Louisiana Toll Road Unable to Cover Debt Service Due to Hurricane Ida Damage
Written by Victor Skinner, The Center Square
Published Dec. 7, 2022
Damage from Hurricane Ida cut toll revenues for the Louisiana Transportation Authority by 78% in fiscal year 2022, leaving the LTA unable to cover its required debt service payments, according to the Louisiana Legislative Auditor.
Louisiana Legislative Auditor Mike Waguespack issued an audit report for the LTA that highlights the impact of Hurricane Ida on the agency and how it’s dealing with the fallout.
Hurricane Ida "severely affected fiscal year 2022 revenue" with widespread damage and power loss when it made landfall on Aug. 29, 2021, auditors wrote.
"The tollbooth, toll gantry and customer service center building sustained water damage. As a result, all tolling operations, manual collections and invoicing were idle from Aug. 28, 2021, through June 30, 2022," the audit read. "This is primarily due to supply chain and contractor labor shortages occurring in the aftermath of the storm."
The result was a 78% decrease in revenue compared to the previous fiscal year.
"In fiscal year 2022, LTA collected $966,682 in revenue from tolling fees," according to the report. "LTA utilized business interruption insurance to offset the loss of revenue. Insurance proceeds collected by LTA totaled $3.4 million and covered losses for the period of Aug. 29, 2021, through June 30, 2022."
The storm also caused a $2.2 million (64%) decrease in net transfers in and transfers out for fiscal year 2022.
"In 2022, LTA’s total operating revenues decreased by $68,457," from $4,423,110 in 2021, according to the report. "The total cost of all programs and services increased by $72,241."
The loss in toll collections meant the LTA could not meet its Cooperative Endeavor Agreement with the state to pay its bond obligations, auditors wrote.
"LTA has an outstanding limited and special revenue obligation bond and two bonds from direct placements related to business-type activities totaling $54,275,000 and $112,545,000, respectively," according to the report.
"In fiscal year 2022, the actual revenues of $4.4 million were 30% lower than the required debt service payment. The toll collections in fiscal year 2022 did not provide sufficient revenues to reimburse the state in full for debt payments made on LTA’s behalf," the report read. "For fiscal year 2023, LTA anticipates that collections will not fully reimburse the state."
The LLA report showed administrative expenses increased to $31,667 in fiscal year 2022 from $24,050 in fiscal year 2023, while total operating expenses for both years was about $9.4 million, including depreciation.
The result is the LTA ended fiscal year 2021 with an operating loss of $5,028,815, and fiscal year 2022 with an operating loss of $5,104,899. The change in net position for 2022 was negative $7.8 million, up more than $2 million from the negative $5.5 million net change the year prior.
The LTA finished fiscal year 2022 with $53,265 in the bank and $14,299 invested in money market mutual funds, down from $226,342 in cash and $20,136 in mutual funds at the end of fiscal year 2021, according to the LLA.