This meeting was an open dialogue on cost oversight, as well as alternative financing. Another meeting has been scheduled for Thursday, Jan. 26 from 12:30 to 3:30 at the Boca Grande Community Center Auditorium to obtain public input, which will enable the board to make the hard decisions that will, hopefully, have positive results for all.
Constructing the new bridges and paying for them are the tasks charged to the GIBA Board. It has been discovered that additional funding will be required in the amount of $1.7 million a year for several years, and that money will have to be funded by either an increase in tolls, procuring bonds, or both.
The possibility of an ad valorem tax was also discussed, but board members weren’t sure if they would be able to make that happen in time.
Two decisions were made at the meeting: One to accept a new line of credit with Bank of America; and also to incorporate Wyoming railings instead of Jersey barriers into the bridge replacement project.
The Bank of America plan includes getting a short-term, $15 million line of credit, which will give the board time to work out a permanent financing solution. It comes with a favorable rate of 1.3 percent, and by the time that loan is paid off in approximately two years, it should be time to start construction on the swing bridge.
Part of the terms of the line of credit will require GIBA to pay down the previous loan they had with the bank, for approximately $1.4 million. At the meeting the board discussed that when they get nearer to closing on the loan in the middle of February, Jim Cooper, executive director of the Bridge Authority, will be authorized to take that money and pay off the old line of credit, then give notice to proceed to Orion to start the fixed bridge project.
Orion could be on site as early as the first week of March.
“The really good thing about that is we can take it out of our own cash,” said Cooper. “We’re not borrowing money to pay off that loan.”
At the January 26 meeting, the Bridge Authority will present several financing options to the public, in the hopes of getting feedback. Board member David Hayes said he is looking forward to hearing from his friends and neighbors in regards to the bridge project.
“The only way to get a consensus on financing is to put the responsibility partially on the community,” he said. “They will be affected by this. If we don’t get that input, it’s the board’s responsibility to do what they think is best.”
Hayes said he was puzzled as to why more island residents haven’t turned out to bridge meetings in the past, when it’s such an important issue. He gave the example of the golf cart path scenario on the north end of the island, and how the residents who live on Cole Island came to voice their opinion. Hayes had supported the idea of putting in a path, but other board members did not.
“Had we not gotten the people from that island to come and support the golf cart path, I would have been voted down again on that. When they showed up, the board listened. When asked who was in favor of the project, they all stood up.
That’s how you get things done, with community involvement.”
Toll increases in the amount of $6 to $7 are options to obtain the necessary funding. Exactly when those toll increases will take affect needs to be determined as well.
Cooper said that in the past when it was time to increase the toll, they always implemented it in October, because it was the start of the fiscal year. He was surprised, though, by one of the handful of residents at the meeting who suggested they do it sooner.
“If we were to announce in May that we would raise the toll in October, it would give business owners and residents time to plan for that increase,” he said. “But one person in the audience suggested we do it during peak toll periods, like this March or April.”
Cooper also said while 2007 and 2008 were the highest traffic years, the two years following, 2009 and 2010, were the lowest. Numbers are slowly increasing, though.
“We may be turning a corner, and starting a more positive trend,” he said. “We had a one percent increase in November, a sevent percent increase in December, and now, in the middle of January, we’re up by about five percent.”
Finally, when asked whether tolls would ever go down again if they were raised to $7, Cooper said he wasn’t sure.
“There’s a lot depending on the financing vehicle, or vehicles,” he said. “If we went out for bonding, we would normally have to have funds set in place for 10 years, and would have to build up Escrow money.
That’s the biggest difference in the cost between borrowing with bonds and borrowing from the bank.
“Right now we have a coverage ration of 1.1, and we have to keep 10 percent more than what our anticipated debt is in reserve. But when you go out for bonding, you want to keep at least 1.5 percent in reserve. What we could do would be to pay the debt down and, at some point after 10 years, lower the debt amount. Then it might be possible to lower tolls again.”
Cooper said the best decisions made will be the ones that control both the costs of design/construction, and that raise the needed revenues in a manner that respects the opinions of all bridge constituents.
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