TO: Honorable Mayor & Members of the North Port Commission
FROM: A. Jerome Fletcher II, ICMA-CM, MPA, City Manager
TITLE: A Resolution of the City Commission of the City of North Port, Florida, Adopting City Commission Policy No. 2024-01 Related to the Debt Management Policy; Providing for Incorporation of Recitals; Providing for Conflicts; Providing for Severability; and Providing an Effective Date.
Recommended Action
Continue Resolution 2024-R-57 to second reading on November 4, 2024.
Recommended Action for Second Reading
Approve Resolution 2024-R-57 as presented.
Background Information
The following provides a chronological order of events regarding Resolution No. 2024-R-57:
Ø June 26, 2024: During the City Commission Special Meeting, the City’s Bond Counsel and Financial Advisor participated in the discussion on proposed Charter options. During this meeting, the Commission approved the following motions regarding the Debt Management Policy:
ü Motion: To include Charter language to state the Debt Management Policy will be adopted by Commission via Resolution with two readings.
ü Motion: To direct the City Manager and City Clerk to schedule debt policy workshop in September with the final adoption to be held prior to the November referendum.
Ø July 23, 2024: During the City Commission Regular Meeting, the Commission approved the following motions:
ü Motion: To amend Ordinance No. 2024-07 to remove the last sentence of Section 2b(i) and create Section 2b(iv) stating “The City shall not avoid the requirements in this section by separating single, simultaneous, or concurrent projects into parts to avoid the limitations set forth herein.”
ü Motion: To adopt Ordinance No. 2024-07 as amended by the previous motion.
Ø September 9, 2024: A City Commission Workshop was held regarding a City of North Port Debt Management Policy and Debt Finance Committee. Jeremy Niedfeldt, PFM Advisors, provided a presentation including outline, City Charter, comparable debt limits, policy objectives, policy defined, components, affordability measures, historical trend, scorecard approach, ratings criteria, peer analysis, debt per capita, debt to taxable assessed value, debt service as a percentage of operating revenues, debt finance committee, debt structuring, considerations, issuance and management, potential financing team members, primary bond sales method, compliance requirements, overview of financing process, and use of derivatives.
Commission questions and discussion took place regarding the following:
Credit rating criteria, debt affordability measures, revenue fund cap applied to debt services, interfund borrowing, debt management policy usage and intent, citizen versus Moody’s involvement, debt per capita target, fees, target thresholds, revenue usage, enterprise rates, metric usage, fiduciary duty, municipality comparison, credit ratings, default examples, debt restructuring, company history and role, current debt versus payment, credit rating versus debt allowance, long term financing options, debt to taxable value, debt affordability measures for different funds, payment calculation, guidelines, annual reporting, citizen feedback, debt service payments, deal approval process, direction requested, and timeline, backloading utilization, frontloading versus backloading, fixed interest versus variable interest debt, variable interest debt utilization, revenue debt use of general fund, loan comparison, advisory board intent and membership criteria, debt management policy guidelines and process, removing designated Commissioner for advisory board, citizen involvement, debt payment process and consequences, default process, and risk assessment.
Staff has incorporated the input provided by the Commission during this Workshop into the proposed City Commission Policy 2024-01 Debt Management Policy.
Ø Resolution 2024-R-57 adopts City Commission Policy 2024-01 which outlines the process and procedures guiding the City when considering issuing debt and the management of debt with the following goals and objectives:
ü Ensure fiscal sustainability.
ü Evaluate debt affordability.
ü Promote transparency, accountability and reporting compliance.
ü Structure debt efficiently.
ü Utilize appropriate debt instruments.
ü Preserve and enhance creditworthiness and investor confidence.
ü Support capital improvement projects.
ü Ensure legal and regulatory compliance.
Proposed City Commission Policy 2024-01 also includes information and criteria regarding the development of a Debt Management Advisory Committee. Consideration for approval of the establishment of this Committee will be conducted via two readings of Ordinance 2024-37.
Resolution 2024-R-57 has been reviewed by the City Attorney and is legally correct as to form.
Information for Second Reading
Following City Commission direction received during the Regular Meeting on October 22, 2024, Section III. Creditworthiness, items 1 through 5 within subsection E. Debt Affordability Measures have been updated to include additional information regarding the calculation of debt ratios. A version highlighting these changes utilizing strikethrough and underline is attached for reference.
Strategic Plan
Good Governance
Financial Impact
To be determined.
Procurement
Not applicable.
Attachments:
1. Resolution Second Reading
2. Policy 2024-01 Strikethrough and Underline
3. Presentation
4. Resolution First Reading
5. Ord. No. 2024-07
6. June 26, 2024, Special Meeting Minutes
7. September 9, 2024, Workshop Notes
Prepared by: A. Jerome Fletcher II, ICMA-CM, MPA, City Manager
Department Director: A. Jerome Fletcher II, ICMA-CM, MPA, City Manager