Submitted by Suanne Z. Thamm
Reporter – News Analyst
September 21, 2016 1:00 p.m.
The Fernandina Beach City Commission (FBCC) held both a Special Meeting and a Regular Meeting on September 20, 2016. Following the second and final public hearing during a brief Special Meeting, the FBCC approved on a 4-0 vote proposed city tax rates and budget for the Fiscal Year beginning October 1, 2016. During the FBCC Regular Meeting that followed the Special Meeting, commissioners also unanimously approved new bonds to pay for various capital improvements and to refinance existing bonds.
Vice Mayor Robin Lentz did not attend the Special Meeting or the Regular Meeting.
Special Meeting on millage and budget
City Manager Dale Martin read the Truth In Millage (TRIM) statement as required by law, informing the public that the proposed millage rate is 6.0682 per $1,000 of assessed value, a 4.10 percent increase over the rolled back rate. The rolled back rate of 5.8294 mills is the ad valorem property tax rate necessary to generate the same amount of tax revenue as the previous year. Voted debt millage, to pay off the greenway bond, will be set at .2362.
The meeting was poorly attended, with less than a handful of citizens in the audience. Only one person—Philip Chapman—spoke during public input, asking commissioners to reconsider during the year ahead the value provided to all city residents by continuing to provide additional funding to the City Golf Course from the General Fund.
The proposed budget reflects approximately $115M in total revenues and expenditures. However, roughly half of that amount is associated with Trust and Agency funds. The General Fund, consisting of almost $20M, reflects the need for additional services related to growth. New positions address needs to enhance public safety (2 new Police Patrol Officers, 2 additional Firefighters). Maintenance needs will be met by converting two existing part time positions to full time positions. Two positions are being added to the Community Development Department to speed up building projects: a Building Plans Examiner and a City Planner. A new Director-level position has also been created to oversee storm water and project management.
Capital improvement projects funded in the new budget include street and sidewalk improvements, waterfront park development, beach renourishment and monitoring, marina dredging, downtown improvements and a variety of recreational facility improvements. Loan proceeds included in the General Fund are proposed to finance continuing software implementation and the re-opening of the Alachua Street railroad crossing.
Twenty percent–$4,000,000—of the General Fund expenditures has been budgeted for unrestricted reserves. This budget also reflects the first time that the restricted reserves of the Building Department –$1,000,000–have been separated out from the unrestricted General Fund reserves. The two reserves combined represent about a quarter of the General Fund’s operating expenses.
The city’s total Enterprise Fund expenditures, primarily funded through user charges, total almost $18M. Those funds include the Golf Course, Airport, Sanitation, Wastewater, Water, Storm Water and the Marina. In the new budget the Golf Course and the Marina will continue to require additional support from the General Fund.
City refinances existing bonds and secures new funding at considerable savings.
During the FBCC’s Regular Meeting that followed the Special Meeting, Ed Stull, the city’s bond counsel, reported positive developments with recommendations for refinancing existing loans and borrowing additional funds for various capital projects at a 1.42 percent interest rate with no prepayment penalty in the total amount of $3.4M, with a maturity date of September 1, 2021. Roughly half of this amount is new debt related to the new software projects and the Alachua rail crossing. The remainder covers golf course debt incurred to build the clubhouse several years ago.
The city through its bond counsel had solicited proposals through the RFP process and received 7 proposals. On a unanimous vote the FBCC accepted First Federal Bank of Florida’s proposal (Resolution 2016-119).
By refinancing the existing notes to a lower interest rate, according to bond counsel Ed Stull, the city has saved $24,000.
The second bond approval, which was also passed unanimously (Resolution 2016-120), involved refinancing Marina debt and borrowing additional funds for marina improvements, including the Vuturo property purchase, in the total amount of $3.6M. The new note, with a 1.92 percent interest rate, has a maturity date of September 1, 2026 and was also awarded to First Federal Bank of Florida following consideration of 6 proposals received in response to a city RFP. As with the first note, there is no prepayment penalty.
By closing out existing loans and refinancing, the city has saved $78,000.
Editor’s Note: Suanne Z. Thamm is a native of Chautauqua County, NY, who moved to Fernandina Beach from Alexandria,VA, in 1994. As a long time city resident and city watcher, she provides interesting insight into the many issues that impact our city. We are grateful for Suanne’s many contributions to the Fernandina Observer.