NEW ALBANY — More questions were raised than answered at the latest Louisville and Southern Indiana Ohio River Bridges Authority meeting Thursday at Indiana University Southeast.

But what has become more clear in trying to determine a financing structure for the $4.1 billion Ohio River Bridges Project is that a steady revenue stream will be needed, multiple funding sources likely will be required and a tolling structure — though it is undetermined what that will be — is still very much in play.

An issue of legality also was raised following a decision made by U.S. Secretary of Transportation Ray LaHood on Tuesday, disallowing tolls to be placed on Interstate 80 in Pennsylvania, in order to fund another transportation project.



Legal issues?

A release issued Tuesday on LaHood’s decision said the move was declined because, “the application did not meet the federal requirement that toll revenues be used exclusively for the facility being tolled.”

Dan Borsch, a Louisville attorney and organizer of a local movement on Facebook called Say NO to Bridge Tolls questioned the legality of using tolls in the same manner — on the John F. Kennedy Memorial Bridge and Sherman Minton Bridges to help fund an east-end bridge and a directional I-65 bridge.

However, a discrepancy may lie in the type of federal program in which Pennsylvania was seeking its funding.

“The Interstate System Reconstruction and Rehabilitation Pilot Program requires that revenue from tolls be used only to improve the tolled facility ... and not be directed toward other state funding needs or transportation projects elsewhere,” the release said.

Whether or not funds received from tolling can be deferred to another program is dependent, said Nancy Singer, Federal Highway Administration spokeswoman.

“States do have options, [but] we have to see the proposal,” she said. “It is one program, but there are programs with other stipulations.”

Joe Prather, the bridge authority’s chairman, pledged the group would perform its due diligence.

“We will explore every opportunity and every avenue and in the end, obviously, it is our responsibility to act legally and we all take that to heart,” he said.

The first step for the bridges authority in ensuring legality is sending a letter of interest to the highway administration. Then, the authority would have to go back to Indiana and Kentucky, and the administration would help guide it to the program that best meets its needs, Singer said.

Meeting the funding threshold is still the prevailing task facing the bi-state authority.



Where’s the loot?

While tolling options are still at the forefront for the authority, no update on a specific plan from the four previously presented to the group was given or chosen. But funding the project solely using state and federal funding seems less and less likely.

“There is simply not enough money to get the job done that needs to be done,” said Regina McElroy, director of the Office of Innovative Program Delivery with the Federal Highway Administration. “One thing that we know for sure is the pay-as-you-go approach that we have been using to deliver transportation projects in this country simply isn’t enough — especially for large projects like the one you are contemplating.”

A combination of sources likely will be the final solution.

“You really don’t have enough revenue, currently, to get you where you need to be in terms of project delivery,” McElroy said.

Possible sources of federal aid include the Transportation Infrastructure Finance and Innovation Act program or Transportation Improvement Generating Economic Recovery, or TIGER, grants.

A second round of TIGER money may soon become available for transportation projects. The original TIGER designation allocated $1.5 billion. The TIGER II will be about two-fifths of the first amount doled out, about $600 million, McElroy said.

And when the grants become available, competition for the money is likely to be fierce.

“In the first round of grant money, we were only able to satisfy 3 percent of the requests, McElroy said.

Transportation Infrastructure act money would also not be a one-stop solution to obtaining federal money as the project must meet several provisions.

Developing a debt-financing agreement is another option, likely through a private and public partnership, that was presented to the bi-state authority. A finance agreement may help to defer some of the initial cost, but it also may cost the region more money in the long run.

“Project finance comes at a cost because interest is paid over the long term for the money that is borrowed today, but sometimes it’s worth the cost to get the project on the ground sooner than later,” said Tamar Henkin, a partner with the High Street Consulting Group. “Financing options included bonds, public-sector support loans, commercial-bank loans and private-equity contribution.”

In order to enter into a debt financing agreement, there is one major caveat.

“You have to have a revenue stream to pay back the money that you are borrowing today,” McElroy said.

According to Henkin, the revenue stream must be determined before the authority were to seek out any bonding or debt-financing agreements.

“The financing approaches can help, and they’re important in terms of facilitating investment, accelerating investment, but they’re not a substitute for the revenues,” she said. “You have to look at it as a package. If somebody says, ‘we’ll bond for that project,’ your next question should be, ‘how do we pay back the bonds?’”

The revenue stream’s most likely source is some type of user fees, broad-based taxes — such as fuel, sales or hotel tax — or development-based fees or taxes.

With the questions still hovering and no simple solution clear, the authority may cast a wide funding net.

“There is unfortunately any magic bullets in all of this,” McElroy said.



Public comment

Opposition to the project is not new, but the sentiment seems to be growing.

The authority was forced to limit the amount of comments made during the meeting, and only eight individuals of the 17 that signed up for the public comment period were given an opportunity to speak.

Prather said time would be allotted in the next meeting for those who signed up and did not get a chance to talk.

Support was apparent — as were examples — of alternatives to the two-bridges plan and the rebuilding of Spaghetti Junction being pursued.

Louisville architect Steve Wiser has been active in promoting an alternative to the project. Wiser’s concept includes building the East End Bridge, a new access connector for I-71 and I-64 and two local access bridges from Louisville into Southern Indiana.

Wiser has said his plan is possible within five years, without tolls and would cost about $1.4 billion.

“The majority of the community wants more bridges, not less, sooner, not later, with no tolls,” Wiser said. “There are reasonable alternatives. I say lets do it if this is a ‘possibility community.’ St. Louis was able to do it without tolls, let’s do it here as well.”

Louisville Mayoral candidates Jackie Green, an independent, and Tyler Allen, a Democrat, were on hand to support alternatives to continuing with the current plan.

Green focused his comments on developing public transportation and a rail system to answer the question of improving transportation infrastructure. Allen, who was a co-founder of the group 8664 — which proposes an alternative that would remove a small section of I-64 — focused on the price tag associated with the project.

“I implore you as a committee representing the citizens around this region not to treat this as a blank check,” Allen said. “We have pushed a project forward for years ... saying we must keep going on this juggernaut because we will lose federal funds, only to discover today that you all are looking at ways to make this community bear the burden of this entire project —particularly commuters in Southern Indiana.”

The scope of the project is something that has often been cited as a necessity in the area, given the congestion that inhibits drivers moving freely throughout the region. Possibly more importantly is the region’s place as central transportation zone for businesses, commerce, logistics and travelers.

But doing nothing was a better alternative for at least one person making a comment.

“Even taking no action an keeping the freeways free, better serves the mobility needs of our community,” said David Morse, president of the board for the Coalition for the Advancement of Regional Transportation.

Morse did comment that many of the alternative plans presented offer better solutions.

“So many people have mobility solutions that sound better than Ohio River Bridges, plus tolls,” he said.

********************

ON THE WEB

• Ohio River Bridges Project — kyinbridges.com

• Groups against tolls or with alternative plans:

— www.8664.org

— www.wiserdesigns.com



Facebook groups

• No tolls on Sherman Minton, or Kennedy Bridges. Ever.

• Say NO to Bridge Tolls