A. Executive Summary

Transcription

1 A. Executive Summary Introduction The Local Economy... A-1 Goals... A-3 Key Strategic Initiatives for A-4 Key Long-term Initiatives... A-5 Adoption Process... A-7 Fiscal Year 2014 Adopted Budget... A-9 General Fund Overview... A-11 Personnel Overview... A-14 General Fund Subsidies... A-16 Enterprise Funds Overview... A-17 CIP Funds and Overview... A-19 Dependent Districts... A-21 Fund Structure and Fund Relationship... A-22 Basis of Accounting... A-23 At-a-Glance City of St. Petersburg, FL... A-25 Civic, Cultural & Recreational... A-27

2 City of St. Petersburg, Florida 14 Adopted Fiscal Plan The Local Economy INTRODUCTION The economy of the city of St. Petersburg is recovering from the recession. Three key data points illustrate this recovery. First is the increase in property value and the commensurate increase in ad valorem revenue, second, increased State Half Cent Sales Tax collections, and third, the increased permitting activity for future development. Property Values and Ad Valorem Revenues For the first time since 2008, the city will see property value increase by 4.21% to $ billion from $ billion in gross taxable property value in fiscal year The increase in property values will generate an additional $3.176 million in ad valorem revenue from $ million in 13 to $ million in 14. Although the city is recovering, it is important to revisit the impact the recession had on the city s economy. The recovery has been prolonged by two important factors; first the recession was marked by a steep and unprecedented decline in property values and second, the duration of the recession was longer than the previous five recessions. As for property values, the city lost a total of $5.643 billion in gross taxable value from $ billion in tax year 2007 for 08 to $ billion in tax year 2012 for 13. The loss in gross taxable value also reduced the ad valorem revenue for the city. The cumulative loss of ad valorem revenue between 08 and 13 is $ million. It is important to note that the increase in ad valorem revenue in 13 was associated with an increase in millage rate from in fiscal years 2008 through 2012 to in 13 rather than an increase in property values. 20,000,000 Gross Taxable Value (000s omitted) 120,000 Property Tax Revenue (000s omitted) 18,000,000 16,000, ,000 14,000,000 12,000,000 80,000 10,000,000 60,000 8,000,000 6,000,000 40,000 4,000,000 2,000, ,016, ,817, ,899, ,690, ,307, ,723, ,721, ,560, ,067, ,220, ,080, Budget 12,576, Budget 20, , , , , , , , , , , , Budget 82, Budget Fiscal Year 2014 A-1 Executive Summary

3 14 Adopted Fiscal Plan City of St. Petersburg, Florida Excise Tax/ State Half Cent Sales Tax Revenue The recession also impacted the collection of the State Half Cent Sales Tax. In 2006, the city s collections from the State Half Cent Sales Tax were $ million. During the low point of the recession the city s share of these revenues decreased by $3.60 million from $ million in 2006 to $ million in In 2014 the city is projecting the State Half Cent Sales Tax collections at $ million surpassing all previous years since 2003, with the exception of The increase in the collections of the Half Cent Sale Tax revenue is attributable to the general improvement of the local economy and the strong performance of the tourism industry. More information can be found in the Revenue Highlights section of this document. 16,000 State Half Cent Sales Tax Revenue (000s omitted) 14,000 12,000 10,000 8,000 6,000 4,000 2, , , , , , , , , , , , Budget 14, Budget Permitting Activity In addition to the increase in property values and the increase in sales tax collections, another indicator that the local economy is recovering is the number of construction permits issued by the city and the projected value of the permitted improvements. A total of 22,607 building permits were issued in fiscal year 2013 with an estimated construction value of $ million. The 22,607 permits issued exceed the 20,163 issued in 2007 and is the highest level of permits and construction values since The tables below illustrate the annual permitted construction value from fiscal year 2007 through fiscal year 2013 and the number of permits issued. Annual Construction Value (000s Omitted) Annual Permits Issues Annual Construction Value 2010 Annual Permits Issues $0 $200,000 $400,000 $600,000 $800, ,000 10,000 15,000 20,000 25,000 The future impact of the increased development activity is dependent on several factors, including the timing of the completion of the development project(s) and the actual value of the improvements as assessed by the Pinellas County Property Appraiser. For example, if a project is completed with a Certificate of Occupancy on January 1, 2013, the property appraiser adds that new value to the tax roll for fiscal year As of this writing the city is unable to quantify the exact amount of new taxable value to be added to the future tax rolls, but the increased permitting and construction activity is a positive trend. Executive Summary A-2 Fiscal Year 2014

4 City of St. Petersburg, Florida 14 Adopted Fiscal Plan Seven S s for City Success Mayor Foster s 7 S s for City Success outline the goals of the city and guide decisions impacting our annual budget. The Foster Formula was developed to ensure the long-term economic viability of the city, public safety and quality of life for its citizens, while promoting the city as a recognized destination, through employees that provide a high level of customer service. Safety Sustainability Seamlessness Schools 7 S's for Success Small Business Sports, Arts & Culture Service The Foster Formula the 7 S s for City Success Safety all citizens and employees actively involved in achieving public safety Seamlessness entire city well served with quality appearance, schools, amenities, housing, retail and commercial services, and transportation Small Business supporting citizen needs for goods, services, and jobs Service customer friendly, cost effective, and professional Sports, Arts & Culture making the city a recognized destination Schools preparing students for life Sustainability ensuring the city s long-term economic and environmental viability Fiscal Year 2014 A-3 Executive Summary

5 14 Adopted Fiscal Plan City of St. Petersburg, Florida Key Strategic Initiatives for Developing the Fiscal Year 2014 Budget The chart below illustrates the key strategic initiatives used in developing the fiscal year 2014 budget. Following the chart is a brief description of each issue and how it was addressed in the fiscal year 2014 budget. Public Safety Top Priority Reduce Millage Rate Provide a General Wage Increase Identify new revenues or reduce expenditures through efficiencies Maintain Service Levels Manage Expenditures Public Safety Police Department Goal: Add five sworn officers to the force. Fiscal Year 2014 Budget: provides for the addition of five sworn officer positions bringing our total sworn officers count to 550. These officers will be added throughout the year in a incremental hiring process that takes into consideration a five year average attrition rate and the contemplation of hiring certified officers and one or two Cadet Academies. Millage Rate Goal: reduce millage rate. Fiscal Year 2014 Budget: The adopted millage rate for fiscal year 2014 is and is a slight reduction as compared to the fiscal year 2013 operating millage rate of signaling the intent to reduce rates as values grow to ensure competitiveness with surrounding communities. General Wage Increase Goal: Provide General Wage Increase (GWI) Fiscal Year 2014 Budget: The Fiscal Year 2014 Adopted Budget includes a 2% GWI or a step increase (if applicable) for all non-sworn and non-uniformed employees represented by the blue or white collar bargaining unit. A 2% GWI has also been budgeted for non-represented, supervisory, professional and management employees. The Police Union has agreed to a 2% GWI plus step increases. The Fire Union agreement calls for either a step increase (if applicable) or a GWI for rank and file members and a step increase (if applicable) and a GWI for Supervisors. Identify New Revenue Sources and or Reduce Expenditures through efficiencies Goal: New Revenue Fiscal Year 2014 Budget: the City of St. Petersburg Fire Department will begin providing Fire and EMS service to the East High Point Fire District. Under the terms of the five year contract, the East High Point Fire District will pay $900,000 annually for these services. Since the city has annexed land in this district, we currently man many of the calls and will re-deploy existing personnel and equipment. As a result, excess revenues above the cost of providing fire protection and emergency medical services may offset some overtime expense for the Fire Department. Executive Summary A-4 Fiscal Year 2014

6 City of St. Petersburg, Florida 14 Adopted Fiscal Plan Goal: Reduce Expenditure through efficiencies Fiscal Year 2014 Budget: the adopted budget includes savings associated with the privatizing of landscaping services along the interstate highways. Savings of $235,000 are budgeted in Parks and Recreation and the personnel that formerly provided this service have been absorbed into other functions within the Parks and Recreation Department. Maintaining Service Levels Goal: Balance the budget while maintaining service levels Fiscal Year 2014 Budget: In 14 service levels are maintained. For example, the quality of life services provided by the Parks and Recreation Department are maintained at 13 levels which means all libraries, parks, recreation centers, pools, and senior centers will continue to provide the same service to our residents. The 14 budget also reinstates the neighborhood grants program in the Community Services Department. Management of Expenditures Goal: Reduce expenditure through efficiencies Fiscal Year 2014 Budget: The cost of providing health insurance to city employees continues to increase. The 14 budget includes an increase of 18.96% in health insurance costs. In an effort to manage these costs and to find efficiencies, the city recently opened a health and wellness center which is intended to increase the level of care provided while reducing future costs. Key Long-Term Strategic Initiatives St. Petersburg s success in meeting the current budgetary requirements is enhanced by a continuing focus on organizational efficiencies that preserve levels of service. The table below illustrates three of our long-term budget strategies. Following the table is a brief description of how these strategies are being pursued. Investment of Capital Dollars to reduce future operating costs Implementing sustainable expenditure reductions Adherence to adopted Fiscal Policies Investment of capital dollars in technology and processes that reduce operating costs: Water Resources During 14, the city will continue to invest capital dollars to reduce future operating costs. Included in Water Resources master plan is the decommissioning (in 15) of one of the city s oldest and least efficient water reclamation facilities (Albert Whitted Water Reclamation Facility) and the redirection of bio-solids to the city s Southwest Water Reclamation Facility that will ultimately be the home of the city s waste-to-energy operation. The waste to-energy project will convert the bio-solids to compressed renewable natural gas. The renewable natural gas generated will be used to produce electricity in order to offset the cost of running the facility at peak hours and used to fuel the city s Compressed Natural Gas (CNG) fleet in the Sanitation department. Sanitation In 14, the Sanitation department will add four new CNG fueled residential trucks as the city continues its efforts to convert the entire residential sanitation fleet from diesel to CNG. Fiscal Year 2014 A-5 Executive Summary

7 14 Adopted Fiscal Plan City of St. Petersburg, Florida Implementing sustainable expenditure reductions: During 13, the city entered into two partnerships that will allow us to reduce cost and improve the delivery of services in 14 and beyond. These two partnerships reflect the type of sustainable expenditure reductions we will seek in future budget years. The Greenhouse is a partnership with the St Petersburg Chamber of Commerce, educational institutions and community organizations to provide entrepreneurs with the resources they need to grow their business in one central location. With the Greenhouse the city is able to leverage the investment made in economic development with private sector participation to provide better service at a lower cost to the city. St. Pete s Promise is a partnership with Pinellas County Schools and the Pinellas County Education Foundation. By leveraging the city s investment with those of its partners the city is able to provide better service to at risk students in a more cost effective manner. One city position was eliminated and each partner places an employee at the city, with the city sharing half the cost and still saving tax payer dollars. Adherence to Fiscal Policies Annually, as part of the budget adoption process, City Council reviews and reaffirms the city s Fiscal Policies. The city s Fiscal Policies, which are included in Section B of this document, are a comprehensive series of fiscal policies that embody recognized financial management concepts. The city s Fiscal Policies were initially adopted in 1980 and have provided guidance on many budgetary decisions since their adoption. These Fiscal Policies are intended to provide long-term fiscal stability for the city and outlast changes in administrations, City Council and city staff. The city s Fiscal Policies are found in section B of this document. Executive Summary A-6 Fiscal Year 2014

8 City of St. Petersburg, Florida 14 Adopted Fiscal Plan Fiscal Year 2014 Budget Adoption Process The city s budget approval process is defined by state statute, the City Charter, and the City Code (ordinances). The process also contains additional non-mandated steps, which are designed to provide the City Council and the general public with opportunities for early input into budgetary decisions. Each year City Council approves an operating budget and a capital improvement budget. The adopted capital improvement budget becomes the first year of a multi-year Capital Improvement Program. Adoption Process The city s fiscal year begins October 1 and ends September 30, as specified by state law. Florida Statutes further require that budget appropriations occur each year and that each year s budget must be balanced. Additionally, there are very specific and detailed rules known collectively as the Truth in Millage or TRIM process as outlined in Florida Statute These rules dictate the approval process for the budget in general and property taxes in particular. TRIM sets the timetable for the County Property Appraiser to deliver estimated and certified tax rolls to the taxing authorities, including the city. It further requires that a tentative millage rate be approved by the city by a certain date, that the Appraiser mail notices of proposed taxes (TRIM notices) to all property owners by a certain date, that two public hearings be held within certain specific time periods, and that the city run newspaper advertisements which follow exact specifications for wording, size, and placement prior to the final public hearing. The hearings themselves must be conducted according to a prescribed format and sequence of Council actions. This process includes the calculation and announcement of a theoretical rolled back millage rate (the rate which would generate the same property tax revenue in the current year given the updated property valuation). The percentage change in property tax from the prior year resulting from the proposed millage rate must also be announced. Finally, the city must document its compliance with the TRIM rules and submit this documentation to the State for review and approval. The City Charter and City Code require that the Mayor submit a recommended budget to City Council by July 1, containing specific information outlined in the Code. The Code also requires additional supplementary line item detail not contained in the recommended document, but provided to Council in a separate volume by July 1. Additionally, two days prior to the second public hearing, state statues require the city to post the tentative budget on-line for citizen access. Following the adoption of the budget, state statues require that the adopted budget be posted on-line within 30 days. Other major planning processes that may impact the budget include the Comprehensive Plan, which according to state statute, defines infrastructure requirements and levels of service. The Comprehensive Plan includes a Capital Improvements Element, which is updated in conjunction with the Capital Improvement Program and budget. The city is required to make an annual report on budget compliance with the Capital Improvement Element of the Comprehensive Plan. Beyond the requirements of state statute and the City Charter, the city adopted a series of fiscal policies that provide guidance in developing the annual budget. A discussion of these policies, which cover such areas as revenue forecasting, fund balances, and the issuance of debt, is included in a later section of this document. A series of workshops were held with City Council throughout the year to discuss the economic, financial, and programmatic issues pertinent to the budget development process. The Mayor also held three budget summits in the community where the public was invited to give city officials input prior to the release of the Mayor s Recommended Budget on July 1. A schedule of the budget process follows: Fiscal Year 2014 A-7 Executive Summary

9 14 Adopted Fiscal Plan City of St. Petersburg, Florida Fiscal Year 2014 Budget Adoption Timeline: Feb. 11 Apr. 24 May 7 May 14 May 15 Operating Budget Kickoff Budget Staff & Departments Mayor's Budget Summit City Council, Mayor & Budget Staff Willis S. Johns Center CIP Budget Workshop with Council City Council, Mayor, Budget Staff & Administrators City Hall Operating Budget Workshop with Council City Council, Mayor, Budget Staff & Administrators City Hall Mayor's Budget Summit City Council, Mayor & Budget Staff JW Cate Center June 1 June 12 Estimate due from Property Appraiser County Property Appraiser Mayor's Budget Summit City Council & Mayor Enoch Davis Center July 1 July 25 Receive Certified Taxable Values County Property Appraiser Set proposed millage rate for TRIM notice, date, time, and place of first Public Hearing, and reaffirm fiscal policies City Council & Mayor Sept. 12 Sept. 26 Public Hearing. Adopt tentative budget and tax rate. City Council & Mayor Public Hearing- Adopt final budget and tax rate. Approve the capital improvement program. City Council & Mayor Executive Summary A-8 Fiscal Year 2014

10 City of St. Petersburg, Florida 14 Adopted Fiscal Plan FISCAL YEAR 2014 ADOPTED BUDGET The operating budget for the city of St. Petersburg for fiscal year 2014 totals $ million for all funds, excluding internal service funds and dependent districts. This is a decrease of $264,435 or -0.06% from the fiscal year 2013 Adopted Budget. The estimate included herein was used by City Council to set the millage rate as required by Florida Statutes. In addition, the fiscal year 2014 capital improvement program budget totals $ million. The city s budget is comprised of a number of different funds which are set up to accomplish different functions. This allows for segregation and tracking of the full cost of different city operations and programs. The following table shows the dollar amount, in millions, budgeted for each operating fund: 14 Operating Budget Summary General Fund & Reserves $ Water Resources $ Non-Operating/ Debt $ Sanitation $ Other Operating Funds $ Stormwater $ Total $ Operating Budget Expenditures As indicated in the charts to follow, the General Fund, which is the fund that receives ad valorem and other tax revenues and includes traditional government services such as police, fire, and parks and recreation, makes up 45% of the total budget. The three largest enterprise funds which are funded by fees paid by users of the services: Water Resources, Stormwater Utility, and Sanitation make up an additional 35%. The remainder is attributable to other operating, special revenue and debt service funds. 14 Operating Budget Other Operating Funds, 11% Sanitation, 9% Stormwater, 3% General Fund & Reserves, 45% Water Resources, 23% Non Operating, Special Revenue & Debt Funds, 9% Fiscal Year 2014 A-9 Executive Summary

11 14 Adopted Fiscal Plan City of St. Petersburg, Florida Operating Budget Revenues The revenues funding the operation of the government come from various sources. The table below illustrates the sources of revenues for operations. The single largest source of revenue comes from user fees at 44% of the total operating budget. The majority of the city s user fee revenue is generated by the city s enterprise systems such as Water Resources (water and wastewater services), Sanitation and Stormwater. The second largest source of revenues is taxes at 30% of the total revenue. Included in the taxes category is ad valorem (property taxes), as well as, other taxes such as utility taxes and franchise taxes. 14 Operating Revenues Sources All Funds Intergovernmental, 9% Other, 3% Transfers, 9% PILOT/G&A, 5% Taxes, 30% Users Fees, 44% Executive Summary A-10 Fiscal Year 2014

12 City of St. Petersburg, Florida 14 Adopted Fiscal Plan GENERAL FUND OVERVIEW General Fund Revenues: The General Fund is the operating fund for general government operations including Police, Fire, Parks and Recreation, Codes, etc. The Fiscal Year 2014 Budget includes a total of $ General Fund revenues which is a 0.52% increase over the fiscal year 2013 budgeted revenues of $ The General Fund is the only fund supported by ad valorem tax revenue. Ad Valorem Tax revenue of $ million or 39% of the total, represents the largest single source of General Fund revenue. Other taxes, including Utility Taxes (electricity, water, sewer, etc.), Franchise Tax (electricity and gas), Communications Services Tax, and others, total $ million or 28% of the total revenues. Intergovernmental revenue including federal, state and local grants, and State Shared Revenues which includes half-cent sales tax is the third largest source at $ million or 12%. General Administrative charges (G&A) and Payment in Lieu of Taxes (PILOT) represent 12% of the total General Fund revenue or $ million. The G&A charges are assessed on each enterprise fund, three internal service funds and represent the pro-rata share of city-wide management and control function such as accounting, personnel and purchasing. The PILOT payments are charges to enterprise funds which are intended to replace General Fund revenues (ad valorem tax revenue) which the city would receive if the enterprise were a private sector operation. 14 General Fund Revenues Transfers, 1% Interest/Misc, 1% Fines & Forfeitures, 2% G&A/PILOT, 12% Charges for Services, 5% Intergovernmental, 12% Ad Valorem Taxes, 39% Other Taxes, 28% General Fund Revenue Assumptions Overall, General Fund revenues are forecasted conservatively as required by city fiscal policy and are expected to increase 0.52 % from 13. The increase in revenue is due to the increase in ad valorem tax revenues and is partially offset by a decrease in revenue from Communications Services Tax, Electric Utility Taxes and Electric Franchise Fees. Ad valorem taxes have been the primary revenue driver in prior years and are based on the certified tax assessment received from the Pinellas County Property Appraiser which indicated a 4.21% increase in assessed value from the 13 final certified value. The increase is due to the firming up of the real estate market locally. Over the last several years the city s share of the Communication Services Tax has been declining. In 14 the city budgeted $ million which is an 11.27% decrease as compared to the $ million in 13. The Electric Franchise Fee is a fee of 6% levied on a business s (Duke Energy) gross receipts for the sale of electricity within the city. This fee is to compensate the city for the use of its rights-of-way. The 14 projected revenue is based on historical receipts and information received from Duke Energy. For 14 the city is budgeting $ million which is a 4.05% decrease as compared to the 13 budget of $ million. Fiscal Year 2014 A-11 Executive Summary

13 14 Adopted Fiscal Plan City of St. Petersburg, Florida There is a strong correlation between the weather and the city s actual collection of the Electric Utility Tax. Recent warmer than average winters and wetter than average summers have reduced the city s collection of utility taxes as electricity usage has been reduced. In 14, the city budgeted $ million, which is a 1.95% reduction as compared to the 13 budget of $ million. Projected State Shared Half-Cent Sales Tax revenue is budgeted at $ million, which is a slight decrease from the $ million budgeted in 13. In 2010, the State-wide sales tax receipts were at record lows and the city s share of those revenues was $ million. Beginning in 11, the city has seen consistent gains in the annual half-cent sales tax receipts. Local option gas tax revenue is based on a county distribution formula. 14 gas tax revenues are projected to come in right at the 13 budget. NOTES: There is a line item on each of the administration and department pages in the Revenue Sources section that shows the amount of the fund balance added to or used for each department. This will be identified in the revenue source section by the name of the fund. For example, in the Public Safety summary for 14 it shows an amount of $115,936,108 for the General Fund. This is the amount of the General Fund that goes to support this function. In some funds the number will be a negative, which indicates the amount that is contributed to the General Fund fund balance as a result of budgeted revenues exceeding budgeted expenditures. In previous years, interest earnings included unrealized gain or loss. In order to follow correct accounting procedures, unrealized gain or loss has been removed from the revenue calculations in this book, causing some previous years actuals to differ from what has been published in the past. General Fund Expenditures by Administration: The General Fund is organized into five administrations. The largest investment in the General Fund is in public safety, which includes the Police and Fire Departments. Additionally, fiscal policies state that ad valorem revenues will be dedicated to support the Police Department and in 14 ad valorem revenues cover 91% of that appropriation. The total investment in Public Safety in 14 is $ million and represents 58% of total General Fund budgeted expenditures. Leisure & Community Services, which includes the quality of life type services provided by the city s Parks and Recreation Department and libraries, is the second largest investment at 19% of the total General Fund. 14 General Fund Expense By Administration General Government, 13% Leisure & Community Services, 19% Public Safety, 58% Public Works, 5% City Development, 5% Executive Summary A-12 Fiscal Year 2014

14 City of St. Petersburg, Florida 14 Adopted Fiscal Plan General Fund Expenditures by Type Below is a chart that illustrates the General Fund expenditures by type. The largest single expense by type is Personnel, which includes all salaries and benefits, at $ million or 71% of the total General Fund expenditures. The second largest expense in the General Fund is Operating expenses, which includes the General Fund cost for services and commodities, at $ million or 21%. 14 General Fund Expense By Type Capital Transfers/Debt, Outlay/Social 6% Services, 2% Operating Expense, 21% Personnel, 71% The following non-discretionary expenditure changes to the 2014 Adopted Budget are those citywide expenses that individual departments cannot control. Benefits changed because they are tied to personnel changes and step increases. Pensions are based on the latest actuarial studies. Health insurance changes reflect current rates. Utility costs reflect projected savings from energy conservation. Fiscal Year 2014 A-13 Executive Summary

15 14 Adopted Fiscal Plan City of St. Petersburg, Florida PERSONNEL OVERVIEW In 14, health insurance costs increased 18.96% over the 13 budget. This is partly due to a premium increase, which is based on projectable claims cost. Of the $ million budgeted for salaries and benefits, employee health insurance costs are $ million. Pension costs are determined by independent actuarial studies. One part of the analysis provided by the actuarial studies includes projection of earnings on the assets of the individual pension funds using a four-year averaging methodology. In 14, general employee pension costs increased by 1.85% over the 13 adopted budget and public safety pension costs decreased 7.34% over the 13 adopted budget; these changes were based on the actuarial studies. As shown in the chart below, salary & benefits costs have decreased by $1.125 million since 09. The reduction in salary and benefit expenditures is attributable to a 6.26% decrease in full-time positions from 2,860 in 09 to 2,681 in ,000 Salary and Benefits Actual Costs (000s omitted) 244, , , , , , , , , , , , , , , , Est. Budget 14 Step increases and/or a general wage increase (GWI), as provided in the contracts with public safety union employees are included in the 14 budget. The 14 budget also includes a modest 2% wage increase or step increase if applicable for all FPSU represented employees, professionals and managerial employees. Salaries and benefits make up 51% of the total operating budget and 71% of the General Fund budget. These costs tend to increase at a higher rate than other operating costs. The city s goal is to manage the growth of positions to the greatest extent possible through the use of technology improvements and other efficiency enhancements. Since 10, the number of full-time employees has decreased by 2.3%. As shown in the following chart, the city will amend its workforce by adding two full-time positions. In addition, the 14 budget eliminates nine part-time positions to control future costs and meet future demands in a recovering economy. Details of the personnel changes can be found on the individual department pages. Executive Summary A-14 Fiscal Year 2014

16 City of St. Petersburg, Florida 14 Adopted Fiscal Plan To align city personnel with service delivery expectations, the 14 Adopted Budget incorporated a re-organization within the Planning and Economic Development Department. The Business Assistance Center division was consolidated with the Planning & Economic Development division subsequently forming the Greenhouse, the new model for business assistance growth. Five full-time positions were transferred into the newly formed division. Also in 14, the Local Administrative Hearing division was created within the city Clerk s office. Two part-time temporary positions were added to provide support to hearing officers in the state mandated red light camera hearing process Full-Time Staffing by Administration Public Works Administration 29% City Development Administration 8% General Government Administration 10% Leisure & Community Services Administration 13% Public Safety 40% Fiscal Year 2014 A-15 Executive Summary

17 14 Adopted Fiscal Plan City of St. Petersburg, Florida GENERAL FUND SUBSIDIES OR ADVANCES In general, Enterprise Fund operations generate revenues which are expected to cover the cost of the operation plus any capital needs and debt service. However, some Enterprise Funds are deemed to have public benefit in addition to the specific benefits to the users and, as such, are provided a subsidy from the General Fund to cover any shortfalls between the cost of operation and the revenue generated. A majority of the funds were previously classified as operating special revenue funds prior to GASB 54, a Government Standards Board pronouncement which required that these funds be reclassified. The chart that follows shows the historical and budgeted amounts of the subsidy for each of these operations. $1,800 $1,600 $1,400 $1,200 Subsidy History Thousands $1,000 $800 $600 $400 $200 $ Airport Port Mahaffey Tropicana Pier Sunken Coliseum Jamestown Golf Field Gardens 2008 $390 $405 $1,030 $1,662 $1,539 $241 $191 $ $ 2009 $466 $469 $934 $1,566 $1,509 $230 $193 $ $ 2010 $136 $508 $966 $1,102 $1,427 $222 $232 $70 $ 2011 $ $397 $1,016 $1,480 $1,207 $211 $237 $ $ 2012 $ $361 $670 $1,471 $1,386 $105 $237 $188 $ $ $319 $470 $1,236 $1,260 $202 $265 $94 $ $ $263 $632 $1,139 $ $219 $216 $ $ Notes: For the Airport, Golf Course and Jamestown any support from the General Fund is in the form of an advance or loan and the enterprise is expected to make repayment. Airport The city did not budget a loan to the Airport in 13, however the Airport will require a loan of approximately $182,000. The total amount owed by the Airport to the General Fund is $3,189,063 ($2,179,469 operating subsidy plus $1,009,594 debt payment). Taking into consideration the $50,000 per year repayments made in 11 and 12, the outstanding balance due to the General Fund from the Airport at the end of 13 is estimated to be $3,089,063. Jamestown -- received $70,000 in 10, and $188,000 in 12. This fund will also need an estimated $96,000 in 13. It paid back $35,000 in 11, so the balance due at the end of 13 is $318,996. Golf Course -- received $27,000 in 12 and will require an estimated $175,000 in 13 from the General Fund. This amount, totaling $202,000, to assist the Golf Course Operating Fund in funding its operations is considered a loan and will be repaid from future Golf revenues. Executive Summary A-16 Fiscal Year 2014

18 City of St. Petersburg, Florida 14 Adopted Fiscal Plan ENTERPRISE FUNDS OVERVIEW Enterprise Operations: Enterprise operations provide services that are of benefit to specific individuals and therefore charge a fee to the individuals who receive the service. The operations below seldom receive any general government support and are expected to cover all costs including capital costs. The amounts shown in the chart below are for the Enterprise Operating Funds only and do not include any associated reserve funds. In 10, a number of Operating Special Revenue Funds were reclassified as Enterprise Funds due to recommendations made in GASB 54. The funds reclassified were the Parking Special Revenue Fund, Mahaffey Theater, Pier, Coliseum, Sunken Gardens, and Tropicana Field Operating Fund. Enterprise Funds History (000s Omitted) Actual Actual Actual Estimate Adopted Water Resources $99,623 $100,320 $105,197 $117,525 $111,291 Stormwater Utility 11,980 10,693 11,409 13,128 12,459 Sanitation 38,912 40,235 39,637 41,902 42,690 Others 24,014 23,903 24,683 23,959 23,036 Enterprise Fund Expense History $ Millions $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Water Resources Stormwater Utility Sanitation Others Water Resources: Based on a rate study completed in 13, water rates will increase by 3.75%, sewer by 3.75%, and reclaimed by 3.75% in 14. In 14, $1.308 million will be transferred to the Water Resources Operating Fund from the Water Rate Stabilization Fund (WRS Fund) to partially offset the cost of raw water from Tampa Bay Water. The WRS Fund was initially funded by the sale of well fields to Tampa Bay Water. Investment earnings on proceeds from this sale are transferred annually to help offset the cost of water. The Water Resources Operating Fund will transfer $ million to the General Fund for payment in lieu of taxes in 14. The transfer to Water Resources CIP is $3 million in 14 The increase in expenditures in 13 is attributable to a $ million advance from Water Resources operating fund to its capital improvement fund. The operating fund was repaid with bond proceeds. Fiscal Year 2014 A-17 Executive Summary

19 14 Adopted Fiscal Plan City of St. Petersburg, Florida Stormwater: Rate increases/decreases are usually equivalent to the previous fiscal year s CPI (2.4% in 13), but no rate adjustment is included in the 14 budget. The transfer to the Stormwater CIP is $800,000 in 14. The Stormwater Utility Operating Fund will transfer $2.071 million to the General Fund for payment in lieu of taxes in 14. Sanitation: No rate increase is included in the 14 budget. A transfer of $4.5 million will be made to the Sanitation Equipment Replacement Fund in 14. The Sanitation Fund will transfer $455,076 for return on investment and $2.511 million for payment in lieu of taxes to the General Fund. Airport: The transfer to the Airport Capital Projects Fund is $34,000 in 14. In 14 the Airport Fund will transfer $168,504 to the General Fund for payment in lieu of taxes. Marina: No rate increase is included in the 14 budget. The transfer to the Marina Capital Projects Fund is $75,000 in 14. In 14 the Marina Fund will transfer $310,000 for return on investment and $130,656 for payment in lieu of taxes to the General Fund. Golf Course: No rate increase is included in the 14 budget. The Golf Course Fund will transfer $63,840 to the General Fund for payment in lieu of taxes in 14. Jamestown: No rent increase is included in the 14 budget. This fund will transfer $59,760 to the General Fund for payment in lieu of taxes in 14. Port: Since 12, the Port does not transfer funds to the General Fund for payment in lieu of taxes because it is subsidized. Parking: The Parking Fund will transfer $350,000 for return on investment and $104,988 for payment in lieu of taxes to the General Fund in 14. Executive Summary A-18 Fiscal Year 2014

20 City of St. Petersburg, Florida 14 Adopted Fiscal Plan CAPITAL IMPROVEMENT FUNDS AND CIP OVERVIEW The five year CIP totals $ million. All funds are balanced in all years. Water Resources projects comprise more than 61% of the five year CIP. As indicated in the chart that follows, the 15 CIP is significantly higher than other years as it includes the final demolition of the Albert Whitted Reclamation Facility and the construction of the waste-to-energy project at the Southwest Water Reclamation Facility. 120,000 CAPITAL IMPROVEMENTS PROGRAM 5 YEAR PLAN 100,000 80,000 60,000 40,000 20, Penny Funds Water Resources Other Funds The first year of the CIP is appropriated by City Council as the 14 Capital Projects Budget and is $ million for all funds in 14. The budget is shown by fund in the chart and table that follow. As indicated, 81% of the budget is comprised of Water Resources projects and projects funded from the Penny for Pinellas. The remaining portion is comprised of a number of funds as shown in the smaller circle. Fiscal Year 2014 A-19 Executive Summary

21 14 Adopted Fiscal Plan City of St. Petersburg, Florida 14 Capital Improvement Program (CIP) $55.71 Million Penny for Pinellas, Water Resources, and Other CIP Funds Break Down of Other CIP Funds Water Resources 49% Airport, Marina, Golf Course, Port, Parking & Tropicana 7% Other 19% Trans Impact Fees, Bicycle & Weeki Wachee 7% Penny Funds 32% Stormwater 4% Housing & General CIP 1% CIP FUNDS 14 (000s Omitted) Public Safety 849 Stormwater 2,325 Neighborhood & Citywide 10,615 Airport 2,900 Recreation & Culture 5,709 Marina 400 City Facilities 650 Golf 0 Housing 93 Port 101 General CIP 585 Bicycle/Pedestrian 828 Tropicana Field 0 Weeki Wachee 0 Downtown Parking 500 Transportation 3,055 Water Resources 27,100 Grand Total 55,710 Funding for Enterprise Fund (Water, Stormwater, Airport, Marina, Golf Courses, Port, Parking, and Tropicana Field) CIP projects comes from operating fund transfers on a pay-as-you-go basis, as well as, from debt or grant funding. Although Enterprise Funds are expected to fully fund all aspects of their operations, Penny Funds are programmed for some Stormwater projects, as well as, for grant matching funds for Airport and Port projects. Funding for other non-general government projects (Bicycle/Pedestrian, Weeki Wachee, Transportation, and Housing) comes from grants and various special revenue funds. The majority of projects in the General CIP Fund are funded by grants, but a portion of funding is provided by transfers from other funds including the General Fund. In 14, there will not be a transfer from the General Fund. The primary revenue source for general government projects, such as streets, roadways and parks, is the Local Option Sales Surtax, which is commonly known as the Penny for Pinellas. On March 13, 2007, voters approved a ten year renewal of the Penny for Pinellas sales tax beginning in January 2010 when the previous penny sales tax expired. In prior years, revenue provided by the Penny has allowed the city to fund a majority of the general government capital improvement program, and the extension of the tax is very important to the city s ability to continue to fund needed capital improvements going forward. Over the ten-year extension, proceeds of the tax are expected to be approximately $215 million. The following provides key provisions of the tax: The basis for the Penny for Pinellas is rooted in State law. With voter approval, the State Legislature authorized counties to levy a sales surtax for infrastructure. The tax has been approved by voters three times beginning in Although Pinellas County has chosen to implement the tax on a ten year time basis, the law allows the tax to be levied for up to 15 years. The tax cannot exceed one cent. In Pinellas County, the Penny for Pinellas is the seventh cent of sales tax. Six cents goes to the state, and the seventh goes to the state and gets remitted back to the county. Executive Summary A-20 Fiscal Year 2014

22 City of St. Petersburg, Florida 14 Adopted Fiscal Plan Pinellas County shares that one cent with all municipalities in the county according to an inter-local agreement that specifies distribution on a population-based formula after removal of a specified amount for county criminal justice projects. St. Petersburg s annual share of approximately 18% of the balance has averaged approximately $21 million for the past 13 years. In 14 Penny projects total $ million and for the period total $ million. These numbers do not include an assignment of $ million for a new Police Facility/Emergency Operation Center in the five-year CIP. The Penny plan approved by the voters provides for projects in four priority areas and established funding goals for each of these areas. The following charts show the appropriations for each of the four areas (not including the assignment mentioned above) in 14 and for the five-year CIP. 14 PENNY FUNDS APPROPRIATIONS $ Million "PENNY FOR PINELLAS" CIP APPROPRIATIONS (000s Omitted) 25,000 Public Safety, 5% City Facilities, 4% Neighborhood Infrastructure, 59% 20,000 15,000 10,000 Recreation and Culture, 32% 5, Public Safety Capital Improvement Recreation/Culture Capital Improvements Neighborhood/Citywide Infrastructure City Facilities Capital Improvements Dependent Districts The city is required to budget for its dependent districts including the Downtown Redevelopment District, Bayboro Harbor Tax Increment District, Intown West Tax Increment District, and the Health Facilities Authority (HFA). The City Council serves as the board for the Downtown Redevelopment District and the other tax increment districts. The Downtown Redevelopment District receives the city and county shares of the downtown tax increment revenue projected to be $8.853 million in 14, a portion of which will pay debt service on public improvement bond issues. The Bayboro and Intown West Tax Increment Districts are projected to receive $26,142 and $676,364 respectively. The property values in the Downtown Tax Increment District, and the Intown West District increased as compared to 13 while the property values in the Bayboro District decreased as compared to 13. The revenue from these special districts is used for improvements in the tax increment district. The Health Facilities Authority issues bonds for health care facilities, and annually includes a budget of $14,000 for minor expenses. Fiscal Year 2014 A-21 Executive Summary

23 14 Adopted Fiscal Plan City of St. Petersburg, Florida Fund Structure The city of St. Petersburg uses funds and account groups to manage and report revenues, expenditures, and expenses as required by the City Charter, state statutes, and generally accepted accounting principles (GAAP). Each of the city funds is a financial/accounting entity, and in a sense, a legal entity. Each fund has its own fund balance, which is accounted for separately. The target fund balance amount for each fund is stated in the city s fiscal policies. The following are the various fund categories the city uses: GOVERNMENTAL FUNDS are designed to focus on near-term liquidity. Consequently, governmental funds do no present fixed assets, long-term receivables, or long-term liabilities. Governmental Funds typically are used to account for activities supported by taxes, grants, and similar resources. There are four types of Governmental Funds: General Fund, Special Revenue Funds, Capital Improvement Funds and Debt Service Funds. PROPRIETARY FUNDS are used to account for the delivery of services similar to those found in the private sector. The services can be provided to outside parties for a profit, or internally to other departments for payment based on cost. There are two types of Proprietary Funds: Enterprise and Internal Service. FIDUCIARY FUNDS are used to account for assets held on behalf of outside parties or other funds. There are two types of Fiduciary Funds: Pension Plans and Agency Funds (including Non-Expendable Trusts). The chart below illustrates the fund structure of the city. Executive Summary A-22 Fiscal Year 2014

24 City of St. Petersburg, Florida 14 Adopted Fiscal Plan Fund Relationship The chart that follows illustrates the interrelationship between funds. Dollars are transferred between funds for various purposes. For example, both the General Fund and the enterprise funds transfer dollars to CIP funds for pay-as-you-go projects (as shown by the solid line in the table). Also, certain enterprise funds transfer dollars to the General Fund in the form of payments in lieu of taxes (PILOT) and general and administrative charges. Additionally, the General Fund provides support in the form of subsidy or loans to several enterprise funds (as shown by a dotted line in the table). Finally, the General Fund, enterprise funds and special revenue funds pay internal service funds for city provided services (as shown by the dash lines in the table). Although each fund is a distinct entity, all funds contribute to the overall operation of the city. Basis of Accounting Modified Accrual The modified accrual basis of accounting is used for financial reporting purposes in the Governmental funds. Under this basis, revenues are recognized when they become susceptible to accrual; i.e., when they become both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are generally recognized under the modified accrual basis of accounting in the period that the liability is incurred. The exception to this general rule is that expenditures for principal and interest on general long-term debt are recognized when due and expenditures for compensated absences are recorded when paid. Fiscal Year 2014 A-23 Executive Summary

25 14 Adopted Fiscal Plan City of St. Petersburg, Florida Accrual The accrual basis of accounting is used for financial reporting purposes in the Proprietary and Fiduciary Funds. Under this basis, revenues are recognized in the period earned and expenses are recognized in the period that the liability is incurred. In contrast to Governmental Funds, depreciation is recorded. Budgetary Control and Amendments The General Fund is subject to budgetary control on a combination of fund and administration levels (e.g., Leisure and Community Services Administration includes the Parks & Recreation and Library Departments within the General Fund). The mayor is authorized to transfer General Fund budgeted amounts between expenditure category within individual departments and administrations according to the original appropriation ordinance. The City Council approves supplemental appropriations and appropriation transfers between administrations by resolution during the fiscal year. These transactions are then approved at fiscal year-end by ordinance. Major capital facilities and improvements, which are accounted for by the city within the Capital Projects Funds are subject to budgetary control on a project and fund basis. Appropriations for a specific project do not lapse until completion of the project. Encumbrances Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration. Encumbrances outstanding at fiscal year-end are carried forward and re-appropriated in the following year. Budget Basis of Accounting Budgets presented for governmental funds have been prepared on the modified accrual basis of accounting, except for encumbrances and the net increase (decrease) in the fair value of investments. Encumbrances are part of the overall budgetary control process and thus are included in the actual column with the related expenditures when a comparison with budget is made. Similarly, the net increase (decrease) in the fair value of investments is excluded from related revenues when a comparison with budget is made. Depreciation is not included in budgetary statements since it is not a use of expendable resources. For management decision and control purposes, enterprise debt service, capital project funds, and some reserve accounts, are budgeted separately, whereas in the financial statements, these funds are combined with the corresponding operating fund. Executive Summary A-24 Fiscal Year 2014

26 City of St. Petersburg, Florida 14 Adopted Fiscal Plan At a Glance - City of St. Petersburg, Florida The city of St. Petersburg was incorporated as a town in 1892 and later in 1903 as a city. It is located on the Pinellas Peninsula, on the central west coast of Florida bordered by Tampa Bay on the East, the Gulf of Mexico on the West, and Boca Ciega Bay to the South. It has a land mass of 60.9 square miles with the highest elevation above sea level of 61 feet. It is the fourth largest city in Florida and the 78 th largest city in the United States. The city had a 2012 population of 247,673. The city is governed by a strong mayor/council form of government; a system that combines the strong political leadership of a mayor with an elected City Council. The mayor is responsible for running the daily affairs of the city. The City Council has a chair and a vice chair and must approve city policies, city budget, and the mayor s choices for city attorney, city administrator, and city clerk. (Map Source: Economic Development Division, City of St. Petersburg Planning and Economic Development Department) Fiscal Year 2014 A-25 Executive Summary