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Tunnel ruling taking its toll on transportation projects?

PORTSMOUTH

A judge’s ruling striking down the Midtown and Downtown tunnel tolls has cast a cloud over other transportation projects, exposed the state to unknown damages and left financial markets “at best, confused,” according to a court memo by lawyers for the Virginia Department of Transportation.

For those and other reasons, the state will ask Circuit Judge James A. Cales Jr. at a hearing today to suspend his May 1 ruling until it can be appealed.

The plaintiffs in the lawsuit counter that the state has failed to show why a suspension of Cales’ order is necessary. They argue in a court filing that any financial injury to VDOT is the consequence of the agreement it negotiated with Elizabeth River Crossings, the state’s private partner in the tunnel project.

The plaintiffs also argue that suspending Cales’ order will not resolve the financial uncertainties around it; only a decision by the Supreme Court of Virginia on the appeal will.

Cales ruled earlier this month that the General Assembly had exceeded its authority by ceding “unfettered power” to VDOT to set toll rates for the Midtown project. The ruling against the fees invalidates a major component of the financing and profit-making structure of the $2.1 billion public-private deal.

An analyst from Fitch Ratings said in a report to investors that Fitch believes the state would be responsible for repaying the project’s debt if the tolls were invalidated by the lawsuit. A federal loan and private bonds issued for the work total more than $1 billion.

Virginia Secretary of Transportation Sean Connaughton said last week that officials do not yet have an estimate of the state’s exposure if they lose their appeal. He also declined to discuss potential contingencies if the appeal fails, such as trying to get the General Assembly to endorse the tolls or diverting road money from elsewhere to fund the project.

Del. Lacey Putney, I-Bedford County, has written Connaughton, inviting him to the June meeting of the House Appropriations Committee, which Putney chairs, to discuss issues surrounding the tunnel toll litigation. The letter from Putney seeks insight on the potential impact to the state if the Supreme Court agrees tolling is unconstitutional in this instance. It also requests some sense of how long it will take for the legal wrangling to be resolved.

The tolls are scheduled to start Feb. 1, 2014, at $1.59 or $1.84 for passenger vehicles, depending on the time of day. They can rise by at least 3.5 percent per year after 2016 and are set to run to 2070.

The project involves construction of a second Midtown tube, rehab of the Downtown and Midtown tunnels, a freeway extension in Portsmouth and private operation and maintenance of the roads for nearly six decades.

The plaintiffs say in their court filing that the Supreme Court “will undoubtedly decide any appeal” by Feb. 1.

VDOT and Elizabeth River Crossings continue to move ahead on design and construction work. Elizabeth River Crossings reported expenses totaling $348 million as of March 31.

The plaintiffs take a shot at VDOT’s assertion that it wants Cales to suspend his ruling to “reduce the drain on the Commonwealth’s treasury.” That “rings hollow,” the plaintiffs wrote, “because they are continuing construction and thereby adding to the potential damages that will be claimed.”

In one of their court filings, lawyers for VDOT and Elizabeth River Crossings call Cales’ ruling “unprecedented, both in substance and impact.” They say no state or federal court has ever equated a highway toll to a tax, as Cales did.

The parties also dispute each other’s interpretation of what, exactly, Cales meant when he verbally gave a brief ruling from the bench on May 1. A formal written order still must be entered into the court record, and both sides have drafted different versions of what it should say.

Lawyers for VDOT and Elizabeth River Crossings contend the plaintiffs “misstate and exaggerate” what Cales ruled and are trying to expand it to cover all projects authorized under Virginia’s Public-Private Transportation Act of 1995.

Cales also will consider the parties’ arguments on what his final order will say at today’s hearing.

Pilot reporter Julian Walker contributed to this story.

Dave Forster, 757-446-2627, dave.forster@pilotonline.com

Posted to: News Portsmouth Traffic - Transportation Tunnels

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These government officials

These government officials should suspend work on the tunnel and make Gov. Bob pay for any costs out of his own pocket. He's the one who shoved this hairbrained (pun intended) idea down our throats. Its illegal. Start a new project that doesnt make foreign nationals rich off the backs of the working folks in Hampton Roads. Spend our taxes on needed projects and not pork. If needed toll only the new roads at a rate that will pay back what the state cant pay for up front and not a penny more. Or sell bonds. The people will support it if its needed but shouldnt be ripped off so our politicians friends can get rich.

Gov Bob is a genius

He got the tunnel built without raising taxes (at least in his mind) thus he can still run for higher office and claim he balanced the budget and didn't raise taxes. Remember according to his office the transportation plan some how increases revenue for roads while being "revenue neutral".

VDOT believes financial markets are confused by tolls ruling

Interesting.

We believe...

And we believes VDOT is the one confused, not only with this but the entire VDOT operation.

Nothing confusing at all.

Nothing confusing at all. This project's current funding mechanism is against the law. And it should be. Stop the project until a legal way of moving forward with it is found. Build the third crossing and it this project wont even be needed. Fund that one legally and the problem is solved... except for the Governor's foreign buddies getting their massive profits.

much like

criminals don't know what they did wrong?

Spinning and Grinning

They're not confused, not in the least. ERC and VDOT have made the business decision to spend as much money as they can, as quickly as they can, precisely in order to make this argument. This is a carefully calculated business decision. They're shovelling taxpayer funds into this bottomless pit so that they can argue that it's too expensive to turn back now. The Attorney General and ERC's battalion of lawyers warned them months ago when this litigation started what potential the consequences of this ruling would be. They chose to roll the dice anyway. Why should our tax dollars continue to be spent defending a deal which clearly violates the law? This is nothing but spin, at our expense.

A tradition for Gov Bob

Having a project become too expensive to turn back now is a tradition for this administration. Northrup-Grumman was way behind and way over budget on taking over IT functions for the state but rather than find another company that could actually deliver, Gov Bob said it was too expensive to change. As punishment for the money N-G cost the state, he offered incentives to have the company move its headquarters to VA from CA.

well.

Just don't build it. I don't need it, I won't miss it. If someone needs it, get a group together, and fund it yourself then.

VDOT funny excuse

The money spent by criminals in committing their crime is their responsibility. The state is now a 2 time loser in trying to shirk it's responsibilities in returning residents gas tax back in road construction.

I dont mind tolls, as long

I dont mind tolls, as long as they are reasonable. But what I find funny, it everyone on here bashing this but offering no solutions to our traffic troubles. Every other attempt to raise money to support road projects gets shot down by voters. Im glad Im retiring in a few years and can move out to the mountains where there are no traffic problems. Then those of you still here can fight the ongoing traffic problems with out me.

I love the Pilot's headline!! LOL!

I have a lot of views on the concept of Public-Private Partnerships and turning over taxpayer funded critical infrastructure to corporations, but I'm setting all that aside to applAud the individual at the Pilot who came up with such a clever HEADLINE for this news story:

Tunnel ruling taking its toll on transportation projects?

"..taking its toll ? <-- VERY funny line!

"mis-state and exaggerate"...

...perfectly describe VDOT's and ERCO's response to the judge's decision. It's also what they did in the briefs they filed with the court and in their arguments on May 1 They also have a decided tendency to omit facts where they might be inconvenient, and they have consistently misrepresented the plaintiffs and our attorneys in communications with the judge and with the press. I am shocked, shocked by this behavior!

This deal is bad for the whole region, and the whole region needs to support the lawsuit or face the specter of ever-rising tolls on every road, bridge, and tunnel here. See NoTollsHR.org for more information.

EZ-PASS INSTALLATION

Yesterday, the electricians were working on the north side of the gantry over the westbound downtown tunnel tube installing the wiring for the cameras and the EZ-Pass readers. Does anyone else wonder what they'll use that equipment for if tolls are found to be illegal?

Gantry

I would love to see them instal traffic cameras to catch the A**holes that speed past the slower Effinham traffic in left lane only to slam brakes and illeagaly cut across 2 lanes of traffic at far end. If they eliminated this issue traffic would flow much better and would at least ease the congestion. They used to have those flexible post seperating the lanes for this exact reason.

Fight the symptom or the disease?

I would love to see them put in another exit between Effingham and Frederick so this move wouldn't be necessary for anyone. Instead, this plan will actually remove ramps along this stretch (at Des Moines).

This lawsuit probably never would have even happened of the state made a commitment to reinvest their saved billions LOCALLY and negotiated some common-sense concessions. Like killing the noncompete clause, making the MLK extension toll-free, adding MLK access from Frederick, delaying tolls until AFTER capacity is added, adding penalties for construction delays or for allowing backups to spill on to the secondaries, and requiring REAL improvements to add capacity at the Downtown after a future date or traffic volume threshhold is met.

Gantry

I would love to see them instal traffic cameras to catch the A**holes that speed past the slower Effinham traffic in left lane only to slam brakes and illeagaly cut across 2 lanes of traffic at far end. If they eliminated this issue traffic would flow much better and would at least ease the congestion. They used to have those flexible post seperating the lanes for this exact reason.

I'd like

I'd like to see them do something about those A**holes that can't merge or think they can coast UP the other side of the tunnel.

REMEMBER?

--the 'leader' is responsible for the incompetency of those that serve under him. especially if he appoints them.

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