By Dale Martin
July 17, 2020
The proposed budget for the City’s next fiscal year, which begins October 1, is in final development. The budget will be presented to the City Commissioners on Monday, July 20, and to the community the following day at the regularly scheduled City Commission meeting. The presentation will provide an overview of the proposed budget, with more close examinations and discussion of the budget taking place in August (two dedicated City Commission workshops scheduled with the opportunity to schedule more as needed). The budget process concludes with two public hearings in September preceding the final adoption of the 2020/2021 annual budget.
City Comptroller Ms. Pauline Testagrose provides a monthly budget report to the City Commission at the second City Commission regular meeting (the third Tuesday). Her report is included in the City Commission agenda packet and is available for public review. City Commission agendas are published (posted online on the City’s website) one week before every regularly scheduled meeting. For those interested, the City’s website offers an option to be alerted when agendas are published.
The City’s fiscal year third quarter concluded at the end of June. This represents seventy-five percent of the fiscal year. By straight-line benchmarking, this offers an opportunity to gauge the status of City finances leading into the final quarter and, if necessary, to make adjustments, primarily to expenditures, over the last three months of the fiscal year.
So, as one budget year is concluding, another budget year is anticipated, and the world continues to be gripped by a pandemic, what insight does Ms. Testagrose’s monthly (third quarter) report provide to the community?
As previously mentioned, a crude picture of the City’s finances can be based upon the seventy-five percent benchmarking. Concerns regarding decreased revenues as a result of the pandemic merit special consideration.
I have noted on several prior occasions that the General Fund is the City’s primary operating fund. Ms. Testagrose reports that General Fund revenues through the end of June are at 86.6% in relation to the total budget. Property tax revenues, from which the bulk of General Fund revenues are received, currently sit at 98.9% of budgeted revenue (over $15.5 million). For this fiscal year, property tax revenues have been markedly unaffected by the pandemic.
Other sources of significant revenues are received from the State of Florida through a variety of other taxes and fees (budget: $4.8 million). These revenues sources are below the seventy-five percent benchmark: Local Option Gas Tax (56.0%), Small County Surtax (65.0%), Half-Cent Sales Tax (64.7%), and Franchise Fees (67.1%). Revenues to-date from those sources totals $3.1 million, approximately 65% of budgeted revenues or a current shortfall of $1.7 million.
Ironically, though, that shortfall is closely aligned with last year’s pre-pandemic third quarter status. The percentage of revenues received from those same sources last year at this time were Local Option Gas Tax (60.6% versus this year’s 56.0%), Small County Surtax (67.4% versus 65.0%), Half-Cent Sales Tax (73.7% versus 64.7%), and Franchise Fees (68.6% versus 67.1%). The pandemic has led the State to reduce distributions to local communities for the time-being, but those revenues will be reviewed and reconciled with local communities by the State in August.
Many of the pandemic concerns related to City finances focus solely on revenues. It is necessary to also review City expenditures as part of the seventy-five percent benchmark: through the end of June, City expenses sit at 58.7% of budgeted expenditures, nearly twenty percent below the benchmark. This percentage includes significant City spending efforts related to the pandemic which were obviously not included in the original budget: public safety overtime and protective gear, other personnel costs as a result of federal pandemic legislation (employees quarantined or required to stay at home to care for others due to the virus are eligible for up to two weeks’ pay without affecting the employees’ accrued leave- this applies to all employers, public and private), additional supplies, enhanced information technology requirements, and even the nearly $300,000 provided to local non-profits to support their community response efforts. On balance, diminished City revenues have been matched by significantly decreased City expenditures.
The pandemic has created great uncertainty at the federal and state levels as well as at the local government level. Nearly every day I receive urgings to curtail City spending followed by pleadings to increase City spending; open facilities, close facilities; stop tourists, encourage tourists. The City Commission is trying to make sense of it all when it makes no sense. What I see from my work with the City Commissioners is that they are sincere in their efforts to try to do what they believe is in the best interests of the community. I hope that you recognize and support that effort.
Please continue to implement the recommendations of the Centers for Disease Control: wear a mask, socially distance, wash your hands, and best, stay at home as much as possible. That last one is hard, but it continues to be critically important to curtail the spread of the virus.