What if we saved instead of borrowing?

Melbourne Beach owes little: $469,000 of loans at the end of its last audit, and its stormwater loan was paid off in July 2026. Now it is asking voters whether to borrow $5.0 million for stormwater and roads. This page lays out the arithmetic of borrowing and of saving, using the town’s own numbers. Updated 2026-10-06.

Melbourne Beach voters decide the bond on November 3, 2026. This site takes no side. It shows the town’s own figures, the arithmetic both ways, and the town’s own reasons — and opens no vote on the question.

The $5.0 million question, both ways — the next round, not the last one

The ballot asks to borrow up to $5,000,000, repaid over up to 20 years from property taxes. The town estimates the cost at 0.53 to 0.70 mills a year — $131 to $175 a year on a home with $250,000 of taxable value. On today’s taxable value ($725,977,934), that is about $385,000 to $508,000 a year.

Borrow: about $385,000–$508,000 a year for 20 years is $7.7–$10.2 million in all at today’s values — so roughly $2.7–$5.2 million of it would be interest. The town hasn’t said what interest rate its estimate assumes (Docket #5).
Save first: setting aside the same $385,000–$508,000 a year would reach $5.0 million in about 10 to 13 years, if interest earned only keeps up with rising construction costs. Nothing gets built until then.
Use savings: the town held $5.7 million in its bank accounts on July 31, 2026, and its General Fund had $3.5 million unassigned — 78% of a year’s spending. The town says it wants to keep reserves as security “against uncertainties such as hurricanes.”
The town’s case for borrowing, in its own words: several needs “can no longer be deferred,” costs rise every year a repair waits, and a bond “spreads the costs to all who will benefit” over the 15–25 year life of the projects.
If the bond fails, the town says the Commission would “revisit the project list, pursue an alternative financing mechanism or fund projects incrementally through the annual operating budget.”

Sources: Town of Melbourne Beach — General Obligation Bond page and two-page fact sheet, estimated tax impact and FAQ · Town of Melbourne Beach FY2027 Final Budget, PDF pp. 22–23 · Town of Melbourne Beach Financial Statements, September 30, 2025 (audit), pp. 6, 34

“Invest it and borrow against it” — why counties can’t, and who can

Wealthy people borrow against their stocks so they never have to sell them and pay capital-gains tax. Governments pay no income tax, so that part doesn’t apply. What’s left is a bet: that investments earn more than the loan costs.

Texas law lets a county invest only in government-type securities, bank CDs, and funds “invested exclusively in obligations approved by this subchapter” (Gov’t Code §2256.014). No stocks.
Arkansas law limits county and city spare cash to securities “having a maturity of not longer than five (5) years,” bank CDs, pools, and repurchase agreements (§19-1-504). No stocks.
Florida law lets a town without a written investment policy hold only the state pool, top-rated money market funds, bank deposits, and U.S. Treasuries. With a written policy that puts “safety of principal and liquidity” first, it may add “other investments authorized by law or by ordinance” (§218.415). Stocks are not on the default list.
Federal law won’t let tax-exempt bond money be invested at a higher return than the bond pays; extra earnings go to the U.S. Treasury (26 U.S.C. §148).
The warning: in 1994, Orange County, California used borrowed money to stretch a $7.6 billion investment pool to more than $20 billion. It lost about $1.7 billion and filed for bankruptcy on December 6, 1994 (SEC order).
The version that works is run by the state: approved Texas school bonds are “guaranteed by the corpus and income of the permanent school fund” (Education Code §45.052), so districts borrow at top-rated rates — borrowing against investments, with a state-sized fund behind it (texaspsf.org).

What this doesn’t show — the honest limits

Saving first means paying for years before anything gets built. Borrowing gets the building now.
People who move here later use a building they never saved for. Spreading the cost over the years people use it is the fair argument for bonds.
A growing pot of money has to survive many elections without being spent on something else.
Money left in residents’ pockets while a county borrows isn’t worth nothing to them.
All figures are in dollars of their own year, not adjusted for inflation. Only the bonds listed above are counted.

Market returns: Aswath Damodaran, NYU Stern — Historical Returns on Stocks, Bonds and Bills (histretSP.xls), retrieved 2026-09-26 — data page. Calendar-year returns. stock = S&P 500 including dividends; tbill = 3-month U.S. Treasury bill; tbond = 10-year U.S. Treasury bond. Returns run through 2025; 2026 is counted with no market growth. This page computes and cites; it doesn’t recommend a plan. Spot an error? Report it.