Trirail Service Drop Could Jeopardize Future Federal Funding For Florida Counties
Written by Risa Polansky on June 18, 2009
By Risa Polansky
Allowing Tri-Rail service to drop below federally mandated levels could not only put at risk the commuter rail line, but could also jeopardize future federal funding for the state and the three counties that fund the system.
In accepting a $256 million federal grant toward its $338 million double-tracking project, the South Florida Regional Transportation Authority committed to running 48 Tri-Rail train trips a day.
But funding constraints have forced the authority board, which oversees Tri-Rail, to consider a budget that would nearly halve weekday service to 30 train trips and eliminate weekend trains beginning Oct. 5.
They’re to vote June 26.
A full system shutdown could follow in as soon as 18 months without a dedicated revenue stream.
Tri-Rail’s potential default from the double-tracking grant agreement would be a first for the Federal Transit Administration.
Administration officials met with Tri-Rail representatives last week, and "They said they did not have any prior examples of this type of default because they have never had a system fail like is possible with Tri-Rail," Greenberg Traurig attorney Teresa J. Moore, general counsel to the regional transportation authority, wrote in a letter to board members Friday.
At the meeting, the federal representatives laid out possible consequences should Tri-Rail derail from the grant agreement.
A possibility: demanding back the full $256 million, plus interest.
There’s a chance the parties could amend the grant agreement and agree on a settlement, avoiding a lawsuit.
But should the feds demand the money back, they would look at all future funds committed to the regional transportation authority, including federal, as sources of repayment.
The Federal Transit Administration’s regional administrator, Yvette Taylor, said she aims to find a resolution so "the service could continue to operate," Ms. Moore wrote.
"However, she [Ms. Taylor] wanted to make sure we understood that she has stopped federal monies from going to other systems in order to obtain repayment on existing debt, and that is definitely an option FTA would consider in [Tri-Rail’s] case."
The state and the three counties that fund the commuter rail line — Miami-Dade, Broward and Palm Beach — may also be at risk when it comes to future federal funding.
"FTA stated that a default of the [grant agreement] could have serious ramifications on future funding requests, not only by [the regional transportation authority], but also such requests made by the state and/or the three counties," Ms. Moore wrote.
Should the Federal Transit Administration determine that in making the grant agreement it depended on the state and counties supporting Tri-Rail financially, that would come into play when considering providing funds to the governments for other projects.
The feds in that case would look at the government’s ability to operate and maintain existing services backed by federal money — including Tri-Rail.
"The failure to support an existing service would be a serious detriment to any entity requesting future federal funding," Ms. Moore wrote. "FTA was clear that the fact that [the regional transportation authority] was the only signatory to the [grant agreement] did not preclude potential political ramifications to the state and the three counties if the service was to be reduced."
The funding jam facing the rail system, which runs 72 miles through the three South Florida counties, stems from budget constraints at the local level.
Each of the three counties must provide a minimum $1.56 million annually toward Tri-Rail operations, but for years the counties have provided well above that.
Each gave $4.1 million this fiscal year.
That’s likely to change during the upcoming budget process, when Tri-Rail officials expect the counties to drop to the $1.56 million minimum.
The state then matches what the counties provide.
Attempts to pin down a long-sought dedicated funding stream failed during the state’s recent legislative session.
Now, to avoid the looming federal issues and make it to next year’s state legislative session — where they can try again to secure dedicated revenue — Tri-Rail officials and proponents are hoping for stopgap funding from the state as one of two possible fixes.
Eleven local congressmen Friday sent a letter to the head of the Florida Department of Transportation expressing concern and pushing for support.
Killing Tri-Rail would mean losing 350 union jobs, they wrote.
"This would not just impact the workers’ families who would lose their jobs, but would also hurt the state and local governments who would lose taxes and the local community who would see a lack of purchasing power," the letter says. "Thousands of more workers rely on Tri-Rail to commute to and from work. Lastly, eliminating Tri-Rail will force more cars on our already congested roads, leading to more unsafe roadways and air pollution."
The congressmen noted also the risk to the state should the South Florida Regional Transportation Authority default from the federal grant agreement.
"Violation of this agreement will impact the state’s ability to compete for other rail and transit funding," the letter says.
At the county level, here in Miami-Dade the feds have already put the brakes on some grant funding for unrelated reasons.
The North Corridor, a planned 9.5-mile extension of the Metrorail system along Northwest 27th Avenue, was on track to becoming a candidate for federal funding until the transit administration downgraded the project last year, doubting the county could afford to build new systems and continue supporting existing ones.
When it comes to Tri-Rail, the county may maintain funding in the upcoming fiscal year’s budget, which has yet to be released.
"We’ve been back and forth working with [the county budget office] — as of right now it does remain for next year," David Clodfelter, transit department chief of budget, audit and reporting, said at a meeting last month.
But the state mandates each county provide the same amount of Tri-Rail funding, meaning whatever Broward or Palm Beach cuts, Miami-Dade must cut.
The other potential solution on the table: diverting capital funds toward operations.
In addition to the minimum $1.56 million toward operations, the counties fund Tri-Rail with $2.67 million each in gas tax revenue.
The money has long been used exclusively for capital projects and to draw down federal matching funds.
But state transportation officials have suggested that if the regional transportation authority uses the capital money to help plug the operations funding hole this year, the department would match the amount.
The authority is waiting for confirmation from the secretary of the state department, Executive Director Joseph Giulietti said.
Still, board members are wary of shifting the dollars, fearing the move could jeopardize federal matching funding and therefore the future of the rail system.
"The board is torn right now," Mr. Giulietti said. "If we use our gas tax money… what we’re actually giving up on is the future. Using it is a Band-Aid solution — it does not take care of this problem."
But it is an option.
The deciding board meeting is set for June 26.
Board members are to decide then whether to cut service in the fiscal 2010 budget.
Said Mr. Giulietti: "The FTA right now is poised and waiting to see what happens when we have our board meeting."