A General Obligation (G.O.) Bond is a form of debt obligation that provides local government with funds for major capital improvements. Miami Beach G.O. Bonds are backed by the full faith and credit of the city, which means the city is obligated to pay back the bonds plus interest by pledging its ad valorem taxing power. As such, the city uses a portion of its property tax revenues to repay the bonds in the form of annual principal and interest payments.

G.O. Bonds are sold to investors and the proceeds are used to pay for capital projects that fulfill a public interest and need. Bond funds cannot and will not be spent on regular municipal operations. Such expenses are paid for by annual revenues (i.e. property taxes, resort taxes, etc.) that support the city’s General Fund.

The Miami Beach G.O. Bond for Arts & Culture totals $159 million, which is allocated to 21 arts and culture projects throughout Miami Beach. This program will consist of 2 tranches, 3 years per tranche as follows:

• Tranche 1: $101,700,000
• Tranche 2: $57,300,000

In November 2022, Miami Beach residents voted to approve the $159 million General Obligation Bond Program for Arts & Culture, with an outstanding support rate of approximately 65%.

The city dedicates a portion of its property tax revenues to repay debt incurred for bond-funded capital improvements. $159 million is borrowed from residents in two separate phases rather than all at once to allow property tax rates to increase over time. The full amount gets financed over the course of the 6-year program as each of the two tranches are issued in increments of about three years. As the debt service tax rate is gradually phased in, the associated tax rate is adjusted each year.

The City of Miami Beach’s financial strength and stability has been recognized by independent credit rating agencies (Standard & Poor and Moody’s) for maintaining outstanding scores of “AA+” and “AA2”. The pricing of the ACGO bonds generated tremendous investor interest, with $398.5 million in orders for $101.7 million in taxable and tax-exempt bonds. This solid demand enabled the City to reduce yields in the final pricing. The true interest cost for the bonds is 4.45% for Series 2023A Tax-Exempt and 5.27% for the Series 2023B Taxable.

The G.O. Bond Program for Arts & Culture implementation plan is being overseen by a small team of designated city staff to deliver the approved projects as promised to the Miami Beach community. There is a total of 46 projects in 21 facilities. While most of the projects are being managed by city departments to plan, design, and construct the projects from start to finish, some projects will be managed by the respective cultural institution and will receive funds through a grant. A citizen-led G.O. Bond Oversight Committee reviews each step of the implementation process and the elected Mayor and City Commission officiates milestones. An Inspector General’s Office ensures that money is spent properly and information is kept transparent.

See the G.O. Bond Program Org Chart!!