ATLANTA Brevard County, Fla., which was recently the site of a bitter taxpayers' revolt over a certificates of participation deal, has drafted a charter that would set stringent limits on debt issuance.
If language approved last Friday by the county's Charter Commission is approved in an upcoming referendum, Brevard would place a $1 million cap on lease-purchase financings and a $15 million limit on tax-supported bonds that have not been approved by voters.
"Our intention is to put non-ad valorem bonds issued by the county on the same footing" with general obligation financings, William H. Patterson, one of the commission's 15 members, said yesterday. He said he expected the charter to be presented to county voters at the Nov. 8 general election.
In Florida, all GO bonds for local governments must be approved by a voter referendum.
Patterson acknowledged that the provisions on debt in the proposed charter were spurred by a controversy over a government center built in Viera, Ha., that was funded by $23.9 million of certificates of participation sold in 1989.
In March 1993, the county's voters decided by a narrow 52% majority to maintain county offices in the Viera complex and continue appropriations for the COPs issue.
The possibility that the county might repudiate the COPs had deeply troubled many municipal market participants, who warned that such action would effectively shut the county out of the credit markets.
"The outcry and public suspicion over the government center was definitely a motivating factor in including these provisions in the charter," said Patterson, who noted that the debt limit items were included with little debate.
County commissioner Scott Ellis said yesterday that he expects the county commission to act soon to place the proposed charter before voters at the Nov. 8 election. He said the commissioners would not change the wording of the proposal.
"Personally, I would have liked to have seen tighter restrictions [on non-GO debt issuance], but the charter is better than what we have now, which is no restrictions," Ellis said.
In addition to the debt provisions, the proposed charter will give Breyard the power to pass its own local laws and to restructure and limit its government by referendum.
Other aspects of the charter include provisions permitting recall of county-elected officials and nonpartisan elections in which candidates can run for office without affiliating themselves with a political party. The recall provision would allow voters to remove elected county officials from office following a petition drive and public vote.
According to section 5.3.1. of the proposed charter, new non-ad valorem debt could not be issued "in an amount which, individually or in combination with other issues for the same purposes authorized within the preceding two years, exceeds $15,000,000" unless it is authorized by voters."
Specifying the limits on lease financings, the proposed charter states in section 5.3.2 that "lease purchase instruments of indebtedness shall be limited to the acquisition of equipment and other tangible property having a value of not more than $1,000,000 per individual contract and shall not pledge, directly or indirectly, any ad valorera revenues of the county."
The charter proposal carves out exceptions to the debt cap, however, specifying that the limitations do not apply to "projects mandated by judicial decree, self-liquidating projects, utility or other enterprise funds, road projects funded by gasoline taxes, or to the refinancing of any existing instruments of indebtedness or certificates of participation to reduce the cost of debt service."
In addition, the charter permits the ceilings on issuance of non-GO debt to be raised in accordance with increases in a "generally accepted consumer price index."
Approval of the charter would rescind a vote in May 1993 by the county commission not to sell any more certificate of participation financings.
At the time, the five-member commission rejected in a 3-to-2 vote a proposed lawsuit against disclosure counsel for the government center COPs deal. The officials also rejected by the same margin a proposal to ask the Florida Supreme Court to review its decisions affirming the legality of COPs in the state.