Bonds

Oklahoma Turnpike Authority to undergo investigative audit

The Oklahoma Turnpike Authority faces further scrutiny after the state attorney general ordered an investigative audit of the agency as it waits for a court ruling on the validity of bonds to start funding a $5 billion extension project.

The audit is needed to determine whether OTA is in compliance with the law, state Attorney General Gentner Drummond said in a letter Wednesday to State Auditor and Inspector Cindy Byrd. Drummond cited concerns he heard from lawmakers, state employees, and others about “improper transfers between the OTA and the Department of Transportation; improper contracting and purchasing practices; and inadequate internal financial controls.” 

Oklahoma Attorney General Gentner Drummond said the investigative audit will examine the turnpike authority’s financial conduct.

Oklahoma Attorney General’s Office

He also pointed to a December district court ruling that found OTA “willfully” violated the Open Meeting Act.

“Such a blatant disregard for openness and transparency suggests to me a willingness to engage in any manner of unlawful conduct,” Drummond said in the letter. 

The ruling came in a lawsuit filed by property owners who sued OTA for keeping them in the dark about its $5 billion, 15-year ACCESS (Advancing and Connecting Communities and Economies Safely Statewide) Oklahoma plan.

OTA, which appealed the ruling, said it submits to the state auditor annual financial audits required by statute and as part of trust agreements with bondholders.

“To be emphatically clear, the turnpike authority has the highest regard for openness and transparency and strives to conduct all business in accordance with laws, rules and regulations in every aspect of its duties and responsibilities to the citizens of Oklahoma,” Secretary of Transportation and OTA Executive Director Tim Gatz said in a statement.

He added, OTA is confident the new audit will assist in addressing the attorney general’s concerns and “clearing up misinformation and operational misunderstandings.”

Tassie Hirschfield, a plaintiff in the Open Meeting Act lawsuit, welcomed a “thorough investigation” by the state auditor’s office, given the OTA’s questionable activities in recent years.

“The public needs to know that any wrongdoing will be documented and that those responsible will be held accountable,” she said in an email.

Property owners in the path of turnpike extensions claim they were blindsided by the project, which they estimate would cut through hundreds of properties and put thousands more next to unwanted highways, damaging quality of life and property values.

A second lawsuit, claiming the bond financing and building of the turnpike’s South Extension, East-West Connector, and Tri-City Connector projects violate state statute, was dismissed by a district court in December on the basis that the Oklahoma Supreme Court has exclusive jurisdiction over turnpike bonds.

After hearing oral arguments on $450 million of new and $50 million of refunding second senior revenue bonds in November, the high court has yet to rule on their validity.

After launching a request for proposals in mid-June, OTA selected Wells Fargo as senior manager and Stifel, Nicolaus & Company; Morgan Stanley; BOK Financial; and Raymond James as co-managers for the initial debt issuance.

OTA, which has 13 turnpikes spanning 630 miles, pays off its bonds with system-wide toll collections as well as a portion of the state’s motor fuel tax revenue if needed.

The turnpike was the focus of so-called interim studies in the Oklahoma House and Senate last fall with lawmakers hearing from turnpike proponents and opponents.

Several bills were introduced this session to rein in the OTA, although none have passed out of either chamber.

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