New Aviation Bonds 19 Billion Miami International Airport Debt On Runway
Written by Risa Polansky on November 12, 2009
By Risa Polansky
As Miami-Dade officials mull revenue-generating projects to pay down escalating aviation department debt, the county is preparing to issue new aviation bonds that, all told, total nearly $2 billion.
Commissioners in committee Monday approved issuing up to $600 million in aviation revenue bonds and $247.5 million in "double-barreled" bonds, with combined principal and interest totaling about $1.9 billion by 2041.
They’re to refund outstanding commercial paper notes and back projects such as north terminal development and a peoplemover to the airport.
Both issuances are designed to save money.
Aviation aims through the $600 million sale to tap a national stimulus initiative that lets local governments issue taxable bonds and get a federal subsidy to help offset interest costs.
And using the "double-barreled" approach on the other bonds is meant to directly trim interest. "Double-barreled" means they’re secured by both aviation revenues and the county’s full credit and taxing power.
The structure raised red flags for commissioners.
Aviation Director José Abreu said he’s confident the department can make payments and that the voter-approved double-barrel method could save about $26 million.
The possible savings convinced even Commissioner Carlos Gimenez, who said he looks at county financing "with a jaundiced eye" since the administration this year pitched what he calls a bad deal for a Marlins ballpark.
The full commission is to vote on the bonds Dec. 1.
Aviation debt service and operating costs are to jump $500 million beginning in 2015, payments on the upcoming bonds included.
To cover the added costs without burdening airlines, commissioners are considering such gambits as slots gambling at Miami International Airport.