State settles lawsuit with toll bridge consultant

The state Department of Transportation and Development and the Texas-based proprietor of the Leeville Bridge tolling system have reached a settlement agreement whereby each entity has withdrawn a lawsuit filed against the other.

Per the agreement, the state will pay $1 million that was being withheld pending the litigation to Electronic Transaction Consultants Corporation. DOTD will pay another $1.5 million as mutually approved improvements to tolling systems on the Tommy J. Doucet and Crescent City Connection bridges are implemented and approved by the state.

Among the milestones are sweeping changes to the tolling system on La. Highway 1, including the installation of a toll plaza with cash options and a more efficient method of penalizing violators.

“We are eager to see the citizens of Louisiana get the tolling service product that they deserve, coupled with the reporting and accountability elements that the state needs to provide oversight and management of its tolling facilities,” DOTD Secretary Sherri LeBas said.

Attributed to a faulty collection and penalty system and unrealized traffic forecasts, the state fell about $700,000 short of its bond debt requirements for LA-1 last year. This led to the re-evaluation of the system, which was directed by HNTB, a toll industry consultant retained by DOTD that assisted in brokering the settlement.

The state collected 71 percent of the toll revenue it should have in 2010 from Leeville Bridge traffic, a DOTD official said in February, which was a component in the lawsuit against ETC. The tolling consultant lawsuit against the state charged DOTD with withholding contractually obligated funds.

The original contract called for $8.2 million for ETC’s work on both bridges. The state paid $7.2 before the legal dispute, and ETC called for an additional $4 million. The settlement agreement stipulates a total contract of $9.7 million once the milestones are met and the $2.5 million is paid in full.

“We both conceded a little bit,” said Jodi Conachen, communications director for DOTD.

The state will pay also $915,000 per year in upgrades and maintenance costs for the Crescent City Connection and Leeville bridges’ toll systems. The number will decrease when Crescent City Connection tolls expire in 2012.

Plans call for an extra lane to be incorporated into the base of the Leeville Bridge for the installation of a cash plaza, and the design team is developing a construction plan that does not impede heavier traffic to and from Port Fourchon.

The agreed upon upgrades for both bridges should be complete by spring of 2012, Conachen said.

“There are milestones along the way, so within the first couple of months, we should start to see some real progress in the reporting mechanism and the violation process,” Conachen said. “We hope some of the adjustments will up our collection rate. That is a process in transition. This will definitely help us to get a better grasp on what we can actually collect on there and be in better shape for the next fiscal year.”

The state is still in negotiations with the Bank of New York Mellon, the LA-1 bond trustee, in regard to how the 2010 shortfall will be addressed. Conachen said more information pertaining to this issue would be known after Thursday’s Louisiana Transportation Authority meeting.

“We are very grateful for the department’s willingness to restart discussions and work with ETC for the benefit of the project,” said Tim Gallagher, managing director of ETC, which is headquartered in Richardson, Texas. “We look forward to working closely with the department to ensure that their toll collection systems provide great value to the state of Louisiana.”

Henri Boulet, the executive director of the LA-1 Coalition, said the settlement cleared the way for the desired upgrades to be implemented.

“We are extremely pleased that they reached an agreement and they will be back completing and even further enhancing the system beyond our expectations,” Boulet said.