BRADENTON, Fla. - Broward County, Fla., next week will sell $138.1 million of general obligation bonds to build 11 new libraries, renovate and expand seven facilities, and refurbish 12 facilities already in the county's library system.
The GO library issue was approved by voters in March 1999. Since then, the county has worked with cities to identify and purchase sites using a commercial paper program.
Moody's Investors Service has rated the Series 2001A bonds at Aa1. The bonds will be priced through negotiation on Aug. 29. Moody's also upgraded the rating on the county's outstanding $270 million of GO bonds to Aa1 from Aa2.
"We're not expecting to see overly dramatic interest savings because of the upgrade," said Matthew Lalla, director of the Broward County Finance and Administrative Services Department. "Now we're pretty much at an equivalent level with Fitch and Standard & Poor's."
Fitch and Standard & Poor's were still evaluating the issue yesterday and had not released their credit reports. Both agencies currently rate Broward's GO debt at AA-plus.
With a population of 1.6 million and property valued at $105.3 billion, Broward County includes Fort Lauderdale -- a popular destination for warm-weather tourists. The county has a consistently strong financial position and revenue diversity due to the county's conservative management and fiscal policies, Moody's analyst John Incorvaia said in his review of the credit.
Retail sales have more than doubled to $61.6 billion over the last 10 years. The annual average income in the county for 2000 was $33,219, above the statewide average of $30,564. Broward's structurally balanced budget achieved operating surpluses in the past six fiscal years, increasing undesignated general fund balance over 83% to $145.6 million, or 17% of general fund balance.
"The operating tax rate, which has remained constant for the past four years, is at 66.4% of the statutory limit, providing ample taxing margin given the county's very large $82.2 billion taxable base," Incorvaia said. "The tax base has increased over 87% since 1990."
While the sale of GOs for libraries is "pretty plain vanilla," the financial future of the south Florida coastal county will be of interest to analysts like Chad Farrington, an associate director in public finance at Fitch.
Broward will require that all land within the county not already annexed or part of a city or town be incorporated by 2010. How that will impact the collection and distribution of taxes, and the payment of debt service, is not known.
"We're still trying to work out the potential ramifications," Farrington said. "We haven't seen a lot of counties doing this."
After the GO sale, the county will be back in the market Sept. 18-19 for a refunding that may be as high as $150 million.
The financial adviser for next week's sale is First Southwest Co. The underwriter is Banc of America Securities.
Bond counsel is Bryant, Miller and Olive PA, and underwriter's counsel is Ruden McClosky Smith Schuster & Russell.
