I have been hearing new or modified arguments in favor of the bond ever since I wrote a Sept. 17 column in this publication. Every single one is based on fallacies.
“This is the same thing that other cities like Miami Beach have done.”
No it’s not. The City of Miami Beach wanted to have a referendum on resiliency bonds on the November 2018 ballot. Unlike Key Biscayne, that city government, which has an approximate annual budget of $610 million dollars, performed their due diligence beforehand. The city came up with an initial project wish list in February 2018 that totaled $1.1 billion. In the nine months between February and November they pared down and prioritized the list, the mayor convened an 11-member Citizens Advisory Panel to further study and reduce the list. Numerous council meetings and workshops were held to obtain citizen input and to reach realistic cost estimates for the projects. By November, they had a specific list of 57 separate projects, with a $439 million budget, or approximately 72% of their budget. This groundwork led to the referendum passing with a 70% approval rate.
This example notwithstanding, our village wants our citizens to approve a $100 million bond, almost three times our total annual budget of $34 million, before we perform any of the same due diligence. And (we) are only working with our initial wish list. Our residents deserve better from their government.
“You need to have a funding source before you can go to bid.”
You’re getting way ahead of yourselves. The village also needs specific identified projects and realistic cost estimates before they have a funding source. The village also needs to perform its due diligence and get citizen input to earn the trust of the voters before they have a funding source. The Village has lost the trust of many residents by putting the cart before the horse and asking for money without being able to say for which projects it will be used. Again, our residents deserve better.
“This only gives the village the option to use GO Bonds in the future because they are cheaper than revenue bonds.”
This is disingenuous because the village ALWAYS has the option to present a GO Bond in any election. Best practices would dictate that the village present a GO Bond for specific, identified projects after doing its due diligence and after earning the support and the trust of our residents.
This is also disingenuous because it is HIGHLY doubtful the village would be able to obtain $100 million in revenue bonds, which are funded by specific revenue streams, based on the fact that we only receive approximately $9 million per year from all of the other revenue sources that are not ad valorem (property tax) based. Indeed, if the village wants $100 million the only way to get it is through GO Bonds, which the voters must approve.
“The village won’t use the full $100 million because we can’t exceed the 1% assessed value debt cap.”
Debt caps change. Ten years ago the approximate value of all the properties in the village was $5.7 billion, resulting in a debt cap of $57 million. Today it is $8.2 billion, resulting in a debt current debt cap of $82 million. It is conceivable, even likely, that the total value of the properties in the village reaches or even surpasses $10 billion during the lifetime of this GO bond. If this happens the full $100 million GO Bond credit line, and possibly additional revenue bond debt voted on at the sole discretion of the council, can be used.
“Residents will be given a chance to provide input before the council issues the GO bonds and the voters can always ask for a referendum pursuant to the Village Charter if they disagree.”
That’s not how it should work. Residents deserve to have input BEFORE the GO Bonds are approved in a referendum, and they should be given the opportunity to work with their council to establish the list of projects that would benefit the village. Furthermore, the council should not create an adversarial relationship with its constituents by daring them to begin a complex legal proceeding within 30 days of the council issuing the debt. Again, our residents deserve better.
So what are the TRUTHS about this bond? First, no one knows what interest rates the village would end up paying. That’s because there is no telling how much debt will be issued at any given time, when it will be issued, for what it will be issued, or how much the accumulation of village debt by itself will cause the interest rate to increase. Second, a vote against this bond is not a vote against resiliency. It just means you want to do things the right way. Third, there are no resiliency projects waiting on standby for funding from this GO Bond. Finally, the only thing “one big bond” will do is eliminate the voters’ check and balance on the council.
The responsible and proactive way forward is very clear. This bond referendum should be rejected by our village so that we can roll up our sleeves and put in the work required to do a GO Bond right. This village should create an initial wish list of specific projects. We should then create a citizen’s advisory panel to examine, prioritize and whittle down the wish list. We should perform our due diligence and attach realistic cost estimates to these projects. We should discuss all of this in council meetings and in workshops where residents are encouraged to actively participate in the decision making process. Only then can we reach a consensus on what is best for this village and earn the trust of our residents in order to ensure that we will have an island paradise for generations to come. Thank you.
Ignacio Segurola is a member of the Key Biscayne Village Council.