LA PORTE — The La Porte County Council voiced concerns over a multi-county consortium bid on the Toll Road after being updated on the matter at Monday's meeting.
The La Porte County Board of Commissioners are pursuing a multi-county consortium bid on the Toll Road lease after receiving further analysis from investing banking firm Piper Jaffray This is the third firm the commission has enlisted to provide analysis of the potential deal. Lake County has joined La Porte County in the multi-county proposal. No other counties have joined, but only two counties are required to be a multi-county consortium. Other counties can join at a later date but will not receive the same benefits of being a charter member.
St. Joseph, Elkhart and LaGrange counties have rejected joining the consortium.
According to the submitted report the Commission presented, the bid would be non-recourse to the participating counties and would take advantage of the low cost of capital provided by tax-exempt municipal debt which is not available to private bidders. The toll road would continue to be operated by the private sector, but the County Consortium would replace the existing toll road operator with a private company who the commissioners want to be U.S. based.
Board of Commissioner's attorney Shaw Friedman said the commissioners and the council would know more about the need of the county's roads than a banker in Spain, in regards to the international interest in purchasing the toll road.
County Council attorney Douglas Biege raised concerns over the advice given to the commission by the three firms brought in to consult on the matter, all at no upfront fee to the tax payers. Biege said these firms are all set to profit off the deal and felt that a neutral third party opinion should be considered.
It was also mentioned at the meeting that the toll road has historically not turned a profit. In the 60 years of its existence the state never operated at a profit and the last owners filed for bankruptcy. Though it was noted that this was under the old toll operating structure.
"The analysis provided by Piper Jaffray backs up what Sen. Joe Donnelly has been telling us all along, with the toll road increases the Indiana Toll Road is now a highly lucrative, revenue generating asset," said La Porte County Commissioner David Decker.
Decker said this is why hedge funds from Australia and Abu Dhabi are considering bids.
"The La Porte County Commissioners believe rather than shipping toll road profits, estimated to be tens of millions every year, off to European banks and hedge funds for the next 67 years, let's keep that money here at home to help fix roads, bridges, streets, water and sewer systems right in our own communities," Decker said.
The current leaseholder for the Indiana Toll Road, ITR Concession Company, filed for Chapter 11 bankruptcy protection in September and a process has been established for interested parties to bid on the lease.
Final bids are due in early 2015. If their proposal passes the first phase, a Bond Rating Agency would be needed at expense for the second phase of the process.