantee in the face of “too many variables out there.”
As did several others, however, Plano City Council member Loretta Ellerbe - who voted for NTTA - said she felt the local tollway authority was a known agency to work with as opposed to Cintra, which is now looking to expand its operations into Texas.
During a previous presentation to the RTC, Cintra cited almost 40 years of experience and said its operates 1,240 miles of toll roads around the world, of which 230 miles are in the United States and Canada. Its major North American operations are located in Indiana, Chicago and Toronto, according to the information.
During the recently concluded legislative session, toll roads and transportation funding were hot issues, with a compromise of sorts struck among the various interests in Senate Bill 792, transportation legislation that was passed and signed into law by the governor.
“I don’t see how we can be responsible and not follow the Legislature’s directive and choose NTTA,” Ellerbe said.
Dallas City Council member Bill Blaydes, who voted for NTTA, said his preference was to see the money involved stay in the region as opposed to leaving in the form of profits to private investors elsewhere.
“I would far rather be dealing with someone here than across a Great Lake or in some other country,” Blaydes said.
John Murphy, mayor pro tem for the city of Richardson, said the competition between the two proposals had moved the RTC from a situation of “Where will we get the money?” for road projects to one of “Show me the money.”
“I think the numbers before us are awesome and we’ve got an opportunity,” said Murphy, who voted in support of NTTA. “I think we ought to grab the brass ring while we’re here.”
Several members voiced opinions the RTC shouldn’t turn its back to the profits Cintra expects to make if it were to receive the bid.
Joe Jaynes, a Collin County commissioner, said Cintra’s profits could range from $700-plus million to possibly $5 billion across the proposal’s 50-year lifespan.
“I’d hate to see our kids and grandkids come back and ask us why we left all of this money on the table,” said Jaynes, who voted for NTTA.
The matter now goes before the Texas Transportation Commission, which has final say on the bid. The commission meets June 28 in Austin.
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