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

adjustments Pai$ t Pg. 14  5. 1. a City Manager' s Budget Message 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 M 00,000. Taxable Values of Rendestiall' arrels Taxable Values of Commemial Nrtth am vmaON` M ON A millage rate of 5. 7954 generates an additio in the General Fund and $ 209K in the LL CRA Fund. The additional funding in the Gene allocated as follows: er franchise fee revenue, Gulf Power' s fuel VN s$ 300K to offset the reduction in G charge decreased from $ 4. 96 i 12 to $ 3. 82 in January 2013 s$ 216K for vehicle replacement c prehensive review of the City' s fleet is underway; most vehicles will be re on 10 -year cycle; patrol vehicles are slated for 7 years s$ 205K for employee waft Ngustments of up to 3. 75% based on tenure; the last wage adjustment was on 10/ a$ 671s for police o mributions 61 K for de ay to replace a fire pumper in service since 1993 s$ 45K to offse reduction in local option fuel tax; this reduction may be higher depending on th outcome of negotiations with the County for a new interlocal agreement a$ 45K for reinstatement of the police chief' s administrative assistant; this was an unsustainable personnel reduction made last year s$ 41 K for computer replacements s$ 36K for facilities repairs & maintenance; a comprehensive review of City facilities is underway, including prioritization of repairs and analysis of possible consolidation s$ 27K for fire pension contributions a$ 26K to reclassify a streets service worker to full -time Wage Adiustments Employee wages were last adjusted on October I, 2008. The real purchasing power of employee paychecks has decreased 7. 48 % since then as measured by the consumer price index. To mitigate the budgetary impact of this initiative, the adjustment will occur over a two -year period and be awarded in conjunction with each employee' s annual evaluation. In the interest of fairness and to maintain a salary separation based on years of service, the amount of the adjustment will be tiered based on tenure as follows: F N' oRw.< e 11  F51.a City Manager' s Budget Message Employees hired prior to 10/ 01/' 2009 —3. 75 % increase in both FY 2014 and FY 2015 Employees hired prior to 10/ 01/ 2010- 3. 00% increase in both FY 2014 and FY 2015 Employees hired prior to 10 /01/ 2011 — 2. 25% increase in both FY 2014 and FY 2015 Employees hired prior to 10/ 01/ 2012 — 1. 50% increase in both FY 2014 and FY 2015 Employees hired prior to 10/ 01/ 2013 —0.75% increase in both FY 2014 and FY 2015 Employees hired 10/ 01/ 2013 and after 0.75% increase in FY 2015 Adjustments for Charter Officers ( City Manager, City Clerk, and City Attorney) will be awarded at City Council' s discretion based on their annual evaluations in September och year. An adjustment of 2. 25% is included for City Council effective April 1 of each ye These wage adjustments are estimated at $ 280K for FY 2013 -14 ( partial- mpaet since awarded on employee evaluation dates), an additional $ 494K for FY Olg/ 15 the balance of FY14 raises as well as the partial -year impact of FY15 raises), an Qyn Tonal $ 215K for FY 2015 -16 ( the balance of FY15 raises).(' j/ J Golf Club Golf Club operations were moved from the General nd to a stand -alone enterprise fund effective October I, 1995. The purpose of an enterpriseif t is to account for operations that are financed and operated in a manner similar to the pr,,, iYYY for when the intent of the governing body is that the cost of providing the goods to the general public on a continuing basis be financed primarily through user charge The Golf Fund has not been profitable v past decade due to a variety of factors, losing money eight of the last ten years. Fund reported a net loss of $265K and deficit unrestricted net assets of $ 99K for the ending September 30, 2012. It is on track to lose another $ 500K at the end of t ent tscal year. No further budgetary cuts are possible if current operations are to be untarw4ram. Alternatives for addressing the recurring deficit include increasing rates and/ or red number of holes from 36 to 27 or 18. Competition from other local courses acing rates impractical at the present time, and professional analysis from an in stry ri is required to determine the expense savings and revenue loss associated with reduct number of holes. 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 years ago. Golf operations are not sustainable as an enterprise fund absent ongoing transfers and support from the General Fund. Moving operations back into the General Fund will reduce the operating deficit to $ 55K for FY 2013 -14. Course conditions have recovered from last year' s improper chemical application. As play continues to improve, it is hoped golf operations will regain their self -sustainablilty and at a minimum break even as part of the General Fund. General Fund reserves will be impacted by this change. There will likely be an approximately 590K decrease in unassigned fund balance due to assuming the Golf Fund' s negative net assets; however, this decrease would still occur if the Golf Fund remained an enterprise fund in order to eliminate the fund' s negative net assets. The $ 2. 7M loan advance will be removed from the General Fund' s nonspendable fund balance. Packet POAG  5. 1. a City Manager' s Budget Message OTHER ASSUMPTIONS & CHANGES REVENUES ( detailed discussion on pages 34 -37) 1. Revenues are estimated at conservative levels to guard against unanticipated economic shifts, legislative changes, or collection levels. General government revenues are largely budgeted based on historical collection and growth levels. Enterprise revenues are based on historical usage and/ or number of customers, adjusted for current rates. 2. An estimated 5% water and sewer rate increase on October I, 2013 is assumed for budget purposes. A new five -year rate study is underway to determine the require to increase to generate enough revenue to sustain a renewal and replacement reserve jWd acclunt for the debt service associated with the new force main and pump station. The r s[ y will also assess the possibility of creating a reclaimed water utility as ells ombining the stormwater fund with the utilities ( water & sewer) fund. The sto master plan will be completed by the end of June 2013 and the list of priority pro a rated will determine the appropriate rate structure to fund required improvemen 3. Fee Schedule changes include eliminating the $ 2 di o t for cash/ check payment for recreation programs, which is an administrative horde nd e fusing to residents. 4. Use of reserves — Appropriations from fund bal overnmental funds) or net assets enterprise funds) are budgeted as follows: a. General Fund — $70,590 from cc ( Harvey Trust - funding bequeathed to the City for library purposes) forrestricted a met, shelving unit, and a/ c replacement; 154, 054 from unassigned for network firewall, laserfiche upgrade, tour police vehicles, and additiio to fleet bays. b. Law Enforcement nrtd td — 12, 785 from unassigned fund balance for meth lab Trusy£' cleanup and forefeiture 1 s. The Florida Attorney General has opined that it is not permissible to budge ure revenues, so an appropriation from fund balance is budgeted to record"t t,, of the prior year' s forfeitures for current year activities. c. Law Enfor en Yraining Fund — $ 1, 490 from unassigned fund balance for accreditation a ent. d. Utilities Fund — $526, 041 from restricted net assets ( renewal & replacement) for water line replacements, sewer system grouting & lining, and lift station rehab. EXPENSES (detailed discussion on pages 38 -42) 1. Wages have been adjusted as previously discussed. 2. Benefits have been adjusted as follows: a. Medical insurance— health insurance premiums will rise only 1. 3% thanks to good claims history and sending the policy out to bid. Nonetheless, the budget is anticipated to decrease $ 8K or 0. 5% due to the City' s contribution being lower for new hires. b. General employee pension — the City' s contribution rate remains at 27.91% with the assumption that City Council adopts plan changes adjusting