County Told Tolls Could Help Pay For Tunnel Construction
Written by Charlotte Libov on October 5, 2006
By Charlotte Libov
Levying tolls may be key to funding Miami-Dade County’s share of a proposed $1.2 billion tunnel at the Port of Miami, according to a staff report prepared for County Manager George Burgess unveiled Tuesday.
Preliminary estimates suggest about $1 for light vehicles, $4 for trucks and $8 for buses would cover the county’s share, the report said.
Commissioners are to formally vote next week whether to enter into a financial agreement with the Florida Department of Transportation to construct a tunnel.
"The toll may be the solution to the whole issue of who pays," said Commissioner Carlos Gimenez. "Whoever uses the tunnel pays the toll."
The commission has been struggling to find a way to pay its share of the project. At a special workshop Tuesday, members discussed cost scenarios for more than two hours.
In the end, they directed Mr. Burgess to draft a resolution of support in the form of a joint financial participation agreement, which would enable the Florida Department of Transportation to request proposals for the tunnel in hopes of awarding a contract by year’s end.
In addition, the manager’s office was directed to draft a memorandum of agreement with the transportation department on non-financial terms of the plan, such as the granting of rights of way.
The transportation department is to contribute 50%, or $600 million, for the tunnel but has refused to request proposals from developers until the county commits funds.
The full commission is to consider the resolution at 9:30 a.m. Tuesday.
State officials have said they didn’t envision charging tolls but apparently changed their minds after the county said it was still $111 million short despite devising a variety of ways to pay its share.
Besides the toll plan unveiled at the workshop, alternatives discussed include raising seaport user fees, pressing the state to change its funding formula, eventually seeking a special federal grant and trying to pressure the City of Miami to come up with a minimum $50 million toward the project.
Originally, the county had hoped the city would pay 50% of the county’s share, but city officials balked, saying that because a tunnel would benefit the county, the city shouldn’t have to pay anything.
"I will continue to ask for the City of Miami to come up to the plate. I don’t mean to be disrespectful, but I want the city’s decision as soon as possible," said Commissioner José "Pepe" Diaz.
"We cannot provide a commitment, but we have made progress that will get us to the magic number of $50 million," José Gonzalez, the city’s assistant transportation coordinator, told commissioners.
But Commissioner Dorrin Rolle, chairman of the workshop, said officials are concerned that the city may run into legal problems in its attempt to expand Omni Community Redevelopment Agency boundaries to raise tax funds for the project. It is stipulated that redevelopment agency money be used for the development of blighted areas. Watson Island, where the tunnel is to originate, would have to meet that criteria.
"That would be my question, if it is legally blighted," Mr. Rolle said.
"If the CRA doesn’t work, they will not participate and we will need to decide whether to go it alone," Assistant County Manager Carlos Bonzon agreed.
A tunnel from Watson Island to the port would allow traffic to flow into Interstate 395 and bypass downtown, where cargo trucks jam traffic.
At the meeting, commissioners first watched a video, "The Port of Miami: The Vision," which, set to a Latin beat, portrayed a bustling port halted by snarled traffic congestion and then, with the help of computer simulation, showed trucks and traffic smoothly flowing along four additional lanes built above a tunnel.
"We’ve been talking about this since 1981, and it’s been looked at by numerous committees, which have looked at all the options," Mr. Bonzon said. "The long-term solution has always been that we need a tunnel, and if we don’t do it, the situation will be exacerbated."
However, officials also said they are leery that tolls and increased seaport fees could hamper the port’s competitiveness.
Although no charges would be levied until 2013, when the tunnel would open, the charge for every 20-foot-container equivalent of cargo would rise from $40.48 to $42.36, up 4.65%, and the cruise passenger fee would rise from $10.96 to $11.58, up 5.65%, in order to raise $100 million, the staff report said. Those fees would probably rise 3% a year, the report said, and the seaport would be expected to contribute several rights-of-way, without which tunnel construction would be impossible.
Acting Port Director William Johnson has said the port could contribute $100 million to the project. But the report said that if the port were to pay more than that, the base charge would increase 15 cents per cruise passenger and 47 cents for 20-foot cargo units for every $25 million required, assuming an even split between cruise and cargo business.
Khalid Salahuddin, deputy seaport director, told commissioners that Mr. Johnson "believes the tunnel must be built. We don’t see another alternative, but the tunnel must be built in such a way that it doesn’t put our users out of business."
Commissioner Diaz said he was concerned that raising fees could put Miami’s port at a disadvantage to Port Everglades in Broward County.
"Trade is our county’s backbone," Mr. Diaz said. "This is a must for us to remain competitive." But he said he is concerned about the fees because "every other port wants to take business away from Miami-Dade."
However, Mr. Burgess said the fee structure of both ports had been studied and "we’re not on the high side. There is room there."
Mr. Diaz also said he was very concerned that the tunnel’s cost could end up higher than projected.
"This will solve our problem, but I want to be realistic about costs," he said.
Commissioner Dennis Moss said the county had been ambushed by rising costs before.
"This is a watershed moment in our county’s history, but I am concerned that there may be a lot of pain along the way," Mr. Moss said. "The performing-arts center is opening this Thursday, but it cost us a lot of pain. My concern is that a decision like this will end up costing us a lot of pain." The Carnival Center for the Performing Arts ran into costly financial overruns, more than double its original budget.
Commissioners also voiced concern over feasibility of the tunnel, which, with 42-foot borings, "could be the tunnel with the largest diameter of borings when it opens," said John Martinez, state transportation department district secretary.
Mr. Burgess told commissioners he doesn’t blame them for being concerned but the tunnel plan must go forward. "Because of the numbers involved, this is a decision that may give people the heebie-jeebies, but there is no other solution."