Like TURF
Follow TURFFL lawmakers takeover, bailout regional toll authorities
Lawmakers site economies of scale and duplicative duties with the of the State Turnpike Enterprise as reasons for the takeover of most every regional toll authority. Our hunch is this is a bailout of sorts. Plus, these agencies are unelected and unaccountable and have clearly gotten out of control with setting toll rates too high to keep the roads viable. Texas State Representative Joe Pickett has a bill, HB 1921 to make the El Paso Regional Mobility Authority elected, Rep. Ken Paxton has one, HB 1636, to require RMAs to have an annual financial audit and to have its checkbook posted online, and Rep. Rafael Anchia has one, HB 1577, to subject the North Texas Tollway Authority to sunset review. The Grant Thornton Audit said RMAs' duties duplicate those of TxDOT's. Texas could take a page out of Florida's playbook and abolish them altogether and put them under the Texas Turnpike Authority division of TxDOT, which would be a HUGE savings to the taxpayer. If TxDOT were run by an elected official as we've advocated for the last four years, that would just about neuter the majority of the problems at TxDOT and with tolling. Now's the time, when we have a $27 billion hole in the budget.
Team Florida at one another's throats - state Turnpike move to takeover regional tollers
Toll Road News - Posted on Fri, April 1, 2011
The Orlando and Tampa tollers see themselves as in a fight for their survival in the state legislature against a hostile takeover move by Florida's Turnpike Enterprise (FTE). A bill moving successfully through the state Senate (SB7198) threatens to kill the long established regional toll authorities in Orlando and Tampa. It would put an end to the Orlando Orange County Expressway Authority (OOCEA), the Tampa Hillsborough County Expressway Authority (THCEA) and the Mid Bay Bridge Authority (MBBA) "transferring all assets, rights, powers, duties, and bond liabilities to the (state) turnpike enterprise…"
It would transfer to the Florida Turnpike Enterprise, a division of the state DOT:
- OOCEA's SR528 Beachline Expressway
- MBBA's Mid Bay Bridge
- THCEA's SR618 Selmon Expressway
- OOCEA's SR408 East-West Expressway
- OOCEA's SR417 Central Florida GreeneWay
- OOCEA's SR414 John Land Apopka Expressway
- OOCEA's SR429 Daniel Webster Western Beltway
The Mid Bay Bridge is a small but viable local toll bridge, not to be confused with the Santa Rosa County Bridge Authority which runs the failing Garcon Point Bridge also in the panhandle of Florida. (CORRECTED)
Killing a bunch of local toll authorities
In addition the bill repeals a bunch of lease-purchase agreements between the state Turnpike Enterprise and county toll authorities, and repeals previous legislation authorizing a whole list of regional and county toll authorities:
- Brevard County Expressway Authority
- Broward County Expressway Authority
- Pasco County Expressway Authority
- St Lucie County Expressway and Bridge Authority
- Seminole County Expressway Authority
- Southwest Florida County Expressway Authority
- Osceola County Expressway Authority
- Jacksonville Transportation Authority
These eight local toll authorities, largely in project development, would be aborted.
Miami Dade Expressway Authority exempted from takeover
Notable by omission is any move against the Miami Dade Expressway Authority (MDX), which operates five major tollroads in the Miami area. It is left entirely out of the bill, its assets and powers completely untouched. (See comment at end by Javier Rodriguez, executive-director MDX)
More toll rate power to state secretary transportation
The bill would also limit toll rate setting by toll managers to an unprecedented degree.
It requires that cash and electronic toll rates throughout the state to be equal.
The Turnpike Enterprise would generally be required to index tolls to the rate of inflation although they could be increased more if required by bond commitments, bond covenants, or if directed by FDOT.
Toll rates for new toll projects would have to be adopted in the planning and project development stage, also seriously handicapping projects that inevitably miss some planned targets.
Sponsors
The Republican leadership - state senators JD Alexander, budget committee chair and Don Gaetz transportation committee chair - are the main sponsors of the bill but they are working closely with the Turnpike Enterprise and the secretary of transportation.
When we called the senators offices asking for any materials explaining the rationale for the bill we were referred to the state Turnpike Enterprise.
Economies of scale claimed
They claim major scale economies through eliminating duplicated activities, and doing operations jointly. A single traffic and revenue consultant compared to many, a single bond counsel etc. they say.
A figure of $14m a year savings in "overhead" is mentioned, and another $10m in amounts FTE presently pays regional tollers.
Supporters of 'consolidation' also claim greater borrowing capacity - $3b more.
Text of SB7198:
http://www.flsenate.gov/Session/Bill/2011/7198/BillText/Filed/HTML
FTE summary of the case for consolidation:
http://www.tollroadsnews.com/sites/default/files/SummaryFTE.docx
EDITORIAL COMMENT: We're skeptical about the economies of scale in what looks like a very superficial analysis of consolidation by FTE (see attachment below). In areas where there are indeed economies of scale these can usually be realized by joint procurement or one toller performing an activity on behalf of another, or several - on a negotiated cooperative basis. Whole organizations don't have to be merged.
There are also diseconomies of scale - operations that require more management when they are centralized but spread over a larger area, reduced opportunity for innovation, more layers of bureaucracy.
There are disadvantages in preventing local initiative and in ending local control ands responsibility. Florida is a large state with distinct regions and there is logic to having regional and local entities run what are usually very regional and local roads.
The bill would straitjacket toll rate setting.
What possible justification is there for a provision requiring cash and electronic tolls to be the same? Cash tolls cost way more to collect than electronic tolls. Tolls should reflect costs. Economical methods of toll collection should not be forced to cross-subsidize higher cost manual activities. That's Luddite thinking.
The bill would seem to rule out variable pricing of roads - a proven means of managing traffic for smoother flow and reduced congestion - and a way of increasing motorists options.
SB7198 makes no provision for toll concessions or public private partnerships.
This is a serious power grab by state officials at the expense of local and regional autonomy.
There's also some very cynical political calculation in the exclusion of Miami-Dade from the state takeover. Does the logic of scale economies and eliminating duplicative activity not apply in south Florida, to the state's largest metro area - only in the metro areas of central Florida?
More likely the sponsors of SB7198 sense the Miami pols are too formidable to take on at present. (see comment at end by exec-director MDX)
They want to grab the low hanging fruit first.
SB7198 is the kind of legislation you'd expect more from Democrats, than from Republicans.
Republicans claim to be opposed to centralization of power, to one-size-fits-all approaches, and to price controls. Not when it comes to tollroads in Florida, apparently - editor.
FOLLOWUP: Javier Rodriguez, executive-director MIami-Dade Expressway Authority emailed us: "the reason MDX is not included in this legislation is because MDX does not have any lease/purchase agreements with FDOT. MDX purchased - paid off the lease/purchase agreements - the five expressways in 1996."
COMMENT ON FOLLOWUP: Mr Rodriguez makes an important point in highlighting the lease-purchase agreements between Florida Turnpike Enterprise and the regional toll authorities, although we're not convinced the payoff of such agreements is what saved MDX from this takeover/consolidation move by the state. MDX is a creature of the state and could equally easily be legislated out of existence and its assets, powers and obligations handed to FTE, if legislators chose - editor.