BRADENTON, Fla. – Florida’s Santa Rosa Bay Bridge Authority, which is in default on more than $116 million of toll revenue bonds, is facing another struggle to keep its governing board in place.
The SRBBA’s insurance carrier, which provides directors’ and officers’ liability coverage, will drop the seven-member board at the end of December.
The authority sold current interest and capital appreciation bonds in 1996 to build the 3.5-mile-long tolled Garcon Point Bridge. Revenues have never kept pace with traffic projections, and the authority has defaulted on three bond payments since July 2011.
It was not immediately clear why the insurer planned to stop covering the board after only a year, though there is an ongoing investigation by the Securities and Exchange Commission that was initiated two years ago, apparently reviewing disclosure and auditing practices of the authority.
A year ago the bond trustee, Bank of New York Mellon, agreed to fund one year of insurance coverage for the board with subsequent years subject to review.
At least two of the five current board members said this week that they will resign if there is no insurance coverage for them, which would make it impossible for the board to muster a quorum.
One board member also expressed frustration that the Bridge Authority has been unable to move forward with a bond restructuring plan, and speculated it could be difficult to get the consent from enough bondholders even if a settlement is negotiated.
A third board member, Ira Mae Bruce, who was appointed by the governor, stepped down several months ago. Gov. Rick Scott has not named a replacement for Bruce, and had not named anyone to fill another of the three board seats he appoints.
The authority’s enabling legislation requires four members for a quorum to hold meetings; in that case all four members must vote affirmatively to make decisions.
“The insurance company has declined to renew, however, we are still negotiating for coverage,” said Morgan Lamb, chairman of the board.
The Bridge Authority last met in September and agreed to ask BNY Mellon for funds to do an audit, which hasn’t been done since 2000 because the all revenues collected by the authority go to paying debt service.
Lamb said the trustee has not agreed to hire an auditor.
In addition, there will be no meeting before the January bond payment is due, and Lamb said it may be difficult to schedule a meeting if four board members, required for a quorum, are not available.
“I have received no word on the bond payment,” he said.
Despite a toll increase in March, unaudited revenue collections from March through September declined by $779,909 compared to the same period in 2011.
While a pro rata portion of toll revenue was released for a portion of bond payments earlier this year, the trustee but said in disclosures that a shortfall was expected for the foreseeable future.