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Friday, April 12, 2024

City of Winter Haven to Incur up to $27 Million in Additional Debt to Fund Various City Projects

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City of Winter Haven to Incur up to $27 Million in Additional Debt to Fund Various City Projects

by James Coulter

Even though the City of Winter Haven will be issuing no more than $27 million in non-ad valorem revenue bonds to fund various city projects, the city’s overall credit rating remains in good standing, as reported in Monday’s city commission meeting.

On Monday evening, Winter Haven City Commissioners voted unanimously to approve a resolution for the issuance of non-ad valorem revenue bonds not to exceed $27 million.

As such, the city will incur up to $27 million in additional debt to be paid from non-ad valorem revenues, which the city agrees to budget and appropriate each fiscal year the bond remains outstanding.

These bonds will go towards funding various city projects, including:

• The construction of a new recreation complex consisting of athletic and event fields, pedestrian facilities, docks, and parking facilities.

• The construction of a roadway extension that will provide multimodal trails, sidewalks, and lighting to support the roadway and associated infrastructure.

• The acquisition of approximately 370 acres of land that will house a planned wetland reclamation area, an operations facility, and an unplanned development area.

City Manager Michael T. Starves mentioned that one of these projects will include funding from Polk County. $10 million will go to the redevelopment of Chain of Lakes Park. Half of that funding will be offset through the county through the TVC, as well as a $5 million cash contribution from the TVC, Starves said.

Despite the city expecting to incur no more than $27 million in additional debt, the city’s overall credit rating remains upstanding, Starves said.

In May 2023, the city went through its Annual Surveillance Review with S&P for its credit rating, which was improved from AA- to AA with a stable outlook, Starves reported.

Additionally, upon conducting additional surveillance in anticipation of this bond issuance, S&P found that the higher rating remained unchanged, Starves said.

Finally, within the past week, another surveillance was conducted by Fitch, which improved their rating. That rating remained the same at AA-, but the outlook was changed from stable to positive in anticipation of this issuance.

“I think that is a testament to what we are doing financially to the fact that we are leveraging these dollars with contributions from other sources,” Starves said. “We have sound fiscal policies. We have strong growth. We have conservative operations. And overall we are in a good position for this issuance.”

Mayor Bradley T. Dantzler quipped that “Winter Haven now has a higher rating than the U.S. federal government.” To which, Starves replied, also in a quippy manner, that he might consider going to D.C. after his term ends this December.

Mayor Dantzler then asked when the city would acquire the money, and who would be buying the bonds. Jake Glover, a financial advisor from the Public Financial Management (PFM), answered that the actual bond sale will take place on Nov. 29 and that the city would receive the money on Dec. 14.

“As soon as we get approval today, an offering document will be released to the market later this week,” he said. “Any investment banking firm can take a bid to the bond. Whoever will be willing to pay the lowest bid will be awarded the bonds and they will likely have those bonds placed. At this point, we don’t know who will buy the bonds, but they will be awarded to the lowest true interest cost offer.”

A motion was made and seconded to approve the resolution, and the City Commission voted unanimously.

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