CHICAGO -- The Democratic candidate for Illinois governor yesterday called for the elimination of the Illinois State Toll Highway Authority in the wake of several scandals.
At a press conference, Dawn Clark Netsch called for abolishing the authority, merging its functions into the state's department of transportation, and creating a new entity to take responsibility for paying off its outstanding bonds.
"The tollway is a rogue bureaucracy that is out of control," Netsch said in a press release. "The only way to stop the abuses and the waste of our toll money is to abolish the tollway authority altogether."
Peter Giangreco, Netsch's campaign spokesman, said that under existing bond covenants, toll revenues needed to pay off bonds must be held separately from state funds. Under Netsch's plan, a tollway bond board would be chaired by the state transportation secretary who would answer directly to the governor.
Netsch, the state comptroller, said her proposal would save $16 million a year in operating expenses by eliminating duplicate functions of the authority and the transportation department. The savings would be used to eliminate three or four toll stations, according to the plan.
James Montana, Edgar's chief legal counsel, said the abolition of the authority could cause problems with both bondholders and rating agencies. He said he doesn't believe bond covenants would allow any entity except the existing authority to collect toll revenues, maintain the tollroads, and pay debt service on about $1 billion of outstanding bonds.
The authority has authorization to finance $2.4 billion of tollway projects.
Montana said that the authority has already begun to adopt reforms instituted by the governor.
The authority's board a month ago adopted reforms that require the disclosure in every request for proposal of any relationship between the firm and any former or present directors. employees, or agents of the authority. The board also approved the creation of a committee of officials to review proposals by architectural and engineering companies, and set up guidelines for using the authority's helicopter.
The reforms were passed in the wake of revelations that Robert Hickman, the authority's former executive director, allegedly used the helicopter for personal matters and failed to disclose that his son worked for an engineering firm that received no-bid contracts from the authority.
Hickman, who was appointed to the post by Edgar in 1991, resigned in April and left the job in May. Edgar replaced Hickman with Ralph Wehner, a 34-year veteran of the state transportation department, who initiated the reforms.
In recent weeks, local news outlets have reported on a questionable tollway land sale that is reportedly the target of a DuPage County grand jury investigation, and a special authority pension fund.
Meanwhile, the authority will not renew a contract with Public Sector Group, its financial adviser, because the job has become moot. Nicholas Jannite, the authority's manager of finance, said yesterday that the firm was hired a year ago to "look at the total capital plans of the authority" in view of what was then a low interest rate environment.
"Rates have gotten away from us and we're not able to do any creative refinancings given the interest rates," Jannite said.
He added that Public Sector Group was paid a total of $60,000 by the authority.
Last May, the Chicago Tribune reported on links between Dana M. Grigoroff, Public Sector Group's Illinois lobbyist, and Hickman.
Jannite said that report had "absolutely nothing" to do with the decision not to renew Public Sector's contract. He said the firm will be considered when the authority sends out a request for proposals to financial advisers.
Phillip Peloquin, Public Sector executive vice president, did not return phone calls.
Earlier this month, Wehner said that the authority will be issuing requests for proposals for bond work for the first time in the authority's history.