It’s a rarity in municipal finances: Over the past eight years, Jacksonville Beach has forgiven nearly $42 million in debt.
JACKSONVILLE BEACH, Fla. — When the calendar moved to Oct. 1, the city of Jacksonville Beach officially wrote “debt free” on that date.
This is a rarity in municipal finances. Over the past eight years, Jacksonville Beach has forgiven nearly $42 million in debt.
Whether the city maintains this status will largely depend on the next group of city council members who will take office after the November 3 elections.
“There will be a clean slate when they take over,” said Mayor Charlie Latham, whose eight-year term will end due to term limits. “It’s up to the next council to decide what they do with this clean slate.”
Today’s low interest rates can make borrowing an attractive option for cities when it comes to projects that will have long-term benefits for residents. The argument is that while residents will benefit from projects for years, their payment may also extend over a longer period.
But this cost-sharing approach means that some taxpayers’ money is spent on interest payments. Latham said he thinks it’s best 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 thought the less there was, the better off Jacksonville Beach would be.
He credits the former city manager George Forbes, who retired in 2018, putting the city on the right path to deleveraging. Former CFO Harry Royal worked with Forbes to push this direction forward and the approach continued with current Deputy City Manager Karen Nelson when she became CFO.
“We haven’t made anything public,” Latham said of the debt-free goal. “We just said we were going to do it.”
Latham said the city paid off about $32 million in debt from Beaches Energy, which is a division of the city, and about $10 million in other city debt.
He said there were some caveats to the debt-free distinction. Beaches Energy still has debt obligations through its partnership with the Florida Municipal Power Association for shared ownership with other municipal power utilities.
The city also has an unfunded pension liability for future payments to retirees, but this amount is the lowest among Florida cities.
The last of the remaining debt directly on the city’s books disappeared Thursday.
“Fiscally, we’re in very, very good shape,” Latham said. “It took a lot of work, a lot of planning and a lot of people. It was a very proud day.”