Fort Walton Beach Council agenda — 04-19-05 — reading text

2001 2002 2003 II County II State II Nation declining while others have experienced increased it unemployment. While this is certainly good news for our community, this environment makes difficult for the City to recruit and retain qualified employees for positions such as police officer, service worker, and sanitation operator. Cost of Livina - The cost of living index compares the price of goods and services in different areas at a given time, but does not measure inflation. In three of the past five years, the cost of Walton Beach has been less than other Panhandle municipalities. While still living in Fort slightly below the national average, the cost of living in Fort Walton Beach is increasing mainly due to the decrease in housing affordability. The median sales price of a home in Fort Walton Beach is currently just over $ 200, 000, which is a 16% increase over the previous quarter, compared to a 9% increase in Panama City and a 1. 65% decrease nationwide. Meanwhile, the median family income remains unchanged. Although housing prices were increasing due to strong regional growth and low interest rates prior to Hurricane Ivan, the lack of housing after the hurricane has driven affordability even lower. Retail Sales - One measure of economic strength and consumer confidence is retail sales. Retail sales in Okaloosa County have increased 8. 5% over the past five years, more than any neighboring county. As residents rebuild homes Retail Sales and businesses lost during Hurricane Ivan, retail :~:~~~ sales are projected to be well above national ~ $ 800 averages. Builders and home improvement ~ $ 600 retailers will see the most benefit from g $400 2~~ reconstruction efforts. While 38% of the sales tax $ generated in Okaloosa County is collected in Fort 2000 III Escambia Co. 2001 2002 IIIOkaloosa Co. 2003 DBayCo. 2004 Walton Beach, the State of Florida only remits 9% IIIWalton Co. III Santa Rosa Co. to the City. Similar to retail sales, bed tax collections have increased over the past five years, but Walton and Santa Rosa counties have seen a larger growth in this revenue source than Okaloosa. As the economy rebounds from the hurricane disruption, the growth trend is anticipated to continue. Per CaDita Ad Valorem Tax - This indicator measures the extent to which ad valorem taxes a 4. 97 millage rate are relied upon to fund new and existing programs. The City has maintained for the twelve Over the ten past years, the per capita property tax has increased past years. 4 FY 2005- 06 Budget Policy Workshop 62. 5% due to increases in property values. County residents, however, have seen an 80. 7% increase in the per capita property tax rate over the same period. When compared to municipalities of similar size and service levels, the City' s per capita property tax is the fourth lowest. Per Capita Tax Comparison 600 500 400 300 200 100 0 Edgewater Sebastian Casselberry Fort Walton Tarpon Winter Panama Oakland Venice New Jacksonville Winter Park Beach Springs Haven City Park Sym rna Beach Beach REVENUES As the Federal government continues to impose unfunded mandates on state governments, municipalities will continue to experience diminishing revenues as state governments shift costs to local governments or decrease revenue sharing. New revenue sources for municipalities are limited by state statute and the City relies upon stable sources such as ad valorem taxes, franchise fees, utility taxes, and user fees to fund services. FRANCHISE FEES & UTILITY TAXES FY 2004- 05 Budgeted Revenues Gas/ Franchise/ The City' s franchise fee agreements provide a Utility 13% 6% rate on gross electric and gas sales. A Comm Svc Tax 1. 50 per ton sanitation host fee is also 6% collected per contract. These revenue sources have averaged a combined 9. 5% annual Transfers increase over the past three years and this 11% growth trend is anticipated to continue. Interest/Other Franchise fees generate approximately 3% 1,450, 000 annually. Utility taxes are levied Fines/ Forfeits against electric, gas, and water revenues at the 1% This revenue source has User Fees rate of 10%. 45% License/ Permit averaged annual increase over the past a 6. 5% 1% three years and this growth trend is anticipated to continue. Utility taxes generate approximately $ 1, 510, 000 annually. Since the collection rates for franchise fees and utility taxes are fixed for 10 to 15 years, revenue growth in these categories is limited to energy price increases. COMMUNICATIONS SERVICES TAX Effective in FY 2001- 02, this tax created a flat tax rate for all communication services so that no one type of service had a competitive price advantage over the other. This revenue category has remained flat since inception and generates approximately $ 1, 650,000 annually. LOCAL OPTION GAS TAX As the result of a ten- year interlocal agreement between Okaloosa County and its municipalities 5 FY 2006- 06 Budget Policy Workshop FY 2002-03, Fort Walton Beach' s local option gas tax proceeds were reduced re- written in approximately $ 50, 000 annually even though the tax was raised to $ 0.02 per gallon. While our revenue decreased as the result of this re- written agreement, all other municipalities in the county enjoy revenue Local option gas tax generates approximately $ 685,000 annually. growth. STATE SHARED REVENUES State shared revenues are generally allocated via a population- based distribution. Municipal revenue sharing, generating approximately $ 740, 000 annually, is funded by 1. 0715% of sales and use tax collections, 12. 5% of state alternative fuel user decal collections, and the net collections from the one- cent municipal fuel tax. Half- cent sales tax distributions, generating approximately $ 1, 600, 000 annually, are derived from net sales tax revenue and generate the largest amount of municipal revenue sharing revenue for local governments. Legislative mandates and limited population growth contribute to minimal increases from year to year in state shared and intergovernmental revenues. Ad Valorem Taxes - Ad valorem taxes comprise 24% of General Fund revenues and nearly all of CRA Fund revenues. Assessed value Ad Valorem Revenue 6 appreciation ( approximately 4. 8% annually) 5 provides moderate increases in revenue without necessitating a rise in the millage rate. 4 Since the City is nearly built- out and few Ii) 3 property owners voluntarily annex, future growth in property value must come primarily 2 from redevelopment and infil!. Private investment in redevelopment is vital for the 1 City' s future and Council' s policies to stimulate 0 redevelopment continue to show positive 2004 2005 1996 1997 1998 1999 2000 2001 2002 2003 results. EXEMPTIONS Sixty- six percent of the City' s 7, 576 residential parcels are homesteaded. The homestead exemption limits the annual increase in taxable value of these properties to 3% or the Consumer Price Index, whichever is lower. Consequently, owners of homesteaded properties see only minimal annual increases in their tax bill when