Sarasota County leaders merit praise for financial stability

This year has been a significant one for Sarasota County in terms of debt, refinancing, and interest rates. It isn’t a sexy topic; in fact, the news rarely highlights it. But it is a year of achievement and savings, which is a big reason why our millage rate remains steady.

Our county administration, the commission, and the Clerk of the Court and Comptroller deserve high praise for saving significant taxpayer money and keeping our credit in a premium status.

When the county sold the bonds on the Legacy Trail for the extension last month, the bond rating was an unbelievable AAA rating with an interest rate so low it was almost free money. A bond rating of AAA is the highest possible rating that can be assigned because of the high degree of credit worthiness of the bonds due to the county’s outstanding financial situation. The remarkable true interest cost of 2.42% was obtained through a competitive bidding process.

The active debt management by our county internal fiscal watchdogs is important to saving money. The Clerk of Court and Comptroller, Karen Rushing, reports that in 2018, we had roughly a $600 million debt portfolio. This encompasses all sorts of debt from utilities to surtax capital improvements.

So how do we keep these great ratings and interest rates? Through proactive planning, sound fiscal policy as recommended by administration and the clerk and adopted by the county commission, and lots of behind-the-scenes work.

Key members of the administration, clerk, and the county’s financial advisor discuss and plan for capital project money financing needs and monitor the debt portfolio. They also look for opportunities to refinance, which has saved tens of millions of taxpayer dollars. Since 2010, the county has refunded debt for savings when appropriate, to the tune of $75.5 million in debt savings. By September, that will have happened three times in 2019 alone.

Sarasota County was one of the founding members of a local government commercial paper program called the Florida Local Government Finance Commission. This program offers short-term interim variable rate financing for projects that need financing but aren’t shovel ready. The use of this program allowed the county to fund projects with short-term rates that were then refinanced at a low point in the market.

Sarasota County did this to lock in long-term rates during 2018 with a general government bond issue for $17.6 million, at a true interest cost of 2.9% and a surtax bond issue to pay off $25.1 million, at a true interest cost of 2.39%. Again, amazing interest rates.

Representatives from the county and the clerk regularly interact with representatives from the rating agencies and update them on key finance points and operations, the county’s policies and practices, and the preparation for capital needs to make sure they have a full picture of the county’s financial direction. The clerk even sponsors rating agency road tours of the county to highlight county assets and to maintain open lines of communication and understanding.

The clerk further increased financial confidence for investors by implementing a single platform for investors to obtain county financial information. Material event notifications are communicated to bondholders through this platform.

Finally, the reserve policy that was adopted by the Board of County Commissioners plays another big role in our outstanding credit. The policy, initially recommended by the Clerk of Court, ensures the maintenance of fund balance levels and mitigates risk.

All of this great debt management is always contingent upon the county continuing to restrain spending and understanding that prioritization is important with a finite amount of money.

We are lucky to have such a financially stable county that has low interest rates and a county that actively refinances to save taxpayer dollars. It can be pretty dry stuff to an average taxpayer, but the bottom line is, it is saving the taxpayer money and getting projects completed with obscenely low interest rates because of our unbelievable credit ratings.

Congratulations to our county administration, the Clerk and Comptroller, and the County Commission, keep up the great debt management!

Christine Robinson is executive director of the Argus Foundation and was on the Sarasota County Commission from 2010 to 2016. Contact her at christine@argusfoundation.org.