Fort Walton Beach — Fiscal Year 2019-20 Adopted Budget — reading text

Budget 2019-20 Garbage fees account for $3.8M in revenues. Recreation and other fees – recreation programs, park rentals, senior activities, the library, museums, golf, and cemetery sales – generate $4.3M in revenues. Stormwater user fees comprise $1.0M in revenues at a residential-equivalent unit of $4.75 per City of Fort Walton Beach, FL 37 Revenues month. Ad Valorem (Property) Taxes – Citywide, the 2019 gross taxable property value for operating purposes is $1.440 billion, an increase of $84 million, or 6.22%, from the 2018 final gross taxable property value of $1.356 billion. Ad valorem taxes levied by the City comprise $7.6M, or 16.2%, of total revenues. 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. Property tax revenues are allocated to the CRA Fund based on the growth in assessed value from the base year (i.e. year of CRA designation). Funding from County property taxes comprises $831K, or 37.5%, of CRA Fund revenues. 1,600 9 1,400 8 Ad Valorem Taxes (millions) 7 1,200 Taxable Value (millions) 6 1,000 5 800 4 600 3 400 2 200 1 - - 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 General Fund CRA Fund Tax Revenue Millage As the chart above depicts, the City maintained its millage rate in FY 2009-10 and reduced personnel and other expenses in response to lower tax revenues as property values began to fall. The millage rate was increased in FY 2010-11 in order to maintain revenues, as the recession was in full swing. Further staffing and operational cuts were made in FY 2011-12 and FY 2012-13. In FY 2013-14, the City simply did not have room to “do more with less” and raised the millage rate to 5.7697 mills. As property values continue to rise, the City has lowered the millage rate to 5.6395 mills, which is the millage rate that the proposed budget is predicated on. This rate, known as the rolled-back rate, generates the same amount of property tax revenue as the prior year, even with the increases in property values. One mill equals $1 per $1,000 of taxable property value. Franchise Fees & Utility Taxes – The City’s franchise fee agreements provide a 6% rate on gross electric and gas sales of utility companies serving $3.0 Fort Walton Beach. A $1.84 per ton sanitation $2.5 host fee on garbage collected outside the City limits and brought to the transfer station is also $2.0 collected per contract. Franchise fees comprise Millions $1.5 $2.0M, or 4.3%, of revenues and have decreased 13.7% over the previous fiscal year. $1.0 Utility taxes are contractually levied against $0.5 electric, gas, and water revenues of local utility $0.0 companies at the rate of 10%. Over the past five Franchise Fees Utility Taxes 2015-16 2016-17 2017-18 Budget Budget years revenues have steadily increased. This year, 2018-19 2019-20 City of Fort Walton Beach, FL 38 Revenues these revenues are expected to decrease by 11.3%. A large portion of electric and natural gas utility bills is exempt since the tax on the fuel charge component is based on 1973 fuel prices (and therefore immaterial to a great extent). Utility taxes are anticipated to generate $2.8M, or 5.9%, of total revenues. Communication Services Tax – This tax was created in FY 2001-02 as a flat tax rate for all communication services. The Department of Revenue collects the tax from vendors and remits the appropriate amounts to local jurisdictions. The Office of Economic and Demographic Research (EDR) provides revenue estimates for cities and counties. Based on information from EDR, $1.1M is budgeted, which is an 8.6% decrease when compared to FY 2018-19. This revenue stream has been declining as more consumers eliminate land lines and service providers bundle taxable services with non-taxable services, thereby eliminating payment of the tax. Half-Cent Sales Tax – This category includes a $4.00 state-shared revenue distribution, derived from $3.75 $3.50 net 6% state sales tax revenue (which is the $3.25 $3.00 largest source of revenue sharing for local $2.75 $2.50 governments), as well as a ½ cent county- $2.25 Millions $2.00 distributed sales tax, implemented by voters in $1.75 $1.50 FY 2018-19. Together, this revenue source is $1.25 $1.00 anticipated to generate approximately $3.7M, or $0.75 $0.50 7.9%, of total revenues. The revenue estimate, $0.25 $0.00 also published by the Office of Economic and Communication Services Tax Sales Tax Municipal Revenue Local Option Fuel Sharing Tax Demographic Research (EDR), which has 2015-16 2016-17 2017-18 Budget Budget rebounded as the economy has improved, is 2018-19 2019-20 estimated to decline slightly by 3.2%. Municipal Revenue Sharing – This is funded by 1.3409% 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. This revenue estimate is published by the Office of Economic and Demographic Research (EDR), and is budgeted at $917K, or 1.9%, of total revenues. EDR anticipates this revenue source to remain relatively stable. Local Option Fuel Tax – These proceeds are allocated via a ten-year interlocal agreement between the county and municipalities based on transportation expenditures. Counties are authorized to levy up to 12 cents of local option fuel taxes in the form of three separate levies. The first is 1 cent; the City does not receive a portion of this. The second is 1 to 6 cents; the County levies the full 6 cents and the City receives 9.7956%. The third is 1 to 5 cents, of which the County currently levies 3 cents. The City’s local option fuel tax proceeds for FY 2019-20 are budgeted at $564K and $263K, respectfully. This revenue source is anticipated to decrease on an average of 10.4%. Interfund Transfers – Interfund transfers represent $2.1M, or 4.4%, of total revenues. The Debt Service Fund receives $1.1M from the General Fund for principal and interest payments. The Beal Memorial Cemetery Fund receives $41K from the General Fund (20% of cemetery lot sales) for investment for perpetual care of the cemetery once all lots are sold. The General Fund receives $675K from the Utilities Fund and $61K from the Stormwater Fund (6% of water & sewer and stormwater fees) as a franchise/right-of-way access fee and $228K from the Sanitation Fund to compensate for additional roadway wear & tear caused by heavy sanitation trucks. City of Fort Walton Beach, FL 39  Expenditures FY 2019-20 Budgeted Expenditures