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Cit ize.ns <br />%(, I :, r <br />RAIL <br />Expansion <br />November 15, 2017 <br />Senator Debbie Mayfield & <br />Representative Jennifer Sullivan <br />Alternating Chairs <br />Joint Legislative Auditing Committee <br />111 W.'Madison Street <br />Tallahassee, FL 32399-1400 <br />Re: OPPAGA's Review of the Florida Development Finance Corporation <br />Dear Alternating Chairs Mayfield and Sullivan: <br />We write regarding the Joint Legislative Auditing Committee (JLAC) meeting that will be held <br />on November 16, 2017 to, among other things, discuss the Office of Program Policy Analysis <br />and Government Accountability (OPPAGA) review of the Florida Development Finance <br />Corporation (FDFC). <br />Citizens Against Rail Expansion in Florida (CARE FL), Indian River County and Martin County <br />• share a number of serious concerns relating to the FDFC's consideration and ultimate approval <br />of Private Activity Bonds (PABs) for the All Aboard Florida (AAF)/Brightline passenger rail <br />project. These concerns span more than three years and include substantial procedural defects in <br />the actions and composition of the FDFC's Board of Directors. We believe the AAF PAB issue <br />can and should be used as a case study for OPPAGA's review of FDFC's most questionable <br />practices. <br />Background <br />New information has been made public regarding AAF's plans to use ,a tax-exempt PAB <br />allocation from the U.S. Department of Transportation (DOT). While this funding is reportedly <br />only for Phase I of the AAF project (Miami to West Palm Beach), not Phase II from West Palm <br />Beach to Orlando that will affect our communities, it is nonetheless important to unpack this <br />latest development. <br />After DOT granted AAF a $1.75 billion PAB allocation in December 2014 for Phases I and II, <br />AAF attempted to sell the bonds four times beginning in August 2015 and was never able to do <br />so. In November 2016, AAF was forced to abandon this $1.75 billion allocation, following an <br />adverse U.S. District Court ruling in August 2016 that found the PABs were subject to the <br />National Environmental Policy Act (NEPA). To avoid compliance with safety, health and <br />environmental requirements, AAF terminated the bonds. <br />On November 22, 2016, DOT provided a "new" $600 million PAB allocation for Phase 1 only. <br />• This was a transparent attempt to give AAF approximately one-third of the original $1.75 billion <br />1ys_ 5 <br />