If Miami-Dade’s toll authority has enough extra money to provide refunds to drivers, why not just lower tolls for everybody?
That’s the question county Mayor Carlos Gimenez asked in a recent letter to the new chairman of the Miami-Dade Expressway Authority, which recently announced a rebate program for frequent drivers that would distribute any year-end surplus not anticipated in the budget.
MDX “should take a proactive approach to this issue by recalculating the cost of tolls based on the funds being forecast, instead of taking a reactive approach by returning unspent funding to frequent toll payers,” Gimenez wrote in a letter Wednesday to Louis Martinez, the Miami lawyer who also serves as chairman of the appointed toll board. That day, he also met with Martinez and MDX director Javier Rodriguez, according to his calendar.
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To receive a refund, drivers must register their electronic SunPass toll devices with the program by Aug. 31, and spend at least $100 for the year to qualify for a refund. Refunds would be portioned out from whatever cash MDX says it has left over by December.
Gimenez cited the registration requirement, and the cost of administering the refund program, as problematic. “I urge the MDX to consider a reduction in the cost of tolls,” Gimenez wrote, saying that was the “more fiscally responsible approach.”
In a statement Thursday, MDX noted its refund payments depend on a year-end surplus, so it couldn’t risk lowering toll rates ahead of time. “The cash-back toll dividend is based upon MDX exceeding its financial projections and senior debt coverage,” MDX said.
With MDX executives estimating a refund pool of $3 million in unbudgeted surplus dollars, the money in question wouldn’t make much of a dent on toll rates. The entire system is budgeted to collect about $202 million in tolls this year, and the estimated refund amount represents about 1.4 percent of that total.
Applying a 1.4 percent cut on toll rates would mostly result in more complicated math. For example, the toll gantry that charges motorists 70 cents between I-95 and Miami International Airport would cost 69 cents if the fee was reduced by 1.4 percent.
But should MDX be pressured to declare more money surplus, the refund pool could be turned into a larger toll reduction. MDX’s budget for the current year expects $56 million to remain in profits after debt payments are made. MDX spokesman Mario Diaz said almost all of that $56 million is slated to pay for ongoing construction and maintenance, as well as future projects.
MDX officials say a large cash cushion is needed to maintain MDX’s strong credit rating, which keeps borrowing costs low. MDX also uses surplus and reserve funds to pay contractors directly for roadwork, rather than relying exclusively on borrowed funds.
“They have a ton of cash,” said Daniel Adelman, a Fitch associate director who helped write the recent report upgrading MDX’s credit rating.
The report cited a “significant increase” in revenue from the toll expansion. It also listed politics as a downside for toll authorities, noting “inherent political risks associated with toll increases especially if economic conditions deteriorate.”
Gimenez’s letter is his latest critique of MDX, which has become a top political punching bag in Miami-Dade following the November 2014 expansion branded “Tollmaggedon” by critics. This spring, Gimenez championed a change in state law that would have made him chairman of the MDX, where a majority of board members are appointed by the county commission.
Gimenez faces reelection in 2016 at a time when anger over higher tolls appears to be a top complaint among voters.
Last fall’s toll increase ended MDX’s practice of tolling only portions of the Dolphin (State Road 836) and its sister east-west route, SR 112. By expanding tolls, MDX created a dramatic increase in revenue; forecasts have toll collections soaring 120 percent this year on the Dolphin to $345,000 a day.
The surge in MDX dollars came from a steep increase in what drivers paid: a round trip on the Dolphin between I-95 and the Florida Turnpike went from $2.50 to $4.20.
Fitch, a private ratings agency, recently upgraded MDX’s bond score, noting MDX, which runs five tolled highways in Miami-Dade, is budgeted to collect about $202 million in tolls this year, compared to $180 million last year.
Leaders of the authority said the November toll expansion was the fair thing to do, since only a portion of drivers were funding maintenance for the entire roadway. And the money is being used for a string of improvement projects on the Dolphin aimed at easing congestion, including the elimination of some left-lane exits and rerouting troublesome on-ramps.