Dale Martin
City Manager
Fernandina Beach, FL
August 2, 2019 12:00 p.m.
The City Commission will have a busy week next week. The coincidental timing of several issues brings many key topics before the City Commission.
Tuesday evening’s regularly scheduled City Commission meeting (the City Commission has regular meetings scheduled at 6:00 PM on the first and third Tuesday each month) will have presentations related to the beaches, to the Amelia River waterfront, to tree replenishment, and to the long-term fiscal stability of the City’s General Fund, the Golf Course, and the Marina. In other words, I’ll put on the coffee.
The beach presentation will be provided by representatives from the United States Army Corps of Engineers (USACE). The City maintains an excellent relationship with the USACE, most notably in regard to beach renourishment. The USACE conducted a beach management plan which emphasizes the stability of the dune system. The study, if formally incorporated, will lay the foundation for federal funding to restore the dune system if, in the event of a significant hurricane, the dunes are compromised. The USACE report will also likely provide direction to the City as to how to construct and manage access to the beaches via “walkovers” or “walkthroughs.” The actual plan for beach access infrastructure (or lack thereof) is not slated to be discussed until later this year.
One of the City Commission goals set in January (of this year, although it could also be for every year since the first pirate set foot on Amelia Island) is to develop the waterfront. Dozens of plans reviewed by scores of Commissioners then skewered by hundreds of residents have thwarted achievement of that goal. I have been tasked to provide a concept to at least offer a common starting point for discussion of the issues that have confounded development- the railroad, Front Street, waterfront property, the shoreline (be it a seawall, bulkhead, and absence of anything). The City Commission will subsequently consider how to integrate (and fund) all the pieces.
Another goal of the City Commission was conservation. A significant step toward that goal is the support of the City Commission for the conservation millage proposed in next year’s budget. Another component of conservation, though, is the development of a plan to replenish trees lost to development. The City’s Urban Forester, Mr. Dave Holley, will offer a replenish concept to add trees and canopy to the City’s landscape.
Following last year’s municipal audit, the auditor recommended that the City develop a plan to address the growing internal debt associated with the City’s Marina and Golf Course. Due to the cost of capital improvements at each of those facilities, other City funds have provided the money needed for improvements. The auditors asked that the City prepare a plan to recover that debt from the Golf Course and Marina.
Ms. Pauline Testagrose, City Comptroller, recommended a consultant, Stantec Consulting Services, to prepare a ten-year fiscal analysis for the City’s General Fund, the Golf Course, and the Marina. Ms. Testagrose and I met with Stantec staff last week to review the preliminary report. Stantec staff will present the report to the City Commissioners next week.
In summary, the City’s General Fund (supported primarily through property taxes) remains healthy for the foreseeable future- with conditions. A key condition was maintaining the current millage rate for future years. It is well-documented that property values in Fernandina Beach continue to rise at significant rates. What is often overlooked, however, is that property tax revenues do not rise at the same rates: while the market value of property may increase by five, ten, even fifteen percent, the assessed value (upon which the taxable value is based following the application of appropriate exemptions) of property is constrained by the State Constitution to no more than three percent. The overall conclusion of the consultant is that the City has a solid financial future.
The Golf Course and Marina do not. Even with significant financial decisions such as hefty rate increases, foregoing capital expenditures for several years, or the infusion of even more General Fund dollars, the Golf Course and Marina will likely always require a subsidy, probably close to $500,000 for the Golf Course and over $750,000 for the Marina. It is imperative that we change how we do business at those two facilities: we simply cannot keep doing the same things and expect to achieve some level of economic success. The consultant will share those findings in greater detail.
We might as well spend the night at City Hall, because on the following day, the City Commission will conduct its first scheduled budget workshop related to the 2020 fiscal budget. Some challenges are evident, but the Commission and City staff have ample time to make the necessary decision to have the budget in place for the start of the next fiscal year (October 1).
Please stay interested (or even better, engaged) with this issues as they come before the City Commission.
I totally disagree with Dale’s characterization that the waterfront plans were “skewered by hundreds of residents” and “have thwarted achievement of that goal”. In fact, it has been the community residents that have consistently supported the development of a waterfront park for the last 25+ years. After numerous community and commission meetings, a waterfront park plan covering what is known as Lots A – D was formally approved in 2012 (conceptual plan approved in 2008). Detailed engineering plans were even done with regards to the first phase of the project covering Lot B.
No, it has been subsequent city commissioners and city managers that have “thwarted” any progress on the waterfront park by returning the $1.8 Million Forward Fernandina loan which contained initial funding and then consistently kicking the can down the street by saying that no work can be done on the park until: Alachua street opening is decided; negotiations with FCRR about the Centre Street and Ash Street crossing are completed; marina dredging and dock realignment project is completed; stormwater and sea level rise studies are completed; parking requirements; road circulation along Front Street, upland stabilization, integration with property owners north of the marina and so on. I have been arguing for years that while these are all very legitimate components that must be considered, there will continue to be paralysis unless they are examined individually and assumptions made for their outcome (assume the worst case for each item) and move forward. Hopefully, this discussion will result in a plan of action to finally move forward to developing a riverfront park on the City owned property. As acknowledged by residents and visitors, such a park will be a major gathering spot for events and individual activities and serve as another reason to come downtown.
IMO, the city golf course is an amenity provided by the city as much as are the parks, parking spaces, and city streets. I believe the measure for whether any of these funds makes money is a simple profit and loss method which subtracts dollar costs from total “revenues”. The airport fund shows grants from the state and FAA and these grants are lumped into the “revenue” portion of that fund. Also, capital additions are not depreciated in this accounting method. So, this may lead to a distorted view of value of one operation verses another.
IMO the argument the City is losing money on one or more of these operations is misdirected. A more important consideration is what would happen were any to be re-purposed: housing developments, hotels, a car race track?? The City must consider whether an operation needs be re-purposed while not simply relying upon an accounting gimmic to make that decision. In addition, perhaps the City should reassess a perceived total reliance on subsidiary fund accounting theories when making decisions which impact our island life style. While it is an important consideration, it is not the highest. Otherwise, what could be next, setting up each police car as a fund to determine whether it makes money (sarcasm I realize)? By the way, I don’t play golf, own an aircraft or a boat.
Vince, I agree with your concept overall that one must consider the overall “value” of an amenity although certainly the pure revenue and expense aspect is an important element. Grants are generally for a specific purpose and are offset either totally or partially (whether it requires a match) by an expense. While grant amount will vary from year to year, I don’t see how that distorts the financial profile of a particular operation. The marina will likely never make a profit due to its current debt service load and frequent dredging costs. Joe and the Westrec team do the best they can with their limited functions and not being able to support dry storage and boat repairs. While enterprise funds are supposed to be run like private businesses, we know that is not the case in a setting such as ours. The marina would increase revenues if it only supported transient boaters, but there is a community benefit in supporting local charter fishing, boaters and tour operations. Likewise, the golf course management is constrained by the inability to do major capital investments to significantly improve the condition of the course. But the conservation aspect of the course in addition to its recreational focus also has great value to many in the community. The airport doesn’t get any ad valorem revenue from the City and has always shown a profit (revenues exceed expenses), so it is quite distinct from the golf course and marina.
A re-purposing of the golf course and/or marina is not as simple as it seems. The golf course land has restrictions on it from its zoning and conditions initially set as part of the land transfer from the Navy. Likewise, the marina has been the recipient of a number of grants with stipulations regarding future usage that would likely trigger major financial penalties if that usage was terminated. It will be interesting to see the recommendations that Stantec Consulting makes to the City.