Florida governor fills FDFC board amid uncertainty about conduit's future
As the Legislature considers a bill that would place the Florida Development Finance Corp. under the auspices of another agency, Gov. Ron DeSantis appointed new board members to run the state-created conduit issuer.
He appointed three new board members Monday and reappointed another member to a new term. The appointments are subject to confirmation by the Senate.
Paul Tanner of Fort Lauderdale, Rebecca Reynolds-Russell of Odessa, and Ayanna Louis-Charles of Pembroke Pines received four-year terms on the FDFC board.
Tanner is managing director of the wealth management firm Las Olas Capital Advisors. Reynolds-Russell is vice president and senior relationship manager for JP Morgan Chase’s government and not-for-profit banking group. Louis-Charles is a vice president in Morgan Stanley’s fixed income division.
James Nelson Bradshaw of Jacksonville, the northeast Florida chief executive officer of BBVA Compass, was reappointed to a second term. He joined the board in September 2016, and that appointment expired in May 2019. However, members with expired appointments can continue to serve until they are replaced or reappointed.
DeSantis made no comment about the appointees and hasn’t taken a public position on Senate Bill 666 filed for next year’s legislative session by State Sen. Debbie Mayfield, R- Melbourne. It would essentially realign the operations of the FDFC.
The independent conduit issuer is headquartered in Winter Springs, northeast of Orlando. The governor appoints all five board members.
SB 666 would place the FDFC under the state Department of Economic Opportunity, which currently oversees the operations of Enterprise Florida, CareerSource Florida, the Florida Tourism Industry Marketing Corp., and Space Florida.
Under Mayfield’s plan, FDFC’s board would expand to seven directors from five. The DEO executive director or a designee would serve as chairman, and the director of the Division of Bond Finance or a designee would be a board member. The governor would appoint the five other members.
Mayfield began questioning the FDFC’s operations and compliance with state law in 2017 after various groups in her district complained about the corporation’s procedures in approving private activity bonds for Virgin Trains USA, also known as Brightline and All Aboard Florida.
Complaints came from residents, elected officials and their attorneys in Indian River, Martin and Brevard counties where the privately owned passenger train will run at nearly 100 miles per hour without stopping.
Martin County later settled a lawsuit with All Aboard Florida with train owners agreeing to make additional safety crossing improvements. Indian River has an appeal pending in federal court an attempt to toss out the bonds issued by FDFC under the Virgin Trains USA name.
The Office of Program Policy Analysis and Government Accountability reviewed the FDFC’s operations at Mayfield’s behest in November 2017 and gave a report to the Joint Legislative Auditing Committee.
Committee members questioned FDFC Executive Director Bill Spivey about how the corporation vets the feasibility of projects before approving debt issuances, public meeting notice policies, the locations of public meetings and delays in responding to letters from Senators.
SB 666 is based on an OPPAGA suggestion that the Legislature improve oversight and accountability of FDFC by adding executive staff from the DEO and Division of Bond Finance to the corporation board.
The bill has been referred to committees on commerce and tourism, governmental oversight and accountability, and rules. A hearing hasn’t been scheduled yet. Next year’s session starts Jan. 14.
Spivey told The Bond Buyer last week that FDFC is reviewing Mayfield’s bill and that the board will be updated on the legislation once the review is complete.
The FDFC has seen a considerable increase in application and issuance fee revenue because of bonds it issued on behalf of Virgin Trains/All Aboard Florida.
In fiscal 2018, the FDFC audit reported $891,320 in fees and said that 75% of that number came from one large issuance: $600 million of bonds issued on behalf of All Aboard Florida.
The 2019 audit said FDFC received $3,117,760, and that 85% of those fees came from two large issuances: Virgin Trains’ deals of $1.75 billion and $950 million that sold earlier this year.
In 2016 the FDFC reported receiving $1 million in fees. In 2017, the agency received $612,894 in fees.