The governor, the legislature, even a special commission on highways are all looking for ways to fund state roads. A select committee on Infrastructure is trying to find ways to save money and increase efficiencies by combining the Division of Highways and the governing authority of the state’s Turnpike, but simply combining the two would create serious legal implications for the state.
Senate Concurrent Resolution 55 requested a study to consolidate the operations and maintenance responsibilities of the state Parkways Authority and the Division of Highways in the hopes of saving money by finding efficiencies.
The Parkways Authority is currently a separate entity responsible only for the 88 miles of turnpike through southern West Virginia. In 2019 when the bond debt on the road is paid off, state law dictates the Commissioner of Highways will decide if the condition of the roadway is good enough for the state to assume control free of tolls.
But state lawmakers want to know, could we save money if we just did that now? The answer, in short, is no. But of course it’s not that simple.
“That would be a problem,” General Manager of the Parkways Authority Greg Barr told legislators Tuesday. “That would violate the impairment of contract clause in the Constitution.”
Barr said should the state choose to consolidate them under the DOH before 2019, it would violate the bond contract.
“When the contract was entered into to sell the bonds by the Parkways Authority, there was representation to the bond holders that the Parkways Authority would be an independent agency that would oversee the maintenance and upkeep of [the Turnpike] and take care of the responsibilities for the bond holders.”
Senator Bill Cole of Mercer County suggested integrating the agency into the DOH, but keeping the Parkways Authority name and governing board to align with the contract. The debt left on the bond then becomes the state’s.
“I would think that if I held that bond, the state of West Virginia might be a little bit more substantive than an authority within the state of West Virginia,” Cole said. “Is that really a technicality that we’re talking about that isn’t a big deal, paying a couple hundred dollars to pay a name and get some approval?”
“In this case it would be a big deal,” responded Brian Helmick, bond counsel for the authority.
Helmick said it is unconstitutional for the state to incur any debt.
“There’s a Constitutional provision that doesn’t allow the state to incur debt without a vote of the people, and when we say a vote of the people, we actually ask the people in west Virginia to vote on an amendment to the Constitution allowing for certain debt to be incurred,” he said. “That has been done a few times over the years, primarily for DOH highway projects.”
So, just pay it off early. Pay off the debt and assume control of the roadway. That’s what Delegate Nancy Guthrie of Kanawha County asked of Helmick. How much would it take to pay it off now?
Helmick said there is about $55 million in principle left on the bond, but you can’t just pay it off when you have funds. The state would incur prepayment penalties to the tune of $7.5 million.
It appears the Parkways Authority is contractually obligated to not just remain intact, but remain in control of the maintenance and collection of tolls on the Turnpike.
But of course, in 2019, all of that could change. The state could decide to re-bond the road, keep the tolls and use the money to fund other road projects, or at least a dozen other scenarios all being considered by the governor, the legislature and the Blue Ribbon Commission on Highways.