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Oviedo addresses $7.2 million debt

Editor’s Note: After this article published, OCN learned that through a miscommunication, we were given the total amount of debt the City of Oviedo has in its general fund, not the total amount of debt the city owes. The general fund debt is $7.2 million and the total debt is $59 million. Because of the language used, the article is accurate but we felt that a clarification was warranted here. Also, Oviedo Mayor Megan Sladek had said that paying down the debt will help the city avoid increasing taxes to pay for increases in costs, such as health insurance and public safety. The City of Oviedo does not borrow money to pay health insurance premiums or public safety cost increases. The article below was changes to reflect this clarification. Please email contact@oviedocommunitynews.org if you have any questions.

Job vacancies, a landfill sale and unexpected savings due to the pandemic have resulted in a $2 million budget surplus for the City of Oviedo.

On Monday, city staff proposed that most of those savings pay down the $7.2 million in debt the city has been accruing for more than a decade.

That debt includes borrowed money for city projects such as $6.5 million in park upgrades, new parks and sidewalk upgrades in 2012; $4.8 million for a new fire station and public works complex in 2012, $3.9 million for improvements to Oviedo on the Park, a new fire station and a new public safety building in 2013 and $2.2 million in new vehicles and equipment in 2016.

Mayor Megan Sladek said that paying down the debt will help the city to not have to increase taxes to pay for increases in costs, such as health insurance and public safety.

“We have been faking it for a really long time and the jig is up,” she said.

The City of Oviedo was considering using the budget surplus to build a new community center in its historic downtown. Staff said city officials could consider that project with the money it would save in annual debt payments, which, by implementing staff’s current proposal, would more than cut the payment in 2022 in half, from $2.2 million to $956,412.

The debt payments in the 2021-2022 fiscal year will not be effected by the proposed pay down. That payment will be $2.2 million.

“This is one of those first steps in becoming resilient and becoming sustainable,” City Manager Bryan Cobb said. “This is a bigger picture than just taking the money and setting it aside for a community center. It’s still a priority — this is just a different way of doing it.”

Sladek said she has not heard great public demand for a community center in Oviedo.

The surplus resulted from several factors, one being the city’s September sale of the Oviedo Materials Landfill, which sits on 95 acres near the corner of Broadway and Evans Street. It was sold to Recycled Concrete & Materials, Inc. for a profit of $733,060.

“We always look for an opportunity to pay off debt,” Deputy Mayor Bob Pollack said. “This is a one-time opportunity.”

Another factor contributing to the surplus is a 17 percent staff turnover rate, which Cobb said is considered high for the city. This has resulted in about 27 vacant positions, saving the city an estimated $850,000 in salaries and benefits.

“It’s a job seeker’s market,” he said. “People are leaving because there’s a lot of opportunity. Everybody’s hiring, eveybody’s raising their minimum wages. A lot of people can go get what they want nowadays.”

He added that a lifeguard left the city’s employ for a job at Target because it was less stress and better pay.

Pollack suggested investing the savings from vacant positions into a tuition reimbursement or bonus program for city employees. Cobb said the city is considering pay scale increases to reward employees who stay with the city, which would also make the city more competitive in the job market.

“One of the things we’re struggling with is how quickly we can get to 15 dollars [an hour],” Cobb said.

The rest of the proposed $1.7 million pay down comes from about $130,000 in miscellaneous savings resulting from the pandemic, such as travel and trainings that were planned but not executed.

The city planned its budget for the 2020-2021 fiscal year using conservative revenue projections, Assistant Financial Director Kelly Jones said. When tax collections outperformed those projections, it created an additional surplus of $475,000. No plans were discussed for using that surplus.

“2021 was unlike any budget year,” Jones said. “But Florida has been open for quite a while with pretty much no restrictions to our economy. In looking at revenue projections for this year, they are considerably better than we could have hoped for.”

The City Council is expected to make a final resolution on this plan to pay down debt in November.

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