Archive for February 10th, 2009
Laconia council mulls extra day for Bike Week vendors
Saying it represents a “goodwill gesture” as well as an opportunity to bring in some extra licensing revenues, the City Council is supporting the idea of letting vendors sell their wares one day before the official start of Bike Week 2009.
Following a meeting of the council’s Finance Committee Monday, City Manager Eileen Cabanel was directed to draft an ordinance that, following a public hearing, could be in place for the rally, which this year runs from June 13-21.
For $100 extra, a vendor would be able to start doing business as of a time to be determined on June 12. A regular Bike Week licensing permit costs $450.
The rationale behind the early vending fee is that the vendors are already here, that they want to sell and that locals are eager to buy before the activities really start rolling, said Councilors Armand Bolduc and Bob Hamel.
The city’s public safety heads say the extended vending wouldn’t change the way they already did business on the Friday before the rally, but both Police Chief Mike Moyer and Fire Chief Ken Erickson expressed concern about the “slippery slope” of Bike Week stretching beyond its current nine days.
While its was agreed that food vendors might also want to begin doing business as their t-shirt or leathers-selling brethren, the chiefs and the committee members were adamant that they would not support the early opening of three beer tents.
Moyer, in conversations he had with rally promoter Charlie St. Clair of the Laconia Motorcycle Week Association, estimated that the earlier vending could see the city make up to an additional $1,200 this year. Erickson speculated that up to 30 vendors might take advantage of the extra selling opportunity.
However many vendors do show up, said Bolduc, who represents the city on the LMWA board of directors, that’s better than seeing those vendors and potential customers go to another venue outside of Laconia.
“Let’s try this for a year and see what happens,” Hamel said. “I think we can get a fair amount of people open.”
With the city of Myrtle Beach, S.C. canceling its two motorcycle rallies this year, “we could have a huge influx of vendors and visitors,” Hamel added, suggesting that vendors could be allowed to sell from 2 p.m. until Midnight on Bike Week Eve.
Erickson expressed surprise that “we’re not shortening this thing,” later explaining that to keep costs down for the city and also for vendors, the rally could be shorter than it is now. The extra several hours that a vendor gets to sell his merchandise at Bike Week will not mean significantly more income for the vendor, Erickson said.
Hamel suggested that the council hold a public hearing on the vending changes and Cabanel agreed, noting that some residents of The Weirs already “complain very loudly” that the rally is too long.
Joe Driscoll, of the Weirs Action Committee, said if the council allows the early vending,” this would be seen very much as a good will gesture” by property owners and vendors while also helping to keep Bike Week money in Laconia.
Driscoll went so far as to suggest that the vendors be able to open up on Friday for free. He discounted Cabanel’s concern that if Laconia allows earlier vending, competing venues in other communities would do the same. Driscoll said most Bike Week visitors don’t show up much sooner than the Friday before the start of the rally.
Fitch Goes Negative on California Toll Roads
Record low traffic levels call into question the financial viability of Orange County, California toll road projects.
A major credit rating agency sees grim times ahead for toll road operators in Orange County, California. Earlier this month Fitch Ratings downgraded to “negative” its assessment of one of tolling projects operated by the publicly run Transportation Corridor Agencies (TCA). In reaching this conclusion, Fitch considered the performance of the Foothill/Eastern Corridor (F/ETCA) toll roads — Routes 241, 161 and 133 –which stretch twenty-four miles from Yorba Linda to Rancho Santa Margarita and Irvine.
“The Negative Outlook reflects the significant economic weakening of the F/ETCA’s service area and resulting declines in traffic and revenue,” the ratings report explained. “If weak economic conditions are prolonged, the lower base of traffic could make the F/ETCA much more dependent upon frequent toll increases at or above inflation to meet growing debt service obligations…. Debt service obligations on the facility are scheduled to increase by over 11 percent between fiscal 2009 and 2010, and by 47 percent from fiscal 2009-2015.”
Orange County has been harder hit by the economic downturn than most other parts of California. The county’s 1.8 percent loss in employment and and a 30 percent drop in housing prices both far exceed statewide averages. That hardship has translated into fewer motorists willing to pay to use the TCA’s toll roads.
Traffic dropped 4.2 percent on the 241/161/133 corridor during fiscal 2008. The first half of fiscal 2009 saw an additional 7.9 percent decrease. Fewer paying customers meant a 3.8 percent revenue loss in fiscal 2008, a gap which widened 8.3 percent in the first half of fiscal 2009. Although average annual toll hikes on the corridor have been kept to just 2.1 percent, that amount is planned to jump to 7.6 percent between now and 2016. The fear of revenue loss has also created a financial incentive for public officials to ensure congestion is maintained on the nearby Interstate 5 freeway.
“The rating also incorporates the significant leverage on the project with… the need for continued traffic and revenue growth, and the vulnerability of the facility to prolonged adverse developments or capacity enhancements on competing free facilities such as I-5,” Fitch noted.
The other project maintained by TCA is already rated at “BB” or junk bond status for $226 million in senior lien toll road revenue bonds covering the San Joaquin Hills Toll Road. This road, known as Route 73, stretches 17 miles from Costa Mesa to Mission Viejo. Fitch gave Route 73 a stable outlook because of the TCA’s willingness to overlook the needs of the motoring public.
“The ‘BB’ rating reflects the strength of the SJHTCA’s service area, an established base of traffic, and management’s demonstrated willingness to raise rates and act in the interest of bondholders,” the report stated. “In addition, the rating reflects the future financial challenges faced by the SJHTCA which are evidenced by high leverage and a continually increasing debt service schedule with a $15 million or 16 percent increase in debt service obligations in 2012, and similar increases every three to four years until 2033. Additionally, the SJHTCA will need to remain at its revenue maximization point for the foreseeable future to prevent a default, thus limiting its ability to deal with short-to-medium term disruptions from economic cycles between now and the final maturity of the debt in 2036.”
The TCA toll hikes hit Route 73 travelers ten times for an average annual toll boost of 6.7 percent — well in excess of inflation. Orange County tolls are already among the most expensive per-mile of any Fitch-rated roads. Despite the higher charge, a 10.2 percent drop in traffic revenue brought revenue down 5.3 percent in fiscal 2009. A continued economic downturn could increase the likelihood of future default.
“In Fitch’s base case scenario … traffic could be expected to continue to grow moderately over time and may very well provide the SJHTCA with enough revenue to prevent a default,” Fitch stated. “Even under Fitch’s stress case scenario which assumes much lower traffic and revenue growth, a payment default would be forestalled to 2025-2030, with liquidity draws beginning in the next few years.”
The best case scenario, however, does not reflect the $120 million in developer fee revenue that must be repaid unless a planned southern extension of the 241 toll road begins construction by 2016. The extension was recently thwarted by anti-road activists who succeeded in convincing the right people that building the new toll road would ruin surfing in the area. Even if environmentalist factions could be satisfied by an alternate route, Fitch questioned the ultimate ability of the toll road agency to fund the new road’s construction without massive toll increases well beyond the inflation rate on existing roads.
Skin-baring might bring ticket, arrest
MYRTLE BEACH — Myrtle Beach leaders are considering a tougher indecent exposure law that would allow officers to issue tickets or make arrests the first time they see someone baring too much skin.
The Sun News of Myrtle Beach reports that the current so-called “thong ordinance” requires officers to issue a warning before issuing tickets. Myrtle Beach has banned thongs on the beach for 16 years.
City spokesman Mark Kruea says the tougher law is not in response to May motorcycle rallies along the Grand Strand, although he acknowledges the biker events bring an increase in illegally exposed skin.
The Myrtle Beach City Council will consider the new rules for the first time today.
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