Fort Walton Beach Council agenda — 8-11-14--proposed budget — reading text

updated Vision and Mission for the City are as follows: Vision The City of Fort Walton. Beach: a recognized leader in the provision of Community Services. Mission To enhance and protect the Community by providing quality services. City Manager' s Budget Message October 1, 2014 Honorable Mayor, City Council Members, and Citizens: It is my pleasure to submit the FY 2014 -15 municipal budget. The City of Fort Walton Beach budget is designed to meet the highest standards of municipal budgeting. This budget continues the City' s commitment of providing quality services in a cost controlled manner, ensuring recurring revenues fund recurring expenses, and maintaining prudent cash reserves. This year' s budget process emphasizes sound fiscal management and sustainability to achieve the goals established by citizens, City Council, and staff. The FY 2014 -15 budget of $37, 218, 231 is $ 2, 502, 048 or 6. 7% more than the adopted FY 2013- 14 budget due to the completion of Pump Station # 1 along with a new Force Main, resulting in additional debt service expenses as well as increased operating expenses throughout the City. Additionally, Ad Valorem revenues are anticipated to increase 1. 71%, generating approximately a $ 125K revenue increase in the General Fund and a $ 16K increase in the CRA Fund. The budget is predicated on maintaining a millage rate of 5. 7697 mills. ECONOMIC ENVIRONMENT National economic indicators - somewhat useful for evaluating the local framework within which the City of Fort Walton Beach operates - seem to indicate continued economic recovery. Consumer Price Municipal Cost Consumer Confidence Leading Economic Index Index Index Index Arrow indicates direction of performance during past year: Color denotes if change has a positive ( green) or negative ( red) impact.* The Consumer Price Index ( CPI) — prepared by the US Bureau of Labor Statistics and the most widely used gauge of inflation — is 2. 3% higher than a year ago for the southern region. The Municipal Cost Index —prepared by American City & County to show the effects of inflation on the cost of providing municipal services — is 2. 4% higher than a year ago. Although higher prices have a negative budgetary impact, they do signal an improving economy. The Consumer Confidence Index — prepared by The Conference Board based on a representative sample of US households — is at its highest level since January 2008. The Leading Economic Index — also prepared by The Conference Board and designed to signal turning point patterns in economic data — has had broad -based growth over the past six months. According to economists at The Conference Board, this signals " an economy that is expanding in the near term and may even somewhat accelerate in the second half." Economic stabilization is evident on a local level as well. The State of Florida projects an increase for three of the four of the City' s revenue sharing funds ( local option fuel tax, municipal revenue sharing, and half -cent sales tax), which suggests an uptick in discretionary spending. However, the communication services tax revenues are slightly down in projections due to a tax reduction on communication services. As mentioned earlier, the Okaloosa County Property Appraiser anticipates a 1. 71% increase in taxable assessed value for the City, indicating the real estate market is still on the path to recovery. City of Fort wahon Beach, FL City Manager' s Budget Message TOP BUDGET ISSUES Current Year, , FY .2014 -15 ` Prior Year.- FY_2013 14 Wage Adjustments $ 268, 714 Property Taxes $ 1, 320, 549 Puy & Classification Study implementation — Year 1 Millage rate increase from 4. 5383 to 5. 7697 to fifnd a of 5. sustainable General Fluid budget. Wage Adjustments $ 280, 166 Cost Allocation Plan $ 603, 867 CPI since the last adjustment on 1010112008; spread Updated cost allocation plan over a nvo year period and tiered based on tenure. Golf Club $ 369, 386 Utilities Fund $ 2, 158, 692 Moved operations fran enterprise fiord to General Increased operational expenses and debt service. Fund to facilitate self-sustainability. Propertv Taxes The City' s 2014 gross taxable property value for operating purposes is $ 1. 147 billion, an increase of $ 19. 6 million, or 1. 71 %, from the 2013 final gross taxable property value of $1. 127 billion. Property taxes primarily fund General Fund operations. However, property taxes paid by certain residents and businesses located in areas targeted for specific improvements to eliminate blight and improve infrastructure are allocated to the Community Redevelopment Agency ( CRA) Fund. 1. 600 77 1. 400 66 1. 200 55 E? 1. 000 44 XX 800 33 0 600 X M 22 400 200 20062006 20072007 20082008 20092009 20102010 20112011 20122012 20132013 20142014 20152015 GeneralGeneral FundFund - - CRACRA FundFund TaxTax RevenueRevenue ...... ...... MillageMillage AsAs thethe chartchart aboveabove depicts,depicts, thethe CityCity maintainedmaintained oror decreaseddecreased thethe millagemillage ( ( tax)tax) raterate duringduring thethe realreal estateestate boomboom ( ( FYFY 20042004 - - 0505 throughthrough FYFY 20072007 - - 08).08). TheThe CityCity maintainedmaintained thethe millagemillage raterate duringduring FYFY 20082008 - - 0909 andand FYFY 20092009 - - 1010 andand reducedreduced personnelpersonnel andand expensesexpenses inin responseresponse toto thethe lowerlower taxtax revenues revenues asas propertyproperty valuesvalues beganbegan toto fall.fall. TheThe millagemillage raterate waswas increased increased inin FYFY 20102010 - - 1111 inin orderorder toto maintainmaintain revenuesrevenues asas propertyproperty valuesvalues continuedcontinued toto fall.fall. FurtherFurther staffingstaffing and and operational operational cutscuts werewere mademade inin FYFY 20112011 - - 1212 andand FYFY 20122012 - - 1313 inin orderorder toto maintain maintain thethe millagemillage rate.rate. InIn FYFY 20132013 - - 1414 thethe CityCity simplysimply diddid notnot havehave roomroom toto" " dodo moremore withwith lessle",ss ", andand raisedraised thethe millagemillage raterate toto 5.5. 76977697 mills,mills, anticipatinganticipating anan additionaladditional $ $ LIMLIM inin thethe GeneralGeneral FundFund andand $ $ 205K205K inin thethe CRACRA Fund.Fund. TheThe budgetbudget isis predicted predicted onon maintainingmaintaining aa millagemillage raterate ofof 5.5. 76977697 mills,mills, whichwhich generatesgenerates $ $ 141K141K moremore inin propertyproperty taxtax revenuerevenue thanthan thethe priorprior yearyear duedue toto increasesincreases inin propertyproperty values.values. OneOne millmill equalsequals 11 perper $ $ 1,1, 000000 ofof taxabletaxable property property value.value. CityCity ofof FortFort WaltonWalton Beach,Beach, FLFL City Manager' s Budget Message Wage Adjustments For the past five years, the City' s Pay Classification Step Plan has been frozen and utilized only for new hire placement. The last Pay &