Florida CFO to Politicians: Look at State’s Liability in Commuter Rail Deal

Florida taxpayers would be on the hook for losses due to train accidents in a proposed deal the state transportation department negotiated with CSX Railroad, according to the state’s chief financial officer.

CFO Alex Sink said the Department of Transportation brokered a proposal with CSX for the state to purchase 61 miles of rail line to implement commuter service in Central Florida. The negotiations took place over several years without the “sunshine” Floridians expect from their government, Sink wrote in a letter addressed to Senate President Ken Pruitt and House Speaker Marco Rubio.

“Indeed, much of the initial negative reaction to DOT’s proposal is a direct result of the lack of full public disclosure on this several hundred-million-dollar deal,” Sink said.

Sink noted that for accidents involving one train, taxpayers are responsible for any loss, injury or damage to any commuter rail passengers, rail corridor invitees (e.g., vendors) and any trespassers – even if CSX is at fault. CSX is only responsible for loss, injury or damage to its employees and property, she added.

Taxpayer liability would not stop there, according to Sink. Under the proposed deal, the same liability applies to multi-train accidents inside the rail corridor.

The only break the taxpayers would receive is if a multi-train accident occurred outside the rail corridor (e.g., a chemical spill.). Even then, taxpayers will split the cost down the middle with CSX for any loss, injury or damage to third parties, regardless of fault, Sink said.

In her April 25 letter, Sink urged legislators to consider the state’s liability in various scenarios should an accident occur under the current proposed language. She said the liability rests on a no-fault principle, meaning taxpayers will be responsible for paying the bill in several scenarios, even if CSX is completely at fault.

“As your Chief Financial Officer and the state’s risk manager, I have been closely following the evolution of the liability language in the proposal,” Sink said. “Prudent steps were taken early in the legislative session to reduce that potential liability; however, recent legislative changes have now greatly increased the state’s financial exposure.”

While the CFO said the transportation department claimed success during negotiations with CSX, she added that “Floridians have been given a take-it-or-leave-it plan at the 11th hour.”

When a future opportunity to expand commuter rail presents itself, the state should assemble a team of experienced negotiators to advocate on behalf of Florida taxpayers, and should include representatives from more than one state agency including the state’s Division of Risk Management, Sink said.

The Senate and House proposals diverge on the amount of the state’s liability, Sink noted. While the House proposal sets a $200 million coverage liability limit, the Senate language sets a floor of at least $250 million in self insurance and insurance liability coverage, she said.

While Sink realizes that a commuter rail system could provide economic stimulus and reduce traffic congestion she asked lawmakers to limit the liability provisions to the CSX corridor acquisition and to “prevent future negotiations from happening under the cover of darkness.”

Source: Alex Sink, Florida chief financial officer