County Commissioner Nancy Robinson wants to see results of a sales tax vote, but a delay could be costly in the bond market.
By WILL VAN SANT
Published February 11, 2004
BROOKSVILLE - Hernando County had planned to issue $26-million in bonds on March 4 to pay for a jail expansion, a new emergency operations center, two new libraries and other construction projects.
But those plans were put in doubt Tuesday after County Commissioner Nancy Robinson persuaded her fellow board members to explore waiting until voters decide on a half cent sales tax March 9 before issuing the bonds.
According to Robinson, roughly $10-million of the amount to be bonded, including $5-million for the operations center and $1.5-million for a Parks and Recreation Department maintenance complex, could be paid for with sales tax revenue, estimated at about $5-million annually.
Robinson's approach depends on the sales tax being approved, and it could delay completion of certain projects. It could also, according to Robinson's analysis, save taxpayers about $7.5-million that would have gone toward debt payment on the bonds.
Robinson had wanted the board to hold off on issuing the bonds until at least March 16 but faced skepticism from commissioners who said her proposal was submitted without adequate warning and lacked detail. They agreed to revisit the issue at the commission's Feb. 17 meeting.
Meanwhile, the decision has some immediate impacts.
Last Thursday, the county distributed a preliminary offering statement to bond rating agencies and insurers that outlined how the $26-million is to be used and how it will be repaid.
That offering statement will have to be retracted, said county finance director Amy Gillis, and the concerns of rating agencies and insurers will have to be addressed.
"They are not going to rate these," Gillis said of the bonds, "if everything is up in the air."
Gillis is also concerned about how a delay might affect interest rates on the bonds. At present, rates are favorable, she said, but if a bond issue is put off, there is an increased risk that interest rates will jump. They could also drop, Gillis said.
Robinson's idea was not on the commission's regular agenda but was added at the beginning of Tuesday's meeting. The move prompted a rebuke from acting commission chairwoman Diane Rowden, who again faulted Robinson later, this time for failing to explore the issue fully before bringing it before the board.
Rowden's comments came after Purchasing and Contracts director James Gantt suggested that waiting for sales tax revenue to pay for projects like the emergency operations center would cost taxpayers more because construction costs will rise over the four or five years needed to collect enough money to build.
Also, Gantt said, projects that would be delayed are in various stages of being contracted out and that failing to issue the bonds as planned could harm the county's reputation.
"It puts us not in the greatest light that we don't go through with what we started," Gantt said.
"It's going to jeopardize the county's integrity," Rowden warned.
Robinson said she had been researching her idea for several weeks but had not had an opportunity to speak with Gantt. She insisted that the obstacles he and others raised could be overcome.
What is at issue, she stressed, is giving the board a chance to save a considerable amount of money by merely waiting a few weeks.
"You're so close," Robinson said. "Why wouldn't you want to take a look at the opportunity?"
County Commissioner Robert Schenck defended Robinson, saying board members are policymakers and should be expected to step forward with ideas.
He said Robinson's idea merited consideration and that there might be more good than bad in it but added he did not have enough information to decide.
- Will Van Sant can be reached at 754-6127. Send e-mail to vansant@sptimes.com
