2010 Debt Report - Volusia County Government

EXECUTIVE SUMMARY 2010
This document provides a detailed discussion of outstanding debt and debt service
obligations for the county. The ensuing report details information relating to the extent,
nature and purpose of the county’s indebtedness. It is a comprehensive, yet consolidated
analysis; one which provides information that can assist in the evaluation, review and
planning of future financings, while taking into consideration the impact of such financings
on the county’s financial health. Data contained in the audited Comprehensive Annual
Financial Report for fiscal year ended September 30, 2010 provides its foundation.
As of September 30, 2010, total county outstanding indebtedness was $306,488,801 and
included bonded debt of $266,180,000, commercial paper loans totaling $26,591,000, and
$13,717,801 in State revolving fund loans. This represents a $23 million reduction in
outstanding county debt over last fiscal year.
FINANCIAL MANAGEMENT STRATEGIES
The county takes a planned approach to the management of debt, funding from internally
generated capital where appropriate, and financing when appropriate. Conservative financial
strategies and management practices help to minimize exposure to sudden economic shocks
or unanticipated expenditures. Quarterly monitoring and evaluation of factors that can affect
the financial condition of the county help identify any emerging financial concerns. The
practice of multi-year forecasting enables management to take corrective action long before
budgetary gaps develop into a crisis.
The GFOA and other national associations have published best practices promoting
efficiency in government and solvency in public finance. The major credit rating agencies
use these and other quantitative measures to determine credit rating. Fitch Ratings and
Standard and Poor’s consider continued funding of the General Fund Reserve a “best
practice” and have a “very significant” rating value. In keeping with this “best practice”, in
FY 1999-2000, the county council adopted a minimum goal of 5 percent working toward a
goal of 10 percent of current revenues to fund this reserve in ad valorem tax funds. Funding
of the reserve provides the county flexibility in responding to economic downturns or sudden
changes in revenue. The importance of these reserves became very evident in 2004 when the
county experienced the financial burden of four hurricanes. For the next budget year (FY
2010-2011), approximately 9 percent has been reserved in the General Fund and 5 percent in
the Municipal Service District Fund. Other emergency reserves include the Library at 7
percent; Ponce DeLeon Port Authority at 10 percent; Mosquito Control at 10 percent; and
Fires Services at 10 percent.
For the last five years, measures have been taken to “tighten the belt” by eliminating
positions through attrition and becoming more efficient in operations. In addition, the county
took into account the changes in the economy and revenue trends when budgeting fiscal year
2010-2011 expenditures. The organization continues to provide citizens with the services
they depend upon; however, few new or expanded programs or capital projects are planned.
Our organization is leaner than it was five years ago, due to the willingness of the employees,
from top to bottom, to embrace change and respond positively to the current realities. In
addition, to ensure the county does not become reliant on unreserved and undesignated fund
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