NEW YORK – Fitch Ratings has affirmed the A rating on approximately $61.7 million of outstanding R.I. Turnpike & Bridge Authority revenue bonds, but revised its ratings outlook to “negative” from “stable.”
According to a statement, the negative outlook reflects uncertainty surrounding the authority’s capital program, with both the Claiborne Pell and Mount Hope bridges requiring considerable maintenance investment in the near and medium terms. The authority’s plan to finance needed repairs through tolling the recently transferred Sakonnet River Bridge has been called into question while the General Assembly seeks alternative funding methods.
Barring external funding sources, Fitch said, issuance of toll-revenue bonds will require additional toll revenue. The latter would be driven by periodic toll rate increases, to maintain adequate financial flexibility to support a reliable state of good repair, which may be difficult given the “politically challenging environment to implement toll adjustments.” The authority will seek to transfer the Sakonnet and Jamestown bridges back to the R.I. Department of Transportation.
Additionally, Fitch said traffic volatility for the bridges is generally low, however growth prospects “are limited.” Traffic levels have been stable at approximately 10 million transactions since 2002.
Rhode Island also has a “limited history” of implementing toll increases on its roads, Fitch said. The last toll increase in 2009 was the first time tolls were increased, after 40 years of operations. The authority has recently voted for the next toll increase to $1 for Rhode Island residents with transponders and $5 for cash and out-of-state users, effective May 16. •