LowT Gimenez lied to us then, he'll lie to us again...

Miami Herald:
How Miami-Dade collected $3 billion and still can’t afford to expand Metrorail


Gimenez lied to us then, he'll lie to us now...
  • What “people understand was ‘promised’ was never possible,” the Dec. 3 memo reads, “if realistic revenue and expense projections were applied from the beginning.” Gimenez added in an interview Tuesday: “The promises made could never be kept. The revenues were overstated.
  • The same memo reported a planned rail line linking the western suburbs had ballooned at roughly the same rate, from $1.4 billion to $2.3 billion.
  • Eileen Higgins, a Miami-Dade commissioner who voted for the plan, noted: “I am actually pretty disappointed, because we are exactly where we were.”

If spending of Miami-Dade’s transportation tax had gone as planned nearly two decades ago, the county would be preparing for a milestone in 2021: the five-year anniversary of a new elevated Metrorail line running 10 miles north along 27th Avenue to the Broward County line. 

Metrorail’s “North Corridor” expansion was originally supposed to open by 2016 under a construction timeline laid out in 2002 on how to spend a transportation sales tax then-Mayor Alex Penelas pitched to voters in a referendum that year, according to a 2005 county summary of the plan.

Far from celebrating, Miami-Dade’s elected leaders and transit advocates are still pointing fingers over how a half-percent sales tax that’s generated more than $3 billion failed to deliver more than three miles of additional rail.

Mayor Carlos Gimenez, in office since 2011, recently issued a memo prepared by his budget office that describes a tax plan doomed by overly optimistic predictions on costs, federal aid and the overall financial health of Miami-Dade’s bus and rail operations. It cited flawed projections on fare growth, far too conservative forecasts for pay and benefits of transit workers, and construction estimates that would end up growing significantly.

What “people understand was ‘promised’ was never possible,” the Dec. 3 memo reads, “if realistic revenue and expense projections were applied from the beginning.”
Gimenez added in an interview Tuesday: “The promises made could never be kept. The revenues were overstated. The expenses were understated. ... We needed to be honest with the people [and] set the record straight.”


THE SAGA OF THE ‘HALF-PENNY’ TAX

Miami-Dade’s saga of the “half-penny” tax remains one of the most popular punching bags when it comes to transit policy. Now the 2020 race to succeed Gimenez is bringing even more attention to the details behind the failures, with Penelas running to reclaim his old job. The former mayor is trying to focus the debate on administrations that followed him in the 15 years since he left office, blaming mismanagement and property-tax cuts that Penelas claims were easier to enact with the influx of new money from the transportation tax he got passed.
“The transportation mess we’re experiencing today is something we predicted 20 years ago. ... The money was misspent, and on their watches,” said Penelas, whose 2020 opponents include four sitting county commissioners and one who left office in 2016. “And they’re trying to find a way of explaining things away.” 

Approved in 2002 by 66 percent of countywide votes cast, the transportation surtax now generates about $275 million a year. From the start, it wasn’t pitched as the sole solution to Miami-Dade’s already struggling transit system. Instead, Penelas and others promoted the tax as key to winning federal and state transportation aid because it would allow Miami-Dade to provide the steady stream of matching dollars needed to compete for big transit grants. 
By 2003, County Manager George Burgess, a Penelas appointee, was writing of “significant and worrisome impacts” from the financial forecast attached to the tax plan just a year ago. 
In 2008, as the nation slipped into a deep recession and Miami-Dade a housing crash, the Federal Transit Administration gave the North Corridor Metrorail project a “medium low” rating for a flawed financial plan, leaving the county lagging behind other applicants and resulting in no Washington dollars for Miami-Dade.

COST PROJECTIONS WERE TOO LOW, AND FEDERAL AID FORECASTS TOO HIGH

Cost predictions proved too low, forcing Miami-Dade to revise its federal application. A Feb. 6 , 2007, memo from Burgess, who was retained by Alvarez, showed the Metrorail extension once projected at $915 million had grown nearly 60% to $1.45 billion. The same memo reported a planned rail line linking the western suburbs had ballooned at roughly the same rate, from $1.4 billion to $2.3 billion.

Even with higher costs, a primary shortcoming in the North Corridor application, according to the federal scoring sheets, was the lack of dollars to keep the existing transit system running in the midst of an expansion. A county summary of the federal scoring cited $1.1 billion in unfunded construction and maintenance needs for Miami-Dade transit, along with a financial plan requiring cuts in bus service to make the cost numbers work.
“I have been saying for a while this plan was an over-promise,” said Commissioner Esteban “Steve” Bovo, a Penelas rival in the 2020 mayoral race. He said he blamed Penelas and staff for the flawed expectations. “They weren’t truthful.”

With federal funds denied, the North Corridor project was all but dead, and with it the best hope for a major Metrorail expansion funded by the new tax. Fifteen years later, the tax has only paid for a 2.4-mile extension from the Earlington Heights station to Miami International Airport, a $506 million project that used only state and county dollars. It opened in 2012. 

FIFTEEN YEARS LATER, LESS THAN THREE NEW MILES OF RAIL 

The tax also funded significant improvements to the existing 25-mile Metrorail system, including the ongoing, $380 million replacement of aging, malfunctioning trains. 
Those are the two biggest transit projects funded by the more than $730 million of transportation taxes that have gone to bond payments for large purchases that’s covered debt payments so far, according to the Gimenez memo. 

Cities have spent almost that much on operating trolleys and building road projects authorized under the original tax rules, which reserved 20 percent of the proceeds for municipalities. The memo said that has amounted to about $710 million since the tax went into effect after the 2002 vote.

About half of the money built and bought nothing, but instead paid for county transit operations previously funded mostly by property taxes. County leaders, including then-Commissioner Gimenez, approved loosening the tax rules to allow spending more of the dollars on transit operations as faulty projections and then the recession’s budget squeeze left Miami-Dade unable to maintain services. 

The Dec. 3 Gimenez memo said about $476 million of the tax went to subsidize transit operations that otherwise would have been funded by property taxes and other general revenues. That wasn’t supposed to happen under the original tax rules, and Gimenez’s 2020 budget for the first time ends that subsidy. 

Millions of dollars of the tax still flow into transit operations, but only for expansion projects tied to the original plan. That includes free Metromover service, operations of the new MIA Metrorail route, and bus routes after 2002. In all, more than $1 billion of the tax has paid for operations and maintenance of expansion projects, according to the Gimenez memo. 


PENELAS WANTS A REFUND FOR THE TRANSIT SYSTEM

Penelas pointed to that figure as a source of contention, saying too much has flowed into the transit system’s budget. If elected mayor again, Penelas said he’s considering a plan to use property taxes to reimburse the money and fund more expansion projects. 
“We better figure out how we’re going to repay this money, if we’re going to truly restore the trust of the public,” he said. 

The Gimenez administration sees ongoing transit funding as a major flaw in the original 2002 plan, since the long-term forecasts had to be quickly adjusted to spend more property taxes on running buses and trains to keep the system solvent. The Dec. 3 Gimenez memo describes the county’s transit system in 2002 as “bleeding” money, with expenses “far in excess” of recurring revenues available even before the tax was passed. 

As a commissioner, Gimenez sponsored a 2005 deal with then-mayor Carlos Alvarez to lock in a yearly 3.5-percent increase in property taxes and other general funds for the transit budget, a change worth about $700 million so far, according to the current administration’s calculations.
When he ran for reelection as mayor in 2016, Gimenez aired a campaign ad portraying him on a Metrorail car under the headline “More Rail Lines,” but he has opposed plans to expand the existing Metrorail system as too expensive and outdated. Instead, he’s pushed for more affordable options under the SMART Plan process, an effort launched in 2016 to re-study six of the corridors laid out in the original 2002 tax plan. 

In September, commissioners agreed to consider a proposal for a roughly $400 million monorail system from Genting, the casino company that would build a station on its planned Miami resort site and receive an undisclosed yearly payment from Miami-Dade plus $240 million upfront in public funds. The commission set a spring deadline for Genting to resubmit the proposal and for other private bidders to propose their own transit plans between Miami and Miami Beach.

Last year, Miami-Dade approved a $300 million rapid-transit bus system for South Dade instead of a Metrorail expansion estimated at more than $1 billion. Commissioners in October approved $76 million for a Brightline station next to the Aventura Mall, allowing the for-profit rail line to begin service there expected to cost more than triple what Metrorail charges. 

In October, Miami-Dade’s Transportation Planning Organization, a board of commissioners and other elected officials, endorsed trying again for Metrorail on the North Corridor in hopes Washington would come through this time with about half of the $1.9 billion needed to build it. 

Eileen Higgins, a Miami-Dade commissioner who voted for the plan, noted: “I am actually pretty disappointed, because we are exactly where we were.”

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