EVENTLINE
July/August 2011
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Leasing the Ohio Turnpike?

Transportation stakeholders in northern Ohio are concerned with an ongoing discussion about possibly leasing the Ohio Turnpike. The turnpike is a key transportation asset in the state and changes in its operations directly impact the transportation system and economic competitiveness in the region. State officials have announced that they are considering a variety of options for leasing the turnpike, or possibly shifting management of it to ODOT. Because the options are so broad and because no specific proposals are under discussion, TMACOG members have not taken a position on the topic of leasing. But since members and partners will be affected by any changes in operation, TMACOG offers the following recommendations as the discussions continue. (See a more thorough briefing paper here.)

Regarding the process to lease or otherwise change the Turnpike administration:

To allow for public evaluation and input, the process must be transparent throughout. Any request for proposals, asset valuation methodology, and other contract provisions should be published or shared in a manner that allows for public review by interested parties.

Revenue produced should be limited to the following types of investments:

  • Highway infrastructure improvements that yield a benefit commensurate with the length of the lease.
  • Improvements to air, rail, and water port facilities as well as intermodal and other infrastructure projects that foster economic development and job creation. Projects in northwest Ohio fitting this description are summarized in the document Transportation Legislative Agenda 2010-2011.

Owing to the greater share of support paid into the asset by toll-paying northern Ohioans (historic and future), revenue produced should be allocated as follows:

  • The transaction should produce a net gain for northern Ohio in terms of overall transportation funding over the term of the lease. Toll or lease revenue should not supplant other revenue.
  • Northern Ohio counties and jurisdictions that are adjacent to the Ohio Turnpike should receive a majority share.

Toll rate changes should be handled as follows:

  • To discourage traffic diversion to other routes and to encourage a greater reliance on operating efficiencies and traffic growth rather than toll increases to achieve profits, the amount and timing of toll increases should be limited.

Other provisions:

  • Operating standards (snow removal, lighting, toll collecting, etc.) should be set to the same or better standards than are currently in force.
  • No other roadways in Ohio should be defined as competitive roads nor have restrictions placed on future improvements.
  • The agreement should stipulate the conditions under which current and future access points may be added, removed, enhanced, or otherwise changed.
  • The agreement should have clear definitions as to what constitutes delays and defaults on the part of the turnpike operator and include enforceable provisions regarding dispute resolution.
  • The agreement should require open bid process for contracts and “Buy Ohio” guidelines.
  • The length of the lease term should be kept relatively short—20 to 40 years—to allow flexibility for technological and societal changes that will inevitably occur.

 


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