County Awaits Cities Paperwork For Bond Funds
Written by Suzy Valentine on December 22, 2005
By Suzy Valentine
Only four Miami-Dade County municipalities have completed the paperwork to receive funding from General Obligation Bonds issued five months ago.
The contracts are part of the formality between cities and the county that pave the way for funds to be repaid once work is finished. Officials overseeing county-based projects must show that money is spent before they get their allocations but need not sign documents, as do those in the county’s 30-plus municipalities.
The first issue of $2.2 billion in bonds voters approved last year produced $265 million for projects this year – $15 million more than anticipated. The surplus resulted from favorable interest rates at the July 7 sale. Funds became available in a central county bank account two weeks later but aren’t to be dispersed until work is completed.
A handful of contracts for the municipalities are ready for execution, said a senior county official.
"We are signing contracts so that they can qualify for reimbursement," said capital improvements coordinator Roger Hernstadt. "There are three of four contracts to be signed by us. The rest are in the hands of the municipalities, but we can’t distribute money until they are (signed). We have written to all of the other municipalities and the contracts are downloadable from our Web site."
Before representatives of municipalities sign the contracts, they must satisfy certain county requirements – issues that have been a sticking point for the cities, towns and villages.
"Some have asked for relief from certain county requirements," said Mr. Hernstadt, "and some of them are asking us to change elements of the contracts."
Some municipalities – Mr. Hernstadt did not disclose which – are asking that their initiatives count as comparable to the county’s.
"Small-business participation was one area of negotiation," he said. "The question was whether it would suffice that a municipality had its own program or whether it must comply with the county’s requirements."
Either way, money must be spent on municipal or countywide projects to warrant repayment.
"The whole system is predicated on reimbursement," said Mr. Hernstadt. "Parties must show that the dollars have been spent. It works in the same way as does the Standard & Poor’s system."
"We don’t send cash to any project until the money has been spent," said Rachel Baum, county finance director. "If it’s a county project, all of the money is in one account."
Ms. Baum said the bonds "work in the same way as Treasury bonds. They are invested so that they earn interest, but if they attract interest above the interest rate, we must pay any excess to the Internal Revenue Service.
"If we were earning 6% interest, which is unlikely," Ms. Baum said, "we’d pay anything over and above the more than 4% we’re paying on the financing. It’s like the government saying, ‘We gave you a benefit, we should share in that benefit.’"