TO: Honorable Mayor & Members of the North Port Commission
FROM: A. Jerome Fletcher II, ICMA-CM, MPA, City Manager
TITLE: Discussion and Possible Action Regarding Charter Amendment Language Related to the City’s Bonding Authority.
Recommended Action
Discussion and possible action regarding Charter Amendment language related to the City’s bonding authority.
Background Information
The following provides the motions approved by the City Commission during their Regular Meeting held on June 11, 2024, as well as a status update for each directive:
Ø Motion One: To direct the City Manager to bring back a draft Debt Management Policy prior to first reading of the Charter Referendum Ordinance.
ü Status Update: An initial draft Debt Management Policy is attached. The City is in the process of contracting with PFM Financial Advisors, LLC (PFM) to provide assistance in the development of the Debt Management Policy. The Amendment to the Contract with PFM will be scheduled on the City Commission Regular Meeting on July 9, 2024, for the Commission’s review and consideration.
Ø Motion Two: To direct the City Manager bring back input from PFM and bond counsel in regard to recommendation of borrowing cap to be included in the referendum at first reading (as amended).
ü Status Update: First reading for the Ordinance is scheduled for July 9, 2024. Staff are working with PFM to provide the input requested for presentation at that meeting. Bond counsel will be available during the June 26, 2024 Special Meeting to provide requested input.
Ø Motion Three: To direct the City Manager to bring back first reading of ordinance and charter amendment language for review (as amended).
ü Status Update: First reading for the Ordinance is scheduled for July 9, 2024. The Ordinance and Charter amendment language to be presented at that meeting will align with Commission direction.
Ø Motion Four: To direct the City Manager to remove the reference to a borrowing limit within the referendum wording.
ü Status Update: Draft Ordinance No. 2024-07 is attached, which provides the detailed Charter Amendment language without a reference to a borrowing limit. The proposed modifications to the Charter are noted in strikethrough and underline below, specifies the authorization to borrow money, contact loans or issue bonds is limited to 1) Emergency responses, or 2) To address safety and public health.
SECTION 1.02 - Powers.
. . .
(b) The City of North Port may borrow money, contract loans, and issue bonds (general obligation or revenue) from time to time to finance the undertaking of any capital or other project for the purposes permitted by the State Constitution and may pledge the funds, credit, property, and taxing power of the municipality for the payment of such debts and bonds. Except as otherwise provided in subsection (c) below, No general obligation or revenue bonds shall be issued by the City of North Port shall not incur debt unless approved by majority vote of the voters of the City of North Port voting on the issuance of those bonds in a primary, general, or special election.
(c) Without referendum, the City Commission may authorize the City of North Port to borrow money, contract loans, and issue revenue bonds to the full extent permitted by the State Constitution and laws of the State of Florida, as provided in this subsection.
1. Emergency response. During the existence of a declared local, state, or federal emergency or disaster, to remove debris from and to repair or reconstruct any public infrastructure or capital facilities damaged as a direct result of the emergency or disaster; or
2. Categories of permissible debt. For safety or public health to address:
(a) Regulatory agency requirements.
(b) Imminent infrastructure or system failure, including but not limited to roads; bridges; water control structures; or sanitation, water, or sewer facilities; and
(c) Capital improvement facilities for emergency and essential services, including but not limited to facilities for the Police Department, North Port Fire Rescue District, North Port Road and Drainage District, North Port Solid Waste District or Utilities Department.
Ballot language to pose the referendum question regarding a Charter Amendment is restricted to 75 words or less. This language must state the current condition and the proposed change. Due to the maximum word limit, the ballot language summarizes the Charter Amendment and is proposed as follows:
Ø In Florida, local governments can issue certain debt for various governmental purposes; however, the City Charter requires voter approval before issuing any debt. Do you approve amending the Charter to allow the City Commission to issue debt without prior voter approval: (i) to respond to a declared emergency or disaster, such as a hurricane; and (ii) for safety and public health projects, such as for emergency and essential services, roads, bridges, and sanitation?
In addition, alternative Charter Amendment language has been developed and is attached for consideration. This language includes section 2, (b) Limitation on debt and outlines a cap on the City’s authority to borrow money, contract loans, and issues bonds to address safety of public health.
(b) Limitation on debt. The City’s authority to address safety or public health in this subsection is limited as follows:
(i) Prior to October 1, 2025, the principal indebtedness or obligation incurred by the City to address safety or public health shall be in a principal amount no greater than Twenty-Eight Million Dollars ($28,000,000.00) per project. Any instrument of indebtedness in a principal amount exceeding a project’s indebtedness or obligation limitation must be approved by majority vote of the voters of the City of North Port voting to incur the debt in a primary, general, or special election. The City shall not avoid the requirements in this section by separating a single, simultaneous, or concurrent project into parts to avoid the limitation set forth herein.
(ii) Beginning October 1, 2025 and each October 1 thereafter, the maximum principal amount of indebtedness or obligation the City may incur to address safety or public health shall be adjusted to reflect the percentage change in the Engineering News and Record (ENR) Construction Cost Index by using the most recent available information for the prior 12-month period
Proposed ballot language to pose the referendum question regarding a Charter Amendment for the alternative language is as follows:
Ø In Florida, local governments can issue certain debt for various governmental purposes; however, the City Charter requires voter approval before issuing any debt. Do you approve amending the Charter to allow the City Commission to issue debt without prior voter approval: (i) to respond to a declared emergency or disaster; and (ii) for safety or public health projects up to a maximum principal amount of twenty-eight million dollars, increasing annually based on a cost index?
Strategic Plan
Good Governance
Financial Impact
To be determined.
Procurement
Not applicable.
Attachments:
1. Presentation
2. Draft June 11 2024 Commission Meeting Notes
3. Draft Ord 2024-07 - Charter Referendum wo cap
4. Alternative Language for Ord 2024-07
5. Draft North Port Debt Management Policy v1
Prepared by: A. Jerome Fletcher, II, ICMA-CM, MPA, City Manager
Department Director: A. Jerome Fletcher, II, ICMA-CM, MPA, City Manager