By Dale Martin
City Manager
Fernandina Beach
June 22, 2018 12:00 a.m.
The first draft of the 2018/2019 budget has been crafted. The final version won’t be completed and adopted until September (the City’s fiscal year begins October 1). In the interim, however, budget presentations and public hearings will be scheduled. Please stay informed of the dates of those efforts.
Property values continue to rise in the community. As a whole, the projected property values indicate that the property values have fully regained the value lost approximately a decade ago in what is commonly referred to as the Great Recession. The estimated value of real property within the city limits is approximately $2.2 billion. Please note that although the aggregate value is now at an all-time high, on the individual level, it may be possible that not all value lost has been recovered.
Due to state statutes, however, the full value of the increase in property values is not reflected in local property tax revenues. The estimated increase in property values is six percent. This increase reflects market values. The State’s “Save Our Homes” amendment (1995) limits, however, the annual increase in the assessed value of homesteaded properties to 3.0% or the change in the national Consumer Price Index (CPI), whichever is less. Since the change in the CPI is approximately 1.5%, City tax revenues will not realize the full impact of the growth in property values.
The initial draft of the budget is predicated upon maintaining the same tax levy as last year: six mills for operating purposes. The total tax levy for the City also includes a levy for voter-approved debt service. The debt service levy, as a result of the aforementioned increase in property values, will be slightly reduced, meaning that the total millage rate will be lower than this year’s levy.
The City will have to publish the proposed millage rate as an increase since the property owners, again as a result of rising property values, will likely pay more next year than they did this year. Ironically, several months ago when the State realized some additional revenue, State officials argued that since the tax rate wasn’t increasing, the State shouldn’t have to provide notice as a tax increase, directly contradicting what local governments are required to notice. My efforts to draw attention to that discrepancy were politely rebuffed, seemingly saying “We make the rules and we also make the exceptions” (while Washington has plenty of eye-popping spectacles, don’t take your eyes off of Tallahassee).
The primary cost drivers in local government are personnel and capital projects. The City’s personnel count for next year’s budget will include personnel already hired- the City’s head count reflects the status of personnel at the start of the fiscal year. Changes that had already been (or likely soon be) implemented include two additional Police Department patrol officers to support new State-mandated School Resource Officer positions in every school. The City, in cooperation with the School District, had officers assigned to the middle and high schools, but no officers assigned to the two elementary schools.
The newly created Urban Forester/Arborist position will also be reflected in next year’s personnel figures. The budget also includes an additional maintenance worker, the transition of a few part-time positions to full-time, and the addition of a few more part-time positions. Several departments requested additional personnel, but those requests are not included in the initial draft of the budget.
The proposed capital budget, which is primarily funded by a contribution from the General Fund (i.e. property taxes), is somewhat “skinny” this year. When normally about a dozen or so projects are funded each year, the cost of Marina projects next year, specifically dredging, means that many capital projects will be forestalled. While the City does anticipate over $300,000 in grant assistance for dredging the Marina, the City will likely have to contribute approximately $750,000 toward the project. New debt costs related to the repair and proposed expansion of the Marina will also ripple through the budget.
The funds spent on dredging will not be otherwise spent on park improvements, recreation improvements, and facility improvements. A few projects deemed critical have survived the first budget pass: roof repairs to the Atlantic Recreation Center and replacement windows/doors at the Peck Center. The Maintenance Department also gets a much needed piece of equipment. The capital project list, as I said, is skinny.
The budget is still a work-in-progress, but I do not foresee any additional sizeable expenditures at this point. More likely, additional reductions will be implemented. Stay tuned, and, more importantly, stay informed.
Even more importantly, happy birthday to my twins, Abigail and Meaghan- I no longer have any teenagers.