Capital improvements & government finance

Citizens for a Better Nassau County
By Bill Gingrich
July 9, 2021

I read with great interest the recent article in the Fernandina Beach News-Leader, titled “Nassau County Commissioners consider improvement plan.” In the article, the county commission heard a report from Marshall Eyerman, assistant county manager, detailing a five-year capital improvement plan showing how the county intends to allocate funds to various priority projects. What the article fails to report on, however, is how the county plans to fund those priorities. A review of their website suggests, once again, and despite our rapid growth rate, the county intends to pay cash for long-lived capital projects in the plan.

For background, Nassau County is one of the five fastest-growing counties in Florida. The county has increased property taxes more than 30 percent over the past two years and took the responsible action of raising impact fees on new growth by approximately 250 percent. The county is finally flush with cash, on top of receiving millions of dollars in federal CARES Act funding. Now, the county greatly needs a modern financing strategy to support this growth. A critical element of that strategy is bonding when a strong balance sheet and low-interest rates are available, which is the current situation. Additionally, it is the only fair way to apportion part of the cost to new residents who otherwise would get a relatively free ride.

Opportunistically pursuing bond financing for capital projects is Government Finance 101. Suppose the county commission and staff really cared about taxpayers. In that case, they’d be leveraging the generosity they’ve collected through bond financing, enabling the county to tackle more of its capital deficit in less time at these historically low-interest rates. After all, how much longer will interest rates remain this low?

More than being good business, this is a fairness issue. For future growth to pay its fair share, impact fees need to be regularly studied and updated. The commission should fund the capital improvement plan, in large part, via bond financing.

In the article, County Manager Taco Pope said the “Board of County Commissioners have a fiduciary responsibility to represent the long-term best interest of all the citizens of Nassau County and promote the shared pursuit of the common good.” We couldn’t agree more. However, implicit in that statement is ensuring that our county’s future growth pays for itself and that the commission is appropriately using debt leverage for the capital improvement plan to get the most value for taxpayers today and tomorrow.

Bill Gingrich is a retired GE executive and chairman of Citizens for a Better Nassau County.