Florida Boomtown Borrows $65 Million to Help Fix Bursting Jail

(Bloomberg) -- The county just north of Tampa, Florida, is one of the fastest growing in the US and the influx of new residents is causing a problem — its local jail is bursting. 

Pasco County — located on Florida’s Gulf Coast — borrowed $65 million from municipal bond investors this week to help finance capital projects including an expansion of its local correctional facility to add about 500 new beds, according to bond documents. A portion of proceeds will also be used to fund improvements to local parks. 

The new Pasco County Corrections Center broke ground last year and construction is expected to be completed in the spring of 2026. The project comes after surging population growth in the area. The county saw a 27% increase in residents over the past decade, with growth accelerating the last several years after slew of office relocations and sports facilities made it a regional center for jobs. 

Pasco County’s growth spurt comes as companies have relocated or expanded in the area, notably Mettler-Toledo International Inc. and Raymond James Financial, which is building a new office campus, according to bond documents. Only Polk County — located just west of Pasco — and Montgomery County, Texas, saw more domestic migration last year, according to data from the US Census Bureau.

A rapid population boom often stresses local infrastructure and services, leading the area to invest in new roads, schools and community developments to support the influx. Jail facilities are no exception. Pasco’s current correctional center is overcrowded, Mike Carballa, the county administrator, said at last year’s groundbreaking. 

“We can’t just go and put a ‘No Vacancy’ sign up, we have to house these folks,” he said. The current facility was built in the early 1990s to house about 1,100 inmates, local news reporting shows. Pasco County currently has an average-daily population of more than 1,500, according to a July report from the Florida Department of Corrections. 

It’s the latest in a wave of new jail construction projects across the US driven by aging infrastructure, overcrowding and unsafe conditions. 

To be sure, Pasco’s jail expansion doesn’t mean the area is unsafe. With about 20 reported crimes per 1,000 residents each year, the county’s crime rate is among the lowest nationally, according to CrimeGrade data. 

S&P Global Ratings gave the bonds an AA grade, the second-highest available, citing Pasco County’s population and tax-base growth contributing to “stable budgetary performance and strong pledged revenue that supports these bonds,” according to analysts led by Victor Medeiros.

“While we acknowledge the strong growth prospects, population increases have pressured officials to provide additional services, which could challenge financial operations,” wrote Medeiros. 

In 2018, voters approved more than $130 million of bonding for the project in Land O’ Lakes, Florida, and the county had previously sold debt to finance it, bond documents state. 

The deal priced on Thursday in a negotiated transaction. Securities priced with 5% coupons across maturities with yields ranging from 2.59% for debt maturing in 2026 to 4% for those due in 30 years, according to data compiled by Bloomberg. 

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