Weekly comments from Dale Martin

Dale Martin

July 20, 2018 12:00 a.m.

City Manager Dale Martin

The 2018/2019 budget is due to the City Commissioners next week. I anticipate that my article next week will be the budget message that accompanies the proposed budget, offering a summary of the highlights. I further expect to provide a short presentation of the budget highlights at the August 7 City Commission meeting. To provide a foundation for those budget summaries, let me offer a description as to how the annual City budget is organized.

The City’s finances are organized as “funds.” Consider these funds as separate and distinct “pots” of money. The City has seven different such pots. In the actual budget document, these funds are presented in this order: General Fund, Enterprise Fund, Special Fund, Debt Service Fund, Capital Fund, Internal Service Fund, and Trust Fund. For this overview, however, I’ll review in the reverse order.

The Trust Fund is the City’s pension accounts. The City’s total annual budget is nearly $150,000,000, but more than a third of that total amount is associated with funds reserved for pension costs (without the Trust Funds, the budget falls below $100,000,000on). The monies in the Trust Fund are generated by City and employee pension contributions as well as interest and investment earnings.

The Internal Service Fund can best be described as the City paying itself for services- more specifically, fleet maintenance and utilities. As will be described later, the main users of these services are the City’s Enterprise Fund activities (Golf Course, Airport, Wastewater, Water, Stormwater, and Marina). Those operations, like City residents and businesses, are treated as customers of the City, and those operations pay for the City services through their user fees.

The Capital Fund provides for the large-scale, long-term needs of the City, primarily land, facilities, vehicles, and other equipment. Each department prepares and maintains a five-year Capital Improvement Plan (CIP) to assist with long-term planning. The most significant source of funding for these projects is property taxes (transferred from the General Fund; described later), although additional funding can be secured through grants, other governmental agencies, and loans.

The Debt Service Fund manages the City’s long-term debt. The City has several debt obligations, including obligations associated with software, public safety, Golf Course, Airport, Marina, and Utilities. With the anticipated Marina repairs, additional debt will be added to the budget.

The Special Fund captures the revenues and expenditures of a variety of operations that are somewhat unique. These operations include law enforcement forfeiture funds, federal and state block grants, water and wastewater impact fees, utility taxes, cemetery operations, and the City’s Community Redevelopment Area (CRA).

The City’s Enterprise Fund has several components (as mentioned earlier). As has been discussed previously, these components are treated as separate “business entities”: the intent is to fund their operations through user fees, not property taxes. The Golf Course, the Airport, Wastewater, Water, Stormwater, and the Marina all charge user fees. The revenue from those fees (and other revenues such as grants) is, in theory, supposed to cover expenses related to their operations. In the case of the Airport and the utilities, revenues do exceed expenses; the Golf Course and Marina, however, require subsidies from the General Fund, mainly due to debt service costs, not operational costs.

The General Fund is the “grand-daddy” of the City’s funds. This is the City’s primary operational fund, gaining the preponderance of revenues from City property taxes. Property taxes are calculated based upon the value of property (as determined by the Nassau County Property Appraiser) and the millage rate, or tax levy, set by the City Commission. The operating millage rate for the current year was set at 6.0000 mills ($1 for every $1,000 of value). The proposed budget is based upon a slightly lower millage rate to accommodate from rising property values, but the City Commission has yet to establish the “tentative” millage rate which may be different. The tentative millage rate is scheduled to be set at a special meeting of the City Commission on July 31.

Other General Fund revenues sources include licenses and permits; grants; county, state and federal contributions; and fines, rents, and reimbursements. The expenditures in the General Fund include all City departmental operations. Over half of General Fund expenditures are related to public safety: Police Fire, Building, and Code Enforcement.

I look forward to providing additional nitty-gritty details of the budget in my budget message next week.