An appellate court is poised to set a date for oral arguments in the litigation between the state of Florida and the Miami-Dade County Expressway Authority.
Florida's First District Court of Appeal received a request from the authority Nov. 18 for oral arguments to be scheduled. The appeal has been fully briefed.
"Oral argument will serve a definite and useful purpose by aiding the court in deciding the central issues raised by the appeal," attorneys for the authority, also known as MDX, said
The Florida Department of Transportation and the Florida House of Representatives are appealing a September 2019 decision by Leon County Circuit Judge John Cooper, who ruled that a bill signed by Gov. Ron DeSantis to dissolve MDX earlier in the year violated Florida's constitution because it preempted Miami-Dade County's home rule power by using a special local law that pertains only to the county.
FDOT and the Florida House
"The department does not comment on pending litigation," FDOT's spokeswoman Beth Frady said Monday.
The filing of the appeal prohibited Cooper's ruling from becoming effective, a legal move known as a stay. It has also prevented the MDX's nine-member board of directors from meeting and overseeing the work program and budget since Sept. 24, 2019.
The MDX has filed motions at least four times since the state court case was filed by the MDX in May 2019 requesting that Cooper lift the stay. MDX filed its suit as a preemptive move before DeSantis signed House Bill 385 into law abolishing the agency on July 3, 2019.
The FDOT has opposed removing the stay saying that MDX's request doesn't meet legal standards necessary for the relief and that MDX has failed to show how it would be harmed economically if the stay continues to remain in effect.
In its most recent motion in the case before Cooper, MDX said that the agency would agree to drop its request to remove the stay in return for an order that would allow staff to work on certain safety programs.
"Until a governing body is in place, to ensure the safety of the citizens of Miami-Dade County and the traveling public that uses the system, and to be in compliance with the authority's bond obligations, the authority will be allowed to operate subject to and consistent with MDX policies in effect on June 30, 2019," the Dec. 9 motion says.
Cooper previously issued
With no governing board in place, though, MDX Executive Director Javier Rodriguez's power to run the agency only allows him to enter contracts that are under $200,000.
"MDX is operating using a stipulated order that was approved last year to allow it to pay bills, make bond payments, and contract for emergency maintenance," Rodriguez said in a statement to The Bond Buyer Friday. "MDX does not have the ability to initiate any new projects or proceed to next phases of existing projects.
"The only projects proceeding are the two construction projects that already had commenced," he said.
Those two projects are a $244.1 million, 1.5-mile interchange on the State Road 836 Dolphin Expressway and a new $115.5 million access ramp connection from the SR 874 Don Shula Expressway to Southwest 128 Street.
MDX operates an expressway system totaling 33.6 miles.
Its 15-mile-long Dolphin Expressway links western Dade County, and Miami International Airport with downtown Miami and Miami Beach. It operates four other tollways around the county.
As of June 30, 2020, MDX had $1.45 billion of outstanding toll revenue bonds, according to the agency's 2020 comprehensive annual financial report.
The CAFR contains nearly two pages on litigation related to efforts by state lawmakers to enact restrictions on raising toll rates in legislation passed in 2017, 2018 and 2019.
MDX's lawsuit contains eight counts, and only the first count for a declaratory judgement for violation of Miami-Dade County's home rule authority has been granted by Cooper. The remainder of MDX's lawsuit remains on hold pending finalization of the state's appeal of the first count.
The remaining counts include declaratory judgements for legislation passed in 2018 and 2019 that allegedly violates Florida's contract clause, which says that the state won't impair bondholders' rights, and two additional counts for legislative violations of the county's special home rule authority in 2017 and 2018. The complaint also seeks a permanent injunction that would prevent MDX from being dissolved.
The 2019 bill signed by DeSantis purported to dissolve MDX and immediately transfer its assets and debts to a newly created Greater Miami Expressway Agency. Most of that agency's governing board has yet to be appointed and the legislation didn't include detailed information on how operations would be transferred to GMX.
According to HB 385, the new agency will have strict state oversight of its finances, including the issuance of bonds, unlike any other local toll road agency in Florida. The bill also requires GMX to have a goal of rebating driver’s toll collections up to 25% and it prohibits increasing tolls until 2029, if that can be accomplished without violating bond covenants.
The bill was pushed by two Republican Miami-Dade County lawmakers, Sen. Manny Diaz and Rep. Bryan Avila, who disagreed with MDX’s toll policies. Both are still members of their respective chambers.
DeSantis, a Republican, made his three board appointments when he signed the bill creating GMX, and a fourth member is the local secretary of the Florida Department of Transportation. Miami-Dade County commissioners and the Miami-Dade Transportation Planning Organization have yet to appoint their combined five board members.
MDX's bonds are rated BBB-plus by Fitch Ratings, A3 by Moody's Investors Service, and A by Standard & Poor's Global Ratings. All three have negative outlooks on the debt.
In October, S&P removed the authority from CreditWatch with negative implications, which had been placed in July, and affirmed its A rating on MDX's bonds after the First District Court of Appeal
"The removal from CreditWatch follows a legal ruling in favor of MDX that prevented implementation of a law that would have constrained the authority's financial independence," said S&P analyst Kevin Archer.
The ruling allowed the current appeal to move forward, he added.
"As a result, the transfer of assets, liabilities, and interests to the GMX have been suspended until the appeal is resolved," Archer said. "The negative outlook reflects our view that these developments still pose some level of uncertainty in terms of when this legal dispute will be resolved and what the final form of the organization will be."
If MDX wins the appeal, it is expected that FDOT and the House will take the case to the Florida Supreme Court for a final resolution, creating continued uncertainty for the future of the toll road agency.
