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Gulf County commissioners approve tax-exempt bank loan approach for road program, set Sept. 29 funding target
Summary
Commissioners approved moving forward with a 25-year, tax-exempt bank loan as an alternative to a traditional bond to finance road projects, citing lower issuance cost, quicker closing, and flexibility. The board authorized staff to negotiate interlocal agreements with municipalities.
Gulf County commissioners voted on Aug. 7 to proceed with a tax-exempt bank loan rather than issuing a traditional municipal bond to finance the county road program, aiming for funding by late September.
Why it matters: The county expects about $9.5 million in new money under the proposed financing. Commissioners said the bank loan offers lower upfront costs, quicker access to funds and more flexible call/refund terms than a conventional bond.
County staff described the chosen structure as a 25-year tax-exempt bank loan with lower issuance costs and faster closing — staff said the county could close in roughly three months and aimed to fund on or before Sept. 29. Finance staff emphasized the deal was callable sooner than older bonds and carries a fixed rate for the 25-year term.
Staff and commissioners discussed municipal participation and formulas for distributing money to cities. County staff said the city of Port St. Joe would be entitled to about 21% of the new money under the proposed interlocal formula and that another municipality referenced in the discussion would receive about 10%. Commissioners authorized county staff to negotiate interlocal agreements with both cities so each could select local roads for funding; the county would bid, contract and inspect work.
The board approved a motion to accept the bank loan approach and to allow county staff to negotiate interlocal agreements with the municipalities. Commissioner Mark Pritchard moved; the motion passed 5–0.
County staff said a firm pre-closing would occur in late September and that the financing is structured so the county can refund higher-interest outstanding debt in stages, subject to certain non-callable provisions on a taxable tranche. Staff estimated the new-money portion at about $9.5 million and said the county’s maximum annual contribution to debt service would not exceed $1.3 million under the proposal.
Next steps: Staff will finalize the bank loan documents, pursue the Sept. 29 funding target, and negotiate interlocal agreements with the cities so municipal roads can be included if the cities sign on.
