Winton says Miami could put bond referendum to voters next year
By Susan Stabley
The City of Miami could present a new bond referendum to voters as soon as November 2005, Commissioner Johnny Winton said Monday.
Miami's growing tax base, improved bond ratings and the success of the city's most recent bond referendum, he said, creates an environment favorable to asking voters to finance more projects.
The city expects this year to release the remaining $100 million from its $255 million bond passed in 2001. If it does, Miami would fulfill a 10-year plan in only three, he said.
Even with Miami-Dade County proposing a $16 billion bond this year, Commissioner Winton said, Miami could be successful in asking the city's voters to approve another one next year. By then, he said, residents will have seen tangible results of the 2001 referendum without a hike in the city's debt-service millage rate.
"The voters will have seen that we were able to deliver and deliver strongly," he said.
Last week, national ratings agency Standard and Poor's raised its assessment of the city's bonds to "A+," its top rating, from "BBB+." Standard & Poor's had held the city to "BBB+" since December 2001.
The higher the bond rating, the less it costs a city to borrow money. A rating upgrade brings an improved financial reputation. According to Mr. Arriola, S&P's "A+" rating will save the city $6 million.
The upgrade would help sell another bond referendum to voters, said Commissioner Winton. But first, the city needs to complete more projects, he said.
Lats week's bond-rating upgrade came after Miami Mayor Manny Diaz, City Manager Joe Arriola and other officials traveled to New York in January to update national rating firms on the city's progress. A big part of the presentation revolved around the city's capital-improvement plan. Ratings firms had previously cited the city's failure to have a plan as a major drawback.
Last week, S&P noted property-tax decreases, financial-management improvements and a continuing flow of new residents as reasons for the upgrade. According to S&P's rating report released Friday, the city's property-tax rate is its lowest in more than 50 years.
Fitch Ratings has Miami rated "BBB+" with a positive-outlook general-obligation credit rating, according to the agency.
"We believe that the rating will be moved upward in the next one or two years," said Rebecca Rhynhart, director for public finance with Fitch. "They have come a long way in a short amount of time."
The city fell into a $68 million deficit in 1996, when Moody's Investors Service rated Miami a below-investment-grade "Ba1." A state oversight board was appointed to help the city regain its financial footing. Miami has kept its general fund in the black for the past six years and had a sizable operating surplus at the end of 2002.
After several years of gradual increases, Moody's in May upgraded the city's rating to "A3" from "Baa1" and said it had a stable outlook.
"The rating also recognizes the challenges facing the city, which include providing services to an increasingly poor residential population with high unemployment, renegotiation of restrictive union contracts, the development and funding of a long-term capital plan to address city infrastructure needs and technology improvements to adequately respond to audit findings," Moody's said in its most recent report, issued in October.
Before another bond referendum could happen - or the city can discuss its value - Miami needs to do an in-depth analysis of needs, said Commissioner Winton.
A bond next year could help finance completion of the Trust for Public Land's greenway proposal, which would create public walkways along Biscayne Bay and Miami River, he said. He also said it could help pay for new parks to accommodate Miami's anticipated growth or to spruce up Bicentennial Park.
The bond probably wouldn't be used for major transportation projects such as a tunnel connecting Brickell to downtown or replacement of Interstate 395 with a landscaped, open-cut corridor.
With more projects in the pipeline, Commissioner Winton said, he expects the city's tax base to increase. However, he warned that a rise in interest rates would hurt plans.