BRADENTON, Fla. — The Santa Rosa Bay Bridge Authority's bond trustee, Bank of New York Mellon, has hired a financial advisor to assist with restructuring the Florida authority's defaulted bonds.
FTI Consulting Inc. will provide financial advisory and consulting services to help develop and negotiate restructuring alternatives for the bonds, BNY Mellon said in a market notice Tuesday.
FTI Consulting will also monitor and participate in meetings among interested parties.
The bridge authority's board will meet for the first time in nearly a year on Dec. 14.
Three new members will be sworn in, which will allow regular meetings to be scheduled.
A year ago, a quorum of the board resigned amid an inquiry by the Securities and Exchange Commission.
The SEC is believed to be investigating the authority's lack of disclosure practices, and its failure to produce an audit in years due to lack of funds for operations.
The authority sold $75.5 million of current-interest bonds and $19.4 million of capital-appreciation bonds in 1996 to build the 3.5-mile Garcon Point toll bridge in northwest Florida.
Though the bonds were investment grade when they were sold initially, they are now rated D by Fitch Ratings and Standard & Poor's, and Ca by Moody's Investors Service.
Traffic on the toll bridge never met forecasts that were projected when the bonds were sold.
About $115.9 million of bonds are currently outstanding because of increasing principal due to accretion of about $20 million on the capital appreciation bonds.
Beginning in 2002, the SRBBA began dipping into reserves to supplement toll revenue to make bond payments.
The first payment default occurred this July when there was not enough in reserve to make the full payment. The trustee elected not to make a partial payment.
The authority has about $6.7 million in various accounts, according to BNY Mellon's recent notice.
The next bond payment is due Jan. 1, though the trustee has already informed bondholders that there most likely will not be enough gross revenue to make payments for the foreseeable future.
After a majority of the board resigned last year, it was difficult to entice people to serve on the authority because no funds were available to pay for officers and directors' liability insurance, a board attorney, or administrative staff.
Several months ago, BNY Mellon agreed to provide funds for insurance.
The bank also retained the board's former general counsel, Roy Andrews, who had been working for free.
Three new board members were also appointed recently and most have experience in municipal finance.
David Walby is a former muni bond underwriter who recently stepped down as an arbitrator for the Financial Industry Regulatory Authority.
Gerry Goldstein is co-owner of a commercial real estate brokerage company and a former muni analyst.
Don Richards is a marketing and business development specialist with experience in financial analysis.
Walby, Goldstein, and Richards will join the three current members to create a voting quorum on the board, enabling the board to move forward with restructuring talks.
At the upcoming meeting, the board is expected to consider approving the purchase of liability insurance and other matters.
An official agenda has not been published. The meeting will be accessible by teleconference.
Details will be posted at www.garconpointbridge.com.