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

position eliminations and reduced services to citizens. TOP 5 BUDGET ISSUES Property Tax Reform $ 409, 509 Property Tax Reform $ 92, 565 Additional exemptions as a result of the January 2008 Decreased the millage rate 9.3% decrease to 4. 1986 Constitutional Amendment and assessed value as a result of State Legislative property tax reform. decreases; Maintain 4. 1986 millage rate. Personnel Reductions $ 1, 423, 152 CST Revenues $ 881, 645 Positions eliminated. 25 Communication Services Tax revenue decrease of Positions with reduced hours: 8 37.8% due to vendor error & previous overpayments. State Shared Revenues $ 441, 901 Golf Club Revenues $ 806, 187 These revenues are down 10% overall due to the Rounds down 18% over prior year as players weak economy and lower sales tax revenues. respond negatively to the rate increase in June 2006. Utilities & Fuel Expense $ 276,280 Cost Allocation Plan $ 75, 691 158K ( 37% incr.) for fuel, $ 118K ( 9% incr.) for The City revised its cost allocation and interfund utilities due to the increase in the cost of crude oil. transfer policy. Pension Contributions $ 180, 110 Pension Contributions $ 52, 292 90K ( 45% incr.) for fire due to early out, $ 90K (29% Effect of adjusting 2006 General Employees valuation incr.) for police due to `frozen" state contribution. for new methodology of one -year payment delay. Property Tax Reform In January 2008 voters approved a Florida Constitutional amendment with the following changes to property taxes: 1. An additional $ 25, 000 homestead exemption ( pro -rated for values between $ 50, 000 and $ 75, 000) 2. A 10% annual cap for assessed value increases to non -homesteaded properties 3. A $ 25, 000 exemption for tangible personal property 4. Portability of accrued " Save Our Homes" benefits The City's 2008 gross taxable property value for operating purposes is $ 1, 383, 195, 309, a decrease of 88, 711, 577 or 6. 0% from the 2007 final gross taxable property value of $ 1, 471, 906, 886. Property values decreased $ 116, 051, 711 due to the constitutional amendment, but this was offset by $ 27, 340, 134 in new construction. The roll -back millage rate is defined per Florida Statute 200. 065( 1) as the millage rate that would produce the same amount of ad valorem tax revenue as was levied during the prior year, exclusive of CRA dedicated increment value, new construction, deletions, and boundary changes. The City of Fort Walton Beach, FL 10- City Manager' s Budget Message roll -back rate is 4. 6883 mills. Because of the decrease in taxable value, the roll -back rate is actually a roll -forward rate this year ( i. e. a higher millage rate is required to generate the same amount of tax revenue due to the lower taxable value). Any rate above 4. 6883 must be advertised as a tax increase. Legislation passed in May 2008 and codified in Florida Statute 200. 186 specifies a maximum millage rate dependent upon the affirmative vote of the governing body. The intent is to limit local governments' ability to recapture revenues that were lost as a result of the constitutional amendment. The maximum millage by majority vote is based on the roll -back rate increased for the 4. 15% growth in personal income, and then adjusted downward in proportion to the loss in taxable assessed value due to the constitutional amendment, < 9. 5 %> for Fort Walton Beach. The maximum millage by two -thirds vote is 110% of the roll- back rate adjusted for the growth in personal income. No local government may levy over 10. 0000 mills. Variance from FY 2008 -09 Maintaining Current Variance from Method of Adoption Maximum Millage Ad Valorem Revenue Millacte of 4. 1986 FY 2007 -08 Revenues Majority Vote 4. 4190 5, 806, 723 289, 613 119, 896> 4 votes) Two -Thirds Vote 5. 3712 7, 057, 948 1, 540, 838 1, 131, 329 5 votes) Unanimous Vote or above 5. 3712 n/ a n/ a n/ a Voter Referendum Staff 4. 1986 5, 517, 110 0 409, 509> Recommendation StaffStaff hashas prepared prepared aa budgetbudget basedbased onon maintainingmaintaining aa millagemillage raterate ofof 4.4. 1986,1986, whichwhich resultsresults inin$ $ 409,409, 509509 lessless propertyproperty taxtax revenuerevenue thanthan thethe priorprior year.year. GeneralGeneral FundFund revenuesrevenues willwill decreasedecrease $ $ 410,410, 727727 andand CRACRA revenuesrevenues willwill increaseincrease $ $ 1,1, 218.218. TheThe CRACRA FundFund isis relativelyrelatively stablestable forfor twotwo reasons:reasons: 1)1) itit isis aa mainlymainly commercialcommercial areaarea andand thereforetherefore diddid notnot experience experience anan assessed assessed valuevalue decreasedecrease duedue toto thethe constitutional constitutional amendment'amendment' ss additionaladditional homesteadhomestead exemption,exemption, andand 2)2) newnew constructionconstruction offsetoffset thethe declinesdeclines inin propertyproperty values.values. TheThe purposepurpose ofof designatingdesignating aa CommunityCommunity Redevelopment Redevelopment AreaArea isis toto eliminateeliminate slumslum andand blightblight andand thethe property property taxtax reformreform doesdoes notnot penalizepenalize jurisdictionsjurisdictions forfor growthgrowth inin thethe CRA.CRA. PersonnelPersonnel ReductionsReductions / / OrganizationalOrganizational Restructure Restructure TheThe budgetbudget includesincludes anan organizationalorganizational restructurerestructure andand thethe eliminationelimination ofof certaincertain vacantvacant positionspositions inin orderorder toto improveimprove efficiencyefficiency andand savesave costs.costs. ToTo addressaddress concernsconcerns thatthat thethe CityCity Manager'Manager' ss numbernumber ofof directdirect reportsreports isis tootoo largelarge andand inefficient,inefficient, thethe numbernumber ofof departmentsdepartments hashas beenbeen reducedreduced fromfrom 1313 toto 10.10. PurchasingPurchasing hashas beenbeen combined combined withwith Finance,Finance, InformationInformation Technology Technology andand PublicPublic Information Information havehave beenbeen combinedcombined withwith HumanHuman ResourcesResources toto createcreate AdministrativeAdministrative Services,Services, andand CommunityCommunity Development Development andand PublicPublic WorksWorks havehave beenbeen combinedcombined toto createcreate PublicPublic Services.Services. InIn orderorder toto streamlinestreamline operations,operations, reducereduce spansspans ofof control,control, increaseincrease decisiondecision - - makingmaking authority,authority, andand enhanceenhance thethe useuse ofof assetsassets andand resources,resources, thethe PublicPublic Services,Services, UtilityUtility Services,Services, andand RecreationRecreation & & CulturalCultural ServicesServices departmentsdepartments areare similarlysimilarly sized,sized, andand certaincertain divisionsdivisions havehave beenbeen realigned.realigned. PublicPublic ServicesServices includesincludes fleetfleet andand facilitiesfacilities maintenance,maintenance, sanitation,sanitation, neighborhoodneighborhood improvement,improvement, planning,planning, buildingbuilding & & zoning,zoning, codecode enforcement,enforcement, communitycommunity redevelopment,redevelopment, economiceconomic development,development, andand thethe CDBGCDBG program.program. UtilityUtility ServicesServices includesincludes waterwater operations,operations, sewersewer operations,operations, stormwaterstormwater management,management, asas wellwell asas engineering,engineering, waterwater distribution,distribution, andand sewersewer collectionscollections whichwhich mustmust coordinatecoordinate effortsefforts regarding regarding streets,streets, repavingrepaving andand lineline replacements.replacements. RecreationRecreation & & Cultural Cultural ServicesServices nownow includes includes rightright - - ofof- -wayway andand cemetery,cemetery, whichwhich allowsallows forfor groundsgrounds maintenancemaintenance coordination,coordination, moremore efficientefficient sharingsharing ofof resourcesresources andand equipment,equipment, andand assistanceassistance withwith parksparks crews.crews. AtAt thethe budgetbudget policypolicy meetingmeeting inin May,May, CityCity Council Council authorizedauthorized anan earlyearly retirementretirement incentiveincentive programprogram andand aa voluntaryvoluntary separationseparation incentiveincentive programprogram withwith thethe goalgoal ofof achievingachieving thethe necessarynecessary personnelpersonnel reductionsreductions throughthrough voluntaryvoluntary separationsseparations andand attritionattrition ratherrather thanthan layoffs.layoffs. PersonnelPersonnel changeschanges fromfrom midmid - - yearyear FYFY - - 0808 reductions,reductions, thethe earlyearly retirementretirement andand voluntaryvoluntary separation separation incentiveincentive programs,programs, thethe operational operational 20072007