NORTH PORT – North Port leaders moved closer Wednesday to approving the wording for a November referendum asking voters to let the city borrow money without getting voter approval for every project.
As required by state law, any bonds that would be backed by property tax revenues would still be subject to a citywide referendum.
Th proposed change to the city’s charter would cover bonds repaid through special district fees or recurring revenues such as proceeds from gate receipts at Warm Mineral Springs. It would also allow the city to participate in state or federal low-interest loan programs, which was not an option to deal with damage at Warm Mineral Springs following Hurricane Ian.
Moving North Port into the 21st century
North Port is the only known municipality in Florida that does not have the ability to borrow without first getting voter approval.
General Development Corp. created that provision 65 years ago, when the city was incorporated as North Port Charlotte in 1959.
Other cities started by GDC, such as Deltona, Palm Bay, Palm Coast and Port St. Lucie, once had similar city charter prohibitions but can all now borrow money up to a certain amount without a referendum.
Mayor Alice White termed the charter amendment as something that would move the cit of North Port into the 21st century.
“It’s also a step that we’re finally free of the legacy of General Development Co. holding everybody in check,” she added.
The first reading of the ordinance setting the referendum and accompanying language that will appear on the Nov. 5 ballot will be July 9, with the second reading July 23 – the adoption deadline to ensure the referendum will be submitted to the Supervisor of Elections in time.
Here are the important developments at this week’s special meeting on the issue.
A prohibition of using property taxes will be listed in the 75-word ballot question
Though attorneys still have to shoehorn the concept into the 75-word referendum, it will clearly state that any bonds will not be repaid through property taxes. All five commissioners wanted that specifically spelled out because they anticipated many residents would want to know.
North Port would have a $15 million per project cap on non-emergency borrowing
For emergency response, such as reconstruction of roads, bridges, and water control structures after a disaster that would impact the health, safety and welfare of city residents, there would be no cap.
The cap of $15 million per project, with a cost index increase, would be for non-emergency projects.
The easy examples discussed by the commission involved an opportunity for Public Works Director Chuck Speake to borrow to cover a portion of the $18 million in road and drainage fees allocated for a pay-as-you-go replacement of water control structures to fast-track that replacement program.
By doing that, Vice Mayor Phil Stokes noted, “we could lock in prices in many instances, where we could level out costs.”
Stokes said more projects could be done earlier at a more efficient cost.
The percentage of those fees that the city could use to guarantee bonds would be subject to the city’s debt management plan and the willingness of potential creditors.
“Each district in effect caps itself because it does not have the ability for unlimited revenues,” Stokes said.
The proposed cap was whittled down from the $28 million figure used by Sarasota County to the $15 million level by the five commissioners.
Debt management plan should be adopted prior to public vote
The board also agreed to put language in the ordinance setting the referendum that would prohibit any non-emergency revenue bonds from being issued through an emergency ordinance.
The commission also wants to see the debt management plan, which will likely be developed by PFM Financial Advisors LLC, the city’s financial advisor, with input from the city’s bond counsel, adopted prior to the Nov. 5 election, to give voters more confidence in the “guardrails” on place on the charter amendment.
That resolution would require two readings – a deviation from the city’s standard practice.
That plan will be next discussed at a September workshop.
Once all that is finalized, city commissioners will have to ensure city voters understand the ballot question.
“We need to advocate and we are legally allowed to,” Stokes said.
Individual commissioners can advocate for the referendum but they city itself cannot promote it.
“This is a grassroots project; whether it will succeed or not will depend on our ability to reach as many people as we can,” he said.
This article originally appeared on Sarasota Herald-Tribune: North Port sets details to prepare for referendum on borrowing power
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