State says Port of Miami tunnel letter of credit is good, Miami attorney disagrees
By Risa Polansky
Roadblocks to getting tunnels to the Port of Miami dug aren't roadblocks after all — at least in one state official's estimation.
A missing $50 million letter of credit from the City of Miami is holding up a financial close on the tunnel project, meant to be finalized by today (10/1).
But a state transportation official sees light at the end of the tunnel.
"It appears we have some good news that could facilitate a closing as early as next week," Kevin Thibault, Florida Department of Transportation assistant secretary for engineering and operations, said in a letter to City Manager Pete Hernandez Tuesday.
"As I understand it, the City Attorney presently objects to the issuance" of the letter because it requires automatic renewals and requires the bank that issues it to maintain its ratings, he wrote.
But "the City has twice acted to adopt this "objectionable' language," Mr. Thibault noted — once in a letter of credit issued last year, and also in the 2007 master agreement for the tunnel project itself.
He also quoted a city resolution to point out that, though the attorney says the commission must vote on a letter, commissioners in the past agreed to allow the city manager to "execute such other documents as may be required under the [master] agreement…"
"Thus," Mr. Thibault wrote, "it would appear that City staff is fully authorized" to deliver a letter of credit to the state.
In an e-mail Tuesday evening, City Attorney Julie O. Bru disagreed.
"The terms of the letter of credit including any costs associated with issuance must be specifically authorized by the city commission," she said.
The commission does not meet again until Oct. 8.
Ms. Bru said she could not address Mr. Thibault's other points because she had not seen the letter of credit in its final form.
The state official in his note asked the city to deliver the letter "as soon as possible."
And if the city assures "the matter will be addressed immediately without need for further Commission action," Mr. Thibault wrote, the head of the state department will "personally reach out to" the selected contractor team and the federal government — set to provide a loan — "to ascertain whether a closing next week is achievable."
City Manager Mr. Hernandez, tied up in a budget hearing Tuesday evening, did not respond to a request for comment.
The letter of credit would cover the city's $50 million contribution to the $1 billion-plus tunnel project, designed to divert cargo trucks from downtown streets via underwater tubes.
Miami-Dade County, which is putting in $402.5 million, last month secured a letter of credit from Wachovia to cover $75 million of a geotechnical contingency reserve.
As recently as a few weeks ago, the state saw the letters as almost perfunctory.
Both governments in the past had secured letters that expired because of prior project delays, so Alice Bravo, district director of transportation systems development, said last month that "they are each refreshing something they already had."