Fort Walton Beach Council agenda — 08-12-13--special--budget — reading text

Agenda — City of Fort Walton Beach Special Meeting of the City Council of Fort Walton Beach Monday, August 12, 2013 5: 30 PM 107 Miracle Strip Parkway Fort Walton Beach, FL 32548 1. CALL TO ORDER 5: 30 PM Meeting will be called to order on August 12, 2013 at Council Chamber, 107 Miracle Strip Parkway, Fort Walton Beach, FL. 2. PLEDGE OF ALLEGIANCE 3. APPROVAL OF AGENDA 4. PUBLIC COMMENTS 5. ACTION --DIRECTION --DISCUSSION 5. 1. Discuss the FY 2013 -14 Proposed Budget Synopsis: ( Budget and Grants Manager) The City Manager will present the proposed budget for FY 2013 -14. At kCnMEN' h: I- ' 013- 14P.... + alna. Set I111A 6. ADJOURNMENT Quasi -Judicial — denotes that the item must be conducted as a quasi -judicial hearing in accordance with Florida Statutes. Action— Direction —Discussion items may be acted upon by the City Council by either a motion with a vote in accordance with Robert' s Rules of Order, or by a consensus of the Council. Any person who decides to appeal any decision made with respect to any matter at this meeting will need a record of the proceedings, and for such purpose may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based. ( Chapter 286. 01105, F. S.) Cav Council eaCen, Wallon Beach Page 1 Pca, W N/ 6 /2013 sts, 6. 1 Meeting Agenda August 12, 2013 The City of Fort Walton Beach adheres to the Americans with Disabilities Act and will make reasonable modifications for access to this meeting upon request Please call City Clerk Helen Spencer at 833 -9509 to make a request. For Hearing Impaired dial the City Hall TDD # 850 -833- 9925 or 1- 800 -995 -8771 ( TDD) or 1- 800 -955 -8770 ( Voice). Requests must be received at least 48 hours in advance of the meeting in order to allow the City time to provide requested service. All City of Fort Walton Beach council and board meetings are recorded. The video can be accessed at www. fwb.org. Poge 2 Printed 81612013 Ot, Cm. c,d of£on W. 1,mn Beach  5. 1 City Council of Fort Walton Beach FINANCE MEMORANDUM To: Michael D. Beedie, City Manager From: Charlotte Dunworth, Budget and Grants Manager Date: August 12, 2013 Subject: FY 2013 - 14 Proposed Budget 1. BACKGROUND: I. I. In compliance with 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. 2. DISCUSSION: 2. 1. The budget process with City Council began in April with the Strategic Planning Session, at which time fourteen ( 14) action items were identified. 2. 2. Based on the Strategic Planning action items, Staff has developed the FY 2013 - 14 budget with the following goals in mind: 2. 2. 1. Establish a sustainable budget to maintain current services; 2. 2. 2. Create a proactive culture within the City; 2. 2. 3. Position the City to grow and prosper for years to come; and 2. 2. 4. Create an environment where the millage is evaluated annually. 2. 3. 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. 3. 1. The result of these trends has been a deferment of renewal and replacement plans and the elimination of employee wage adjustments. 2. 3. 2. Because of the reduced renewal and replacement programs, the City has been unable to replace vehicles and equipment on a standard ten ( 10) year cycle, resulting in increased maintenance and repair costs for both fleet and facilities, and safety is becoming an issue. 2. 3. 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. 3. 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 Page 1 of 4 PeGtet P®t3  5. 1 institutional knowledge. Further losses may occur as the private sector begins to rebound in line with the economy. 2. 4. For the most part, residents and businesses have seen only minor reductions in services and programs as a result of staffing and operational reductions over the last several years. However, retaining the millage rate at 4. 5383 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 identify the City (e. g. Library, Heritage Park Museums). 2. 4. 1. Reductions to recreational programs would be counter -productive since a new Recreation Complex is currently under construction. 2. 4. 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. 5. On June 18, 2013, City Council approved a millage cap of 6. 0000 mills. Staff has developed a proposed FY 2013 -14 budget with a millage rate of 5. 7954 mills, an increase of 1. 2571 mills over the current millage rate of 4. 5383 mills, which has remained unchanged since FY 2010 -11. 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. 7954 mills equates to $ 125. 71 per year, or $ 10. 48 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. 42 per year, or $ 5. 95 per month. 2. 6. 1 The median commercial taxable value is $ 165, 281, which results in an increase in property taxes of $207. 77 per year, or $ 17. 31 per month. 2.7. The proposed millage rate of 5. 7954 mills allows the City to " sustain' all of its current services and re- implements the necessary renewal and replacement programs to provide a safer working environment for the employees and citizens and business owners. 2. 7. 1. The proposed FY 2013 -14 budget follows the direction received from City Council at the April Strategic Planning Session. 2. 7. 2. The FY 2013 - 14 budget also allows the City to create a proactive culture within the City instead of being reactive, and positions the City to prosper for the short- and long -term future. 3. FINANCIAL INFORMATION: 3. 1. A millage rate of 5. 7954 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: Page 2 of 4  5. 1 3. L I. $ 300K to offset the reduction in Gulf Power franchise fee revenue; Gulf Power' s fuel charge decreased from $ 4. 96 in January 2012 to $ 3. 82 in January 2013. 3. 1. 2. $ 216K for vehicle replacements; a comprehensive review of the City' s fleet is underway; most vehicles will be replaced on a ten ( 10) year cycle with Police patrol vehicles on a seven ( 7) year cycle. 3. 1. 3. $ 205K for employee wages adjustments of up to 3. 75% based on tenure; the last wage adjustment was on October 1, 2008. 314. $ 67K for Police pension contributions. 3. 1. 5. $ 61K for debt payments to replace a Fire Pumper Truck that has been in service since 1993. 3. 1. 6. $ 45K to offset the reduction in the current Local Option Fuel Tax; this reduction may be higher depending on the outcome of negotiations with Okaloosa County for a new interlocal agreement on the funding distribution. 3. LT $ 45K for reinstatement of the Police Chief' s Administrative Coordinator; this was an unsustainable personnel reduction made in FY 2012 -13. 3. 1. 8. $ 41K for IT equipment replacements. 3. 1. 9. $ 36K for additional required Facilities repairs & maintenance; a comprehensive review of City facilities is underway, including prioritization of repairs and analysis of possible consolidation. 31. 10. $ 27K for Fire pension contributions. 3. 1. 11. $ 26K to reclassify a Streets Service Worker to full -time status. 3. 2. Although the Golf Fund is typically able to generate positive cash flow from operating activities, it is not able to cover its debt payments to creditors or the advance from the General Fund granted two ( 2) years ago to pay off the Clubhouse construction loan. Golf operations are not sustainable as an