City Manager's Annual Report 2017 | A Year In Review | Page 49

F I N A N C I A L H E A L T H

2.
DEBT
REDUCTION

| 49
ENTERPRISE DEBT | 48%
SPECIAL ASSESSMENT | 18%
$820,310,000
SEPTEMBER 30, 2017
PROJECTED
GOVERNMENTAL | 19%
ECONOMIC DEVELOPMENT | 15%
The City’s total outstanding debt
has decreased each year since
2010. The City’s overall debt has
been reduced by more than 21
percent since its peak eight years
ago.
Collective bond refinancing
efforts and principal payments have
reduced the City’s long-term debt
by over $222,000,000. an economic development impact
fee, a one-time charge on new
construction.
In order to understand how the City
accomplished this reduction, it’s
important to see how the debt is
allocated. A majority of the City’s
debt is “enterprise debt,” where the
proceeds are used to provide capital
improvements, such as stormwater
and water sewer utility systems. This
debt is necessary for the City to run
its state-of-the-art utility and keep
its streets from flooding. This debt
is paid back with user charges, not
the City’s general fund or property
taxes. In 2017, enterprise debt made
up $436 million, or 48 percent of the
overall debt. The City Council has made debt
reduction one of its highest priorities,
and the Council has achieved it by
paying down the principal in some
funds and refunding many of our
bonds. For example, in March 2017,
the City Council took significant action
and paid down millions of dollars in its
economic-development related debt
-- while also increasing the amount
of money required to be retained
in the City’s contingency fund. In
two separate actions, the Council
unanimously
took
steps
toward
formally increasing its undesignated
reserve requirement, along with
agreeing to pay off its City Center and
Community Redevelopment Agency
special assessments.
The smallest portion of the City’s
debt
is
related
to
economic
development projects of the past.
Of those, the debt for the Torrey
Pines Institute is being repaid with
While those two categories are the
largest and smallest portions of the
City’s overall debt, the chart above
shows the breakdown of the rest of
the City’s categories of debt.
In 2017, the Council identified the
level of reserve that the City will
budget each year to be held for
unforeseen issues and emergencies
like a hurricane, building repairs
or an economic downturn. The
new policy sets the General Fund’s
Undesignated Reserve at 20 percent.
This new policy increased the
undesignated reserve requirement
from 17 percent to 20 percent of
the General Fund expenditures. All
other operating funds will use a 17
percent policy.
The City Council approved issuing
approximately $23 million of Special
CHANGES IN LONG TERM DEBT
2013
2014
2015
2016
2017
Obligation
Revenue
Refunding
Bonds.
This
means
the
City
refinanced the City Center Special
Assessment District Bonds with a
principal buydown of $7.3 million.
As a result of this refinancing and
buydown, the City will save an
estimated $15.76 million in total
debt service over the next 18 years,
cutting out nearly $8.5 million in
interest payments. These savings
will free up a combined $761,000
per year for the City and the CRA.
$941,424,945
$922,624,274
$882,087,934
$862,685,000
$
PAID $
$121,114,945
$820,310,000
CITY OF PORT ST. LUCIE

A N N U A L R E P O R T 2017