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

constructed or purchased, with a cost of 25, 000 or more and a useful life greater than ten years. This category comprises 6% of total expenses and 4% of General Fund expenses. Budgeted Capital Improvements The FY 2005- 06 proposed five- year Capital 3. 0 Improvements Program identifies over $ 21 2.5 million in future needs. Although the City has 2.0 begun to address a number of these issues by o 1. 5 developing annual maintenance programs ( e. g. 1. 0 sidewalks, medians, streets, water and sewer lines, water tanks and wells), many other 0.5 projects get deferred due to limited staff and 0.0 fiscal resources. Parks, streets, water and 2001 2002 2003 2004 2005 sewer, CRA, and golf comprise the bulk of is the main reason the capital improvement projects. Deferring capital improvement projects budget increases over the past 3 years have been held below 1 %. Stormwater Utilitv - As staff continues to prepare for federal regulations associated with the NPDES Stormwater Management Program, financial and technical services will be obtained to would evaluate the feasibility and methodology for developing a stormwater utility. The study and evaluate issues such as maximum daily loads, operating and maintenance obligations, fees that is equitable to capital in order to recommend a rate for impact fees and/ or user residences and businesses. The FY 2004- 05 budget includes $ 25, 000 and another $ 25, 000 is proposed in FY 2005- 06 for this study. in March Golf EauiDment & ImDrovements - The multi- year rate plan adopted by Council in addition to increased rates to return golf operations to 2004 called for a reduction in expenses at $ 2, 369, 940, including $ 30, 000 for solvency. The rate plan projected FY 2005- 06 expenses capital outlay and $ 20, 000 for capital improvements. bulkhead However, FY 2005-06 budget requests include equipment replacements, cart paths, not included in the rate plan replacement, and a chemical storage building. These items were 11 FY 2005-06 Budget Policy Workshop due to the lack of available funding. Additionally, the electric golf cart lease ends in June 2006 and it is anticipated another lease will be signed for a new fleet of carts at that time. Staff will evaluate which requests are critical to operations and maintaining current course conditions. The findings will be presented to Council at a later date to determine a funding mechanism. 12  FY 2005- 06 Budget Policy Workshop f! III8 I!' POLICY DECISIONS City Council' s position on these policy issues is critical to development of the Fiscal Year 2005- 06 operational budget and capital improvements program. i!." 13  FY 2005-06 Budget Policy Workshop AD V AlOREM TAXES ( MilLAGE) STRATEGIC PLAN GOAL - Policv Decision At what millage rate should the FY 2005- 06 budget be prepared? Backaround Ad valorem taxes comprise 24% of General Fund revenues. The current 4. 97 millage rate has been maintained for the past 12 years. Assessed value appreciation ( approx. 4. 8% annually) provides moderate increases in revenue without necessitating a rise in the millage rate. Discussion Compared to 11 Florida municipalities of similar size and service levels, Fort Walton Beach ranks fourth lowest in both millage rate and per capita ad valorem taxes. Over the past 10 years, the City' s per capita ad valorem tax has increased 62. 5% due to increases in property values despite the City millage rate remaining constant. In contrast, County residents have seen an 80. 7% increase in the per capita ad valorem tax rate. Sixty- six percent of the City' s residential parcels are homesteaded - reducing their taxable value by $ 25, 000 and capping the annual increase in taxable value at 3% or the Consumer Price Index, whichever is lower. Four percent of the City' s residential parcels claim the senior exemption - reducing their taxable value by $ 20, 000. Policv Imoact Maintaining the millage rate has translated into an average annual increase of $ 9 per capita and has allowed the City to provide an expanded level of services such as a DUI officer, ALS, pump- out stations, septic tank replacement, and e- government. Minimal revenue growth and escalating expenditures for maintaining current service levels could erode fund balance stability. Projected General Fund scenarios indicate significant reduction or depletion of available fund balance over the next five years. One- time, non- recurring revenue such as land sales and reduced capital improvement outlays have averted fund balance decline in the past. If the roll- back rate is considered, over $ 200,000 in revenue ( based on 2004 assessed value) would be lost in the General Fund and current service levels and programs, staffing, and capital projects would have to be prioritized and evaluated to determine changes, reductions, or eliminations. Recommendation Maintain the current rate of 4. 97 mills in preparation of the FY 2005- 06 budget. jI/j 14  FY 2005-06 Budget Policy Workshop OCCUPATIONAL LICENSES Policv Decision to-.... Should occupational license fees be increased? Backaround User fees are levied to fund the cost of regulating an activity or providing a service or facility. Discussion Per Florida Statute 205. 0535, municipalities are permitted to increase occupational license fees no more than 5% every two years. This fee has not been adjusted since 2001. Policv I mDact Increasing the occupational license fee 5% would yield an additional $ 8, 600 in revenue based on FY 2003- 04 collections with minimal impact to business owners. Although this fee increase provides minimal revenue, it is important to increase rates gradually to keep pace with the increased cost of license administration, most notably staff time. Recom mendation Increase occupational license fees 5% effective October 1, 2005. w 15  FY 2005- 06 Budget Policy Workshop SANITATION RATES Policv Decision Should sanitation and recycling fees be evaluated? Backaround Operations are financed primarily by a charge based on usage; therefore, greater rate 1\' 4iiiiit setting flexibility exists to ensure desired service delivery levels can be maintained. Discussion Rates for residential and commercial garbage have not increased since 1995. In fact, they were reduced by $ 1. 00 per month for residential customers in May 2001 resulting from decreased tipping fees at the BFI transfer station. Recycling rates remain unchanged since inception over ten years ago. Over the last several years, tonnage sent to the landfill has increased, recycled tonnage has decreased, and fuel and oil costs have increased - resulting in increased costs to collect garbage, yard waste, recyclables, and white goods. According to the past ten years' annual Notice of Public Disclosure, the cost of providing garbage and recycling service has increased and revenues have not kept pace. The sanitation enterprise fund cash flow continues to decrease and costs for maintaining or replacing sanitation trucks has increased. Policv ImDact A multi- year fee schedule ensures desired service delivery levels can be maintained and the fund sustained in a positive cash position. Recommendation Conduct a sanitation and recycling rate study and develop a multi- year fee schedule. 16  FY 2005-06 Budget Policy Workshop RECRUITMENT & RETENTION Policv Decision Should adjustments be made to the City' s compensation system to recruit and retain qualified and experienced personnel? Backaround Industry standards recommend a comprehensive pay, benefit, and classification study be conducted every three to five years. The City last conducted and implemented such a study in 2000. Discussion An essential element of quality service delivery is the people who provide the service. As a key service provider to our citizens, employees are the City' s most important asset. Compensation is most commonly noted as the reason for leaving according to exit interviews. The City' s turnover rate averages 21 %, which is higher than the national average of 15% for governments according to the Bureau of Labor Statistics. In 2004, the City' s turnover rate decreased to 18% because positions that typically have a high turnover rate ( e. g. service workers, refuse collectors)