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

Liceneev & yenniLr, Inlerfund Trand—, I, fi93. 911. 5° fr 5222, 083T 4J',j' 1\ mndes $ 97 Revenges, s6sa. 999, 29< _ nne snadnd 125, 7OO, OT Rucwdan. Golf, 591 ( If1o, 2'] Rme¢ ry, Olt,, Fees. t$ 2, 611, 329, 9% 3. 584, 700, 10% Charges for Services ( User Fees) — T ies user fees to fund the cost of regulating an activity or providing a service or ' 1' harges for services are anticipated to generate approximately $ 15. 2 million and are th2west source of revenue for the City at 43. 8 %. Unlike taxes, these service charges are t tl related to the service received. User fees include leisure services such as recreation s error center, library, museum, and golf; water and sewer service; garbage collection; the cost of providin pros water management. Fees are set by City Council based on ces, reviewed and adjusted annually as part of the budget Comprehensive Fee Schedule. Revenues are budgeted based on process, and historical usage an poblis Pudber of customers adjusted for current rates. This revenue source averages a 3. 4 % anase. Water and sewer rates, which generate $ 8. 4M, are assumed to increase 5 °l0 on October 1, 2013 for budget purposes. A new five -year rate study is underway to determine the required rate s+ increase to generate enough revenue to sustain a renewal and replacement reserve and account for ax the debt service associated with the new force » main and pump station. Garbage fees account for $ 3. 6M in revenues. Although tipping fees increased 18 % in January 2013 as a result of a 10 -year contract renewal with Allied Waste, the fee is fixed for the first five years followed by biennial increases for the last five years. The tipping fee represents the City' s cost of disposing of garbage at the transfer station for further transport to a landfill. Recreation and other fees — recreation programs, park rentals, senior center, library, musuem, PacketP6:.42 34  5. t. a Revenues golf, cemetery sales — generate $ 2. 6M in revenues. The $ 2 discount for cash/ check payment for recreation programs, which is an administrative burden and confusing to residents, is slated for elimination. Stormwater fees comprise $ 591K in revenues at a residential -equivalent unit of $ 3 per month. The stormwater master plan will be completed by the end of this summer and the list of priority projects generated will determine the appropriate rate structure needed to fund required improvements. Ad Valorem ( Property) Taxes — The City' s 2013 gross taxable property vat for operating purposes is $ 1. 129 billion, an increase of $9. 4 million or 0. 8% from the 2012 fi a oss taxable property value of $ 1. 119 billion. Ad valorem taxes levied by the City comp $ 6. or 17. 9% of total revenues. Property [ axes primarily fund General Fund opera ons ($ M or 29% of General Fund revenues). However, property taxes paid by certain f9wIdAts and businesses located in areas targeted for specific improvements to elimina 114 njliprove infrastructure are allocated to the Community Redevelopment Agency ( CRA) Fu d. P operty tax revenues are allocated to the CRA Fund ($ 964K or 61 % of CRA reverm ba/ d n the growth in assessed value from the base year ( i. e. year of CRA designation). n g from County property taxes comprises $ 547K or 35% of CRA Fund revenues. V 1. 600 1, 400 1, 200 0110 Soo 600 400 200 200405 200506 2M M07 -09 2008 -09 2009 -10 : 010 -u 2011 12 2012 13 2013 - 14 General Fund CRA N,M _ Tax Revenue • • • • • Millupc As the chart above d 6NCity maintained or decreased the millage ( tax) rate during the real estate boom ( FY 2 OS rough FY 2007 -08). The City maintained the millage rate during FY 2008 -09 and FY 200 and reduced personnel and expenses in response to the lower tax revenues as property values began to fall. The millage rate was increased in FY 2010- 11 in order to maintain revenues as property values continued to fall. Further staffing and operational cuts were made in FY 2011 - 12 and FY 2012 -13 in order to maintain the millage rate. 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 Musuems). Reductions to recreational programs would be counter productive since a new recreation complex is currently under construction. 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. One mill equals $ 1 per $ 1000 of taxable property value. Increasing the millage rate from 4. 5383 to 5. 7954 mills equates to $ 125. 71 in additional property taxes for a property with a taxable value of $ 100,000. Interestingly, 80% of residents and 34% of businesses have taxable values under $ 100, 000. Packe! Pg. 4S  5. 1. a Revenues Franchise Fees & Utility Taxes — The City' s franchise fee agreements provide a 6% rate on gross electric and gas sales of utility companies serving Fort Walton Beach. A $ 1. 84 per ton sanitation host fee on garbage collected outside the City limits and brought to the transfer station is also collected per contract. Franchise fees comprise $ 1. 8M or 5. 1 % of revenues and have decreased 4. 7% per year on average over the last T five years, with a decrease of $300K anticipated X20 for this budget year. The decline is attributable to Gulf Power' s fuel charge steadily decreasing good for residents' bills, bad foAity revenues). Utility taxes are contractu ly ev d against b1. a electric, gas, and water revers o oval utility sus companies at the rate o l()I/ Kncr have averaged sm a 1. 2% annual mere s A large portion of le t the past five years. d natural gas utility mav n"., lm UEmr I —, bills is exert si [ c tax on the fuel charge 0a 1° 111 ° " °' I M, 1 -° " BOOpL' v1 "` neo ° "` ° °" component std on 1973 fuel prices ( and a` 0 therefore immaterial to a great extent). Utility taxes are anticip ed to generate $2.2M or 6. 5% of total revenues.