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The Texas Department of Transportation is considering development of an unusually wide median area on the Texas 130 toll road near Texas 71 east of Austin, potentially leasing the land to investors to build and operate a gas station, store or restaurant that drivers could use without leaving the tollway.

Although such highway plazas are common in other states and overseas, it would be a first for Texas.

Though the idea is still far from reality, it has drawn critics. Anti-toll-road activist Terri Hall said such an initiative undermines free enterprise and would use once-private land, possibly obtained through eminent domain laws, to enrich the state.

TxDOT in June published a "request for information," asking interested companies to respond by July 25 with the outlines of what they might install and how such a lease with the state could be structured. An agency spokesman on Friday emphasized the preliminary nature of the initiative. A second, formal bidding process would have to occur before TxDOT reaches a deal.

"This is exploratory," TxDOT spokesman Mark Cross told the American-Statesman. "What they're looking to do is to find a way to increase the revenue and enhance the customer service along the tollway."

Cross said the agency is not considering a similar arrangement at any other place along Texas 130 or the other three Central Texas tollways owned by the agency. TxDOT, in its agreement with a private consortium to extend Texas 130 another 41 miles to Seguin, retained exclusive rights for this sort of development. That section of road should open this fall, officials said Friday.

State law allows TxDOT to lease land on its tollways for only a handful of uses: gas stations, garages, stores, hotels, restaurants, railroad tracks, utilities and telecommunications facilities and equipment.

The wide median was a staging area and concrete plant for the tollway's construction before that section's 2007 opening. Cross said it was envisioned as a spot for a possible toll plaza since construction of the road. The area is 2,875 feet long and 450 feet wide, or about 30 acres, the TxDOT document indicates.

The TxDOT solicitation includes a schematic, labeled "for illustrative purposes only," of what might end up in the median, including car and truck parking areas and a 19,000-square-foot convenience store and restaurant.

The document also touts the growing traffic potential of Texas 130, which six years after opening still has light traffic on its four lanes. The document includes maps showing 2010 daily average traffic along various points of the road, including about 20,200 cars and trucks a day at the potential development site. By 2035, TxDOT expects that traffic there will have more than tripled to about 77,500 vehicles a day, according to the solicitation.

About 215,000 vehicles a day pass through Austin on Interstate 35, according to a 2010 count.

The document points out that there are no similar facilities within four miles.

The Texas 130 corridor, with some exceptions near Pflugerville and the coming Circuit of the Americas racetrack, has been slow to develop. But David Roche, the managing principal and a retail specialist with Endeavor Real Estate Group, said he could see small-scale commercial development being successful at the location.

"Yeah, I think it would, providing you have some signage saying it's coming," Roche said. "I don't see a hotel there though. And if they ground-lease, they could stagger the payments so they're much smaller now and increase as the volume of traffic increases."

Hall, the activist who is from Comal County, characterized the possible facility as an improper intrusion of government into private enterprise. Any developers who might open shop in the median, she said, would have a competitive advantage over restaurateurs or service station operators who might hope to operate similar facilities on private land alongside Texas 130.

"Who's going to have that be financially viable when TxDOT has a captive audience, a monopoly inside the tollway?" Hall said. "TxDOT condemned that land. It was supposed to be in the public use for a road. But now TxDOT is getting in the development business, and is picking winners and losers.

"It may be the norm other places, but we see it for what it is. It's a threat to property rights on its face."

Chris Newton, president of the Texas Petroleum Marketers and Convenience Store Association, said his organization has generally opposed commercializing rest areas along highways. "We're obviously concerned whenever state government begins taking property used for a public purpose and considers how it could be used for a private purpose."

Cross, asked for a reaction to Hall's criticism, sent an email quoting a passage from the request for information that did not directly address the government-
private sector balance.

"The department is dedicated to providing a safe and efficient system of tolled highways," Cross wrote, "while ensuring the highest possible level of service and efficiency to its customers."

Railroad Commission favoring pipelines over Texas landowners

By Debra Medina - Houston Chronicle

Updated 08:39 p.m., Friday, July 13, 2012

"Only one candidate for Railroad Commissioner has the proven experience and ability to lead the agency and protect private property rights."

That is the opening line from one of Railroad Commissioner Barry Smitherman's re-election radio ads. The problem, at least from my perspective as an engaged citizen who has fought to protect private property rights in Texas for years, is that Smitherman has not lifted a finger to protect property from eminent domain.

Like his predecessors, Smitherman has presided over a Railroad Commission that has issued T-4 permits, rubber-stamping pipeline claims to common carrier status for any and all pipeline companies who check that box on the form. Those companies then turn around and use their T-4 permit as proof that they have been given the right of eminent domain by the Railroad Commission.

So exactly what has Smitherman or the Railroad Commission done to protect private property? Under Texas law, a pipeline is a common carrier only if it meets a number of strict criteria, but these T-4 permits are granted without any fact checking to determine whether or not the pipeline in question meets those criteria.

Published: 8:48 p.m. Sunday, July 15, 2012

Last year's drought caused cracks to form in the asphalt in several sections of the still-to-open southern 41 miles of the Texas 130 tollway, causing millions of dollars in damage.

The private consortium that is building the road — and will run it for the next five decades as part of an agreement with the Texas Department of Transportation — has been tearing up and repaving stretches of the road between Mustang Ridge and Seguin. The rehabilitation work, under way since the spring, will cost as much as $30 million, said Chris Lippincott, a spokesman for the State Highway 130 Concession Co., but it will cause minimal or no delay in the road's opening.

The lease contract with TxDOT requires that the road be open by November, Lippincott said.

"We'll be open ahead of that," he said. The company, still working on frontage roads and toll facilities as well as the rehabilitation work, is probably a month away from announcing an opening date, Lippincott said.

The consortium and TxDOT signed the long-term lease in 2007, and construction began in 2009. The four-lane tollway is flanked by two-lane frontage roads between Mustang Ridge and Lockhart because it overlays what was U.S. 183, and then does not have continuous frontage roads as it runs around Lockhart's west edge and then onto Interstate 10 near Seguin.

The construction cost, which the company had said late last year would be $968 million, now will be about $1 billion, Lippincott said. The overall cost of the project, counting engineering, right of way costs and an initial $25 million concession payment to TxDOT, will be a little more than $1.3 billion, he said.

The consortium, led by Spanish toll road company Cintra and a subsidiary of San Antonio-based Zachry Construction Corp., is paying all of those costs, including the added $30 million. It will split toll revenue with TxDOT over the life of the lease, with TxDOT's share increasing from a few percent to as much as half as traffic grows on the road over the years.

Texas 130 lies over the Blackland Prairie section of the state, known for its clay-rich soils and their tendency to expand in wet periods and contract in drier times.

The problem, Lippincott said, "was neither faulty workmanship nor faulty design. What happened was a historic drought."

The company's inspectors first detected the cracks last fall, he said. The work involves not only replacing broken pavement, but also changing the substructure of compacted soil beneath to create moisture barriers with impermeable layers.

"We're going to keep the wet parts wet and the dry parts dry at the subsurface level," Lippincott said.

The company in some cases is reworking soil and pavement where no cracks had been found because pre-construction soil sampling had indicated those areas have heavy clay content and could be prone to similar damage in the future.

"For us, this is the stitch in time that saves nine," Lippincott said. "We're making these changes now so that in a year or three from now we don't have to put up orange barrels, slow the traffic down and go fill the cracks."

AASHTO opposes federal power grab on tolls

In testimony this week on Capitol Hill the states' highway lobby AASHTO (Association of American State Highway and Transportation Officials)  argued against Senator Frank Lautenburg's so-called Commuter Protection Act, S2006. Speaking for AASHTO North Carolina DOT head Eugene A Conti said enactment of the bill would add great uncertainty to financing of toll projects and discourage states and local authorities from advancing projects that would have to gain federal clearance for toll rates.

"(T)he loss of tolling agencies’ ability to set their own rates would have a deeply unfavorable effect on their credit ratings, increasing the cost of capital and making it harder for such agencies to borrow money through issuances of bonds for much needed capital improvements, maintenance and other essential services."

In addition S2006 would discourage use of toll-financed public-private partnerships (PPPs):

"Instead of granting maximum access and flexibility to a mix of funding and financing tools most appropriate for each state including toll-based PPPs, Congress would create new impediments to private investment through this legislation."

Conti said the states agree that "federal limitations should be removed" that hamper use of tolls for reconstruction within the tolled corridor. At present only three states of 50 are able to use tolls in this way under the very limited "pilot program" outside of bridges and tunnels.

The AASHTO submission says the traditional highway trust fund financing is "at a crossroads" with flat or declining revenues and increasing difficulties obtaining other funding. The deficit relative to existing inadequate federal grants of $90b/year is put at $13b/year by the Congressional Budget Office.  National Surface Transportation Policy and Revenue Study Commission had projected future federal investment needs at $225b/year, almost three times the yield of current gas tax revenues.

Conti: "In recent years, with the growing gap between highway investment needs and available revenues as well as the development of easy-to-use automated toll collection technology, toll roads and toll lanes have once again become an important means for financing investment in new highway capacity—in the last decade about one-third of all new limited-access lane miles built in the United States were tolled; in states such as Texas and Florida, the share is even higher."

The AASHTO submission said currently, there are more than 270 state and local toll roads, bridges, and tunnels in 32 states, totaling 5,541 miles of roadway.

Toll revenues nationally are around $11b/year.

Rough economic times for tollers worldwide

The Wall Street Journal has a p1 headline "New Signs of Global Slowdown" and a "darkening" economic outlook around the world. Today's news in the US is merely of drop in capital goods orders, the second monthly drop. But economic data from around the world while not dramatic is remarkably consistent in pointing to a new slowdown in economies virtually around the world.

Economic Cycle researcher Lakshman Achuthan cites for the US:

- coincident indicators, all major broad measures (output, sales, income and jobs) are all turning down together, a sign that "a recession is at the doorstep"

- income growth lower than the level of the last ten recessions

"We have 223 years of business cycle history, we have had 47 recessions, and we have the hope that if the Fed can print enough money we can stave off the 48th recession, but the odds are not in our favor."

The elections six months off make any kind of intelligent response by the federal government more difficult.

Europe of course is in the throes of the biggest challenge to the Euro in decades with likely defaults by Greece and possible other countries.

China a former growth leader looks increasingly weak as it struggles with vast inventories of empty housing and  commercial buildings and underutilized infrastructure - with financial crises likely to follow.

Brazil the biggest economy in South America has seen a contraction every month this year.

Fuel costs down

One of the few bits of good news is the major decline in world oil prices in the past few months - 15%. Gasoline and diesel are on the way down too of course. 

But that may reflect weak demand as much as improved supply. And to the extent the big oil price rise last year was driven by hedging and speculation about war in the Persian Gulf, these prices could go up again too.

VMT weak

Of direct interest to tollers vehicle miles traveled (VMT) are bumping around month to month but the so far the basic trend seems to be flat, or even a tad down.

From mid 2010 through mid-2011 there seemed to be faint signs of recovery, but since then VMT has dropped again slightly.

Recently released INRIX data on the 150 most congested urban corridors in the country showed an approximate 1% drop in traffic 2011/2010.

The latest FHWA figures - a moving 12 months VMT total - shows US drivers still well below the 3 trillion vehicle-miles figure reached in the years 2006 and 2007.

The high in driving was 3,039b November 2007. In March this year we were 3.24% below that and since October last year we've been at least 3% below every month.

For a good period now the FHWA numbers and the INRIX data mesh, showing us now down a bit nationally on 2010, when we got within 2.5% of the Nov 2007 high.

With the economy so weak probably the best to hope for is an essentially flat trend line for the foreseeable future.

CHICAGO — As Indiana spends down $3.8 billion generated by its 2006 lease of the Indiana Toll Road, the state has a series of new public-private partnerships in the pipeline that underscore its continued reliance on the technique to provide financing for transportation infrastructure projects.

As of this year, all of the remaining cash from the toll road lease to a private consortium — $1.7 billion — is earmarked for ongoing projects, and officials plan to rely on other P3s to help finance transportation projects in the future.

The Hoosier State has three major privatization deals in the works under a P3 program launched by Indiana Department of Transportation for the state’s largest infrastructure projects.

The transactions include the state’s participation in a bi-state effort with Kentucky to build a new $2.4 billion bridge spanning the Ohio River, a planned 47-mile expressway that connects to Illinois, and a major revamp of a highway that runs north of Indianapolis.

On the local side, the city of East Chicago, Ind., recently inked a deal with a private company that will create the state’s only privately owned toll bridge to replace a failing span that was shuttered in 2009.

“Indiana has tried to position itself as being innovative with regard to leveraging private capital for infrastructure,” INDOT spokesman Will Wingfield said. “It’s very important in the current economic climate that Indiana makes it clear to the private sector that Indiana is open for business and interested in engaging in these types of innovative deals that help improve transportation for Hoosiers.”

Gov. Mitch Daniels, who will leave office in January, has been one of the biggest cheerleaders for P3s throughout his years in office.

Read more here.

Link to article here.

The $6 billion Dulles Rail project has been the subject of controversy for high toll rates, delayed construction, and union favoritism that could send jobs to out-of-state firms. Republican officials trace the source of the problems to Kaine, who ceded the Virginia toll road to the Metropolitan Washington Airports Authority (MWAA) in 2007.

“It was Tim Kaine’s decision as governor that turned management of the Dulles Rail project over to the Metropolitan Washington Airport Authority (MWAA) in the first place,” Delegate Tim Hugo said in a statement. “The rising costs, the jobs lost to other states, and the ongoing mismanagement of this project are the result of Tim Kaine’s bad decisions.”

The news worsened Tuesday when the Department of Transportation’s inspector general released a scathing report on the MWAA, detailing a culture of secrecy, lavish spending, and potential corruption.

The audit found that MWAA’s 12-member Board of Directors, appointed by officials in Virginia, Maryland, and the District, operate outside of federal regulations, allowing them unlimited use of taxpayer-funded travel with limited accountability.

Federal employees are restricted by a per diem when travelling on business, while MWAA members face no such threshold. The board members took advantage of this loophole, according to the report. Taxpayers footed the bill for a number of over-the-top expenses, including a $238 reimbursement for two bottles of wine, $4,800 for three meals in Hawaii, and a $9,200 plane ticket for a trip to Prague.

The MWAA board operates in the dark, awarding a slew of no-bid contracts, some of which could violate conflict of interest statutes imposed on federal agencies.

One member awarded a $100,000 contract to his wife’s law firm without soliciting competitive and open bids to the work.

“This certainly falls short of industry standards,” Virginia Delegate Barbara Comstock said. “They continue to make exemptions for themselves and they aren’t being supervised.”

U.S. Rep. Frank Wolf (R., Va.), who called for the inspector general’s audit in March 2011, said he was not surprised by the report.

“There’s ethical lapses, contractual lapses all over the place,” Wolf said. “There is much more to be disclosed.”

The $100,000 law agreement was no ordinary conflict, according to Wolf. The board hired the law firm in an attempt to dodge a federal law passed in November that reauthorized MWAA with a provision to expand the board, allowing Gov. Bob McDonnell (R., Va.) additional appointments.

The MWAA resisted when it appeared that McDonnell’s appointments would reverse the pro-union mandate.

“We passed a bipartisan bill signed by the president on Nov. 18 and they hired a lawyer to contravene the will of Congress and the president,” Wolf said.

That is not the only conflict of interest at MWAA, according to Virginia lawmakers.

Kaine appointed Dennis Martire, a vice president of the Laborers’ International Union of North America (LiUNA), to the board. Martire has pushed openly for a Project Labor Agreement, which would mandate union rules for construction. Such an agreement could preclude Virginia companies from competing for the job, since only 4.6 percent of workers are unionized in the right-to-work state.

Workers represented by LiUNA have obtained several MWAA contracts. And though Martire recused himself from voting on the issue, he helped draft the PLA policy and remained in the room as other board members took up the vote.

The project ran $150 million over budget in the first phase of construction and Virginia is pressuring the MWAA to allow McDonnell to replace Kaine’s appointees on the board. McDonnell suffered a setback Monday when Virginia’s General Assembly rejected his bid to withhold funding from the project until the board allowed new appointments.

“[The report] seems to validate many of our grave concerns with the governance and decision making within this vital transportation entity,” McDonnell spokesman Jeff Caldwell said. “This is why Gov. McDonnell has been calling for substantial reforms and additional representation from Virginia to influence decisions by this entity.”

Martire’s fellow directors have stood their ground on the use of unionized labor.

“We aren’t changing anything,” authority member Bob Brown told the Washington Examiner in March. “We’re going to tell Virginia they should live up to the deal they made.”

Republicans are using that argument as a battering ram, saying that the “deal” belongs to Kaine rather than to the taxpayers of Virginia.

“That is Tim Kaine’s legacy … the costs are all on Virginia; we want people on there working with us rather than attacking us and working against us,” Comstock said. “These board members and union workers don’t have to live here and pay taxes and pay the tolls; they just get here, take the jobs, and leave.”

Costs could be passed onto Virginia drivers in the form of higher tolls. MWAA has weighed its maximum potential toll—the highest rate budgeters feel can be charged on a road without losing drivers—to $7 in 2013, up from $2 in 2005.

The Kaine campaign did not return calls for comment.

Wolf is calling for a permanent inspector general to oversee MWAA operations. Transportation Sec. Ray LaHood is considering the possibility of appointing a staffer to watch over daily operations at the agency, according to sources with knowledge of his intentions.

The inspector general expects to finish its audit by January 2013.

Link to article here.

Texas isn't ready for bigger ships from Panama Canal expansion

Gordon Dickson | The Fort Worth Star-Telegram

May 28, 2012

Trucks used in oil, gas drilling take $2 billion toll on Texas roads, officials estimate

By Christina Rosales
This email address is being protected from spambots. You need JavaScript enabled to view it.
8:19 am on July 3, 2012 | Permalink

Photo by David Woo/Staff photographer

The surge in oil and gas production in the state has created thousands of jobs for Texans and has gushed forth plenty of tax revenue. But those aren’t the only effects, reports the Fort Worth Star-Telegram.

Drilling activity has put a strain on the state’s roads and the Texas Department of Transportation told officials they would need about $2 billion to bring them up to standard. And that’s just farm to market roads and local road, not state and interstate highways.

Although most of the gas wells are located in Tarrant County, drilling trucks are using roads around Dallas-Fort Worth. It  takes an estimated 1,200 loaded trucks needed to bring one gas well into production, according to the Department of Transportation. That’s about the equivalent of 8 million cars driving on the roadways.

According to a Corpus Christi engineer’s study, a typical county road should last about 20 years but “all it takes is one pass of 6 million pounds of drilling equipment to destroy a road like that,” David Underbrink Sr. told the Star-Telegram.

According to the Star-Telegram’s story, a task force of elected officials, industry representatives and public safety officials met recently to discuss the problem. The group plans to make legislative recommendations “to address what has become a statewide infrastructure problem,” the story says.

County judges say some oil companies do provide compensation when they drill a new well. The cash allows for counties to maintain roads but other companies do not provide the money.

“‘Who should pay for it?’ That’s the kind of questions we in the industry are asking ourselves,” said Deb Hastings, executive vice president of the Texas Oil and Gas Association, which has a committee dedicated to transportation issues. “We do pay billions in taxes already. How that’s funneled to local governments, that’s the question.”

For more details, read Barry Shlachter’s story on the Star-Telegram’s website.

In the latest scheme to separate residents from their hard-earned dollars, High-Occupancy-Vehicle (HOV) lanes are now being converted to High-Occupancy-Toll (HOT) lanes in Southern California.

Two freeways in Los Angeles County are about to begin charging motorists toll fees if they want to use the carpool lane. Despite being originally portrayed as including more than one person in the vehicle, carpoolers now must have a minimum of three people to qualify for "free" travel in the carpool lanes during peak commuting hours. Additionally, regardless of the amount of people in the vehicle, all autos travelling in the toll lanes must have an RFID transponder device installed in their car starting in October 2012. ["Those vehicles that are carpooling and meet the minimum occupancy requirements will not have a toll deducted from their account"]. Carpool lanes were initially implemented during the presidency of George H.W. Bush, after he signed two federal laws to "specifically encourage states to consider, and implement, if feasible, HOV lanes".

The L.A. Metro website states "The Metro ExpressLanes Demonstration Program is primarily funded with a $210 million congestion reduction demonstration grant from the U.S. Department of Transportation (USDOT)".

The two freeways affected will be the I-10 from I-605 to Alameda St and the I-110 from Harbor Gateway Transit Center to Adams Bl.

Among the stated "Program Goals" are to "Test strategies to alleviate congestion, Fund additional transit alternatives, Maximize freeway capacity usage, Increase travel time savings, Improve trip reliability and safety & Reduce air pollutants and greenhouse gas emissions".

The toll rates will range from $0.25 to $1.40 per mile and "will vary within the range based upon demand", promising to ensure a minimum speed of 45 mph to participants. Not willing to be accused of revenue-generation, the state adds a caviat that "The maximum toll represents a price to discourage more entry rather than generate additional revenue."

The main page claims "The average toll for Metro ExpressLanes during the peak period (end to end) will be $6 for the I-10", yet digging deeper into their website, another page in the labyrinth of charts admits that the "Avg Trip on I-10 is 9 miles", which at a peak charge of $1.40 per mile would equal more than double that, $12.60. For a commuter travelling west and eastbound in the morning and evening during peak hours, that would total over $25 per day, or $126 per week.

The Overall Program Budget is $290 million. Some "customer benefits" alleged are "saves time, reduces green house gas emissions, metro carpool loyalty program", and "new expansion bicycle lockers". The loyalty program promises that "Carpools and vanpools are automatically entered into monthly drawings for gift cards each time they use FasTrak." The Green Fact Sheet" portion of the website boasts that the program "promotes bicycle, pedestrian, and transit, healthier air", and "reductions in both smog and toxic air contaminants". It is beyond absurd to contend that commuters would switch to riding a bike to work in Southern California.

Consistent with the cashless Big-brother tracking ideology, cash customers will be penalized and charged nearly double to set up their accounts; $40 to set up the account with a credit/debit card, but $75 to set it up using cash:

"What does it cost to set up a pre-paid FasTrak account?
Credit/Debit Card Accounts: An initial prepaid toll deposit of $40 per transponder is required to open an account. The $25 transponder deposit will be waived.
Cash/Check Accounts: An initial prepaid toll deposit of $50 per transponder and a per transponder deposit of $25 will be required to open an account."

They claim that the program will be available to all income levels, but the only discount is that for the initial setup, not for toll charges. Also, the measly discount only specifies as applicable to residents of L.A. County, leaving out a huge number of commuters who drive into L.A. daily from the nearby counties of Orange, San Bernardino and Riverside. ["Residents of Los Angeles County with an annual household income (family of 3) at or below $37,060 will qualify for a $25 credit when they set up their account. This credit can then be applied to either the transponder deposit or pre-paid toll deposit. The monthly $3 account maintenance fee will also be waived".]

As with all revenue schemes, the police aren't far behind, with "a combination of visual monitoring by California Highway Patrol (CHP) vehicles" and "photo enforcement". A myriad of punitive and excessive fees accompany the revenue officers, including a $3 Monthly Account Maintenance Fee, $25 Credit Card Declined Fee, $25 Returned Check Fee, $25 Negative Balance Fee, $25 Forced Account Closing Fee, and $25 Failed to Return Transponder in Good Condition Fee.

The Metro FAQ page, in response to the question Aren't tolls just another tax? replies

"No. These are optional tolls, and the choice is yours. Unlike a tax that everyone pays, only the drivers that do not meet the minimum occupancy requirements who choose to use a toll facility will be charged a fee. Solo drivers have the option to use the existing general purpose lanes toll-free, or pay to use the toll facility if better mobility and more reliable trip times are desired".

Link to blog post here.

Eminent domain: The next big bail-out
By Tyler Durden
July 5, 2012
Zero Hedge.com

It seems that governmental efforts to save the underwater and ineligible homeowner from his own fate are reaching fever pitch. Not only do we hear today of the up to $300mm in Agriculture Department Rural Housing Service loans that may have financed ineligible projects or borrowers with a high potential inability to repay the loans; but yesterday's WSJ reports on the growing call for 'eminent-domain' powers to be used by local government officials in California to stop the "housing bust's public blight on their city". In yet another get-out-of-jail-free card, the officials (helped by a friendly local hedge-fund / mortgage-provider) want to use the government's ability to forcibly acquire property to remove underwater homes, restructure the mortgage (cut principal), and hand back the home to the previously unable to pay dilemma-ridden homeowner.

Following last week's bankruptcy in Stockton, it seems cities are increasingly desperate as they reel from the effects of the housing bust - willing instead to use government funds (provided by the working and mortgage-paying taxpayer) to bailout the underwater (and likely not paying anything at all) homeowner. As PIMCO's Scott Simon puts it: "I don't see how you could find it anything other than appalling", as this would crush property prices further and drive up borrowing costs. As we noted earlier, until these mal-investments are marked to market, there will be no useful growth in our credit-bound economy but transferring wealth to the 'mal'-investor seems like a terrible idea.

A project to build two express toll lanes on MoPac Boulevard (Loop 1) got a little closer to a six-month, $130 million jump-start on Monday night when the Capital Area Metropolitan Planning Organization board agreed to allocate that money to the toll agency behind the project.

The Central Texas Regional Mobility Authority will use the funding to build a toll lane on each side of MoPac from Lady Bird Lake to Parmer Lane. Earlier this year, officials estimated that the 11-mile project would cost about $200 million in construction expenses.

The funding agreement still needs to be approved by the Texas Transportation Commission to take effect.

Under the agreement approved Monday, CAMPO will allocate the mobility authority the $130 million for construction of the express lanes. In exchange, the mobility authority will repay the money by establishing a regional infrastructure fund, into which it will pay $230 million over 25 years. CAMPO would use that money for other area road projects.

Under traditional financing methods, officials estimated the total cost for the toll lanes would be $544 million.

The terms approved Monday differed from a previous proposal when the toll agency suggested paying the money back over 22 years at 3 percent interest.

Some CAMPO board members later suggested that the interest rate was too low and that the payoff too slow. At the time, Mike Heiligenstein, the mobility authority's executive director, said the agency welcomed discussion of changes.

CAMPO Executive Director Maureen McCoy said the basic terms of the agreement were negotiated in advance of Monday's meeting. CAMPO's website cited benefits from the agreement, including lowering the cost of development to allow for flexibility in toll rates and keeping project revenues local rather than making payments to out-of-state bondholders and lenders.

"This agreement we've negotiated keeps all funding local and allows the region to avoid $314 million in cost over the life of the project; those are savings that directly benefit Austin commuters," Austin Council Member Sheryl Cole said in a statement.