The Flagler County Commission voted 5-0 this evening to approve a $20 million commercial loan with CenterState Bank to finance a 51,000-square-foot Sheriff’s Operations Center south of the Government Services Center in Bunnell.
A public groundbreaking at the sheriff’s project, some two and a half years after the law enforcement agency vacated its former operations center off State Road 100 in Bunnell, is scheduled for Wednesday at 9 a.m.
County commissioners had few questions for Jay Glover, the county’s financial adviser, who presented the CenterState proposal and revealed that–contrary to Administrator Jerry Cameron’s claim last week that the loan, which he called a bond, would be financed with local sales surtax revenue–there would not be one specific source of funding for the financing
“Obviously any time a lender is going to provide you $20 million-worth of financing, they’re going to do a great deal of due diligence on your ability to repay that debt,” Jay Glover, the and this loan is secured by what we call a covenant-to-budget and appropriated from legally available non-advalorem revenue [that is, property tax revenue], so we do not pledge a specific revenue stream. Instead, within each budget year, you identify any legally available source of non-advalorem revenue to make that payment. So ad-valorem taxes are in no way involved in this, because in the state of Florida, that requires a voter referendum in order to do so.”
Commission Chairman Donald O’Brien provided the only moment of clarity about the county’s actual debt-repayment abilities: “If I look at our Fund 212, looks like we’ve got approximately $6 million or so flowing into the fund,” he said, “just being general here, and you have about $3 million in debt service coming out of there, and this debt service, after the first couple of years, is about $1.6 million a year, approximately.” He asked the finance director if he was reading the figures correctly.
Finance Director John Brower could not answer. “I’m not 100 percent following what you’re saying,” Brower said, “we’ll set up a debt service fund for this, it will be transferred from general fund, using non-advalorem revenue.”
O’Brien tried to further clarify: “If I looked at the schedule that we have now, what we’re paying from that non-advalorem revenue, from our budget documents, again, it’s roughly $6 million, servicing about $3 million now, it’s like there’s about another $3 million” available. In other words, the county will be left with very little maneuvering rom with similar capital funding for many years into the future.
Including the financing of the loan, the county will owe close to $23 million, to be financed over 15 years. With financing, the county’s total debt load will rise to $165 million. The county currently has a credit rating of AA, which is considered very solid.
Glover said the interest rate on the loan was higher than some of the five other banks that placed a bid on the county’s loan. But in one case, Capital One required all the funds to be drawn down at closing. What CenterState did, he said, was allow drawing the funds through June 30 2022, with just a $250,000 draw at closing, and additional draws every three to four months, through June 2022, somewhat reducing the interest costs up front. The last $1 million doesn’t have to be drawn if the county doesn’t need it (an unlikely scenario, given the county’s history of profligate spending). “That’s why the recommendation is on the table here today,” Glover said.
If the county were to repay the whole sum in the first five years, it would pay a 1 percent penalty. From the fifth to the 10th year, it could repay without a penalty.
Commissioner Andy Dance asked about the county’s reserves. “Obviously that is the first line of defense amongst revenue downturns or things that might happen like Covid, or like a hurricane, or something especially for a coastal community,” Glover said. “So if I tell issuers anything to pay attention to and you’re going through your budget process and you’re making decisions, it is having those fund balance levels at or above your policy, it is the one thing that is most important.”
The evacuation was the result of dozens of employees reporting sicknesses usually associated with sick-building syndrome. Environmental analyses, including one by the Centers for Disease Control, found several issues with the building’s ventilation system, water intrusion especially at ground level, and bat droppings in the rafters, among other problems. The county sold the building at a loss earlier this year.
“This continues to be a very significant historical moment for our county to finally start the end of the game that started with our sheriff’s operations center,” Commissioner Dave Sullivan said this evening.
For more details, see “$21 Million Sheriff’s Building Would Be Financed With 15-Year CenterState Bank Loan at 1.83% Interest” and “$21 Million Flagler Sheriff’s Operations Center Unveiled, But Questions About Financing Remain Unanswered,” and see below.
Deborah Coffey says
Republicans simply cannot manage money. How many tries and buildings were bought for a Sheriff’s Office that all went south? And how many recessions and depressions were caused by Republicans? Almost all of them. And, we know who pays the bill for their economic ineptitude. It’s an easy Google search.
Dennis C Rathsam says
Lets see, we have the old sheriff’s mold filled building, the new sheriff’s ( sears) full of mold, & now we get a substainal loan for the new HDQ. Does anyone see a pattern here? Everyone blamed MR Coffee, including me, for one of theses mold farms. But stupidity never stops. More loans mean the tax payers are on the hook again…We cant spend our way,into oblevium. Why cant we, as a county,& cities…do the respectable thing, Live within our means, if U dont have the money…Its gonna have to wait! Our leaders can piss away more money, than a drunkin sailor on leave. Who holds these people responseable?
I concur with your entire comment, but sadly the county has a lot of uneducated voters who keep voting our inept politicians back into office. Kind of like our countries career politicians who keep pushing our country deeper towards socialism. TERM LIMITS!
Land of no turn signals says says
If they didn’t waste millions of dollars on the other 2 buildings maybe this one wouldn’t have such a “sticker shock”.
Been There says
Cameron is bankrupting this County. Everyone is worried about democrats and taxes; I’ve NEVER seen such blatant mismanagement of county dollars ever until this current Replublican administration showed up. What does he care? He doesn’t live here.
Between the City and the County and their frivolity with our taxes dollars, noone is going to be able to afford to live here and for what (?) more deputies sitting on Belle Terre profiling vehicles and drivers?
Paul Harrington says
The writing is on the wall. More development and more people, it’s progress you know. Hello Daytona !!!
James M. Mejuto says
re: Sheriff’s Operational Center . . . Folks, there’s not a thing we can do about the financing of this Center.
There is no one to carry the torch for fair government in Palm Coast.
The voters have spoken and the rewards of total Republican control
have come to roost. We have ourselves to blame for a spinless democrat
party with no taste to battle the windmills. It’s about time the citizens rose
up to protest, to register as voters and throw-out these scoundrels.
me too says
When the police and fire departments are defunded we’ll end up with another albatross . After all it’s not their money they’re throwing against the wall in hopes it sticks.
DEFUND THE POLICE! We need mental health facilities and homeless facilities way more than we need a brand new police building. Cant we stick them in a remodeled version of the old sheriffs operation center? This is a slap in the face of every citizen in the County.
So why isn’t the existing FCSO Center just demolished and and new building constructed in its place? but this time properly without the County Engineers involved and without bat feces and moldy building materials left in the walls. These folks are piling on the debt. Expect taxes to go up.
James M. Mejuto says
So . . . it’s just like that! Five politicians are going to decide the expenditure. We are going to
be in debt for $31+ million dollars simply because a sheriff with political connections wants it so.
Do we remember these scoundrels we voted- in office?
Republicans . . . aren’t they!
Folks . . . we have a spinless democrat party that pretends to represent us !
James M. Mejuto says
We have sent a man to the moon, we have sailed by Mars, we came up with vaccines for Covid-19 but yet we
can’t rid a building of mold. I know, mold has been with us for as long as Cockroaches but can I go to ACE
For a chance to work at a job . . . I know I can gather a crew of unemployed workers to rid us of this creature.
Seems better than $31+ million dollars ! Don’t ya think ? ! ! !
Unfortunately these things often turn into a psychological issue if not handled properly at the start. If I was a business owner who owned the building, I would be highly concerned that my employees would sue me even if all of the mold was removed, despite the fact that a definitive source of illness was never identified. If the construction and engineering oversight was done properly in the first place, I wonder if this would have ever been an issue. I wonder if we will find moldy insulation and bat crap in the new building walls too. What a disgrace.