BRADENTON, Fla. — The Florida Senate Budget Committee Wednesday unanimously approved a $70.7 billion budget for fiscal 2013 that sets the stage for controversy by transferring toll revenue from local agencies to the Florida Turnpike Enterprise, and placing restrictions on bond issuance for the foreseeable future.
In what is believed to be another attempt to consolidate the local agencies into the state fold, the Senate budget would roll the entire Mid-Bay Bridge Authority into the Turnpike enterprise, and place spending limits on the Tampa-Hillsborough County Expressway Authority and the Orlando-Orange County Expressway Authority.
A consolidation effort last year triggered a firestorm of opposition from communities served by the agencies. The effort was halted, but has resurfaced in this year’s legislative session.
A bill accompanying the Senate budget would require the Turnpike Enterprise to collect tolls for the expressway authorities, which would then be responsible for paying the Turnpike collection fees.
The locally governed expressway authorities would also be required to function like a state agency, and would be subject to annual appropriations by the Legislature. Lawmakers would determine who they could hire, the salaries offered, and how much they spend on operational and capital expenditures.
The local expressway governing boards would be left in place, but it is unclear what decisions they would make.
The THCEA and OOCEA currently are authorized by law to set their own budgets and issue bonds. Both have lease-purchase agreements with the Department of Transportation, to whom they owe $122.6 million and $235.6 million, according to a Senate staff analysis. Under the agreements, DOT provides operations and maintenance for constructed toll roads until bonds are paid off.
Under the bill, both expressway authorities would be required to seek approval from the DOT to issue bonds until their lease-purchase agreement obligations are paid off, and only refunding bonds may be allowed. Their bonds would be issued by the state Division of Bond Finance until the DOT is paid for operations and maintenance costs.
The analysis suggests that by requiring the expressway authorities to issue bonds through the Division of Bond Finance, their debt will be sold using more conservative financing structures. It notes that the division typically issues bonds competitively, and details the process used for the limited use of negotiated bond structures. The division usually issues fixed-rate bonds.
“Higher interest costs and unconventional debt structures pose additional risk to the [DOT] in terms of getting reimbursed” for operations and maintenance costs of the local agencies, the analysis said.
It noted that some of the triple-B rated Mid-Bay Bridge Authority’s bonds feature a springing lien, a subordinate structure under which the authority issued bonds late last year. Mid-Bay owes the DOT $17 million.
The A-rated OOCEA has about $2.7 billion of toll revenue bonds outstanding, a portion of which is in variable-rate mode with associated swaps. Though some variable-rate debt remains outstanding, the authority has been restructuring its debt over the past year.
It is unclear how the Senate provisions would affect expressway bonding plans. The OOCEA has more than $300 million of bonds planned in its five-year budget. The bill also makes provisions for the funding of the long-planned Wekiva Expressway to complete the beltway around Orlando.
The THCEA validated in court nearly $1 billion in bonding authority less than a year ago, and had been making plans to sell a portion of that debt later this year.
The House’s budget, which does not have provisions to take over Mid-Bay or the expressway authorities, is about $1.6 billion less than the Senate’s version. The difference represents the incorporation of the local agency budgets.
The Senate proposal specifically excludes any changes to the Miami-Dade County Expressway Authority, which does not have a lease-agreement with the DOT. It also does not address the Santa Rosa Bay Bridge Authority, whose toll revenue bonds are in default.
The expressway authorities could not be reached for comment about the Senate budget or the accompanying bill.