Flagler County commissioners on Monday will consider approving a $20 million loan from a commercial bank to finance the proposed Sheriff’s Operations Center in Bunnell, significantly adding to the county’s current debt load of $142 million and annual debt servicing of more than $11 million, records show.
Six banks responded to Flagler’s Nov. 3 request for proposals to finance the loan. The county’s financial adviser is recommending awarding the bid to CenterState Bank, whose Gary Lubi, a well-connected local banker and past president of the now defunct Chamber of Commerce, submitted that bank’s proposal: a 15-year loan at a fixed 1.83 percent interest, pending a closing on or before Dec. 18. Lubi has brokered various financing and re-financing arrangements with Palm Coast, the county and the school board over the years.
CenterState’s was not the lowest bid. Capital One offered a 1.68 percent interest rate, one of J.P. Morgan’s four options was a rate equal to that of CenterState, and RaymondJames offered a 1.69 percent rate. Other bidders were KeyBank and Truist.
“While CenterState did not offer the lowest fixed interest,” Jay Glover, the county’s financial adviser wrote in a memo to Jerry Cameron, the county administrator, “their proposal includes an attractive draw down feature that will allow the County to draw funds down through June 30, 2022. This minimizes the interest cost in early years and gives the County flexibility on final draw if the full $20,000,000 is not needed to complete the project. When comparing the CenterState proposal to the lowest interest rate proposal (Capital One at 1.68%), there is a small present value benefit in debt service cost with the draw down feature.”
The CenterState loan would bring principal and interest costs of the loan to $22.85 million.
Architects and the general contractor on the project unveiled plans for the 51,000 square foot building along the future Commerce Parkway, south of the Government Services Building complex, at a commission meeting on Monday. The county is the landlord for all constitutional officers, responsible for housing all their offices at the county’s expense. The sheriff’s Office vacated its operations center off State Road 100 in mid-2018 after employees became chronically sick from what was believed to be water intrusion and other issues that caused symptoms similar to sick building syndrome. The county had bought and renovated that building for $7 million less than three years before. The building was sold at a huge loss in July: the buyer paid $807,000 for it, an apparent difference of just $423,000 from the price the county paid for it in 2013, but that was before the nearly $6 million in renovations the county invested in the building. The county is still carrying that debt.
Contrary to Cameron’s claims to commissioners on Monday, the proposed loan for the new building will not be bonded and financed by the county’s half-penny surtax that the commission approved in 2012: since the commission voted in the tax, foregoing a referendum, the commission does not have the authority to bond revenue or finance a loan from that particular tax. It will finance the bank loan through the county’s portion of the state’s sales tax revenue.
The two taxes are often confused, as Cameron appeared to have been on Monday when a commissioner noted that the local surtax doesn’t go on forever. “It does if you say it does” Cameron told the commissioner (the tax is not set to expire before 2032). Each tax generates about $2.9 million a year.
“The small county surtax we enacted cannot be used to pay debt and cannot be used to repay this bank loan,” County Attorney Al Hadeed confirmed. (Cameron himself appears to have ordered his public information office not to answer questions about his inaccurate statements on Monday. When asked what bond he was referring to on Monday, Julie Murphy, who’s in charge of Cameron’s PR, wrote, “This is not a public records request.” The records, however, which were not provided by Murphy, clarify the picture, though it isn’t clear why Cameron did not disclose the financial recommendations to commissioners on Monday: the county’s financial adviser sent his memo on Dec. 1.)
The county’s commission-approved half-penny surtax has paid or will pay for such things as the cottages at Princess Place Preserve, parking at Bings Landing, improvements at Bunnell’s Carver Gym and the long-planned, yet-to-be-built south branch library. Revenue from the half-penny share of the state sales tax, which may be bonded, paid for the jail expansion, the once and future sheriff’s operations center, the GSB complex and will be used for a west-side fire station.
But in both cases, money spent on those projects means it’s money diverted from other needs. That will also be true of the financing of the sheriff’s operations center, which will significantly narrow the county’s ability to pay for other projects through that fund. It is difficult to conceive, for example, how the county would pay for both the operations center and a branch library. The county’s available funds for unexpected projects or emergencies will also be further limited.
The loan amount for the proposed sheriff’s building falls short of projected costs for the building, which on Monday were pegged at just under $21 million, when architectural and engineering fees and furniture costs are included, as they must be. The cost does not include an additional building for purchasing and logistics planned for the sheriff’s grounds, and it does not include interest on the loan, all of which would push the cost well beyond $21 million.
Fortunately for the county, it has no legal debt limits.
The $142.5 million in debt the county is currently carrying was issued between 2004 and 2020. Not all of it is for general government services. For example, the nearly $10 million owed for the Plantation Bay sewer plant and water projects the commission approved this year and last are administered through a separate fund that only Plantation Bay utility ratepayers are responsible for. That’s also the case for the outstanding debt of $6.5 million from when the county acquired the plant in 2014. The airport and a Beverly Beach utility the county administers also have their own funds, outside of the general government stream.
In sum, the county currently owes $115 million through its general government funds, and $27 million through proprietary funds such as Plantation Bay and the airport. In general government, for example, the county took out a bond to build the GSB complex in 2005 and refinanced in 2015, leaving it with a still-outstanding debt of $52 million. The $33 million bond to build the courthouse in 2005 was not refinanced. The county still owes nearly $29 million on that building. (See the county’s debts in detail here.)
Jane Gentile-Youd says
Disgraceful expenditure of our (future and present) tax dollars by Flagler County. Neither Jerry nor Dave Sullivan will be around to carry the burden upon us with the ever growing mountainous debt for frivolous over priced real estate deals and projects based more on egos than practicality. And the Sheriff has no money for masks for his deputies nor masks for those he throws in jail. Sickening is putting it mildly in my opinion, How do you all see it?
Robjr says
One of my first questions before even reading the article was whose friend of a friend owns the bank?
Lynette Smith says
The ineptness with decision making at the County and City level are incomprehensible. The tax payer’s finances are what takes a hit with this incompetent decision making by the Flagler County Commissioners and decisions made by the City of Palm Coast.
Mark says
How is this considered defunding the police? While the rest of the country is cutting back police budgets to invest into the good of the community, Flagler County is throwing its money away into over policing its own community members while pushing aside its own residents that need mental health help.
SHAME! there is a perfectly good building that needs a small rebuild that would cost frations of this montrosity, its the OLD SHERIFFS OPERATIONS CENTER. Move them back!
deb says
And you read this where, please share a link
“while pushing aside its own residents that need mental health help.”, provide some facts on that as well.
Thanks
Mark says
DEFUND THE POLICE!
https://flaglerlive.com/159532/grand-jury-rips-floridas-mental-health-system-citing-deficiencies-in-funding-leadership-and-services/
Here is a link for you^
A good example is the gentleman recently arrested with no bond for stalking a Judge., clearly a case of mental health issues , but Flagler County just continues to lock him away over and over instead of getting him the help he needs
Lou says
Local banks giving 0.05% on Certificate of Deposits.
How about offering it to the local citizens of this country??????????
Jimbo99 says
Let’s talk about pay cuts & reduced pension obligations to finance this as well. You can’t have it all & a blank check after screwing up on the previous solutions for mold infested building purchases. I doubt the benefits of the higher interest rate with the present value for drawdown(s) is a real feature that Flagler County would ever take advantage of in the immediate or longer term build. If the building will cost that much today for taxpayers, it will only cost more, not less going forward. Must be nice to manipulate numbers on a spreadsheet like that & play with everyone else’s money. I think the county government as labor needs to have more skin in the new FCSO building game, they can do better than this. From what I last saw an entire department of the Flagler County economic development department was terminated recently. That was a $ 1/2 million a year in budget. Taxes for taxpayers needs to remain stable rather than grow with every new screw up the county does for providing a home for FCSO. I’m just not a fan of effectively building where the mold infested building originally purchased was located. For the same reasons that building became/had mold infestation and every subsequent real estate purchase after it. How long before this new building becomes those mold infested buildings ?
https://flaglerlive.com/145862/flagler-county-economic-development-pt/
James M. Mejuto says
With all the SHIT going on around the new sheriff’s building, we the people actually do not need another
building, especially at $21 million + $9+ million interest.
Let us build for tomorrow: less inmates, no assault weapons, no military tanks but a program to teach
the police how to deal with citizens and protests.
One way to deal with protests is to find jobs for the people: “It’s the economy, stupid !”
As a homeowner, I don’t want to pay for something that is not necessary.
Mark Peterson says
So if I get this right, Flagler County/Palm Coast is deeply in the hole financially….isn’t it counterintuitive?….here is a simple plan….from now on taxpayers will decide who gets what from their tax dollars….my taxes in NO WAY will build an f’n pickleball court or anything else existential to the running of the City or County….not while we are in the midst of a pandemic!
Mike Cocchiola says
This is outrageous! We do not need a 51,000 square foot office building for the sheriffs department. And this probably doesn’t include many upgrades and nice-to-haves that will be added later when our backs are turned.
We are being steamrolled here in Flagler. The sheriff runs the county. The commission so just there to carry hid bags – of our money! We need a citizen’s oversight committee to question these sweetheart deals. The BOCC just takes the sheriff’s orders.
Frank says
How big of a build can you possibly need for a head quarters. This is just another case of a county being out of control.
The new wave allows for work from home/ work from the patrol car, etc.
Ron Boyce says
Does the land they are building on have flood issues? If so why are they moving forward with this project?
Joanne says
This is still not the time to build this.We need our taxes to go down not up.Sell your other bad investments first.
Robert says
The Sheriff wants his maypo at any cost to the taxpayers. We’re headed down the wrong path on excessive expenditures to the County and City.
Jack says
Based on Flagler county’s 2019 population of 115,000, the current $142,000,000 county debt comes out to be $1,234 for every man, woman and child in Flagler county!
Add another $21,000,000 to the debt, it comes out to be $1417 for every person in the county!
Ask youeself, is this acceptable?
Doug says
Something is very fishy smelling about this deal and I quote Flagler Live – anyone who’s “well-connected” shouldn’t be part of the bidding process. I’ll be the first to call BS on this one.
“The county’s financial adviser is recommending awarding the bid to CenterState Bank, whose Gary Lubi, a well-connected local banker and past president of the now defunct Chamber of Commerce, submitted that bank’s proposal: a 15-year loan at a fixed 1.83 percent interest, pending a closing on or before Dec. 18. Lubi has brokered various financing and re-financing arrangements with Palm Coast, the county and the school board over the years.”
James M. Mejuto says
There’s not a thing we can do about this CenterState Bank and the sheriff’s dept. The deal will go through
no matter what we do. These are the forces or Republican control of city politics.
The voters of Palm Coast voted these political scoundrels into office and now, we are paying for it.
Palm Coast has a non-representative gov’t entirely controlled by the Republican Party.
This is an indicator that we the people have not done our due-diligence at election time when we voted-in
these scoundrels. We have ourselves to blame !
Jaybee says
DO YOUR HOMEWORK FOR THE CITIZENS, NOT THE BANK!
BEFORE WASTING THE MONEY MAKE A PHONE CALL. SEMINOLE COUNTY FLORIDA SHERIFF’S DEPT HAD THE SAME SHI++Y BUILD OF THEIR OFFICE. WATCHING IT GO UP MADE ME ILL, KNOWING WHAT THE END WOULD BE.
SURE ENOUGH, MOLD GOT THERE SOONER THAN THE FINISHED BUILDING! MANY GOT SICK. MOLD CAN KILL YOU.
CALL, GET THE REPORT, DON’T WASTE MONEY THE PEOPLE CAN’T AFFORD!