Greenway Toll Increase Update

I've used this way in the past. It used to be quite scenic. How does the new contsruction traffic affect the trip time? I dumped this route b/c of the gravel trucks. When 28 is fixed it will be much better w/ Waxpool being the worse road. Is there a way to get to 28 w/o using 7, waxpool, the toll road or going to Belmont to Ox?

 

Homer - to be honest, I've only recently taken this route in post-rush hour (9:30-10am) and it's been no problem. I was behind a dump truck the last time and he was doing the speed limit so it was an ok trip.

 

They haul more than gravel. I'm worried about rocks. I already went through one windshield.

 

Below is a letter from Andy Farmer of the SCC.

I think he misses a few points which have been brought up here. 1) If the state acknowledges the need for the highway to manage traffic, why doesnt the state contribute funds like it would in any other "utility" or highway project. 2) Why is the TRIP II company approved to build yet another state approved toll road if it is clear it is underserving and over taxing the users of the greenway under the same business model? and 3) as mentioned, what is being done to reduce operational costs or find alternative revenue besides toll revenue?

the letter:


I would like to provide you with some background information on the toll issue in Loudoun County. The Virginia Highway Corporation Act of 1988 was passed by the General Assembly to provide for the construction of private toll roads in the Commonwealth and gave the SCC authority to grant certificates to projects that met the requirements of the Act and was approved by the Commonwealth Transportation Board. After the Commonwealth Transportation Board approved the project in July 1989, the SCC granted a certificate to TRCV (the corporate predecessor to the current operator, TRIP II) for the construction and operation of the Greenway, after finding the project to be in the public interest.

The Greenway is a private sector alternative to construction and operation of public highways. The impetus for the project was the need to accommodate population and employment growth in eastern Loudoun County. In late 1980s, the Virginia Department of Transportation stated that it had no plans to build a new highway in this corridor. The 1988 Act provided an approach that established a public "utility" model for the construction of a new road in a timely manner with no investment of state funds. That means the SCC sets toll rates and regulates the operator as a public service corporation similar to an electric utility or local telephone company.

The Code of Virginia provides that the SCC may adjust toll charges on the Greenway to a level that is reasonable to the users, will not materially discourage use of the roadway by the public, and which provides the operator no more than a reasonable return. In its review of the Greenway's application to revise tolls rates, the SCC staff concluded that it is in the public interest to complete needed improvements to the existing Greenway system, in effect, strengthening the highway infrastructure within Loudoun County.

The highway operator presented testimony that additional revenues are needed to complete capital improvements required by expanding traffic levels, meet debt service obligations, and ensure the financial stability of the company. TRIP II's audited financial statements indicated that it has experienced losses for every year since 1993 when roadway construction began.

The Greenway opened to traffic in 1995. Toll revenue is the company's only revenue stream (it receives no federal, state or local assistance). As a private entity, it also is subject to local taxation (approximately $2 million a year is paid to Loudoun County) and must contract with the Virginia State Police for the enforcement of traffic and safety laws. The company was not given the power of eminent domain and had to purchase all right of way for the highway at market prices.

The SCC found that the company's current revenue stream is adequate to pay its current operating expenses. However, rapidly escalating debt service requirements and payment of accrued interest will soon require additional revenue.

The SCC approved a revised toll structure that raises the maximum toll ceiling for cars to be phased in over a three-year period. The company has the flexibility to adjust tolls at or below the ceiling as the market dictates.

TRIP II is the certified operator of the roadway. The general partner of TRIP II is the Bryant/Crane family of Middleburg. The two limited partners are Kellogg Brown & Root of Houston and AIE, LLC. AIE, LLC is owned by the Franklin L. Haney Company which acquired its interest from Autostrade S.p.A., an Italian corporation. Autostrade International of Virginia, O&M, Inc., a subsidiary of Autostrade S.p.A., directly operates and maintains the Dulles Greenway.

VDOT and Kellogg Brown & Root have signed a comprehensive agreement to design and build the Coalfields Expressway in southwest Virginia under provisions of Virginia's Public-Private Transportation Act of 1995.

As for voting records of your elected representatives, I do not have that information from the 1980s when various individuals, organizations and elected officials supported the construction of the Greenway.

This summary gives you highlights of the major issues considered in this case. All of the information I have provided (an much more) is available on the SCC website (www.state.va.us/scc) in the "Case Information" section and search for Case #PUE-2003-00230. Please let me know if you have additional questions.

Andy Farmer

Education Resources Manager

State Corporation Commission

804-371-9928

afarmer@scc.state.va.us



scott shipm

 

In an MBA course way back in 1996, we looked at the Greenway as a case study - they were in serious financial trouble then as they had seriously underestimated ridership and were close to default on their debts. IIRC, they restructured and refinanced in 1999 at a much less advantageous bond rating.

I looked through some of the details on the SCC case site. It appears that TRIP II carries somewhere around $480 million in debt, with 2002 reveunues around $26 million. If they were to do nothing but pay off their debt, it would still take over 18 years. That assumes no money towards capital improvements, etc. I doubt that they are making much if any profit as a company.

I use the Greenway everyday, and don't like the idea of the proposed toll increases anymore than others have expressed. However, I don't see Richmond coming up with money to finance other much needed road projects in Northern Virginia, so I will most likely end up continuing to use it.

> 2) Why is the TRIP II company approved to build yet another state
> approved toll road if it is clear it is underserving and over
> taxing the users of the greenway under the same business model? and

As far as I can tell, TRIP II isn't - one of the partners is. Kellog, Brown and Root is a large construction company - building roads is what they do.

> 3) as mentioned, what is being done to reduce operational costs or
> find alternative revenue besides toll revenue?

Just curious - what alternative revenue sources do you think they could find?

 

Thanks Scott! This just shows how messed up VA is with the DOT. We are on our own. And if you didn't get it from the read this tracks with what I've been saying all along. The increase is to cover TRIPs mismanagement (i.e, the debt). The SCC is telling me that we have to pay more b/c TRIP could not secure lower loans during a record period of low interest rates? I've also seen maintenance being done on roads that didn't need any. And paying for the State troopers! Drop the speed traps then or at least the State could pick that up if it really cared about it.

This letter also says another thing. We have the power. If we boycott, the revenue will drop and they will have to lower rates.

I started the boycott last week. Join me if you can. I understand if you can't b/c the way traffic is around here some folks wouldn't be getting home for an extra half hour b/c of it but those who can, do it! Make TRIP think about what they are doing or it will only get worse as VA implements HOT lanes. This is setting a precedent.

 

26 million? No way. Not even close. In 2003 they had 65,000 vehicles per day. Let's give a modest 10,000 reduction for the year. 55,000.

And let's assume that 55,000 is paying an average of $2 in tolls (from cars to trucks). This is probably way way too low.

Even at $2 thats 110,000. Times 365 thats $40,150,000.

Just where exactly did you get $26 million from?

Today I'd bet they are taking in 150-200 million a year. 18 years to pay off their detb?

Try more like 4-5 years.

I don't buy this 'we're in debt and don't make enough money! spin at all.

---------------
Got Broadband?

 

It's the same thing as what's going on with BRMC. Out of the blue, some nimrod in Richmond approves the request in spite of local public opinion and prior denials. Doesn't take a rocket scientist to figure out what is really going on. This one's gonna backfire on 'em, though, because it's local people who use this yellow (gold) brick road, not out-of-towners, and we'll find another way to get around.

 

I addressed Andy Farmer on my questions...his response follows. I dont think its questionable that TRIP mismanaged the operations of the Greenway. The question I have now is "is a project like this conceivably profittable, and if so, can it be sold to an organization that will run it that way?" Its also worthwhile to explore with VDOT and Loudoun a demand for alternative revenue sources.

Responses to your follow-up questions:

1. TRIP II is not involved in any other highway project in Virginia. However, one of the limited partners, Kellogg Brown & Root is involved in a project in southwest Virginia. Kellogg Brown & Root (also known as KBR) in a huge international engineering and construction company, including projects rebuilding Iraq. Brown & Root (before it was known as KBR) was the general contractor for the Greenway.

2. The Greenway's approved financing plan is based on a series of taxable revenue bonds with toll revenue as the only means of repaying principle and interest. It cost approximately $350 million to develop and build the road. TRIP II's debt as of 6/30/2003 was approximately $532 million. Over the years the total debt has increased because revenues have been insufficient to pay operating costs, make capital improvements, and also make interest and debt payments. As a result significant debt obligations have been deferred. Any refinancing program would be subject to SCC review and approval. Any change in the pricing structure (rate design) to congestion pricing or distance pricing for the Greenway also would be subject to SCC review. TRIP II has a Comprehensive Agreement with the Virginia Department of Transportation and has a contractual responsibility to initiate needed improvements to the roadway to meet current and expected traffic demands.

3. Your third question should be addressed to your elected officials, transportation planning bodies in Northern Virginia and the Virginia Department of Transportation. The SCC is a regulatory body and does not participate in the development of transportation policy in Loudoun County. In the late 1980s, VDOT made it very clear that it had no plans to extend the Dulles Toll Road beyond Washington Dulles International Airport because of limited resources. Since that time the Virginia General Assembly explored many ways to supplement public funding with private sector investment for a more timely construction of large transportation projects. The Virginia Highway Corporation Act of 1988 that led to the Greenway was the first attempt at involving the private sector by using the public service corporation model. The General Assembly approved a different model in 1995 called the Public-Private Transportation Act (PPTA). It allowed tax-exempt revenue bonds and a different approach that provides no SCC regulation of the private operator. The 1995 Act was modified in 2000. The Pocahontas Parkway (Route 895) in Richmond is the first PPTA project finished in Virginia. It is a toll road only 8.8 miles in length with a $1.50 toll right now, going to $2.00 in August.

I hope this information addresses your questions:

Andy Farmer

scott shipm

 

The '80s were a long time ago. No one in Virginia had the forsight to see that NoVA would be the fastest growing area of the late 90's and early 21st century. VDOT stance has changed with the talk of the Western Transportation Corridor and w/ the Rt 28 improvements. This is not a valid excuse of what's happening today.

And that makes it all right? Haha! I lived in Richmond for many years and that highway is lightly traveled and THERE ARE MANY WAYS TO GET TO CHESTERFIELD W/O IT! Sorry to shout but that's amajor sticking point when it comes to the Greenway. And just before then 95 used to have a toll right before downtown and it was taken away. Seems that Richmonders dont want tolls either!


Again, thanks for getting more info, Scott!

 

More like new things to come so we can justify the price gouging to the SCC.

 

I would love to see MORE state troopers on the Greenway and toll road. Way too many speeders, tailgaters, and dangerous lane changers out there and don't get me started on the HOV violators!

 

I would rather see the cops going after real crime like, murders, cars being stolen, etc..

 

See http://docket.scc.state.va.us:8080/vaprod/DOCUMENTS.ASP?MATTER_NO=117729

Look about twelve entries down for:

TOLL ROAD INVESTORS PARTNERSHIP II, L.P. - RESEARCH REPORT REGARDING CREDIT PROFILE OF TRIP II ISSUED BY STANDARD & POOR'S DATED 12/31/03.

That's where the $26 million figure comes from.

 

Did you see how many letters opposed were posted? If you use the marketing rule of thumb where only 1 in 10 will complain the rest will just stop using the product the Greenway may just be in trouble.

And, just a thought that poped into me noggin. TRIP is is Toll Road INVESTORS Partnership. Isn't there risk in investment? Why should the state bail out investors? Why should the greenway guarauntee profit? Man I wish I was in on that scam.

 

Just b/c it's a law does not mean it is right or used as intendend.

Obviously it will deter people, its already happening. You must be on of the investors to get all riled, defending a price gouge that lots of folks on this forum don't like.

 

You've got a choice, folks. As I recall, when the Greenway first opened, it had some absurd price which they promptly dropped to $1.00 because no one used it. Herein lies another word of wisdom: "He who chooses to ignore the past is doomed to repeat it." They must think we have some really short-term memories. I really think these "investors" are the ones who have short-term memories. Or, they think we all are really that stupid.

 

FYI - an interesting article from the Economist on the future of toll roads

http://www.economist.com/science/tq/displayStory.cfm?story_id=2724381