Leesburg receives favorable financial review; consultant highlights strong reserves and debt posture

Davenport & Company gave Leesburg Town Council an annual financial update on Jan. 14, 2025, saying the town enjoys top credit ratings, a healthy unassigned fund balance and a manageable debt profile while flagging medium-term challenges including stormwater needs and operating pressures.

David Rose of Davenport & Company told council there was "no request tonight of any action, but simply hopefully just some education." He said the town holds the highest possible credit ratings from Standard & Poor's, Moody's and Fitch and that council and staff practices have helped maintain a strong fiscal position.

Rose reviewed key figures from the town9s finance materials. He said the town9s unassigned fund balance (the "rainy day" reserve called for in policy at 20 percent) is roughly double the policy minimum, producing seven-figure interest earnings the town has used for one-time capital needs. Rose said the town spent about $700,000 less than was budgeted in the past year and that investment earnings were stronger than forecast.

On debt, Davenport gave two headline figures: about $63,000,000 in principal outstanding for the general-fund portfolio and about $86,000,000 when principal and future interest are combined, numbers Rose identified on the presentation pages. He described the town9s payout profile as favorable: roughly 61.7 percent payout in 10 years, meaning the town will have retired more than 60 percent of principal on current non-utility debt within a decade.

Rose reviewed recent financing actions and potential refundings. He said the town borrowed roughly $46,000,000 during the 2024 period at a fixed rate of about 3.5 percent, and that the budget had assumed 5 percent, producing several million dollars in savings. He said Davenport identified potential refunding opportunities in the future that could save additional millions if market interest rates fall by roughly 1 percentage point.

On capital needs, Rose flagged a stormwater backlog and said the town9s capital-plan estimate is in the low tens of millions; in Council Q&A he confirmed the stormwater figure discussed in the capital plan was about $34,000,000 over roughly six years. He said staff and consultants are working to match funding strategies with a goal of limiting general-fund pressure by using enterprise or user-fee approaches where appropriate.

Council members asked for clarifications on the debt schedules and historical balances. Rose directed council to presentation pages for principal and debt-service schedules and said staff could provide multi-year historical tables showing year-to-year principal outstanding and the net balance.

Rose concluded by recommending continued attention to financial policies, monitoring refunding windows, and considering one-time uses of excess reserves to pay down debt if that aligns with council priorities. He told council staff would return with more detailed numbers if requested.