FY 2026 Adopted Budget - Flipbook - Page 108
The analysis of the total capital projects operating costs impact highlights the need for strategic
decision-making that ties in with short-term objectives and long-term sustainability. Thoroughly
examining the financial impacts of capital projects on the operating budget underscores the
importance of responsible allocation to avoid potential strains on daily operations. This assessment
empowers the City’s decision-makers to make well-informed decisions that are in line with the City’s
strategic objectives while ensuring the continuous delivery of vital services to the community.
Debt
Regarding Long-term debt, the City will make timely payments for all debt outstanding. It will strive
to maintain an underlying issuer’s credit rating of no less than Aa3 (dependent on the credit rating
agency). General Obligation Bonds may be issued as prescribed by law. Revenue Bonds or Notes
may be used to fund major capital purchases or construction projects, but such financing shall be no
more than 30 years. The City will not issue long-term debt to refinance current operations.
Refinancing will be considered when it is economically beneficial to do so. If the City is unable to sell
three Downtown parcels for a reasonable price, City will refinance the CRA balloon loan, issued in
2020.
Regarding short-term debt/leases, debt for less than five-year periods shall be avoided, unless a
debt mechanism is in place that provides decreased costs of issuance. Leases or lease purchases are
allowed when the total costs of the lease and maintenance are less than the total costs of the purchase
and maintenance or if there are other special factors to be considered.
Interfund loans are also permitted unless otherwise prohibited by law. In such cases when interfund
loans are made, interest will be paid to the loaning fund equal to the interest it would have received
under the normal investment performance of the City’s cash management program.
The City currently has two State Revolving Fund Loan issues, a Water and Sewer Revenue Bond, a
Community Development Bank Note, a Water & Sewer Bank Note, and both a loan and a lease for fire
equipment:
State Revolving Fund Loans 350300 and 350302 - These loan agreements with the Florida
Department of Environmental Protection are secured by water and sewer revenue. The original loan
amounts totaled $5,557,247 and were used for wastewater plant upgrades in compliance with
Environmental Protection Agency nitrification regulations. The interest rates range from 1.28% to
1.46% and both loans extend through FY2031/32. Debt service payments are being made from the
City’s Sewer Impact Trust Fund. The remaining balance for notes payable SRF 350300 and 350302, at
the end of FY 2024 was $2,395,684. The bond rating is at the lowest risk investments: AAA by Standard
& Poor’s.
Series 2016 Water & Sewer Utility Revenue Bond – This issue of $8,184,691 provides funding for
the City’s Water and Sewer Capital Improvement Plan Implemented in October of 2016. It is secured
by utility system revenues with an interest rate of 3.21% and has a maturity date of October 2036.
Debt service payments are being made from the City’s Water and Sewer Revenue Fund. The
principal balance at the end of FY2023 was $5,280,000 with an unamortized bond premium balance
of $346,975. The bond rating is at the lowest risk investments, AAA by Standard & Poor’s.
CRA Loan 2020 – In September of FY 2020, the City’s Community Redevelopment Trust Fund secured
financing of $3,000,000 with USB Bank for the purchase of three large lots in Downtown Eustis. The
five-year financing balloon loan is at a fixed interest rate of 2.875%. Principal balance at the end of
FY 2025 was zero. The balloon payment was due in September 2025 and was repaid. The bond will
be refinanced in October 2025, when the commission approves the refinancing.
Legal Debt Limits
The City of Eustis currently has no legal debt limitations imposed on its ability to borrow funds.
98
