Miami-Dade Expressway Authority predicts chaos

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Chaos could lie ahead for management of south Florida’s toll roads, Miami-Dade County Expressway Authority board members said this week at what may have been their final meeting.

The board said Tuesday that a bill passed earlier this year to dissolve and replace the Miami-Dade County Expressway Authority doesn’t include a plan for the transition-of-power. The bill was sponsored by area lawmakers who contend the authority ignored past legislation ordering tolls to be reduced, even though the agency did.

If House Bill 385 is signed into law by Gov. Ron DeSantis, the measure could result in the lack of an operations plan for at least a month — from the time the current governing board is dismissed and a new board is appointed.

HB 385, which the Senate passed May 2 and the House passed on May 3, was signed by legislative officers on Wednesday, a procedure required before it could be sent to the governor for consideration.

The measure is now headed for DeSantis’ desk.

The lack of transitional details in the bill was among the concerns discussed at the current board's meeting Tuesday. Members also talked about how they would repair the agency’s credit quality following three rating downgrades in May, should the expressway authority remain as it exists today.

There are many unanswered questions about the potential gap in the transfer of governance and the lack of details in the bill, said Miami-Dade County Mayor Carlos Gimenez, chairman of the expressway authority board.

“That’s why we think there may be chaos when this happens,” said Gimenez, who is a Republican, although his position as county mayor is nonpartisan.

If DeSantis approves the bill, it would take effect July 1, immediately disbanding the current expressway authority and its board. Its assets, budget, debt and operations would be turned over to a new governing board for the Greater Miami Expressway Agency.

The bill requires that a new board be appointed by July 31, and for the panel to hold its first meeting within 15 days.

The governance gap between July 1 and July 31 could cause operational problems, according to Executive Director Javier Rodriguez.

“How do we make payroll,” Rodriguez asked. “How do you pay vendors?”

James Wolfe, the local district secretary of the Florida Department of Transportation who is the only voting board member who will retain his seat on the new board, said he does not expect changes in day-to-day operations if the governor approves the bill.

Rodriguez also said the agency is prepared to file for a preliminary injunction in court if the bill becomes law, in an attempt to block it from being enforced while the agency pursues a lawsuit.

The suit, filed by the expressway authority in Leon County Circuit Court May 5, challenges the constitutionality of the pending bill. It’s been placed on hold because the bill hasn’t become law.

The complaint contends the bill would violate Miami-Dade County’s home rule charter and a December 1996 agreement in which the Florida Department of Transportation agreed to transfer control of five local expressways to the Miami-Dade County Expressway Authority, also known as MDX.

A hearing in the case is set for Aug. 8 for the judge to consider a motion by the House of Representatives to intervene in the suit and argue for its exclusive authority to enact legislation.

The Miami-Dade County Commission reportedly is considering intervening as well, in support of the MDX.

DeSantis, a Republican, hasn’t indicated if he supports HB 385, although he has signed 145 bills into law, most of which were sent to him by the GOP-led Legislature. He has vetoed only two bills.

The governor has supported building new toll roads in the state. He approved Senate Bill 7068 in May, which requires the construction of three new major toll roads in rural parts of the state, even though a need for them hasn’t been determined.

Environmentalists had urged DeSantis to veto SB 7068 because they say it will lead to building “roads to nowhere” in rural and ecologically sensitive parts of the state.

The toll roads, part of the so-called Multi-use Corridors of Regional Economic Significance Program, are a top priority of Senate President Bill Galvano, R-Bradenton. The thoroughfares were also supported by the Florida Chamber of Commerce and groups representing road builders.

DeSantis now has 15 days to sign HB 385 into law or veto it. He could also allow it to become law without his signature.

If DeSantis signs the measure on or after July 1, it would become effective immediately and the current board would be dismissed. It’s not clear if the board would have the legal authority to pursue a lawsuit, although a judge said in May that he would reschedule a hearing on an injunction if the bill is approved.

Louis Martinez, an attorney and treasurer of the MDX board, said at Tuesday’s meeting that the delay in determining the bill’s fate has placed the agency in limbo.

“This is going to affect this community greatly,” he said.

Because the legislation requires the new board to review whether to keep or fire all employees, including the executive director, board member Luz Weinberg said that means the current staff faces uncertainties and some employees may seek employment elsewhere.

The only thing for certain about the bill, said board member Maritza Gutiérrez, is that it already has cost Miami-Dade County more to pay for transportation projects because of the three bond rating downgrades that occurred in May.

The pending bill, and legislation that passed in 2017 and 2018 ordering MDX to reduce tolls, led analysts to cut credit ratings on $1.5 billion of outstanding debt citing “unprecedented” political interference into the operations of what was an autonomous board.

S&P Global Ratings lowered its rating to A from A-plus and changed the outlook to negative; Fitch Ratings dropped its rating to A-minus from A and placed it on watch negative; and Moody's Investors Service cut its rating to A2 from A1, and kept it under review for further downgrade.

Analysts have warned of additional downgrades if HB 385 becomes the law, because they believe that the new governing board will be less likely to increase tolls. The bill also requires the new agency to have a goal of rebating 25% of the tolls paid each month by Miami-Dade County residents who use SunPass transponders and incur a minimum of $12.50 in tolls.

The current governing uncertainties led the expressway authority board on Tuesday to adopt a flat budget for fiscal 2020 that's based on cash flow, toll collections and the use of some reserves.

No bond financing is planned, in part, because the board said the rating downgrades mean it will cost more for the agency to issue debt.

In addition, bond counsel has told MDX that a qualified opinion would be necessary to issue bonds because of bills passed in 2017 and 2018 and the pending HB 385, which the agency believes impacts its covenants with bondholders.

If HB 385 goes into effect creating the new Greater Miami Expressway Agency, the governor would appoint three board members, the Miami-Dade County Commission would appoint two members, and the Miami-Dade Transportation Planning Organization would appoint three. The ninth voting member of the board would remain the local FDOT secretary.

The bill bars the county and the TPO from appointing anyone to the new governing board who worked for the former expressway authority or served as a board member during the past 10 years.

During a June 20 meeting, the Miami-Dade Transportation Planning Organization expressed concern about the timing of its appointments because the bill requires new members to be appointed by July 31. They said it could be difficult to advertise for applicants, review applications, and make appointments by the deadline.

“I also believe it’s going to be difficult to get someone who wants to go on the board,” said TPO board member Audrey Edmonson, who also is chairwoman of the Miami-Dade County Commission.

Edmonson said it could be hard to get volunteer board members for the new expressway agency because it wouldn’t operate autonomously. She also said if they failed to follow the law when setting toll rates they could “get spanked” by lawmakers who would pass a bill to put someone else on the board.

Edmonson also said the board may face new bond rating downgrades because of its lack of autonomy.

She asked what would happen if the TPO and the County Commission failed to make their combined five appointments to the new board by the deadline required in the bill.

The new governing board wouldn’t have a quorum and couldn’t meet to govern the Greater Miami Expressway Agency, said TPO attorney Bruce Libhaber.

HB 385 doesn’t say what the consequences are if new governing board members aren’t appointed, Libhaber said, adding that the state could take legal action to force the county and TPO to make their respective appointments.

The TPO decided by consensus to wait to make its appointments until the bill becomes law and legal challenges have concluded.

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