Anti toll-bridge bailout sentiment prevails in Florida committee

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A Florida legislative committee, unwilling to be seen bailing out bondholders, is willing to offer 50 cents on the dollar as a starting point to negotiate taking out the defaulted debt issued to fund the Garcon Point Bridge.

Rep. Jayer Williamson, R-Pace, on Tuesday recommended the reduced payment as an amendment to House Bill 1281, a measure he sponsored that originally could have offered bondholders haircuts between 27% and 45.5%, a range based on refinancing strategies recommended by the Division of Bond Finance.

Williamson told the Government Accountability Committee that he proposed reducing bondholder recoveries after talking with committee members and finding from those discussions that “it was clear for the bill to continue to move” through the legislative process the change was necessary.

“We’re simply saying we’ll offer 50 cents on the dollar,” he said. “It gives us bargaining power as we’re naming the price that the state will pay.”

The Santa Rosa Bay Bridge Authority, which owns the tolled Garcon Point Bridge in northwest Florida, has $132.2 million of debt outstanding. The bonds have been in payment default since January 2012 because toll income doesn’t cover debt service on the revenue bonds.

Williamson said he arrived at the reduced payment in part by subtracting $33.2 million owed to the Department of Transportation, which consists of a $7.9 million loan and $25.3 million of operation and maintenance costs incurred by the DOT since the bridge opened in 1999.

Gross toll revenues are pledged to the authority’s debt, according to bond documents. Payments to DOT for the loan and O&M under a lease-purchase agreement are subordinate to the payment of debt service as long as the bonds are outstanding.

Several members of the committee Tuesday thanked Williamson for the amendment, including Rep. Bob Rommel, R-Naples.

“I was concerned that the state of Florida was bailing out private bondholders…which I thought was a bad deal for the residents of Florida,” Rommel said. “Under your new proposal in essence you could be saving taxpayers over $100 million.”

No one from the public spoke about the bill or the amendment. The committee voted unanimously to approve HB 1281, which now goes to the House floor.

Senate Bill 1436, a companion measure sponsored by Sen. Doug Broxson, R-Pensacola, was also recently amended but doesn’t set a floor for what the state can offer bondholders.

SB 1436 allows the bond refinancing to be structured by taking into account various conditions, including debt owed to the DOT for O&M and O&M expected to be paid in the future. The bill is waiting to be heard by the Senate Appropriations Committee, its final stop before going to the Senate floor for a vote.

If both bills are approved, the final language would need to be worked out in conference.

The Legislature’s session is scheduled to end March 9, but both chambers are still hammering out the state budget and have scheduled new committee meetings on gun control legislation in the wake of the Feb. 14 gun massacre of 17 students and adults at Marjory Stoneman Douglas High School in Parkland, Fla.

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Toll revenue bonds Infrastructure Bond defaults Florida