Maine Turnpike chief says bank could end up operating road if tolls aren’t raised

The Maine Turnpike could become 109 miles of highway owned by bondholders and operated by Bangor Savings Bank if toll increases proposed by the Maine Turnpike Authority aren’t approved and the authority defaults on the terms of its debt, according to the authority’s executive director.

The chances of that happening are remote but it’s among the consequences the Maine Turnpike Authority faces if it can’t raise enough money to meet the revenue and road maintenance requirements laid out in its agreements with bondholders.

“It’s a cascade of consequences,” said Peter Mills, executive director of the turnpike authority.

Mills and the Maine Turnpike Authority are making those consequences clear before three hearings next week where members of the public will be able to weigh in on the turnpike authority’s proposal to institute $26 million in toll increases starting Nov. 1.

The public hearings take place on Tuesday at Auburn City Hall, on Wednesday at Portland City Hall and on Thursday at Saco City Hall, all starting at 6:30 p.m.

The turnpike authority says it needs to raise about $26.5 million in additional revenue annually to fund $113 million in bridge repairs on northern sections of the 109-mile highway over the next five years, pay for $82 million in paving and other road improvements, and pay off debt from a highway widening project completed in 2004.

The toll increase scenario favored by turnpike authority staff would mean a $3 charge for passenger cars at the York toll plaza, up from the current $2; a $2.50 cash charge at New Gloucester, up from $1.75; $2 at West Gardiner, up from $1.25; and $1.50 at both the Wells and Gray tolls, up from the current $1.

“I think the good news [is] I don’t foresee another toll increase for a long, long time,” Mills said Friday. “This increase will get us where we need to get, as well as take care of our needs well into the 2020s.”

In a memo prepared this week for Gov. Paul LePage and members of the Maine Turnpike Authority board, Mills explains the consequences if the authority doesn’t raise enough revenue to meet the terms of its bond agreements.

Without the additional revenue, he says, the turnpike authority would have to direct additional funds to its reserves, diverting cash from maintenance and other needs. And without that required level of revenue, the turnpike authority wouldn’t be able to secure new bonds that could fund bridge improvements.

In addition, a revenue shortage would leave the turnpike authority without the required amount of money to put into a mandatory account for maintenance. Each year, according to Mills, an independent engineering consultant reports on the condition of the road to bondholders and tells the authority how much it needs to invest in its maintenance account.

“Failure to make the required [reserve maintenance] deposit puts us squarely into default and forces the bond trustee, Bangor Savings, to take over the Pike, raise tolls, and start running the road as trustee in possession,” Mills wrote in the memo.

As trustee for the turnpike authority bonds, Bangor Savings Bank’s role is to make sure the authority makes its payments and that the bondholders are paid what they’re owed, said Yellow Light Breen, an executive vice president at the bank.

Breen said it’s “incredibly unlikely” the bank would need to step in and operate the Maine Turnpike.

“We don’t get involved so long as they’re meeting their obligations to the bondholders,” Breen said.

The Maine Turnpike Authority, which last raised tolls in 2009, raises about $103 million annually in tolls and another $3 million from its service plazas, according to Mills. The turnpike authority board would have to sign off on any toll increase.

The proposed toll increases this week sparked criticism from Democratic legislators in the Lewiston area, who said the increases would unfairly affect drivers headed to the Lewiston-Auburn area and western Maine. The legislators also recommended holding off on the toll increases until lawmakers can discuss them when they return to Augusta in January.

And Sen. Ronald Collins, a Wells Republican and chairman of the Legislature’s Transportation Committee, said Friday he wants the Maine Turnpike Authority to “investigate all other alternatives before the toll increase,” and he’ll be looking for evidence the agency has done that when he attends the hearing in Saco on Thursday.

“Here in southern Maine, they use the turnpike extensively to get from home to work, and I just think it’s an additional hardship on people,” he said.

Collins also said the turnpike authority should hold an additional hearing closer to York, where the largest toll increase is slated. Mills said he would be open to a meeting in that area to discuss the toll increase and other turnpike issues.

In his memo to LePage and authority board members, Mills said the turnpike authority has minimized the size of the toll increase by cutting its operating budget, refinancing bonds at lower interest rates and negotiating less costly construction contracts.

Those moves have won the praise of the Maine Motor Transport Association, which represents much of the state’s trucking industry.

“We don’t dispute it being necessary, and we think that Peter [Mills] and his team have done a good job mitigating the impact,” Brian Parke, the association’s president and CEO, said of the increase.

Still, Parke said, the toll hikes come at a difficult time economically and would disproportionately affect commercial trucks. A five-axle commercial truck now pays four times the passenger vehicle rate. That multiplier would jump to 4.25 under the turnpike authority’s proposal.

Already, Parke said, “our industry will be paying a significant portion of the primary toll increase at the barrier tolls.”

A spokeswoman for LePage said Friday the governor has been briefed on the proposed toll increases but that it would be premature to comment on them.

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Comments

Kim Waite's picture

One more reason why...

....the government owning the roads is a good thing. Privately owned means the bank could end up owning the roads in the end and we know how the banks operate: screw the little people for their wealthy investors! If the turnpike goes to the bank, don't be surprised if the bank sells the road to Canada (which will make the guv'nah of Maine very happy! He's trying to get in an east/west highway via Ciambro ownership to help the Canadians also!).

Mike Lachance's picture

Keep on raising the tolls... go ahead...

Ya... do it... watch the revenues decrease. Eventually there is a point of diminishing returns. the toll increases in 2004 or so pretty much cut my Turnpike use in half... the rate increases in 2009 cut them in half again.... do it again and I will make every effort to avoid the damnable thing altogether.. (and Im not alone)

295, Rt100, 136, 196, even rt1 become more appealing every day.

CLAIRE GAMACHE's picture

Adding insult to injury

The reason this toll increase is so unfair to Western Maine is because we have received unfair treatment with our roads all along. This is just the final blow. Because our other connector roads are so poor and so poorly maintained we are totally dependent on the pike for commuter and delivery traffic. Other than the pike we have RTE 4, that great death trap of the North, Rt. 196, a nice Sunday drive for the 1950's, Rt. 136 ditto but a little better and Rt. 100 can you say skating rink? Not using the pike to avoid the tolls only makes it more expensive, and poorly maintained for those who have no choice and for our truck deliveries. That's still an economic blow to the area. What we have needed for a long time is a high speed connector to Topsham (maybe using the River Road) and huge improvements to RT 4. That would improve the flow of traffic both ways to Bath, Brunswick, Freeport, Portland, Farmington and Rumford. Think of how that could improve our economy.

Dan MAINE TURNPIKE AUTHORITY's picture

Claire: Unfortunately, the

Claire: Unfortunately, the claims of inequity between the Maine Turnpike and other roads in Maine is outside the purview of the Maine Turnpike Authority and were settled by elected officials many decades ago. 30 years ago in 1982, the Turnpike Authority had paid off its bonds and offered the Turnpike to the state free of debt. The Legislature at that time made a policy decision to keep the tolls in place to maintain the Pike, to widen it, to replace parts of it as it wore out and to assist Maine DOT with state projects that relate to the Turnpike. The building of I-295 and the remainder of I-95 north to Augusta was a result of the 1956 Highway Act signed by President Eisenhower. The federal government paid 90% of interstate construction costs. Those intersate highways are now also facing billions in repair and rehabilitation costs. Highway, road and bridge funding is losing its priority in Congress and many states are facing hundreds of million in funding deficits. The only method to change those policy decisions is through the Maine State Legislature and/or Congress and not the Maine Turnpike Authority. The federal government prohibits tolling existing highways built initially with federal funds. The Maine Turnpike Authority did not plan or build I-295 or I-95 north of Augusta. The Turnpike is directed by state law and through legal bond agreements to maintain the 109 miles under its purview to the highest possble quality through enough toll revenue to accomplish its responsibility.

CLAIRE GAMACHE's picture

Aggravating the problem

I realize the Turnpike Authority isn't the cause of the dismal state of our connector roads nor are they the ones who can change that but what we don't need is for the Turnpike Authority to make things worse for us. That is what the plan you are proposing represents. If you must have this increase get it from the people who are already blessed with good economic development thanks to those great roads they got with our tax dollars. Maybe the folks who benefitted the most from the widening should be paying the most for it.

Dan MAINE TURNPIKE AUTHORITY's picture

Thanks for responding Claire.

Thanks for responding Claire. 72% of all toll revenue received by the Maine Turnpike comes from all side toll souths of New Gloucester (36%) and the York Toll (36%). 13% percent comes from the New Gloucester Toll and 5% from the West Gardiner Toll. The proposed toll increase would raise York from 36% to 39%; New Gloucester would stay at 13% and West Gardiner would go from 5% to 6%. To reiterate, moving away from cash to a Maine E-ZPass gets you lower rates and discounts based on how many times one uses to the Turnpike. The new Volume Discount proposal takes 10% off your monthly tolls if you use the Pike 20+ times a month; 20% for 30+; 30% for 40+; up to 50% for over 60 trips. Your comments are exactly what we're asking for and we thank you.

Dan MAINE TURNPIKE AUTHORITY's picture

I forgot to add that E-ZPass

I forgot to add that E-ZPass allows you to avoid the cash tolls and pay a rate by the miles you travel. There is much more equity. Coincidentally, even with E-Zpass, the side tolls in Portland pay a higher rate per mile than the north or the southern end. there is a minimum toll charge for evey entry. It's $1 for cash and 50 cents for E-ZPass. The proposal raises the minimum E-ZPass toll to 60 cents. A motorist traveling one mile near Portland (Exit 45 to 46) now pays $1 ($2 to get back) and $1 for a 2 mile round-trip with E-ZPass. The average E-ZPass rate per mile under the preferred option would be 8 cents a mile. Under the preferred option--Lewiston to Maine Mall Road Exit 45 be 6.8 cents per mile or $4.80 for 70 miles round-trip.

 's picture

I have been saying for quite

I have been saying for quite some time now about needing an east to west highway connecting Brunswick - Lewiston/Auburn with ramps in Lisbon/Topsham and potentially further on to the N.H. border with exits in towns like Mechanic Falls, Oxford (possibly by the casino), etc... This would make it easier to travel between the towns in Western Maine to L/A and allow easier travelling between L/A and Brunswick. You could also have this highway connect to I-95 and I-295. This would also allow towns that currently don't have an actual highway system the opportunity for one, which could allow for actual growth economically. If they really want to get ambitious they could speak with representatives in N.H, Vermont and New York about looping it down into those states eventually hooking up with I-90 interstate in Albany, N.Y. Regardless you are correct most of the roads you mentioned are horrible especially when you get into the towns and areas in between. I, for one am just happy that the representatives in Lewiston/Auburn are finally sticking up for those who elected them.

CLAIRE GAMACHE's picture

Good point

Good point about improving traffic to Oxford and the casino. Our local representatives should be looking for ways that we can get business contacts there and roads are key. In the meantime maybe bus trips going both ways on days when we have special events like festivals, or offering trips to the mall.

Jason Theriault's picture

Not much of a threat.

You're threatening us with a bank take over of the MTA?

Oh noes! Who will give away gift cards and use turnpike funds for travel and unearned sick time?

Jim Cyr's picture

Toll increase for

viability. What a crock. This is just another cash cow !

FRANK EARLEY's picture

There's one thing I don't get....

I know what the " Maine Motor Transport Association " is, I just have no clue what they do or who they represent. In twenty four years of driving the length of the turnpike, I don't ever remember anyone ever asking me my opinion on anything. I never once remember a representative of the MMTA, seeking my opinion while trying to get from Millinocket to York, at two in the morning in a driving snow storm. They somehow never seemed to be there while I was waiting in line to be weighed , a half mile south of the weigh station, while trying to get home legally. I never knew any other drivers in Maine, who were ever asked for any input. I don't feel that they are a fair representation of the truckers using the turnpike.

Robert McQueeney's picture

This seems a case of pay some

This seems a case of pay some now, or pay more later, much more. We are so much better off taking care of the turnpike, than if we were to let it fall into disrepair and then have to perform major repairs. Which would require a much larger increase in tolls.

As far as how to fairly increase the tolls? That's the tough part. I wish them well. If I see things correctly, going from Lewiston to Auburn on the turnpike or vice versa, there is no charge right now? How is it unfair to finally be charging to use it?

 's picture

Judging by your statement I

Judging by your statement I assume you don't and/or never have lived in Lewiston/Auburn. Citizens between the two cities don't use the turnpike to go between the cities, it makes no sense to. You would have to drive to the outskirts of either city then proceed to drive the 5 miles between each exit, get off and proceed to drive back into the cities which would be an estimate 10-13 miles. When all you would have to do is use either the Bernard Lown Peace Bridge (Green Bridge) or Longley Bridge to go into each others downtowns or use the Veteran's Memorial Bridge to go between Upper Main St. in Lewiston to Center St. in Auburn. Not only that, but given the fact that roughly 10-15 miles north and south of either city there is a toll plaza that is 25-75 cents more expensive to use the turnpike then that of any of the toll booths in Greater Portland. If someone in Greater Portland uses the turnpike between Gray and York toll plazas they are paying a minimum of $2 between getting to and from work. If Someone from Lewiston/Auburn work south of Gray toll plaza at minimum it would cost that individual $4.50 (Gray toll booth $1.75 x 2 and $1 dollar to get on the turnpike from any Greater Portland on-ramp). If the same individual worked somewhere north of Gardiner toll plaza it would be $2.50 (Gardiner toll booth $1.25 x 2). Why would the Turnpike Authority switch it to toll booths to get on the turnpike in Lewiston-Auburn-Sabattus when they would lose a ton of money? I just think if they are going to increase the tolls it should be more equal then it currently is. I am orignally from Lewiston and currently living in Greater Portland, everyone down here generally uses I-295 which is toll free (as long as you don't go south of Scarborough or north of Gardiner). Either spread the increases equally amongst all of the toll booths or they should just put a $10 dollar charge at York and tear down the rest, since I highly doubt that expect Lewiston-Auburn and Western Maine to continue to get robbed.

Dan MAINE TURNPIKE AUTHORITY's picture

Michael: It's important to

Michael: It's important to look at the entire toll system rather than select examples. Your example of Gray to Wells, while true, also leaves out the concerns we here from the Portland area. For example, it now costs a motorist $2.00 round trip to travel from Maine Mall Road at Exit 45 to Exit 48 in Westbrook -- 33 cents per mile. In addition, south of York to Saco round-trip (58 miles) is a $5.00 cash toll but the same disctance round-trip from Auburn to Exit 46 (Jetport/Unum) is $4.50. The current toll structure of the Maine Turnpike is certainly complicated and in some cases inequitable due to the combination of barrier tolls (York, New Gloucester, West Gardiner and Gardiner) and side tolls. Decisions made years ago. It was necessary to keep the side tolls as a result of the failed 4 barrier plan. Four barriers were initially planned for construction although the MTA was not allowed to construct a 22 lane Scarborough barrier just south of Exit 44. It is a very difficult platform on which to assess tolls simply due to the physicial toll structure of both barriers and side tolls. That is the maine reason why the MTA is strongly encouraging Maine residents to get an E-ZPass. It enables us to smooth out many inequities which are nearly impossible with cash rates and move back to a system where motorists pay on a per-mile basis -- you pay for how far you drive -- much like the old ticket system.

Dan Morin
Public Relations Manager
Maine Turnpike Authority

Dan MAINE TURNPIKE AUTHORITY's picture

Pardon my spelling. Smart

Pardon my spelling. Smart phone auto correct can get you on occasion.

Steve  Dosh's picture

Maine Turnpike chief says bank could end up operating road if .

Mainers 12.06.17 21:00 hst •
Y'all are turning in to a lughingstock . okay ?
Get rid of all tolls and toll bridges . We have none in Hawai'i
Take the money out of the Governor's and your US Senator's paychecks and retirement and health plans if this is the best you can come up with
Let the bank have the crap road . Privatize it . Now
h t h ? Steve

Dan MAINE TURNPIKE AUTHORITY's picture

Steve: Having lived and

Steve: Having lived and worked in Hawaii for a number of years previously I do not miss the 1 hour, 5 mile one-way commute on H-1 into downtown and the projected $5 billion + price tag for the upcoming light rail system to address the congestion.

Dan Morin
Public Relations Manager
Maine Turnpike Authority

Steve  Dosh's picture

Dan , Monday 15:00 hst

Dan , Monday 15:00 hst • 
Thanks for response
We both run on tourism , Vacationlandites . Both ? 125,000,000 inhabitants . I'm F B I ( From the Big Isle )
You think the tourists like paying tolls ? Canadain coins do not work yet they are probably worth more these days . Bring back The Cat
The light rail ( Yes ! We are building j o b s - infrastructure , capital improvments and it's is more can you can boast . t y v m Jacobs Engineeering Boston MA for assisting just last week , also thanks for the wind farm advice that other Boston firm
Ya'll do not seem to realize how many boats you've missed over the years if you are in a predicament such as this
Yes, i am talking B I W , Kittery and President Obama's http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009 . Are your bridges rutsy ? Minnesota's were, also . ( rt. 35 )
it's yours' for the taking
Why are you so short sighted ( just my opinion ) ?
Even that Gov. from TX who was running for President is accepting billions from the US Federal Govt for drought and wildfires
h t h /s Steve Dosh

Roger  Cyr's picture

paychecks

i agree but NO ONE has the GONADS to push THIS ISSUE,,,ALL TALK AND NO ACTION, NO GUTS TO PURSUE THIS....

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