The mayor says financing a $35 million city grant and a $40 million bridge loan is a wise use of city debt.
Jacksonville Mayor Lenny Curry signed legislation Aug. 5 that commits a $70 million city contribution and a $40 million bridge loan to the Jacksonville Port Authority’s dredging project in the St. Johns River.
“This bill represents a significant win for our city, the growth of our local economy, and our reputation as a logistics hub for the Southeastern United States,” Curry said at a virtual news conference that included the signing.
City Council voted 17-0 on July 28 to authorize Ordinance 2020-377, which includes a $35 million grant and the bridge loan to be used in the final contract for a $484 million, 11-mile portion of the Jacksonville harbor deepening project.
Curry’s signature commits the city to another $25 million grant in the fiscal year 2020-21 budget with the option to increase that amount by $10 million if needed, according to a summary filed with the bill.
JaxPort plans to deepen the 13-mile shipping channel from 40 to 47 feet from the Atlantic Ocean to the Dames Point Marine Terminal. The project is divided into four segments.
The city funding approved by Curry will be used for the leg of the project through the Blount Island Marine Terminal, which is east of the Dames Point terminal.
Dredging began in February 2018 and is anticipated to be completed in 2023, two years ahead of schedule, based on continued funding.
The new depth can accommodate the large post-Panamax ships from Asia passing through the enlarged Panama Canal.
Curry told reporters Aug. 5 that he believes borrowing to finance the local contribution for the dredging is a good use of the city’s debt capacity, despite an uncertain revenue outlook because of the COVID-19 pandemic.
“I’ve had five budgets. All five of my budgets have reduced the debt, “Curry said. “We have been fiscally responsible and continue to be in this budget. Our credit rating is strong, so we’ve used debt wisely. But most importantly for taxpayers to know is every single year we’ve paid down debt that we inherited, frankly, when I got here.”
City CFO Patrick “Joey” Greive told Council members before the bill passed that the $35 million grant would be debt-funded by bond issuance before Oct. 1.
Greive said the $40 million for the bridge loan will be financed by the city’s commercial paper program, a short-term liquidity loan option.
The port will repay the loan with interest using $46.1 million awarded to JaxPort by the state of Florida.
An agreement filed with the bill requires the port to pay for any project cost overruns.
Curry said he is not concerned that the river dredging will lead to environmental impacts, despite warnings from local environmental groups.
A federal judge ruled in May the dredging can continue and rejected arguments made in a lawsuit filed by the St. Johns Riverkeeper that deepening the channel would impact wetlands and the increase in salinity would harm ecosystems.
The Riverkeeper argued that under the U.S. Army Corps of Engineers assessment, the project will increase water levels up to 8.4 inches in some areas during 100-year storm events. The Army Corps is the developer.
Army Corps Biologist Mike Hollingsworth said July 20 that water level rise would impact “discrete areas” like Blount Island Terminal at JaxPort, the mouth of the Trout River and the Timucuan Ecological & Historical Preserve.
Hollingsworth’s assessment does not expect increased flooding in areas impacted by Hurricane Irma in 2017.
Curry supported the Army Corps’ environmental assessment.
“I’m confident that the environmental impacts have been mitigated. There will be additional mitigation, I’m open to that, “Curry said. “We have the federal, state and now local funding. It’s time to get this done and create jobs.”