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Lake City Report - July 29, 2011
Workshops over, City Manager lays out the budget

From City Manager Wendell Johnson*

Fiscal Year (FY) 2012 Budget

 The City Council and Staff have completed the FY 2012 Draft Budget.  As required by Florida Statute for Truth in Millage (TRIM), staff completed the DR-420 Certification of Taxable Value, DR-420TIF Tax Increment Adjustment Worksheet and the DR-420MM-P Maximum Millage Levy Calculation Preliminary Disclosure.  A copy of each form was submitted to the Columbia County Property Appraiser, Columbia County Tax Collector and Florida State Department of Revenue. The City informed the Property Appraiser of the following:

Prior Year millage rate:                                 3.9816
Current Year proposed millage rate:               3.9816
Current year rolled-back rate                         4.1366

The Property Appraiser must mail out TRIM notices to citizens pursuant to section 200.065 of Florida Statutes within 55 days after certification of value. The mailing should occur the third week of August.

The City’s Public Hearing for the FY 2012 Tentative Budget is set for September 6, 2011 at 6:30 p.m.   The Public Hearing for the FY 2012 Final Budget is set for September 19, 2011 at 6:30 p.m. in City Hall.

The FY 2012 Operating (O&M) and Capital Budget is $53,048,646.

There has been an approximately 25% increase over last year due to impending construction of the new Kicklighter Road Wastewater Treatment Plant. The 2012 O&M Budget is $30,206,008 – compared to the 2011 $31,644,939 O&M Budget.   The 2012 Capital Budget is $22,841,638 – compared to $8,974,252 last year.

Summary highlights of the FY 12 Budget process:

 Financial Climate.  The financial climate is determined by comparison of recurring revenues, reserve revenues, expenditures, liabilities and debt service.  Show continued financial strength, Standard & Poor's credit rating on the City as of May 2011 remains at “AA” supported by:

1)  City assets exceed liabilities by approximately $60M.
2)  City demonstrates good historical and projected debt service coverage.
3)  Strong liquidity with approximately $9.7 million (unreserved fund balance) on hand at the end of fiscal 2010.  

Throughout 2011 several financial initiatives designed to strengthen City finances were approved by the City Council.  Those which will have direct influence on the City’s financial climate as we move into 2012 are:

 City Sales Tax Bonds Refunding and issuance of $2,500,000 in new revenue for use in FY 11 and FY 12.   The funds are already being applied toward a variety of General Fund capital purchases and construction projects.  Thus far usage includes $193K in Drainage/Roadway improvements, $265K for two dump trucks, $191K for PD Technology Improvements, $160K for a street sweeper, and $60K for sidewalks.   During FY 12,  the remaining $1.65M will be  used for a Fire Truck ($300K), Public Works/Utilities Garage ($300K) and Street Upgrades ($1.0M). 

City Utilities Bonds Refunding  and issuance of $18,000,000 in new revenue for the proposed Kicklighter Road Wastewater Treatment Plant and various improvements to the existing St. Margaret’s Street Plant.  Enterprise Fund Debt Service increased by $456,610 to fund the $18,000,000 Utility.  However, a $399,093 Federal annual “Bond Subsidy” associated with “Build America Bonds” offsets the increased debt service through 2040.  In essence, the City’s added annual debt is $57,517 for the $18,000,000 loan. 

Enterprise Inc., Vehicle Fleet Management Program  started during early 2011 and the first 30 vehicles are now operational.  Another 15 vehicles will begin operation during the second quarter 2012.  Thus far the projected cost reductions of $150,000 annually have been exceeded and savings are expected to continue into 2012.

 Health Insurance Costs.  No cost increase for 2012.  2011 BC/BS premium is $1,919,855.88.  The City has three options relevant to health care costs:
   1) Continue BC/BS Plan with annual premium of $1,927,656
   2) AVMED Plan with annual Premium of $1,535,170.
   3) FMIT Plan with annual premium approximately same as current BC/BS.   Plan modifications will apply to the FY 12 Employee Health Care Plan.

 Personnel Matters.

  •  Personnel costs account for 38% of the City’s FY 12 O&M Budget; personnel costs declined by $120,168 from FY 2011.
  • Hiring Freeze – Still in force for FY 12 – Only life safety and/or critical positions will be filled.
  • No lay offs are required for FY 12.
  • No employee COLA for 2012 – 4th year in a row.

Energy Costs.   Based upon the Florida Power and Light (FPL) energy use report for the period July 2010 through June 2011, the City’s overall energy billing amount has continued to decline and was reduced by 10% from the previous period, July 2009 – June 2010.  Energy cost for the July 2008 – June 2009 reporting period was $1,191,152.    The cost for July 2010 to June 2011 was $861,396; a reduction of $329,756.   We expect this trend to continue into FY 12.

2012 General Fund operating and capital expenditures total $12,976,448 in comparison to the FY 11 total $13,655,775.  For perspective purposes it is noted that:

  • FY 12 General Fund is 5.25% less than FY 11; a decrease of $679,327.
  • Property Tax remains at the FY 11 rate of 3.9816 mills.  
  • FY 12 Property Tax revenue ($2,820,475) declines vs.  FY 11 ($2,891,346).  
  • The FY 2012 “roll back” rate to gain same property tax as FY 11 is 4.1366
  • To balance the General Fund, $1,524,649 was allocated from the Water/Sewer/Gas Enterprise Fund and $670,544 was carried forward from prior year.  The surplus fund carry forward is approximately the same as FY 11 if the General Employee Pension Fund Liability payoff is deducted. 

Non-advalorem Fire Assessment. FY 12 rate remains constant for all property classifications.  The City is projected to receive $1,541,174 of fire assessment revenue.  A transfer of $292,307 (up from FY 11 by $40,192) from the General Fund and $300,000 cash carry forward (sales tax revenue for new fire truck) is applied to fully fund the Fire Department at $2,151,324 for FY 12.  Other than the fire truck and added cost of “Fire Dispatch” fees to Columbia County, the Fire Department budget is substantially the same as FY 11 – around $1.8 million.

2012 Water/Sewer O&M  budget is $12,579,997 – compared to the 2011 $12,608,910 O&M Budget.

2012 Natural Gas O&M  budget is $3,807,124 – compared to the 2011 $3,960,333 O&M Budget.  Revenue allocation to general fund is at 7% ($266,849).  Capital outlay at $321,000.  The Rate Stabilization Fund will be sustained at the required level ($400,000) and all billing (weatherization) and administration issues associated with Natural Gas services have been resolved. (2010 Audit)

2012 Airport O&M  budget is $1,197,931 compared to the 2011 $1,031,098    A $562,963 (revenue) carry forward was required in FY 11 to fund the new General Aviation Terminal.   Revenue for 2012 will increase by $166,833.

 Community Events Support.  In addition to $25,000 to Chamber of Commerce in support of community events, the City expends an additional $19,500 in material and labor support.

The City Staff Report is available in pdf format here

This work by the Columbia County Observer is licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.

 
 

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Read the City Manager's 2010 Budget and Administrative Report • here.

 

City Staff Report
 • Week ending July 29, 2011