NORTH PORT — North Port leaders moved closer Wednesday to approving language for a November referendum that would ask voters to let the city borrow money without requiring 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.
The proposed change to the city charter would address bonds that are repaid through special district fees or recurring revenues such as receipts from Warm Mineral Springs. It would also allow the city to participate in low-interest state or federal loan programs, which was not an option to help with the damage to Warm Mineral Springs after Hurricane Ian.
Bringing North Port into the 21st century
North Port is the only municipality in Florida that cannot borrow money without first getting approval from voters.
General Development Corp. created this facility 65 years ago, when the city was incorporated in 1959 as North Port Charlotte.
Other cities founded by GDC, such as Deltona, Palm Bay, Palm Coast and Port St. Lucie, once had similar bans on city charters, but can now all borrow money up to a certain amount without a referendum.
Mayor Alice White called the charter change something that would bring the city of North Port into the 21st century.
“It’s also a step in the right direction because we are finally freed from the legacy of General Development Co. that keeps everyone in check,” she added.
The first reading of the ordinance establishing the referendum and the accompanying text that will appear on the ballot on November 5 will take place on July 9, with the second reading on July 23. This is the deadline for approval to ensure the referendum is submitted to the Supervisor of Elections on time.
Below you will find the key developments from this week’s special meeting on this topic.
A ban on the use of property taxes will be included in the 75-word ballot question
While advocates have yet to work 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 to specifically record that, because they expected that many residents would want to know.
North Port would have a $15 million limit per project for non-emergency loans
There is no maximum for emergency aid, such as the reconstruction of roads, bridges and flood control structures after a disaster that affects the health, safety and well-being of city residents.
The cap of $15 million per project, with an increase in the cost index, would apply to non-urgent projects.
The easy examples discussed by the committee involved the ability of Public Works Director Chuck Speake to borrow to cover part of the $18 million in road and sewer costs allocated for a pay-as-you-go replacement of water control structures to accelerate that replacement program.
By doing that, Deputy Mayor Phil Stokes noted, “in many cases we would be able to fix prices, where we could equalize costs.”
Stokes said more projects could be completed sooner and at a lower cost.
The percentage of these fees the city could use to guarantee bonds would depend on the city’s debt management plan and the willingness of potential creditors.
“Each district is essentially limiting itself because it doesn’t have the ability to generate unlimited revenue,” Stokes said.
The proposed cap was reduced from the $28 million amount used by Sarasota County to the $15 million level used by the five commissioners.
The debt management plan must be adopted before the public vote
The council also agreed to include provisions in the ordinance establishing the referendum that would prohibit the issuance of non-emergency revenue bonds through an emergency ordinance.
The commission also wants 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, to be adopted before the Nov. 5 election to give voters more confidence in the “guardrails” in place on the charter amendment.
That resolution requires two readings, which is a departure from the city’s standard practice.
That plan will then be discussed during a workshop in September.
Once everything is finalized, city commissioners will need to make sure voters understand the ballot question.
“We have to engage and we are legally allowed to do so,” Stokes said.
Individual commissioners can advocate for the referendum, but the 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 possible,” he said.
This article originally appeared on the Sarasota Herald-Tribune: North Port finalizes details to prepare for referendum on borrowing power
