By CHARLIE WHITEHEAD
If Lee County commissioners follow their recent financing trend for the new Boston Red Sox spring training complex, they should make sure there’s enough money for both it and the services residents expect.
That’s the advice from Clerk of Courts Charlie Green in a new audit released Monday.
The audit is of the county Construction and Design Department. It points to a recent trend by the county of borrowing money for projects from property taxes instead of the more traditional bonding of projects.
“The latest trend for county financing of projects is the borrowing of money for projects from general fund (property tax) sources with long-term paybacks,” the audit conclusion says.
“This internal ‘debt’ funding process allows for the select projects to progress, but there is a question on whether this process places an undue burden (risk) on other general fund core services that rely on (property tax) sources, now with budget shortfalls and in the future.”
Commission Chairman Ray Judah - who leads the county effort to keep the Red Sox and to attract a third spring training team - said Green simply opposes the new Red Sox project and doesn’t get what baseball means to the local economy.
“He’s opposed the project from the outset,” Judah said. “He has no earthly understanding of the economic impact the Red Sox have on the community.”
Estimates place that impact at anywhere from $25 million up to $45 million. Judah said that spring training baseball is one part of the local economy that’s ducked the economic beanballs being thrown at the rest of Southwest Florida. The Minnesota Twins also train in Lee County.
Green said he’s not against baseball but is concerned with where the stadium money will come from.
“The question is when do we pay that back,” he said. “Should long-term debt be accrued on future revenue for future boards?”
If commissioners decide to build the Red Sox a new complex - they approved a new 30-year deal before Christmas that called for the new stadium - they should simply bond tourist taxes and pay for it, Green said.
“Why not just bond the bed tax?” he asked. “Thirty years is a long time to be paying that back.”
Green said other services funded by property taxes could suffer. One account that’s been identified as a possible source is the unincorporated municipal services account, from which the county pays for everything from recreation centers and programs to law enforcement outside the cities.
Commissioners haven’t yet decided how to finance the new stadium, but Judah said services will not suffer as a result.
“By borrowing internally we could position ourselves to provide an enhanced level of service,” he said. “Now we’re getting a half-percent maybe less on short-term accounts.”
Greens concerns are familiar ones. Commissioner Brian Bigelow’s been raising them.
“I still think we need to put the horse before the cart and figure out how much we’re willing to spend,” he said. “I want that done only if we’re able to find someone for the perfectly good facility we already have.”
That would be City of Palms Park in Fort Myers, which the Red Sox want to leave in 2012 to move into their new stadium. The county’s been talking with the Baltimore Orioles about moving in, but there is no deal yet.
“I think it’s a bad idea to borrow from reserves to build a sports facility,” Bigelow said. “I’m troubled by the notion of us being the banker and the borrower.”
A future board could decide the Red Sox are such a good investment they could forgive the stadium debt, Bigelow said, leaving a hole in the property tax-fed budget.
County administrative services director Dinah Lewis said that she’s exploring all the financing options, internally and externally.
“We still think there’s a lot of merit to internal financing,” she said.
Bonding would cost an estimated 5 to 6 percent, plus another 11⁄2 to 21⁄2 percent to issue the bonds, Lewis said. If the stadium costs $50 million - the low end of the county estimate - bonding cost alone would be as much as $2.5 million before any interest is paid. An internal loan could be repaid early if conditions allow.
“That’s part of why options are being considered internally,” Lewis said.
Lewis said she will lay various financing options before commissioners and they will decide.
“We’ll do that when we have a big contract that needs to be executed, like the land purchase,” she said.
Commissioners will take a step toward that today when they vote on a short list of potential stadium sites. The plan is to negotiate with all four landowners at once and make the best deal.
Originally Published At:
http://www.naplesnews.com/news/2009/mar/16/audit-questions-boston-red-sox-spring-training-com/
http://www.naplesnews.com/news/2009/mar/16/audit-questions-boston-red-sox-spring-training-com/
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