County Debates 14 Billion In Bonds As Economic Stimulus
By Victor Cruz
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Miami-Dade Mayor Alex Penelas is urging county commissioners to approve a proposed $1.4 billion bond issue for capital developments and place it on a November ballot.
County Manager Steve Shiver introduced a list of capital needs totaling $5.4 billion Tuesday at special county commission meeting. He said although the list has yet to be prioritized, it clearly represents needs that had to be addressed "in one, five, or 10 years."
The 26-page list included improvements for everything from animal service facilities, bus and rail, prisons, cultural venues, courthouses, fire and rescue infrastructure, public works, human services and road widening.
Commission Chair Gwen Margolis asked that a prioritized list be presented Thursday when the commission considers the proposal. If approved, a bond issue could be voted on in a countywide referendum on Nov. 13.
The proposed bonds are timed to take the place of the county’s now expiring ‘Decade of Progress’ bonds. Issued in the ’70s, the 30-year bonds are just being paid off. By issuing bonds that would be financed at the same amount as the revenues put aside to pay for the expiring bonds, the county would be able to maintain the same tax rate, according to Mr. Penelas.
While the mayor is promoting the proposal to spur economic growth, the package dates back to former county manager Merrett Stierheim. In January, the county commission voted 6-1 to hold a referendum on his previous $1.5 billion bond proposal, although no date was set.
In the wake of the Sept. 11 attack and the resulting downturn in Miami-Dade’s economy, Mr. Penelas said he has committed himself to accelerating capital improvement projects to put people to work and pump money into local businesses.
The county should not have any trouble handling the debt, according to Percy R. Aguila Jr., vice president of J.P. Morgan Securities, one of the bonding agencies on the county’s underwriting team.
"Miami Dade County is one of the stronger counties financially in the state," Mr. Aguila said Tuesday. "They have the credit rating, they certainly have the capacity, the ability to pay, and the need."
Interest rates, which are at an all-time low, should also help, he said.
While the Greater Miami Chamber of Commerce’s Economic Generation & Recovery Task Force has not been involved with preparing the bond package, many members support it. Greater Miami Chamber of Commerce Chairman Ramiro Ortiz, and Chairman-elect Jack Lowell spoke Tuesday on behalf of the bonds.
In order to make the deadline for the Nov. 13 referendum, the county would have to advertise the proposal no later than Saturday, according to David Leahy, supervisor of elections. The elections department, which is federally mandated to provide another advertisement in Spanish, would likely reserve advertising space before 3 p.m. today (10/11) to make the typical two-day lead needed to place the ads.
"There’s a lot of work to be done to make such an ad run properly," Mr. Leahy said. "It is a potentially large ad. We will get it ready before Thursday."
If approved, the county attorney’s office would prepare the ordinance authorizing the issuance of bonds along with a resolution calling for an election on Nov. 13, said to Rachel Baum, county finance director.
But before the issue can be placed on the ballot, the proposal must overcome sharp criticism by many county commissioners Tuesday. They argued that although the county needed the improvements the bonds would provide, the timing was bad, saying there is too little time to inform voters that many are facing an increasingly difficult financial situation.
Commissioner Jimmy Morales cited the defeat of the penny tax two years ago as an example of a similar program that "crashed and burned" when voters didn’t find the local government’s communication efforts to be credible.
‘A Decade of Progress’ bonds approved by the county in 1972 issued $550 million in capital improvement bonds. Remarkably successful, the program resulted in a number of construction and renovation projects throughout the county.
"At that time, the county had historically done almost no bonding for capital improvement," said R. Roy Goode, former city manager. "They were trying to do everything on a pay-as-you-go basis, but in the meantime were falling further behind."
The package eventually grew to exceed $2 billion when coupled with state and federal matching funds.
He said the bonds eventually paid for countywide sewer and road construction projects and an addition to Jackson Memorial Health Center. It allowed the county to create Tropical Park and to establish the Metrorail. The financing also provided $34.7 million for the construction of new libraries throughout the county and allowed the city to move the Miami Metrozoo from its original location on Key Biscayne to its current, larger facility.
If the referendum is approved, the county would hold a Nov. 20 public hearing on the bond issue ordinance, and a resolution would be drafted outlining the first series in the bond sale and what projects it would cover, Ms. Baum said.
The amount has not been set, but County Manager Steve Shiver said a first series could be issued for $200 million in projects needed immediately.
In December, the county would work with financial advisors, bond counsel and others to prepare the package.
The notice of sale for the bonds would be published the first week of January, followed by a public sale for mid-January. The sale would then close at the end of January and receive cash from the lowest bond underwriter.
Construction on projects could begin as soon as December if the resolution for the issuance of the first series of bonds is approved by the county commission.
"It’s an aggressive time frame, but it’s do-able from our perspective as long as the commission can come to a consensus," Ms. Baum said.