The Palm Beach Post – Board charged with approving All Aboard Florida bonds has one member

Posted on March 2, 2015

By Kimberly Miller


The chairman of the state board charged with deciding whether All Aboard Florida will get $1.75 billion in tax exempt bonds resigned his post earlier this year, leaving the committee with one member and three vacancies the Governor’s office is trying to fill.


Peter Tesch, a member of the Florida Development Finance Corp. board for eight years, said Friday that he recently joined other organizations and needed to devote more time to them.


But Gov. Rick Scott’s spokesman John Tupps said his office never received Tesch’s resignation and still considers him a board member. The other member on record is Rebecca Reynolds, Tupps said. State law says the board should have five members, three of whom are supposed to be bankers nominated by Enterprise Florida.


“Right now our appointments office is actively reviewing applications for this board,” Tupps said.


Tesch’s exit comes as a deadline nears for All Aboard Florida to market its private activity bonds. The Florida Development Finance Corp., or FDFC, acts as a conduit issuer for tax exempt bonds for Florida businesses.


All Aboard Florida, which has plans to run express passenger trains between Miami and Orlando on the FEC tracks, has until July 1 to issue the bonds, according to the U.S. Department of Transportation, which provisionally approved the debt plan in December.


Private activity bonds are marketed to investors with no risk assumed by taxpayers. The notes have a low interest rate, but are attractive to investors because they don’t pay taxes on the interest earned.


The FDFC must give final approval following an as yet unscheduled public meeting. The funding is one of the last hurdles for All Aboard Florida, which still faces a Federal Railroad Administration review of its environmental impact report.


Florida statutes say the governor, subject to confirmation by the Senate, is responsible for appointing five members to FDFC’s board of directors.


“Once the administration appoints members to the finance board, we expect quick consideration of our application,” said Lynn Martenstein, vice president for All Aboard Florida corporate communications.


Rebecca Reynolds, the lone FDFC board member, resigned her job at Fifth Third Bank in Orlando effective Jan. 8, according to an automatic email response from her account, and could not be reached Friday.


Documents obtained by The Palm Beach Post through a public records request include minutes to an Aug. 20 meeting where the FDFC board approved a declaration of intent to issue the $1.75 billion in private activity bonds. At that meeting, two other board members are named in addition to Tesch and Reynolds; William Jones and Frank DiBello.


It’s unclear what happened to Jones and DiBello, but the governor’s office said that it considers Tesch and Reynolds the only members on the board.


Tesch recused himself from the August vote because All Aboard Florida is a member of St. Lucie County’s economic development council. Tesch is president of the council.


He said he would have likely done the same in subsequent votes involving the project.


“It was in the best interest of FDFC and my employer that I recuse myself,” Tesch said, acknowledging the high level of controversy the project has spurred in the Treasure Coast. “Obviously, living in the Treasure Coast and seeing the media, as well as public reaction, this is a very visible issue.”


All Aboard Florida’s planned 32 trains per day will reach speeds of up to 110 mph as they travel through Treasure Coast communities, including historic downtowns such as Stuart. The county commissions of Indian River and Martin approved a combined $4.1 million last week to fight the project.

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