NOTE 12 UNUSUAL OR INFREQUENT ITEMS
NOTE 12 Unusual or Infrequent Items
On March 26, 2024, the main spans and three approach spans of the Key Bridge collapsed after the container ship, Dali , struck one of the Key Bridge piers. Six members of a maintenance crew working on the bridge were killed. Two other workers were injured. No one from the traveling public was killed or injured. This is the first bridge collapse in the history of the MDTA. The Key Bridge is a toll bridge which provides toll revenue for the MDTA. The collapse of the bridge was not in the control of management. The MDTA has estimated the total cost of debris clean up and salvage to be approximately $75 million and the impairment of the Key Bridge to be approximately $45 million, which brought the book value of the bridge to zero. MDTA’s losses on account of the destruction of the Key Bridge, including the Key Bridge’s valuation for purposes of MDTA’s damages, are the subject of MDTA’s litigation against the vessel owner and operator currently pending in Maryland federal court. The MDTA has recognized insurance proceeds of $350 million, of which $25 million was for debris cleanup. The remaining amount of the insurance proceeds of $325 million is for the loss of the Key Bridge. The loss of the Key Bridge and the costs related to the cleanup resulted in unused insurance proceeds of approximately $280 million which will be used to offset future bridge replacement costs. As shown below, the unused insurance proceeds of approximately $280 million consists of the $350 million in insurance proceeds reduced by the use of $25 million of insurance proceeds for cleanup cost allowed to be charged to insurance proceeds and the approximate $45 million write off of the net book value of the Key Bridge. The MDTA has obtained Federal grant revenue to offset the remaining federally eligible clean up and salvage effort of approximately $35 million. The following charts show the insurance proceeds, grant, and expense items:
Debris Clean up Costs $ (75,462)
Net
Key Bridge
Expenses Insurance proceeds Federal grants Other revenue related to Key Bridge Collapse Net Activity
$
(120,176) 350,000 35,057
$
(44,714) 325,000 —
25,000 35,057
2,907
2,907
—
$
267,788
$
(12,498)
$
280,286
Note: Debris clean up expenses of $75,462 are shown net of insurance proceeds of $25,000 on the Statement of Revenues, Expenses, and Changes in Net Position ($50,462).
The MDTA anticipates continued FHWA Emergency Relief Funding for the reconstruction of the Key Bridge of approximately 90% of Federally eligible costs after using the remaining $325 million in insurance proceeds. The exact timing of such federal funding is unknown. Federal and state partners continue to work on a path forward to increase funding further. Regardless, MDTA and the State are pursuing the M/V DALI and its owners for all costs to rebuild the bridge, and all damages suffered from the State.
80 | Maryland Transportation Authority | Notes to the Financial Statements ($ in thousands)
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