Rep. Avila clarifies, "ban all current appointees from joining the new board." AKA LowT Gimenez

Miami Herald:
These may be the final days of the MDX, and the toll agency promises trouble ahead

  • "ban all current appointees from joining the new board. “Our intention was essentially to have a clean slate,” Avila said."
  • Rep. Avila clarifies, "ban all current appointees from joining the new board." AKA LowT Gimenez
The leaders of the Miami-Dade Expressway Authority are enjoying some I-told-you-so moments as they preside over what may be the sudden demise of the toll agency. 

MDX board members warned lawmakers they would wound the agency’s finances if they passed legislation to dissolve the expressway authority and replace it with a new one. The bill passed earlier this month, and on Friday the third major credit-ratings firm issued a downgrade for MDX, citing “persistent political interference.” 

“What we said was going to happen has happened,” said Miami-Dade Mayor Carlos Gimenez, MDX’s appointed chairman. “This legislation has already cost tens of millions dollars ... with no guarantee of any toll reduction.” 

Gimenez was in Tallahassee Friday for the first day of arguments in MDX’s suit to have the bill declared unconstitutional before Gov. Ron DeSantis had a chance to sign it. MDX claims the bill violates the original 1996 county agreement with Florida creating the MDX and allowing the new agency to purchase the five former state expressways for $91 million. 

The Leon County judge, John Cooper, declined to consider an injunction until the bill becomes law through the governor’s signature, freezing MDX’s legal assault on the legislation for now. 

Bill sponsor Rep. Bryan Avila, R-Miami Springs, had urged lawmakers not to let warnings from the credit agencies deter them from voting for his legislation, saying last-minute language was designed to reassure Wall Street. 

The additions watered down previous requirements for the new Greater Miami Expressway Agency to provide local motorists a more generous rebate program than MDX offers and to freeze existing toll rates for 10 years. The final legislation calls for both, but requires the new board to consider a financial analysis in setting the rebate program and gives directors the chance to avoid the freeze after five years with a super-majority vote. 

“We put in a lot of safeguards,” Avila said in an interview Friday afternoon. “I think that’s ultimately going to be helpful in terms of getting an upgrade.” 

Friday’s downgrade came from Moody’s, which lowered MDX’s debt rating from A2 to A1. That still puts the MDX in the category of “low credit risk” but is just two notches above a B rating, which designates “moderate” risk. The lower the credit rating, the more a borrower typically pays in interest to Wall Street lenders buying bonds. 

Moody’s is the third of the three major ratings firms to downgrade MDX this month. Standard and Poor’s went first, on May 1, two days before the anti-MDX bill passed the Legislature. Fitch followed suit on Wednesday, days after the legislation passed. Each agency said the legislation suggested Florida’s elected leaders no longer accepted Miami-Dade’s toll agency as having a free hand to set the toll rates that ultimately generate the money needed to pay back bondholders. 

The “bill enshrines an extreme example of state-wide political interference into the rate-setting policies of an independent tolling authority,” Fitch wrote. 

It also knocked the bill for banning board members appointed by the Miami-Dade County Commission from serving on the new board, while appointees of a governor may make the transition. This has been a point of confusion with the legislation, with Avila and co-sponsor Sen. Manny Diaz Jr., R-Hialeah Gardens, both saying they meant to ban all current appointees from joining the new board. “Our intention was essentially to have a clean slate,” Avila said. 

An MDX analysis predicted a single notch downgrade like the one Moody’s announced Friday would cost the system roughly $41 million over several decades. That’s about $1 million a year for a toll system that generates more than $250 million in revenue every 12 months through five expressways: the Airport, the Dolphin, the Don Shula, the Gratigny and the Snapper Creek.

Revenues nearly doubled in the two years after the MDX ended toll-free stretches on the Airport and the Dolphin in 2014, a move that made the MDX a target of motorists’ ire and politicians’ demands for relief. 

The new toll agency is supposed to take over MDX operations on July 1, with a new board appointed that month. This week, a representative for some bondholders wrote MDX’s lawyer to praise the lawsuit. 

“We bought bonds believing MDX had independence,” Baird managing director Duane McAllister wrote MDX general counsel Carlos Zaldivar. “The state is setting a very concerning precedent for bondholders by taking this action.”

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