Lawmakers’ request for rehearing denied in Florida toll road agency suit

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A judge has denied a request by the Florida House of Representatives to hold a rehearing in a lawsuit that will determine the future of the embattled Miami-Dade County Expressway Authority.

Leon County Circuit Judge John Cooper’s ruling, handed down Sept. 30, sets the stage for a possible appeal of his earlier decision striking down portions of House Bill 385 as unconstitutional.

HB 385, signed into law by Gov. Ron DeSantis July 3, abolished the Miami-Dade County Expressway Authority, also known as MDX. The bill created the Greater Miami Expressway Agency, and a new board under tighter state control. It also ordered the new agency to work on lowering toll rates and adopting toll rebates for certain drivers.

MDX challenged the law, and Cooper ruled on Aug. 29 that a portion of HB 385 pertaining to the MDX was unconstitutional because it usurped Miami-Dade County's home rule powers by makings a special local law that pertains only to the county. He granted summary judgment in favor of MDX.

In its motion for a rehearing, the House said it needed more time to develop evidence it believed would show that HB 385 wasn’t a local bill, and argued that it was passed under general laws of the state, meaning that it wouldn’t pertain solely to Miami-Dade County.

In rejecting the request, Cooper sided with Miami-Dade County and the MDX who contended in a joint filing that the House’s argument had been “fully considered” in previous hearings.

HB 385 also ordered the Florida Auditor General to prepare a report for the governor, Senate president and House speaker “assessing the financial situation” of the expressway authority, including its assets, liabilities, revenues, operating expenses and bonding capacity.

The auditor was also ordered to study the financial feasibility of instituting monthly toll rebates of as much as 25% and to examine if roll rates could be reduced by up to 5%.

“Overall, our assessment of the financial situation of the MDX as of June 30, 2019, is positive,” said an 11-page report signed by Auditor General Sherrill F. Norman on Sept. 27.

The report concluded, however, that the planned $1 billion Kendall Parkway project, a 14-mile tolled extension of State Road 836, could not be financed and constructed if tolls are rebated and lowered as required by the bill.

Miami-Dade County Mayor Carlos Gimenez, who also chairs the MDX board, said the Florida Auditor General’s report “vindicates" the MDX.

“Like the MDX board and I said all along, it is impossible to reduce tolls and also complete the five-year capital plan and the 836 extension,” Gimenez said in a statement to The Bond Buyer. “Yet, the legislation creating the Greater Miami Expressway Agency included toll reductions and the parkway.”

Gimenez said before HB 385 was signed into law, the MDX had reduced tolls by 5% and instituted a rebate program for drivers who pay $150 or more per year on the authority’s five expressways, a 30% savings for those drivers.

The passage of HB 385 led rating agencies to downgrade MDX’s ratings, citing the Legislature’s “political interference” into the operations of an independent toll road authority. The MDX has about $1.5 billion of bonds outstanding.

S&P Global Ratings lowered MDX's rating to A from A-plus on July 16. Moody's Investors Service cut its rating to A3 from A2 on July 5, and to A2 from A1 on May 10. Fitch Ratings downgraded the authority to A-minus from A on May 8. All have negative outlooks.

At the MDX board’s meeting on Sept. 24, Executive Director Javier Rodriguez said that based on everything that has happened, including the lowering of bond ratings, the authority needs to rebuild its capital program and “figure out what we can afford and what we can’t afford.”

The MDX needs to determine what the lowest cost of capital would be and change project priorities to move forward, Rodriguez said.

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