Sec. 110.516. - Debt management parameters.

The City is establishing appropriate objective guidelines and parameters for future debt issuance. Guidelines that are too restrictive do not provide enough debt capacity to finance needed infrastructure. Guidelines that are not restrictive enough may result in excessive debt issuance in the near term, which will reduce future budgetary flexibility by creating an excessive debt service demand on the City's resources, contributing to a deteriorating credit position. Objective guidelines typically take the form of debt ratios. Below are seven debt related ratios identified by the City to control its debt position. Target Maximum/Minimum Overall net debt to estimated market value 2.50% 3.50%** Debt per capita $2,600 $3,150** General Fund/General Services District (GF/GSD) Debt Service to GF/GSD revenues 11.5% 13.0%** General Fund/General Services District (GF/GSD) Debt Service to GF/GSD expenditures 12.5% 15.0%** Ten-year principal paydown - GF/GSD 50% 30%* Ten-year principal paydown - All 50% 30%* Unassigned GF/GSD Fund Balance to GF/GSD revenues 10% 5%*   * Measured as a minimum ** Measured as a maximum A supermajority of Council Members present shall be required for a waiver of two or more debt parameters in authorized borrowing not including "Ten-year principal paydown - All." For purposes of this Section, the following definitions and exclusions shall apply: Overall net debt to estimated market value shall be computed as the aggregate City and overlapping debt (debt issued by other jurisdictions within the boundaries of the local government that is repaid from the same tax base) divided by the market value of that tax base. The estimated market value shall not include the portion of taxable values of properties located in the Beaches and Baldwin service districts upon which the City has the inability to collect property taxes. For purposes of this calculation, the taxable value of Beaches properties shall be reduced by 30 percent and the taxable values of Baldwin properties shall be divided by 118.8%. Debt per capita shall include overlapping debt. GF/GSD Debt Service to GF/GSD Revenue shall include all GF/GSD debt service, as well as any debt service supported by GF/GSD transfers to Enterprise or other internal funds. This shall include banking fund debt repayments within individual departments and non-departmental accounts. This parameter requires a comparison to total GF/GSD Revenues, rather than total operating expenditures. The Ten-Year Principal Paydown is computed as the total principal repayment scheduled for the next ten years divided by the total debt currently outstanding and shall be computed for two separate measures. 1. "Ten-Year Principal Paydown - GF/GSD" shall apply only to GF/GSD debt service as described above. 2. "Ten-Year Principal Paydown - All" shall apply to all outstanding City debt regardless of the pledged revenue source. Unassigned GF/GSD Fund Balance to GF/GSD Revenues shall be computed as the aggregate of unassigned GF/GSD fund balance divided by total GF/GSD operating revenues and shall not include any Fund Balance within any other General Revenue Fund subfund. The fund balance within any other General Fund subfund, including the City Council Emergency Reserve, shall not be included in the unassigned fund balance for purposes of this calculation. A second optional ratio may be provided that includes such fund balances if they are included by ratings agencies in their evaluation of the City's credit status, but such calculation shall not replace the established unreserved/undesignated target and minimum for guiding the City's borrowing decisions. (Ord. 2015-483-E , § 1; Ord. 2025-434-E , § 1) Editor's note— Formerly § 106.111, Debt management parameters.