A workshop is pending for the Board of County Commissioners (BOCC) to discuss which county projects should be funded by General Obligation (GO) bonds. At the Nov. 28 meeting, commissioners were met with a list of potential projects, and discussion ensued about measures that could affect property taxes.
Discussion on the language of the three potential referenda for the 2024 ballot will also take place at the workshop. Public safety, jail and transportation will all be considered for GO funding, and each would have their own separate item on the ballot.
No decisions about these projects were made during the meeting.
GO bonds are essentially loans issued with the confidence that the local government will be able to repay the debt through taxation or revenue generated from projects. No government assets are used as collateral.
Repayment of GO Bonds is with dedicated property tax millage and they must be approved by a referendum. Should the county move forward, the referendum would be presented on the November 2024 ballot. If approved by voters, any property tax changes would happen in November 2025.
The county has a number of projects for which they are seeking General Obligation (GO) bonds to finance under the categories of Public Safety, Jail, and Transportation Capital Improvement Projects. The specifics of these projects were not discussed during this meeting and are expected to be discussed in full at a future workshop. A date for the workshop was not set during the meeting.
According to Julie Santamaria with PFM, a financial consulting firm, the county’s current debt is considered low, at roughly $131 million. Around $75 million is general government debt, and $55.5 million is related to water and sewer interests.
The significant Capital improvement needs for Public Safety, the jail, and transportation are often funded by debt because their costs outweigh the revenues generated through usual streams. Santamaria explained, “Just like most of us can’t pay for our homes out of cash, we need to borrow and pay it over time.”
She further explained, “Accelerating projects, rather than waiting for cash to be available, will mitigate rising construction costs and that borrowing and paying over time provides taxpayer and resident equity by spreading costs over future generations.”
Though the specifics of each category were not discussed, an overview of each category breaks down as follows, assuming a $259,000 home value after the homestead exemption (which equates to a home value of $209,000 without exemptions):
Jail: An estimated $212 million with a 30-year bond would result in a millage under 1 mill, the taxpayer impact being $248 annually or $21 monthly.
Public Safety: A $257 million bond would result in mileage over 1 mill, with taxpayer impact being $300 annually or $25 per month.
Transportation: An approximate $277 million need, 1.25 mills or $324 annually or $27 monthly to the taxpayer.
Commissioner Steve Champion began the discussion following the presentation by saying, “This has zero chance in passing. Absolute zero with what is going on in the economy right now. I get flooded with emails every day, (citizens) are getting killed on their tax bill. Now, the school board is putting two referendums up at the same time. If we put this on there, you can guarantee all three lose.”
One of the School Board referenda that Champion referred to is the renewal of a one-half-cent sales tax for Capital Improvement Projects within the school district.
Champion recalled a similar situation in 2022, where the County’s referendum for a one-half-cent sales tax increase was not approved by voters. “I won’t be for any of this.”
Santamaria explained, “Due to the large amount of projects and estimated timing, the county would likely borrow in multiple series of bonds if any of these (referenda) were passed. If all three were approved, the county would anticipate borrowing in four series, with one every five years. Staggering this over time reduces the impact on the property owners as each financing could be up to 30 years or lower … so that just allows the impact to phase in, and also assuming growth, it reduces the impact for each property owner as the taxable assessed value if they continue to rise.”
At this point, Champion asked, “Where’s the assessment on the businesses, the ones that are getting absolutely destroyed … right now? And I hate the government math, ‘It’s only $24 a month…’ I’ve heard this for eight years, and the businesses are getting destroyed out there. And the landlords are small businesses, too. On Hernando Beach right now, the average taxable rate is $15,000 on these properties on the water. So where are they going to be? $3000 more? If you want to send the economy into a severe recession in this county, do stuff like this … This is crazy.”
At this point, County Administrator Jeff Rogers commented that the BOCC directed him and his staff to come back to the board with options to ask voters if they would like to have these items on the upcoming ballot.
Champion interjected, “I will absolutely politic against it. Everybody I know will know I will be against it. If we have one of these members on the board against it, it will never pass.”
Rogers continued, “My job is to bring this to you, but your job is to figure out how to fund projects in the county or not to have these projects.”
“Send the inmates back to Pasco … send them back to Federal Government,” Champion said, referring to Hernando County’s Detention Center’s population of Federal inmates and inmates from Pasco County. “$170 million on jails is ridiculous.”
Commissioner John Allocco, who is a realtor, commented on the taxable home value given in the examples. “The problem is that people who are buying today are not buying at $259,000 … they’re buying at a significantly higher taxable value than that.”
After more discussion on the impact on the property owners of the county, Commissioner Brian Hawkins asked if impact fees could be used to offset the annual debt, which they can.
Commissioner Jerry Campbell added that the list of projects to consider includes more ‘needs’ than ‘wants.’ “We can’t lower, lower, lower and never raise anything, and sit back and say ‘Why can’t we do this (project)? It’s got to come from somewhere at some point.”