Town could end long-term debt restriction
Two Town of Fort Myers Beach committees have been working in conjunction in hopes of eliminating a part of a section of the Town charter that restricts long-term debt borrowing.
The Town’s Charter Review Committee and Audit Committee will recommend to Beach Council that Charter Section 11.03 (b) should be eliminated in its entirety. That subsection reads: “Unless authorized by the electors of the town at a duly held referendum election, the council shall not authorize or allow to be authorized the issuance of revenue bonds or enter into lease-purchase contracts or any other unfunded multi-year contracts all for the purchase of real property or the construction of any capital improvement, the repayment of which extends in excess of 36 months, unless mandated by state or federal governing agencies.”
In a memo from Charter Review Committee and Audit Committee member Dan Hughes to other members of the committees and Town officials, the rationale expressed was that the “existing provision unduly restricted the Town its ability to finance capital improvements and the authority to borrow.” Prior to the Charter Review Committee unanimously approved recommendation to delete the subsection last Thursday, the Audit Committee unanimously did the same action on Dec. 15, 2014.
“We concluded after discussions to eliminate the section,” said Hughes on Thursday. “If you are in favor of the Town not having a referendum to refer the bonds, then there is no need to have the section at all. We felt that the Florida Statutes and Constitutional provisions adequately protected the public in terms of what limitations and what you can do or not.”
Constitutional provisions require voter approval when bonds are payable from ad valorem taxes, thus a referendum would be needed for any Town action that would use property taxes.
Audit committee members have worked on a draft for Beach Council recommendation. A strong voter education plan may be needed before any referendum is on the table.
“This thing has probably the most potential for customers and certainly has the biggest long-term implications for the Town,” said Charter Committee member Jay Light. “So, there is a need to sell it properly and effectively.”
If the long-term debt restriction language is removed from the charter by way of referendum approval, the committee members agreed it needs to be placed within some form of policy, like a resolution or ordinance. Reference to state statute or national constitution may be needed in the charter, however.
“Voters need to know that we are not saying that the Town can do whatever it wants,” said Charter Committee’s Miffee Greer.
Light said the action was overdue. The Town is 19 years older than when the charter was constructed.
“We’re at the point when the Town has to decide if it is going to grow up and be a real Town,” he said.
Charter Committee chairman Tom Babcock agreed that the task is not as “ominous” as it was in the late 1990s. A referendum to replace a decrepit water utility system that Beach voters originally approved back in 2007 with a 91.6 percent passing rating would not have been needed.
“If this were in place, we would not have had to have the referendum for improvements for the water system,” said Babcock.
Hughes pointed out that other municipalities do not require referendums on non- ad valorem indebtedness. Greer believes the point should be publicized.
“I think that it is important that the entire populace be aware of why we have chosen this and what the advantages are and cons are,” she said. “I think the whole publicity aspect is going to be critical.”
Long term debt could be used for a possible Town Hall purchase or any other capital improvement financing.
Recommendation for this particular task of the Charter Review Committee to Council should be soon. Light provided a motion to expedite the process.
“We urge them to use the authority that we already granted them to put (long-term debt borrowing) on a separate referendum,” he said, “and then we will go back to finish our work in the normal timeframe that we have.”
“I think this motion will benefit our Town tremendously,” added committee member Dan Parker.
The Charter Review Committee meets next Jan. 22. The draft proposal is expected to be solidified at that meeting, and the item could be in front of Council in February. Potentially, a referendum could be on a special election ballot as early as May, says Babcock.