State seeks loan to avoid doubling toll charge
State transportation officials said Friday they are trying to get a $174 million loan from the federal government to ease problems paying for a toll bridge in far south Louisiana.
Without the loan or other action, they said, tolls would have to more than double to pay borrowing costs.
“We don’t want to have that happen,” said Michael Bridges, undersecretary for the state Department of Transportation and Development.
Bridges made his comments to the nine-member Louisiana Transportation Authority, which oversees the bridge.
The $371 million structure, which opened in 2009, is on La. 1 in Leeville and crosses Bayou Lafourche, just west of Grand Isle.
It is on a key artery used to haul crude oil and natural gas supplies and is also relied on by fishing enthusiasts.
About 8,000 to 10,000 cars and trucks use the bridge daily.
Legislative Auditor Daryl Purpera said in a report earlier this month that the toll bridge is failing to generate enough revenue to pay for the structure.
The rate for most car operators is $2.50 per roundtrip.
It is set to rise to $3 on Jan. 1.
Without the federal loan or other steps, Bridges said, those tolls would have to rise to more than $5 to pay the borrowing costs.
Operators of most big trucks will pay $15 starting on Jan. 1, up from $12 now.
Without the loan or other relief, officials said, those rates would need to rise to $24 to pay off the debt.
Bridges said state officials are asking the federal government for a $174 million loan through a fund that assists state infrastructure projects.
If that request is approved, Bridges said, toll revenue will be able to retire the revamped debt.
“We want to do a long-term refinance,” he said after the meeting.
A similar loan, which totaled $141 million, was a key part of the state’s original financing plan in 2005.
However, the new loan would carry an interest rate of 1.5 percent compared with 4.45 percent now.
The new loan would consolidate the outstanding balance of some of the bonds and the earlier federal loan, Jodi Conachen, director of communications for DOTD, said in an email response to questions.
Bridges said the new arrangement would leave the state with a manageable payment schedule for the bridge.
State officials sought the loan on Oct. 12.
They hope for an answer by midsummer.
Bridges said the key problem is that truck traffic is 50 percent below predictions.
He said the national recession and the oil leak in the Gulf of Mexico were key contributors to that drop.
In addition, the state was only collecting between 70 percent and 80 percent of revenue owed because of toll problems.
Purpera said state transportation officials allowed up to 300,000 cars and trucks to use the bridge without operators paying. His report also said officials failed to send delinquency notices for 39,700 violations as required by state law.
Rhett Desselle, assistant DOTD secretary, said earlier this month that officials are now capturing about 95 percent of bridge traffic payments owed.
The Louisiana Transportation Authority approved a resolution that would allow DOTD officials to seek aid from the Legislature if officials are unable to pay the borrowing costs in 2013 and 2014.
Purpera said in his report that toll revenue generated $3.3 million for the financial year that ended June 30.
That is roughly what the state owes next year to help retire bonds used to finance the bridge.
Those borrowing costs are set to rise to $8.4 million, $7 million and $7.3 million in the following three years.