2010 Debt Report - Volusia County Government

management policies resulted in an affirmation of the AA- underlying rating on these bonds,
and further reported Volusia County’s Outlook as “stable”, indicating the credit rating is not
likely to change. Of particular note are several statements in their latest report:
• Financial operations remain strong with robust reserves and continue operating
surpluses despite the pressured operating environment
• Flexibility is robust as evidenced by strong unreserved fund balance
• Debt service coverage on revenue bonds remains satisfactory for the respective rating
levels despite recent volatility
• Debt levels are low and are expected to remain so given the county’s moderate capital
needs and limited debt plans
• Capital needs appear manageable
These comments are a reflection of sound fiscal policy, strong financial management and a
conservative approach to debt management.
ECONOMIC OUTLOOK
Like all governments and businesses across the country, the county is facing challenges of
historic proportions due to the economic recession and the effects from the real estate market
downturn. Central Florida was hit particularly hard due to the tremendous housing growth
that occurred here during the boom years. The county’s property tax base continues to
experience declines. The county’s tax base fell 13.2% from $30.1 billion in fiscal year 2010
to $26 billion in fiscal year 2011.
The sluggish economy continues to have an effect on tax revenues other than property taxes.
Gas tax collections in fiscal year 2011 (an estimated $14.3 million) are expected to be
slightly lower than fiscal year 2010 ($15 million). However, sales tax revenues are estimated
to increase in fiscal year 2011. Current estimates for 2011 collections total $16.1 million
compared to $15.3 million in 2010. The collection of utility, resort, and communication taxes
are expected to slightly increase over 2010 amounts.
SUBSEQUENT EVENTS
Subsequent to the closing of fiscal year 2009-2010, the following actions of significance to
the debt discussion occurred. The following is a recap of related events.
Notes Payable Refinancing
On November 18, 2010, County Council approved the refinancing of seven installment
purchase agreements whose total remaining principal balance equaled $17,750,000 and were
originally issued by the Florida Association of Counties to acquire or construct various
improvements. The approved notes payable was issued through JP Morgan Chase at a fixed
rate of 3.02%. The new note refinanced the following obligations:
• Land acquisition on the south side of the Daytona Beach International Airport,
$1,361,000, 6 years
• Acquisition and construction of trails, $4,724,000, 10 years
• Capri Drive and West Highland subdivision special assessment district
improvements, $1,790,000 combines total, 10 years;
• Ocean Center improvements, $9,875,000, 20 years.
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