County Looks At Tolls As Best Option To Finance Port Tunnel
Written by Risa Polansky on May 17, 2007
By Risa Polansky
Tolls have moved to the forefront among options Miami-Dade County is exploring to pay its share of a $1 billion port tunnel.
The tolls would be charged on all vehicles that access the Port of Miami.
County officials plan to sign a memorandum of understanding with the state in the next two weeks, Assistant County Manager Ysela Llort said.
"It’s up in the air, but it’s getting closer," she said.
Selecting a contracting team this month to build and operate the Watson Island tunnel — designed to keep truck traffic from the port out of downtown — allowed the county to identify a rough figure of its share of the $1 billion project — about $400 million.
"Prior to that, we were all dealing with a range of figures," Ms. Llort said. "Now we know what it really looks like. We’re at this really crucial point of retuning and refining the deal."
County Manager George Burgess reported the same in a memorandum to county commissioners last week.
"Now that we know what the costs would be in terms of the required annual MAP (maximum availability payment), the county’s financial plan, including projections associated with revenue yields from proposed open road tolling, increased seaport tariffs or other county contribution are being refined," he wrote. "We expect to finalize the county’s financial plan within the next few weeks."
A selection team this month selected the team to construct the tunnel, naming French company Bouygues Publics Travaux for construction; Babcock & Brown for banking; Jacobs Engineering; and Transfield Services for transport operations.
The tunnel is to run from the port to Watson Island, connecting it to the MacArthur Causeway and then Interstate 395.
The county has already identified about $300 million in funding — $100 million from 2004’s general obligation bond, about $114 million in gas tax revenue and $45 million from county and port right of ways.
The source of the $150 million still needed, which depends on what is decided between the county and the state as they draft the memorandum of understanding, will "most probably be a user fee, perhaps an open toll road," Ms. Llort said.
Negotiations with the state are focusing on the "county’s efforts to clearly define risk-sharing between the concessionaire, FDOT (the Florida Department of Transportation) and the county regarding any unforeseen costs and limit the liability issues since the FDOT will administer the project," Mr. Burgess wrote in his memo.
Once these costs are hammered out, which will pin down the exact amount the county will be responsible for, the city manager’s office will be able to take a formal proposal to county commissioners, most likely in June, Ms. Llort said.
The anticipated user fee may come in the form of tolls to access both the tunnel, once it’s built, and the existing port bridge, because, she said, "you can’t toll one point of entry without tolling the other point of entry."
Traffic studies the county is conducting at the port to ascertain port activity will help determine the amount of the user fee, she said.
In his memo, Mr. Burgess said "the county’s financial plan is weighing carefully the impact of any tolls or fees on the competitiveness of the port."
Port Director Bill Johnson is open to the tolling idea, predicting $2 to $3 tolls for two-axle vehicles and $5 to $7 for cargo-carrying trucks, although "we’re still playing with numbers," he said.
There has been a "mixed reaction on the part of tenants" regarding the tunnel, Mr. Johnson said.
But, "we’re losing cargo business to other ports," and "without a tunnel, this port cannot grow."
The City of Miami is also exploring its funding options for its $50 million share of the project. An additional $5 million is to be funded by city right of ways.
Administrators hope to use Community Redevelopment Agency funds, but the agency board, which has shown resistance to the idea in the past, has yet to vote. Also, the agency’s lifespan and boundaries would first need to be expanded to include the port tunnel area and allow time to generate sufficient revenue.
Another potential roadblock in that funding scenario is the outcome of the state Legislature’s special property tax session next month, Mr. Burgess wrote in his memo.
"Discussions on the city’s contribution have always centered around financing backed by one of the city’s community redevelopment agencies," the memo reads. "As you are aware, movements in Tallahassee on property taxes will greatly affect the revenue-generating ability of all CRAs. Notwithstanding, discussions with the city to realize their $55 million share will continue. The state Department of Transportation will be at risk for the city’s $55 million contribution."