Weekly comments from Dale Martin: Proposed FY 2017/18 Budget

Dale Martin
City Manager
Fernandina Beach
July 21, 2017 1:00 a.m.

NOTE:  City Manager Dale Martin presented a proposed budget to the Fernandina Beach City Commission at the commission’s July 18, 2017 Regular Meeting.  His message is presented below, along with slides from his presentation.

The proposed budget, which is subject to change, is available for public review in the Documents Center on the city’s website:  http://fbfl.us/DocumentCenter/View/16410 

Honorable City Commissioners, Residents, and Staff of the City of Fernandina Beach:

Please find following this memorandum the proposed 2018 budget.

Planning for the 2018 budget began with the City Commission’s annual goal-setting workshop, conducted on December 14, 2016, almost two years before the 2018 budget would be effective.

The proposed budget reflects total revenues and expenditures in the amount of $130,529,510. Approximately one-third of that amount, however, is related to cash, revenues, and expenditures associated with the Trust and Agency Funds. With those funds excluded, proposed revenues and expenditures total $85,021,010.

The portion of the proposed budget that typically draws the most interest is the General Fund, which is the primary operating fund for the City, and principally financed by property tax receipts. The proposed General Fund expenditures total $21,228,086. The proposed General Fund budget is supported primarily by an operating millage rate of 6.0000 mills, a lower operating millage rate than levied by the City for the previous budget (6.0682). Despite the reduction of the property tax rate, the proposed millage rate, as defined by state statutes is considered a tax increase.

The total proposed millage rate consists of the 6.0000 mills levied for operations, and 0.2097 (down from last year’s 0.2362) mills levied for voter-approved debt service. The proposed property tax levy, at a collection rate of 96%, will generate approximately $12,045,231. The City’s aggregate taxable value increased by approximately 11.7%. The comparable taxable value (an effort to compare “apples to apples” from the preceding year) increased by 10.4%. Despite these substantial increases, the taxable value of many properties (if classified as a “homestead” property) is limited to no more than a three percent increase due to state statutes. If a property not subject to those limitations experienced an increase in taxable value of 10.4%, the estimated increase in related property taxes would be about $55 for every $100,000 of 2017 taxable value.

An additional note to the continued growth is that the annual three percent increase for water and wastewater services will be deferred: the associated revenues required to support previous financing obligations will be realized, instead, through community growth and resulting usage.

Staff additions included in the proposed budget are minimal: the Public Information Officer (actually added during the current budget year, but, as part of the budget process, not formally incorporated into the City’s organizational structure), a Comptroller (to serve transitionally in anticipation of a scheduled retirement), a Police Service Aide, and a Cemetery Maintenance Worker. A part-time Human Resource Generalist will transition to full-time status, and an additional Police Patrol Officer is conditionally included (based upon federal grant funding). Another Building Inspector and Administrative Coordinator are included to support the Community Development Department, but the bulk of funding for those two positions will be provided by building permit fees.

With the increasing importance of stormwater management (and associated funding provided by federal, state, and regional agencies), the City continues to develop the Stormwater Department. Following the initial staffing during the current year (a Department Director and two operational staff), two more staff are proposed: an engineer and an equipment operator.

Proposed capital projects supported by the General Fund include funds for downtown development, street and sidewalk improvements, beach access reconstruction, recreational facility improvements, and public safety equipment. Several other projects may be considered as the proposed budget is scrutinized over the course of the next few months.

In accordance with the City’s reserve policy, approximately $4,269,000, or 20% of General Fund expenditures, is budgeted for reserves. The restricted reserves of the Building Department have been separated from the otherwise unrestricted General Fund reserves ($900,000).

In additional to the aforementioned Stormwater Department, the proposed budget includes several other Proprietary (Enterprise) Funds in addition to the General Fund: the Golf Course, the Airport, Sanitation, Wastewater, Water, and the Marina. Significant activities associated with those funds include the construction of a terminal building at the Airport and the redevelopment of the Marina following Hurricane Matthew. The Golf Course and the Marina continue to require additional General Fund support. Discussions related to appropriate user charges to finance Golf Course and Marina operations continue, with the stated recognition that General Funding support for operational activities will cease within five years.

I wish to express my sincere appreciation to the Department Directors, especially Comptroller Ms. Patti Clifford, for their assistance. The desired personnel and projects could not all be included in the proposed budget, so the policies and priorities as indicated by the City Commission resulted in some difficult decisions. While additional review and work is necessary, I look forward to working with the City Commission to complete the 2018 budget.

We live in a community with high expectations for quality of life and levels of service. With the dedication and professionalism of City staff, I believe that those expectations can not only be met, but they can be exceeded, ensuring that the attractiveness of Fernandina Beach as a place to live and work continues for the foreseeable future. I am very thankful for the support provided to me by the City Commission, the City Staff, and, most importantly, the residents of Fernandina Beach that I am privileged to serve.