Fort Walton Beach — Fiscal Year 2021-22 Adopted Budget — reading text

Department Directors and the City Manager, the updated Vision and Mission for the City are as follows: Vision The City of Fort Walton Beach: a recognized leader in the provision of Community Services. Mission To enhance and protect the Community by providing quality services. 2  Strategic Plan Adopted in May 2021 City Council’s primary responsibility is to shape public policy to achieve the citizens’ desires for the future. As time passes, the complexion of a community, its residents and leaders change, as do the priorities of the community. There is probably no more daunting a task that any community faces than planning for its future and identifying future priorities. The Strategic Plan is a multiyear plan and the budget process determines which parts of the Plan receive resources each year. Each Objective is in line with the City’s Vision, Mission Statement and Core Values. Throughout this document, Strategic Plan Objectives have been tied to expenses, capital improvement projects, and performance measures – look for the icons below Objective #1 – Downtown Master Plan / Around the Mound Implementation In April 2021, City Council allocated up to $1 million as a match to FDOT to begin the PD&E phase of Around the Mound in FY 2021-22; the implementation of the Downtown Master Plan continued in FY 2020-21 with the Infrastructure Master Plan and Library Relocation Study. Objective #2 – Expansion of City Recreation Amenities The demolition of the existing Field Office Complex, the completion of a Phase II Environmental Site Assessment and the design of the Preston Hood Athletic Complex Expansion will be completed in FY 2021-22. Objective #3 – Public Safety For FY 2021-22, one (1) Code Enforcement Officer and a School Safety Officer Program at Okaloosa Academy were added. The design of a new Westside Fire Station will be completed as well as the FWBPD Training Facility & Shooting Range. 3 4 City Manager’s Budget Message October 1, 2021 Honorable Mayor, City Council Members, and Citizens: It is my pleasure to submit the FY 2021-22 municipal budget. The City of Fort Walton Beach budget is designed to meet the highest standards of municipal budgeting. This budget continues the City’s commitment of providing high quality services in a cost-controlled manner, developing an assortment of revenues to fund programs and maintaining prudent cash reserves. This year’s budget process emphasizes sound fiscal management and sustainability to achieve the goals established by citizens, City Council, and staff. The FY 2021-22 budget of $52,861,351 is $3.2M, or 6.63%, more than the adopted FY 2020-21 budget; the increase is primarily due to the inclusion of Capital Improvement Projects in the General Fund, Enterprise Funds (Utilities & Stormwater), and the CRA Fund. The budget is predicated on maintaining the current millage rate of 5.3293 mills; as a result ad valorem revenues will increase by 5.97% citywide. ECONOMIC ENVIRONMENT FY 2020-21 brought about numerous challenges, including reopening from the COVID-19 Pandemic, which required the employees of the City of Fort Walton Beach to rise to the challenge and adapt on-the-fly to continue conducting the business of the City in a professional and safe manner. COVID-19 resulted in a shutdown of the local economy from late March to the end of May in 2020, which negatively affected many of our revenue sources for FY 2020-21. As a result, the projections for State-shared revenues in FY 2020-21 were much lower than normal and capital projects were put on hold due to the uncertainty of revenue sources. Emerging from the COVID-19 Pandemic, City employees adapted quickly and developed alternative service delivery methods to remain available to our customers. As a result, the City is now providing services more efficiently through the adoption of new procedures on how to conduct business while maintaining the highest level of customer service that our constituents have grown accustomed to. As a result of COVID-19, the City of Fort Walton Beach received the following grants from the Federal Government via the CARES Act and American Rescue Plan Act of 2021 in the amounts of $3,792,200 and $3,651,981, respectively, to assist with the response and recovery from the Pandemic. Unemployment in Okaloosa County is 3.7% as compared to 6.9% a year ago. Unemployment in the State of Florida is 5.0% with the National average at 5.8%. The State of Florida revenues have rebounded and are forecast to increase 8.13% year-over-year. These changes show increases in demand for services and consumption of goods. However, the communication services tax revenues have declined in projections over the last few years due to the bundling of taxable wireless services. On a brighter note, the Okaloosa County Property Appraiser anticipates a 5.97%, or $92M, increase in taxable assessed property values for the City, as the real estate market continues its recent boom. City of Fort Walton Beach, FL 5 City Manager’s Budget Message TOP BUDGET ISSUES Current Year – FY 2021-22 Prior Year – FY 2020-21 CIP’s $4,800,000 ▲ Fire Assessment Fee $1,152,767 ▼ Capital Improvements Programs were added Fire Assessment Fee is implemented (1/1/2020) and is throughout the various Funds. designed to offset the costs of Fire Protection Services. Insurance Benefits Insurance Benefits $400,000 ▲ Health insurance premium rates remained flat for Increase of 10.5% in overall rates for health insurance. FY21-22. State-Shared Revenues $222,824 ▲ State-Shared Revenues $620,721 ▼ Have rebounded and show a healthy 8.13% increase A decrease of 39.23% year over year as a result of year-over-year. COVID-19. Property Taxes The City’s 2021 gross taxable property value for operating purposes is $1.637 billion, an increase of $92 million, or 5.97%, from the 2020 final gross taxable property value of $1.544 billion. Property taxes primarily fund General Fund operations. However, property taxes paid by certain residents and businesses located in areas targeted for specific improvements to eliminate blight and improve infrastructure are allocated to the Community Redevelopment Agency (CRA) Fund. 1,800 9 1,600 8 Ad Valorem Taxes (millions) 1,400 7 Taxable Value (millions) 1,200 6 1,000 5 800 4 600 3 400 2 200 1 - - 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 General Fund CRA Fund Tax Revenue Millage Staffing and operational cuts were made in FY 2011-12 and FY 2012-13. In FY 2013-14, the City simply did not have room to “do more with less” and raised the millage rate to 5.7697 mills. As property values continue to rise, the City lowered the millage rate to the rolled-back rate of 5.6395 mills in FY 2019-20 and lowered it to 5.3293 mills in FY 2020-21. The FY 2021-22 proposed budget is predicated on maintaining the current millage rate of 5.3293 mills. The rolled back rate for FY 2021-22 is 5.0844 mills. One mill equals $1 per $1,000 of taxable property value. City of Fort Walton Beach, FL 6 City Manager’s Budget Message Wage Adjustments The Pay & Classification Study was completed and implemented in FY 2019-20. Human Resources and Finance implemented the recommendations of the study for each position minimun and adjusted the compressed salaries for the affected employees. Furthermore, the position reclassifications were adopted within our current position management structure. In the Proposed FY 2021-22 Budget, there is a 3% Cost of Living Adjustment (COLA) effective on October 1, 2021 and a 2.0% Length of Service Adjustment (effective on the employee’s anniversary date) for all general employees. Sworn Police Department employees will receive the 3% COLA on October 1, 2021 and step increases on their anniversary date based on the pay grade and step plan adopted with the Pay & Classification Study. Step increases for Fire Bargaining Union Members will be based on the current pay grade and step plans adopted with the current Collective Bargaining Agreements. The COLA equates to an increase of $456.8K and the Length of Service adjustments will equate to an increase of $138.9K for an overall cost of $595.7K in the budget. Pension Defined Benefit Changes The City is required to maintain its three defined benefit pension plans in a fiscally sound manner. Investment earnings and employee/employer contributions comprise the plans’ income. General employees and police officers currently contribute 5% of wages while firefighters contribute 8% of wages into their respective plans. The City’s annual contribution, as a percent of payroll, is based on actuarially determined contribution levels except for the General Pension Plan which has switched from a percentage to a fixed