Miami-Dade County jumps into legal fight over terminated toll-road agency

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A court hearing Thursday and Friday could determine the fate of the Miami-Dade County Expressway Authority, and a new party in the case may sway the outcome.

Miami-Dade County Commissioners decided Tuesday to become an amicus curiae, or friend of the court, in the lawsuit challenging House Bill 385. The bill abolishing the expressway authority become law July 3 when it was signed by Gov. Ron DeSantis.

County commissioners said the suit is just one example of state lawmakers chipping away at their autonomy by usurping local laws. They voted unanimously Tuesday to authorize the county attorney to pursue all litigation that challenges Miami-Dade County’s home rule authority, including HB 385.

Commissioners complained that few people except for their local representatives in the Legislature requested that MDX be dissolved and replaced with a new agency under tight state control. The bill was pushed by Sen. Manny Diaz and Rep. Bryan Avila, both Republicans representing Miami-Dade who disagreed with the authority's toll policies even though the authority had reduced tolls.

The county contends that it created the authority, often known as MDX, using its home rule authority, which is instilled in the state constitution.

“Miami-Dade County needed to step up because it is an assault on our home rule,” county Mayor Carlos Gimenez said after the commission voted Tuesday. “It’s not only under assail right now, it’s going to be in the future even more. We’ve been silent for far too long.”

Gimenez also served as the chairman of MDX and isn’t eligible to be on the board of the successor agency due to restrictions in HB 385. He was critical of the state takeover of MDX, saying that the bond rating downgrades it spurred would cost toll payers more in increased interest rates.

On Tuesday, the county filed a 26-page motion requesting to appear in the MDX suit. County attorneys said in the filing they will be available to discuss the county’s home rule authority and the validity of HB 385 at the hearing in Tallahassee scheduled Thursday and Friday.

The hearing will include arguments on motions to dismiss the suit filed by the Florida House of Representatives and the Florida Department of Transportation. FDOT contends that MDX lacks standing to bring a constitutional challenge and that the agency ceased to exist when DeSantis signed HB 385.

The House said it supports FDOT’s motion, and argues that contrary to MDX’s position Miami-Dade County created the expressway authority by ordinance pursuant to the state-created Florida Expressway Authority Act, and not by virtue of the county’s home rule power.

Circuit Judge John Cooper, who is presiding in the case, had already raised the issue of whether MDX has the legal authority to bring the litigation.

“I'm still struggling with this standing issue,” Cooper said, according to the transcript of a July 15 hearing. “I don't know why [Miami] Dade County is not a party in this case.”

The Legislature’s move to eliminate MDX led rating analysts to criticize Florida lawmakers for what they called unprecedented and persistent political interference into an independent agency with toll-setting authority.

Lawmakers passed HB 385 this year, and bills two previous years attempting to impose toll reductions, which led to several bond rating downgrades. MDX has about $1.5 billion of outstanding debt.

Other municipal market experts have taken notice of the situation.

In a July 12 podcast by Breckinridge Capital Advisors, portfolio managers Matt Buscone and Sara Chanda discussed the willingness of issuers to pay debts in the municipal market, citing as examples Puerto Rico, Illinois, and Florida.

Buscone and Chanda said the passage of HB 385 makes it more difficult for MDX’s successor agency to raise tolls and resulted in bond rating downgrades, illustrating that Florida’s “commitment to bondholders” is relatively weak.

Kimberly Olsan, a senior vice president at FTN Financial, said in a July 15 municipal commentary that the Legislature’s replacement of MDX with a new agency that has limited ability to raise tolls is a development that bears watching.

The bill Florida passed usurping the power of the MDX to raise rates and build projects is an example of an action that can affect credit quality, Patricia Healy, Cumberland Advisors' senior vice president of research and portfolio manager, said in a July 17 column.

“The legislation is being challenged and even if the challenge is successful, it is clear the entity has had its independent rate-setting authority compromised,” Healy wrote.

If the MDX’s lawsuit is unsuccessful at keeping the authority intact, it’s unclear when its successor will meet for the first time.

When HB 385 became law, it transferred MDX’s assets and bonds to the new Greater Miami Expressway Agency. The bill requires that the authority’s nine-member governing board be appointed by July 31, and an initial meeting must be held within 15 days.

The Miami-Dade Transportation Planning Organization is required to appoint three board members, while the County Commission has two appointees.

In the last two weeks, both the TPO and the County Commission decided that they may not make their appointments until October because they need more time to advertise for people interested in serving on the board, to review their resumes, and finalize the selection process.

DeSantis made his three appointments to the panel July 3. The local FDOT secretary is a fourth member representing the state.

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Toll revenue bonds Transportation industry Lawsuits Ratings Ron DeSantis Miami-Dade County Expressway Authority Miami-Dade County Florida