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Will road authority need state bailout?

"Their track record is not good," Sen. Mike Fasano says of the agency behind Tampa's elevated roadway.

By LETITIA STEIN
Published March 23, 2006

	[Times photo: Chris Zuppa]
	Construction continues on the elevated lanes of the Lee Roy Selmon Crosstown Expressway on Wednesday.

Word in Tallahassee is that the elevated lanes project of the Lee Roy Selmon Crosstown Expressway may need a major bailout.

Back home in Tampa, the Tampa-Hillsborough Expressway Authority insists everything's fine. A spokeswoman says it has the cash reserves to open the commuter lanes between Brandon and Tampa on schedule this summer.

The disconnect has renewed concerns about the future of a government agency the Legislature created to meet local transportation needs.

The Expressway Authority has been sweating in the limelight since the collapse of an elevated roadway section in unstable ground two years ago.

Recently, it discussed the possibility of a $15-million loan with the Department of Transportation. The proposal now is off the table, though it may haunt the agency.

While the agency disavows talk swirling around Tallahassee of cost overruns and funding shortfalls, it hasn't directly contacted key lawmakers from the region. Except to request a $1.5-million loan to start its next project.

"Their track record is not good," said Sen. Mike Fasano, R-New Port Richey, who chairs the Senate committee that funds transportation projects. "I think the Hillsborough County Expressway Authority got caught, and now they are backing off their original request to borrow more money to finish this project."

The Expressway Authority denies anything of the sort.

"The discussions were in an abundance of caution," said Beth Leytham, spokeswoman for the Expressway Authority. "When we sharpened our pencil, we determined we had enough in the contingency, and we are financially solid."

The project was designed with a bold plan for a sky-high commute. In the morning, traffic on the elevated lanes would flow westbound to downtown Tampa. Traffic would change directions in the afternoon, bringing cars back home to Brandon.

Here's how the agency describes its financial picture:

In February, it had $11-million in a contingency fund for the project. Repairs to the elevated lanes on the Crosstown are expected to cost $115-million, the agency recently told state transportation officials in a financial disclosure statement.

It noted that the cost of fixing the elevated lanes rose almost $18-million since July 2005. Factors include increased materials costs, delay charges and the complexity of the repairs. It plans to cover the escalating costs through internal funds, toll revenues and insurance proceeds.

The agency reported that contingency funds should be enough to cover expenses.

In further statements, the agency indicated that known claims total more than $19-million for this project. Disputes over claims between an agency and contractors are common during road-building projects of this magnitude.

"We will probably end up paying $8- to $10-million of that," said Leytham, the spokeswoman, stressing that the agency's expectations fall within the contingency funds available. "We feel like from a financial perspective, we're fine right now."

Calls to the agency's interim executive director, Ralph Mervine, its chief financial officer, Brady Sneath, and the board chairman, Tom Gibbs, were not returned Wednesday.

While the agency denies trouble, one contractor on the project is worried.

Last week, Hubbard Construction Co. sued the Expressway Authority over its failure to pay for several jobs related to the project.

"We've had concerns about the authority's funding," said Robert Vezina, the company's Tallahassee attorney. "It seems like every segment of the Lee Roy Selmon job is either in litigation or headed to litigation, and that's unusual."

In October 2005, the Expressway Authority filed a lawsuit for damages exceeding $120-million against URS Corp., the general engineering consultant, and Figg Engineering, which designed a bridge over Interstate 75. It sued for breach of contract and professional negligence.

In the Hubbard case, the Expressway Authority does not believe the items in question should be paid, Leytham said.

But worries are echoing up to the Capitol.

Senate President Tom Lee, R-Valrico, acknowledges that rumors of funding shortfalls are swirling wildly.

He has heard from a fellow lawmaker that the agency could require a bailout to the tune of $30-million to $40-million. If necessary, he would be prepared to rescue the project.

"I'm not sure that we have a whole lot of options right now, given that we are this deep into the project," Lee said, noting from personal experience in the home-building business that it becomes difficult to hire a new contractor when a project nearly is complete.

Sen. Jim Sebesta, R-St. Petersburg, was surprised to hear secondhand about the agency's request for a $1.5-million legislative loan from a trust fund for toll-road facilities. The money would be used to plan its next project.

Sebesta, who chairs the Transportation Committee in the Senate, has been closely involved with this effort, which would bring private financial backers to the community to build a road connecting New Tampa's suburbs to Interstate 275.

"I'd kind of like to know what's going on," he said.

Fasano, who controls the purse strings for transportation dollars in the Senate, isn't prepared to give the agency more money until the Crosstown is done on time and on budget.

"They're holding their breath," Fasano said. "Once session is over, what stops them from saying, "Oh, we really do need $20-million' ?"

Fasano would favor turning the Crosstown project over to the state's transportation experts. But he's looking to Hillsborough's lawmakers for direction.

After the collapse, rumblings surfaced that the Expressway Authority had outlived its usefulness. Those were beat back by community supporters who felt a transit agency focused on local needs was necessary for economic development, Lee recalled.

Until dispelled, the uncertainty clouding the project's financing could become a factor in its future.

"What that says for the long-term viability of the Expressway Authority and the support that they will have in the community going forward I think is probably a bigger question," Lee said.

Times Tallahassee bureau chief Steve Bousquet contributed to this report. Letitia Stein can be reached at lstein@sptimes.com or 850 224-7263.

[Last modified March 23, 2006, 02:45:08]