Dale Martin
City Manager
Fernandina Beach
June 10, 2016 1:00 a.m.
The first round of 2016-2017 budget development has been completed. The process actually began back in January with the City Commission’s visioning session. From that session, six specific goals were identified: the re-opening of the Alachua Street railroad crossing, a review and report of beach safety operations, a review and revision of the City’s storm water master plan, revised regulations to increase downtown residential density, the installation of lights at the soccer field, and additional recognition as an Americans with Disabilities (ADA)-friendly community. Several other projects or issues were also identified for City staff to pursue.
With the City Commission’s goals as a key starting point, directors prepared departmental budgets. Additional guidance for the departmental budgets was further provided by the City Commission as part of the Commission’s February workshop related to organizational structure. The Commissioners requested that the directors budget for what was needed, not what the directors anticipated that the Commissioners would approve. Departmental budgets were required to be submitted in early May.
Ms. Patti Clifford, City Controller, compiled, formatted, and organized the requests. I spent the balance of May reviewing the budget requests with Ms. Clifford and each director. Adjustments were made regarding projected expenditures for the current fiscal year and questions were posed and expenditures clarified for the 2016-2017 budget.
This week, completing the first round of preliminary budget work, has been spent reviewing the preliminary budget with City Commissioners. The details of the preliminary budget are distinguished from what will become the proposed budget: the preliminary budget is still very much a work in progress.
For those unfamiliar (and not bored) with municipal budgeting, let me share a few basic aspects of the City budget.
Fernandina Beach (and nearly all local governments) utilize what is referred to as “fund accounting.” Think of the various funds as separate pots of money. The most significant pot is the General Fund- this is the City’s primary fund, similar in many ways to your family’s checking account- most of the revenues (property taxes, grants, fees, etc.) come into this fund, and most expenditures (operations, payroll) come out of this fund.
Other City funds include “enterprise funds.” These funds are intended to function as a stand-alone business- revenues and expenditures are both associated with specific funds. For example, the Water and Wastewater Funds generate their revenues primarily from user fees and those user fees, in turn, support maintenance and operational expenditures. Other enterprise funds in the City budget include storm water operations, the marina, airport, and the City golf course.
The final funds are classified as “internal service funds.” These funds are most simply described as funds for the City to conduct business with itself. These funds include the City’s garage, which purchases and maintains the City’s fleet of vehicles; and the City’s Utility Billing and Utility Administration funds which oversee, obviously, the various City utilities- water, wastewater, and sanitation.
As mentioned earlier, the City budget to finance operations in the General Fund is primarily drawn from property taxes. Property taxes are levied usage a “mill rate,” or millage. A “mill” is equal to 1/1000 of a dollar, or, in simpler terms, $1 for every $1,000 of taxable value of your property. To review your property’s taxable value, you can visit the County Property Appraiser’s web site: www.nassauflpa.com (an abundance of information related to your property (and everyone else’s) can be found on this site). For example, the 2015 taxable value of my property is approximately $250,000. Without factoring any exemptions, a mill rate of 1.0000 mills would generate $250 of tax revenue from my property.
Tax bills are distributed by the County later in the calendar year.
The City’s mill rate for the current year’s budget was set at 6.3044 mills. This rate is actually the sum of the adopted operating mill rate (6.1021) and voter approved debt (the necessary repayment of the principal and interest of debt assumed by the City for previous- or future- projects; 0.2023).
Now that City Staff and Commissioners have had the first glimpse of the preliminary budget, the next round of budget preparation will begin in earnest to balance the budget through reductions in desired expenditures or increases in possible revenues.
The discussions this week with the Commissioners appears to indicate a common philosophy on the direction that Ms. Clifford and I will implement as we move toward the proposed budget; nonetheless, we have plenty of work to do given the extensive requests submitted by directors.
We will spend the rest of this month and early July developing the proposed budget. The proposed budget will be submitted to the City Commissioners on July 19. I am sure that I will be able to share more insight into the budget as we approach that date.
Thank you for your interest in the budget. If you have any questions, please contact me.