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

Michael Beedie Sent: Wednesday, September 04, 2013 4: 39 PM To: Carole Jones; Brandy Ferris; Charlotte Dunworth; Jeff Peters; Helen Spencer; Kenneth W. Perkins; Ted Litschauer; Tim Bolduc Subject: September 4th Budget Hearing Script September 4th Budget Hearing As the City Manager, I am tasked with preparing an annual budget and presenting it to City Council for final approval. 1. When I was hired as City Manager, I began developing a culture and a vision for the City to follow. This vision was unveiled at the April Strategic Planning Session, where 14 action items were developed to allow Staff to move toward achieving the vision. The proposed FY 2013 - 14 budget is the first step towards achieving the vision. Tonight' s meeting is the third time the budget has been presented to City Council and serves as the first public hearing to adopt the FY 2013 - 14 budget. 1. At both the June and August meetings, City Council, as a body, adopted or endorsed the proposed budget, which gave Staff direction to move forward with the tentative budget in front of you tonight. 2. I must remind you that City Council, as a body, approved Staff to move in this direction. As the City Attorney reminded us last week, decisions made by City Council are as a body and not as individuals. The first step in the FY 2013 - 14 budget adoption is to adopt the tentative millage rate. The proposal in front of you tonight requests a tentative millage rate of 5. 7909 mills. The proposed millage rate is less than the 6. 0000 mill cap set in June and the 5. 7954 mills presented in August. The tentative millage rate is 1. 2524 mills higher than the FY 2012 - 13 millage of 4. 5383 mills. All of the details of the necessity of the millage rate increase have been discussed in detail at both prior budget meetings. This information is also included in the staff report included with the agenda item. Tonight, I would like to concentrate on setting the facts straight about certain items in the budget. I have seen the propaganda that has been circulated throughout the City since the August budget hearing. 1. As City Manager, it is my responsibility to relay the facts about the budget so City Council and the public can make an educated decision one way or the other. It is not my job to persuade property owners one way or the other on a topic such as the budget. 1  There have been a Facebook page setup, petition drives, letters to citizens, and who knows what else. And, all of the propaganda has been focused on opposing the millage rate increase. 1. Petitions can be structured to get the response desired based on the information included. This could have been done either way. 2. I also extended an invitation to every property owner in the City to come in and ask questions, present ideas, etc. on ways to reduce the budget. Not one property owner opposing the tax increase took me up on my offer. The issue with all of the negative propaganda is that the information being relayed is not 1006 fact. While the proposed millage rate increase is close to 286, people must realize that percentages are relative. 286 of a small number is still a small number, while 286 of a large number is a larger number. If we want to focus on percentages, let' s focus on the fact that 806 of the City' s residential properties have a taxable value of $ 100, 000 or less. The median taxable value of residential properties is $ 56, 813. The City has just under 8, 000 residential properties. 1. 56 of the City' s residential properties, or 400, are tax exempt, meaning those properties owners don' t pay a penny in ad valorem taxes to either the City or County. Some of the most vocal critics of the proposed millage rate fall in this category. 2. These properties' exemptions outweigh the taxable value, and therefore, no tax revenue is received from these properties. This can be attributed to what can be compared to unfunded mandates - Save Our Homes and other additional exemptions - that were out of local government control. 3. In essence, these 400 properties are subsidized by the other taxpaying property owners of the City. The other percentage I want to focus on is the 286 increase. It is true that the proposed millage rate of 5. 7907 mills is approximately 286 higher than the current millage rate of 4. 5383 mills. However, this does not translate into a property owner' s entire ad valorem tax bill rising 286. As I have previously stated, the City' s portion of the overall tax bill is around 306, so the 286 only applies to 306 of the tax bill. This equates to an increase of the overall tax bill of around 86. Another percentage we should focus on is the fact that ad valorem revenues only fund about 256 of the overall General Fund services, or 596 of Public Safety. The other percentage comes from user fees, franchise fees, utility taxes, etc. Ad valorem revenues are the only significant revenue source the City has control over within the General Fund. Let' s put the proposed millage rate increase into perspective one more time. On a taxable value of $ 100, 000, the increase in property taxes equates to $ 125. 24 per year, or 10. 44 per month. 1. So, in order to keep all of the City' s services intact and develop a sustainable budget, 806 of the City' s residents will pay $ 10. 44 or less per month. 56 of property owners will still pay $ 0. The other fact I must clarify revolves around the proposed renewal and replacement programs. The propaganda stresses that the proposed budget includes NEW vehicles and equipment. I want to make sure everyone understands that we are not adding vehicles to the fleet, we are actually reducing the number of vehicles in the fleet. 1. And, I must state that the vehicles proposed for replacement have exceeded their useful life and have become a safety hazard to operate and irresponsible to maintain. The repair costs exceed the initial and current value of the vehicle. 2. Comparisons have been made to the mileage and condition of the City' s vehicles versus personal vehicles. The daily wear and tear of City police vehicles cannot be compared to the daily wear and tear of personal vehicles. There is a reason why the industry standard on the replacement of police vehicles is 7 years, and it' s because the vehicles are always running to power the equipment, the miles are hard miles and not just your daily drive to work and back. 3. Misinformation about the cost of take home vehicles has also been brought up. It has been calculated that take home vehicles cost the City between $ 15, 000 and $ 20, 000. The cost is not $ 10, 000 per vehicle. 4. Another benefit of a structured replacement program for vehicles is marketing. Every Council member expressed an interest at the Strategic Planning Session to initiate a marketing campaign for the City. One of the simplest ways to do this is to utilize the employees that are most visible to the public: Police and Fire. Driving vehicles that are not up to standards does not give a good impression on residents and visitors. However, driving new vehicles with an updated striping theme serves a dual purpose. In the proposed budget, there have always been two " fluid" items: employee wage adjustments and personnel changes. The other items, such as renewal and replacement programs and pension contributions, are what I call non - neogitable. 1. In order to be fiscally responsible, the City should be setting aside funding each year for renewal and replacement programs. while it has been nice to use fund balance to purchase vehicles