Lake City Report -
July 29, 2011
Workshops over, City
Manager lays out the budget
Lake City, FL (Posted July
29, 2011 10:57 pm )
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.
*Content and form may be
edited for accuracy, appearance and
grammar.
