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

support from the county while struggling to maintain service levels for a growing population. For the Cooperative headquarters, funding cuts have resulted in cessation of bookmobile service, loss of one position, inability to fill an open position for almost a year, and failure to replace aging technology infrastructure. Despite the challenges of declining revenue, there is a strong desire on the part of all participating cities to continue the Cooperative in its current configuration. Museums Support. After several years of 10.0% reductions, last year the Board of County Commissioners decreased funding to museums by 50.0%. This was the fourth year in a row for funding reductions. Current Board support for museums consists of donations to Destin Fishing Museum of $6,480 and to the Baker Block Museum of $6,480. The Board also pays for Baker Block Museum’s water, natural gas, and electric utilities, Attachment: Budget Policy Document FY14 (1578 : Budget Policy Document) estimated at $13,000 annually, from Public Works/Parks. The Board supported the Heritage Museum with funding of $13,485 in Fiscal Year 2013. With the continuing decline in available revenues, budget staff is proposing further reductions or elimination of funding for museums. Fleet Operations. The County’s fleet is aging and growing unreliable. Regular replacement of vehicles has been suspended since Fiscal Year 2007. The lack of replacement vehicles has resulted in soaring maintenance costs and not enough vehicles in an operationally reliable condition for County work crews to depend on day to day. There are 361 vehicles within the Board of County Commissioners’ departments. Currently 205 County vehicles have in excess of 100,000 miles; many of these have over 150,000 miles with some over 300,000 miles. Of the County’s 19 ambulances, 13 have over 150,000 miles. Fleet Operations recommends the Board resume a timely vehicle replacement program. Approximately 30 vehicles need to be replaced per year and would cost the General Fund Departments $626,000 and Enterprise Departments $1,295,000 in Fiscal Year 2014. Since Fiscal Year 2007, the County has also delayed replacement of construction and maintenance equipment. As with the vehicle fleet, the maintenance costs have soared while increases in downtime have caused project delays. The Road Department has nine essential pieces of equipment needing immediate replacement including a crane, a boom axe, two loaders, a tractor and four batwing mowers. Replacing these nine units in Fiscal Year 2014 will cost $1,152,500. Though fuel prices have fluctuated, on average, the cost of fuel has remained at least 20 cents per gallon under the Fiscal Year 2013 budgeted amount. At this time, Fleet Operations anticipates no increase in the budgeted cost per gallon in Fiscal Year 2014. Policy Recommendation. After six years of limited vehicle and equipment replacements, the Board should consider the implementation of a more aggressive program to begin updating county’s aging fleet and equipment. Staff recommends budgeting $1,253,500 for Fiscal Year 2014 General Fund replacements (Vehicles $626,000 and Equipment $627,500) deemed as critical needs. Reserves. The level of reserves to be budgeted is established by Board of County Commissioners policy, State law, or debt covenants. Reserves are a very important source of residual funds in case of emergency needs. Although the Board has attempted to increase the reserves at least to what is considered an “adequate level” in recent years, over the last couple of years the reserves have declined due to their necessary use for operations, in light of declining resources and budget needs. Florida Statutes cap Reserves for Contingencies at 10.0% of the total budget. All “general governmental” reserves, not just reserve for contingencies, in the Fiscal Year 2013 Page 23 Packet Pg. 30  1.b budget, exclusive of debt service and enterprise operations, comprise about 19.5% of the total budget. Reserves are also utilized as a buildup of funds in anticipation of major capital projects. Major capital projects in enterprise activities are built up as anticipated through fees, fee increases and fee study reviews. Other elements of this buildup could be reductions in costs and long-term debt capital funding. Governmental fund capital projects are generally funded through some sort of long-term debt scenario. Governmental fund resources are generally more difficult to build up than enterprise fund activity due to the limited flexibility of governmental resources. Policy Recommendation. Reserve levels need to be maintained at adequate levels for a variety of reasons. Emergency needs, bond rating purposes and annual Auditor General financial condition assessments, are just a Attachment: Budget Policy Document FY14 (1578 : Budget Policy Document) few. Many counties have policy levels related to reserves increasing from 5.0% of total budget and more. As reference to the General Fund, exclusive of Constitutional Officers, staff would recommend a target reserve of 8.0% or approximately, 30 days of “operating cash”, of total General Fund expenditures, therefore the General Fund reserve would need to equal approximately $3,015,000. Budgeted Reserves for "General Governmental" Operations $155,668,821 $154,210,620 $149,287,599 $146,550,520 $180,000,000 $141,118,141 $160,000,000 $140,000,000 $120,000,000 $100,000,000 $80,000,000 $30,064,995 $21,017,667 $60,000,000 $16,002,293 $21,025,055 $16,518,562 $40,000,000 $20,000,000 $0 2009 2010 2011 2012 2013 Reserves Budget Page 24 Packet Pg. 31  1.b Capital Project Budgeting Policies Capital Improvement Program The Capital Improvements Program (CIP) guides the development of public facilities needed to meet a determined level of service, including roads, parks, utility infrastructure, government buildings, major equipment and renovations to existing buildings, over a five year period. The CIP provides the financial foundation necessary to implement the Comprehensive Plan. The CIP must be financially feasible which means that sufficient revenues are currently available or will be available from committed funding sources for the first 3 years, or will be available from committed or planned funding sources for years 4 and 5. Attachment: Budget Policy Document FY14 (1578 : Budget Policy Document) The County’s CIP includes the five-year growth projections identified in the Capital Improvements Element (CIE) of the Comprehensive Plan as well as non-CIE capital improvements not directly related to the Comprehensive Plan. On an annual basis, Okaloosa County prepares and adopts a Five-Year CIP consistent with the requirements of the Comprehensive Plan. The CIP is presented to the Board of County Commissioners as a separate report from the budget printout. Under this format, departments provide a description of capital having an anticipated cost of $5,000 or more and include any known operational impacts, such as additional personnel or equipment. The annual budget will include sufficient appropriations to fund capital projects identified in the first year of the Five-Year CIP. Any project approved for funding will have an adequate budget for operation and maintenance. 45,018,974 Capital Expenditure History by Fund Type $50,000,000 $45,000,000 21,399,726 $40,000,000 16,993,670 $35,000,000 12,541,257 14,991,943 13,048,534 11,570,767 $30,000,000 $25,000,000 7,028,000 6,089,039 6,301,503