Turnpike Authority postpones its meeting as debt woes mount
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The Massachusetts Turnpike Authority, struggling with debt and a burgeoning credit issue, has postponed its monthly meeting, a move one member said could trouble creditors and put the quasi-state agency in more financial trouble.
Turnpike Authority officials said the postponement of Tuesday's meeting until Nov. 14 was made to give state officials more time to complete long-awaited legislation that would abolish the agency, so that information about the move could be presented to the board.
But Mary Z. Connaughton, a holdover from the Republican Romney administration, said any delay in discussing ways to rescue the financially troubled agency - such as controversial proposals to increase tolls - could further hurt the agency's bond rating.
"The toll payers will wind up having to have an even bigger toll increase," she said. "The Turnpike Authority is in dire financial straits."
Turnpike Authority officials have signaled in recent weeks that toll increases are inevitable as the agency struggles with $2.5 billion in long-term debt, mostly related to the Big Dig.
The agency has had difficulty getting loans with favorable terms, and earlier this month
The decision increased the threat that the agency will be forced to immediately repay a $37 million loan that was part of a financial deal made nearly a decade ago.
A decision by the Turnpike Authority's other bond rating agency, Fitch's, could allow creditors to require the immediate repayment of the loan, which could financially break the agency.
"I think it . . . ultimately puts toll payers at risk," Connaughton said.
She noted that Moody's decided to lower the bond rating just a week after the Turnpike board at its last meeting decided against an immediate toll increase, in spite of concerns that it would leave the agency's finances uncertain.
She said the authority has delayed toll increases in the past because of the plan to abolish the agency, but in the meantime the finances have only worsened.
Klark Jessen, a spokesman for Bernard Cohen, secretary of the Executive Office of Transportation and chairman of the Turnpike Authority, denied the postponement will hurt the agency's credit ratings, saying those concerns were considered.
He said the meeting was postponed to give Cohen's office more time to develop plans to abolish the authority and merge its operations under other state agencies, a move that will dictate how the state plans to raise revenue.
Toll increases are not a sure thing, and plans are still being outlined, Jessen said.
Mac Daniel, a spokesman for the Turnpike Authority, said, "We're going to know more about what the plan's going to look like (in November) and that will allow the board to make better-informed decisions about the future of the Turnpike Authority."
In another development, Governor Deval Patrick is expected to announce next week that he has appointed John Jenkins of Natick, a 63-year-old former chief executive officer of Polaroid Corp., as a new member of the board.
Jenkins is president of the West Insurance Agency of Boston and has a law degree from Suffolk University.
He was also a member of Patrick's transition team on economic development.
State officials said yesterday that the appointment was needed - even as Patrick's administration proposes abolishing the Turnpike Authority - so that the authority can address immediate issues such as the financial woes.
"John Jenkins will bring a strong voice and a fresh perspective to the board at this critical time," said Rebecca Deusser, a Patrick spokeswoman.
Milton Valencia can be reached at mvalencia@globe.com.
