Okaloosa County BOCC — October 5, 2013 — 7-15-13 budget workshop — reading text

July 15, 2013 Budget Workshop A Budget Workshop of the Okaloosa County Board of County Commissioners was called to order at 6:00 p.m. at the Okaloosa County Courthouse in Crestview. Members present were Don Amunds, Chairman; Dave Parisot, Vice Chairman; Wayne Harris; Nathan Boyles, and Kelly Windes. Also present were Gary Stanford, Finance Director, and Dave Skarzynski, Budget Analyst, Clerk's Office; Ernie Padgett, County Administrator; and members of the press. Mr. Padgett opened with details from his Budget Transmittal Letter. He drew attention to the second paragraph, stating Board action has reduced the budget from $313,000,000 in Fiscal Year 2008 to $257,000,000 in Fiscal Year 2013. Mr. Padgett pointed out that ad valorem taxes collected by the county have remained basically the same as those collected for 2005. He said the measures were taken to cut costs and make the county more efficient. However, Mr. Padgett stated that trend should be stopped or reversed. He said many things have been put off year after year because of no additional revenues. Continuing, Mr. Padgett remarked that in the short time he has been here and been working on the budget, he believes we have an opportunity to reverse the downward trend and start taking care of the things we need. He said this cannot be done in one year but must be done incrementally. Mr. Padgett said there are 89 fewer employees working under the Commission than there were five years ago; 24 were enterprise fund employees and 65 were supported by the General Fund. He stated the strategies over the past four years were to reduce staffing and operational expenses, delay vehicle and equipment replacement, limit capital projects, and draw down discretionary reserves. Mr. Padgett informed the Board that Fleet repair/maintenance costs have increased from $900,000 in 2007 to more than $2 Million in 2013. Fiscal Year 2013 is the sixth consecutive year of no significant replacement of equipment and vehicles. He advised there are ten essential pieces of equipment which needs to be replaced, the cost of which will total $1.5 Million. Mr. Padgett stated in another workshop the Board will hear from the IT Department and learn of computer needs and service needs. Another area of concern is Corrections. He reported the inmate population at the jail has been hovering near the 600 mark for the last six months and if the inmate population increases much July 15, 2013 -i- Minute Book 69, Page 198 Okaloosa County Board of County Commissioners higher during the coming year (650 inmates), it will be necessary to add correctional officers in order to reopen a 46- bed unit. This action will cost $275,000 annually. Mr. Padgett told the commissioners this year they will hear in detail from all departments what he called “the good, the bad, and the ugly.” The Board will learn both short-term and long- term needs. He recommended an increase in two funding sources. One of those is gas tax which can be increased up to $.05. The projected revenue for an additional five cents in gas taxes is $3.3 Million. He said they should keep in mind that if enacted October 1, collections will be for only the nine remaining months of Fiscal Year 2014. This figure is based on a county/city split of 70/30. Mr. Padgett noted the current agreement defines the split as 60/40. Upon inguiry by Mr. Parisot, Mr. Padgett stated the formula (70/30 split) is based on transportation expenses. He added that Public Works Director John Hofstad will provide more details during his presentation. Mr. Padgett stated the second recommended source of revenue will be the greatest challenge for the policy makers. He advised that his recommendation is to increase the millage rate approximately 10%. This will increase the current rate of 3.2899 mils to 3.6249 mils and will generate an additional $4.3 Million annually. Mr. Padgett underscored this action will help the county with its backlog of needs. He acknowledged this is a large pill to swallow but our job is to provide services at the lowest possible costs. Mr. Padgett said if we move on both of these funding sources, he believes that goal can be accomplished. In the event the Board elects not to accept these recommendations of increasing the gas tax and raising the Millage rate, Mr. Padgett stated the county will have to continue pulling down from various reserves in order to balance the FY 2013-14 Budget. He said there are three funds available for this consideration: (1) Self-Insurance Reserves--presently $2.8 Million (2) Capital Outlay for judicial renovation at the Shalimar Annex--$1.9 Million (3) General Fund Reserves--$3 Million The total in these three reserve funds is $7.7 Million. Mr. Padgett stated these reserve funds can be used to balance the budget with the $1.5 Million required for increased Florida Retirement System (FRS) contributions and $1,260,000 for a 3% salary increase for employees. July 15, 2013 -2- Minute Book 69, Page 199 Okaloosa County Board of County Commissioners Mr. Padgett acknowledged the invaluable assistance provided by Mr. Stanford and Mr. Skarzynski in preparation of the proposed budget. Upon inquiry by Mr. Parisot, Mr. Padgett reported the State is picking up the tab on the FRS increases for the School Boards in all 67 counties. Mr. Padgett said the additional FRS contribution is an unfunded mandate for cities and counties. He reiterated that he and the budget staff believe this is a turnaround year. Mr. Padgett said some current revenue sources will provide an increase of about $1.5 Million. He noted the latest correspondence indicates the billing from the Department of Juvenile Justice (DJJ) will be $1.8 Million less per year. Mr. Stanford noted reserves have been set aside for the last three years during the administrative process with DJJ. Mr. Harris stated Okaloosa County had to go to court and when the DJJ formula was redone, Okaloosa County’s billing went from $1.5 Million to $100,000. Mr. Harris asked Mr. Stanford to explain the issue with DJJ billing in greater detail. Mr. Stanford answered the DJJ cost sharing from the State of Florida related to detention facilities. The budget for this item was divided amoung the counties which were not indigent counties and was based on previous disposition days. He clarified that the counties are responsible for pre-disposition days and the estimates are reconciled at the end of each year. Mr. Stanford said Okaloosa County’s estimated bill was typically $800,000 to $900,000 per year. However, for the last few years we got a bill for an additional $1.5 Million in reconciliation costs. He reported that we filed for an Administrative Hearing and did win at those hearings. The State determined the cost allocation was not appropriate and the figures were changed. Mr. Stanford stated back in May the estimate was $900,000 but for this year the figure has been reduced to $190,000. Mr. Padgett commented that the State has been overcharging 67 counties for a number of years and it has finally caught up with them. He pointed out that expense for Okaloosa County will go down considerably and is the same as additional revenue coming in. Mr. Amunds stated in 2010 the county covered the 3% FRS increase for county employees so they would not take a loss. Mr. Padgett July 15, 2013 -3- Minute Book 69, Page 200 Okaloosa County Board of County Commissioners agreed that 3% FRS employee contribution would have been an additional expense for each employee that year. Upon inquiry by Mr. Windes, Mr. Padgett stated for the Sheriff's Department an additional $600,000 will be needed for FRS and another $600,000 to give the Sheriff's employees a 3% cost of living allowance. Mr. Padgett reported the Sheriff feels his budget has been reduced by $5 Million from the period FY 2008-09 through FY 2012-13. Mr. Parisot asked if the Sheriff believes the Board should make up that $5 Million in one year. Mr. Padgett replied that is not what the Sheriff said. He continued, saying the Sheriff asked for $4.7 Million but he is recommending a $2 Million increase. Mr. Amunds stated another item being pursued regards operational costs for the Medical Examiner. He said for several years Okaloosa County has paid the costs for facilities and Walton County will be asked to help with those operational costs. Mr. Padgett said Walton County has only been paying for each autopsy but the Medical Examiner has been directed to begin billing Walton County a prorata share for the facility. Mr. Windes posed a number of questions to Mr. Padgett regarding the ad valorem increase and DJJ expense. Mr. Windes stated if you add the increase in ad valorem tax revenue (at the current millage rate) and the windfall from DJJ, there will be $2.8 Million in additional revenue. Mr. Stanford identified the budget workshops: July 15 at 6 p.m. in Crestview; July 23 at 1 p.m. in Fort Walton Beach; July 30 at 8:30 a.m. in Fort Walton Beach; August 6 at 1:00 p.m. in Crestview; and August 8 at 6 p.m. in Fort Walton Beach. The Budget Hearings are set for September 5 at 6 p.m. in Crestview and September 16 at 6 p.m. in Fort Walton Beach. Mr. Stanford stated July 30 is the day the Board will set a tentative millage rate. The Property Appraiser will then prepare the Truth in Millage notices (TRIMs) to be mailed to the property owners. Mr. Stanford provided highlights of the following slides: e #12 - A comparison of the FY 2012-13 Budget and the Proposed FY 2013-14 Budget. The millage rate used to prepare the FY 2013-14 is 3.6249 mils. The ad valorem value is $47,603,808. The total proposed budget for FY 2013-14 is $278,988,961. July 15, 2013 -4- Minute Book 69, Page 201 Okaloosa County Board of County Commissioners e #13 - Countywide ad valorem taxes at 95% are $47,603,808. This revenue would support the General Fund at 95.8%, the Health Department at 1.3%, and Emergency Medical Services with 2.9% e #14 - Identifies multiple elements of the millage (countywide, unincorporated, current, rolled-back rate, etc.) e #15 - Millage history from 2005 through 2014. The proposed millage increase would be the first in several years. The millage rates for 2005 and 2006 were 4.2500 mils. e #16 - Identifies the 28 funds within the budget, providing a summary of balances for revenues and expenditures e #17 - Pie chart identifies percentage of proposed budget for non-discretionary (50%, $139,819,714) and governmental (50%, 139,169,247) fund distributions e #18 - Bar graph comparing FY 2013 and FY 2014 revenues by sources e #19 - Bar graph comparing FY 2013 and FY 2014 expenditures by function e #20 - Graphs showing General Fund Reserves and Capital Outlay Reserves e #21 - Budget distribution comparison by category/costs (Public Safety, Essential Services, Quality of Life) e #22 - Pie chart with budget distribution comparison by category and costs for FY 2014 e #23 and #24 - List of Capital Projects proposed for FY 2014 Road and Bridge Construction Mr. John Hofstad, Public Works Director, stated there are five divisions in the Public Works Department, He said some of the news for these divisions is encouraging and some is not. Mr. Hofstad stated Fund 302 is the construction fund and largely supplied by gas tax revenues. He utilized a series of slides to Support his presentation. Mr. Hofstad included a list of needed equipment, saying it has become an efficiency problem because the equipment is spending as much time in the shop for repairs as on the road. He emphasized that he is not requesting more people but his needs are for materials and equipment. Mr. Hofstad listed major accomplishments for the year. Among those undertakings were Keyser Mill Road Phase II, West Plympton Road, Millside Road Bridge, and Foxwood Subdivision Phase II. Goals for the coming year include three bridge conversions; July 15, 2013 -5- Minute Book 69, Page 202 Okaloosa County Board of County Commissioners