Longboat gets court approval for neighborhood utilities project financing

The bonds Longboat Key plans to use to finance its project to bury utility wires in Longboat Key neighborhoods received legal approval on Tuesday from the 12th Judicial Circuit Court.

The town seeks to borrow $23 illion for the project,  a sum to be repaid by affected residents through non-ad valorem taxes. But before that could proceed, a legal review  called a  bond-validation hearing had to be held.

A Circuit Court judge approved the terms of repayment and the validity of town approval by referendum for the debt as legally sound. 

This action protects the town from the threat of a lawsuit that could have the potential to stop the project after it has begun.

Chris Roe, the bond counsel for the town and attorney with Bryant, Miller, Olive, said the judge is ruling on the legality of the endeavor.

“The court’s role isn’t to determine whether or not it’s a good policy decision, or whether it should be funded in a different way,” Roe said. “The court’s role is a legal analysis for ‘does the town have the legal foundation to do this.’”

The town “estimated [the cost of the project] conservatively” in its application seeking bond validation, Roe said. The project may cost less than expected by the time it’s complete.

“Once the town has the judicial validation to issue the bonds, it can proceed full speed ahead,” Roe said of the project. “You want to know before you incur the bond indebtedness that you have the legal authority to do it.”

A bond for a similar price for a project to put all Gulf of Mexico Drive wires underground was validated in 2016 by the court.

Town voters approved two referendums in the past couple years to allow the town to tax its residents to put all island overhead wires underground for the sake of safety, reliability and improved aesthetics.

The project is scheduled to finish by 2021. Work is scheduled to begin this year.

“It gives the bond issuance a sense of finality,” Roe said of the bond validation. “When the town goes to issue the bonds, the lender will have a sense of security that no one can challenge the credibility.”