Debt management policy adopted on first reading

Debt management policy adopted on first reading

Published on October 22, 2024

The City's debt management policy, a key document that provides guidance on future borrowing to pay for North Port's infrastructure needs and emergency repairs, was adopted by the City Commission on first reading Tuesday.

An ordinance creating a Debt Management Advisory Committee, made up of five North Port citizens with experience and background in capital projects, financing or governmental operations, was also passed by the Commission on first reading. Both items were approved unanimously and will come back to the Commission for final adoption on Nov. 4.

The Commission has approved a referendum for the Nov. 5 ballot asking voters to amend the City Charter to allow the commission to issue debt to respond to emergencies or pay for some safety and public health projects. While state law limits the ballot language to only 75 words, the debt policy provides detailed guidelines and guardrails for how the City can responsibly leverage debt to pay for needed infrastructure or emergency repairs.

The current draft of the debt management policy can be viewed online at NorthPortFL.gov/Referendum. The website includes impartial information about the City Charter and the City's unfunded infrastructure needs, as well as a list of Frequently Asked Questions.

Why it matters

The objectives of the debt management policy are to:

• Ensure fiscal sustainability
• Evaluate debt affordability
• Promote transparency, accountability and reporting compliance
• Structure debt efficiently
• Utilize appropriate debt instruments
• Preserve and enhance creditworthiness and investor confidence
• Support capital improvement projects
• Ensure legal and regulatory compliance

The proposed policy was modeled after those of other successful municipalities and the Government Finance Officers Association's best practices, with input from the City's independent financial advisor.

Referendum facts

North Port is the only city out of 411 in the state of Florida whose charter prohibits the borrowing of money or incurring any debt without voter approval, according to research by City staff and outside consultants. Every other Florida city and county routinely relies on borrowing - in the form of bonds, loans, leases or other borrowing instruments - to pay for growth and infrastructure needs and keep their community going. In North Port, these projects could include roads, bridges, water control structures or water/wastewater infrastructure.

The charter amendment would allow the City to issue debt payable from funds other than property taxes without voter approval in response to declared emergencies or for safety and public health projects of $15 million or less per project.

The proposed charter change will only apply to revenue bonds that are paid back by dedicated revenue funds, not property taxes. Any borrowing or incurrence of debt would need to be approved by a majority of the City Commission in at least two public hearings.

General obligation bonds - those paid back using property taxes - would still need to be approved by voter referendum in a general election on an individual basis. General obligation bonds are typically used to pay for large-scale infrastructure projects, such as a police headquarters.

For more information, visit NorthPortFL.gov/Referendum.

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