On November 3, Key Biscayne voters will be asked to approve or reject a $100 million general obligation (“GO”) bond proposal for the village.
I urge every single resident to REJECT this proposal and I will explain why.
The first reason given for the bond when it was first presented was that interest rates are “at an all-time low,” making now the time to borrow. We now know, however -- and it has been conceded after-the-fact -- that the interest rate on monies used will not be locked-in until funds are actually withdrawn. No potential project will be at that stage for at least 2 to 4 years, at the earliest. Accordingly, no one knows what the interest rates will be at the actual time of borrowing, nor if there will be any actual savings through lower interest rates, especially given that the projection is to draw the funds during the next 10 years or more.
Disappointingly, the village has published a website that, in my opinion, is incomplete, simplistic, one-sided and misleading regarding the choice being faced by village voters in November. The website advocates for the approval of this GO bond and even goes so far as to estimate how much individual property owners would pay -- even though no one knows the amount to be borrowed, the interest rate to be paid, or the term of the loans. The only name I can come up for this is voodoo math.
Secondly, it has been incessantly repeated that you must approve this bond if you are for resiliency. Wrong. No one is against resiliency. Everyone living in the village wants a thriving community for generations to come, but throwing money at a problem has never fixed anything. Indeed, as worded, the bond can result in many unexpected expenditures given that ANY project can have a “resiliency” or “infrastructure” component added to it, justifying the use of bond funds.
It is also being said that this GO bond “just gives the village another funding option.” This is true, the same way that it is true that the village has ALWAYS had GO bonds as a funding option, and it will ALWAYS have GO bonds as an option in the future. The difference is that in the past the voters were presented with a vote for a GO bond for one project at a time with the terms known and disclosed. Indeed, when a specific future project is ready another GO bond proposal can be brought at any time. The current GO bond is a pre-approved line-of-credit secured with our ad valorem taxes for unknown projects with unknown costs and unknown interest rates and terms to be determined solely by the council at a future unknown date. This rush is not acceptable.
Next it is said there are many resiliency projects waiting for funding. FALSE. The only ready resiliency project involves stormwater management. The stormwater project already has a separate funding mechanism: in-place stormwater and transportation fee monies already being collected by the village. It does not rely on the passing of this bond to go forward. Every other project mentioned is a “wish-list” item. There are no real plans for any other projects on the drawing board. Indeed, the next closest project is the undergrounding of utilities, and actual plans are years away.
Finally, the last argument in favor of the bond is that it is more “efficient” to issue one big bond even though no one knows for what it will be used. This is not “efficiency.” The requirement of individual GO bonds for individual projects is the main check-and-balance that voters -- the actual bosses on Key Biscayne -- have on the council, your public servants. I do not want to do away with this “inefficiency.”
This takes us to the real issue at stake on November 3: CONTROL. Who will be in control of deciding what debt the village gets into? Will it be you, the taxpaying voters, or will the control reside solely in the hands of the council? That is the real question. If this bond referendum passes, the current and future councils will not ask your permission to issue general obligation debt until they have gone through the entire $100 million. PERIOD.
Even ignoring the argument that the timing is not right for the bond given current financial times, which comes on the heels of three consecutive years of falling property values, this proposal must be rejected for all of the reasons I have outlined.
As a sitting Councilmember I ask the voters of Key Biscayne: Do not give us this power. Please reject the bond proposal on the November ballot. Thank you.
Ignacio Segurola is a member of the Key Biscayne Village Council.