Facing nearly $1 billion in identified capital needs, the City of Miami is examining how much it can responsibly borrow and whether expanding its long-term bonding capacity could help fund major infrastructure projects. Commissioners discussed the city’s bonding capacity and long-term borrowing st rategy during its Jan. 8 meeting, including whether to potentially ask voters to approve increased borrowing during the August primary election. Concerned about the potential annual tax impact on residents, commissioners requested further analysis before advancing the bond proposal. Bonding capacity refers to the amount of money a city can borrow through long-term bonds while still being able to repay that debt without financial strain. Miami is revisiting the issue as rising construction costs, aging infrastructure and project shortfalls have pushed identified capital needs close to $1 billion, prompting questions about how future projects can be funded within existing financial limits. Finance officials presented an analysis showing the city has about $994 million in capital needs, including unissued portions of the Miami Forever Bond program, cost overruns on existing projects and major public safety investments such as new and renovated fire and police facilities. Chief Financial Officer Erica Paschal said about $127 million in previously approved Miami Forever Bonds have not yet been issued, largely because projects are still underway and issuing bonds too early can increase interest costs and trigger federal tax implications. An additional $331 million reflects shortfalls in existing Miami Forever Bond projects, driven largely by rising costs for parks and sea-level rise and flood-prevention initiatives. The analysis also included about $182 million for fire station repairs, new stations and equipment, about $3 million for police facility recertification and roofing, and roughly $350 million for a proposed new public safety building. Ms. Paschal explained that under the city’s current voter-approved debt millage cap of 0.5935, Miami can issue up to about $602 million in additional debt. Increasing the debt millage rate to 0.7917 would raise bonding capacity to about $995 million, enough to cover the full range of identified capital needs. Several commissioners raised concerns about the potential cost to residents. Ms. Paschal said preliminary estimates suggest increasing the debt millage could result in roughly $100 more per year in property taxes, though she noted the exact impact would depend on final bond terms and would require further analysis. Commissioners also questioned how additional borrowing would interact with other potential cost increases, including long-stagnant sanitation fees and rising insurance and escrow costs faced by homeowners. Some expressed concern about asking voters to approve higher taxes without a clearer picture of all upcoming financial pressures. The legislative item, sponsored by Commissioner Damian Pardo, would have directed the city manager to further analyze capital funding needs and prepare a future resolution calling for a voter referendum on issuing a general obligation bond, potentially as soon as the Aug. 18 primary election. The item was ultimately deferred, with commissioners indicating they want a more detailed analysis of the impacts on residents before advancing any borrowing proposal. City staff is to return with additional financial information before the commission considers whether to pursue a bond referendum or other long-term funding strategies. The post Miami examines its bond borrowing capacity for big projects appeared first on Miami Today. ...read more read less