2023 Wakulla County Debt Report Recap with Source Links

The 2023 Wakulla County Debt Report can be found here. There are also many other financial reports located here. As always, the source documents are available to you and Wakulla Reports encourages you to read them, digest them, and form your own opinion with the information provided. A link to the Wakulla Reports highlighted document can be found here.

The report state that "the County's overall debt status, while higher than in years past, is still favorable as of the close of FY 22/23. An overview is included on page 2 of the report.

Further, the report statues that Wakulla County's outstanding debt totaled approximately $36 million as of September 30, 2023. The prior fiscal year, debt totaled just over $9 million. The increase from the prior year comes in at nearly $27 Million. That's an increase of $27 million in debt for ONE YEAR.

The below is the greatest portion of our debt that was acquired in April of 2023 to "fund construction projects for wastewater expansion, road projects and various other infrastructure projects." This is something to watch since it accounts for most of our debt and has claims that it will be repaid with grant funds received over the period. Didn't we just see an article where DeSantis awarded Wakulla County a grant in the amount of 4.5 Million for Rural Infrastructure? But, I see this money is spoken for, for project Boomer.

To avoid issuing a moratorium (a temporary stop) on building permits the county again acquired debt to fix its infrastructure. The total cost of the project was $9.8 Million. The USDA provided a grant in the amount of $3 Million. The remaining $6.8 million is financed through two bonds: $6,495,000 at 3.25% interest and $321,000 at 2.25% interest. Both bonds will be repaid with sewer revenues (amount you pay for sewer service) over the next 40 years. To note, this could affect your sewer rates. See below:

It is important to note some of the definitions in this report so that you can weed through the terminology. The report does outline most of the terms but failed to define enterprise funds. In short:

Governmental Activities (or Governmental Funds): not intended to function like a business or to make a profit. Think of your county employee pay, benefits, building maintenance, etc. (AKA Genera Fund, Special Revenue Fund, Capital Project Fund)

Business-type Activities (Enterprise Funds): intended to function like a business and make a profit or break even (a wash). Think of sewer, solid waste, and the Golf Course.

Debt Service Payment: periodic payment made to a lender to cover the interest and principal on a loan or other debt.

Principal: The amount that was borrowed.

Interest: The amount you pay to borrow.

Restricted Funds: Donations or grants that are given to an organization with specific conditions on how they can be used.

Below is the county's 10 year debt history:

According to the report, the overall debt service payments have fluctuated over these ten years. For fiscal year these payments were at an all time high of over $3 Million. The previous highest payments were just over $358,000 in the prior year. Payments, just payments, increased over $2.5 million in one fiscal year.

The following shows when the county will pay off their debt if not paid early. Note the last two USDA loans that do not have a maturity date until 2057. I wonder how much interest we will pay on those loans over the next 33 years?

In addition to Project Boomer being awarded 4.5 Million that could have been used to pay for infrastructure (yes, other counties did it - you can read the Governor's press release here). In the near future, in order to continue the expansion of 319, the county will have to demolish and relocated the BOCC's, Property Appraiser and, Supervisor of Elections entire operation. As of this reports release, the project is not even on the 5 year plan. To note, after we reviewed the One-Cent Sales Tax Committee meeting minutes, it's no suprise that the committe does not provide much recommendation. The funds are already spoken for.

The largest upcoming projects according to the report, are centered on sewer expansion.

The below projects a steep increase in debt service payments (principal and interest payments on loans for Government Activities (Governmental Funds) and Enterprise Funds (Business Type Activities) over the next two fiscal years with a goal to eventually only be paying debt service on business type activities. I wonder if our County Administrator will be around to see this through?

The two snippets below show that the county's Debt Policy A.R.: 3.02 has been exceeded. The below verbiage appears on page 14.

Additional verbiage on page 18.

The below snippet is from the county's own debt policy outlined in A.R.: 3.02 (see above hyperlink).

Further, the county uses a ratio of debt services expenditures (loan payments) to total expenditures (all other expenses). So, basically how much are we paying on borrowed money v. our operating costs paid in cash. The county policy (again see link above) states that "When this percentage increases over time it may indicate a declining flexibility of the county to respond to economic changes. The county should strive to maintain a ratio of less than or equal to 15% of operating expenditures." It looks like the county projects the Business-Type activity ratio to reach an all time high of 323% in FY 24/25. It states the BOCC has implemented new sewer rates to ensure the sewer fund stays viable (capable of operating successfully).

The file located on the Media Fire drive includes many, many more highlights that may be of interest to you. Or, you may decide you would like to watch the Rumble Video that we created. Or, you may like to look at both! No matter which way you choose to digest the information, we just hope that you do.

Keeping our county financially healthy is as important as keeping our personal households financially healthy. Happy reading/watching!