Florida
Dade County Mayor Alex Penelas last week appointed Public Financial Management Inc. as the Port of Miami's external financial adviser to probe the port's revenue projections and fiscal health.
"This represents the first step in our efforts to restore the credibility of port finances with the financial markets and the people of Dade County," the mayor said.
PFM will join Ernst & Young, which Penelas appointed as an external auditor at the port. Both firms will work for the Port of Miami Financial Oversight Committee, which will examine the port's finances. PFM was tapped last year to help the state-appointed City of Miami Financial Oversight Board.
These appointments follow a disclosure by the county that the port, owned and operated by Dade, has an estimated $22 million cash shortfall. Penelas and commissioners were surprised by the news, which could jeopardize the port's $168 million expansion plan.
PFM is charged with reviewing the overall fiscal health of the port as well as the revenue estimates that support the expansion. In the meantime, the port's current financial adviser - Rauscher Pierce Refsnes Inc. - was asked to suspend services until the review is completed, the mayor said.
Penelas has criticized firms that worked with the port and its former director, Carmen Lunetta, because he claims they did not call attention to the cash-flow problem.
A Rauscher spokesman has said the firm stands by its analysis and advise, and welcomes another opinion about the port.
Last month, Lunetta resigned amid allegations of corruption and mismanagement after directing the port for 18 years. Preliminary findings of the oversight board are due in 30 days.
- Christopher McEntee
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PaineWebber Inc. analyst Jeff Lipton is bullish on the credit trend for more than $2 billion of Orlando-Orange County Expressway Authority revenue bonds, according to a recent research report.
A rating upgrade is possible if the authority continues to exhibit favorable operations, Lipton said, noting that about $560 million of its junior and senior lien bonds are unenhanced.
Lipton examined three Florida credits, including the state and Orange County tourist development revenue bonds, but the Expressway Authority's debt was the best story.
Its unenhanced senior lien bonds are currently rated A by Standard & Poor's and Fitch Investors Service, while junior lien bonds receive an A- minus from Standard & Poor's and an A from Fitch. Moody's Investors Service does not rate authority debt.
Lipton said strong debt coverage and increased traffic activity on authority roads could trigger an upgrade. He also noted that management is very sound and has cut costs by privatizing toll collections. That initiative is expected to save $1 million in labor costs.
- Christopher McEntee
Georgia
At least 11 more school systems, in seven counties, will ask voters Tuesday to approve a one-penny sales tax increase to fund school construction and retire bonds.
The most-watched election will likely be in Cobb County, a booming Atlanta suburb. Other referendums will take place in Cobb's biggest city, Marietta; Hall County, another Atlanta suburb, and its largest town, Gainesville; a portion of Hall County's city of Buford; Dougherty County, home of the fast-growing southwestern Georgia city Albany; and other south or central Georgia communities Peach, Worth, Crisp, and Lowndes counties.
Other city or county school districts may be calling elections without having reported them to state education officials, Jeff Williams of the Georgia School Superintendents Association said.
In March, 63 school systems got voter approval on an extra penny of sales tax to build schools, while only six were rejected, according to Williams. The winners took advantage of a new Georgia law enabling school districts to call sales tax referendums without having to get county or city governments' permission.
Williams wasn't sure of how many school systems on Tuesday's ballot plan to issue five-year bonds or retire outstanding debt. More school-tax elections are expected in September and March.
- Jon McKenna
North Carolina
City Council members voted 7 to 4 Monday to lease the Charlotte Coliseum to the Hornets basketball team rather than sell the bond-financed arena to the highest bidder.
Council members said the lease is the best option because the city could retain the property and its surrounding land even if the Hornets leave Charlotte. If the city sold the Coliseum and the Hornets moved, Charlotte would lose the team, the arena, and the land, council members said.
Hornets owner George Shinn had offered to buy the arena for $30 million. Prominent local businessman Bruton Smith had bid at least $40 million for the Coliseum.
But these offers were hindered by a state law requiring a public bid if the property is sold.
Charlotte pays $4.8 million of annual debt service for the $48 million of general obligation bonds it issued in 1985 to build the arena. Those bonds are due to be retired in 2004.
If Charlotte agrees to Shinn's proposed lease terms, the Hornets would pay the city $1.4 million a year to operate the Coliseum, as opposed to the $400,000 the team now pays annually in rent.
In return, the Hornets would schedule events other than their games and collect all concession and parking revenues from those events. The Hornets and the city are now negotiating over the lease.
Shinn hopes to reach an agreement by June 24 so the team can estimate how much money it can spend on players once the National Basketball Association's free-agency period begins July 1, Hornets spokesman Keith Kroehler said.
- Jim Molis
South Carolina
It took three years, but state lawmakers have finally passed legislation to limit the taxing authority of local governments.
Lawmakers have debated the issue among themselves and with lobbyists for cities and counties since 1995, when the state Supreme Court ruled that local governments have broad taxing powers.
Legislative leaders ratified this year's bill Monday and sent it to Gov. David Beasley for his signature.
Now cities and counties can implement an optional sales tax of up to one cent for capital projects. They also may levy taxes of up to 3% on accommodations and 2% for restaurant meals, with their percentage points not adding up to more than 5%.
All told, local governments could raise $497 million if they taxed the maximum amounts, according to the state Department of Revenue. But observers say not all local governments will raise taxes, largely because some cities and counties don't attract enough tourists to make the taxes worthwhile.
Tourist hot spots that benefit the most from accommodations and hospitality taxes, like Myrtle Beach and Charleston, already collect close to the maximum.
- Jim Molis
Tennessee
The state kicked off its new prepaid tuition program this week with some barnstorming by Treasurer Steve Adams and his staff.
Some states have initially capitalized such tuition funds with revenue bond issues until parents start making prepayments. However, Tennessee will use bonds for the Baccalaureate Education System Trust program, state bond finance division director Ann Butterworth said.
Under Tennessee's program, parents can purchase "tuition units" representing the value of 1% of the weighted average annual tuition and mandatory fees at a state university. Families cannot withdraw their investments before the beneficiary turns 18, except in the event of a death or permanent disability.
If the child decides not to attend college, the money can be transferred to another family member or the family can wait until the beneficiary turns 18 for a refund.
- Jon McKenna
Virginia
Gov. George Allen last week appointed Walter W. Craige, managing director of Wheat First Butcher Singer Inc., and William A. Forrest Jr., senior counsel for Sands, Anderson, Marks & Miller, to the state's Debt Capacity Advisory Committee.
The committee of economists and municipal bond market professionals advises Virginia officials on appropriate debt levels for maintaining the state's triple-A rating from the three major rating agencies.
- Amy B. Resnick
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Unemployment in the state dropped to 3.9% in April, the first move below 4% in seven years, the state Employment Commission has reported.
"Aggressive recruitment of new business, expansion of existing enterprise, as well as competitive tax and reasonable regulatory policies are clearly creating more job opportunities for Virginia families," Gov. George Allen said.
The five largest metropolitan areas in the state presented mixed employment results in April. Both Lynchburg and northern Virignia saw drops in unemployment - in Lynchburg, the April rate was 3.6%, down from 4% in March; in northern Virginia, the rate was 2.5%, down from 2.6%.
In contrast, unemployment rose to 4.7% in April from 4.6% in March in the Norfolk-Virginia Beach-Newport News area. The jobless rate climbed by one-tenth of a percentage point both in the Richmond-Petersburg area and in the Roanoke area, to 3.4% and 3.6%, respectively.
Lancaster County, on the Chesapeake Bay, had the highest unemployment rate, of 17.2%.
- Amy B. Resnick
