Tunnel bond crisis still at square one
By Meisha Perrin
Two more weeks will pass before Miami commissioners and officials are any closer to averting a financial crisis than they were two years ago.
Commissioners were supposed to act on a resolution regarding repaying the two-year $45 million loan due in January that the city took out from Wells Fargo bank to finance its portion of the four-year PortMiami tunnel dig that's now about half completed.
But last Thursday, the only action taken was to defer the resolution as requested by City Manager Johnny Martinez, who said he preferred to wait until the absent commissioner, Vice Chairman Marc Sarnoff, was on the dais to consider the item.
The commissioner, whose district includes the tunnel, was traveling in China with the Miami Heat — and three of the four remaining commissioners agreed not to act until he returns for their Oct. 25 meeting.
Meanwhile, naysayer Frank Carollo said that while he understood their concerns, the bigger concern for him is the timeframe: Will Miami be able to make the January deadline with another two-week deferral?
According to Mr. Martinez and Chief Financial Officer Janice Larned, the answer is an unsettling yes.
However, according to Commission Chairman Francis Suarez, who criticized the administration for scrambling at the 11th hour to avoid yet another crisis, a bond counsel representative said in a briefing that bank officials were in fact concerned that they would have a hard time meeting the deadline.
Still, Ms. Larned said the department is pursuing a backup plan should the city be unable to refinance or meet its deadline. That plan includes flipping the current short-term loan into another short-term loan, taking advantage of interest rates that are lower than they have been in decades.
"From a financial management perspective, it makes sense to try and seek a long-term solution in order to capture that savings for a reduced interest rate," she said.
The cost of that, she said, will be based on the prevailing rates at the time, not necessarily a higher cost.
But in that instance, she said at the meeting, much to the distaste of Mr. Suarez and Mr. Carollo, additional requirements may be placed on the city. Commissioners requested more detail of those requirements for the next meeting.
"Why did we get to October without a solution to this problem when we've had two years to finance this? Two years — not six months, not a year. We've had two years… and now, we're in a crisis," Mr. Suarez said.
"That is the problem that I have."
Still, the deferral, which Mr. Carollo said was risky, was passed — leaving officials meanwhile working toward solving the issue by December.
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