By Jim Saunders, The News Service of Florida
TALLAHASSEE — Representatives of bondholders have asked a judge to order the Florida Department of Transportation to increase tolls on a financially troubled Panhandle bridge.
The request last week from attorneys for UMB Bank came after Leon County Circuit Judge John Cooper in December directed the department to raise tolls to help meet financial obligations for the Garcon Point Bridge, which spans part of Pensacola Bay.
UMB Bank is the trustee representing bondholders in the lawsuit, which was filed in December 2018 because bonds used to finance the bridge were in default. In the filing last week, the bank’s attorneys said tolls were not increased Feb. 1, as they had expected.
“The trustee submits that it incurs additional (significant) damages each day the court-mandated toll increases are not implemented,” the document said. “The trustee also believes the department has had a reasonable and sufficient time to implement the court-mandated toll increase.”
Beth Frady, communications director for the department, said in an email Monday that the “department is coordinating the implementation of the order and will provide additional information regarding the amount of the tolls to customers and media in the coming weeks when a final decision is made.”
The dispute stems from about $95 million in bonds that the state-created Santa Rosa Bay Bridge Authority issued in 1996 to pay for construction of the bridge, which has been known in Tallahassee as “Bo’s Bridge” because it was championed by former House Speaker Bo Johnson of Milton.
The bridge opened in 1999, but toll income has been inadequate to meet the financial obligations, a situation that has been complicated because the bridge authority has been effectively defunct since 2014, according to court documents. The Department of Transportation has a lease-purchase arrangement in which it operates and maintains the bridge and remits tolls to the bondholders. The department is supposed to ultimately become the owner of the bridge after the bonds are paid off and amounts advanced by the department are repaid.
UMB Bank said in the lawsuit that bondholders were owed $134.9 million as of July 1, 2018, a number that continued to grow.
With the bridge authority not functioning, the crux of the lawsuit has been whether the Department of Transportation should be required to raise the tolls. In an October filing, the department argued, in part, that it could only raise tolls if it has recommendations from the authority’s traffic consultants.
“It is undisputed that the authority is effectively defunct and has insufficient active members to take actions or pass resolutions,” department attorneys wrote. “Without a recommendation from the authority’s traffic consultants on which it could act, the department cannot be in breach of its limited obligation to establish tolls under the LPA (lease-purchase agreement).”
But UMB Bank disputed the department’s arguments and pointed, in part, to a February 2019 report by consultants hired by the department to look at the toll issue.
“This action arises from the department’s refusal to raise the tolls on the Garcon Point Bridge to a level necessary to repay the bonds, the proceeds of which were used to finance the construction of the bridge,” UMB’s attorneys, who work for the Greenberg Traurig law firm, wrote in an October document. “The bond documents squarely provide that tolls are to be used to repay the bonds; they also make clear that the department is obligated to retain a traffic consultant and implement the toll schedule recommended by the consultant if the Santa Rosa Bay Bridge Authority is unable or fails to do so.”
The consulting firm hired by the department, CDM Smith, recommended that tolls for two-axle vehicles increase from $3.75 to $4.50 for motorists who use the SunPass system and to $5 for motorists who pay cash. The firm also recommended trimming a discount from 50 percent to 25 percent for motorists who make 30 trips on the bridge a month.
In his Dec. 13 ruling, Cooper directed the department to carry out the recommendations of CDM Smith. He also wrote that the “implementation of the recommendations of CDM Smith does not preclude the department from conducting another toll rate study.”
Lawmakers in recent years have looked at possible ways to resolve the financial troubles of the bridge but have not reached agreement.