by Ken Ibold
Updated 4 yearss ago
The expressway authority and state square off over how the authority wants to operate.
By Ken Ibold
A $2-billion turf war is under way in an Orlando courtroom. On one side is the Orlando-Orange County Expressway Authority, which wants more flexibility in the way it raises money through bonds that will be paid off by road tolls. Opposing the authority is the state, which contends it should have oversight of the authority's finances. At stake is the financing of the authority's 25-year plan for central Florida's 90 miles of toll roads, as well as adding 42 miles of highway and three interchanges. The bond issue would be the largest in state history.
Under state guidelines, the authority is allowed to sell bonds to finance construction and condemn property needed for highways. It is also allowed to levy tolls to service the debt -- the basis for the power struggle.
Six years after the authority was formed in 1963, the state Legislature created the Division of Bond Financing to protect the state's interests from overaggressive or ill-considered action by the various authorities around the state that are empowered to sell bonds. The law requires those various authorities to get the division to sign off on their plans to issue bonds. The expressway authority followed those requirements until the agency's lawyers concluded that the authority should not be subject to such oversight because it raises money from tolls to repay the bonds rather than servicing the debt from the state's general tax revenues.
Last summer, the authority quietly asked a judge to allow it to sell the bonds on its own without getting approval from the Division of Bond Financing -- attempting what the state considers an end-run around the state government.
The authority doesn't see it that way. "We want to run the authority like a business, but the government doesn't operate that way," says Hal Worrall, executive director of the expressway authority.
The state contends the oversight is necessary because taxpayers are on the hook if the authority defaults on the bonds. It also says that contractors can make so much money that officials may be tempted by bribes or other inappropriate behavior in awarding contracts. The red tape, the state contends, is there to ensure the process is fair and open.
One move that concerned state officials who monitor state debt: The authority attempted to open a $50-million line of credit without approval from the governor or Cabinet. The authority says the credit would have allowed it to save $8 million by retiring bonds early.
Circuit Judge William Gridley may issue a ruling this month. But the point may be moot. Rep. Bob Allen has already filed a bill that would allow the authority to bypass the Division of Bond Finance.
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