2013 Budget Workshop Presentation to Plantation City Council Mayor - - PowerPoint PPT Presentation

2013 Budget Workshop Presentation to Plantation City Council Mayor Diane Veltri Bendekovic Thursday, June 14, 2012

Agenda Agenda

Rollback Reality Revenues Reductions Resources Responsibility

How we got here – 2007 “roll back” How we got here – 2007 “roll back”

A “one size fits all” approach that penalized cities like Plantation that have historically low millage rates

State mandated tax reforms that required the City to roll back tax revenues to 2006 levels with an additional 7% reduction When economy and housing markets fell, we were once hit again (“double whammy”) Amendment One provides additional $25,000 Homestead Exemption; $25,000 Tangible Personal Property Exemption & Portability

Introduction Introduction

Going into this budget season …  Difficult choices are ahead  Reserves can no longer be used to balance budget  Cannot rely only on incremental increases in property values  Need to find : – $10.1 million to balance budget – $4.1 million for general obligation bond underwriters – $1 million designated capital

This is the Reality of SUSTAINING & MAINTAINING Plantation as we know it today

2 4 6 8 10 12 $4.1 million needed to secure bonds $1 million needed annually in designated capital $10.1 million needed to balance budget $4.1 $1.0 $10.1

$10.1 million shortfall $10.1 million shortfall

Perfect storm of components that make up the gap

Need $10.1 million to balance the budget Need $10.1 million to balance the budget

2 4 6 8 10 12

Total decrease from 2012 budget Inflationary cost of doing business Reserves no longer available Retirement/ pension increase Heathcare stop/loss insurance increase Comm. tax share from state End of amnesty program

$10.10 $5.20 $2.40 $1.40 $0.80 $0.21 $0.10

In millions Revenue sources we can no longer rely upon

Need to build up capital Need to build up capital

 Five years without any significant capital investments  Need to start funding capital to maintain the City’s assets and infrastructure

Year Capital budget 2008 $2,454,900 2009 $795,900 2010 $565,100 2011 $524,800 2012 $365,133

Reserves used to balance the budget Reserves used to balance the budget

500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 $2.5 million $2.3 million $3.0 million $2.4 million Over $10 million in the last 4 years alone

 Need $4.1 million in unassigned reserves for underwriters  General fund reserve balances (as of September 30, 2011)

Reserves no longer available Reserves no longer available

2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000

Non spendable Restricted Committed Assigned Unassigned

$1.2 million

Increase in pension costs Increase in pension costs

 Pension cost increased $1.4 million  General employees – 550 employees – Pension costs totaled $4.96 million – Increase of $800,000  FOP – 137 employees (164 in FOP; 27 already in DROP) – Pension costs totaled $6.07 million – Increase of $600,000

*As of Oct 2011 valuation report

Increase of consumable goods Increase of consumable goods

 Average retail price of fuel – 2004 to present  Nationwide, Florida and locally (Miami)

Increase of consumable goods Increase of consumable goods

 Cost of living index

50 100 150 200 250 Increase since 2007 = 9%

Revenue over time Revenue over time

Year General fund Millage rate Tax base (property values) Ad valorem revenue 2000 41,791,845 3.7500 4,631,363,344 15,797,700 2001 44,905,526 3.8350 4,928,446,711 17,347,500 2002 51,366,950 4.0000 5,269,827,354 19,605,950 2003 56,929,050 4.0000 5,731,306,593 20,426,150 2004 63,063,500 4.2500 6,203,798,086 23,279,250 2005 68,672,050 4.3500 6,895,063,091 25,690,700 2006 74,222,250 4.5889 7,918,683,869 30,173,550 2007 82,457,200 4.5889 8,671,121,470 34,639,300 2008 81,219,600 3.9155 8,198,630,080 32,271,100 2009 80,554,700 4.0925 7,478,948,210 31,910,200 2010 78,513,650 4.5142 6,647,273,357 32,207,200 2011 77,901,707 4.5142 6,656,786,025 28,876,900 2012 81,141,241 4.6142 6,677,220,055 29,677,628 % change since 2007

• 1.6%

0.6%

• 23.0%
• 14.3%

Other changes in revenue Other changes in revenue

 Stop/loss gap insurance – Increase this year of $800K due to 7-8 catastrophic illness claims – Premium last year $500,000; premium this year $1.3 million due to increase in claims  Communication tax – $211,000 decrease in revenue – State reduced this revenue source  Code amnesty program – $100,000 last year; no longer generating revenue

What’s at stake What’s at stake

 This Administration’s mission has been to sustain and maintain Plantation as we know it today  Residents are used to a certain level of quality customer service  For past 5 years, the City absorbed increased operating costs  Cannot continue to provide that level of service without additional revenue

General fund expenditures General fund expenditures

Salaries & Benefits Services & Allocated Costs Materials & Supplies Capital Costs Grants in Aid

 Expenditures by Category – Personnel costs represent 80.5% of the total General Fund budget

Expenditures by department Expenditures by department

Police Parks & Rec Public Works/Central Svcs Office of the Mayor/Admin Information Technology Fire Building Financial Services Planning Zoning & Econ Dev Human Resources Engineering Library/Hist Mus City Clerk Design, Landscape & Const Mgmt

Nearly 50% of the total general fund budget Ad valorem revenue doesn’t even cover the Police budget!

Reductions to date Reductions to date

 Have already cut one time expenses, such as Plantation Quarterly, “turkey money,” federal lobbyist, etc.  Positions eliminated; departments realigned  For third year, general employees are not getting an increase  Neglecting much needed capital items and infrastructure  Opened Employee Health & Wellness Center to help defray insurance costs  Eliminated Choice Plus insurance plan for new employees and transferred 99.9% of existing employees into Preferred Choice Plan  Implemented Standard Choice Insurance Plan  Implemented Tier II pension plan for new employees  Implemented benefit reductions and increased employee contribution for health benefits  Departmental budget reductions

Bonds needed for capital purchases Bonds needed for capital purchases

 General obligation bond – $32 million – on hold  Utilities revenue bond – $31 million – funding by Utilities, revenue generated  2003 bond – $2.3 million left to be used for Plantation Community Center at Kennedy Park Options: Repair Renovate Replace Remove

Revenue choices Revenue choices

 We do have choices to garner additional revenue to help balance budget, begin to shore up our designated capital and reserves and demonstrate stability for underwriters  Most are not one-time revenue sources – Will help strengthen our financial position, provide for

• pportunities to fund much needed capital items

 Provide quality service and facilities that Plantation residents have come to expect

Fire assessment fee Fire assessment fee

 Most cities charge between $84 and $365 per year  Impact per household – $60/year = $5/month (add’l $2.4 million) – $80/year = $6.65/month (add’l $3.2 million) – $100/year = $8.35/month (add’t $4 million)  Won’t see impact for 1 year  State law allows cities to use fee to pay for salaries – Free up even more general revenue funds  Can be used to build new fire station #1, fire services, fire trucks, ladder truck, etc. $80/year will net the City an additional $3.2 million

Grants Grants

 Recent ARRA grant projects: – Paving of Park East roads ($139,000) – Reverse 911 system and laptops ($111,000) – Park East water lines ($970,539 plus $162,860 City contribution) – Energy Efficiency Team Center ($804,300 plus $1.4 million City contribution) – 84th Avenue/Enclave wayfaring signage ($3.1 million grant) – Deicke Auditorium ($452,000)  Single stream recycling grant ($1.3 million) Grant availability unknown at this time, but we will continue to monitor appropriate sources for additional grant opportunities

Increase millage rate Increase millage rate

Millage rate Revenue generated 4.6142 (current rate) $31,201,823 4.6642 $31,539,930 4.7142 $31,878,036 4.7642 $32,216,143 4.8142 $32,554,249 4.8642 $32,892,356 4.9142 $33,230,463 4.9642 $33,568,569 5.0142 $33,906,676

 Property value estimated at $6.76 billion

(2.0% increase from last year)

Just 4/10 mill increase would generate $2.7 million additional ad valorem revenue

Estimated taxes by millage rate Estimated taxes by millage rate

$0 $200 $400 $600 $800 $1,000 $1,200

$922.84 $942.84 $962.84 $982.84 $1,002.84 $692.13 $707.13 $722.13 $737.13 $752.13 $530.63 $542.13 $553.63 $565.13 $576.63

Comparison shows assessed value with $50,000 homestead exemption $250,000 $165,000 $200,000 * With a 4/10 mill increase, a homeowner whose house is worth $250,000 w/ $50,000 homestead exemption would pay only $80 more/year

Millage rate comparison Millage rate comparison

1 2 3 4 5 6 7 8 9 10 With 4/10 mill increase, 60% of cities still have millage rates higher than Plantation

Millage rate comparison Millage rate comparison

1000 2000 3000 4000 5000 6000

 When you add assessments, Plantation looks even better

Includes annual fees of $80 fire assessment and $30 storm water

Sell off surplus real estate Sell off surplus real estate

North Acres Park  11831 & 11200 NW 21st ST  Acquired in 2000 as part of BCPS land swap  BCPA assessed value = $866,840 Middle Acres Park  NW 8th St & 118th Ave  Purchased in 1988 for $30,000  BCPA assessed value = $65,340 CRA Acquisition  4271 Peters Road  Purchased in 2010 for $385,000  BCPA assessed value = $314,140

If all surplus property is sold off at assessed value, the City will net $1,371,710 (one time revenue)

Sell off surplus residential real estate Sell off surplus residential real estate

 4520 NW 5th Place  Empty, unkempt residential lot  BCPA assessed value = $51,050 (land only)  5341 SW 9th Street  Unkempt, vacant residential lot  BCPA assessed value = $74,340

Utilities franchise fee Utilities franchise fee

 Utilities department water fees total approximately $13 million each year A 10% franchise fee would net approximately $1.3 million

House type Typical utility bill today (water only) With 10% franchise fee increase Condo $14.20 $15.62 ($1.42) Single family home $29.22 $32.14 ($2.92) Large single family home $89.66 $98.63 (8.97)

Storm water management fee Storm water management fee

 Will not see impact on budget until 2013/2014 budget  Funding source – approximately $6 million loan Will return approximately $500,000 to City: $200K to general fund, and $300K to road and traffic fund

Property taxable value increase Property taxable value increase

 BCPA expecting 2.0% increase in property values  Anticipated future revenue from One Plantation Place, Midtown Phase II, Riverwalk and Veranda Phase II – We won’t see impact on property values for at least two years Should net the City approximately $426,000 additional revenue

Fire & Police impact fee (1) (2) (3) Fire & Police impact fee (1) (2) (3)

Davie Sunrise Police Fire Police Fire 3,000 SF Bank/Office $888 $636 $114 $405 1,000,000 SF Office (4) $29,600 $21,200 $3,800 $13,500 20,000 SQ Retail (5) $5,920 $4,420 $1,720 $4,100 150 Unit Apt (6) $13,500 $15,750 $0 $8,250

 (1) Levied on new developments to reimburse City for capital cost of providing public utilities to that development  (2) Florida statute states that if the fee is challenged, the government must prove that the fee meets the requirements of legal precedent. A court deferential standard may not be used.  (3) Generally based on new construction (floor area or dwelling units)  (4) Midtown has approx 400,000 SF of new office capacity (does not include 321 North, Westside Regional new patient tower, redevelopment of existing parking space to accommodate new office development  (5) Includes underutilized commercial areas with redevelopment potential  (6) Current Comp Plan allows for 800-900 new multi-family units in Midtown (does not include Veranda II and Midtown 24 II – already under construction)

Should net the City approximately $100,000 additional revenue

Proposed commuter fee Proposed commuter fee

 Option I: Commuter miles driven and on sliding scale of $10- $30/pay period  Revenue would be approx. $88,000 annually ($77,000 for Police; $11,000 for all other employees)  Option II: allow one-way trip of up to 8 miles, then charge federal mileage rate of $0.51/mile  Generate approx. $225,000 annually ($206,000 for Police; $16,000 for all other employees)  Option III: Require any employee who has a take home car to live within the City limits  Fuel savings would only be approx. $134,000 ($112,000 for Police; $22,000 for all other employees)  Option IV: Alternatives to take home cars

Occupation/business tax license Occupation/business tax license

 Won’t see benefit until 2014 budget year (can only bring up for discussion every other year)  Maximum increase = 5%  Would increase revenue by $36,000/year

Franchise fee increase Franchise fee increase

 Negotiable at contract expiration

Revenue & Resource Summary Revenue & Resource Summary

Revenue source Revenue impact Fire assessment fee ($80/year) $3.2 million Millage rate increase (4/10 mill) $2.7 million Sell off surplus property $1,371,710 Utility franchise fee $1.3 million Storm water impact fee $500,000 Taxable value increase $426,000 Fire and Police impact fees $100,000 Commuter fee (Option 1) $88,000 Business tax license increase $36,000 Franchise fee increase TBD

Personnel options Personnel options

 Full to part time  FOP – collective bargaining contract negotiations began June 13  Insurance – Standard vs. Preferred Choice cost savings  Retiree buy-outs – cost vs. savings  Work week options: 4 day work week or volunteer to cut hours w/ no benefits  Reorganizations: Landscape, PZED, Finance; Efficiency Study – possibly more to come  General employees – no raises  Eliminate vacant positions

Hours of work Hours of work

 Holiday or mandatory furloughs – FLSA places limitation on furloughs for exempt employees – Short term, one time savings – Can have implications on benefits  Using part time or will call positions to reduce overtime  4/10 work schedule; closing City Hall on Fridays (no quantifiable savings, inconvenient to residents)  Introduce “family hours” program with a voluntary reduction of hours to 30; reduce wages by 25%  Service and program reductions  Voluntary separation incentives – Expensive – we have no available funding – Difficult to predict who will take the incentives; critical positions may become vacant

Changes to pension plan Changes to pension plan

Topics covered at July 28, 2009 workshop included:  Florida Retirement System – 18% of payroll to participate equals higher cost for General and lower cost for FOP – Loss of state funds of $650,000  Tier II Pension Plan for new hires – Already in place for general employees  Defined Contribution vs. Defined Benefit

Workshop outcome: no changes other than Tier II for General Employees

Changes to pension plan Changes to pension plan

GENERAL POLICE 2011/2012 $58,593 $0.00 2012/2013 $118,305 $0.00 2013/2014 $168,213 $0.00 2014/2015 $221,239 $0.00 2015/2016 $273,149 $4,514 2016/2017 $322,085 $41,659 2017/2018 $380,571 $81,916 2018/2019 $435,334 $127,107

Tier II Pension Projected Reductions

Changes to pension plan Changes to pension plan

Defined benefit vs. defined contribution  Closing of General & Police plans would require immediate change of funding methodology  The combined annual amount of increased costs to the City was estimated at approximately $2.1 million dollars – plus loss of Chapter 185 funding of approximately $650,000 (state funds fluctuate annually)  These costs are in addition to employees’ contributions currently required (General – 8.5%; FOP – 9.5%)  Add to this amount the cost of a DC plan City contribution of 6% (or whatever % the City deems “reasonable”) of a $44 million dollar payroll = $2,640,000

Changes to benefits Changes to benefits

 “Standard Choice Health Plan” for all employees  “Preferred Choice Health Plan” for employees who choose to complete “3 Steps to Wellness” – Biometric screening, online health risk assessment, comprehensive medical review – Identify small issues before they become larger, potentially catastrophic health problems – Keeps our employees healthier – less sick time used = more productivity  Eliminated longevity for future employees

Wages Wages

 Freeze wages and salaries across the board (already doing this for General Employees)  Strategies for reducing overtime in all departments

What makes the “grass greener” in Plantation? What makes the “grass greener” in Plantation?

 Helen B. Hoffman Plantation Library  Plantation Historical Museum  Plantation Equestrian Center  Central Park Aquatics Complex  Frank Veltri Tennis Center  Plantation Preserve Golf Course & Club  City events such as Fourth of July parade and fireworks, Santa’s Visit and Holiday parade  PAL youth and adult athletics program  Chamber of Commerce partnership

Costs vs. benefits Costs vs. benefits

 Receive national and international recognition through

• ur world class facilities & events

 Able to accommodate athletic events in multiple sports  Brings revenue into the City, not just for us, but for our businesses as well

Facility Direct Economic Impact * Equestrian events $183,138 Tennis events $2,642,136 Aquatic events $4,805,802 Athletic events $12,977,646 * Figures calculated using Greater Ft. Lauderdale Convention & Visitors Bureau standard formula

Cost vs. benefit Cost vs. benefit

Facility Benefit

Plantation Preserve Golf Course & Club Over 190 players participated in the Miccosukee Nationwide Qualifier and PGA Tour Second Stage Qualifying Tournament. Preferred location

• f weddings, baptisms and other family celebrations. Everglades

inspired wetlands and linear park provide safe haven for local wildlife and learning experience for visitors. Hoffman Library/Historical Museum Community events promoting literacy for children: Poetry Under the Stars, Teddy Bear Picnic, Summer Reading Program, etc. Also promotes the arts available in the City through bi-annual Cultural Arts Expo. City events (July 4th parade, Santa’s visit, etc.) Community events bring people together to make them feel connected to community; parade promotes awareness for many City businesses, schools, volunteer organizations, etc. Provides opportunities for students to earn community service hours required to graduate. Chamber of Commerce Plan community events such as Prayer B’fast, Economic Dev Summit, Holiday Parade, etc. – cost to hire individual plus benefits would well exceed $26,950.

Our fiduciary responsibility Our fiduciary responsibility

 Goal of this budget – and this Administration – is to continue to provide quality services and facilities to residents  Cannot do that without your help  Cost of doing business has increased significantly over the years  Cost cutting measures won’t do it alone  Cannot be just one thing – will have to be combination of several revenue sources and cost cutting measures

Revenue & Resource Summary Revenue & Resource Summary

2012/2013 Revenue source Revenue impact Millage rate increase (4/10 mill) $2.7 million Sell off surplus property $1,371,710 Utility franchise fee $1.3 million Personnel options $1,000,000 Taxable value increase $426,000 Fire and Police impact fees $100,000 Commuter fee (option 1) $88,000 Total $6,985,710 Future revenue source Revenue impact Fire assessment fee ($80/year) $3.2 million Storm water impact fee $500,000 Business tax license increase $36,000 Franchise fee increase TBD

Summary Summary

 No easy decisions to make  Future of our community is at stake  Times are difficult for all of us – residents, businesses and the City itself  Today’s financial reality stems from the worst economic times experienced in our lifetime  Bottom line: a balanced budget

Thank you for your support…