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

May 2009 revenue increase from fee adjustments of land with current use of unused land with future use identified Develop Master Plan for City o o of unused land that is Public Services January 2009 Growth Land declared excess Management revenue from excess land sales Present Land Development August 2008 n/ a Public Services Cost/Cost/ BenefitBenefit AnalysisAnalysis ofof OctoberOctober 20082008 n/n/ aa Police Services Structural Change ContractContract w/w/ SheriffSheriff Review Fire Consolidation n/ a Fire Services February 2009 CB residents interested savingssavings toto CBCB residentsresidents Examine Examine ProvidingProviding FireFire revenue to FWB ProtectionProtection toto CincoCinco BayouBayou & & FireFire ServicesServices SeptemberSeptember 20082008 FinancialFinancial Viability Viability o o ME residents interested MaryMary EstherEsther savings to ME residents revenue to FWB none identified 7-  Distinguished Budget Presentation Award The Government Finance Officers Association ( GFOA) of the United States and Canada presented an award of Distinguished Budget Presentation to the City of Fort Walton Beach for its annual budget for the fiscal year beginning October 1, 2007. In order to receive this award a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communication device. The award is valid for a period of one year. The City has received this prestigious award for ten consecutive years. We believe our current budget continues to conform to program requirements and we are submitting it to GFOA to determine its eligibility for another award. GOVERNMENT FINANCE OFFICERS ASSOCIATION i tin u fished B u dget Ptes-entation Award PRESENTED TO City of Fort Walton. Bead Flon'da For the Fiscal Year Beginning October 1, 2007 Present Executive diremr j 8- City Manager' s Budget Message August 1, 2008 Honorable Mayor, City Council Members, and Citizens: It is my pleasure to submit the fiscal year 2008 -09 municipal budget. The fundamental mission of the City of Fort Walton Beach is to provide the most efficient, progressive, and comprehensive array of municipal services possible within the constraints of fiscal responsibility. The FY 2008 -09 budget of $ 36, 316, 985 is 293, 683 or about 1 % less than the adopted FY 2007 -08 budget and includes the elimination of 25 positions and reduced hours for another 8 positions. Funded full -time equivalent ( FTE) postions total 339. 56 compared to 363. 24 last year, a decrease of 23. 68 FTE' s or 6. 5 %. The budget is predicated on maintaining the current millage rate of 4. 1986 and is balanced with no appropriation from unreserved /undesignated fund balance to cover operational expenses. organzation I organization The City's 2008 assessed value is $ 1. 383 billion, a 6% decrease. Ad valorem revenues in the General Fund are anticipated to decrease 8. 3% or $ 410, 727. The General Fund budget of $ 18, 480, 903, exclusive of the $ 178K transfer to the Golf Fund and a new requirement to budget for the state' s $ 373K contribution to police and fire pension plans, is 6% less than the prior year. Personnel expenses comprise 52% of the City' s budget ( though 74% of the General Fund budget). Although position eliminations and hours reductions result in $ 1. 4 million in wages and benefits savings, increases in medical insurance, pension contributions, utilities, fuel, and the state' s pension contributions largely offset those savings resulting in a total budget that is about 1 % less than the prior year. The City of Fort Walton Beach has prepared a budget 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, developing balanced sources of revenues to fund programs, and maintaining prudent cash reserves for the betterment of the community's citizens and businesses. In order to accommodate reduced revenues from property taxes, state shared revenues, and interest earnings the General Fund budget is predicated on reduced hours at the library and museum; elimination of the fire prevention /education program and special events such as Kids' Day and Sunday in the Park; a lower City contribution to medical insurance coverage for new hires; and continued delay of vehicle, equipment, and computer replacements as well as capital improvements. ECONOMY National and local economic indicators are useful for evaluating the framework within which the City of Fort Walton Beach operates. NATIONAL EiQNOMY LCAi EC±Q tflMY Help Wanted Consumer Price Consumer Advertising Housing Unemployment Index Confidence Index Index Retail Sales Affordability Rate 1 l ffial 1 to t t Arrow indicates direction of performance over the last year; Color denotes whether 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 5. 0% higher than a year ago. The Consumer Confidence Index, prepared by The Conference Board based on a representative sample of US households, is 52. 0% lower than a year ago. The Help Wanted Index, also prepared by The Conference Board and measuring job offerings in major newspapers across the country, is 37. 0% lower than a year ago. Our local economy generally follows the national economy. The most recent retail sales data, as reported by the University of West Florida Haas Center for Business Research and Economic Development, indicate sales are 2. 7% less than a year ago as sales continue to return to pre- hurricane rebuilding levels and as a result of the softening economy. The affordability of housing, as reported by the Haas Center, is 22. 3% better than a year ago. The standard definition of housing affordability is that the cost of buying a house uses less than 30% of annual household income. This means that more residents are able to purchase their first home or upgrade. Local unemployment, as computed by the Florida Agency for City of Fort Walton Beach, FL 9- City Manager' s Budget Message up 32. 3% from a year ago. The Fort Walton Beach metropolitan Workforce Innovation, is currently 4. 1 %, 0 statistical area continues to enjoy an unemployment rate that is lower than the national and state averages, both of which are currently 5. 7 %. The stock market decline, as a result of the subprime crisis as well as the rise in the cost of oil, has led to higher consumer prices and lower consumer confidence. Higher costs of operation coupled with lower sales have led to corporate layoffs, which in turn yield higher unemployment. Housing affordability has improved due to lower interest rates and declining prices. Locally, these economic challenges are coupled with fiscal constraints imposed by the Florida Legislature and voters. Legislation passed in June 2007 caps property tax revenues based on the majority vote of the governing body and a Constitutional amendment passed by Florida voters in January 2008 provides additional exemptions and assessment caps. Futhermore, the City's revenue sharing funds from the State suffer when discretionary spending decreases during a weak economy. These issues will be discussed in more detail in the pages that follow. BUDGET ISSUES & CHALLENGES Fort Walton Beach is navigating a dynamic environment and we are adjusting and refining our activities and finances to continue the course of progress steered in recent years. The 2008 -09 fiscal year budget has been the most difficult budget for the City to prepare in recent years and has resulted in