Weekly comments from Dale Martin . . .

Dale Martin

July 26, 2019 12:00 p.m.

Editor's Note: Budget workshops will begin July 30 at 5:15 p.m., Aug 7, 6:00 p.m., Aug 13, at 6:00 p.m. Discussions with City Commissioners are ongoing and projects continue to be added or deleted.

Honorable City Commissioners, Residents, and Staff of the City of Fernandina Beach:

City Manager Dale Martin

Please find following this memorandum the City’s proposed 2020 budget.

The proposed budget reflects total revenues and expenditures in the amount of $170,203,163. Approximately one-third of that amount, however, is related to cash, revenues, and expenditures associated with the Trust and Agency Funds. With those funds excluded, proposed revenues and expenditures total $110,511,787.

The portion of the proposed budget that typically draws the most interest is the General Fund, which is the primary operating fund for the City, and principally financed by property tax receipts. The proposed General Fund expenditures total $22,859,756. The proposed General Fund budget is supported primarily by an operating millage rate of 5.8553 mills, maintaining the same operating millage rate levied by the City for the previous budget. Despite the lack of an increase of the property tax rate, the proposed millage rate, as defined by state statutes is considered a tax increase (due to rising property values).

The total proposed millage rate consists of the 5.8553 mills levied for operations, and 0.1683 (down from last year’s 0.1929) mills levied for voter-approved debt service. The proposed property tax levy, at a collection rate of 96%, will generate approximately $14,551,054. The City’s aggregate taxable value increased by approximately 14.5%. The comparable taxable value (an effort to compare “apples to apples” from the preceding year) increased by 10.9%. Despite these substantial increases, the increase in taxable value of many properties (if classified as a “homestead” property) is limited to no more than three percent or the rate of inflation, whichever is less (in this case, the 2019 rate of inflation is 3.39%). Under “homesteaded” circumstances, a property owner would see an increase of approximately $11 per $100,000 of taxable value. If a property not subject to those limitations experienced an increase in taxable value of 10.9%, the estimated increase in related property taxes would be about $65 for every $100,000 of 2018 taxable value.

Based upon discussions by the City Commission and the preliminary results of the 2019 National Citizen Survey, two new sources of revenue have been incorporated into the draft budget: an additional half-mill levy for the purpose of funding land conservation efforts (expected to generate approximately $1,200,000) and the introduction of parking fees at City-maintained beach parking facilities (expected to generate approximately $1,000,000). The revenues raised from both of these new sources will be segregated and dedicated for purposes solely related to land conservation and beach operations, maintenance, and capital expenditures, respectively.

For the third consecutive year, the City’s continued growth will forego the need to increase fees for water and wastewater services (as stipulated in related bond covenants). The associated revenues required to support those financial obligations will be realized, instead, through an increase in the number of users and associated usage.

For the first time, a Capital Improvement Project Committee prepared a detailed five-year Capital Improvement Plan (CIP). Capital expenditures, funded through property taxes, utility fees, impact fees, loans, and grants, are approximately $7,300,000. Significant projects proposed in the draft budget include the acquisition of the United States Postal Service facility (to be re-purposed as City Hall), the acquisition of additional Amelia River waterfront property (to be incorporated as part of a waterfront park), street maintenance, Central Park recreation and playground improvements, Simmons Road park development, beach “walkover” construction, utility relocation, and a replacement for Fire Engine 3.

Although some staff is added (a net gain of seven positions), the preponderance of staff changes is related to reorganization efforts in the City Manager, Streets Maintenance, Parks and Recreation, and the Information Technology departments. A proposed new position of a Deputy City Manager, with an engineering and project management background, will provide key support to capital and infrastructure projects.

In accordance with the City’s reserve policy, approximately $4,633,000, roughly 20% of General Fund expenditures, is budgeted for reserves. The restricted reserves of the Building Department, separated from the General Fund, sit at $2,266,316, placing the City’s total reserves (albeit with some restrictions) at 29.8% of the City’s operating budget.

After a frustratingly long process due to the involvement of various federal and state agencies, the City’s Marina is expected to return to full operation by the end of December. Reimbursement (nearly 90% of the construction cost) from state and federal agencies for the reconstruction effort is expected to be received by the City during the 2019/2020 fiscal year. Due to longstanding contributions to the Marina and Golf Course, and in response to formal auditor comments, the City will complete a long-term financial projection for the Marina (and the Golf Course) within the next several months to improve the financial operations of those two assets.

This proposed budget was developed with the outstanding expertise and assistance of City Comptroller Ms. Pauline Testagrose. Ms. Testagrose has admirably “filled the shoes” of her predecessor, continuing the leadership and professionalism in the City’s Finance Department. I also wish to express my appreciation to the Department Directors for their assistance, not only with preparing the budget, but throughout the year as they strive to support this community.

I have now served this community for nearly four years. Expectations continue to rise, as do frustrations for such key issues as waterfront park under-development and residential/commercial over-development. Many challenges are new, but some have vexed the community for quite some time. I look forward to working with the City Commission and the community to address longstanding shortcomings and preparing a vision for the future. I remain honored and privileged to serve the residents of Fernandina Beach.