Okaloosa County BOCC — April 9, 2013 (meeting #1123) — reading text

Increase Fund Title 9-30-2012 9-30-2011 (Decrease) General Fund $8,423,310 $3,936,643 $4,486,667 Attachment: Budget Policy Document FY14 (1578 : Budget Policy Document) Special Revenue County Transportation Trust $1,091,779 $2,066,310 ($974,531) Tourist Development Trust $13,196,918 $16,225,315 ($3,028,397) Natural Disasters $1,157,322 $1,206,022 ($48,700) E911 Operations $1,299,843 $1,085,587 $214,256 Unincorporated County Parks $4,675,333 $4,413,418 $261,915 All Other $2,791,003 $2,543,302 $247,701 Debt Service Fund $194,806 $430,601 ($235,795) Capital Projects Funds Capital Outlay Construct $3,699,258 $7,974,845 ($4,275,587) Road & Bridge Construct $11,201,953 $10,745,328 $456,625 Enterprise Funds(Net Assets) Water & Sewer $35,112,802 $19,507,521 $15,605,281 Airport $22,673,659 $21,416,750 $1,256,909 Solid Waste $1,023,698 $97,186 $926,512 Inspection $122,876 $213,290 ($90,414) Emergency Medical Services $3,432,243 $2,673,937 $758,306 Convention Center $6,456,466 $6,938,552 ($482,086) Internal Service Funds Self Insurance $1,174,318 $980,250 $194,068 Garage Services ($29,863) $130,627 ($160,490) Total $117,697,724 $102,585,484 $15,112,240 Page 17 Packet Pg. 24  1.b Local Government Expenditures Governmental expenditures are utilized primarily to provide required services not provided by any other source. Governmental services include; property appraisal, tax collections, election services, assimilation and recording of legal/court documents, law enforcement and public safety services, growth management, public transportation, road construction and maintenance, recreation/cultural services, water and sewer services, airport services and solid waste services, just to name a few. Personal Services Salary Adjustments. Each budget year, staff reviews National economic trends, including an averaging of the Attachment: Budget Policy Document FY14 (1578 : Budget Policy Document) Employment Cost Index (ECI), the Consumer Price Index (CPI), and various compensation surveys, and provides wage scale increase recommendations based on those sources. During the Fiscal Years 2009, 2010, 2011, 2012 and 2013 the Consumer Price Index (CPI) indicated wage scale increases of 4.30%, .10%, 2.70%, 1.50% and 2.90%, respectively. In Fiscal Year 2009, the Board awarded the last across the board market adjustment in the amount of 2.0%. Based on the minimal employee wage increases awarded and the stated CPI adjustments for those Fiscal Years, employees have fallen behind 9.89%. For Fiscal Year 2014, the National economic trends indicate wage scale increases of 1.9% are warranted. In an effort to begin addressing the lack of market adjustments and keeping with current economic trends, staff recommends a 3.0% market adjustment for employees. This increase in compensation equates to approximately $1,903,460, including constitutional offices, of which $444,838 represents enterprise or proprietary funding. For discussion purposes, a 1.0% increase or decrease in compensation equates to approximately $634,487, including constitutional offices, of which $148,279 represents enterprise or proprietary funding. Note that although the Board would not fund the merit program under this proposal, the program’s associated performance reviews would continue to be conducted on employees’ anniversary dates. An alternative to providing an across the board employee wage increase would be to offer a one-time lump sum payment. This option provides the County some savings in retirement contributions as employer and employee contributions are not due on this type of lump sum payment. Also, because this alternative occurs once, it does not compound the County’s liability for future years. A comprehensive discussion of furloughs is included in a white paper entitled Potential Budget Reduction Strategies included with this document. Furloughs are a planned event by an agency and are designed to absorb reductions necessitated by downsizing, reduced funding or any other event which requires an agency to save money. These programs are generally implemented to resolve immediate, short-term funding shortages and unless implemented year after year until funding returns, do not fully address the shortfall. For discussion purposes, each five days (40 hours) of furlough equals approximately 1.9% reduction in pay to employees and represents $651,686 in savings to the Board. Retirement Contributions. On July 1, 2011, the Florida Retirement System (FRS) began requiring most employees to contribute 3.0% toward their retirement. This change along with significantly reduced employer contributions equated to over a 52.0% decrease in the cost of retirement or an annual savings of $2,184,346. On July 5, 2011, the Board approved a 3% pay increase for employees affected by the new FRS requirement, effective the fourth quarter of Fiscal Year 2011 and the entire Fiscal Year 2012, which has remained in place. Page 18 Packet Pg. 25  1.b A lawsuit was filed challenging the Florida Retirement System’s mandatory 3.0% employee contributions effective July 1, 2011 and reduction in the 3.0% cost-of-living adjustment for Pension Plan members retiring on or after July 1, 2011. On January 17, 2013, the Florida Supreme Court, in a 4-3 decision, ruled in favor of the state thus allowing for the continued collection of the 3.0% employee contribution. Staff will continue to follow current legislative activity that could affect the contribution rates and other provisions of the FRS. Benefits and Other Insurance. The current contract for group health insurance with Florida Blue is scheduled to expire at the end of Fiscal Year 2013. Staff recommends that the County renegotiate a contract with Florida Blue for new rates and coverage options. Under the current contract, if the County attempts to rebid or cancel Attachment: Budget Policy Document FY14 (1578 : Budget Policy Document) the health insurance contract prior to September 30, 2013 or January 31, 2014, respectively, the County will forfeit any ProShare refund monies. The current ProShare refund is expected to be received in Fiscal Year 2014. For discussion purposes, we anticipate the health insurance premium rates to decrease by approximately 10.0%. Based on the anticipated decrease for Fiscal Year 2014, staff anticipates decreasing the per employee cost for health insurance benefits from $9,667 to $8,701. This 10.0% decrease represents a savings of approximately $699,384 annually including participating constitutional offices. As last year’s 3.0% increase was offset by the ProShare refund, a budgetary savings of $496,085 could be anticipated. Utilizing the ProShare refund monies received for the first three years of the program, the $40 per month employee contribution was offset in Fiscal Years 2012 and 2013, and could again offset the $40 per month employee contribution for Fiscal Year 2014. Last year, the Board approved transferring the dental insurance to United Concordia and the life and long term disability insurance to PRISM/Symetra. These changes resulted in approximately $115 per employee annual savings for Okaloosa County. There will be no change in the premiums for these insurance products for Fiscal Year 2014 as the contracts have a minimum rate guarantee of 2 years. Staff recently recommended and the Board approved changing the County’s renewal date of the property insurance from October 1st to April 1st and extending the County’s current property coverage for an additional six months. This will allow the County to renew coverage without the fear that weather events may negatively impact rates or cause insurers to not bind coverage leaving the County vulnerable to catastrophic losses. Premiums will increase 5.0% and therefore will cost approximately $468,429 for the additional six month extension due October 1, 2013. In April 2014, a full year’s premium will be due and is estimated to be $1,005,350. Therefore, it is projected that expenses in Fiscal Year 2014 for property insurance will be $1,473,779 (October 2013 and April 2014 payments). The remainder of the insurance program, including coverage such as liability and excess workers’ compensation, will continue to renew annually on October 1st. Assuming a 5% increase, the premiums for these insurance products are estimated to be $502,611 for Fiscal Year 2014. In total, Fiscal Year 2014 premiums for other insurance are projected to be $1,976,390. Estimated premiums for Fiscal Year 2015 will return to prior levels of premiums in the area of $1.5 million. Staff will continue to work closely with brokers to negotiate an acceptable renewal including options that will allow Okaloosa County to continue its effective protected insurance program. Page 19 Packet Pg. 26  1.b Staffing Board of County Commissioners Positions. Staffing needs are considered on an annual basis prior to budget review. Personal service costs comprised 17.4% of the Fiscal Year 2013 budget. Over the past six budget years, the Board has eliminated a total of 137 positions through three voluntary separation incentive programs (VSIP), layoffs and attrition, and added 48 new positions, for a net decrease of 89 positions. For Fiscal Year 2013, the number of budgeted positions is currently 819 (743 full-time equivalents). Of the 48 new positions, the Board has added 12 of those during the current Fiscal Year. These positions include: 10 Airport Police Officer (Relief) to augment the Airport Police Division; 1 Finance, Administration & Compliance Manager to help