M E M O R A N D U M
To: Honorable Mayor and Town Council
From: Rafael G. Casals, ICMA-CM, CFM, Town Manager
Date: August 26, 2020
Re: Fiscal Year 2020-21 Proposed Budget
(2nd Budget Workshop)
Town Staff has worked diligently in order to provide the Council with a preliminary 2020-21 budget that you initially reviewed on the 1st Budget Workshop held on August 10, 2020. The attached updated Executive Summary, Fund Summaries and Detailed Departmental Budget Spreadsheets reflect Staff changes incorporated since the 1st Budget Workshop.
In the past, Council Members have expressed interest in discussing the upcoming year’s budget earlier in the process and prior to the scheduled Budget Hearings. While last year’s proposed budget was presented to the Council in July, the COVID-19 pandemic has delayed this year’s initial proposed budget presentation to August. Delaying the initial budget presentation to August has allowed time for the State to issue preliminary revenue estimates taking into account COVID-19 impacts and has allowed Staff to prepare a more accurate budget presentation.
Below are the Budget Hearing dates which the Town Council adopted via Resolution #20-45 on July 29, 2020 at the Regular Council Meeting:
|
DATE |
TIME |
PLACE |
|
1st Budget Hearing September 8, 2020 (Tuesday) |
7:00 PM |
Virtual Meeting |
|
2nd Budget Hearing September 22, 2020 (Tuesday) |
7:00 PM |
Virtual Meeting |
Please find attached the Fiscal Year 2020-21 Proposed General Fund Budget which is based on a millage rate of 2.6500 mills as adopted by Resolution #20-45.
Additional proposed budgets are provided for the Special Revenue Fund, various Special Revenue project funds, the Capital Projects (Parks) Fund and the Stormwater Utility Fund.
The following table reflects changes to the General Fund Budget as a result of changes from our 1st Budget Workshop (August 10, 2020):
As discussed in detail during our July 29th Council Workshop with the Town’s Financial Advisor, a combination of operating deficits in four (4) of the past five (5) Fiscal Years, as well as a unique set of events in the past year, have resulted in a significant utilization of the Town’s Fund Balance Reserves in the General Fund.
Since Fiscal Year 2014-15, the Town has experienced annual fund balance deficits in four (4) of the past five fiscal (5) years, although the amount of the deficit has been less than the deficit budgeted for those years (i.e., the “planned” dip). The table below shows the operating results of the General Fund for the past five (5) Fiscal Years versus the budget:
During Fiscal Year 2019-20 the Council had a unique opportunity to secure, complete, and fund three (3) major Capital Projects (the “Capital Projects”): 1) improvements to Franjo Park; 2) acquisition of vacant land for preservation, conservation and resiliency purposes (8.45 acres property); and 3) the acquisition of vacant land on Old Cutler Road (16 acres property).
Town Staff understands the Council’s desire to set a millage rate with as little impact to the community as possible, however, the rate set these past five (5) Fiscal Years were not sufficient for the Town to operate at a balanced budget. As a result, deficits were incurred, and Fund Balance Reserves were negatively impacted. While the Town ended Fiscal Year 2018-19 with adequate Fund Balance Reserves, the utilization of Fund Balance Reserves to fund operating deficits and capital improvements and acquisitions will quickly deplete the Town’s reserves unless measures are undertaken to stabilize the operating budget and replenish the reserves for the amounts planned to be spent on these capital improvements and acquisitions.
During the July 29th Workshop, a plan was presented to Council to address both the operating budget shortfall and replenishment of the Fund Balance Reserves over a three (3) year period.
This plan recommended adopting a millage rate of 2.6500 mills in FY 2020-21, as well as restructure certain existing debt and issue new, open-market debt securities (in an amount not to exceed $15.25 million). The attached General Fund budget incorporates the recommendations of the July 29th Workshop plan.
Town Staff has identified several items for the Council to consider. The items include, but are not limited to:
Ø The July 1, 2020 Certified Property Value from the Property Appraiser indicate an approximate 4.4% increase in property values for 2020.
Ø Unless directed otherwise by the Town Council, Town Staff currently anticipates no change in full-time Town staffing nor any changes to Police staffing levels.
Ø Notwithstanding the COVID-19 revenue declines and impacts, Town Staff strived to present to Council a Fiscal Year 2020-21 proposed General Fund budget that maintained levels of service comparable to the recent past. The primary significant initiatives for the upcoming budget year are implementation of the proposed debt restructuring plan, which includes the aforementioned $15.25 million open-market bond issuance, and completion of the purchase of the 8.45 acre parcel along Old Cutler Road & SW 184 Street. Other significant changes in the General Fund departmental budgets are discussed in Attachment “A” - Proposed Budget FY 2020-21- Executive Summary.
In addition to the General Fund budget discussed above, for which a millage rate is set, the Town has proposed budgets for various Special Revenue and Capital Projects Funds and for its Stormwater Utility operations. There were no changes to these other fund budgets since the 1st Budget Workshop.
Special Revenue funds are generally used to account for grant and/or other restricted sources of funds. For Fiscal Year 2020-21, the Town has budgeted the Special Revenue Fund that accounts for collection and use of the 2nd local option gas tax monies passed through from the State, as well as for various Impact Fees collected by the Town. Separate Special Revenue Funds have been budgeted to account for park grants, such as from The Children’s Trust and the Department of Juvenile Justice (DJJ), as well as for transportation and transit related projects, such as the Franjo Road Joint Participation Agreement (JPA), the strategic Miami Area Rapid Transit (SMART) Demo Grant (Transit Fund) and the Transportation Master Plan Update (Transportation Fund). Additionally, the Citizens Independent Transportation Trust (CITT) Fund accounts for the People’s Transportation Plan (PTP) Surtax Funds received from the CITT and used for eligible transportation and transit projects, including roadway resurfacing projects and our Circulator Bus and Bus Shelter Replacement Program.
Staff’s proposed budget also includes the Capital Projects (Parks) Fund. In this fund we account for major park improvement projects. For Fiscal Year 2020-21 we are budgeting for completion of the Franjo Park Restoration Project ($1,560,000 carried over to the new budget year funded by a $200,000 grant and $1,360,000 transferred from the General Fund), as well as completion of the Lakes by the Bay (LBTB) Park Canoe/Kayak Launch Project ($237,000 carried over to the new budget year funded by a $200,000 grant and $37,000 of park impact fees).
We have also provided for Council consideration a proposed budget for the Stormwater Utility Fund, an Enterprise Fund. In addition to its recurring activities, such as stormwater drain cleaning, street sweeping, and community outreach, two major drainage projects are budgeted. First, the Cutler Ridge Sec. 3 Drainage Improvement Project is an approximate $2 million project. It is funded with a $200,000 grant, $250,000 of Stormwater Fees, and approximately $1.54 million of CITT Surtax Funds. Second, the Saga Bay 1.7 Drainage Improvement Project is an approximate $1.005,000 project being funded with a $600,000 grant and approximately $405,000 of CITT Surtax Funds. Both projects will provide much needed drainage improvements to their impacted areas.
Town Staff looks forward to discussing the above items with the Town Council today, during our 2nd Budget Workshop, to gain further insight from the Town Council as to the programs and initiatives it would like for Town Staff to incorporate into the upcoming 2020-21 Fiscal Year budget. The 1st Budget “Hearing” scheduled for Tuesday; September 8, 2020 will incorporate any changes requested by the Council during today’s workshop.
The Executive Summary (Attachment “A”) provides a written summary of the significant decreases/increases in departmental expenditure line items. The Fund Summaries and Department Expenditure Reports (Attachment “B”) provides the Council with the following comparative information:
• Actual Fiscal Year 2018-19
• Adopted Fiscal Year 2019-20
• Actual Projection Fiscal Year 2019-20
• Proposed Fiscal Year 2020-21 (based on Millage Rate at 2.6500 for the General Fund)
• Net Change:
- Proposed Fiscal Year 2020-21 (1st Budget Workshop) compared to Adopted Fiscal Year 2019-20
- Proposed Fiscal Year 2020-21 (2nd Budget Workshop) compared to Proposed Fiscal Year 2020-21 (1st Budget Workshop)
ATTACHMENTS
Ø Attachment “A” - Proposed Budget FY2020-21 Executive Summary
Ø Attachment “B” - Proposed Budget FY2020-21 - Fund Summaries and
Department Expenditures