Part 2 Q&A: Pros & Cons of Florida's additional homestead exemption:
Today's entry: Good morning Brian, what are your thoughts on which way to vote for the $25,000 increase on homestead exemption? Our county tax collector burned us last election, along with Lake Worth's $40 million golden street bond. Thanks again for everything you do for "We the People".
Bottom Line: In the first part of the Q&A I addressed the homestead exemption expansion. Now for the latest on the Lake Worth Bond issue...
Like you I opposed the bond issue last fall. That being said it overwhelmingly passed and will move forward. We received some of the best possible news we could have last week. Here's an excerpt from Lake Worth's update on the bond:
On May 8th, 2017 the City of Lake Worth’s 2017 General Obligation Bonds received an initial underlying rating of A1 from Moody’s Investor Service (the bond credit rating business of Moody’s Corporation) followed, 24 hours later, by a rating of AA- from Standard & Poor’s Financial Services. The General Obligation Bonds are the financial instrument being used to pay for the $40 million Neighborhood Road Program following last November’s successful referendum.
Moody’s indicates that “the A1 rating reflects the city's above average tax base that continues to recover, adequate reserve and cash positions, low debt burden, and elevated pension liabilities.” Standard and Poor’s indicates that an obligor with an AA rating “has very strong capacity to meet its financial commitments. It differs from the highest-rated obligors only to a small degree.” An A1 / AA- rating places the City of Lake Worth’s bonds as upper investment grade with low credit risk which will allow for a lower interest rate to be set upon them at the time of sale (expected June 5th, 2017).
The $40 million will be drawn down in two installments, to shield the City from excessive interest liability. This, the 2017 series, being valued at $21.2 million will leave $18.8 million to be drawn down as the Neighborhood Road Program progresses.
So given that it's moving forward the news that the debt will be a respectable investment grade, lowering the interest liability, and that the city will draw down the money as needed to limit interest expense is about the best news would could hope for. So fingers crossed that the road program is well managed and successful from here...
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