JACKSONVILLE BEACH, Fla. — When the calendar rolled over to Oct. 1, the city of Jacksonville Beach officially wrote "debt-free" on that date.
That's a rarity in municipal finance. Over the past eight years, Jacksonville Beach zeroed out almost $42 million in debt.
Whether the city maintains that status will depend largely on the next set of City Council members who will take office after the Nov. 3 election.
"There's going to be a clean slate when they take over," said Mayor Charlie Latham, whose eight years in office will be ending because of term limits. "It's up to the next council what they do with that clean slate."
The current low-interest rates can make borrowing an attractive option for cities when it comes to doing projects that will have long-term benefits to residents. The argument is that when residents will be gaining from projects for years, paying for them can likewise be stretched over a longer period as well.
But that spread-the-cost approach means a portion of tax dollars are going toward interest payments. Latham said he thinks it's better to pay cash for projects.
Latham said that when he took office in 2012, the impact of the Great Recession on small businesses had shaped his view of debt. He figured the less of it, the better positioned Jacksonville Beach would be.
He credits former City Manager George Forbes, who retired in 2018, with putting the city on course to become debt-free. Former Chief Financial Officer Harry Royal worked with Forbes to move that direction and the approach continued with current Deputy City Manager Karen Nelson when she became chief financial officer.
"We didn't publicize anything," Latham said of the debt-free goal. "We just said we're going to get this done."
Latham said the city paid down about $32 million of debt from Beaches Energy, which is a division of the city, and about $10 million in other city debt.
He said there are a couple of caveats to the debt-free distinction. Beaches Energy still has obligations for debt through its partnership in the Florida Municipal Power Association for shared ownership with other municipal utilities of electric generating stations.
The city also has some unfunded pension liability for future payments to retirees, but that amount is on the low end among Florida cities.
The last of the remaining debt directly on the city's books went away Thursday.
"Fiscally, we're in very, very good shape," Latham said. "It took a lot of work and a lot of planning and a lot of people. It was a very proud day."
