CEO Says Economic Development funds will still be spent
On Sept. 14, The Delaware River Port Authority (DRPA) enacted a 33 per cent toll hike on the four major bridges spanning the Delaware River. In 2010, a second toll increase will go into effect, amounting to a 67 per cent hike. This will be followed by automatic increases in relation to the regional consumer price index.
In the 1990’s, the Authority embarked on a vast program of economic development projects, totaling nearly $400 million, most of which had nothing to do with the operation and maintenance of the bridges. As a result, DRPA is mired in a $1.2 billion debt, and must allocate 76 per cent of revenue to salaries, benefits and debt service. At the DRPA Board Meeting this week, the Authority disclosed that it will be issuing more revenue bonds, valued between $200 and $500 million, to pay for capital projects over the next five years.
There are still $35 million of economic development funds available to the DRPA Board to spend in any manner it chooses. While it has stated that it will not use revenue from the new toll hikes for economic development purposes, it had not been forthcoming with The Bulletin on how it would utilize the $35 million, until the press conference following the Board Meeting. Following is the Q and A between DRPA CEO John Matheussen and The Bulletin:
TB: Does DRPA still have the $35 million in economic development funds?
TB: Has there been any discussion by the Board to take the $35 million out of the economic development fund and use it for capital projects, such as the re-decking that the Walt Whitman Bridge requires?
JM: There has been discussion, and the Board has resolved that it will continue to use those monies for economic development projects.
TB: What was the justification for that?
JM: The justification for…?
TB: The region is in an uproar over the toll hike on the bridges and PATCO. The DRPA spent $400 million in economic development projects, which angered commuters given that they had no relevance to the bridges. Now the Walt Whitman needs re-decking, and there is $35 million that could be used for that which…
JM: Not to be picky, but it was closer to $350 or $375 million in economic development. The reason and the authority for doing that was by virtue of a charter change in 1992, which allowed the DRPA to be an economic development authority, not just a transportation authority.
TB: I’m not questioning the Authority’s legal ability to spend economic development money. I’m asking from a discretionary and common sense perspective. The Board has the power to allocate that money any way it wants. People are looking for justification as to why that $35 million, which could cover at least 20% of the Walt Whitman re-decking cost, is still being spent on economic development when they’re paying a $4 toll now, and $5 in two years. They’re upset, and they don’t feel like they’ve gotten an adequate answer.
JM: If anything, the people have gotten the answer to similar questions on numerous occasions. Although there is a reported number of people who are upset with the DRPA being involved in the economic development business, there is a significant number of people who supported it. Even the media, to some degree, went along and said the DRPA was doing good projects, without a lot of criticism heaped at the DRPA.
But the Board has resolved that the $35 million will remain for whatever economic development business that they, by public vote, will decide to do. But any monies raised from the tolls, from here on out, will not be used for economic development. They have directed those monies to be used for capital projects. So they have listened to the public, and while the Board still has economic development authority by the charter, they won’t be doing that going forward.
TB: So let’s be clear. The basis for no more economic development is because of the public outcry, in that people were upset that the DRPA was funding hundreds of projects.
JM: And we stopped it.
TB: Yes, stopped it for future projects, but there’s still the public clamor about why the Authority will still spend the $35 million on economic development when that money could help alleviate…
JM: The Board has made a decision that it will continue to use that $35 million for economic development. I don’t know what to add to that.