Manatee County Bonds Additional $140 Million for Infrastructure Projects – The Bradenton Times

by Dawn Kitterman

BRADENTON — This week, Manatee County Government shared on its social media accounts that it had finalized a $140 million line of credit with Wells Fargo to fund various infrastructure projects. County administration received approval to move forward with the bonding in a 4-2 vote by county commissioners on Oct.22.

“Exciting news for Manatee County,” the local government’s Facebook post began. “This funding will jumpstart key projects that enhance our infrastructure and make life better for residents…”

The post included a photo of County Administrator Charlie Bishop, Manatee County CFO Shelia McLean, and Commission Chairman Mike Rahn smiling. In the first 48 hours, the post received over 200 comments.

“Hope you all get voted out,” wrote one responder in the comments. “Maybe you shouldn’t look so happy taking out a loan,” replied another.

Several commenters left remarks regarding the commission’s previous decision regarding impact fees. One such example was, “Great, more debt for citizens. Developers should be paying higher impact fees to cover a lot of this.”

Few, if any, of the comments appeared to be favorable to the county’s announcement about the newest line of credit.

TBT reviewed public records related to the county’s outstanding bond debt over the years and found that from Fiscal Years 2014 to 2021, the county’s government non-self-supporting debt averaged roughly $115 million per fiscal year.

In FY2022, however, Manatee County government’s non-self-supporting debt rose to $301 million. For FY2024 to 2025—which includes the most recently finalized credit amount—the local government’s non-self-supporting debt crossed the half-billion mark, reaching $546,906,000.

While the non-self-supporting government debt has surpassed half a billion dollars during the most recent Fiscal Year, when the self-supporting debt of the Utilities Department and the Port Authority is included in the total, it raises the government’s current total debt to $959,206,000—nearly a billion dollars.

In government finance, “non-self-supporting debt” refers to debt that is repaid using general tax revenue, while “self-supporting debt” is debt that is repaid using generated revenue.

According to public records, the current total in self-supporting debt carried by Utilities is $378 million, and the Port Authority is carrying $34 million of self-supporting debt.

After the county’s social media posted on Tuesday about having finalized the most recent credit debt for infrastructure, Commissioner George Kruse shared the post to his campaign Facebook account and included a personal message.

“Save this post for your grandkids,” Kruse wrote in his post. “They can look at it when they finally pay off this debt.”

In his post, Kruse included that he did not support the decision to bond additional debt. When the item came before commissioners during an Oct. 22 BOCC meeting, he voted against it.

The item for the bond’s approval was placed on the meeting’s consent agenda—item 34. Kruse motioned to pull the item from consent, moving it to presentation before the vote.

During his opening comments on the item, Kruse told his fellow commissioners that with post-election changes in board members just weeks away and in consideration of previous decisions made by the current board that impact the local government’s revenue streams—such as votes to lower the millage and to adopt impact fees lower than the maximum—he felt the item should be opened for discussion. 

“We need to act upon the decisions this board makes,” Kruse said. “When you have kids, you tell them that there are consequences, and you have to live with those consequences.” 

Kruse continued, “These bonds allow us to avoid living with consequences—they don’t allow the county to avoid living with consequences, however.” 

During his comments, Kruse retold the timeline of the item. He reminded his colleagues that in September, the board authorized county finance staff to “assess the market” and to explore bonding options for the infrastructure projects—a decision made before the board voted to reduce the millage and before the county was impacted by multiple hurricanes resulting in recovery expenses.

“These bonds are going to cost us $4 million a year,” Kruse said. “Four million to float this. I don’t like the fact that we are floating more money when we are at such a level of uncertainty.” 

Kruse suggested that an alternative to the county taking on more debt for infrastructure projects would be to “make hard decisions” and more closely examine the county’s hundreds of approved Capital Infrastructure Projects to determine priorities. 

Manatee County Chief Financial Officer Shelia McLean responded to Kruse’s remarks, clarifying that two of the six projects that the additional bonding would go toward are major roadway projects that are already “in motion.” The two projects already underway are Upper Manatee River Road and the 44th Avenue East extension project. 

The additional projects that the bonding funds would be used for are the 51st Street West extension, 54th Avenue West to El Conquistador project, the Lakewood Ranch Library second floor, and County Club East Baseball Park improvements. 

While McLean said she understood Kruse’s position about identifying funds to direct to certain projects in question without securing more debt for their completion, she added that the 44th Avenue East project might not be so simple to “rearrange.” 

“It is going to have to take some rearranging,” explained McLean. “It will require consulting with our experts at public works… something would have to be pushed over, or moved around, or pushed out into other years.” 

Commissioner Kevin Van Ostenbridge offered that while he “partly agreed” with Kruse’s comments, he had concerns that not approving the $140 million in bonding would delay necessary projects causing the government to “move slower.” 

Kruse conceded that projects “with shovels in the ground” needed to move forward, but he repeated his previous suggestion that projects approved but not yet broken ground should be examined for priority and possible rearrangement. 

Van Ostenbridge disagreed that securing the bond would restrict the next board from prioritizing how the funds would be spent and highlighted that several of the projects earmarked for the additional debt funding are “shovel-ready” projects that would not be subject to deferment or “rearranging” as Kruse had proposed. 

“I see what you’re saying,” Van Ostenbridge told Kruse, “but in the grand scheme of things, it is a small amount—which, I don’t know at what point in my life these millions of dollars became small amounts—but it’s a small percentage of this that can also be switched out by a later board at a later time.” 

CFO McLean clarified that while there may be some room for rearranging or prioritizing certain projects over others, there are restrictions as to what types of projects would qualify for substitution. 

Commissioner Amanda Ballard stated that she agreed with the points raised by Kruse, but she questioned whether delaying the bonding could present a negative impact in terms of future interest rates. 

Commissioner Mike Rahn asked McLean to clarify the conditions of the credit agreement, specifically whether there were fees assessed for unused funds.

“Commissioner Kruse mentioned that on this line of credit,” Rahn prepositioned his question, “He stated that if it’s for $140 million and we use only $100 million—would we still be paying on that $40 million?”  

McLean confirmed that there is such a fee but added that Wells Fargo, the lender from which the county would secure the bonding, offered the lowest fee among the eight proposals received by the county. 

“We are trying to balance the quarterly draws,” McLean explained, “so that we will have the lesser of the unused fees.” 

A memo of recommendation furnished by the Public Resources Advisory Group (PRAG), the county’s financial advisor, showing an estimated draw schedule was attached to the meeting agenda. 

The recommendation was for the county to draw roughly $35 million from the credit line before the close of 2024, to draw roughly $37 million in the first few months of 2025, to draw another (approximate) $62 million between April 1 and June 30, 2025, and a final draw of roughly $5.7 million between July and end of September 2025. 

According to the memo, there are no pre-payment premiums or penalties on the bond, but a termination fee is payable equal to the undrawn fee multiplied by the unused portion if the credit line was terminated before reaching its first year of servicing. 

Rahn also asked McLean to confirm that a decision to approve the $140 million bond would not negatively impact the county’s debt service coverage or bond rating. McLean confirmed that there would be no impact on either. 

Following Rahn’s questions to the CFO, Van Ostenbridge again put himself on the board to speak on the matter. 

“Every once in a while, you surprise me, George,” Van Ostenbridge said, directing his comments to Commissioner Kruse. “I’m a little surprised that the board would think—and you guys do whatever you want, I’m not going to be here—but that you would delay infrastructure projects, particularly road projects, but infrastructure projects in general.” 

Van Ostenbridge continued, “Administration went full-throttle to get those baseball fields ready, and this would certainly delay them by another year.”

Summarizing his position, Van Ostenbridge repeated his earlier points about future flexibility in how the line of credit could be spent and which projects could be prioritized by a future board. 

“I’m a little surprised at the pushback,” Van Ostenbridge said of Kruse’s arguments. “I just don’t think that delaying infrastructure and road projects is going to be well received.” 

Before the item was put to vote, one more commissioner weighed in on the discussion. 

Commissioner Jason Bearden told his colleagues that he believes the economy is “a bubble” and that it could burst in the coming years. 

“We don’t know what’s going to happen,” said Bearden. “After the election, something is going to happen. I can just feel it. I think that it’s just going to be that interest rates are just going to skyrocket.” 

“We are due a bubble burst somewhere,” he added. “Whether it’s in the stock market or interest rates, I don’t know… Interest rates are lower right now, because, yeah, why? Because an election is coming up.” 

Given his concerns about interest rates, Bearden said the county should secure whatever funding it could under current rates. He also surmised that if interest rates went down, the county could simply refinance the debt. 

Commissioner Kruse, who holds a Bachelor’s in Financial Management and a Master’s of Business Administration, pushed back on Bearden’s comments. 

Kruse argued that if interest rates were to “skyrocket,” as Bearden alleged, then the debt service on the bonded credit would also rise as the rates are adjusted daily. A scenario that would leave local taxpayers responsible for repaying the debt at a higher rate, said Kruse  

“If the true concern is that interest rates are going to skyrocket,” offered Kruse, “the last thing you want to do today is bond variable rate debt.” 

Offering his position on the interest rate debate between Kruse and Bearden, Van Ostenbridge commented, “The rate of inflation versus the rate of interest speak for themselves.” 

“If you were to delay,” Van Ostenbridge continued, “the rate of inflation would kill you versus what you might make up off of an interest rate.” 

Following the board’s discussion, Commissioner Van Ostenbridge motioned for approval, which was seconded by Commissioner Ray Turner. When put to a vote, the item to approve the bonding passed 4-2, with Commissioners Kruse and Ballard voting in opposition. 

To hear all commissioner and staff comments in full from the Oct 22, 2024, BOCC meeting on consent item 34, “Adoption of Resolution R-24-202 authorizing the issuance of the Revenue Improvement Note in the amount not to exceed $140,000,000,” click the video below.