A Tale of the Real Nassau County

Press Release from Nassau County
By Megan Diehl, Office of Management & Budget Director
July 10, 2020

Recently, a great deal of misinformation regarding the fiscal health of Nassau County has been distributed over multiple platforms, including print media, a targeted phone campaign, and through various social media outlets. In a recent “investigative report” from FLAPOL, which misleadingly cited a study that is now thirteen years old, a reference to the County’s deficient capital budget was used as substantiating evidence of its “long standing money problems”. The “investigative report” cited an outdated 2015 Fitch rating report to further substantiate that claim by cherry-picking statements referring to pay-go funding for capital needs as potentially having a long-term detrimental effect on the County’s financial position. This couldn’t be further from the truth. The 2015 Fitch report affirmed the County’s general obligation bond rating at AA-, or high-level, with an overall stable outlook. That same report identified key rating drivers in their analysis which included “satisfactory reserves, and ample liquidity despite recent draws on fund balance, increased revenues and contained costs, an improving overall economy, and manageable long-term liabilities” as the contributing factors in affirming the high-level rating.

What was not acknowledged in this “investigative report”, was the updated Fitch report from 2017, which again affirmed the rating of AA-, stating that the “issuer default rating reflects Nassau County’s superior financial resilience and low long-term liability burden”. Fitch refers to the County’s “superior budget flexibility and reserve levels” as solid should another economic downturn occur, as well as “restored structural balance, contributing toward the first net general fund operating surplus in three years” as key indicators of favorable operating performance. This is a stark departure from the claim that “the County had found itself in a position where it had a growing deficit and no sustainable path to traverse the trend”, as cited by FLAPOL.
Furthermore, in January of 2020, Moody’s issued a rating report on Nassau County assigning a General Obligation rating of Aa2, which is equivalent to the Fitch rating of AA-. There are thirteen other counties in Florida that are rated Aa2: Alachua, Bay, Charlotte, Escambia, Hernando, Leon, Miami-Dade, Osceola, Pasco, Polk, St. Lucie, Sumter, and Volusia. Nassau is the only County on that list with a population less than 100,000. In their analysis, Moody’s cites a robust financial position, an extensive tax base and an exceptionally light debt burden among the key credit factors contributing to the Aa2 rating.

On March 18, 2020, Ron Whitesides, Partner at Purvis Gray & Co. gave his report to the Board on the FY 2019 annual audit. Mr. Whitesides stated that the County received an unmodified opinion, which is the highest level of assurance that can be issued. When discussing the County’s overall financial condition, he described it as healthy, pointing to reserve levels as the main indicator. The Government Financial Officers’ Association (GFOA) recommends that a local government hold at least 2 months of operating expenditures in reserves. As of September 30, 2019, the County had 2.7 months.

The recent opinion piece by The Citizens for a Better Nassau County, Incorporated titled “A Tale of Two Nassau Counties” continues to beat the drum that the prior pay-go strategy to fund large capital projects has caused the county to “raid reserves” to cover operating budget shortfalls. This veritable Groundhog Day of so-called investigative journalism is nothing more than recycling outdated information in a feigned attempt to show the County in a bad light. In fact, as stated in the Moody’s report, the County’s current low debt levels directly contributed to its high credit rating; and the opportunity to leverage low interest rates should the County decide to issue bonds to fund capital projects is as favorable as it was in 2015. To that extent, Nassau County has contracted with financial advising firm Hilltop Securities to assist with developing funding strategies to execute future capital projects. This could include a number of short and long-term financing options, including bonds and loans, to ensure that a financial plan that appropriately addresses capital needs is implemented.

The County’s adopted five- year capital improvement plan is well underway, with more than $100 million in committed improvements including new fire stations, new parks and public recreation, and an extensive road improvement plan which leverages Federal and State grant funds, direct state appropriations, County mobility fee funds, and County general revenues to implement. A portion of improvements are funded by impact fees, which are one-time payments made by developers to offset impacts on public facilities. The notion that prudent financial stewardship and sound long- term capital planning and maintenance are not being practiced in Nassau County is, in a word, false.

Nassau County administration encourages all citizens to be informed and engaged participants in local government. To access the documents referenced in this article, along with others, please visit the Office of Management and Budget webpage at www.nassaucountyfl.com/168/Management- Budget. All citizens should have the opportunity to view the documents for themselves and form their own opinions. Any questions can be directed to Megan Diehl, Office of Management and Budget Director, at 530-6010 or [email protected].

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William Gingrich
William Gingrich (@guest_58235)
3 years ago

While Citizens for a Better Nassau County acknowledges that the county has taken a few steps to begin to right decades of gross financial mismanagement, their actions over the last year or two, such as beginning to analyze and update impact fees (paid by builders, not developers) that have been largely ignored for many years, do not make up for the many years of mismanagement. And one would have to wonder if the impact fees would have been addressed at all if Citizens for a Better Nassau County hadn’t embarrassed them into it. We’re happy to finally see the county contract with Hilltop Securities to assist with capital budget funding strategies; but it was only a few years ago, the board of county commissioners approved $10 million dollars in cash disbursements for the new Sheriff’s Complex and Emergency Operations Center, instead of bonding this long-lived capital asset at historically low interest rates.  

 

The facts remain that the commission’s failure to think over the long term and manage our tax dollars properly to prepare for inevitable growth has led to a huge capital deficit and caused the dramatic tax increases we’ve experienced (your property taxes have increased by more than 30 percent over the last two years). Residential property owners should take note, because until Nassau County commits to structural changes in the way it addresses capital needs; plans to repair depreciating assets and better manages and stretch our tax dollars; regularly update impact fees; and broaden the tax base through wise investments in economic development, they will continue to dig the financial hole deeper and we’ll continue to see our property taxes rise.

 

Janey Wilcox
Janey Wilcox (@guest_58238)
3 years ago

Oh so now you acknowledge they’ve done “some good” but the last series of articles written by the citizens group you are affiliated with used old data in an attempt to prove a point. you haven’t acknowledged that the two commissioners that were adamant about using the “pay as you go” method in lieu of financing the sheriff facility are no longer even on the commission. You’re just trying to make the current commission look bad.