Parkways Authority members on Thursday approved the sale of up to $333.63 million of road bonds, part of a 2017 law authorizing the sale of up to $500 million in Parkways bonds for road construction projects in 10 southern West Virginia counties.
It will be the second bond issue under the legislation, with the authority selling $172 million of bonds in 2018.
“We’re estimating that we’re probably four to six weeks, conservatively, before we go to market,” Parkways executive director Jeffrey Miller told the authority during a meeting conducted telephonically.
Interest rates on the bonds, which are to mature in 2051, may not exceed 6%, although bond rates currently are much lower. The bonds are to be paid off with $25 million a year of revenue from increases in West Virginia Turnpike tolls that went into effect in January 2019.
On that front, the authority got some good news Thursday with a 2021 update of the Turnpike’s 2018 Traffic and Revenue Report.
The initial report by CDM Smith projected that nearly 20 percent of commercial truck traffic would divert off the Turnpike to avoid some or all tolls, which doubled in 2019. However, the 2021 update found that in 2019 and in the pre-pandemic months of 2020, less than 3% of commercial traffic diverted to avoid tolls.
“We were able to determine the diversion did not come anywhere near the rate they had projected,” Miller said.
“This is an extremely positive report on the stability of traffic on the Turnpike,” he said.
Under the legislation, the Turnpike bonds can be used to fund highway construction projects in Fayette, Greenbrier, Kanawha, McDowell, Mercer, Monroe, Nicholas, Raleigh, Summers, and Wyoming counties.
Approval of the bond resolution comes one day after the state sold $262 million of general obligation bonds as part of the Roads to Prosperity road bond program. However, Parkways director of finance Parrish French said the timing is strictly coincidental.
Also Thursday, authority members:
- Authorized the authority to spend up to $425,000 to purchase an office building owned by Phillips Global, located at 324 George St., in Beckley, adjacent to Parkways’ Beckley South facility.
According to media reports, Phillips Global was created earlier this year with the consolidation of three Beckley-area coal mining machinery companies, Phillips Machine Service, Gauley-Robertson CAI Industries, and RiJa Inc., and that the building was no longer needed as the companies consolidate into one headquarters.
Authority members were told the purchase price represents a significant discount for a building of its quality and size.
“We do need it for office space,” Miller said, adding that customer service and tolling operations will move into the building.
- Awarded a $9.77 million pavement reconstruction project to West Virginia Paving of Dunbar, despite concerns that it was the only bidder for the contract.
In 2020, West Virginia Paving and two other subsidiaries of Ireland-based CRH plc paid the state $101 million to settle an anti-trust case contending that the three companies had conspired to create a state monopoly on paving and asphalt supply.