An Audit Report on the Department of Transportation's Oversight of Regional Mobility Authorities
October 2007
Report Number 08-007
Overall Conclusion
The Department of Transportation's (Department) oversight of regional mobility authorities (authorities) includes approving the creation of authorities and monitoring grants and loans awarded to the authorities for transportation projects. As of September 2007, the Department had reviewed eight petitions submitted by local governments to create authorities, which the Texas Transportation Commission (Commission) subsequently approved. The Department has approved $107 million in loans and grants to authorities to finance the planning, design, and construction of transportation projects.
Authorities also have received loans and grants from local governments to fund initial operations. Issuing revenue bonds is the primary financing mechanism available to authorities for the construction and operation of major transportation projects. The principal revenue source used to finance debt service for transportation projects built by authorities will be provided by tolls collected from users. Authorities have the option to set tolls high enough to generate surplus revenue to finance additional transportation projects.
There are opportunities for the Department to improve its oversight of authorities. For example:
- The Commission's process for approving the creation of authorities complies with the requirements listed in statute and the Title 43, Texas Administrative Code, Chapter 26. The Department could improve this process by providing more detailed criteria and examples of the types of materials that must be included in petitions submitted by local governments to create an authority.
- The Department could be more consistent in monitoring an authority's use of grants and loans that it awards to authorities. The Department effectively monitored $17.5 million in loan and grant reimbursement requests from four authorities, but it did not monitor a $52 million grant awarded to the Central Texas Regional Mobility Authority (Central Texas Authority). The $52 million grant was awarded to provide equity for the Central Texas Authority and help it secure $168 million in revenue bond financing for construction of the 183A Toll Road.
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