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Debate over future of Harris County Toll Road Authority

HOUSTON – Harris County Commissioners Court Tuesday approved a measure to restructure how the county’s toll roads are managed, clearing the way for changes to how revenue can be used, including using money for matters unrelated to transportation infrastructure.

Commissioners Court voted 3-2, along party lines, in support of the measure, which creates a corporation that will oversee duties currently carried out by Harris County Toll Road Authority, or HCTRA.

HCTRA, created in 1983 following a voter-approved bond referendum, manages all aspects of the county’s tolled highway system. The county’s oversight wouldn’t lessen under the change but the legal grip the state has on where revenue from tolls can be spent will, according to HCTRA.

A local government corporation, or LGC, will manage the county’s toll roads, under the restructuring. The LGC, according to a memo addressed to commissioners from Peter Key, HCTRA’s interim executive director, will contract with the county. An amendment to the initial measure places Harris County Commissioners Court as the corporation’s initial board of directors, however, commissioners did not establish a timeline for how long they would control the corporation.

A separate measure, proposed by Precinct Four Commissioner R. Jack Cagle, failed 3-2, along party lines. It called for a delay on the vote to restructure HCTRA in hopes of generating more expert and public input.

Why the change?

Supporters argued the restructuring allows for more discretion at the local level of how revenue from tolled highways can be spent. State law limits how money can be used from revenue generated by tolls. Much of it must go back into the toll road system. 

“HCTRA’s current bond indentures (the contracts between Harris County and bondholders of HCTRA’s bonds), only provide for the issuance of revenue bonds for tolled infrastructure,” according to the memo, which continued, “despite the county’s non-transportation infrastructure challenges, HCTRA’s long-term existence under its current legal, financial, and governance structure, is predicated only on the continued construction, acquisition, and/or improvement of debt-financed tolled highways in our region.”

HCTRA also argued the move would allow the toll road system to refinance its debt, which is estimated to be between $2.7 billion and $2.8 billion. Interest rates currently are low — hence the push to do so now.

The debt amount makes Tuesday’s vote the largest financial transaction in county history, according to commissioners court.

Under the agreement, the LGC would pay Harris County an initial $300 million franchise fee to manage toll roads and an additional $90 million annual franchise fee.

Those franchise fees are where there would be wiggle room to use money from toll revenue for other unrelated projects — such as investing in more flood control.

Critics: Where’s the oversight and why now?

Commissioner Cagle questioned the timing of Tuesday’s vote, calling for more public input, as well as expert opinion on whether the presented benefits were valid for the county. The virtual meeting also included public input, which presenters scrutinized oversight of the corporation.

A couple of their questions: What’s to guarantee the money will be spent responsibly — or if voters want money from toll revenue to go to non-mobility expenses?

Other area counties use similar local government corporations to oversee its toll roads, according to HCTRA, which cited Fort Bend, Brazoria, and Montgomery Counties.

A timeline for how the change would be implemented was not discussed during Tuesday’s hearing.