2009 - 09-21-09 Regular Meeting - Laserfiche WebLink

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BOOK 20 Past 53 A citizen asked me two questions recently Are we in bad financial shape, and do we really need the Y. cent sales tax? The answer to the first question is we are in good financial shape considering the current recession and our drop in revenues Our fund balance situation is good, and we made the necessary adjustments to our current budget to address the dropping revenues and prepare us for the future. The biggest threat to our financial future is the State's financial condition - a situation we have no control over. The answer to the second question is yes, if we borrow money above the $1.5 million we need for the San-Lee Dam, we need the revenue from the Y, cent sales tax- Zero interest, or with interest, any borrowing today or in the next 2 to 3 years will require new revenue to pay the debt service. We not only need the revenue for the Lee County High School Project, but we need the revenue so that as our revenues begin to grow again we can address the other projects in our CIP. If we want to address the capital needs in the County, our existing revenue structure will not support the debt service needed That is the bottom fine. I cannot recommend any new borrowing that doesn't include a tax increase. After working with this budget for two years, we do not have the ability to reduce expenditures further to cover any new debt beyond the San-Lee Dam project We also don't have the fund balance levels to bring on a lot of debt and pay that debt with fund batance. History in this county has shown that when the county maintains a high dependence on fund balance in the annual budget, a large property tax increase like the 12 cent increase 5 years ago is not far away. The current recession should show everyone that we are keeping an adequate fund balance level to address issues as they arise so that we don't have to raise taxes and further eliminate services to balance the budget. What makes this issue a difficult one for us is that it will be unlikely that we will get the zero interest offers in the future and construction prices will not stay as low as they are at the current time- If we choose to take advantage of the situation and make a bold move to address the issues at Lee County High School, it will require a tax increase How much will depend on how much of the project the Commissioners decide to fund. It is my opinion [fiat if the Commissioners are going to fund capital projects in the next 3 years, we need additional revenue from either a property tax rate increase or the cent sales-tax. Ifthe choice is not to complete any projects, then we may be able to keep our property tax rate where it is if the State Legislature doesn't pass along too much to us as they try, to get out of their budget mess, and our budget situation doesn't decline further. On a different topic - below is the upcoming time schedule for the issuance of the debt for the Lee County High School Renovation and Reconstruction Project. This is going to be a complicated process. Three different sources of financing, all with different requirements will be used to finance the entire project. Once we get started the process will move very quickly so that we can meet all the requirements of the bonds and the Local Government Commission. Issuing the debt is complicated further as we try to tie bidding, LGC approval and bond/debt issuance together at the same time. Attached is a schedule we would need to meet if we are going to issue the QZAB and QSCB bondsby December 31 TIMELINE FOR ISSUING ZERO INTEREST BONDS August 17'h Commissioners meeting 1) Consider Cent Sale Tax Proceeds Intended Use of the Funds Resolution 2) Authorize Board of Education to begin architectural work on renovation of existing buildings at Lee County High School This has to be started now so that the project will be ready to bid when we issue the bonds We will "loan" these funds from the Capital Project fund and repay 3