Fort Walton Beach — Fiscal Year 2023-24 Adopted Budget — reading text

38 Revenues Ad Valorem (Property) Taxes – Citywide, the 2023 gross taxable property value for operating purposes is $2.079 billion, an increase of $193 million, or 10.23%, from the 2022 final gross taxable property value of $1.886 billion. Ad valorem taxes levied by the City comprise $9.11M, or 16.2%, of total revenues. 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. Property tax revenues are allocated to the CRA Fund based on the growth in assessed value from the base year (i.e. year of CRA designation). Funding from County property taxes comprises $1.555M, or 2.99% higher than the previous year. 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 millage rate was reduced to 4.9999 in FY 2022-23 and reduced again to the rolled-back rate of 4.6116 for FY 2023-24 propsed budget; One mill equals $144.35 per $1,000 of taxable property value. City of Fort Walton Beach, FL 39 Revenues Franchise Fees & Utility Taxes – The City’s franchise fee agreements provide a 6% rate on gross electric and gas sales of utility companies serving Fort Walton Beach. A $1.93 per ton sanitation host fee on garbage collected outside the City limits and brought to the transfer station is also collected per contract. Franchise fees comprise $2.4M, or 7.3%, of revenues and have increased $3.5 16.44% over the previous fiscal year. $3.0 Utility taxes are contractually levied against electric, gas, and water revenues of local utility $2.5 companies at the rate of 10%. Over the past five $2.0 years revenues have steadily increased. This year, Millions $1.5 these revenues are expected to increase by $1.0 10.39%. A large portion of electric and natural gas utility bills is exempt since the tax on the fuel $0.5 charge component is based on 1973 fuel prices $0.0 Franchise Fees Utility Taxes (and therefore immaterial to a great extent). 2019-20 2020-21 2021-22 Budget Budget Utility taxes are anticipated to generate $3.3M, or 2022-23 2023-24 10.2%, of total revenues. Communication Services Tax – This tax was created in FY 2001-02 as a flat tax rate for all communication services. The Department of Revenue collects the tax from vendors and remits the appropriate amounts to local jurisdictions. The Office of Economic and Demographic Research (EDR) provides revenue estimates for cities and counties. Based on information from EDR, $1.15M is budgeted, which is a 11.5% increase when compared to FY 2022-23. This revenue stream has been declining as more consumers eliminate land lines and service providers bundle taxable services with non-taxable services, thereby eliminating payment of the tax. Half-Cent Sales Tax – This category includes a $4.25 $4.00 state-shared revenue distribution, derived from $3.75 $3.50 net 6% state sales tax revenue (which is the $3.25 $3.00 largest source of revenue sharing for local $2.75 $2.50 governments), as well as a half-cent county- Millions $2.25 $2.00 distributed surtax, implemented by voters in FY $1.75 $1.50 2018-19. Together, this revenue source is $1.25 $1.00 anticipated to generate approximately $5.2M, or $0.75 $0.50 15.6%, of total revenues. The revenue estimate, $0.25 $0.00 also published by the Office of Economic and Communication Services Tax Sales Tax Municipal Revenue Local Option Fuel Sharing Tax Demographic Research (EDR), which has 2019-20 2020-21 2021-22 Budget Budget rebounded as the economy has improved, is 2022-23 2023-24 estimated to increase 23.84%. Municipal Revenue Sharing – This is funded by 81.0% of sales and use tax collections, 19.0% of state alternative fuel user decal collections, and the net collections from the one-cent municipal fuel tax. This revenue estimate is published by the Office of Economic and Demographic Research (EDR), and is budgeted at $1.16M, or 3.4%, of total revenues. The revenue estimate, also published by the Office of Economic and Demographic Research (EDR), which has rebounded as the economy has improved, is estimated to increase 14.9%. Local Option Fuel Tax – These proceeds are allocated via a ten-year interlocal agreement between the county and municipalities based on transportation expenditures. Counties are authorized to levy up to 12 cents of local option fuel taxes in the form of three separate levies. The first is 1 cent; the City does not receive a portion of this. The second is 1 to 6 cents; the County City of Fort Walton Beach, FL 40 Revenues levies the full 6 cents and the City receives 9.7956%. The third is 1 to 5 cents, of which the County currently levies 3 cents. The City’s local option fuel tax proceeds for FY 2023-24 are budgeted at $726K and $330K, respectfully. This revenue source is anticipated to increase on an average of 14.1%. Interfund Transfers – Interfund transfers represent $2.2M, or 5.9%, of total revenues. The Beal Memorial Cemetery Fund receives $35K from the General Fund (20% of cemetery lot sales) for investment for perpetual care of the cemetery once all lots are sold. The General Fund receives $1.2M from the Utilities Fund and $212K from the Stormwater Fund (6% of water & sewer and stormwater fees) as a franchise/right-of-way access fee and $485K from the Sanitation Fund to compensate for additional roadway wear & tear caused by heavy sanitation trucks. City of Fort Walton Beach, FL 41  Expenditures FY 2023-24 Budgeted Expenditures $56,300,597 Capital Outlay/ Debt Service , Improvement , Contingencies , $512,214 , $3,949,384 , 7.0% 0.9% $3,882,817 , 6.9% Culture & Recreation , Reserves , $1,265,772 , $5,627,154 , 10.0% 2.2% Economic Environment Interfund Transfers , , $1,362,984 , 2.4% $1,129,171 , 2.0% Transportation , $685,661 , 1.2% General Government , $6,659,802 , 11.8% Physical Environment , $15,057,154 , 26.7% Public Safety , $16,168,484 , 28.7% Physical Environment – This category comprises $15.0M, or 26.7% of total expenses and $16 includes cemetery