Florida Bridge Authority On a Path to July Default

BRADENTON, Fla. — The Santa Rosa Bay Bridge Authority, which oversees the Garcon Point Bridge in north Florida, appears to be headed for default in July.

The authority's secretary-treasurer said on Monday it was hoped that default could be averted if a grant could be obtained to subsidize lower tolls and traffic recovered from the April 20, 2010 Gulf oil spill that affected the state's Panhandle region.

"I don't see that happening," said Morgan Lamb, who is one of only two people remaining on the board. "I think we will be around $300,000 short of making the July [bond] payment."

The authority's website shows that vehicle use on the 3.5-mile-long bridge has fallen to the lowest level since 2001, except for a month affected by Hurricane Ivan in 2004. The drop-off has occurred since a 7.1% toll increase Jan. 1, though vehicle levels are typically lower in the winter months.

Lamb said a grant that would have allowed toll rates to be lowered as part of a strategy to entice more traffic has not materialized, and the precipitous increase in gas prices in the last few months may have encouraged drivers to use free, nearby alternate roadways.

"I'm looking for that knight in shining armor," he said. "I can't fathom the state letting this default."

Several bond market professionals have contacted Lamb to discuss proposals for restructuring the bonds, including one person involved in the recent South Carolina Connector 2000 Association's bankruptcy, he said.

He said he could not recall the names of people who contacted him.

In addition to the pending default, Lamb said the Securities and Exchange Commission appears to have broadened its inquiry by requesting additional information from people who served the Bridge Authority over the years, including several recent board members who resigned in an effort to avoid contact with the SEC. Lamb said he has not been queried by the commission.

The SEC began its investigation last fall by calling the former board chairman to testify and requesting numerous documents, financial reports, and information related to disclosures that were given to the authority's dissemination agent pursuant to the continuing disclosure agreement. The authority has not filed an audit in many years.

The Santa Rosa County Commission reappointed Lamb to the authority board earlier this year along with two new members. One new member had to resign because he was a bondholder, Lamb said.

Three vacancies on the board can only be filled by the governor, who so far has taken no action. Gov. Rick Scott's office could not be reached for comment.

Because there is no quorum, the authority board has cancelled its April 20 meeting — the second meeting cancelled this year for that reason. The next meeting is scheduled for July 20.

The Bridge Authority is a special independent district of the state that sold $75.5 million of Series A current interest toll revenue bonds in 1996 that mature in 2028 and $19.4 million of Series B capital appreciation bonds that mature between 2005 and 2028. The bonds are secured only by tolls.

Bond proceeds were used to build the Garcon Point Bridge, which has fallen short of forecast traffic levels since it opened. The bonds are considered junk by rating agencies.

The authority dipped into its dwindling pot of reserves to make the January debt service payment. Reserves are expected to be exhausted in July.

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Transportation industry Florida
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