BRADENTON, Fla. — The Orlando-Orange County Expressway Authority said in a notice that Florida has refused to pay its monthly bill under a lease-purchase agreement for facilities built with toll-backed debt.
The Florida Department of Transportation would not pay the central Florida authority’s monthly bill for $464,097 in July, Thursday’s notice said.
FDOT said it lacked the authority to pay any invoices for lease-purchase agreements because funding for them was not appropriated in the state’s fiscal 2012 budget.
The department said the lease-purchase contract was contingent upon annual appropriation by the Legislature.
The Expressway Authority said it disagreed with that interpretation.
The Legislature did authorize the funding in the state budget but it was removed by a line-item veto of Gov. Rick Scott when he signed the 2012 spending plan in May.
Scott vetoed $11.15 million of appropriations for lease-purchase agreement payments to various expressway authorities and other local transportation agencies.
The Legislature did pass a bill removing the ability of FDOT to enter into future lease-purchase agreements and Scott signed it.
Around $8 million of the appropriations rejected by the governor were to be the annual amount paid to the Orlando-Orange County Expressway Authority.
The authority said it had been in contact with FDOT since May to determine if the state could find a way to fulfill the lease-purchase agreement, according to expressway authority spokeswoman Lindsay Hodges.
FDOT in late August rejected the first invoice in writing.
“While the non-payment of this obligation is not expected to have a material effect on the authority’s financial condition, operations or its ability to make debt-service payments on its outstanding bonds, once FDOT made it clear it would not be meeting its payment obligation, we felt our bondholders had a right to know of this event, thus we made the voluntary disclosure,” Hodges said in a statement Monday.
“Authority staff and counsel are evaluating … rights, remedies and obligations under this agreement and once they have made a determination their findings will be brought forward to our governing board,” she said.
Hodges added that the agency is continuing discussions with FDOT in hopes of reaching a longer-term solution to the issue.
The department could not be reached for comment by press time.
In its material event notice last week, the authority said that its lease-purchase agreement was not subject to annual appropriation.
“The authority continues to maintain that the [DOT’s] obligation under the lease-purchase agreement to pay for the costs of operations on certain segments of the system is an absolute, irrevocable contractual obligation and is not subject to appropriation,” the notice said.
Since his budget veto message, Scott has said that his office is continuing to explore the consolidation of expressway authorities and other local transportation agencies with the Florida Turnpike Enterprise.
Such an effort was proposed during the legislative session earlier this year but failed after local agencies mounted campaigns against the measure.
The governing board of the Orlando-Orange County Expressway Authority has scheduled a workshop meeting next week with lobbyists to discuss the consolidation issue, which is widely anticipated to resurface in the upcoming legislative session, which begins in January.
The Expressway Authority has about $2.4 billion of outstanding revenue bonds rated A by Fitch Ratings and Standard & Poor’s, and A1 by Moody’s Investors Service.
Funding for the Tampa-Hillsborough County Expressway Authority also was subject to Scott’s veto.
The agency could not be reached for comment.
Tampa-Hillsborough was granted the right during the legislative session this year to issue its own bonds and validated $990 million of bond capacity in court earlier this year.