Fort Walton Beach Council agenda — 09-08-2010 Special-1st Public Hearing FY 10/11 Budget — reading text

to stock market decline, tighter lending standards, layoffs, and oil spill fears. These economic challenges are coupled with fiscal constraints previously imposed by the Florida Legislature and voters. Legislation passed in June 2007 caps property tax revenues based on the majority vote of the governing body and a Constitutional amendment passed by Florida voters in January 2008 provides additional property tax exemptions and assessment caps. BUDGET ISSUES & CHALLENGES The City continues to navigate an environment of decreased revenues, coupled with a desire to maintain the same level of programs and services. TOP 5 BUDGET ISSUES Current Year —FY 2010 -11 Prior Year —FY 2009 -10 Property Taxes $ 0 Property Taxes $ 286,455 Assessed value decrease of $ 96M or 73% due to Assessed value decrease of $ 66M or 4. 8% due to declining property values; Millage rate increased to declining property values; Millage rate maintained at 4. 5383 to be revenue neutral. 4. 1986. Personnel Reductions $ 1, 433, 916 Personnel Reductions $ 1, 475, 863 Positions eliminated: 17 Positions eliminated: 29 Positions with reduced hours: 11 Positions with reduced hours: 10 Use of Reserves $ 824, 735 Interfund Transfers $ 1, 025, 244 65% decrease in General Fund, budget reductions 32% decrease due to updated cost allocation plan & ensure recurring revenues fund recurring expenses. inability of enterprise funds to transfer surplus funds. Pension Contributions $ 8, 023 Pension Contributions $ 401, 605 Minimal increase due to position eliminations, 216K or 75% incr. for fire; $ 99K or 25% incr. for implementing defined contribution plan for new hires. police; $86K or 7% incr, for general. Interest Earnings $ 338, 925 Sales Tax Revenues $ 199, 800 61% decrease due to certificates of deposit being These revenues are down 9% overall due to the reinvested at lower interest rates. weak economy and lower taxable sales. Property Taxes The City's 2010 gross taxable property value for operating purposes is $ 1, 213, 149, 471, a decrease of 95, 906, 544 or 7. 3% from the 2009 final gross taxable property value of $ 1, 309, 056, 015. The rolled -back millage rate is defined per Florida Statute 200. 065 as the millage rate that will produce the same amount of ad valorem tax revenue as was levied during the prior year, exclusive of CRA dedicated increment value, new construction, deletions, and boundary changes. The rolled -back rate is 4. 5383 mills. Because of the decrease in taxable value, the rolled -back rate is actually a " rolled- forward" rate this year ( i. e. a higher millage rate is required to generate the same amount of tax revenue due to the lower taxable value). The budget is based on a millage rate of 4. 5383, which generates property tax revenues of $ 5. 230M, same as the prior year. The impact of this millage rate increase on any given property owner will vary based on the property's exemptions and change in assessed value. As an example, a property owner with no change in taxable value will pay an additional $ 8. 49 in annual property taxes per $ 25K in taxable value at a millage rate of 4. 5383 compared to the prior year rate of 4. 1986. City of Fort Walton Beach, FL City Manager' s Budget Message September 8, 2010 Honorable Mayor, City Council Members, and Citizens: It is my pleasure to submit the fiscal year 2010 -11 municipal budget. The City of Fort Walton Beach budget is designed to imeet the highest standards of municipal budgeting. The core of the City's budget process places an emphasis on sound fiscal management and operational decision -making in accordance with the goals and objectives established by the citizens, City Council, and staff. This budget continues the City's commitment of providing quality services in a cost controlled manner, developing balanced sources of revenues to fund programs, and maintaining prudent cash reserves for the betterment of the community' s citizens and businesses. The fundamental mission of the City of Fort Walton Beach is to provide the most efficient, progressive, and comprehensive array of municipal services possible within the constraints of fiscal responsibility. The FY 2010 -11 budget of $ 35, 708, 090 is $ 358, 601 or 1. 0% less than the adopted FY 2009 -10 budget and includes the elimination of 17 positions and reduced hours for another 11 positions. Two new part -time positions are included. Full -time equivalent ( FTE) positions total 297. 74 compared to 315. 16 last year, a decrease of 17. 42 FTE' s or 5. 5 %. The City's 2010 assessed taxable value is $ 1. 213 billion, a 7. 3% decrease. The budget is predicated on the rolled -back rate of 4. 5383 mills. The rolled -back rate is the tax rate that will generate the same amount of property tax revenue as the prior year, exclusive of new construction, deletions, boundary changes, and CRA dedicated increment. The General Fund, which includes services such as police and fire, recreation programs and parks, building inspections and code enforcement, streets and right -of -way, and general government administration, totals $ 17, 633, 614 and is 5. 2% or $ 976K less than the prior year with personnel reductions of 20. 18 FTE' s or 9. 2 %. Public safety ( police and fire) was not reduced and most quality of life ( recreation) programs will continue despite reduced personnel. While the vast majority of City services are able to continue status quo, many vehicle, equipment, and computer replacements as well as capital improvements continue to be delayed. Employee wage adjustments are not included for the second consecutive year; however, vacation hours on a sliding scale of 4 -hour increments based on evaluation scores are proposed. Police bargaining unit members are ineligible due to ongoing contract negotiations. City of Fort Walton Beach, FL  Mission Statement It is the MISSION of the City of Fort Walton Beach to be a leader among cities and in the region at large in delivering outstanding quality services to all citizens through innovative and efficient use of resources. We will achieve this through: 1. Providing the most responsive services possible by focusing on the citizen as the customer 2. Practicing a well established policy of fiscal conservatism 3. Planning and providing for a strong infrastructure 4. Recruiting, developing, and retaining highly qualified staff 5. Maintaining highly effective equipment resources for delivery of services 6. Providing a model environment in which to live by enhancing and preserving the City's unique beauty and quality of life. We will respectfully measure our achievement of the above by: 1. Citizen satisfaction 2. Overall fiscal health, annual financial statements, and bond ratings 3. Effectiveness of annual Capital Improvement Program and subsequent bond package approvals 4. Improved employee productivity 5. Ability to continue to control costs 6. The City's continued national and state recognition for its quality of life efforts 7. Continued strong working relationships with local businesses and industry, and growth in the City's tax base and retail sales. FY 2010 -11 Budgetary Impact of Strategic Plan Goals: Structural Change a. Conduct departmental operational reviews —streamlining operations resulted in the elimination of 17. 42 full -time equivalent positions, a 5. 5% reduction. b. Examine alternative compensation plans — vacation hours in lieu of pay increases awarded on anniversary date on sliding scale of 4 -hour increments based on evaluation score. c. Examine healthcare and benefits alternatives — medical insurance RFP resulted in modest average increase of 5. 5% for 10/ 1/ 10 renewal. Natural Environment a. Create stormwater utility — stormwater master plan will be developed to identify and prioritize infrastructure improvement projects. Quality of Life Services n/ a Economic Development a. Continue 50/ 50 allocation of CRA funding — current year projects are 77% residential and 33% commercial due to Soundside affordable housing project. Financial Viability n/ a Proactive Growth Management n/ a  Strategic Lead Plan Goal Initiative Performance Measure Department Status of facilities reviewed Quality of Analyze City Facility Use programs expanded Recreation Life Patterns & Funding Options programs reduced Services Pending net $ savings to City Senior Center Volunteer Hrs Additional Resources for Library Volunteer Hrs Recreation Volunteer Development Services Ongoing Quality of Museum Volunteer Hrs Life Special Event Volunteer Hrs Increase Non -Profit of Non -Profit Partnerships Recreation Partnerships Services Pending savings to City Economic Streamline Permitting Process Engineering & of days for permit approval Pending Development for CRA Utilit Services of functional areas reviewed Examine Purchasing Options w/ Financial savings to Cit Ongoing Financial other Governments Services FTE' s reduced Viability rants received Financial Increase Grant Writing Activities Services Pending amount of rants received M Maintain Staffing & Resources Infrastructure i— Natural