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W.Va. Parkways Authority begins process of selling road bonds

By JIM ROSS

The State Journal

BECKLEY, W.Va.  — The West Virginia Parkways Authority has begun the process of doing its part in bringing Gov. Jim Justice’s “Roads to Prosperity” bond program to fruition.

The authority on Thursday approved the use of $900,000 of a projected $120 million in bond sales.

The $900,000 will be used for work that must be done before the bonds are sold.

The work will be paid for by money the Parkways Authority has in hand and will be repaid after the bond sale, said Greg Barr, general manager of the Parkways Authority.

As part of the $2.6 billion Roads to Prosperity plan, the Parkways Authority is expected to sell up to $500 million in bonds, Barr said.

“Rather than do the whole $500 million all at once, we’re going to do $120 million to start with, and then we’ll do the rest of it later to try to get up to that $500 million,” Barr said.

The authority must prove to the bond markets that it has enough revenue to pay back the bonds, and that is why it’s starting small, Barr said.

“And that’s where the new toll rate structure will be developed that incorporates that new single fee discount program for passenger cars,” he said.

“The governor wanted that to be $8 a year for unlimited use for passenger cars, whether they’re in-state or out-of-state, but the Legislature said it can be a range of $8 up to $25 a year, which isn’t a big difference. That’s got to be built in to this whole proposal to the bond market.”

The $900,000 upfront work includes a $442,000 traffic study. The bond markets want third-party engineers to certify that the turnpike will generate enough revenue to pay back the bonds, Barr said. Other work in that $900,000 will include services by financial advisers and consulting engineers to do 30-year projections for operating expenses and capital needs, along with necessary legal work, Barr said.

“We’re paying for it now out of current revenues, and that way when the bonds are sold, we can reimburse those revenues,” he said.

At their regular monthly meeting at Tamarack Thursday, members of the authority voted to approve the $900,000 allotment.

Roger Hunter, an attorney with the law firm Bowles Rice, described the need for the expense.

“This is an unusual bond issue, the first of its kind in many respects,” he said.

The authority also approved the appointment of underwriters for the $120 million bond issue. Wells Fargo will hold the senior position and receive 60 percent of the fees to be paid. J.P. Morgan will be co-senior underwriter and receive 25 percent. Two other firms will receive 7.5 percent each.

In other action, the authority members authorized Barr and his staff to negotiate easements with the state Department of Commerce, the Broadband Council and others to allow the installation of fiber optic cable on Turnpike property. Tom Smith, secretary of transportation, said the state’s own rules for such easements remain under development and still need approval from the federal government.

The authority also authorized its staff to continue talks with the Kanawha County Regional Development Authority to install water lines and necessary infrastructure to extend service into the Standard, Paint Creek and Collindale areas.

Staff Writer Jim Ross can be reached at 304-395-3483 or email at [email protected]

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