Harrison County explores bond options fueled by Gulf of Mexico Energy Security Act revenue

The Harrison County Board of Supervisors convened on February 3, 2025, to discuss significant financial matters related to the Gulf of Mexico Energy Security Act (GOMESA) and its implications for local funding. The meeting featured a detailed presentation on the revenue streams generated from offshore oil and gas drilling, particularly focusing on how these funds are allocated to coastal counties.

The discussion began with an overview of GOMESA, established in 2006, which allows for oil and gas drilling in specific areas of the Gulf of Mexico. The act was designed to ensure that coastal states receive a share of the revenues generated from these activities. The speaker emphasized the importance of understanding the flow of these funds, which have been a consistent source of income for Harrison County.

Key points included the breakdown of revenue distribution: 50% of the first billion dollars goes to the federal government, 37.5% to states and counties, and 12.5% to the Land and Water Conservation Fund. Harrison County has received approximately $4.08 million in recent years directly from these revenues, bypassing state allocation processes.

The presentation also highlighted the volatility of these revenue streams, which are influenced by factors such as oil prices and federal drilling policies. The speaker noted that while the revenue from lease auctions has decreased, royalty revenues have become more stable over time. This shift has prompted local governments to consider issuing bonds secured by GOMESA revenues to fund various projects, including coastal restoration efforts.

A significant portion of the meeting was dedicated to discussing potential bond issuance strategies. The board explored the implications of issuing bonds based on GOMESA revenues, including interest rates and repayment structures. The speaker indicated that while these bonds typically carry higher interest rates than general obligation bonds, they do not affect the county's overall debt capacity.

The board members expressed interest in structuring the bonds conservatively, particularly in light of future coastal restoration needs. The discussion concluded with a consensus to pursue a bond issuance plan that would allow for flexibility in funding while ensuring compliance with federal regulations governing GOMESA funds.

Overall, the meeting underscored the critical role of GOMESA revenues in supporting local initiatives and the importance of strategic financial planning to maximize these resources for Harrison County's future needs.