Debt Overview August 19, 2011 Finance Department: G. Michael Miller, CFO Ronnie Belton, CFO Designate Michael R. Givens, Treasurer

2 City Bond Programs BJP Transportation Sales Tax (BJP I) BJP Infrastructure Sales Tax and Covenant Bridge Bonds (BJP II) General Fund Covenant to Budget and Appropriate Legally Available Non- Ad Valorem Revenues within Banking Fund external to Banking Fund Other Non-Covenant General Fund revenue pledges Within Banking Fund: Internal loan pool (rolling stock and computers) External to Banking Fund: Revenue specific pledges: Excise Tax, General Sales Tax, JEA payment, etc

3 Outstanding and Authorized but Unissued Debt by Program

4 Outstanding Debt by Program (cont’d)

5 Legal Authorization to Borrow City’s ability to borrow limited to taxing body (City Council) by State statute and local ordinance. City Council delegates elements of that legal authority to borrow to the Mayor in local ordinances specific to each bond program

6 Authorization to Borrow (cont’d) Many/most jurisdictions have narrow “delegations” from legislative body to executive body to borrow with limitations as to: Amount to be borrowed Repayment source Project scope Market access: competitive vs negotiated, timing, etc Debt structure: length of amortization, fixed vs variable, etc

7 Authorization to Borrow (cont’d) City of Jacksonville has broad delegations from legislative body to executive body to borrow with limitations as to: Amount to be borrowed (see App A) Repayment source ( E) Project scope

8 Authorization to Borrow (cont’d) “Broad” delegation originated in Better Jacksonville Program implementation, early 2000s Specific legalities as to form and scope of the delegation were validated through Circuit Court as part of BJP legal approval process

9 Authorization to Borrow (cont’d) Every bond offering is accompanied by opinions from both the Office of General Counsel and outside bond counsel that collectively address: Adequacy of legal authorization by City Council and appropriateness of delegation to Mayor Adequacy of approval process regarding public meetings, etc Qualification of projects for tax exempt financing relative to Tax Code and State/local laws: Public purpose Capital vs operating

10 Best Practices and Controls The broad delegation to the Mayor requires institutionalized best practices and controls

11 Best Practices (cont’d) Working with City Council since 2005 the Finance Department has sponsored legislation that: Established operating and emergency reserve targets (Code Sections and ) Established pay-as-you go target: value of one mil per year (Code Section ) Codified debt management parameters (Code Section ) Codified requirement for City Council approval of Debt Policy ( E amending Code Section ) Codified annual requirement for Debt Affordability Report (Code Section )

12 Appendix A Creation of Banking Fund Sec Program defined. The City has created the City Banking Fund, an internal service fund of the City, to provide an alternative means of financing capital projects within the City of Jacksonville governmental funds. The maximum indebtedness of the City Banking Fund shall not exceed $118,656,171 as stated in Revised Schedule B-4 to the Fiscal Year 05/06 Budget Ordinance E, except as increased from time to time by the City Council either in the annual budget ordinance or other ordinance supported by an itemized list of planned expenditures. This fund shall not be used to provide loans to independent agencies of the City.

13 Appendix B Banking Fund Authorizations