Fort Walton Beach Council agenda — 05-20-08 special agenda - budget policy issues — reading text

2006 2007 2008 Budget General Fund CRA Fund ( excl. CountyTIF) 5 of 34 FY 2008 -09 Budget Policy Meeting Budgeted Program Expansion FY 2006 Land Acquisition on Lewis Turner Blvd. 255, 270 Purchased 42 acres from Division of Forestry - debt payment ALS Program Phase 3 298,018 Purchased Rapid Response Vehicle & Hired 6 Addt'I Firefighters Address Affordable Housing 175, 000 Funding Workforce Housing Initiative Maintain Competitive Public Safety Salaries 191, 622 Police COLA 7. 55 %, Fire COLA 4. 0% Improve Recruitment & Retention of Police Officers 10, 440 AdAd ValoremValorem revenuerevenue increase increase duedue toto assessedassessed Expanded Take -Home Vehicle Policy - fuel only valuevalue appreciationappreciation FY 2006 Total 930, 350 803,803, 385385 ForFor FYFY 2007,2007, thethe City'City' ss taxabletaxable assessed assessed valuevalue increasedincreased 23.23. 3%3% oror$ $ 256M,256M, resultingresulting inin aa furtherfurther 15.15. 6%6% oror $$ 814K814K increaseincrease inin propertyproperty taxtax revenuesrevenues inin thethe GeneralGeneral FundFund andand CRACRA FundFund combined.combined. InIn additionaddition toto thethe newnew andand expandedexpanded servicesservices ofof FYFY 2006,2006, inin FYFY 20072007 thethe CityCity addedadded oror expandedexpanded additionaladditional servicesservices andand programsprograms whilewhile reducingreducing thethe millagemillage raterate 6.6. 6%6% fromfrom 4.4. 97009700 toto 4.4. 6458.6458. BudgetedBudgeted ProgramProgram ExpansionExpansion FYFY 20072007 MaintainMaintain CompetitiveCompetitive PublicPublic SafetySafety SalariesSalaries 314,314, 904904 PolicePolice COLACOLA 9.9. 00%,%, FireFire COLACOLA 2.2. 99% 99% Underground Underground UtilitiesUtilities InitiativeInitiative 135,135, 827827 Continue Continue ThemeTheme onon EglinEglin PkwyPkwy betweenbetween HughesHughes & & HollywoodHollywood Improve Improve RecruitmentRecruitment & & RetentionRetention ofof PolicePolice OfficersOfficers 128,128, 200200 PrePre - - ServiceService Hiring;Hiring; TakeTake - - HomeHome VehicleVehicle PolicyPolicy - - newnew vehiclesvehicles ReduceReduce DrugDrug ActivityActivity 89,89, 429429 AddedAdded CRACRA PolicePolice OfficerOfficer ImproveImprove CodeCode InspectionsInspections andand ComplianceCompliance 74, 416 Added Code Inspector I ALS Program Phase 3 96,401 FullFull YearYear FundingFunding forfor 66 Addt'Addt' I Firefighters Firefighters Improve Emergency Response Capabilities 55,55, 000000 Purchased Command Vehicle 40, 740 Ad Valorem revenue Maintain Professional Sporting E =vent increase due to assessed UpdatedUpdated andand RepairedRepaired TennisTennis CenterCenter value appreciation FY 2007 Total 944,917 814,480 The City of Fort Walton Beach uses ad valorem revenues to enhance the quality of life for its citizens. With respect to the double digit property tax revenues increases in these two years, the City's budget reflected additional and Expanded programs and services ( at a cost greater than the ad valorem revenue increase) as directed by City Council through annual Budget Policy Workshops held in April, Budget Workshops held in August, and Public Budget Hearings held in September. The increase in property taxes was not used to fund increased operational costs such as fuel, utilities, concrete, or property & casualty insurance ( which increased 60% or $ 258K in FY 2007, with building and contents coverage quadrupling from $ 96K to $ 380K). For FY 2008, the millage, rate was lowered for the second year in a row by 9. 6% to 4. 1986 as a result of legislation designed to reduce property tax revenues. A major factor in preparing the FY 2008 -09 budget will be property tax reform. The Florida Legislature passed legislation in June 2007 limiting the millage rate the City may levy by simply majority vote of the governing body. For FY 2009, the maximum millage rate by majority vote is the roll -back rate ( calculated exclusive of the impact of Amendment One on assessed value) plus a 4. 15% adjustment factor for growth in per capita Florida personal income. 6 of 34 FY 2008 -09 Budget Policy Meeting Additionally, Florida voters in January 2008 approved Amendment One providing additional exemptions and limiting increases in property values. Amendment One provides 1) an additional $ 25, 000 exemption for homestead properties, 2) a $ 25, 000 tangible property exemption for businesses, and 3) limits the increase in assessed value for non -homestead properties to 10% annually. The impacts of these changes will not be known until the Property Appraiser provides the City's 2008 assessed value no later than July 1. However, based on parcel data from the property appraiser, the additional $ 25K homestead exemption could reduce the City's tax base by $ 101. 7M, which translates to $ 427K in revenue at the current millage rate of 4. 1986. In addition to a decrease in assessed value due to Amendment One, it is possible that assessed values will have decreased as a result of the cooling real estate market. The effect of the real estate market decline will probably be more pronounced on the 2009 tax roll, though some effect may be seen on the 2008 tax roll. This information will not be known until mid -to -late June, July 1 at the latest. Unfortunately, the City will not be able to absorb this level of revenue reduction through increased workload on existing staff, program efficiencies, and cost savings. Service, program, and staff reductions will be required to reduce expenses in line with decreased revenues. Departments have prepared their initial FY 2009 budget submission based on an 8% across -the -board decrease. This budget, along with analyses of programs and revenues and staff's recommendation for changes, will be presented for City Council consideration during the August budget meetings. User Fees — The City levies user fees to fund the cost of regulating an activity or providing a service or facility and these are the largest source of revenue for the City. Unlike taxes, these service charges are directly related to the service received. User fees 15 inc Id u e I eisure services suc h as recreation programs, 12 senior center, library, museum, and golf; development activities such as building permits; water and sewer 9 service; and garbage collection. Fees are set by City 0 Council based on the cost of providing these services, 6 reviewed and adjusted annually as part of the budget process, and published in the Comprehensive Fee 3 Schedule. o Parks and recreation fees recover approximately 25% 2003 -04 2004 -05 2005 -06 2006 -07 Budget of the cost of recreation programs and services. Recreation Water /Sewer 2007 -08 D Garbage /Recycling Community Dev. Community development fees fund approximately Other 70% of the building and zoning department. State statute allows full cost recovery for implementing the Florida Building Code. Water and sewer rates increase annually in accordance with the five -year plan adopted in