Merger meets mild roadblock

Alicia Robinson

A long-anticipated consolidation of the San Joaquin Hills Toll Road

and the Foothill and Eastern toll roads met with another delay on

Thursday.

Members of the toll roads’ governing boards voted to put off until

April a decision that would finalize the merging of the toll roads’

operations. Officials have been discussing the merger for nearly two

years to prevent the San Joaquin Hills Toll Road from defaulting on

its debts. They also voted to create a subcommittee to explore

financial alternatives to the current merger proposal.

“Frankly, it’s clear to me that this consolidation is in the best

interest of Orange County as a whole, and I’m having a hard time

understanding the opposition to it,” said Newport Beach City

Councilman Gary Adams, also a member of the toll roads’ governing

boards.

The proposed consolidation allows the toll roads’ governing

agencies to sell $3.9 billion in bonds and restructure their debts at

low interest rates. The boards were expected to vote on the deal on

Feb. 12, but they postponed a decision so they could peruse an

independent report on financial aspects of the plan.

The San Joaquin Hills Toll Road and the Foothill and Eastern toll

roads are governed by separate boards, and a combined board was

formed when they began exploring the merger. On Thursday, each of the

two smaller boards voted to sell their toll roads’ assets, but the

combined board must still vote to acquire those assets to finalize

the merger.

If the larger board -- the Transportation Corridor System board --

had voted on the deal on Thursday, it wouldn’t have been approved,

said Adams, a member of the San Joaquin Hills and corridor system

boards. The subcommittee will meet before the regular March meeting

of the Transportation Corridor System board, spokeswoman Clare

Climaco said.

Most board members will probably attend the subcommittee’s

meetings, and the board will be briefed at the March meeting on the

subcommittee’s progress, Adams said.

The board could decide on the merger proposal at either its March

or April meeting, Climaco said. To go forward with the consolidation,

a supermajority of 16 of the board’s 21 members must vote to approve

the acquisition of toll road assets.

The independent report issued last week questioned the costs of

the proposed bond deal, but Adams said that didn’t give him pause. He

was ready to approve the deal last week, and the board should have

approved it on Thursday, he said.

“There’s a real problem because this is a delicate deal that had

many components,” Adams said. “It’s difficult to say whether or not

all the pieces will fall together like they have to two months from

now.”