Everyone agrees that city facilities need to be replaced. But there is disagreement on how to finance the needed buildings. These City has two options:
The City plans to finance the project with a combination of private funding and public financing under what is called Public-Private Partnership (P3). A P3 is collaboration between a government agency and a private-sector company or companies to finance, build, and operate public infrastructure projects.
Read the City's P3 definition (FAQ #9)
When the City originally announced the project, residents were told that renovations would be paid for by the developers. Later the City said that it would have to issue bond for the public buildings. Altogether, the public component reflects:
That means the city is paying 82% of the costs for redeveloping the city buildings.
Altogether, the public components reflect a $201.4 million investment by the City; however, total bond revenues are estimated at $114.0 million. The City’s financial
consultants reported this meant there would be a funding deficit of $87.4 million that will
need to be financed with other city revenues. A few weeks later, the consultants
found previously unreported funds, erasing the funding gap. It's difficult to feel confident when the numbers continually change and always to the benefit of the project. The axiom "If it sounds too good to be true, it probably is" seems relevant to this situation.
Many of our residents are experts in public accounting and finance. Together, they have decades of experience working with governments throughout the region. Their combined professional assessment is that:
Boca Raton has ample resources and a strong enough credit rating to finance more modest buildings through traditional public funds. We can have beautiful public buildings and parks that are designed with functionality and simplicity in mind rather than extravagance. Considering that the city is already required to cover 82% of the costs of the city buildings, adjustments can be made to the plans to reduce the overall budget by 18% and then we do not need a private partner.
The City’s is relying on a discount rate and risk assessment our resident experts believe are unrealistic. This makes costs appear lower and benefits appear higher. If the developer becomes financially unstable or abandons the project mid-construction, the City could be left with a half-finished project and the significant legal and financial fallout. Such a failure on the private side could harm the City’s credit
rating and increase the cost of borrowing for essential services. The City could have to commit additional taxpayer money to keep the project from collapsing.
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