by Bradley Parsons
Staff Writer
A City Council fact-finding trip to Orlando could pay dividends for the mayor’s proposed financial strategies.
Last week, Finance Committee members Jerry Holland and Warren Alvarez accompanied Council Auditor Richard Wallace on the trip to review Orlando’s investment and borrowing policies. Interim Chief Financial Officer Walt Bussells has compared Mayor John Peyton’s desired changes to those already practiced in Orlando.
Like Peyton’s proposal, which is currently under Council review, Orlando matches interest rates on money it borrows and invests. Jacksonville currently pays more to borrow than it does to invest, a situation that Bussells said costs the City more than $15 million annually in unnecessary interest payments.
Bussells said Orlando’s investments into fixed-income mutual funds intrigued him. Although he has not previously considered the funds, Bussells said they could be a means to achieve the desired bottom line.
“Everybody seems to agree that matching the books [interest rates on borrowing and investing] is the way to go,” said Bussells. “It’s the different strategies you use to get there where different ideas come in. Fixed income mutual funds might be another way to get the results we’re seeking.”
Blue Ribbon Financial Commission member Ava Parker, also a public finance attorney, cautioned Bussells during the commission’s Tuesday meeting against using Orlando as the public face of the administration’s proposed changes. She said that City’s recent budget struggles could scare the public.
However, Bussells said Orlando’s financial problems were primarily caused by the loss of tourism revenue stemming from the Sept. 11 terrorist attacks.
“They’re so dependent on tourism and revenue from that high sales tax that Sept. 11 really kicked the pins out from under them,” said Bussells. “I would almost say, but for matched-book financing, their problems could have been worse.
Bussells said Orlando’s structure had allowed it to perform markedly better in the recent climate of falling interest rates.
“When we were earning three-and-a-half [percent], they were earning six-and-a-half. When we earned one, they were earning four; I’ll take it,” he said.