Okaloosa County BOCC — January 30, 2013 — Budget Policy Workshop Apr 9 2013 — reading text

April 9, 2013 Budget Policy Workshop The Budget Policy Workshop for the Fiscal Year 2013-14 Budget was called to order at 6:00 p.m. at the Water & Sewer Administration Building in Fort Walton Beach. Members present were Don R. Amunds, Chairman; Dave Parisot, Vice Chairman; Wayne Harris; Nathan Boyles; and Kelly Windes. Also present were Gary J. Stanford, Finance Director, Clerk’s Office, and James Curry, County Administrator. Constitutional Officers present were Don W. Howard, Clerk of Circuit Court, and Paul Lux, Supervisor of Elections. Mr. Curry stated this process actually began in the January/ February timeframe with discussions and adoption of a Strategic Plan. He advised budget development will accelerate after this workshop. Mr. Curry said staff has been working on the Budget Policy Document for several months and his PowerPoint presentation will address key points. He pointed out this document is available on line for public review. Mr. Curry said the information provided for the Fiscal Year 2013-14 budget at this stage is a best guess scenario. The key policy issues, as itemized on the agenda, were quickly listed by Mr. Curry before he began his presentation. Mr. Curry displayed the organizational chart for Okaloosa County government. The next series of slides gave the statutory fiscal responsibilities of each Constitutional Office. He highlighted the fact that the budgets for the Tax Collector and the Property Appraiser are approved by the Department of Revenue (DOR) and the DOR does accept input from the Board of County Commissioners. The Clerk’s budget is primarily court-related but the BCC does have oversight over the BCC functions: Clerk to the BCC and County Accountant. The Sheriff submits his budget to the Board and it may be amended or modified. The Sheriff may appeal the final decision of the BCC to the Governor and Cabinet. Mr. Curry stated the Supervisor of Elections also submits his budget to the Board. The statutory reference for fiscal responsibilities for each Constitutional Office is listed below: • Property Appraiser: Chapter 195.087 • Tax Collector: Chapters 129.03(2) and 195.087(2) • Board of County Commissioners: Chapters 129 and 200.065 April 9, 2013 -1- Minute Book 69, Page Okaloosa County Board of County Commissioners  • Clerk of Courts: Chapters 129.03(2), 128.12, and 128.36 • Sheriff: Chapters 129.03(2) and 130.49 • Supervisor of Elections: Chapters 129.03(2) and 129.201 Economic Information – Charts and graphs showed the county’s population from 1990 through 2012; a comparison of unemployment rates at the county, state, and national levels from 2010 through 2012; and consumer and employment indices from 2003 through 2012. Revenue & Policies – A chart showing the county’s countywide millage history and rolled-back (or rolled-up) rates from 2004 through 2013 was shown. Other charts showing the millage history since the last increase (1992) to present and the ad valorem tax history since 2004 were given. The last set of charts on this topic gave the Tax Collector’s and Clerk’s excess fees since 2001. Mr. Curry enumerated revenue options and recommendations: • Ad valorem/millage increase; an increase to the countywide assessment is recommended • 1 to 5 cent fuel tax increase; the county’s portion would be $547,025 for each penny (this revenue is shared with the municipalities) • Recommendation for Board to continue to consider additional revenue sources available to them, including the Second Local Option Fuel Tax which is not currently levied • Stormwater Utility assessment; consideration recommended Mr. Parisot pointed out the second five cents must be imposed by January 1st and the county would only receive revenue from this source for nine months the first year. Mr. Curry concurred, saying you could only budget that revenue for nine months. Expenditures and Policies – Mr. Curry addressed employees’ salaries and benefits. He stated there have been several years with no salary adjustments and this has resulted in employees having 10% less due to inflation. He felt an increase is necessary not only for morale of the employees but for the county to remain competitive with entities trying to recruit staff away. Mr. Curry stressed that when you get so far behind, it is difficult to catch up and asked for consideration of a 3% salary increase across the board. April 9, 2013 -2- Minute Book 69, Page Okaloosa County Board of County Commissioners Mr. Curry said he wants to give some good news and reported health insurance costs are anticipated to decrease by 10%. A substantial benefit is expected from the ProShare but will not be available until FY 2014. Mr. Amunds said receipt of the ProShare could allow the county to assist employees with their premiums rather than go into the General Fund. Mr. Curry responded the Board is trying to build a budget, advising the ProShare would automatically be realized not only in the General Fund but enterprise funds. Regarding operating expenses, Mr. Curry stated the Board has been consistently decreasing contributions to social and community service agencies. Last year those agencies were given notice that future funding may be eliminated. He noted these agencies will be considered at the end of the budget process. Mr. Curry stated because of downsizing efforts, more than 130 positions have been eliminated over the past six years. He reported the General Fund operations will continue to be a challenge this year and without enhanced revenues, further reductions may be required. Upon inquiry by Mr. Parisot, Mr. Curry said proposed staffing changes are on Page 27 of the agenda packet. Proposals include deleting one Domestic Violence Case Monitor in Court Services and one Growth Grant Project Coordinator in Growth Management. Proposed additions are: Fleet Operations – one Lead Equipment Technician and one Equipment Technician Human Resources – one Human Resources Specialist to replace the position deleted last year Public Safety 9-1-1 Division – one 9-1-1 Call Taker Tourist Development - one Security Guard and one Marketing Coordinator Water & Sewer – one Master Painter The packet also noted the Board has discussed the establishment of a Legal Department. Mr. Curry stated he would like to address Fleet Operations for a moment. He pointed out the county had a good fleet in 2007 but there has been minimum replacement of vehicles since then. Mr. Curry stated the fleet is aging and consideration must be given to replacing a minimum number of vehicles and equipment. April 9, 2013 -3- Minute Book 69, Page Okaloosa County Board of County Commissioners Upon inquiry by Mr. Parisot, Mr. Curry stated consideration should be given to upgrading IT equipment. He noted that last year $75,000 to $100,000 was allocated for such updates. Reserves – Mr. Curry recommended a target General Fund Reserve of 8% or approximately thirty days of “operating cash” for the Board. The approximate target amount for General Fund Reserves is $3,015,000. Capital Projects – Mr. Curry stated the Policy Document has several pages detailing capital projects and he will not review those. Fiscal Challenges – Mr. Curry provided a “snapshot” of the fiscal challenges. Ad valorem taxes, using the current millage rate, are projected to increase by $390,000. Other General Fund revenue considerations were identified. Mr. Curry projected a total revenue increase of $470,000. Under the heading of “untapped revenues,” Mr. Curry estimated $21,160,000 could be realized with a local option sales tax. Also, the second LOGT could bring in $2,735,125. Other revenue possibilities are franchise fees, impact fees or stormwater assessments. Mr. Parisot asked if any estimates have been received from the Tax Collector regarding the implementation of the new Business Tax Receipt Ordinance. Mr. Amunds replied the Board will not know that impact until the Tax Collector returns his excess fees. The expenditures side of the Fiscal Challenges was identified. Those were: $1,742,561 for the Sheriff’s expanded School Resource Officer Program; $1,253,500 for replacement of vehicles and equipment; $1,458,623 for a 3% salary market adjustment; and $675,000 for Capital Outlay. Mr. Curry said the Florida Retirement System impacts are unknown at this time. The estimated known expenditures were $4,821,211. Mr. Curry emphasized the numbers being used are for demonstrative purposes. The difference between estimated General Fund increased expenses and estimated General Fund revenue increases is -$4,351,211. To compensate, the Board could approve a millage increase of 0.355 mills or reduce government services by 3.3% or $4,351,211. Mr. Parisot posed questions about the Department of Juvenile Justice (DJJ) issues. Mr. Curry responded money has been set April 9, 2013 -4- Minute Book 69, Page Okaloosa County Board of County Commissioners aside in Reserves in the event Okaloosa County is not successful in that litigation. He added that if the county is successful, those set-aside funds will provide a “nice nest egg.” Upon further inquiry by Mr. Parisot, Mr. Curry said he is not optimistic about proposed legislation regarding Medicaid this year. Mr. Curry’s recommendations for balancing the FY 2014 budget were to review the big picture, consider revenue enhancements, look at a reduction methodology, and adopt a services and staffing philosophy. Using a pie chart to demonstrate the “big picture,” Mr. Curry identified the portion of the total budget of $257,241,963 which is Governmental ($132,467,495) and which is Non-Discretionary ($124,774.468). Other pie chart showed revenues for the Governmental portion of the budget, as well as expenditures. Reduction options are across the board, reductions based on category hierarchy (#1 Public Safety, #2 Essential Services, #3 Quality of Life), reductions based on prioritization of services, or a combination of all three. In 2009 a countywide survey was conducted to learn the citizens’ viewpoints on service priorities. The first four in order of importance are ambulance/EMS, Emergency Management or disaster preparation, law enforcement/jail, and roads/bridges. Mr. Curry felt a philosophy of services and staffing in association with reductions should attempt to keep services and staffing in place to weather the economic downturn. Options are reductions in compensation and benefits, use of Reserves (which is not recommended) or additional staff layoffs as a last resort. Continuing, Mr. Curry emphasized the importance of the Board providing direction early in the budget process. He acknowledged there are hard decisions to be made. The budget workshops are set for July 18, July 23, July 30, August 6 and August 8. The Tentative Budget Hearing is scheduled for Crestview at 6 p.m. on September 5 and will be followed by the Final Budget Hearing on September 17 at 6 p.m. in Fort Walton Beach. Mr. Parisot asked if the final hearing can be moved to September 16 because he will be traveling. Mr. Curry replied the Board cannot set a budget hearing in conflict with the School Board’s hearing and it will be necessary to research before making a decision. April 9, 2013 -5- Minute Book 69, Page Okaloosa County Board of County Commissioners Mr. Paul Lux, Supervisor of Election, stated the deadline for purchasing voting equipment for voters with disabilities was extended from 2012 until 2016 and asked the commissioners to keep that on their radar. He also pointed out the current equipment is getting older and