Weekly comments from Dale Martin

Dale Martin
City Manager
Fernandina Beach
August 12, 2016 1:00 a.m.

The 2016-2017 budget process continues moving forward. The proposed budget is to maintain the same millage rate (6.3044 mills) as this year’s levy. The 6.3044 is the combination of two separate millages, one levied for operational purposes (6.0682 mills), and the other levied for debt service previously authorized by City voters (0.2362 mills).

The proposed levy exceeds what is referred to as the “rollback rate.” The rollback rate is the revised rate needed to be levied to generate the same revenue after considering changing property values. The property values are calculated by the Nassau County Tax Collector and subsequently provided to the City. For 2017, it is estimated that property values (in aggregate) increased by 4.7 percent. Given that increase, the estimated rollback rate for the City’s operational millage is 5.8294 mills.

The combination of maintaining the same total millage rate and the increased property values means that the City will receive approximately $400,000 more revenue than would be received from the rollback rate. The estimated effect upon individual property owners is an increase of approximately $30 per $100,000 of value: a property valued at $300,000 will see an increase of approximately $90.

Since the homestead exemptions and the provisions of the Save Our Homes state constitutional amendment make property value comparisons somewhat difficult, it is somewhat easier to compare the tax amount for each property associated with the City’s operational millage. A cursory review of the Nassau County Tax Collector’s web site reveals that the amounts paid for City operational taxes range from a few hundred dollars to tens of thousands of dollars (for these figures, only single family residential properties are considered).

A further study of taxes paid reveals that, in my opinion, City services are a great value. For example, if your tax bill shows that you pay roughly $2,000 for City operational taxes, consider how that $2,000 is apportioned across the City’s General Fund. Based upon the percentage of each department as related to the total General Fund, that $2,000 provides $548 for police services and $478 for fire services: key public safety services are provided for approximately $3 per day. Most telecommunications bills (cable, internet, telephone) for residential services probably cost nearly twice as much per day.

The $2,000 tax payment additional funds approximately $219 for street maintenance, $105 for recreation, $70 for each of finance, information technology, facilities maintenance, and $50 for planning. All other departmental services receive less than $50 of the $2,000 tax payment. It is possible to similarly calculate the distribution for different tax payments to see how those funds are typically allocated.

Another component of the budget to consider is the water and sanitary sewer rates. These rates are “fees,” not taxes. Based upon previous actions by the City, these rates increase by 3% annually. Nonetheless, based upon usage alone (therefore not including the base charge of approximately $12 per month), water is provided to the typical City resident at the cost of $1.18 per 750 gallons. That price remains in effect for the first 3,000 gallons each month (and then nominally increases to $1.58 per 750 gallons for the next 4,500 gallons). A customer at a local convenience or grocery store will pay more than that for 16 OUNCES of bottled water! In other words, you could save significant money personally by filling your own bottles, jugs, or other containers at home (even if you do include the base charge). Total cost for 7,500 gallons of water each month is a little over $25.

It is imperative that City staff serve as a good steward of your tax dollars. Although everyone wants to pay as few taxes as possible, it is, as the saying goes, a necessary “evil” to provide for the quality of life that we desire. As with typically households, costs usually rise over time for a variety of factors: labor, supply, competition, market forces, etc. In order to continue to provide the levels of service desired, the City must pay higher costs, too.

The levels of service are guided by the policy decisions of the City Commission. If you have programs, projects, or personnel that you wish to see considered in this or any future budgets, please contact a City Commissioner. If you have any questions related to the development of the budget, please contact me. I welcome the opportunity to share how your community government functions, especially regarding such a key document as the annual budget.