Wednesday, July 9, 2014

Greenlight - The 50 Year Mortgage

Below are two lengthy Sections from the Interlocal Agreement between PSTA and Pinellas County that was approved at the June PSTA Board of Directors meeting.

 (A)  In  order  to  finance  or  refinance  projects,  PSTA  may  issue  bonds  or  notes,  enter  into  lines  of  credit,  incur  loans  or  other  indebtedness,  enter  into  concession,  lease  or  similar  agreements,  and  may  secure  payment  obligations  under  such  bonds,  loans,  notes,  lines  of  credit  or  other  indebtedness  or  pursuant  to  such  concession,  lease  or  similar  agreements  with  a  pledge  of  and  lien  on  the  Surtax  Net  Proceeds  in  accordance  with  the  provisions  of Section  212.055(1),  Florida  Statutes,  and  other  applicable  law,  including  any  indebtedness  refinancing  such  bonds,  loans,  notes,  lines  of  credit  or  other  indebtedness.  Prior  to  the  initial  issuance  of  any  indebtedness  by  PSTA,  the  Pinellas  County  Attorney  shall  approve  the  trust  agreement  or  trust  indenture  (the  "Trust  Agreement")  pursuant  to  which  such  indebtedness  is  to  be  issued.  The  County  and  PSTA  agree  that  it  is  their  intent  that  such  approval  be  provided  by  the  County  Attorney  prior  to  the  date  of  the  Surtax  Referendum.  Notwithstanding  the  foregoing,  PSTA  shall  at  all  times  comply  with  its  debt  policy  referred  to  in  Section  10  hereof.

(B)  Notwithstanding  anything  herein  to  the  contrary,  to  the  extent  permitted  by  law,  in  order  to  effectuate  the  purposes  in  PSTA's  Greenlight  Plan,  PSTA  may  enter  into  leases  or  public  private  partnerships  with  concessionaires,  and  may  secure  its  obligations  to  make  lease,  concession  and  other  payments  under  lease  and  concession  agreements  with  a  pledge  of  and  lien  on  the  Surtax  Net  Proceeds  in  accordance  with  the  provisions  of  Section  212.055(1  ),  Florida  Statutes.  (C)  Nothing  contained  herein  shall  be  construed  to  limit  the  amount  of  indebtedness  that  may  be  incurred  by  PSTA  to  be  secured  by  the  Surtax  Net  Proceeds.

This Section provides the authority for the PSTA to obligate sales tax proceeds to the payment of bonds issued by PSTA. Once obligated, these funds cannot be reduced or used for any other purpose by PSTA or the County. The bond covenants will determine how the money is to be spent, and while the County may have some say in the structuring of the bonds, PSTA will really be in the driver's seat, because they will actually be spending the bond proceeds with limited County over sight.

We have already seen how liberally PSTA interprets rules related to spending money.

Upon the earlier of: 

(A)  completion  of  all  steps  to  finance  (including  without  limitation  debt  incurrence,  and/or  execution  of  public-private  partnerships  or  leases), acquire,  and/or  construct  all  projects  and  capital  improvements  contemplated  in  PSTA's  Greenlight  Plan,  as  mutually  determined  by  PSTA  and  the  County  (if  the  parties  cannot  mutually  determine  whether  PSTA's  Greenlight  Plan  has  been  completed,  the  parties  shall  engage  a  nationally  recognized  transit  consultant  acceptable  to  both  Parties  to  make  such  determination); 

(B)  PSTA's  decision  to  discontinue  such  steps  to  finance,  acquire  and/or  construct  substantially  all  of  the  projects  and  capital  improvements  contemplated  in  PSTA's  Greenlight  Plan; 

(C)  the occurrence  of  a  Force  Majeure; 

(D)  the  fiftieth  50th  anniversary  of  the  date  the  Surtax  is  first  levied  and  each  20th  anniversary  thereafter; 

(E)  a payment  default  under  the  Trust  Agreement;  or 

(F)  PSTA  applying  Surtax  Net  Proceeds  for  a  purpose  other  than  PSTA's  Greenlight  Plan, 

the  County  and  PSTA  shall  meet  to  discuss  the  particular  event  described  in  clauses  (A)  through  (F)  that  has  occurred  and  shall  consider,  depending  upon  the  event,  revising  this  Agreement,  revising  or  adding  to  PSTA's  Greenlight  Plan,  seeking  further  authorization  for  additional  uses  by  PSTA  of  the  Surtax  Net  Proceeds  or  reducing  or  increasing,  if  there  has  been  a  previous  reduction  and  subject  to  the  limitations  of  the  Surtax  Referendum,  temporarily  or  permanently,  the  Surtax  Net  Proceeds.  If  the  Parties  are  unable  to  agree  on  what  action,  if  any,  to  take,  after  making  a  good  faith  effort,  the  County  may  take  any  legally  required  action  to  reduce  the  Surtax  Net  Proceeds  distributed  to  PSTA.  In  determining  what  action  to  take,  if  any,  pursuant  to  this  Section  9,  the  Parties  shall  comply  with  the  provisions  of  Section  29(B)  hereof. 

Any  reduction  of  Surtax  Net  Proceeds  distributed  to  PSTA  as  a  result  of  an  action  or  event  described  in  clauses  (C),  (E)  or  (F)  above  shall  be  temporary  and  the  County  shall  promptly  begin  distributing  the  full  amount  of  the  Surtax  Net  Proceeds  to  PSTA,  including  all  amounts  that  were  held  back  and  actual  interest  earnings,  if  any,  actually  derived  by  the  County,  when  the  County  determines,  in its  sole  discretion,  that  such  event  or  action  has  been  cured  or  no  longer  exists.  The  foregoing  shall  not  impose  a  duty  on  the  County  to  invest  any  of  such  withheld  amounts.  The  County  shall  determine,  in its  sole  discretion,  whether  any  reduction  of  Surtax  Net  Proceeds  distributed  to  PSTA  as  a  result  of  an  action  or  event  described  in  clauses  6  (A),  (B)  or  (D)  will  be  temporary  or  permanent.  If  the  County  determines  to  permanently  reduce  the  distribution  of  the  Surtax  Net  Proceeds,  to  the  extent  and  as  permitted  by  law,  it  may  take  such  action  as  it  deems  necessary  and  is  legally  required  to  reduce  the  amount  of  the  Surtax  levy  in  accordance  with  this  Section.  Notwithstanding  anything  in  this  Section  9  to  the  contrary,  any  temporary  reduction  shall  be  limited  to  an  amount  that  will  not  impair  PSTA's  ability  to  meet  all  of  its  then  outstanding  financial  obligations  under  the  Trust  Agreement. 

This Section sets up the conditions under which the sales tax would terminate. Note that (D) sets the life expectancy of Greenlight at 50 years but allows for two 20 year extensions.

That's 90 Years!

TWO generations.

A baby born on January 1, 2015 when this Tax starts, will pay the tax their entire life, their children will pay it and it is not inconceivable their grand children may also pay it.

This amount of indebtedness for this length of time to develop 24 four rail stations for a train generally going to the wrong places; buying and selling a bunch of land and building tracks and buildings so a very few can get very rich is very, very wrong.

The law you are being asked to approve with your YES vote is just over 5000 words long. The Interlocal Agreement where the County attempts to put some control on PSTA is over 7000 words long. And we have just begun.

Don't mortgage your future, your children's future and grandchildren's future for a train that does not meet the core public transportation need and will cost millions more than the Greenlight plan contemplates.

Send the County, PSTA, TBARTA and Greenlight back to drawing board just like they did in Hillsborough County.

Greenlight is a plan that we don't need and cannot afford.

Vote NO November 4

 Talk to you fiends and neighbors and be sure they know what they are voting for.

It's not public transportation. It's all about the money.

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Disclosures: Contributor to
No Tax for Tracks

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