Okaloosa County BOCC — May 15, 2013 — reading text

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Most written communications to or from City of Fort Walton Beach officials are public records available to the public and media upon request. Your e-mail address and communications may therefore be subject to public disclosure. Think Green - Please consider the environment before printing this e-mail.  BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: May 21, 2013 TO: Honorable Chairman and Members of the Board FROM: Don Turner SUBJECT: Asbestos Policy DEPARTMENT: Facility Maintenance BCC DISTRICT: All STATEMENT OF ISSUE: Request BCC approval of a new county asbestos policy. BACKGROUND: Until 1984, asbestos was a common ingredient in a wide variety of building materials. Its unique properties made it an almost ideal component for thermal insulation, sound proofing, and fire proofing as well as chalk boards, flexible boiler breaching, and cementious roofing tiles among other uses. It was later discovered that prolonged and/or intense exposure to airborne asbestos fibers resulted in some people developing asbestos related diseases. After the link between asbestos and some rare diseases was made, laws were implemented in every state which spelled out how asbestos containing materials (ACM) were to be handled to protect people of exposure to airborne fibers. Left alone, most ACM is perfectly safe. In most cases the asbestos is bound up in a matrix with other materials that make up a composite. Still, asbestos fibers can be released into the air if the materials are mishandled or removed improperly. To go further to protect the occupants in and visitors to county facilities, it's in the best interest of the county to formalize a policy that spells out what must be done before a county building may be modified in any way. These modifications may take the form of minor or major remodeling, roof replacement, major systems replacement, flooring repair or replacement, or any number of activities which may disturb ACM. The proposed policy centralizes the clearing point through which all building modification projects must be filtered to ensure proper procedures are followed with regard to the presence of ACM every step of the way. Following the policy will go much farther to ensure the safety of staff, citizens, and visitors who come to any of our county facilities. RECOMMENDATIONS: Request BCC approval of a new county asbestos policy. RECOMMENDED BY: APPROVED BY: Ernie Padgett, County Administrator  BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: May 21, 2013 TO: Honorable Chairman and Members of the Board FROM: Rick Owen SUBJECT: Fiscal Year 2014 Revenue Options DEPARTMENT: County Administrator BCC DISTRICT: All STATEMENT OF ISSUE: Request the Board continue discussion and offer guidance on additional revenue source(s) for Okaloosa County's Fiscal Year 2014 Budget. BACKGROUND: At the BCC Budget Policy Workshop held on April 19, 2013, the Board discussed projected revenue shortfalls of approximately $4.4 million to offset expenses for the purpose of ensuring a balanced budget for FY2014. This discussion primarily focused on the use of the additional 5-cents of local option gas taxes and the use of franchise fees to utility companies in the unincorporated areas of Okaloosa County. Many of our cities, e.g., Fort Walton Beach, Crestview, Destin, and Niceville, implemented franchise fees many years ago and use such as a viable revenue source. Okaloosa County currently does not impose franchise fees, which can range up to a maximum of 6 percent. The Board continued discussion, primarily centered on the local option fuel taxes, at the April 16, 2013 and May 7, 2013 regular Board meetings. Commissioner Parisot has requested the Board continue discussion with regard to franchise fees as a potential revenue stream. RECOMMENDED BY: APPROVED BY: Ernie Padgett, County Administrator Fiscal Challenges (Anticipated General Fund Impacts): Sheriff Expanded SRO Program $1,742,561 Vehicles & Equipment $1,253,500 Salary Market Adjustments (3%) $1,458,623 Health Insurance (10%) ($ 308,473) Capital Outlay $ 675,000 Florida Retire System (FRS) $ 678,000* (*BCC General Fund only, per Kay Godwin, HR) Medicaid (FAC est. above 2013-new Legislation) $ 103,000 REVISED TOTAL: $5,602,211 FISCAL CHALLENGES: $ 5,602,211 (estimated GF increased expenses*) $ 470,000 (estimated GF revenue increases) $ 5,132,211 oRecommended target reductions/revenue enhancements of 4.4% or $5,132,211 of Anticipated General Government Services. oBased upon projected Assessed Valuation that would equate to .422 millage increase (Would produce $5,132,211added revenue) * Include a 3% employee salary adjustment and other factors from previous page. Fellow Okaloosa County Commissioners: May 15, 2013 RE: Franchise Fee Discussion During the Budget Policy Workshop of April 9, 2013, the County Administrator addressed projected increased expenditures for our FY2014 Budget along with some potential sources of revenue to address the projected increases in expenses. (See attached charts labeled Fiscal Challenges which I have updated to include the FRS estimate from Kay Godwin and our projected FY2014 increase in Medicaid billings.) One of the potential revenue sources we briefly discussed was imposing franchise fees on utility companies for their use of our County lands and rights- of-way for their product distribution networks, primarily the electric and natural gas utilities. Most of our nearby counties have established franchise fees as a revenue stream. Within Okaloosa County, at least four of our municipalities (Fort Walton Beach, Crestview, Niceville, and Destin) have established these franchise fees. The utility companies having been using our lands and rights-of- way without paying for these uses for decades. At the Budget Policy Workshop, it was estimated that each 1- percent of franchise fee would generate approximately $1.25 million of new revenue. The maximum franchise fees permitted is 6 percent; thus, franchise fees have the potential to create $7.5 million of new revenue. Such fees would only apply to utilities servicing the unincorporated areas of the County. In addition to the estimated shortfall of revenue, other areas of concern discussed most recently have been ways to increase revenues available for our badly needed increased infrastructure funding for road and stormwater projects, both of which have been on the Commissioners’ priorities in our Strategic Plan for years, but, due to limited revenues during tough economic times we have not increased the revenue stream for these projects. In fact, we have reduced the funding for both of these areas, very often by shifting revenues to balance the budget. We are also all aware that in the areas of replacing critical equipment, vehicles, information technology, employee compensation, and other areas, we have “kicked the can down the road” to the point that it is having very negative impacts on the capabilities of our Departments to provide the services needed and desired by our citizens. A potential way to address many of our anticipated needs of the “Fiscal Challenges” identified at the Budget Policy Workshop as well as funding sources for roads and establishing a Stormwater Utility is via franchise fees. A way of increasing the near-term availability of revenues is to leverage a designated income stream through bank loans or bonding. In this regard, I have been in contact with Mr. Mark Galvin of First Southwest Company to get estimates of various levels of bank loans/bonding and the amounts of revenues and debt service that would be required for various time periods, i.e., 10 years, 15 years, 20 years, and 30 years. The four attached charts labeled “Okaloosa County, Florida ,New Money Capacity Analysis” show the estimated revenue available and the annual debt service for four different levels of debt service ($1,250,000; $1,000,000; $750,000; and $500,000). Each of the four charts shows the amount of borrowing/bonding we could do for four different periods of time. For example, the first chart shows that we could acquire $10,565,000 via bank loan with an annual debt service of $1,249,200 for 10 years, or, $15,444,792 via bonding with annual debt service of $1,250,000 for 20 years. The ensuing charts show similar data for the other levels of annual debt service. How would the franchise fees provide revenues to address the above budget issues? We could dedicate by County Resolution and Ordinance that a 1% franchise fee be dedicated to Roads (approx. $1,250,000 annually) and a 1% franchise fee be dedicated to establish a Stormwater Utility (approx. $1,250,000 annually). The remaining percents of franchise fee (up to a maximum of 4%) could be allocated to the General Fund (1% would produce approx. $1,250,000; 2% approx. $2,500,000; 3% approx. 3,750,000, and 4% approx. $5,000,000). By keeping the Road funding from the General Fund at current levels, with a 1% franchise fee we could borrow/bond from $10,565,000 to $19,404,000 for current projects by using the entire $1,250,000 for debt service. As far as a Stormwater Utility using a 1% franchise fee, per John Hofstad his current annual personnel and operating expenses (i.e., no project money) is approx. $750,000. Using the $1,250,000 to cover these annual expenses would leave $500,000 available for annual debt service. From Mr. Galvin’s charts, annual debt service of $500,000 would provide from $4,170,000 (10-years) to $7,641,020 (30-years) for stormwater projects. In the current FY2013 budget, we are using $400,000 from the General Fund for stormwater personnel and operating expenses. By establishing a Stormwater Utility using a 1% franchise fee, we could use this $400,000 to offset our projected expenditure increases in FY2014. (This would reduce the revenue shortfall as shown on the “Fiscal Challenges” charts from $5,602,211 to $5,202,211.) Please remember that without a Stormwater Utility we are not very competitive for State and Federal funding and grants as these often require a funding match. Such grants are another way of expanding our availability of funding for projects. The remainder of any franchise fees could go to the General Fund. However, I would propose that we limit the percents of franchise fees to the General Fund to 2% ($2,500,000) or to 3% ($3,750,000) maximum. Two percents of franchise fee would reduce the projected revenue shortfall on the “Fiscal Challenges” charts from $5,202,211 to $2,702,211 and 3% would reduce it to $1,452,211. If we