§ 2-577. Debt limitations.

(a) Self-supporting debt. For the city to issue self-supporting governmental debt, revenues, as defined under the resolution authorizing the revenue bonds in question, shall be a minimum of one hundred twenty-five (125) percent of the debt service for the year in which requirements are scheduled to be the greatest. For proprietary debt, revenues shall be a minimum of one hundred twenty-five (125) percent of the annual debt service in such fiscal year. Annual adjustments to the city's rate structures will be made as necessary to maintain the required coverage factors.

(b) Non self-supporting debt. The city shall conduct an objective analysis as to the community's ability to assume and support additional debt service payments before the issuance of non-self supported debt. The city shall use an analytical approach for its determination. This process shall compare generally accepted standards of affordability to the current values for the city.

(1) These standards shall include (1) debt per capita, (2) debt as a percent of taxable value, (3) debt service payments as a percent of current revenues and current expenditures, and (4) the level of overlapping net debt of all local taxing jurisdictions.

(2) An examination the direct costs and benefits of the proposed expenditures.

(3) Staff shall provide the city commission with a "financial condition assessment" based on financial indicators and benchmarks provided by the State of Florida Auditor General Office. Auditor general staff compile the information from audit reports and other sources.(Data source: http://www.myflorida.com/audgen/pages/fca_procedures.htm). Staff shall include an analysis of how any new debt would affect the city's financial condition.

The decision on whether or not to assume new debt shall be based on the identified costs and benefits, the current conditions of the municipal bond market, and the city's ability to "afford" new debt as determined by the aforementioned standards. The city shall strive to achieve and/or maintain these standards at a low to moderate classification.

(c) Debt burden measures. For the purposes of measuring the general government debt capacity, the city includes all non self-supporting debt under the definition of general government debt. These are the programs whose expenditures for debt service are in direct competition with other general fund expenditures. Additionally, the city considers all tax supported debt to include all non self-supporting debt, as well as the self-supporting governmental debt. This distinction recognizes that self-supporting proprietary programs should be measured by comparing the user rates of comparable governmental providers, and that such programs do not directly or indirectly place a burden on taxpayers in the form of increased taxes. As long as each system's user rates meet the needs of both operations and debt service, the debt program is not considered part of either the general government or tax supported debt of the city.

(d) The city commission commits to:

(1) Act with regard to self-supporting proprietary operations, when necessary, to increase rates to ensure that each operation maintains rate coverage (revenue to debt service ratios) as required by the higher of either city policy or related debt covenants.

(2) Limit with regard to self-supporting governmental revenues, the level of annual debt service as a percentage of available annual revenues to ensure a reasonable ability to address recurring operations and maintenance and/or capital requirements on a pay-as-you-go basis.

(3) Establish with regard to all non self-supporting debt, debt limits to ensure current and future flexibility.

(Ord. No. 2013-03, § 1, 2-5-13)