Fort Walton Beach Council agenda — 09-04-13--public hearing-budget — reading text

ca The reason for setting the millage rate at 5. 7907 mills is to provide sufficient revenues to balance the General Fund budget. d, oN Mayor: Open the Public Hearin a and ask for comments on the tentative millage rate. nN Mayor: Close the Public Hearing. c N Mayor: Ask for a Motion and Second for Resolution 2013 -23 to set the tentative n millage rate for the City of Fort Walton Beach at 5. 7907 for the fiscal year beginning October 1, 2013 and ending September 30, 2014. r Use specific language above for motion.) n u Mayor: Ask for Council Discussion. d N m Mayor: Ask for a Vote. e Mayor: Upon adoption of the Resolution, the Mayor shall announce: The tentative millage rate for the City of Fort Walton Beach is 5. 7907 v mills for the fiscal year beginning October 1, 2013 and ending September 30, 2014, which is 28. 17% above the rolled -back rate of d 4. 5180 mills. m TheThe proposedproposed millagemillage isis subjectsubject toto aa secondsecond andand finalfinal publicpublic hearinghearing oo thatthat willwill bebe heldheld herehere atat thethe CityCity ofof FortFort WaltonWalton BeachBeach CouncilCouncil oo ChambersChambers onon Wednesday,Wednesday, SeptemberSeptember 18,18, 20132013 atat 5:5: 30pm.30pm.  42 City Council of Fort Walton Beach FINANCE MEMORANDUM To: Michael D. Beedie, City Manager From: Charlotte Dunworth, Budget and Grants Manager Date: September 4, 2013 Subject: 2013 -24 - FY 2013 -14 Tentative Budget 1. 1. 1. In compliance with the City Charter, the City Manager is to prepare and submit to City Council the annual budget identifying expenditures and revenues in sufficient amounts to cover all appropriations. The City Manager' s proposed FY 2013 -14 budget was presented to City Council at the August 12, 2013 budget meeting. 2. DISCUSSION: 2. 1. Based on the Strategic Planning Session held in April, the FY 2013 -14 budget was developed with the following goals in mind: 2. 1. 1_ Establish a sustainable budget to maintain current services; 2. 1. 2. Create a proactive culture within the City; 2. 1. 3. Position the City to grow and prosper for years to come; and 2. 1. 4. Create an environment where the millage is evaluated annually. 2. 2. Over the past five ( 5) years, the City has experienced declining revenues and a declining workforce, while the cost of providing services has remained flat or increased. The " reactive" year -to -year budgeting that occurred has strained the City financially and has sacrificed long -term viability for a short- term balanced budget. 2. 2. 1. The result of these trends has been a deferment of renewal and replacement plans and the elimination of employee wage adjustments. 2.2. 2. Because of the reduced renewal and replacement programs, the City has been unable to replace vehicles and equipment on an industry- standard ten ( 10) year cycle, resulting in increased maintenance and repair costs for both fleet and facilities, and safety is becoming an issue. 2.2. 3. The financial strain caused by the year -to -year budgeting has resulted from increased costs to maintain and repair aging vehicles, equipment, and facilities due to postponing necessary improvements and replacements. 2. 2. 4. To reduce the workforce, retirement incentive programs were offered to longer tenured employees, which has resulted in the loss of a tremendous amount of institutional knowledge. Further losses may occur as the private sector begins to rebound in line with the economy. 2. 3. For the most part, residents and businesses have seen only minor reductions in services rxrc 11), 2488 Page I  F- 4.2 RESOLUTION 2013 - 24 and programs as a result of staffing and operational reductions over the last several years. However, retaining the millage rate at 4. 5383 mills for FY 2013 -14 is not possible without cuts that would result in increased response times for Police and Fire as well as safety concerns for those personnel or the elimination of programs that give the City its identity. 2. 3. 1. Reductions to recreational programs would be counter- productive since a new Recreation Complex is currently under construction. 2. 3. 2. The deferment of computer, vehicle, and equipment replacements and facility maintenance as well as the elimination of employee wage adjustments is not sustainable. Maintenance and repair costs for fleet and facilities are increasing, and talented employees are leaving for more competitive pay. 2. 4. On June 18, 2013, City Council approved a millage cap of 6. 0000 mills. A proposed budget based on a millage rate of 5. 7954 mills was presented at the August 12' budget meeting. The budget has been further refined to reflect a millage rate of 5. 7907 mills, an increase of 1. 2524 mills over the current millage rate of 4. 5383 mills, which has remained unchanged since FY 2010 -11. 2. 5. The proposed millage rate of 5. 7907 mills allows the City to sustain all of its current services and re- implements the associated equipment renewal and replacement programs necessary to reduce maintenance and repair expenses and provide a safer working environment for the employees, citizens, and business owners. 2. 5. 1. The proposed FY 2013 -14 budget follows the direction received from City Council at the April Strategic Planning Session. 2. 5. 2. The FY 2013 -14 budget also allows the City to create a proactive culture instead of being reactive, and positions the City to prosper for the short- and long -term future. 2. 6. One mill equals $ 1. 00 per $ 1, 000 of taxable property value. Increasing the millage rate from the existing 4. 5383 mills to the proposed 5. 7907 mills equates to $ 125. 24 per year, or $ 10. 44 per month, in additional property taxes for a property with a taxable value of $100, 000. 2. 6. 1. Interestingly, 80% of residents and 34% of businesses have taxable values under 100, 000. 2. 6. 2. The median residential taxable value is $ 56, 813, which results in an increase in property taxes of $71. 15 per year, or $ 5. 93 per month. 2. 6. 3. The median commercial taxable value is $ 165,281, which results in an increase in property taxes of $207. 00 per year, or $ 17. 25 per month. 2.7. A preliminary list of encumbrances ( i. e. open purchase orders) and projects identified for carryover will be provided at the meeting. These amounts will be finalized at the second public hearing on September 18, 2013. Carryovers include open purchase orders, grants, and projects that are anticipated to be incomplete as of September 30, 2013 and are proposed to be continued and made part of the FY 2013 -14 8  42., ";. RESOLUTION 2013 - 24 appropriations. These expenses were authorized, budgeted, and appropriated by City Council in the prior fiscal year and are carried forward and funded with the corresponding revenue appropriations of the prior year. 2. 8. The salaries for Charter Officers have traditionally been set during the annual budget process in accordance with Section 53 of the Charter. However, commencing with FY 2012 -13, all Charter Officers were evaluated in August and their performance incentives awarded at that time by City Council. 2. 8. 1. The FY 2013 -14 budget includes funding for a wage adjustment up to 3. 75% for both the City Manager and City Clerk should City Council elect to award wage adjustments during the August 2014 review process. 3. FINANCIAL INFORMATION: 3. 1. A millage rate of 5. 7907 mills generates an additional $ 1. 1M in the General Fund and 209K in the CRA Fund compared to the current millage rate of 4. 5383 mills. The additional funding in the General Fund is allocated as follows: 3. 1. 1. $ 300K to offset the reduction in Gulf Power franchise fee revenue; Gulf Power' s fuel charge decreased from $