Orange County’s toll road agency is getting questioned by one of its largest member cities as Santa Ana Mayor Vicente Sarmiento this month publicly pondered abandoning ship — after San Clemente already did earlier this year.
Meanwhile, a new OC Grand Jury report on the toll roads, published Monday, has resurfaced one central question:
Does the Transportation Corridor Agencies (TCA)’s existence benefit the public anymore, or is the TCA dragging out its business and financial activities despite its original intent in the 1980s to eventually fold after paying off its road construction debts?
On one hand, the local toll roads — which are overseen by two governing agencies for two different regional sectors — are a traffic decongestion engine and an option to shrink commute times, if people are willing to pay.
On the other hand, the agency managing them has gone through its public purse paying for lobbyists, public relations and political battles over, for instance, its controversial efforts to pave an extension of the 241 toll route through San Clemente communities.
On top of that, toll-payers and developers with projects in TCA’s member cities are still forking over money to help fully pay off the bond debt incurred by the roads’ construction — something that isn’t believed to happen for another 30 years — and will end up paying more than it cost to build the roads in the first place, due to interest.
It was originally believed the full repayment would take less time. By 2040, at one point.
Now Orange County Grand Jurors, in a June 21 report, are again fueling questions of whether the TCA has outlived its purpose — and whether it will resist the temptation of millions in new toll revenue each year, whenever that debt is paid off, and make the roads free to honor the spirit of the TCA’s formation in the 1980s.
It’s the second year in a row that the Grand Jury opted to scrutinize the TCA.
TCA officials have said the bond debt underlying the roads’ construction won’t be paid off until 2053.
Even then, grand jurors in their report don’t think TCA will step aside:
“Although a debt-free TCA would be allowed to go out of business, there is no law requiring that it does. In fact, when asked by the Grand Jury about eventual shutdown of the agency, some in TCA management claimed to be surprised by the supposition. This new attitude is a complete reversal of the TCA’s public statements over the past three decades.”
Orange County Grand Jury
The report adds that TCA employees are primarily motivated to “defend the TCA’s financial status and (look) for ways to expand the scope and extend the life of the organization.”
TCA spokesperson Lori Olin, reached for comment, deferred to a statement the TCA prepared in response to the Grand Jury report.
“While the Agencies respect the Grand Jury’s opinions and analysis, the Agencies do anticipate correcting substantive items in a formal response to the Grand Jury’s report,” TCA officials wrote in the statement. The TCA has 90 days to respond.
For example, officials said, the report “fails to acknowledge the billions of dollars the roads provide as an economic driver for Orange County.”
“Our region’s transportation system is core to the quality of life we enjoy, making this one of the best places in the world to live,” the statement adds. “The tangible economic value transportation infrastructure provides should always be a consideration when reviewing the total cost of the investment.”
Even if TCA doesn’t fold itself, its member cities don’t have to stay in.
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Up north, the most high-profile elected official in Santa Ana is beginning to question how the city benefits from paying into an agency managing south county roads that are more or less disconnected from the central county commuter routes — where the freeways don’t cost anything to drive — most proximate to the city’s predominantly working-class population.
At a June 3 Santa Ana City Council budget hearing, Mayor Vicente Sarmiento wondered aloud “whether there is a benefit for the city to continue” being a part of the TCA.
“About $20 million has been paid by developers in our town to those agencies over these past years that we’ve been a member, and so I don’t know what benefits the city has received as a result,” Sarmiento said at the meeting.
What he said he did know, however, was that “those $20 million that developers have paid, have properties and businesses here, that could’ve been used for other community benefits in the city for these residents.”
He voiced interest in city staff looking into what the “tangible benefit” is in staying with TCA.
Sarmiento didn’t respond to repeated requests for additional comment as of Monday beyond his remarks at the budget hearing.
City Hall spokesperson Paul Eakins, reached for comment about whether the city is studying the idea, said over text: “There was no council direction related to this.”
“We provided some information to the mayor, but nothing is going back to the council at this time,” he said.
Sarmiento was talking about developer impact fees, which developers pay on top of what it already costs to get a certain project, like a residential development, approved by a TCA member city.
The city collects the development impact fees and sends them to TCA.
In their report, grand jurors said it also marks up the cost — and mortgage payment — to prospective homeowners, who grand jurors postulate may feel entitled to drive freely on a toll road but “would be disappointed.”
“All drivers on the toll roads pay the same charges, even if they also pay Development Impact Fees.”
Olin, asked about Sarmiento’s comments, in another written statement said “while the City has not contacted to discuss this topic, TCA values the participation of all of our cities, which became members under terms set forth by the Joint Powers Agreement.”
“It’s not for TCA to weigh in on proposed actions that a member city may or may not take,” Olin said, adding, however, that “we do think it would be unfortunate for any city to give up its voice on mobility issues affecting Orange County, in which TCA is a committed partner.”
Olin said each member city voted to impose these developer impact fees as part of their requirements for new development in their communities, but emphasized the fees don’t “come out of city coffers.”
“Cities do not pay DIFs unless they – as a city — develop land and/or property. The cities simply collect the fees from developers and remit them to TCA.”
Peter Garcia, a transportation equity advocate from Santa Ana, said it remains to be seen how many Santa Ana residents actually use the toll roads, “but I would think about travel behavior among the poor and how that may influence that decision (to leave TCA.)”
“The poor tend not to drive as much, especially not as much as the wealthy, and if anything there’s always the freeways,” he said, which are way closer to the city and don’t cost anything to use.
If Santa Ana leaves the TCA, it would join the seaside City of San Clemente, which already did so this year.
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In San Clemente, officials voted to leave the TCA’s governing boards in May.
The city and the TCA battled for years over proposed plans to extend the 241 toll road through San Clemente, which led to a lawsuit.
The TCA publicly backed off the proposed extension, instead committing to an extension of the toll-free Las Patrones Parkway.
But suspicions remain over TCA’s motivations, after it staunchly opposed efforts by state Senator Pat Bates to codify TCA’s commitment to step back from the 241 extension with a state bill.
Pursuing the project would require at least $1 billion in new bond debt issued by TCA, according to the grand jury.
Another planned future TCA project is the SR-91 Express Connector, which several transportation agencies will collaborate on, but TCA will pay for with $250 million, according to the Grand Jury report.
It’s argued that the project, which would connect two toll roads, will solve a traffic bottleneck, generate revenue and “further institutionalize tollway commuting in the region,” according to the report, which adds the project should be “accomplished in the next few years.”
“San Clemente did not join this agency to agree to perpetually charge tolls and perpetually incur more debt,” said Mayor Kathy Ward at the meeting where she and her colleagues voted to leave TCA.
She added: “San Clemente has one vote on each one of these boards. We alone cannot stop this agency from usurping it’s mission … We can, however, tonight use our one vote San Clemente has to get out of this agency.”
Councilmember Laura Ferguson opposed the move at the time:
“I truly believe we need to represent the voice of the people here. We have political powers staying on the TCA board and I believe we lose some political clout if we leave.”
Brandon Pho is a Voice of OC staff writer and corps member at Report for America, a GroundTruth initiative. Contact him at bpho@voiceofoc.org or on Twitter @photherecord.