Which voter approved Surtax III projects would be fast tracked?

The projects that are being considered for the fast track list will be those projects that could be started or completed within 72 months. Many of the projects on the proposed fast track list have either the designs already in place or have the right of way purchased/identified. Fast tracking projects that are already further along in design will do the most to stimulate the economy because they will provide an immediate impact to our local economy.

No, there will be no new or raised taxes to support these projects. These projects were already funded by the penny sales tax which was approved by voters in November 2007. The bond plan will help stimulate the economy and create new jobs, all without increasing local taxes.

Sarasota County commissioners have been discussing different options for local economic stimulus, including this one, since January. The decision to place this on the ballot came in late March when a separate decision was made to hold a referendum on the Urban Service Boundary.

The voters approved a 15-year extension to the surtax, to run from Sept. 1, 2009, through Dec. 31, 2024. Any bond or bank loan issued using surtax as the pledge could not exceed this 15-year limitation.

Why bond these projects now?  Why not wait until we get the money as originally intended?

This is an economic stimulus program designed to build long planned public facilities and help our local economy.  Bonding allows us to borrow the money to begin these projects now, as opposed to waiting for the cash revenues to begin accumulating in September of 2009 and undertaking projects then on a piecemeal pay-as-you-go basis. Additionally being allowed to borrow more than the cap currently allows will help speed up many of the surtax III projects. Since the economy is slow and the cost of construction has been declining, now is an optimal time to get some of the voter-approved projects started. We will save taxpayers money, stimulate our local economy and create much needed jobs.

What is the anticipated bond rate? 

In general, we expect to pay about a 4.50% interest rate for a bond. Naturally, the market fluctuates daily, so this rate is an estimate. Alternative financing might include looking at bank loans with a rate savings of anywhere from 10 to 15 basis points depending on market conditions at the time of pricing. This would help lower the interest cost to between approximately 4.35% to 4.40%.

Is it cheaper to bond and get the projects done sooner?

There are indeed issuance and interest costs associated with each bond or bank loan. One example is the Fruitville Road project where the analysis shows that when adding inflation against the borrowing/issuance costs, a net savings of more than $4 million dollars could be realized by doing this one project in FY08 as compared to FY16 when it is currently scheduled. Because construction costs are at a multi-year low we have an opportunity to construct these projects at lower costs. Being allowed to bond over our charter cap will accelerate many of the Surtax III projects since without the ability to bond we would have to construct the projects as the funds became available.