A Florida court has denied the state government’s latest attempt to eliminate the Miami-Dade Expressway Authority, but the legal battle over the future of the toll-road agency is far from over.
Florida’s First District Court of Appeal issued a June 25
The authority, known as MDX,
In the June 25 ruling, Florida First District Court of Appeals Judge Ross L. Bilbrey wrote that the court lacked jurisdiction to provide the type of writ sought by the Legislature.
The Florida Department of Transportation and the state House of Representatives filed the motion looking to strike down a lawsuit MDX filed in 2019.
Leon County Circuit Judge John Cooper ruled in August that House Bill 385 was in violation of Florida’s constitution, which protects Miami-Dade County's home rule authority and prevents the state from passing a law pertaining only to the county.
HB 385, which Gov. Ron DeSantis signed into law on July 3, 2019, dissolved MDX and replaced it with the Greater Miami Expressway Authority. The new board of directors were given orders to reduce tolls and place a moratorium on increasing toll rates. It also subjected the new agency to more state oversight of its budgeting and debt issuance.
Despite last week's ruling, MDX litigation will likely be prolonged. The FDOT and House previously filed an appeal of Judge Cooper’s ruling.
“The department has received the referenced ruling and is reviewing it,” said Florida DOT spokeswoman Beth Frady. “This remains pending litigation; therefore, it would be inappropriate to provide further comment at this time.”
The press office for the Republican House Majority Office did not immediately respond for comments on the appellate court ruling or plans for additional appeal filings.
Javier Rodriguez, MDX’s executive director, did not immediately respond for comment on the June 25 decision. Miami-Dade County Mayor Carlos Gimenez, who chairs the MDX board, also did not immediately respond for comment. He
The Florida DOT and state House of Representatives argued before the court on March 10 that the MDX didn’t have standing to bring the suit because HB385 dissolved the agency. The oral arguments took place just before Florida courts were forced to close due to the COVID-19 pandemic.
“Petitioners have not demonstrated that their pending appeal is not an appropriate remedy to address the denial of their defenses that MDX lacks standing to bring the causes of action,” Judge Bilbrey wrote in his ruling. “A writ of prohibition is not warranted where there is an adequate remedy at law.”
“Moody’s sees this ruling as credit positive, bringing closer the final resolution of HB385 and full restoration of MDX and its tolling ability,” said Myra Shankin, a senior analyst at Moody’s Investors service.
Moody's lowered its MDX debt rating to A3 from A2 in July 2019, less than two months after another one-notch downgrade. S&P Global Ratings also cut MDX bonds by one notch last July to A from A-plus.
Fitch Ratings downgraded MDX’s credit rating by one notch to BBB-plus from A-minus in February citing the lack of clarity the agency’s governance and the potential for lengthy legal proceedings.
Fitch analyst Stacey Mawson said day-to-day operations at the MDX have not been too negatively impacted this year and noted that the agency has strong liquidity with around 700 days of cash on hand. Mawson stressed though that lack of clarity on MDX’s future direction is hindering its ability to map out borrowing strategies and capital projects.
“They have been operating without a functioning board since the fall of 2019 which has limited their long-term planning,” Mawson said. “There really won’t be clarity until issues regarding the legal status is decided.”
Fitch confirmed the BBB-minus rating and negative outlook in April as part of a wider review of toll roads amid the coronavirus.
Shankin noted that MDX’s revenue remains hampered by bills enacted in 2017 and 2018 where state lawmakers ordered various toll reductions. She also cautioned that the “political environment” that fostered HB 385 hasn’t changed and that new bills filed by state a lawmakers this year seeking to restrict tolling are credit negative development for toll revenue bonds across Florida.
Prior to the passage of HB 385, MDX displayed growth in operating revenues and was strongly positioned to manage escalating debt service payments after adopting an index toll rate policy, according to Shankin. The Greater Miami Expressway Authority, the state's would-be replacement of MDX, then required a toll rate freeze through 2024 except as needed to comply with rate covenants, which Shankin noted will result in declines of debt service coverage.
As of June 30, 2019, MDX’s outstanding debt totaled $1.4 billion of senior bonds, in which the vast majority (94.4%) was fixed rate, according to Moody’s. The senior bonds are secured by net revenues of the toll road system
MDX operates an expressway system totaling 33.6 miles that connects the Miami International Airport with downtown Miami and Miami Beach. The system includes the Airport Expressway, the Dolphin Expressway, the Don Shula Expressway, the Snapper Creek Expressway and the Gratigny Parkway.
