Scott Powers
Blowback erupted from another direction for the South Florida Regional Transit Authority late Friday over its big and controversial Tri-Rail operations contract when Florida Department of Transportation Secretary Jim Boxold questioned the agency’s accountability and threatened to cut off its state money.
Boxold sent the transit authority’s Executive Director Jack Stephens a letter late Friday questioning the SFRTA’s accountability and saying the department now will be reviewing state funding for the commuter rail system, “and may elect to withhold such funding in the future.”
The trigger for Boxold’s response came when the SFRTA Board of Directors voted on Friday afternoon to award a long-term railroad operations and maintenance contract to Herzog Transit systems – after the transit authority’s staff first tossed out five competing bids, including some that would have cost up to $115 million less.
The rejected companies challenged their rejections in court last week but lost. Yet, saying “it just didn’t look right,” state Sen. Jeff Brandes issued a stern warning Thursday to the SFRTA board that it should hold off on the contract decision for a while, to allow time for more scrutiny.
On Friday, by a 6-2 vote, the board awarded the contract to the only proposal left after the staff review. That deal calls for the SFRTA to pay Herzog $344 million to run the trains for seven years, with three annual renewal extensions that, if exercised, would push the total bill to $511 million. At least some of the other proposals – all rejected by transit authority staff in late December on technical grounds that the companies are disputing – were as low as $269 million for seven years and $396 million for ten.
FDOT’s official representative on the SFRTA board, District IV Secretary Gerry O’Reilly, voted against letting the contract, as did board chairman Tim Ryan, a Broward County Commissioner.
Boxold characterized the contract award as being in defiance of concerns that the department had previously about fiscal accountability at the authority.
“This action heightens the department’s overall concern regarding the authority’s accountability for expenditures of the state funding that the department provides for authority operations and maintenance costs,” Boxold wrote.
Boxold noted the SFRTA gets $42.1 million in state money to subsidize the railroad, which runs commuter trains through Palm Beach, Broward and Miami-Dade counties.
“Based on the authority’s action today, and the authority’s position on the ability of the department to impose state law controls on the authority’s expenditures, the department is reviewing all discretionary funding it provides the authority and may elect to withhold such funding in the future,” Boxold warned.
Boxold made reference to an apparent running dispute between the state department and the regional transit authority about whether the state has oversight on accounting for state money that goes into Tri-Rail.
“The authority has made it clear that it does not believe that the department has the power to comprehensively require the authority to account for its expenditure of those funds beyond the initial review of a proposed authority procurement,” Boxold said. But he wrote that the department’s inspector general determined in the fall that the state does have that oversight for the transit authority’s state money.
Earlier Friday Brandes expressed deep concerns about the board’s approval of the operations and maintenance contract, and said he would explore options to hold SFRTA accountable. His concerns, combined with his frustration that the board ignored his request that it postpone the contract vote, also signals a potential threat to Tri-Rail’s finances. That’s because Brandes chairs the Senate Appropriations Subcommittee on Transportation, Tourism, and Economic Development. Tri-Rail’s future proposed state subsidies must go through that committee in order to make it into the state budget.
