AVON PARK - On the international grand scheme of things, it may not be a huge economic group hug. But on a small municipality scale, it is does amount to a collective pat on the back.
As of Nov. 12, the City of Avon Park became 100 percent debt-free and the accomplishment was announced by City Manager Julian DeLeon at the Dec. 9 city council meeting.
Over the past three years, Avon Park has liquidated close to $5 million in debt, lowering operating costs by eliminating interest payments. DeLeon said there has been action taken on several bonds and loans that have resulted in the elimination, such as prepaying $56,000 in interest on a $1.6 million utility bond due to mature in 2015.
DeLeon said when he started as an engineer with the city in 2009, it was in debt $7 million. Part of his solution to get out of debt was to lower property taxes 39 percent, from 5.89 mills to 3.6 mills, as well as trim staff from 101 in 2008 to 83 in July 2012.
In addition, growth of the city limits by two square miles over three years increased the tax base, helping to offset the debt.
"By lowering operating costs, capture savings combined with other city initiatives, it has helped us pass on large tax reductions," said DeLeon, at his City Hall office.
DeLeon said in 2009 the city had difficulty making monthly payments but wanted to reduce property taxes and lower the debt, which at the time was approximately $7 million in bond issues. The payment for one bond alone at that time was $500,000 annually. He said the city hasn't increased staff, but the increased revenues from annexation and savings have been used towards dropping taxes and user rates.
"Today, we still have $4 million set aside in our rainy-day fund. I doubt that we'll be back in debt ever," DeLeon said.
"We're by no means flush with money but what we have is being passed back to the city's taxpayers as a savings.
In Tallahassee, the news of Avon Park's clean log is a notch in the Florida's staff of economic achievement.
Ken Small, financial technical assistant manager for the Florida League of Cities, said it was "fairly uncommon" for small- to medium-sized cities such as Avon Park, with a population of about 9,000, to be in the black. Of the state's 410 cities, about half are made up of 5,800 or less. He said those towns are experiencing growth and more apt to borrow, with school construction being the main funding pit.
"Julian is very excited about it," said Small. who has been with the League for 29 years. "Growing cities generally accrue debt; you're having to expand, you need to borrow money. A city such as Avon park, their situation I would say, is fairly uncommon. It says they have their finances under control."
At the county level, Highlands County Commissioner Jim Brooks said he's proud of Avon Park's ability to get out of debt and it bodes well for the county's economic conditions.
"I think it's a good thing Avon Park is able to keep their millage down; something positive is going on there," he said.
DeLeon said he's been fielding calls from mayors from as far as California asking the secret to Avon Park's success. At the Dec. 9 meeting, the council had the city's new $240,000 garbage truck on displayed which was purchased in cash due to the city's economic stability.