There are two ways this whole new bridge finance issue can go from this point on. The first way would be for a tax referendum to pass. Then there would be a bit more wiggle room in how much, or should I say how little, we could raise the toll. Keep in mind, the October toll increase is a “gimme” no matter what. We will be paying a $6 cash toll when that time comes.
If it passes, the bonds that will be issued will be partially secured by the tax and partially secured by the tolls.
If the tax referendum passes we won’t necessarily have to jump to the $8 to $10 range.
Now, if the tax referendum does not pass we will definitely be looking at sturdier toll hikes. Possibly anywhere between $8 and $10, but there are many different scenarios. On the survey card it said $7.50 with a $4.90 discount toll. It could be higher, it could be lower. That was just an illustration of what it could be, nothing more.
If the tax is voted down, it will not allow tax-supported bonds to be issued, but will have no bearing on toll-backed bonds. Whether three cars cross the bridge or 30,000, we will still pay the price in some form or fashion, and apparently the lenders won’t be frightened away by that equation.
According to all the research done by the planners on this project, we have an established traffic pattern that is reasonably impervious to outside conditions. The authority will need to set tolls predicated on that traffic in an amount that will serve the debt.
Now, the ballot language may be confusing to some. It will only speak to bonds secured by tax and tolls, and does not affect bonds backed by tolls alone. The bridge authority can set tolls wherever they want, and can issue bonds predicated on that without any referendum.
The language that will appear on your November ballot is shown above right.
See? Clear as mud! There will be more opportunities prior to the November election, though, to get more answers on what this all means. The authority’s next meeting is scheduled for this summer, and they will go more public with their ballot language explanation in October. This is just a little preview for all of you who wanted to know what that ballot will say.
Keep in mind, the authority wanted to make sure that if there was a tax, those monies would be exclusively used to pay bonds. Tax money would not be used for operating purposes at the toll plaza. The money would be pledged as security for the bonds. Once you pledge those tax revenues to the bonds, then from a legal perspective what was once a possible tax refrerendum turns into a bond referendum.
One thing is for sure, there are going to be considerable questions relating to the ballot. Under state law the authority has to be very explicit with the language on the ballot.
Remember, the figures presented by Bill Holmberg and others at recent GIBA meetings to show how high tolls could go are illustrative only, and just give us a feel for where the tolls would be with or without the tax. There is the interim toll increase to $6 in October, but beyond that what the authority choses to do is up to them next year. The key is whether the referendum passes or not.
Marcy Shortuse is the editor of the Boca Beacon
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