Botched MDX Open-Road Toll System About to Produce Big Bills for Some Users

If drivers zipping through toll plazas without SunPass thought the absence of bills meant they were getting a free ride, they are about to get a rude awakening.

By Tony Pipitone
|  Thursday, Apr 3, 2014  |  Updated 12:32 PM EDT
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If drivers zipping through toll plazas without SunPass thought the absence of bills meant they were getting a free ride, they are about to get a rude awakening. Team 6 Investigator Tony Pipitone reports.

If drivers zipping through toll plazas without SunPass thought the absence of bills meant they were getting a free ride, they are about to get a rude awakening. Team 6 Investigator Tony Pipitone reports.

By now, drivers whizzing through Miami-Dade Expressway Authority open-road toll plazas without SunPass transponders were supposed to be paying monthly invoices sent to the addresses where their vehicle license plates are registered.

But the Team 6 Investigators have uncovered a stunning lapse in the MDX toll collection system: owners of vehicles without SunPass accounts have not been sent a bill since October 1, interrupting the collection of what could be about $7.5 million in so called toll-by-plate charges over the last six months.

And if drivers zipping through the plazas without SunPass thought the absence of bills meant they were getting a free ride, they are about to get a rude awakening.

On April 15, MDX says it plans to inform those who have racked up a half year’s worth of tolls that they have 30 days to pay up for their first three months -- and 30 more days to pay for the second three months – or ultimately face fees, collections actions and even a freeze on their vehicle registrations that would prevent them from renewing or transferring their tags.

Asked what he would say to those about to be given two months to pay six months of tolls, Stephen Andriuk, head of toll operations for MDX, said, “The best thing to tell them is to hang in there, that MDX is doing the right thing.”

He said the bills will direct customers to the mdxway.com website and, for those with hardships paying the bills, a phone number they can call to discuss options. "We're willing to work with anybody as we’ve done in the past. We can understand dire straits," he said. "We do have to collect a toll, and that’s really the bottom line."

The authority said it cannot determine how many of its 60,000 toll-by-plate users will be billed, or how much money they owe the authority. Some, Andriuk said anecdotally, have inquired about the lack of billing and voluntarily paid.

But, based on last year’s toll-by-plate charges of $15 million, the six-month bill could total $7.5 million. Or it could be much higher, because toll-by-plate is the fastest growing method of payment for MDX users, increasing by 140 percent from fiscal years 2012 to 2013. The authority said it does not know if that trend carried into this fiscal year, ending June 30, 2014.

The lapse was caused by a longer-than-expected transition from a problem-plagued system that was supposed to transform MDX highways into a model of toll-by-plate technology.

Instead, six months after shutting down the old system and trying to transition into the new one, MDX cannot tell NBC6 how many vehicles have passed through toll plazas without paying and how much money they owe.

It is the latest in a long string of mishaps, which MDX claims in court filings began soon after it awarded its open-road tolling conversion and its account management and toll enforcement system projects to a Texas company, Electronic Transaction Consultants Corp. (ETCC), in 2009.

Since then: the project budget has ballooned from a projected $31.4 million in 2010 to $46.7 million today -- a nearly 50 percent increase; the completion date has moved from June 2011 to June 2014; MDX has terminated ETCC’s involvement in the project; and the whole affair is mired in complex litigation.

For customers, the toll-by-plate system resulted in so many false billings that, in the litigation, MDX claims the “volume and consistency” of “careless billing errors” has harmed customers and damaged MDX’s brand. Drivers have complained of being repeatedly billed based on video that clearly showed it was not their car going through the toll plazas.

Now, as MDX struggles to transition away from the ETCC system to a new system, the authority has suspended toll-by-plate billing. And, six months later, it’s still not clear the system is working properly; remember, they cannot say how many vehicles are not paying and how much the authority is owed.

Asked if the entire project has been a fiasco, Andriuk replied, “No, I think it’s a lesson learned and we move on.”

MDX never told the public about the six-month suspension of billing because, Andriuk said, it did not know how long the system was going to be down after the transition began on Oct. 1, 2013.

“It was never contemplated that we’d be this far out,” Andriuk said. “We thought we would get it done a lot sooner, but as any system has hiccups, we didn’t want to roll this out until we’re perfectly clear we were rolling out the system that we wanted.”

As for not informing the public that the bills would be coming due eventually: “I guess hindsight, I don’t know what it would have done. We would have probably got a rash of phone calls, but there was nothing we can do,” Andriuk said. “I don’t know what benefit it would have provided, other than the fact that maybe somebody would have said, ‘Maybe I need to put this money away.’”

Now, instead of budgeting or paying voluntarily, some MDX customers will see the big bills hit mailboxes in mid-April.

Andriuk concedes some may have thought they had been getting a free six-month ride on the MDX expressways.

“I would think a lot of them think they’re going to get away with something until they get that first bill,” he said. “We’re willing to work with them, that’s part of our program, there’s no fees attached so it’s just paying the toll.”

Much more complex: deciding who might be paying the costs of the botched rollout of open-road tolling in Miami-Dade County.

In December 2012, MDX terminated its contract with ETCC, claiming the company failed to properly perform its duties under the contract, according to court filings.

ETCC had sued MDX a month earlier, claiming MDX had failed to pay what it owed for work already done and may not pay a potential $30 million it claims would be due over several years for operating the system, pleadings state.

MDX filed a counter claim seeking damages from ETCC for its “failure to develop, install and operate a fully-functional all-electronic” off-road tolling system, according to MDX’s lawsuit.

Last September, a judge ruled in favor of MDX on one of ETCC’s four counts, agreeing MDX could not be liable for future operations payments because it never granted “provisional acceptance” to the work ETCC had already done. MDX claims in its filings that ETCC’s work was “flawed’ and its account management and toll enforcement system “unverifiable.”

For its part, ETCC claims MDX interfered with and disrupted their attempts to do the work, sometimes letting projects submitted for MDX approval linger long after MDX was supposed to approve or reject the plans.

“We have suffered substantial reputational and financial harm,” ETCC President Tim Gallagher told the Team 6 Investigators. As for the suspension of toll-by-plate invoices, Gallagher noted, ETCC had completed its work for MDX by then, saying, “We don’t have any insight into what is occurring with those transactions after Oct. 1 2013.”

The open-road tolling partnership “started with great hope and great potential,” Gallagher said, but he denies ETCC is to blame. “We have a substantially different point of view with regard to what the issues are and who’s to blame for the issues.”

MDX’s counter suit and the remaining counts of ETCC’s lawsuit are set for trial in September.

But the failure to collect millions in tolls over time could have severe effects on MDX’s creditworthiness and endanger its bond rating, according to court filings by MDX and an affidavit from its chief financial officer, Marie Schafer.

It is “vital to MDX that all toll revenue be collected continuously and without interruption,” Schafer wrote.

In its lawsuit, MDX claimed ETCC’s “breaches and delayed billing” have “impacted MDX’s creditworthiness … As a result, MDX’s finances have been stressed and MDX may encounter an increase in its ongoing borrowing costs.”

With $1.2 billion in outstanding bond debt, even a slight increase in MDX’s borrowing costs could severely impact its budget. In an extreme case, Schafer said, tolls would have to be raised to satisfy the bond requirements.

Andriuk said management anticipated there would be a lapse in toll-by-plate collections this year and lowered some expenses accordingly. He said the disruption to collections will not be too severe because toll by plate constituted only about 10 percent of MDX’s total toll revenue of $134 million.

And, he added, the MDX budgets will account for whatever revenue is billed before the end of this fiscal year, June 30, 2014. That end-of-year budget number is what those monitoring the authority’s books consider when they determine bond ratings, he said, so the six-month billing lapse would not have a detrimental effect.

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