Bonds for Longmeadow toll bridge said to be no risk to Kane taxpayers

Kane County transportation officials nullified a long-standing fear Tuesday about the tollway portion of the Longmeadow Parkway, saying no scenario puts taxpayers on the hook if drivers don't use the toll bridge.

The county board's transportation committee moved forward with plans to update the traffic and revenue projection study last completed in 2009. The update will cost about $489,000.

The study is the precursor to issuing bonds for construction of a new bridge spanning the Fox River in the northern part of the county. The county will borrow at least $30 million to build the bridge and fund future maintenance of the parkway. The tolls will provide the money to repay the bonds. The endowment is what would allow the county to retire the tolls at some point.

The need to borrow money for the Longmeadow Parkway is one of the focal points for those who oppose the project. Opponents have long said local taxpayers will be on the hook to repay the bonds if not enough people use the toll bridge. Several county officials, including board Chairman Chris Lauzen, echoed that belief until Tuesday.

Lauzen put the Kane County Division of Transportation staff on the hot seat with questions about how the county would repay bond investors if the toll bridge fails.

"Isn't it true that the county is the guarantor of those bonds, in essence?" Lauzen asked KDOT Deputy Director Tom Rickert.

"This isn't like your typical general obligation where the county puts up a guarantee along with it," Rickert answered. "It's strictly toll revenues that pay the debt service. That's one of the reasons why there needs to be a high degree of certainty that the tolls will cover the costs."

Lauzen asked a second time if there is any other backing the county provides to the buyers of the bonds in the worst-case scenario of a failed toll bridge. Rickert said there is no such backing.

"It is guaranteed by the toll revenues," Rickert said. "That is the guarantee, the toll revenues. So they will be paying close attention to what is the amount of the bond. The lower the bond, the more the comfort level."

In an interview, Rickert explained there are several ways to ensure the bond debt gets paid and investors receive their money. For example, the county could raise or lower the toll to increase traffic or toll collections.

"Say the world's economy collapses. There's even ways to extend collection," Rickert said. "So the likelihood of not being able to pay the bonds with the toll is nil."

The county's bond consultant also chimed in to support Rickert's statement. He called the relationship between the bonds and the tolls a "lockbox in the financing." There is no risk to the county's credit rating.

Lauzen hailed those statement as a game changer for opposition to the project.

"When opponents say, 'Kane County taxpayers, you're on the hook if the toll bridge fails' - that is not true," Lauzen said. "That cannot be repeated going forward without a person intentionally lying."

The timeline for the updated financial feasibility study puts the county on track to issue the bonds next spring.