News Service of Florida
Siding with bondholders, a Leon County circuit judge Feb. 25 ordered the state to increase tolls on the financially troubled Garcon Point Bridge.
Judge John Cooper in December directed the Florida Department of Transportation (FDOT) to raise tolls to help meet financial obligations for the Garcon Point Bridge, which spans part of Pensacola Bay. But the department did not act by Feb. 1, spurring UMB Bank, the trustee for bondholders, to go back to Cooper and request an order for toll increases.
Cooper held a hearing and ordered tolls to increase by March 1, according to hearing minutes posted on the court website and a news release from MC Advisors LLC on behalf of a group of bondholders. The news release said bondholders had “no choice” but to return to Cooper for an order.
“Over the years, bondholders made several unsuccessful attempts to resolve this issue outside of the court by offering alternatives to FDOT, the Legislature, and other stakeholders,” Maria Cheng of MC Advisors said in a prepared statement. “One of the alternatives would have utilized the current low interest rate environment and refinanced the bonds that are outstanding. Under that scenario, tolls may not have needed to be raised and the savings would be passed on to Florida taxpayers and bridge users. However, all alternatives were rejected. The bondholders remain willing to explore these previously offered alternatives or other reasonable solutions.”
UMB Bank filed the lawsuit in December 2018 because bonds used to finance the bridge were in default. 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. The span 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 lawsuit has focused on whether FDOT should be required to raise the tolls. A consulting firm hired by the department issued a report last year that recommended 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. It also recommended trimming a discount for frequent users of the bridge.