Opponents of the extension of the 241 were waiting anxiously for TCA Directors to emerge from their January closed session meeting with their attorneys.  "We were looking at the body language, and when they slumped into the room with a beaten look and hang-dog expressions, we knew that their lawyers had given them glum news." The agency attorneys had apparently advised that further legal action would add additional waste to the 40 million plus that had been expended in an attempt to build the final 16 miles of the 241 Toll Road.

Although some directors continued to bluster, for the first time there was talk of reaching out to all stakeholders to put together a new plan. The arguments and logic developed and articulated by toll road opponents had prevailed with the coastal commission, and even the Bush cronies in the waning lame-duck days of the Commerce Department wouldn't buy the cart-load of preposterous arguments concocted by the TCA flacks.

But their willingness to compromise is too little, too late. It's like a late stage alcoholic abusive husband, still unable to face the fundamental addiction. The disease is pathetically obvious to close observers, and in moments of sobriety or remorse, the abuser promises to do better. Until the board members of TCA hit bottom and start working a new program, they'll continue with a pattern of denial, victimhood, and relapse.

Will Jerry Amante symbolically cut up the TCA's over-sized  credit card using giant scissors after bond ratings and falling revenues end the toll roads' access to credit markets ?

There's probably no route that can satisfy the surfers, planners, developers, existing homeowners, and nearby Marines at Camp Pendleton. When you're talking about the loss of the last wild beach, sullying the last pristine creek, loss of a campground and habitat that was donated as mitigation for other development, there isn't a lot of room for compromise.San Mateo Creek and Trestles are the Yosemite of surfing.

What's at stake are habitat and lands that were set aside as mitigation for previous development and the SONGS nuclear plant.  Toll road proponents spent years tinkering with the plans to lessen the impacts, and at the last minute offered 100 million dollars in a mitigation fund for the loss of the park land, but a coalition of environmental groups has joined with the Surfriders to make a last stand here, and their arguments have prevailed with the Coastal Commission.

But even if there were some environmentally acceptable alternative, there's no market for the bonds they need to sell to create over-priced toll roads in the 21st century.  The 1980's style planning depended on North San Diego county residents hurrying to a new international airport at El Toro, but the death of that plan was really the defining moment for the future of the 241 South.

Even a non-compete clause that exacerbates congestion and extorts public money for any improvement to the 5 wouldn't be enough to force tolls high enough to make this work. Tolls per mile on the existing system are already high, and adding 1.2 billion dollars in additional payments to the cost structure will push tolls on the proposed segments to unsustainable levels.

Financial Turmoil

In press accounts of the battle over the extension of the 241, the Foothill South Agency is referred to as the "more successful" of the two TCA toll road entities, but this is slight praise indeed in comparison to the SJC/73.

In January the Fitch rating agency lowered the outlook on the Foothill Eastern to "negative" while preserving the existing bond rating of BBB.

Unlike the SJC/73, the Foothill Eastern has, at least until recently, met their forecasts for ridership and revenue, and has had enough money to siphon 30 million dollars a year from their funds to keep the SJC/73 afloat for the last three years, with a promise of another 30 million this year, and an open-ended promise of loaning up to a billion dollars from excess revenues.

But now revenues at FETCA are dropping even faster than those on the SJH.73. For the first half of 2008-2009  fiscal year revenues were off  8.3% over the previous year. An agency that boasted of hitting 105.9% of projected revenues in FY2007 and fell to 93.6% of projected revenues last year will be lucky to hit 84% of projected revenues this year. When your financial models are based on accreting debt and rapidly rising finance payments in later years, this is grim news indeed.

TCA flacks treat this as a blip, and they have a model with a recession scenario, but they still can't imagine a fundamental shift in the Southland economy that echoes our national deep recession. Much of  TCA/FETCA's revenue relies on peak-hour commuters from the Inland Empire, where the congestion and the lack of competitive routes has bolstered traffic. Jobs in Orange County and housing in Riverside County have followed an historical pattern with housing there and jobs here, but that pattern may be collapsing, as some of the biggest employment drivers in our region - real estate, finance, and construction - have shed jobs aggressively. Simultaneously, the people who have been buying those inland empire homes are finding that the values have plummeted while their payments have skyrocketed.

Emails back and forth to TIFIA, a federal infrastructure financing agency, indicated that neither TCA entity has any access to financial markets without a major federal financial guarantee, and the diseased SJC/73 is a conundrum.

From a September TCA email to TIFIA,when financial markets were much healthier than they are now,

a.) The structure of the Foothill Eastern's standalone financing (even assuming a $400 million loan), is challenging at best and unmarketable at worst and b) the San Joaquin Hills TCA does not have market access.

FETCA has been propping up the SJC73 and attempting to roll all debts from both agencies into a huge new loan package with 1.2 billion dollars in federal guarantees, because if the sister agency defaults, FETCA's projections and plans will face intense negative scrutiny. But by propping it up with unsustainable toll increases for their own patrons, FETCA may be dooming their own future.

But FETCA can't justify continuing their subsidy of their sister agency if the justification for the bailout is gone. Don't forget that the 120 million in transfers and the loan guarantee were based on compensating the SJC/73 for traffic that they would lose when the Foothill South was completed. It's illegal under the California State Constitution for a public agency to make such a massive gift of public funds once the foundation for their tortured logic becomes impractical.

The Greenbelt Option

One option for FETCA would be to pull the plug on the 241 South immediately, enforce the cancellation clause of their bailout agreement with the SJC/73, and start planning for a different future. Combined with some belt-tightening at TCA headquarters as the armies of lawyers, flacks, and consultants are sent packing, this should free up enough money for the FETCA to lower tolls and focus on a new end-game that would require less construction money, address real South County problems, and accelerate the date when the toll roads become free.

Ironically, the best opportunity for both agencies may come from the alternative Beltway plan that has been proposed by toll road opponents. This is a fascinating alternative, developed by activists with active input from traffic engineering professionals that offers real hope in addressing the real traffic problems of the south-county cities. An east-west connection joins the 73 to the 241, and takes some of the traffic off of local roads.

Will this work, either financially or practically? It's hard to tell without study, but it may be time to take a close look at this alternative.

A Realistic Plan for Widening I-5

To actually relieve congestion on the I-5 corridor, the Beltway proponents also recommend that state and regional planners, without any involvement from TCA, start planning to augment the capacity of the 5 through San Clemente.

From a letter to the governator:

As members of the stakeholders committee to the South Orange County Major Investment Study by the OC Transportation Authority, we assert that significant and irreversible environmental effects from this road extension do not justify its questionable utility to the overall transportation network. Studies done by Smart Mobility, Inc. and other traffic engineers illustrate that improvement of I-5 with a community-sensitive design would reduce right-of-way impacts. And in any event, considering the growth of intra-regional traffic, this freeway corridor must be upgraded, smoothing out the curves and grade changes, providing room to underground the LOS-SAN rail corridor so necessary to goods and human movement for the coming decades.

Despite TCA disinformation, an augmented I-5 plan uses exactly the same types of concepts that are a precondition for the OCTA's widening the 405 from Euclid to the 605, and follow the practices safely used in every major urban area. Instead of starting with the standard expansive Caltrans designs that were developed when raw land was dirt cheap,  you begin by examining your existing right-of-way and figuring out how to squeeze the most capacity into that space without sacrificing safety. There are dozens of tricks that highway engineers have used in other urban areas - different styles of interchanges, narrower shoulders and breakdown lanes, some lanes 11 feet wide instead of 12, barriers between lanes instead of wide separations,  shifting the centerline of the freeway slightly, cheating a little on the adjoining frontage roads, allowing less room for landscaping.

Changing Attitudes

Admitting defeat for the 241 extension will not be easy for Orange County Republicans. Their aggressive anti-tax posture in the state and Federal legislature only works if they aren't reliant on compromises that might bring infrastructure money back into Orange County. As long as South County Republicans could count on privatization of the toll roads, they had far less incentive to compromise on any other issues with Democrats from the rest of the state. If the toll roads experiment collapses, and the system is shown to have been as fraudulent as the rest of the kleptocratic agenda of the Reagan and Bush years, then Republicans might need to come to the table on all of the issues, especially revenue enhancement.

As one toll-road opponent told me, following this story has been about following the intellectual history of the country, through this window on the machinations of the people who led the early Reagan revolution. The hollowing out of America, the savage attacks on government per se, the idea that public goods could be privatized and piratized, came as much as anywhere from Orange County.

And the death of the toll roads may be our signal that hope and change are on the way, even here, even now, even in Orange County.