Delaware River bridge tolls will go up by $1 and PATCO train fares will increase by 10 percent on July 1, under a plan approved Wednesday by the Delaware River Port Authority board.
The PATCO fare hike was delayed from a scheduled Jan. 1 effective date, but the DRPA board bowed to pressure from Wall Street not to further delay the bridge toll increase.
The board also approved a $194 million contract to rebuild the PATCO fleet of 120 railcars over the next five years.
The move to raise tolls came as the DRPA board approved the agency's operating and capital budgets for 2011. The operating budget of $265 million included about $134 million for debt service and related costs.
The DRPA is $1.4 billion in debt, and 47 percent of tolls go to making payments on that debt.
Much of that debt accumulated during the last 12 years, as the DRPA spent about $500 million on economic-development projects, such as sports stadiums, museums, and concert halls.
Now the agency is planning to borrow more money to pay for a $1 billion, five-year construction plan to repair its four bridges and overhaul the rail fleet. The board Wednesday approved a $150 million capital budget that is part of that $1 billion spending plan.
The decision to proceed with the toll increase came after weeks of talk about delaying the hike and using unspent economic-development funds to make up the lost revenue.
The DRPA has more than $50 million in unspent economic-development funding, and about $28 million of that is not contractually obligated for projects. That $28 million would provide as much revenue as six months of a $1 toll increase.
In the end, though, the DRPA's financial advisers convinced the board that a delay in raising tolls could prove costly, causing financial rating agencies to downgrade the DRPA's bond rating and prompting a Swiss bank to call for immediate repayment of a $220 million "swap agreement."
Only board member John Dougherty, a Philadelphia labor leader, voted to postpone the bridge toll increase, which will raise the toll to $5 from the current $4.
"We hold up a toll increase because people can't pay it," Dougherty said.
Jeffrey Nash, the Camden County freeholder who is vice chairman of the DRPA board and the leader of its New Jersey delegation, said he was "pained" by the toll increase but felt compelled to vote for it to avoid possible retribution from Wall Street.
"I believe we have a responsibility to see that we don't cause an $8 toll," Nash said.
Rick Remington, a spokesman for the motorists' organization AAA Mid-Atlantic, said, "DRPA played on Wall Street and lost and now is turning to motorists for a bailout."
He said the DRPA "got into this predicament because it ran up hundreds of millions in debt to pay for economic development projects totally unrelated to the bridges or PATCO. With gas prices at a two-year high, it is particularly egregious now to raise tolls."
The DRPA already delayed the bridge-toll increase once. Originally, the increase was to have taken place in September. It was put off for 10 months when the DRPA board reallocated $8 million in economic-development funding last December.
But chief financial officer John Hanson said the unspent economic-development money can't bail out the DRPA now the way it did last year.
Because the DRPA has since borrowed an additional $300 million, it needs an infusion of ongoing revenue, not a onetime boost, Hanson said. A toll increase would provide that, he said, but a shift of economic-development money would not.
Financial adviser Kim Whelan, co-president of Acacia Financial Group in Marlton, echoed that position Wednesday, telling the board: "We have been clear. You need to do the toll increase in July. You have let the bonds [for the $300 million]. The boat has sailed."
The vote to delay the PATCO fare hike was 10-2, with "no" votes from representatives for Pennsylvania Auditor General Jack Wagner and Pennsylvania Treasurer Rob McCord.
"Tollpayers are subsidizing the people who take the train," said John Lisko, McCord's representative. "Once again this is a decision putting PATCO in the front of the line."
PATCO gets about $20 million a year from tolls to help pay for its $45 million operating costs.
PATCO general manager Robert Box said motorists benefit from the train's existence because it reduces traffic and parking jams.
Dougherty proposed selling PATCO to save money, but the proposal was defeated when it got no support from the New Jersey board members.
The board also approved a $194 million contract to rebuild PATCO's 120 railcars, despite a last-minute plea from the losing bidder to reconsider.
Alstom Transport of France won the contract to rebuild the cars at its plant in Hornell, N.Y.
The contract calls for replacing the interiors, the brake and propulsion systems, the lighting and messaging systems, and the heating and cooling systems. The stainless-steel car shells, wheel assemblies, and traction motors would be reused.
The project, including design and construction, is expected to take about five years.
PATCO officials said buying new cars would have cost about twice as much.
The losing bidder, Bombardier Inc. of Canada, asked to be allowed to made a "best and final offer" that it said would drop its price by $15 million (to $215 million) and provide new car shells. But PATCO officials said that would mean re-opening the bidding process and delay the project by up to two years.
The operating budget approved Wednesday provides for a second year in a row without raises for nonunion workers and a third year without raises for the top officials. The agency's police officers continue to work without a new contract.
The budget also assumed continued operation of the summer ferry that plies the Delaware between Camden and Philadelphia, although the operation is up for bid and faces some opposition on the board because of a projected $1.2 million cost for new docks.