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The Problems
with a Public-Private Partnership Controlling I-595
Is the re-design of the
freeway introducing a radical form of road financing, control and
maintenance?
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Will a private
corporation control the planned elevated
reversible toll road on I-595? There are ideas
under discussion, and laws just passed by the
Florida Legislature, that would
authorize turning over construction
and management of the super highway to
business interests. Now that Governor Charlie Crist
has not vetoed H.B. 985, Floridians have a
lot to worry about.
Dubbed "Highway Privatization,"
the South Florida Sun-Sentinel reported
on April 4, 2007, that "Florida is among more
than 20 states that have passed bills
authorizing some form of highway privatization."
The paper reported there were plans for State
officials "to meet with investors and
contractors all over the world to consider
financing options for the mammoth I-595
project."
Just what the
Florida Department of Transportation (FDOT)
intends and what this concept means for your "freeway"
is ambiguous at this point. It's time to put the
brakes what has, to date, been a discussion-free
idea of
highways controlled by the boardroom.
Toward the end of
the 2007 Regular Legislative Session,
Tallahassee revised Section 334.30
and established additional criteria allowing
FDOT to enter
into "P3's" (Public-Private Partnerships).
According to a bill summary published on-line by
the Florida Senate, "FDOT may develop new toll
facilities...through P3's." Now that the law is
in place, and plans speed ahead to create an
elevated (and reversible) toll road through the
heart of Broward, we need to step back and take
a good hard look at the ramifications of such a
partnership.
There are many questions
which need to be answered. The legislation is
short on details, and how the law will be
interpreted and applied will be based upon the
regulations which will be produced by FDOT.
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Editorial
endorsing FDOT's plan to eliminate elevated toll lanes over 595.
Click here.
FDOT
considers plan to scrap elevated highway above I-595. Decision
expected by end of September. Click
here.

Click picture to
play video of 9.5.07 Davie Town Council meeting. More information on
595Alert.org News
page.
The Danger
of "Included Traffic" and the need to get the data right. Click
here.
Preserving
Florida's transportation infrastructure and the danger of "Shadow
Tolls." Click
here.
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Who will select the
business entities who will control the road?
What criteria will be utilized in the selection
process? Is the planned governmental oversight
tight enough to insure tolls are reasonable, and
not raised at the whim of a corporate board?
Since when did government feel it should
delegate what has been a primary function of a
public transportation policy? If the state is
meeting with investors and contractors, why not
report on those meetings in a public forum, in
the sunshine and in detail, so the public has a
chance to follow the discussions?
Private toll roads
are controversial. CBS4.com (May 4,
2007) quoted State Representative Jack Seiler
(D-Wilton Manors) as saying "The day we
privatize our public roads and we turn them over
to private companies is the day we start selling
this great state off." "It's going to be a big
mistake."
Initial analysis of
the bill approved by the Legislature indicates
the companies could build and run the toll way
for years under a contract. At the end of the
contract, the high bridge envisioned by FDOT
would be controlled by the State. That leaves
more unanswered questions. Could the contract be
renewed? For how many years? Could the
agreement be assigned by the original company to
yet another? What say would the public have in
the future?
The cost of building
the I-595 corridor project is estimated to be at
least $1.5 billion. Anyone who thinks the price
will stop there is ignoring history. Cost
overruns are a part of American road
construction culture. If private business
controls the tolls, and under-estimates the cost
of building and maintaining the new
infrastructure, those costs will be passed on to
the drivers who will pay for the right to use
the road. Tolls will most certainly increase.
Corporate boardrooms strive for profit, or they
would not be involved. If profit shrinks, owners
or shareholders sitting in some distant
boardroom may increase the charges to use the
road.
"A toll
road constructed, operated and maintained with
private capital creates a slippery slope."
Nothing we have
seen, by the way, eliminates the possibility of
a taxpayer bail-out if the elevated road proves
too costly. For that matter, nothing prevents
the operating concern from asking for changes in
the restrictions imposed by Florida law and
regulations about fare increases. And what
controls will be in place to insured maintenance
of the road is not cut back in order to maximize
profit? A toll road
constructed, operated and maintained with
private capital creates a slippery slope.
In reality, how much
public control will there be? What is the length
of any P3 contract? Will the P3 have eminent
domain powers? Will the P3 hold public meetings
for toll payer input? Will records and plans be
made public? How transparent will this
operation actually be? Will some sort of
sovereign immunity attach to the public-private
partnership? How accountable will the private
interest be to the people of Broward County?
Will non-compete clauses be used to shore up the
corporate road monopoly?
There must be
careful citizen analysis of this method of
funding highways and bridges. The public
interest is to scrutinize the details. If
the facts are not known, there should be no rush
to employ a P3 on Interstate 595.
The wisdom of
private toll roads is in dispute across the
nation. In 2006, Indiana Governor Mitch Daniels
approved a bill allowing for a $3.8 billion
agreement to lease 157 miles of the Indiana Toll
Road for 75 years. The lease was reportedly
entered into by an investment company. The
Indiana experience has become a topic of heated
conversation. According to Stateline.org, a
public policy website run by the Pew Research
Center, "As states increasingly look to toll
roads and public-private partnerships for quick
road-financing fixes, the public, consumer
advocates and motorist and trucking associations
are putting up barriers to pay-as-you drive
proposals." See the article, "Toll Roads Hit
Speed Bumps," published by Stateline.org,
here.
The Stateline.org
article reports debates about private toll
roads are raging in Texas, Pennsylvania,
Colorado, and New Jersey. Reuters.com
reported on April 27, 2007 "the Texas
Legislature approved a two-year moratorium on
privatizing toll roads after a public outcry
over whether private companies are reaping
overly generous profits from some recent deals."
In Chicago,
Reuters.com reports, a lease agreement made
in 2005 enriched the City by $1.83 billion for
the Skyway bridge. However, Joan Gralla, of the
news service, states, "But fiscal monitors have
criticized Chicago's deal..." She reports, "The
99-year-pact failed to give taxpayers the extra
toll revenue the companies can get."
TampaBay.com
reported on February 16, 2007, that the
Tampa-Hillsboro Expressway Authority is
trying to enter into a partnership with
private industry to build and operate a
toll road. According to the article, "One
firm it will still need millions in public
subsidies every year to break even on the
road - a potential deal breaker. The other
firm is asking for no public money but would
charge higher-than-average tolls."
Looking between
the lines, one can ask, "The higher the
tolls, isn't there less justification for a
partnership with private interests?" Will
FDOT promise subsidies will not be
entertained? The Tampa article points out
that one foreign company has said without
subsidies, a $3 toll might have to be
charged. Now that tolls are being considered
for Interstate 95 between Miami and
Fort Lauderdale, just how much will it cost
to go to work? To make deliveries? To see
friends and family?
These debates
demonstrate the need for a thorough analysis of
a local P3 that threatens to dominate the 595
corridor for decades to come. Florida, and
Broward County, need to proceed with extreme
caution on such partnerships.
The Sun-Sentinel
report of April 4, 2007, states tolls would
increase during rush hour, to keep the traffic
from clogging. That is known as "congestion
pricing." The decision to use the road will not
just depend on where you want to drive (high
above the main roadway or on the ground) but
also upon the time of day you need to use it. In
a county already too expensive for many to live
quality lives, are we further pricing
our residents out of Broward County? Are we
creating second class citizens who cannot afford
high daily fees to go to and from work?
The case is
compelling....Governor Crist needed to veto H.B.
985.
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© Copyright
2007, Broward Citizens For A Better 595, Inc., a non-profit
corporation. No claim to governmental works.
Mitchell A. Chester, Website Editor
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