Miami-Dade toll road agency rebuts state's termination arguments

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The roads are open but the board is mute.

The Miami-Dade County Expressway Authority continues to operate in a stealth-like mode as the Florida Department of Transportation and the state House of Representatives pursue legal avenues to terminate the agency.

The authority canceled board and committee meetings in October and none have been scheduled since, because FDOT and the House are appealing Leon County Circuit Judge John Cooper Aug. 29 ruling that a bill to dissolve the authority, known as MDX, violated the state constitution. The state entities are also seeking a writ in an attempt to toss a lawsuit filed by the Miami-Dade authority.

Cooper ruled that a portion of House Bill 385 signed by Gov. Ron DeSantis on July 3 dissolving the authority and replacing it with another agency was unconstitutional. He issued a partial summary judgment in favor of the MDX’s lawsuit challenging the legality of the bill.

While that case was pending, the authority operated its expressways but the governing board stopped meeting and procurement for projects couldn’t move forward. After Cooper’s ruling, board meetings resumed as did planning for projects such as the $1 billion Kendall Parkway, a southwest extension of the Dolphin Expressway.

On Oct. 7, FDOT filed a petition asking the First District Court of Appeal to grant a writ of prohibition that would overturn Cooper’s ruling and void the MDX lawsuit. On Oct. 10, FDOT and the House also filed an appeal of Cooper’s ruling. Both cases are still in the briefing stage.

The petition and the appeal imposed a stay preventing Cooper’s ruling from being implemented. It also prevents the MDX board from meeting and pursuing procurement. MDX has about $1.5 billion of outstanding revenue bonds, and debt service payments are being made.

MDX’s attorneys contend that FDOT’s petition for a writ of prohibition is an unauthorized appeal of the lower court’s order.

“It is fundamental that a writ of prohibition is an extraordinary remedy, designed to be preventative and not corrective in nature,” the attorneys said in a Nov. 12 filing. “The petition should be denied because it is not being used preventatively, but instead as an unauthorized appeal to revoke the lower court’s order denying motions to dismiss and order granting partial summary judgment.”

A writ of prohibition is a remedy that can only to be deployed in emergencies, when the entity filing the petition is facing impending injury, and has no other adequate remedy available, they said, pointing out that FDOT has also filed an appeal.

The brief said HB 385 is a law that usurps Miami-Dade County’s constitutionally protected home rule rights, and abiding by the law would require “acceptance of an unlawful legislative act that abolishes MDX, divests it of all property and jurisdiction, and terminates its contract rights.”

“MDX is under a contractual duty to its bondholders to enforce the state’s obligations under the transfer agreement, the terms of which were unilaterally and materially modified by” HB 385, the brief said, referring to the state’s 1996 transfer of five toll roads to MDX.

In addition, a footnote in the filing said, the bill made no provision for transitioning assets, operations, or control of the expressway system from MDX to the Greater Miami Expressway Agency, which doesn’t have a duly constituted governing board to provide governance of the system or protect bondholders’ rights.

Only four of the nine members of Greater Miami Expressway Agency’s governing board have been appointed.

When DeSantis signed HB 385, he appointed to the new board Koch Industries regional manager Fatima Perez, Key Biscayne attorney Marili Cancio, and Rodolfo Pages, who is a managing director for the private equity firm Caoba Capital Partners. The local district FDOT secretary is an automatic board member.

The Miami-Dade Transportation Planning Organization has three appointments to the new board, and Miami-Dade County Commission has two. Neither have chosen them.

“The Miami-Dade TPO executive policy committee has opted to hold off on making any recommendations [about board appointees] until the litigation has been resolved,” TPO spokeswoman Elizabeth Rockwell told The Bond Buyer.

The Miami-Dade County Commission had planned to appoint members at its Oct. 3 board meeting, but the item wasn’t on the agenda. Board chairwoman Audrey Edmonson, couldn’t be reached for comment.

At the heart of the litigation is Cooper’s ruling that a portion of HB 385 terminating the Expressway Authority is unconstitutional because it preempted Miami-Dade County's home rule power by using a special local law that pertains only to the county.

FDOT contended that HB 385 was a general bill that applied statewide. Cooper rejected that argument.

While FDOT and the House are appealing, there appears to be recognition by some Florida lawmakers that a local bill affecting Miami-Dade County can’t be passed because of its protected home rule powers.

The Joint Legislative Auditing Committee discussed the issue in an Oct. 31 letter sent to the chairs of the House State Affairs Committee, the House Local, Federal & Veterans Affair Subcommittee, and the Senate Committee on Community Affairs.

The letter, penned by JLAC alternating Chairman Rep. Jason Fischer, R-Jacksonville, discusses avenues that could be used to dissolve financially distressed Opa-locka, a small city in Miami-Dade County. The letter was first published in the Miami-Herald.

In 2016, former Gov. Rick Scott declared the city to be in a state of financial emergency, and appointed a Financial Emergency Oversight Board to review and approve city expenses and guide budget planning. The oversight doesn’t include financial assistance.

“As we approach almost three and a half years after the creation of the Financial Emergency Oversight Board, there does not appear to be an end in sight for its existence,” Fischer wrote. The city still hasn’t submitted to the state an acceptable five-year financial recovery plan, he added.

In June, the Florida Auditor General’s office released a report that included 99 audit findings and identified nearly $5 million in questioned costs or potentially avoidable losses for the city and its Community Redevelopment Agency, he said.

The JLAC held meetings about the city’s financial condition on Oct. 17 and 24. Fischer said the city’s prepared remarks for meetings estimated that Opa-locka needs between $70 million and $90 million to pay for needed public works projects to repair crumbling infrastructure.

“If the city was located in any other county, individual [lawmakers] could file legislation to dissolve it if they were so inclined,” Fischer said. “However, the Miami-Dade County home rule amendment in the Florida constitution prohibits the Legislature from taking such action against any municipality in Miami-Dade County.”

Because of the restriction, the JLAC requested that the House and Senate committees consider preparing legislation that would expand the Legislature’s authority to address troubled municipalities.

“We request that you consider a general bill that would require any municipality in the state to hold a referendum based on certain criteria,” Fischer wrote. “The purpose of the referendum would be to allow the citizens an opportunity to vote on whether or not to dissolve their municipality.”

Fischer asked the committees to determine the criteria that would trigger a referendum.

“While this suggestion is the result of [JLAC’s] recent involvement with the city of Opa-locka, the intent is to provide an option to the Legislature in addressing municipalities statewide that may need to consider dissolution,” he said. The letter didn’t name any other financially struggling cities.

While legislative committees have held meetings in recent months to review bills filed for next year’s session, nothing has been proposed yet that would implement a municipal dissolution procedure.

The Legislature’s 60-day session starts Jan. 14.

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