By HUNTER GEORGE

Associated Press

OLYMPIA – The state’s effort to hire a private firm to finance, build and operate a toll bridge over the congested Tacoma Narrows hit speed bumps Thursday when the state Supreme Court dumped the contract.

The nine-member court unanimously agreed that the project violates a 1961 law that banned tolls from the existing bridge. The court also said the state exceeded its authority by giving a private entity the ability to set tolls.

The ruling was a victory for Gig Harbor-area residents who have been desperately trying to block the project on the grounds that they would end up paying the most for it.

“I think the fact it’s a unanimous ruling only verifies the strength of our case,” Randy Boss, a Gig Harbor real estate agent who has been one of the project’s most vocal critics, said as his phone rang with people calling to congratulate him.

State Transportation Secretary Sid Morrison noted that the high court rejected a constitutional challenge to the law authorizing the state to find private investors to pay for expensive transportation projects.

He predicted the project will proceed after the state Transportation Commission and United Infrastructure Washington, the construction firm hired to run the project, either negotiate a new contract or ask the Legislature to repeal a pair of old laws.

“It puts a couple of speed bumps in our way. We think those can be worked out,” Morrison said.

The state and UIW had hoped to clear all legal hurdles this year so that bonds could be sold as early as next month and construction could begin soon after.

Construction could still begin next year if the state and the firm can renegotiate the contract, Morrison said. The project likely would be delayed a year if the Legislature gets involved.

The project is expected to cost more than $800 million in construction, financing and contingency charges.

The Peninsula Neighborhood Association, in a lawsuit filed in July 1999, challenged the project from its inception under a 1993 law known as the Public-Private Initiatives Act.

The state hired UIW to build a new bridge, modify the existing bridge, and operate and maintain the pair.

A toll would be charged over the new bridge, which would carry three lanes of traffic eastbound across Highway 16 toward Tacoma. The existing 50-year-old bridge would carry traffic westbound to Gig Harbor.

Under the agreement, UIW would sell bonds to finance the project and then repay the bonds and earn a yet-to-be-determined profit by charging a round-trip toll across the new bridge. The initial toll was to be set at $3.

The neighborhood group argued that the Public-Private Initiatives Act was unconstitutional, and if it wasn’t, that the contract was illegal.

In January, Thurston County Superior Court Judge Daniel Berschauer dismissed the challenge, saying the law was constitutional and the contract the state signed with UIW was valid. The neighborhood group appealed.

On Thursday, the Supreme Court rejected the group’s claim that the Public-Private Initiative Act was unconstitutional, which Morrison called a crucial element of the ruling.

But the high court, in a decision written by Chief Justice Richard Guy, agreed the project is at odds with the 1961 law declaring that the Narrows Bridge would be a “toll-free facility” once its construction debt was paid off. The debt was repaid in 1965 and the toll came off.

Even if the existing bridge were allowed to have a toll, Guy added, the state transportation agency exceeded its authority by agreeing to let a private entity determine the toll rate on the existing bridge.

State law gives toll authority to the Transportation Commission, a citizen panel that oversees the agency, he said.

The state Attorney General’s Office had argued that the Public-Private Initiatives Act should supersede earlier statutes, including the one declaring that the existing bridge would be operated toll-free.

The state also had said the law did not prohibit it from undertaking a new project that would be financed through tolls.

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