Newly formed corporation could divert Harris County toll road revenue to non-mobility projects

Vehicles drive alongside the Tomball Tollway in Harris County. (Anna Lotz/Community Impact Newspaper)
Vehicles drive alongside the Tomball Tollway in Harris County. (Anna Lotz/Community Impact Newspaper)

Vehicles drive alongside the Tomball Tollway in Harris County. (Anna Lotz/Community Impact Newspaper)

A new limited government corporation formed by Harris County Sept. 15 could result in surplus revenue from the Harris County Toll Road Authority going to other county needs outside of the realm of transportation and mobility.

The corporation was formed following a conversation at a Sept. 15 commissioners court meeting about refinancing the authority's debt. Commissioners were presented with three options—the first involving a simple debt refinance without any changes to how the toll road authority operates; and another that would have allowed the county to issue mobility bonds to use toll road revenue to fund more non-toll projects.

The third option—which was recommended by the toll road authority and the budget office and which commissioners ultimately supported in a 3-2 vote—involved creating the corporation to contract with the county over the operation of the toll road authority.

As a key part of the corporation's inception, the authority will pay the county a $300 million one-time franchise fee, as well as roughly $90 million in annual franchise fees moving forward, money that is effectively removed from the authority's budget and given to the county. The court's five commissioners will initially assume the rolls on the board of directors of the new corporation.

The three Democratic members of the court who supported the motion—Harris County Judge Lina Hidalgo, and Precinct 1 and 2 commissioners Rodney Ellis and Adrian Garcia—said they saw value in the added flexibility in how that money can now be spent. While money collected by the toll road authority can only be spent on debt and transportation infrastructure, money in the LGC can be spent on a wider variety of projects, including flood control projects and health care needs.

"I favor some flexibility on the issues that we deal with in this county," Ellis said. "I think in the midst of the worst health challenge in 100 years and probably the worst economic challenges since the Great Depression, we can’t solve all our problems, but I think we should not handcuff ourselves."

Meanwhile, Garcia called on commissioners to begin the process of determining what infrastructure needs exist within the county to determine how the money should be allocated.

The motion was opposed by the two Republican members of the court, Precinct 3 Commissioner Steve Radack and Precinct 4 Commissioner Jack Cagle. Cagle said he did not see a need to rush the decision on what officials believe is the largest financial transaction in the history of the county, instead calling for a second opinion and for more public input.
Leaders with both the Cy-Fair Houston Chamber of Commerce and the Greater Tomball Area Chamber of Commerce were among those who submitted requests to commissioners calling on them to refrain from diverting any funding away from infrastructure, including road and transportation projects.

"We are the fastest growing precincts in Harris County and to take this money away from our infrastructure will not only crumble our streets but will hurt our businesses and communities," Cy-Fair Chamber President Leslie Martone said, referring to precincts 3 and 4.

Radack said the move lacked transparency. He argued that money collected from toll road drivers should not be used to fund projects that otherwise would have to be funded by an increase in property taxes.

"There is nothing transparent about this," Radack said. "This is a money grab, and it is a way to try to basically, as far as I'm concerned ... use money to pay for things that are normally paid for by ad valorem [property] taxes."

Garcia said he was sensitive to concerns about transparency. He said keeping the conversations within commissioners court would demonstrate a commitment to transparency as funds are allocated.

"This is not a workaround, but rather this is just working to give the public more for what they have already given us other than just holding it all in a safe deposit box without it working for the public," Garcia said.

The toll road authority brought in just over $900 million in revenue in the fiscal year that ended Feb. 29, according to budget documents, meaning the $300 million one-time payment constitutes around one-third of the annual revenue. Berry said he expects the annual $90 million franchise fee to make up about 10% of annual revenue during an average year.

Any funds not sent over to the county in franchise fees would remain with the authority. The portion of toll road revenue that goes to each county precinct for mobility projects each year will also not be decreased, Berry said.

The county will refinance between $2.7 billion-$2.8 billion in toll road debt, Berry said. He said the move to establish the LGC will not likely trigger a downgrade in the toll road authority's bond rating, though he cautioned that a downgrade still could eventually come as a result of fewer people using toll roads during the pandemic.

"All toll roads right now are under some negative pressure," Berry said at the Sept. 15 meeting. "If commissioners court goes down that path, it is unlikely that would trigger a downgrade, but I can’t promise no downgrade because we’re in middle of pandemic where folks are driving less."

Hidalgo, who cast the deciding vote on the measure, said she thought the move would help the county "maximize every dollar" while also taking advantage of the low interest rates.

"We have time to develop priorities," she said. "Right now, the proposal is that we bring this additional resource to the community. As far as I am concerned, if there is an additional resource that we're not maximizing ... then we should do it."
By Shawn Arrajj
Shawn Arrajj serves as the editor of the Cy-Fair edition of Community Impact Newspaper where he covers the Cy-Fair and Jersey Village communities. He mainly writes about development, transportation and issues in Harris County.


Commuters who use the Northwest Transit Center in Harris County will have access to close to double the amount of parking spaces after officials announced the opening of a new parking lot Dec. 1. (Courtesy Metropolitan Transit Authority of Harris County)
METRO adds more than 200 parking spaces at Northwest Transit Center amid improvement project

Commuters who use the Northwest Transit Center in Harris County will have access to close to double the amount of parking spaces after officials announced the opening of a new parking lot Dec. 1.

As winter approaches, COVID-19 cases are up in Cy-Fair. (Courtesy Pexels)
COVID-19 diagnoses up nearly 100% month over month in Cy-Fair

DATA: The number of new COVID-19 cases confirmed locally throughout November nearly doubled over the previous month.

To support this initiative, community members are encouraged to visit NAM's Blessing Tree, located at 15555 Kuykendahl Road, Houston, where they can choose a child's name and shop specifically for that child. (Courtesy Northwest Assistance Ministries)
Northwest Assistance Ministries in need of donations to support biggest Season of Blessings campaign in nonprofit's history

Northwest Assistance Ministries is in need of toys, food and monetary donations to provide meals to more than 1,700 families and toys to more than 5,300 children this holiday season. By comparison, the nonprofit provided meals for 994 families and toys for 1,773 children in 2019.

The Texas Higher Education Coordinating Board has launched a campaign to address declining college enrollment numbers across the state since the pandemic started. (Courtesy Pexels)
Texas Higher Education Coordinating Board launches campaign to boost college enrollment

The decline in college enrollment across the state of Texas has prompted several agencies to partner up and create online resources for students and counselors.

The 24-hour hospital boasts the latest in diagnostic and surgical expertise, including health care, women's health and orthopedics. (Courtesy CHI St. Luke's Health The Vintage Hospital)
CHI St. Luke's Health The Vintage Hospital to celebrate 10 years in Northwest Houston on Dec. 10

The 24-hour hospital boasts the latest in diagnostic and surgical expertise, including health care, women's health and orthopedics.

Nearly 750 cases of COVID-19 were confirmed in Cy-Fair ISD from Sept. 8-Nov. 29. (Courtesy Adobe Stock)
Cy-Fair ISD reports 170 COVID-19 cases among students, staff Nov. 16-29

Most of these cases came the week leading up to Thanksgiving break from Nov. 16-22—only 38 cases were confirmed over the weeklong break when campuses were closed Nov. 23-29, according to district data.

An effort to widen White Oak Bayou is one of several flood mitigation projects that are moving forward in Jersey Village, according to a series of Nov. 30 announcements. (Shawn Arrajj/Community Impact Newspaper)
Jersey Village secures $4 million in grant funding for flood control projects

Construction has also begun on a separate project to widen White Oak Bayou.

The ice skating complex has been in business since 1995. (Courtesy Aerodrome Ice Skating Complex)
Aerodrome Ice Skating Complex celebrates 25 years of business in Willowbrook this month

A pro-shop tent sale is planned Dec. 4-5, featuring discounted hockey gear and figure-skating merchandise.

Construction begins on new Timewise Food Store and Exxon gas station in Bridgeland

Officials with the The Howard Hughes Corporation—the development company behind the Bridgeland master-planned community in Cypress—announced Nov. 19 that construction has begun on a 5,200-square-foot Timewise Food Store and Exxon gas station at the intersection of Tuckerton and Mason roads in Bridgeland.

Dozens of clinics throughout the county offer COVID-19 testing services. (William C. Wadsack/Community Impact Newspaper)
COVID-19 testing locations remain open in Montgomery County and more local news

Read the latest Houston-area business and community news.

Shoot 360 is coming soon to the Cy-Fair area. (Courtesy Shoot 360)
Shoot 360 to bring unique basketball training center to Cy-Fair area

Shoot 360 uses interactive technology to help athletes develop their shooting, passing and ball-handling skills.