Honkin' Mad

How NTTA seized control of its debt so it can keep building toll roads for years to come

TollTag user saves time at a cost

Chris Bellomy estimates he saves about five hours a week using toll roads to commute from Fort Worth to Plano, and says the cost is worth it.
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Chris Bellomy estimates he saves about five hours a week using toll roads to commute from Fort Worth to Plano, and says the cost is worth it.

Less than a decade ago, the North Texas Tollway Authority was so immersed in debt the agency had to create a special fund — an arrangement that had to be co-signed by the state of Texas — to finance construction of Chisholm Trail Parkway in Fort Worth.

But now, the Dallas-Fort Worth area’s premier toll road construction and management agency is in a much better financial position. The agency, which is widely known in the region by its four-letter acronym, NTTA, has refunded more than $6 billion in debt during the past six years, according to the industry publication Bond Buyer.

By refunding those bonds, the tollway authority is expected to free up an estimated $1.6 billion in cash, which can be spent on improving and expanding the tollway system over the next five years without issuing any new debt, said Horatio Porter, NTTA chief financial officer.

At a time when Texas and other states are borrowing billions of dollars to build toll-free highways — to make up for a lack of funds from traditional sources such as vehicle registration fees and gas taxes paid at the pumps — NTTA is poised to play a major role in expanding and modernizing Dallas-Fort Worth’s network of roads.

For example, NTTA recently partnered with the Texas Department of Transportation to extend Texas 360’s main lanes from Arlington to Mansfield.

Many motorists don’t like paying tolls, but often in North Texas transportation planners find that using toll-backed bond debt is the only way to get the roads built fast enough to meet growth needs.

“DFW is still one of the highest-growing areas in the country, and we believe we have served as a catalyst to that growth,” said Porter, who served as Fort Worth’s financial officer before moving to NTTA in 2013.

Porter also is well-known in Tarrant County for his days at Texas Christian University, where he was a track star in the late 1980s and early 1990s before turning to a career in accounting and finance.

Horatio Porter was an All-American sprinter at TCU in the early ’90s. He later became the city of Fort Worth’s chief financial officer before taking the same job with the North Texas Tollway Authority. Star-Telegram Archives

“We’re building roads that people need,” Porter said in a phone interview. “It connects them to their homes, places of employment and entertainment facilities.”

No variable interest rates

On Tuesday, Porter and other NTTA officials and financial advisors will be in New York to meet with bond managers to price $679 million in tax-exempt bonds.

Once that pricing is complete, NTTA will have about $9 billion in outstanding debt, but none of it will be variable-rate, which means it won’t be subject to the peaks and valleys of changing interest rates, Porter said.

For now, much of the emphasis is on expansion projects, including adding a fourth lane in each direction to Sam Rayburn Tollway, and extending the President George Bush Turnpike in the eastern part of the region. Chisholm Trail Parkway, a 28-mile toll road that opened in 2014 from downtown Fort Worth to Cleburne, also will eventually be improved with new lanes and additional ramps to connecting corridors such as Interstate 20, tollway officials said.

TxDot lends a hand

Back in 2011, when Chisholm Trail Parkway was being financed, NTTA entered into a partnership with the Texas Department of Transportation, which signed a toll equity loan agreement that essentially used state highway dollars as a financial guarantee for the project.

At the time, NTTA was concerned that its bond ratings could be downgraded without the state’s co-signature.

But NTTA wanted to end its arrangement with the state early, and in 2017 refinanced those bonds, a move that put Chisholm Trail Parkway’s financing fully back into NTTA’s tollway system.

“We were able to pay off those bonds, and clear that obligation to TxDot and merge the Chisholm Trail operation with the NTTA system,” said Kenneth Barr, who resigned as chairman of the NTTA board earlier this year after winning a seat on the Tarrant County College board of trustees.

Barr, also a former Fort Worth mayor, had served on the NTTA board for 11 years, including seven years as chairman, so he had an up-close view of the agency’s efforts to improve its debt situation. He believes NTTA could play a major role in solving the region’s mobility challenges in the coming years.

“The NTTA has a five-year plan and the board has pushed the staff to look out beyond that five years as to what the region’s needs are going to be,” Barr said in a phone interview. “I have always viewed NTTA as a resource in the region’s toolbox, so to speak, and when there’s no other way to get a road built then tolling offers us an option that can be very useful.”

Tollway authority Chairman Kenneth Barr left that board to join the junior college board. NTTA

In addition to Chisholm Trail Parkway, the President George Bush Turnpike and Sam Rayburn Tollway, the agency also operates Addison Airport Toll Tunnel, Mountain Creek Lake Bridge, Lewisville Lake Toll Bridge and 360 Tollway.

In all, NTTA is expected to generate $886 million in revenue this year, Porter said.

The agency is expected to have a $488 million cash balance. That money, combined with an espected $1.1 billion in cash flow from refunded bonds, is expected to provide the agency with $1.6 billion for capital projects over the next five years.

Moody’s Investors Service has added a positive outlook to NTTA’s bonds based on an expectation of increasing annual cash flow, which would then go to capital projects, Bond Buyer reported.

Gordon Dickson joined the Fort Worth Star-Telegram in 1997. He is passionate about hard news reporting, and his beats include transportation, growth, urban planning, aviation, real estate, jobs, business trends. He is originally from El Paso, and loves food, soccer and long drives.