BRADENTON, Fla. - Voters in the Southeast on Tuesday will be asked to approve more than $3.5 billion of bonds for a variety of public projects, including public safety, transportation, utilities, and schools.
In the region's largest single question at the ballot box, voters in East Baton Rouge Parish, La., will be asked to approve $989.2 million of bonds to finance delayed infrastructure and economic development projects. Voters in various cities and counties across North Carolina will weigh in on referendums that total more than $1 billion of bonding authority.
Democrats also are attempting to keep footholds in the governor's office of two Southeast states. North Carolina voters will be asked to replace retiring Democrat Gov. Mike Easley and have a choice between Democrat Beverly Perdue and Republican Pat McCrory. West Virginia Gov. Joe Manchin, a Democrat who is seeking another term in office, faces GOP challenger Russ Weeks.
Voters in East Baton Rouge Parish, including the city of Baton Rouge, on Tuesday will decide on two parish-wide tax increases that would support the largest municipal bond proposal in Louisiana history. Projects in the nearly $1 billion proposal range from drainage improvements to a massive natural history venue along the Mississippi River in downtown Baton Rouge.
The 30-year bonds would be supported by a 0.5% increase in the sales tax to a total of 5%, and an increase in the parish's property tax rate of 9.9 mills.
The additional property tax would be collected by the Parish of East Baton Rouge Capital Improvements District, a parish-wide taxing district, with revenues dedicated to supporting capital improvement bonds.
The parish's sales tax bonds have underlying ratings of A2 from Moody's Investors Service and A-plus from Standard & Poor's and Fitch Ratings.
Bond proceeds would finance $597.4 million of infrastructure projects and $391.8 million of economic development efforts.
If voters approve the tax increases for the bonds, the consolidated city-parish government would take the first tranche to market in the first quarter of 2009, said Richard Leibowitz of Breazeale, Sachse & Wilson LLP, the parish's bond counsel.
Leibowitz said that under state law, Baton Rouge must have the money in the bank for projects before signing the construction contracts. There is a 60-day waiting period after the election before the bonds can be sold, he said.
"We don't have a firm schedule at this point, but we're using a model that calls for four distinct issues," Leibowitz said. "All the projects are scheduled to be completed within seven years, so we'd do the final sale in the fifth year to provide the funds to complete them.
"We haven't had a bond issue for basic infrastructure in this parish since the 1960s, so we're 50 years behind," he said.
The parish will be going to market with the second tranche of its Green Light program of road improvement bonds in January, totaling around $160 million, Leibowitz said, and the sales schedule for the sales tax bonds will be arranged to avoid interfering with that sale.
"We have to do that sale, because the parish will be out of available proceeds for the roads effort by then," he said. "It is another program that cannot be stopped."
The largest single project to be financed by the bond proceeds would be a $247.5 million nature-themed tourist attraction to be known as Alive. The complex would include an aquarium, river walk, museum, and a combined attraction and research facility that would provide visitors with the experience of being in a hurricane.
The Audubon Nature Institute would operate the park through a public-private partnership. The organization currently operates the Audubon Zoo and the Audubon Aquarium of the Americas in New Orleans.
Infrastructure and public safety projects on the bond-financed list include $208.3 million for bridge and drainage improvements, $135.3 for a new parish jail, $89.7 million for a new public safety complex, and $49 million to consolidate city and parish offices in the governmental building, which will have excess space when judicial offices move into a new justice center in 2010.
In addition to the Audubon project, economic development efforts include a $75 million expansion of the downtown convention center and $69 million for two adjacent parking garages. If the convention center is expanded, Virginia-based developer Armada Hoffler said it would spend $100 million to build two hotels, with a total of 440 rooms, at the convention center complex.
If supporting tax revenues are higher than needed for debt service, the combined city-parish government said it would use the additional funds to redeem the bonds early and remove the taxes.
Several members of the Metropolitan Council, the parish's government body, suggested in July that the bond package be split into three or more questions. However, Mayor-President Melvin "Kip" Holden said many of the infrastructure projects could not be separated, and he wanted the bond vote to be held at the general election to ensure a high turnout.
In the second-largest single bond referendum question in the Southeast Tuesday, Fulton County, Ga., voters will be asked to approve $275 million of general obligation bonds to implement a countywide library facility capital plan to replace the downtown Atlanta main library, build eight new branch libraries, expand two existing libraries, and renovate 23 others.
In a statewide referendum, Georgia voters will be asked if they want to join 17 other states that allow developers to sell tax-exempt bonds to finance infrastructure, sometimes referred to as dirt bonds. In the leading states that have authorized such debt, California and Florida, billions of dollars of dirt bonds have been sold over several decades although sales have tapered off dramatically in the last two years because of plummeting real estate values.
If the referendum is approved, Georgia voters would amend the state constitution to authorize infrastructure development districts, or IDDs.
"All the bells and whistles are there for people to start selling bonds, but the real estate market has got to turn first," said John L. Gornall, who heads up the economic development and public finance practice at Atlanta-based Arnall Golden Gregory LLP.
With many local governments at the limit of their ability to increase taxes, infrastructure costs rising, and fewer state and federal dollars available, Gornall said IDDs could be an important tool to enhance economic development opportunities.
"I think there are a number of major developers that plan on using [IDDs]," Gornall said. "It's pretty appealing to make the new folks, through the assessments they pay, finance the infrastructure required by the new development."
Peach State voters also will be asked if they want to allow public school funding to be used for economic development projects in tax allocation districts, which is known elsewhere as tax increment financing. State lawmakers decided to put the issue to a vote after the Georgia Supreme Court in February decided that school taxes in the future could not be used to back TADs. That decision raised questions about the status of some planned TAD bond issues.
Two burgeoning school districts in the Lexington County, S.C., area are asking voters to approve bonds for major construction programs. Lexington County School District No. 1 is asking voters for permission to issue $336 million of GOs to build five new schools and renovate 18 facilities. Lexington-Richland County School District No. 5 wants to issue $243.6 million of GO bonds to finance three schools and a career and technical education facility, as well as renovate existing schools.
Among the referendums in North Carolina, Mecklenburg County is seeking authority to issue $250 million of debt to buy land for open space and to build parks and recreation facilities. Charlotte is seeking authority to issue $227.2 million of bonds for transportation, neighborhood, and affordable housing projects. New Hanover County is requesting $164 million for building projects, and Greensboro is requesting $185 million for housing, street improvements, and a war memorial auditorium.
Voters in Virginia counties will decide on more than $400 million of bond ballot initiatives, most of which are in the northern counties of Arlington and Loudoun that sit just outside of Washington, D.C.
Triple-A rated Arlington County is looking to voters to approve about $170.2 million of bonds that would finance the county's six-year capital improvement plan and the Arlington public schools' CIP.
"This year's CIP was developed amid an increasingly difficult economic environment," the county board said in a statement. "The county made prudent choices for necessary investment in infrastructure and facilities, while ensuring the county's financial health."
Arlington voters' choices will include $99.4 million of bonds to build one high school and design another; $50 million to expand and upgrade a water pollution control plant; and $10 million of bonds to fund the Washington Metropolitan Area Transit Authority for Metro, the region's public transportation system.
Voters in Loudoun County will decide whether to authorize $82.2 million for capital improvements at the Dulles area high school, $21.8 million for capital improvements to Ashburn/Dulles elementary schools, and $8.6 million for a new fire and rescue station.
Loudoun County is also seeking an up to 4% tax on food and beverages sold by restaurants and on prepared foods in grocery stores and convenience stores, which officials expect will raise $13 million annually to be used for school construction projects and to pay debt service on the bonds issued for those projects.
Elsewhere in Virginia, Fairfax County voters will be asked to approve $77 million to finance the cost of parks and related facilities and purchase easements for the preservation of open space. Voters in Stafford County will decide whether to approve $70 million of GOs for multiple transportation projects.