Hilton Head toll on track for removal in 2021

tbarton@islandpacket.comDecember 9, 2013 

Cars approach the toll booth on Cross Island Parkway the morning of Dec. 9, 2013, on Hilton Head Island.

DELAYNA EARLEY — Staff photo Buy Photo

Although fewer drivers are using the Cross Island Parkway, the highway's financial outlook has improved.

S.C. Department of Transportation figures indicate the debt on the Cross Island will be paid off on schedule -- by 2021 -- and tolls could end.

New DOT financial numbers paint a brighter picture for the toll road, which went from a $1.1 million accumulated deficit before 2008 to a $2.4 million total surplus in fiscal year 2013.

The DOT increased the toll on the 7.5-mile road by a quarter in 2008, to $1.25. The hike was intended to offset the road's rising maintenance and operations costs and compensate for DOT's underestimate of the number of drivers who would use the Palmetto Pass.

Drivers who use the prepaid pass pay a discounted toll; when more people than expected acquired the pass, revenues fell short.

Before the toll increase in 2008, the cost of maintaining the road and paying the debt outpaced revenue collections almost every year.

Today, the increased toll has brought in enough added income to more than offset yearly debt payments, operating and maintenance expenses. It also is covering past shortfalls, according to the DOT.

The revenue increase comes despite a decrease in traffic on the toll road, from an average of 22,600 daily trips in 2006 to 20,300 in 2012. Meanwhile, the number of Palmetto Pass users has remained steady at about 24,000 a year since 2009.Annual revenues increased from about $7 million in 2008 to $7.7 million as of June 30, while yearly expenses decreased from $7.4 million to about $6.9 million during the same period.

The state changed its operating contract in 2001, refinanced its bonds in 2004, signed a new contract with toll operator Xerox State and Local Solutions in 2008, and installed more efficient equipment in 2007, all to help hold down costs.

This month, the DOT again refinanced its debt, which is expected to save nearly $2.5 million over the remaining life of the bonds, or about $340,000 per year.

As for the traffic decline, it's not large enough to affect the DOT's current ability to cover costs, said DOT Toll Office spokesman Roy Tolson.

The DOT has no plans to raise the toll, he said, but it is in the early steps of performing a new toll study to see whether current cash flow is sufficient to meet future maintenance and operating costs. The last one was done in 2007.

The DOT performed "micro-surfacing" of the toll road in 2009, sealing cracks and installing new pavement markings, and it probably will need to be repaved before 2021, he said.

The repaving and possible bridge work is estimated to cost $6 million to $10 million, part of which would be paid for from the $2.4 million surplus, Tolson said.

"If it is determined there is a need for resurfacing or bridge repair, we will have to make sure there's enough money in the toll account to pay for these needed maintenance items," Tolson said. "But as of right now, numbers are positive."


By the Numbers

  • $81 million: Cost to build the Cross Island Parkway
  • $25.9 million: Remaining amount of bonds to be paid off
  • $1.1 million: Deficit the road faced before 2008
  • $2.4 million: Surplus as of June 30, 2013
  • $7.7 million: Revenue, fiscal year 2013
  • $6.9 million: Expenses, fiscal year 2013

Source: S.C. Department of Transportation

Follow reporter Tom Barton at twitter.com/IPBG_Tom.

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