Fiscal Year 2016 and Beyond: Balancing Revenue with Community Expectations

Transcription

1 Fiscal Year 2016 and Beyond: Balancing Revenue with Community Expectations St. Johns County Board of County Commissioners Special Meeting January 27, 2015 Michael D. Wanchick St. Johns County Administrator

2 Introduction

3 We Each Play a Role 3 Introduction Revenue and Expenditure Analysis Three primary roles in the public budgeting process: COUNTY ADMINISTRATOR: to facilitate resident examination of the financial issues and promote understanding of the consequences of specific actions. Managing Our Success Future Budgeting Strategies RESIDENTS: to examine the financial issues and openly communicate their desires regarding a preferred balance of public services and public expenditures. COMMISSION: to adopt a balanced budget that fairly reflects the diverse interests within the community and is in the best long-term interests of the County.

4 Commission Budget Adoption Process 4 Commission Policy Direction Administrator s Draft Budget Community Outreach Administrator s Recommended Budget Formal Commission Public Hearings Commission Adopts Final Budget

5 Current Revenue and Service Status 5 Introduction Revenue and Expenditure Analysis Managing Our Success Future Budgeting Strategies The County has come out of the recession and maintained fiscal soundness through long-range planning and making difficult, and at times, unpopular decisions. Over the next five years: Property tax growth of 5% annually is necessary to fund existing levels of County programs (e.g. inflation, new growth, etc.). Incremental property tax growth above 5% can supplement existing underfunded essential operational deficits. Up to 5% Growth for Existing Programs 5% Above 5% Growth for Underfunded Programs

6 Permits Issued Residential Growth (Single Family) 6 3,500 3,249 3,000 2,500 2,277 2,658 2,585 2,000 1,856 1,500 1,000 1,359 1,073 1,175 1, Fiscal Year

7 Increased Demand for Programs 7 Introduction Since FY 2005, the demand for programs continues to increase. Introduction Revenue and Expenditure Short-Term Analysis Financial Managing Strategy Our Success Long-Term Future Financial Budgeting Strategy Strategies Decisions Regarding the Future Program Library Services Recreation Programs Animal Control Code Enforcement Fire Rescue County Roads Program Demand Increases 37% in library usage 50% in program participation 73% in animal intakes 119% in new code violation cases 43% in emergency responses 27% in road system usage

8 Managing Our Success 8 Introduction Introduction Revenue and Expenditure Short-Term Analysis Financial Managing Strategy Our Success Long-Term Future Financial Budgeting Strategy Strategies Decisions Regarding the County s Future The County s quality of life has been built on high levels of property tax revenue. The County has attempted to maintain that same quality of life on decreasing property tax revenue. Fiscal Year Tax Growth /(Decline) FY % FY % FY % FY % FY 2009 (5.1%) FY 2010 (12.3%) FY 2011 (10.2%) FY 2012 (5.0%) FY 2013 (2.5%) FY % FY % 96.8% compounded (24.3%) compounded

9 Maximum Growth Projections 9 Introduction Revenue and Budget Expenditure Guidelines Analysis Managing Revenue Our Success Projections Future Budgeting Strategies CIP Planning CIP Funding Options The State of Florida established maximum annual increases on the rate of taxable property value growth. Property Classification Percent of County s Taxable Value FL Statute Maximum Increase Maximum Growth Homestead 50% x 3% = 1.5% = Non - Homestead 50% x 10% = 5% New Construction Pass-through = 5% Total = 11.5% For FY 16, maximum growth of 11.5% (which is not anticipated) would generate $15.0 million: $6.5 million (5.0%) to fund growth in current County programs $8.5 million could supplement existing underfunded programs

10 Underfunded Programs 10 Introduction Revenue and Expenditure Analysis At maximum growth, the remaining $8.5 million will fall short in funding essential programs alone by over $20 million annually. This financial dynamic will create tension between essential and non-essential programs. Managing Our Success Future Budgeting Strategies Essential Pavement Management ($14.0 M) Drainage Infrastructure ($1.0 M) Fire Services ($3.5 M) Sheriff Operations ($3.5 M) Water Quality ($10.0 M) Other Public Safety ($0.8 M) Non-essential* Libraries ($3.0 M) Parks & Recreation ($2.6 M) Beach Services ($1.4 M) Social Services ($1.1 M) Alternative Transportation ($1.0 M) Independent Agencies ($0.6 M) * Dollar amounts reflect FY 2014 requested budget levels and future CIP needs.

11 Unfunded Programs 11 Maximum property tax growth will not address our underfunded program needs, nor will it provide funding for unfunded programs such as those below. Without adequate funding, existing programs will be overburdened by the demands from the County s future growth. Transportation Essential CR210/US 1 Interchange CR 2209 Woodlawn Rd. Old Moultrie Rd. Wildwood Dr. CR 305 Extension New Growth Rd. Capacity Alt. Transportation Fire Rescue New NW Station Replace Station 7 Nocatee Staffing Marine Rescue Staffing Sheriff s Office Communication Center Staffing Regional Commands Training Facility Libraries Non-essential Hastings Branch World Golf Village Branch Nocatee Branch Bookmobile Parks & Recreation Village Regional Park Davis Park Expansion Sports Lighting Nocatee Preserve Beach Operations Pier/Pier Park Micklers Expansion Beach Walkovers Beach Parking Vilano Ocean Front Pope Road Parking Beach Access Mussallem Expansion

12 Revenue and Expenditure Analysis

13 FY 2015 Tax Dollar Allocation 13 Special Districts Anastasia Mosquito Control District Florida Inland Navigation District St. Johns River Water Management District Public Schools 51% 4% Board of County Commissioners 45% Includes Constitutionals Sheriff s Office Clerk of Courts Supervisor of Elections Property Appraiser Tax Collector Note: 2014 Ad Valorem Property Tax Bill

14 FY 2015 Property Tax Allocation 14 Introduction Introduction Revenue and Expenditure Short-Term Analysis Financial Managing Strategy Our Success Long-Term Future Financial Budgeting Strategy Strategies Decisions Regarding the Future Total County property taxes of $134.8 million support numerous programs. Without additional revenues, current funding allocations between programs will be affected. General Government $8.2 Parks & Recreation $8.4 Health & Human Services $6.2 Public Library $4.5 Growth Management $3.0 Economic Development $1.4 Courts & Other Constitutionals $8.2 EMS & Public Safety $10.3 Transportation $10.2 Fire Rescue $24.4 Sheriff $50.1

15 St. Johns County Services 15 Public Safety Court Services Physical Environment Transportation Sheriff Law Enforcement Operations, Detention Center, Bailiffs; 9-1-1; School Crossing Guards; School Resource Officers; Sheriff Beach Patrol; Fire Rescue (Fire Protection and Ambulatory Services); Marine Rescue (Lifeguards); Animal Control; Communications (Dispatch); 800 MHz Emergency Radio System Operations; Emergency Management; Building Services; Code Enforcement; Medical Examiner; Driver s Education; Fire Rescue, Law Enforcement Impact Fees Clerk of Courts; State Attorney; Public Defender; County Court; Circuit Court; Court Reporting Support; Court Technology; Court Facilities Support; Guardian Ad Litem; Juvenile Justice (State Mandated); Adult/Juvenile Drug Court Support Growth Management; Land Use Planning and Development Services; Regional Planning Council Support; Ponte Vedra Zoning and Adjustment Board Support; Environmental Services; Tree Bank; Agriculture Home Economics (Cooperative with University of Florida); Hastings Agricultural Center Support; Ponte Vedra MSD Sewer; St. Johns River Environmental Management Support; Solid Waste Management; Utility Services (Water and Wastewater); Ponte Vedra Utility Services (Water and Wastewater) Road and Bridge; Traffic and Transportation; County Engineering/Drainage; Surveying; Land Management (Real Estate); Geographic Information Systems (GIS); County Fleet Maintenance and Fueling; County Transit (COA Sunshine Bus); SR-207 Corridor Development (Developers); Road Impact Fees; Road MSBUs; Street Lighting MSTU Districts; Elkton Drainage MSTU; Summer Haven MSTU

16 St. Johns County Services 16 Health & Human Services Culture & Recreation Economic Environment General Government Support Services Social Services; Medicaid (State Mandated); Local Indigent Healthcare Support; Health Department Support; Independent Agency Support (Including Mental Health Services); Community Based Care (Foster Care Under State Contract); Veteran Services; Legal Aid; Law Library Recreation Programs & Facilities; Beach Services; County Pier Operations; Aquatics (Solomon Calhoun Community Center and Pool); Northwest Tower Funded Recreation Projects; Park Impact Fees; County Golf Course; Cultural Events (Amphitheatre & Ponte Vedra Concert Hall); Tourist Development; Beach Renourishment; Library Services Economic Development; Chamber of Commerce / JAX USA Partnerships; Economic Development Grant Program; Small Business Development Support; Housing & Community Services; State Housing Initiatives Partnership (State Funded); World Commerce Center DRI (Workforce Housing); Community Redevelopment Agency (CRA); County Convention Center Property Appraiser; Tax Collector; Supervisor of Elections; Clerk of Courts; Finance Department; Board of County Commissioners; County Administration; County Attorney; Personnel; Management Information Systems (MIS); Office of Management & Budget (OMB); Purchasing; Risk Management; Construction Services; County Facilities Maintenance; Building Operations (Including Security)

17 In $ millions General Fund Reserve Utilization 17 Adherence to budgetary guidelines will resolve General Fund s structural deficit by FY19. $160 $140 $120 $100 $80 $60 $40 $20 $0 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Revenue Expense Reserves Target Reserves Note: Reserves are declining from $47.9 million to the recommended minimum of $26.3 million in FY19.

18 In $ millions Fire District Fund Reserve Utilization 18 The Fire District Fund continues to utilize reserves to fund operating deficits $35 $30 $25 $20 $15 $10 $5 $0 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Revenue Expense Reserves

19 In $ millions TTF Fund Reserve Utilization 19 Transportation Trust Fund continues to utilize reserves to fund operating deficits. $35 $30 $25 $20 $15 $10 $5 $0 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Revenue Expense Reserves Note: Assumes annual funding of Pavement Management at $2 million versus identified $14 million.

20 In $ millions TTF Pavement Management 20 Maintaining our pavement index may necessitate up to $14 million annually. $20 $ $16 $14 $14 $14 $14 $14 $14 $14 $14 $14 $ $ $ $ $ $ $ $0 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY Annual Maintenance Pavement Index Represents a $126 million investment over nine years (FY14-FY22).

21 In $ millions TTF Pavement Management 21 Deferring pavement management compounds the long-term financial impact. $ $300 $ $260 $ $200 $ $ $ $ $100 $50 $0 $83 $53 $30 $ FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY Financial Impact Pavement Index Represents a $296 million investment needed at the end of nine years (+$170 M).

22 In $ millions Falling CIP Investment (Net Utility Services) 22 $250 $230.5 $200 $178.9 $150 $124.7 $153.6 $129.8 $100 $70.0 $80.8 $50 $44.7 $51.4 $32.5 $41.0 $45.8 $45.6 $

23 Summary of Requested Future CIP Needs 23 In FY 2014, the Commission held a series of workshops in which departments identified their CIP needs over the next twenty years. The following chart represents the first ten years of future CIP needs: Area 1-5 Years 6-10 Years Total I Transportation $230.2 $204.5 $434.7 II Library Services $12.3 $10 $22.3 III Fire Rescue $22.7 $13 $35.7 IV Recreation and Parks $29.7 $3.4 $33.1 V Beach Operations $11.5 $15.7 $27.2 VI Sheriff $62.5 $30.2 $92.7 Total (CIP Needs in Millions) $368.9 $276.8 $645.7

24 Revised County Capital Improvement Plan 24 This revised chart is based upon departments top priorities over the next ten years originally totaling $645.7 million. The following chart represents a $376.6 million reduction from the originally requested department submittals. Area 1-5 Years 6-10 Years Total I Transportation $91.3 $84.0 $175.3 II Library Services $3.1 $11.5 $14.6 III Fire Rescue $15.4 $12.6 $28.0 IV Recreation and Parks $5.9 $14.2 $20.1 V Beach Operations $3.0 $3.0 $6.0 VI Sheriff $16.3 $8.8 $25.1 Total (CIP Needs in Millions) $135.0 $134.1 $269.1

25 Managing Our Success

26 St. Johns County in the Media 26 Introduction Introduction Revenue and Expenditure Short-Term Analysis Financial Managing Strategy Our Success Long-Term Future Financial Budgeting Strategy Strategies New York Times Quality of Life Study (June 2014) Ranked the quality of life for 3,135 counties in United States. St. Johns County ranked in the top 4% nationwide. St. Johns County ranked number one in Florida. When compared to other Florida counties, St. Johns has a low overall tax burden for a full service county. According to Tax Watch, St. Johns County is ranked 66 th out of 67 Counties in taxes per $1,000 personal income.* Decisions Regarding the County s Future *2011 Florida Tax Watch report entitled How Florida Counties Compare (

27 Percentage of Income The Price of Government 27 The Price of County Government as a percentage of per-capita income has been reduced from a ten year high of 2.77% (2007) to a ten year low of 2.12% (2015). 4.00% 3.00% 2.53% 2.77% 2.53% 2.68% 2.49% 2.32% 2.25% 2.15% 2.12% 2.12% 2.00% 1.00% 0.00% Note: The Price of Government includes property taxes, gas taxes, sales tax, and charges for services.

28 Untapped Revenues / New Challenges 28 Introduction Revenue and Expenditure Analysis Managing Our Success Future Budgeting Strategies The County has also not enacted other fees and taxes including: Local Option Sales Tax Additional Gas Taxes Utility Franchise Fee Storm Water Utility Fee Additional Tourist Development Taxes Off-Beach Parking Fee Animal Licensing St. Johns County s success leads to new challenges: Balancing population growth with program demands. Leveraging reduced Federal and State grant awards.

29 County Comparisons 29 Of the 67 Florida Counties, only 11 have not enacted a Sales Tax greater than 6%.

30 County Comparisons 30 Of the 11 Counties without a Sales Tax greater than 6%, St. Johns County is the only county that has not enacted additional Gas Taxes.

31 St. Johns County at a Crossroads 31 Increasing Costs Limited Revenues Quality of Life Additional Capital Needs Available Options State and Federal Mandates Population Growth Service Demands Operational Expenses Property Taxes Gas Taxes Sales Taxes State and Federal Funds Public Safety Public Libraries Parks Recreation Transportation Services Social Services Other nonessential programs Jail Capacity Emergency Communications Fire Rescue Master Plan Federal Storm Water Mandate Transportation Infrastructure Organizational Efficiencies Reduction of Services/Layoffs Borrow Funds Sales Tax Increase Additional User Fees Property Tax Increase

32 Revenues / Services 32 R e v e n u e s High Revenues / High Services (Sustainable) Low Revenues / Low Services (Sustainable) High Revenues / Low Services (Sustainable) Low Revenues / High Services (Unsustainable) S e r v i c e s

33 Future Budgeting Strategies

34 A Community at the Crossroads 34 Introduction Introduction Revenue and Expenditure Short-Term Analysis Financial Managing Strategy Our Success Long-Term Future Financial Budgeting Strategy Strategies Decisions Regarding the County s Future Questions posed to the community for financial direction: What level of programs and services is the community willing and able to pay for over the next few years? Is it most important to keep taxes and fees as low as possible even if it means reducing the current level of programs and services? Is there a level of revenue increase acceptable to the community if it means preserving current levels of programs and services?

35 County Commission Goals 35 Introduction Introduction Revenue and Expenditure Short-Term Analysis Financial Managing Strategy Our Success Long-Term Future Financial Budgeting Strategy Strategies Decisions Regarding the Future Along with community input, the Board s adopted goals are relied upon to provide financial direction. Board Adopted Goals* Promote Economic Development Ensure Health, Safety, and Welfare Address County s Financial Stability Manage and Improve Infrastructure Participate in Regional Initiatives Improve Community s Quality of Life Protect Environmental Assets Enhance Community Beautification Emphasize Community Redevelopment Increase Community Communication * Developed at BCC Workshop on February 26, 2013.

36 Potential New Revenue Sources 36 Fee/Tax Increase Who Pays Revenue* Used For 1% Sales Tax - Infrastructure Residents, Tourists $23.6 Capital Projects Property Tax Increase (1 Mil) Property Owners $17.9 General Fund Utility Franchise Fee Property Owners $7.0 General Fund Stormwater Utility Fee Property Owners $6.0 Water Quality Additional Gas Taxes Residents, Tourists $5.8 Transportation 1% Additional Bed Tax Tourists $1.5 Tourism Increase/Add User Fees Residents $1.0 General Fund - Off-beach Parking Residents, Tourists $0.5 Beach Services - Animal Licensing Residents $0.1 General Fund *Annual Revenue in Millions Note: A 1% sales tax would also generate an additional $2.5 million for the County s municipalities.

37 Commission Budget Adoption Process 37 Commission Policy Direction Administrator s Draft Budget Community Outreach Administrator s Recommended Budget Formal Commission Public Hearings Commission Adopts Final Budget

38 Commission Budgeting Strategies 38 Available Board options for FY16 to balance the provision of public services with future financial resources and community expectations: Decline: Consideration of any new revenue sources Explore: Sales tax as the primary new revenue source Enact: Select new revenue sources Action: Begin allocating funds from non-essential to essential programs. Action: Authorize County Administrator to explore feasibility of a citizen referendum. Action: Authorize alternative new revenue sources. Outcome: Reduced programs leading to a decline in County s quality of life. Outcome: Would significantly address underfunded and unfunded programs. Outcome: Would provide targeted funding for a select group of essential programs.

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