Winter Park is getting some high marks after some key changes in 2009 may have saved the city-owned electric utility’s finances. And it appears that a recovery plan enacted by the City Commission and city staff is working.
“I think it speaks highly of what we’ve been doing,” Mayor Ken Bradley said of the city’s financial recovery plan.
Now the city is back in the black as far as Fitch Ratings is concerned. The municipal finance-rating agency in August upgraded Winter Park’s electric revenue bonds from a negative to a stable rating, giving AA- ratings to five series of electric revenue bonds.
Those bonds add up to more than $80 million.
Those improvements came despite a national trend toward the opposite. In the past six consecutive financial quarters, U.S. public finance rating downgrades outpaced upgrades. Winter Park has managed to buck that trend.
Massive changes amid the 2008 economic downturn may have helped right Winter Park’s ship more quickly than other municipalities, thanks to a few key moves with the city’s electric utility.
How the city decided to adjust its electric rates may have had the biggest impact, with the city breaking away from Progress Energy of Florida’s rate adjustment scheme and changing over to quarterly rate adjustments.
That more rapid adjustment of rates to reflect increases in the costs of providing electricity has helped the city adapt more quickly to the rise and fall of oil prices to the power plants that supply Winter Park.
That means the city doesn’t have to wait around to raise rates while taking the hit from sudden spikes in oil prices.
“The customers will see rates go up slightly and down slightly based on oil costs rather than major swings,” Bradley said.
Fitch also indicated that the city’s five-year financial recovery plan is working, as the electric utility is continuing to pay back financial advances from the city’s general and enterprise funds. That recovery plan began in May of 2009, just after Bradley was elected.
“About the time he got elected we got the notice that we’d been put on negative watch,” Winter Park city manager Randy Knight said. “That’s when we went to work on it.”
The Commission voted unanimously to work to improve the electric utility, forming a plan along with city staff to pay back debts and improve service.
“It’s clearly a team effort,” Knight said.
The city has now more than tripled its repayments of its internal debts compared to 2008. And Fitch said they expect those payments to continue to increase in the future, leaving the city on track for continued high ratings.
“We all worked hard on this, and it’s been a success,” Knight said.