City of West Palm Beach Florida. Budget In Brief Fiscal Year 2015

Budget In Brief

Fiscal Year 2015

City of

Mayor

Geraldine Muoio

City Commission

Sylvia Moffett—President

District 1

Isaac Robinson, Jr.

District 2

Kimberly Mitchell

District 3

Keith James

District 4

Shanon Materio

District 5

City Administrator

Jeff Green

Deputy City Administrator

Dorritt Miller

About the Budget

The City of West Palm Beach’s Fiscal Year 2015 Budget In

Brief is provided to serve as an overview of the City’s

budget. This document provides a summary of the highlights to the budget, revenues the City expects to receive and the planned areas where the money will be spent.

In order to address budget issues and to identify ways to balance the budget, a series of Budget Workshops were held over the past four months. In these workshops the operating and capital funding needs for the upcoming fiscal year were identified and prioritized. The City also held five Community Budget Meetings to further engage our citizens in the budget process.

The proposed budget is a deliberate balance of revenues and expenditures prepared in accordance with Florida’s statutory Truth in Millage process and best serves the City’s prioritization for provision of core services and Commission initiatives. State law requires that the City adopt a balanced budget prior to the beginning of its fiscal year on October 1st.

The Fiscal Year 2015 budget was developed to assure that fundamental services are appropriately delivered while attempting to maintain rates, fees, and programs at current levels. The budget is a responsible allocation of scarce

Operating Budget Highlights

 The City’s certified taxable property values increased $533 million or 6.39%.

 New construction projects added to the tax roll amounted to $30.6 million.

 Maintained millage rate at 8.3465 mills levied on every $1,000 in taxable property value.

 Provided general employee raises for the first time since fiscal year 2008.

 A net of eleven (11) new positions were added to the General Fund.

 Redesigned the employee health care plans to minimize the proposed insurance increase.

 Higher costs of workers’ compensation, general liability, and automobile claims increased operating expenses.

 Building permit revenues are expected to exceed the FY 2014 budget of $4.7 million by over $3.5 million.

 Over $1.3 billion of new construction projects are projected to be completed within the City over the next 5 years.

General Fund Budget at a Glance

FY 2015 FY 2014 Change $ Change %

Revenue

• Property Taxes $ 57.5 $ 52.8 $ 4.7 8.9% • Licenses & Permits 15.1 15.4 (0.3) -1.9% • Intergovernmental 21.4 20.6 0.8 3.9% • Charges for Services 33.9 33.4 0.5 1.5% • Transfers 2.5 5.6 (3.1) -55.4% • Fire Assessment Fee 1.0 1.6 (0.6) -37.5% • Misc., Interest, Fines & Forfeitures 5.1 2.3 2.8 121.7% • Other Taxes 19.4 16.8 2.6 15.5% • Cash Carryforward 1 _{0.0 7.5 (7.5) -100.0%}

• Appropriated Carryforward 2 _{0.0 2.4 (2.4) -100.0%}

Total Revenue $ 155.9 $ 158.4 $ (2.5) -1.6%

1 _{FY 15 removed budgeted Carryforward. See offset in Expenditure section, below.} 2 _{FY 15 did not require the use of Reserves to balance the budget.}

Expenditures

• General Government $ 21.1 $ 20.0 $ 1.1 5.5% • Police 56.5 54.7 1.8 3.3% • Fire 31.3 31.3 0.0 0.0% • Engineering / Public Works 15.5 15.1 0.4 2.6% • Parks & Recreation 15.1 14.2 0.9 6.3% • Library 4.2 4.0 0.2 5.0% • Debt Service (debt transfers) 4.8 7.6 (2.8) -36.8% • Other Transfers 7.4 4.0 3.4 85.0% • Cash Carryover 0.0 7.5 (7.5) -100.0

Charges for Services

21.74%

Misc., Int., Fines and Forfeitures 3.27% Licenses and Permits 9.69% Intergov. 13.73% Other Taxes 12.44% Transfers 1.60% Property Taxes 36.88% Fire Assessment Fee 0.64% Eng / PW 9.94% Parks & Recreation 9.69% General Gov't 13.53% Library 2.69% Debt 3.08% Fire Dept. 20.08% Police Dept. 36.24% Other Transfers 4.75%

Components of General Fund Revenue

This was another challenging budget year. The effects of the economy improved, but the City continued to experience the impact the City’s taxable values, revenue streams and the cost of operations. The following chart illustrates the General Fund budget shortfall at the first budget presentation on July 7, 2014, and the actions implemented to achieve a balanced budget.

_Balance 7.7.14 Additions Reductions _Balance Ending

Revenue $153.6 $2.5 $(0.2) $155.9

Expenditures ($156.8) ($4.2) $5.1 ($155.9)

Difference $(3.2) ($1.7) $4.9 $0.0

Adjustments to General Fund Revenue

Adjustments to General Fund Expenditures

The Budget Process

Fleet replacement $ 1.0

Reduce debt (1.2)

Cuts to various Departmental budgets (0.7)

Transfers between Funds $ 1.6

Administrative fees 0.3

Improved revenue assumptions 0.5

CST revenue reduction (0.1)

0.000 1.500 3.000 4.500 6.000 7.500 9.000 $2 $4 $6 $8 $10 $12 $14 2009 2011 2013 2015 Millage Rate Valuation (Billions)

City of West Palm Beach Taxable Values and Millage Rates

Fiscal Years 2008-2015 Taxable Value Millage Rate ` 1,696 1,635 1,550 1,471 _{1,422 1,434 1,470 1,486} 500 700 900 1100 1300 1500 1700 1900 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15

8-Year Citywide Personnel Trend Full-time Equivalents (FTE)

Property Taxes

The City’s taxable property value is $8.9 billion, a 6.39% increase from the prior year. The Fiscal Year 2015 budget was developed using the proposed millage rate of 8.3465. The proposed millage rate is higher than the rolled-back rate of 7.8503, which is the rate that would achieve the same amount of Ad Valorem or Property Tax revenue, based on the new taxable property values as in the prior year. New construction added $30.6 million to the tax rolls.

The 8.3465 millage rate generates property tax revenue of $57.5 million to the General Fund and represents 36.9% of the total General Fund revenue budget. This contributes towards paying for the public safety budget of $87.7 million, or 56.3% of total General Fund expenditures.

7-Year Property Tax Trend

Growth in Value Millage Rate General Fund Tax Revenue* 2008/09 $11,791,806,949 -6.9% 7.5500 $68,897,336 2009/10 $10,017,236,196 -15.0% 8.0739 $61,254,745 2010/11 $8,789,746,247 -12.3% 8.0739 $54,142,401 2011/12 $8,412,599,546 -4.3% 8.0739 $51,556,890 2012/13 $8,147,594,065 -3.2% 8.3465 $51,222,824

General Fund Reserves

The Fiscal Year 2015 budget results in an estimated General Fund ending reserve balance of $35.3 million or 22.6% of total Net General Fund expenditures.

Of the available reserves, $12.5 million are restricted by the City for use in emergency situations. Another $14.6 million is restricted for other purposes. The remaining $8.2 million is undesignated and unrestricted.

Amounts are reported in millions

0 10 20 30 40 50 60 2 0 0 7 2 0 0 8 2 0 0 9 2 0 10 2 0 11 2 0 12 2 0 13 2 0 14 F 2 0 15 B Restricted Committed Unrestricted

In addition to the typical governmental activities such as public safety, planning and development, recreation, and public works, the City of West Palm Beach also maintains several other activities as part of its Citywide Budget. These activities include Utility and Stormwater Funds which provide water, sewer, and stormwater services to the residents of our community; a sewage and treatment facility joint venture (“ECR”) with other governmental organizations; two Community Redevelopment Agency (CRA) funds, as well as several funds dedicated to capital improvements and the payment of debt services.

Additionally, the City operates a municipal golf course and several parking garages which are accounted for as business-type activities under the classification of “enterprise funds”.

Citywide Budget at a Glance

(Amounts are reported in Millions) FY 2015 FY 2014 Change $ Change % • General Fund $ 155.9 $ 158.4 $ (2.5) -1.6% • Utility Fund 134.2 124.6 9.6 7.7% • ECR Fund 47.5 154.6 (107.1) -69.3% • Stormwater Fund 16.5 19.2 (2.7) -14.1%

• All Other Enterprise Funds 7.9 7.1 0.8 11.3%

• Debt Service Funds 4.7 4.7 - 0.0%

• Capital Improvement Funds 10.7 9.6 1.1 11.5%

• Internal Service Funds 50.6 47.8 2.8 5.9%

• CRA 40.0 40.2 (0.2) -0.5%

• Special Revenue Funds 30.9 14.9 16.0 107.4%

Citywide Debt at a Glance

Citywide Long Term Debt

Governmental CRA Utility

The City’s downtown and Northwood Community Redevelopment Agencies have borrowed approximately $130 million to fund various community redevelopment projects such as CityPlace, Northwood Vil-lage, and the City Center Library complex. These bonds are backed by the incremental tax revenues generated within these districts. These bonds are repayable thru 2036. The CRA’s debt carries a rating of A from Standard and Poor’s.

The City’s General Fund has borrowed approximately $100 million to fund various public projects including the City Center Government com-plex, the Waterfront, and other recreation venues. Various revenue sources including public service taxes, guaranteed entitlement obliga-tions, and general tax obligations have been pledged to various bonds issued. These bonds are repayable through 2037. The City’s bond rating is Aa2/AA-/AA.

The City’s Utility Fund has borrowed approximately $260 million to fund various water, sewer, and stormwater capital projects. Revenues from the

Prepared by the

City of West Palm Beach