Oklahoma Turnpike OKs $1 billion of bonds for expansion project

The Oklahoma Turnpike Authority authorized on Thursday the issuance of $1 billion of revenue bonds to continue financing the controversial ACCESS Oklahoma expansion program with a projected price tag that has risen to $8.2 billion. 

Turnpike Executive Director Joe Echelle told the board that inflation boosted the cost of every line item in the 15-year Advancing and Connecting Communities and Economies Safely Statewide program since it was announced in February 2022 at an estimated cost of $5 billion.

“The bond program and these new numbers include all of the engineering design, the property acquisition for necessary right of way, our utility relocation work, and then all of the construction projects that will come — everything that we have in this program is more expensive,” he said, noting that three projects were also added to the program. 

The second senior revenue bonds will be sold in 2025’s first quarter along with a potential refunding of Series 2017A bonds, according to turnpike officials. The deal follows an initial $500 million bond sale in October 2023 that had been delayed by litigation.  

Jordan Perdue, OTA’s senior financial analyst and legislative liaison, said approval for the 2025 bonds will be sought late this year or early next year from Oklahoma’s Council of Bond Oversight and that court validation, which was granted for the first debt sale, was not necessary.

OTA ultimately emerged the winner in litigation brought by property owners in the path of the expansion, who challenged the turnpike’s ability to build and finance ACCESS projects and alleged Open Meeting Act violations on the authority’s part when the program was unveiled. After the Oklahoma Supreme Court ruled in the turnpike’s favor in the lawsuits in May 2023, justices subsequently validated the initial debt in a 6-3 decision. 

An investigative state audit of OTA ordered by state Attorney General Gentner Drummond last year has yet to be released, while the city of Norman so far has declined to cooperate with a toll road expansion impacting its residents. 

“Under these conditions we believe it is utterly reckless and irresponsible for the OTA board to rubber stamp a massive billion dollar bond offering with no due diligence and no regard for the feasibility, desirability, or financial integrity of the proposed projects,” Tassie Hirschfeld, a member of Oklahomans for Responsible Transportation, said in a statement.

The 2023 bonds were rated Aa3 by Moody’s Ratings and AA-minus by S&P Global Ratings and Fitch Ratings — all with stable outlooks.

Goldman Sachs was tapped to head up the underwriting team for the upcoming bond sale, which consists of Morgan Stanley, Jefferies, Stifel, Raymond James, BOK Financial, and PNC Capital Markets, according to Perdue.

He said OTA refreshed its underwriter pool this summer. Oklahoma’s 2022 Energy Discrimination Elimination Act led to the banning of Barclays, Bank of America, JP Morgan, and Wells Fargo from underwriting municipal bonds in the state.  Wells Fargo resigned as lead underwriter for the OTA’s 2023 bond sale and was replaced with RBC Capital Markets.

Last month, Drummond said he will appeal a state judge’s permanent injunction against the law’s enforcement to the Oklahoma Supreme Court.