Fort Walton Beach Council agenda — 08-18-08 special agenda - budget — reading text

following policy statements govern the City's investment of funds in - excess of those required to meet current expenses, excluding pension funds: The City's Investment Policy, adopted by City Council, authorizes investments in accordance with Florida State Statute 218.415. The primary investment objectives, in order of importance, are: safety of principal, liquidity, and i investment income. Cash balances from all funds are consolidated to maximize investment earnings. Investment income is allocated to each fund based on the fund' s respective participation and in accordance with r generally accepted accounting principals. The investment portfolio shall be structured, to the extent possible, to match investment maturities with known cash needs and anticipated cash flow requirements. Investments will be diversified, to the extent practicable, to control the risk of loss resulting from over - concentration of assets in a specific maturity, issuer, instrument, dealer, or institution. The Finance Director is responsible for the operation of the investment program. The Finance Director or designee of the Finance Director and /or City Manager is authorized to invest surplus public funds of the City in accordance with the adopted Investment Policy. i City of Fort Walton Beach, FL 32 - a Budget Overview Debt Issuance Debt Limit —The State of Florida does not place a legal limit of debt on municipalities. However, general obligation debts greater than one year require voter referendum approval. Special revenue debt is pledged by a specific revenue source and limited by available revenue; therefore it is not subject to voter referendum. Any new debt will be carefully evaluated as to its impact on operations. Debt Philosophy — The use of debt financing for long -term capital improvement programs is based upon two types of debt financing: 1) " pay -as- you -go" and 2) " pay -as -you- use ". In practice, the City uses a mix of these two basic methods to finance its Capital Improvements Program, with pay -as- you -go financing used for recurrent capital expenditures and with pay -as- you -use financing used for long -term, non - recurrent capital expenditures. Pay -As- You -Go —A type of financing whereby current revenues, taxes, and /or grants rather than long term debt are used to pay for capital improvements. Example: annual street paving. Pay -As- You -Use — A type of financing whereby long term debt is used to pay for capital improvements. Example: debt financing for new wastewater treatment plant. Debt Policy Statement — The following policy statements govern the City's use of debt to finance long- term, non -recurring capital improvements: Recurrent capital expenditures for replacement, expansion and /or acquisition of plant, equipment, and /or motor vehicles will be financed on a pay -as- you -go basis from funds available and appropriated in the City's annual operating budget. Only long -term, non -recurrent capital expenditures for public improvements having a relatively greater cost and longer useful life, and which require additional funding over and beyond the fiscal capacity of the City's annual operating budget, will be financed through the issuance or creation of long -term debt. These expenditures will not be debt -financed for periods exceeding the projected useful life of the improvement. All capital improvements financed through the use of long -term debt will be consistent with the adopted Capital Improvements Program and the current fiscal year' s adopted Budget. Revenue sources that will be used to pay long -term debt will be conservatively projected to ensure that such debt is adequately and soundly financed. The City's total general obligation debt will not exceed 10% of its assessed valuation. The City will use special assessment revenue bonds or other self- supporting bonds where possible and appropriate to finance long -term, non -recurrent capital improvements, rather than general obligation bonds. The City will establish and maintain effective communications with bond rating agencies to keep them informed of its financial condition. Debt Capacity —The General Fund' s debt capacity is 20% of revenues, exclusive of appropriations from fund balance. The City is currently at 12% of its $ 3. 8M debt capacity, including Golf Fund debt for which non -ad valorem revenues are pledged. The Utilities Fund' s debt capacity is a coverage ratio of 1. 25 times earnings, and the City is currently at 2. 16. The Sanitation Fund is currently debt -free. City of Fort Walton Beach, FL 33-  1 CITY OF FORT WALTON BEACH, FL Summary of Estimated Financial Sources & Uses - All Funds Major Funds' GENERAL FUND UTILITIES FUND SANITATION FUND 2006 -07 2007 -08 2007 -08 2006 -07 2007 -08 2007 -08 2006 -07 2007 -08 2007 -08 Actual Estimate Budget Actual Estimate Budget Actual Estimate Budget Financial Sources Ad Valorem Taxes 5, 159, 370 4,929,053 4,518, 326 Other Taxes 3, 967, 253 3, 956,570 4,308, 767 Licenses and Permits 2, 174,814 1, 992,310 2, 077, 310 Intergovernmental Revenue 3, 274,327 2, 748,751 2, 474,340 Charges for Services 909, 526 929, 396 947, 771 6, 808, 392 6, 987,500 6, 988, 200 3, 427, 925 3, 448, 570 3, 504, 150 Fines and Forfeitures 157, 180 140, 350 150, 350 183, 476 118, 500 118, 500 Interest & Other Revenues 3, 389, 408 834,903 1, 124, 558 1, 694,856 463, 124 478, 541 152, 349 119, 612 81, 000 I Other Financing Sources 1, 928, 924 3, 212, 310 3, 159, 860 37, 000 40, 000 40, 000 SubTotal Financial Sources 20, 960, 802 18, 743, 643 18,761, 282 8, 723, 724 7, 609, 124 7, 625, 241 3, 580,274 3, 568, 182 3, 585, 150 Appropriations 756, 386 270, 481 488, 105 353, 950 177, 231 Total Financial Sources 20, 960,802 19, 500, 029 19, 031, 763 8, 723, 724 8, 097, 229 7, 625, 241 3, 580, 274 3, 922, 132 3,762, 381., 1 Financial Uses General Government 4, 355, 861 4, 787, 030 4,450, 421 f Public Safety 8, 253, 423 8, 032,084 8, 447, 898 Physical Environment 276, 086 279, 357 273, 560 5, 191, 710 3, 730, 202 3, 876, 618 3, 008, 206 2, 542, 337 2, 546, 121 Transportation 1, 550, 204 1, 832, 283 1, 454, 185 Community & Economic Dev. 937, 825 754,806 748, 960 Culture & Recreation 2, 636, 387 2, 754, 175 2, 648, 644 Capital Outlay 677,256 218, 464 124, 208 135,709 465, 443 70, 645 292, 810 355, 350 222, 800 Capital Improvements 363, 715 211, 050 100, 000 3, 739, 553 414,427 593, 510 Debt Service 600,548 941, 442 939, 832 Transfers 715,801 480, 780 633, 887 1, 400,