Debt for south La. toll bridge being refinanced
By MELINDA DESLATTE
BATON ROUGE — The state will rework its debt payments for a south Louisiana bridge that has been riddled with problems to keep the tolls from rising beyond the current schedule under a plan approved Thursday.
The State Bond Commission agreed without objection to the $176 million restructuring plan for La. Highway 1 in Leeville, which opened in 2009 and is a key route for trucks heading to and from the oilfield hub of Port Fourchon.
The bridge, over Bayou Lafourche just west of Grand Isle, was built to improve a critical pathway used to haul offshore oil and gas to the rest of the nation. Toll revenue — particularly from large trucks in the oil and gas industry — was supposed to repay the borrowing costs to build the bridge.
But toll collections have fallen well below expected income levels and threatened repayment of a federal loan used to finance construction, unless the debt was restructured before December.
“What happens if we don’t do this?” asked Treasurer John Kennedy, chairman of the Bond Commission.
“You’ll have insufficient revenues to make the debt service. You’ll have a default,” replied Whit Kling, director of the commission.
Michael Bridges, undersecretary for the state Department of Transportation and Development, said the plan approved Thursday extends repayments for six years beyond what was planned, with the borrowing paid off by 2046.
Despite the extension, Bridges said the debt restructuring doesn’t increase repayment costs and keeps tolls from growing more than expected under an already planned increase schedule.
The current toll rate for most cars is $3 roundtrip, while the largest trucks are charged $15. The rates increase every five years.
Bridges said toll revenue should cover most of the repayment costs under the new plan, saying “it’s going to be very close to what’s needed.” Any shortages will have to be covered from the state’s general fund.
The refinancing uses $122 million in federal transportation loans and $54 million in public market bonds, which will be sold to investors for upfront cash. Officials said Louisiana received low interest rates and favorable terms in negotiating the federal loans.
“This is a wonderful deal. We’ve got to take it,” Kennedy said.
But the treasurer also said DOTD should go back to consultants who worked on the original construction plans to determine how toll income from truck traffic fell about 50 percent lower than their estimates.
Bridges said repeated hurricanes in the region delayed construction. He said the national recession, the BP oil spill and the federal government’s temporary moratorium on offshore drilling then lessened oil activity in the area.
Also, DOTD had problems with the installation of electronic tolling equipment and collection efforts, but the department said those problems have been cleared up and toll collections have improved.