CINCINNATI, OH (FOX19) - Hamilton County commissioners may have a way to pay for the stadiums another year without having to raise property taxes. Commissioners are considering a proposal to get a $9.4 million credit from BBVA bank.
The money is required for a 2013 Reserve Fund payment. More than $9 million has already been set aside for the fund which is required to contain $27.6 million by the end of 2014. The $9.4 million is in addition to a debt service payment the county pays monthly. The loan will cost $200,000 taxpayer dollars plus another $80,000 to $90,000 in upfront costs.
"Saving $9 million next year is the way to go," commissioner Todd Portune argued.
"At this point I'm cautiously optimistic that it looks like a good path to do," echoed fellow commissioner Chris Monzel.
"It saves us from having to take nine million in cash from the Sales Tax Fund and putting it aside," commissioner Greg Hartmann said. "It's obviously a stressed fund already."
Hartmann says the loan replaces a surety previously in the hands of a bond assurance company called Ambac. Portune says that company has since gone "belly up".
Commissioners argue the loan would help them avoid digging up any more one-time funding sources like the sale of Drake Hospital.
The commissioners recognize, however, that the loan will not solve all of the stadium fund woes.
"It's a short term solution," Monzel recognized. "But at the same time, it's going to take a while to find a long term fix."
"It gives us another year to work at a long term solution," Portune said.
The other option in front of commissioners was to pay cash into the reserve fund, an option commissioners say would have forced them to go to taxpayers for more money.
"We're not going to raise taxes," Monzel said. "We're going to have to come up with other ways to get through this issue until the economy starts turning around and things start going in the right direction."
"If we start breaking promises that have been made, good luck to the county getting any other matter in front of the public favorably voted upon," Portune argued. "The ripple effects of continuing to invade the property tax rollbacks are significant."
Some question, however, if the preferred plan would create its own ripple effect.
"This is not really kicking the can down the road because we're replacing a surety that we once had," Hartmann argued.
"I don't think it's kicking the can down the road," Monzel said. "Honestly, as I said last year, we have to take this year by year."
"To the extent that it would, I would view it as creating a problem for myself which I don't think it is. I mean, I'm running for reelection next year," Portune said.
Commissioners say they are also expecting revenues from the Banks project and the casino to lessen the stress on the stadium fund in future years.
While the initial surety from Ambac guaranteed the entire Debt Service Reserve Fund requirement, BBVA is only committing to the $9.4 million for one year. Another $8.8 million will come due in 2014. If the county does not continue its commitment with the bank into 2014, it will have to begin paying back the $9.4 million loaned over a four-year period.
Before the commissioners can vote to secure the loan, the county has to make sure its other lenders sign off. The county administration says they plan to have the final commitment ready for commissioners to vote on sometime in September.