Agenda 03/12/2019 Item #11A03/12/2019
EXECUTIVE SUMMARY
Recommendation to Adopt the FY2020 Budget Policy.
OBJECTIVE: That the Board of County Commissioners (Board) adopt policies to be used in
developing the Collier County Government budget for FY 2020.
CONSIDERATIONS: For staff to begin preparation of the FY 2020 budget, direction is needed from
the Board on major policy issues.
Attached to this Executive Summary is a listing of pertinent policy issues that will affect preparation of
the FY 2020 budget. The budget policy document is broken down into three distinct elements. The first
consists of budget policies proposed in FY 2020 that require policy direction from the Board. The second
element consists of routine budget policies that the Board has endorsed for several fiscal years. The third
element consists of a three-year analysis of the General Fund (001) and the Unincorporated Area General
Fund (111). Establishing broad goals to guide governmental decision makers is the first of four budget
process principles developed by the National Advisory Council on State and Local Budgeting (NACSLB)
and endorsed by the Governmental Finance Officers Association (GFOA).
The Board needs to establish June budget workshop dates. Tentative dates are Thursday, June 20, 2019
and if necessary Friday, June 21, 2019 with meeting times scheduled from 9:00 a.m. to 5:00 p.m. The
Florida Association of Counties annual conference is scheduled for June 11 through June 14, 2019 in
Orlando.
For informational purposes, adoption of the maximum tentative millage rates is scheduled for Tuesday,
July 9, 2019. The Board is required by Florida Statutes to provide the Property Appraiser with the
proposed millage rates within 35 days of taxable value certification which is generally on or around
August 4, 2019 to prepare the Notice of Proposed Property Taxes.
Finally, the Board needs to establish September public hearing dates for the adoption of the FY 2020
budget. The School Board has tentatively scheduled September 10, 2019 for their final budget hearing.
Recommended dates for the Collier County budget public hearings are Thursday September 5, 2019 and
Thursday September 19, 2019.
FISCAL IMPACT: The adopted policies will serve as the framework for the development of budget and
ad valorem taxation issues for FY 2020.
GROWTH MANAGEMENT IMPACT: There is no Growth Management impact.
LEGAL CONSIDERATIONS: The County Attorney has approved this item as to form and legality.
Majority support is required for Board approval. - JAK
RECOMMENDATION: That the Board adopts budget policies as detailed in the attachments to this
Executive Summary, establishes June budget workshop dates and September public hearing dates. In
addition, the Board needs to adopt the attached Resolution establishing a May 1, 2019 deadline for the
Supervisor of Elections, the Sheriff’s Office and the Clerk’s budget submittals.
PREPARED BY: Mark Isackson, Director of Corporate Financial and Management Services
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03/12/2019
ATTACHMENT(S)
1. Resolution FY 20 Budget Policy and Constitutionals (PDF)
2. FY20 Budget Policy PowerPoint (PDF)
3. Fiscal Year 2020 proposed budget policies (PDF)
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03/12/2019
COLLIER COUNTY
Board of County Commissioners
Item Number: 11.A
Doc ID: 8235
Item Summary: *** This item to be heard at 9:30 *** Recommendation to adopt the FY2020
Budget Policy. (Mark Isackson, Corporate Financial and Management Services Division Director)
Meeting Date: 03/12/2019
Prepared by:
Title: Operations Coordinator – Office of Management and Budget
Name: Valerie Fleming
03/05/2019 11:15 AM
Submitted by:
Title: Division Director - Corp Fin & Mgmt Svc – Budget and Management Office
Name: Mark Isackson
03/05/2019 11:15 AM
Approved By:
Review:
Office of Management and Budget Valerie Fleming Level 3 OMB Gatekeeper Review Completed 03/05/2019 11:15 AM
Budget and Management Office Mark Isackson Additional Reviewer Completed 03/05/2019 11:24 AM
County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 03/05/2019 3:19 PM
County Manager's Office Leo E. Ochs Level 4 County Manager Review Completed 03/06/2019 12:05 PM
Board of County Commissioners MaryJo Brock Meeting Pending 03/12/2019 9:00 AM
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11.A.a
Packet Pg. 96 Attachment: Resolution FY 20 Budget Policy and Constitutionals (8235 : Recommendation to adopt the FY 2020 Budget Policy)
Collier County
FY 2020
BCC Budget Policy
March 12,2019
1
11.A.b
Packet Pg. 97 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
FY 2020 Budget Policy Highlights
1.Ke y Annual Policies for Consideration and
Board Direction (Policy Document Pages 3-40)
2.Continuing Policies to be Endorsed by
the Board (Policy Document Pages 41-43)
3.Three (3) Ye ar General Fund and
Unincorporated Area General Fund
Analysis (Policy Document Pages 44-54)
2
11.A.b
Packet Pg. 98 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Suggested Board Budget Guidance Action
After due consideration it is recommended that;
The Board approve all recommended Budget
Po licies with any changes dealt with on an
exception basis.
3
11.A.b
Packet Pg. 99 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Millage Rate Policy
—Ta xable Value! Budget Planning Around a 4% TV Increase
—General Fund Millage Rate of $3.5645 per $1,000 of Ta xable Value;Why?
ü Property taxes comprise on average 70% of general governmental
revenues
ü Several FY 20 new funding initiatives including strategic land purchases;
enhanced storm-water maintenance and capital;school safety officer
mandates;newly activated innovations zones;etc.
ü Grow reser ves to ensure sufficient cash at year end and provide a buffer
against unexpected expenses or Board policy shifts
ü Protect cash position and fund general governmental capital deferred
while funding Hurricane Irma recove ry and waiting for reimbursement.
ü Ensure that dollars are available to cash flow another natural disaster in
2019-2020
ü Continue inve stment in public safety operations and infrastructure
ü Continued inve stment in capital infrastructure
ü Operate and maintain new capital facilities constructed
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11.A.b
Packet Pg. 100 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Millage Rate Policy
Continue Unincorporated Area General Fund (111) millage rate at
$0.8069 per $1,000 of Ta xable Value
ü Allocate $0.0908 (amount increased by) to maintain
constructed median landscaping
ü Equivalent transfer from Fund (111) to storm-water
maintenance and capital programming for projects benefitting
the Unincorporated Area
ü Fund new Innovation Zones
ü Maintain commitment to community parks;code enforcement;
zoning and land use;natural resources;and road maintenance;
ü Continue capital commitment to community parks;and the
transportation network;
Why? Maintain Budget Flexibility;Public
Health,Safety and We lfare Program
Investment;Continuing Infrastructure
Investment;Human Capital Investment and;
Reser ves
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11.A.b
Packet Pg. 101 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Millage Rate Policy -MSTU’s
MSTU’s –Assuming Increasing Taxable Value
•With Advisor y Board Oversight –Ta x Neutral
(Rolled Back Rate –same revenue as last year) to
Millage Neutral
•No Advisor y Board –Rolled Back Rat
•FY 2018 –12 millage neutral rates; 3 ro lled back
rates; 4 Other
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11.A.b
Packet Pg. 102 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Unincorporated Area Proper ty Tax Impact
(Homestead Proper ty)
7
FY 19
Pa rcel
Ta xable
Va lue
Example
FY 20
Ta x Base
Esc. P roj.
(Cap 3%)
FY 20
Parcel
Ta xable
Va lue
Example
General
Fund
Ta x Rate
Unincorp.
Area GF
Ta x Rate
FY 19
County GF
and
Unincorp.
GF Tax
Example
FY 20
County GF
and
Unincorp.
GF Tax
Example
Difference
Between
FY19 &
FY20
100,000 1.025 102,500 3.5645 0.8069 437.14 448.07 10.93
125,000 1.025 128,100 3.5645 0.8069 546.43 559.98 13.55
175,000 1.025 179,400 3.5645 0.8069 765.00 784.23 19.23
225,000 1.025 230,600 3.5645 0.8069 983.57 1,008.04 24.48
250,000 1.025 256,300 3.5645 0.8069 1,092.85 1,120.39 27.54
275,000 1.025 281,900 3.5645 0.8069 1,202.14 1,232.30 30.16
300,000 1.025 307,500 3.5645 0.8069 1,311.42 1,344.21 32.79
325,000 1.025 333,100 3.5645 0.8069 1,420.71 1,456.11 35.41
500,000 1.025 512,500 3.5645 0.8069 2,185.70 2,240.34 54.64
600,000 1.025 615,000 3.5645 0.8069 2,622.84 2,688.41 65.57
287,500 1.025 181,940 3.5645 0.8069 775.93 795.33 19.41AVG
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Packet Pg. 103 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Unincorporated Area Proper ty Tax Impact
(Non Homestead Proper ty)
8
FY 19
Parcel
Ta xable
Va lue
Example
FY 20
Ta x Base
Esc. P roj.
(Cap 10%)
FY 20
Parcel
Ta xable
Va lue
Example
General
Fund
Ta x Rate
Unincorp.
Area GF
Ta x Rate
FY 19
County GF
and
Unincorp.
GF Tax
Example
FY 20
County GF
and
Unincorp.
GF Tax
Example
Difference
Between
FY19 &
FY20
100,000 1.040 104,000 3.5645 0.8069 437.14 454.63 17.49
125,000 1.040 130,000 3.5645 0.8069 546.43 568.28 21.86
175,000 1.040 182,000 3.5645 0.8069 765.00 795.59 30.60
225,000 1.040 234,000 3.5645 0.8069 983.57 1,022.91 39.34
250,000 1.040 260,000 3.5645 0.8069 1,092.85 1,136.56 43.71
275,000 1.040 286,000 3.5645 0.8069 1,202.14 1,250.22 48.09
300,000 1.040 312,000 3.5645 0.8069 1,311.42 1,363.88 52.46
325,000 1.040 338,000 3.5645 0.8069 1,420.71 1,477.53 56.83
500,000 1.040 520,000 3.5645 0.8069 2,185.70 2,273.13 87.43
600,000 1.040 624,000 3.5645 0.8069 2,622.84 2,727.75 104.91
287,500 1.040 299,000 3.5645 0.8069 1256.78 1307.05 50.27AVG
11.A.b
Packet Pg. 104 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
FY 2020 New Funding Initiatives/Requirements
General
Fund
Unincorp. Area
General Fund
Golden Gate Golf Course (Debt Service)2,000,000 0
Golden Gate Golf Course Development Planning & Maintenance 1,000,000 0
New (2) Innovation Zones 683,500 350,000
School Safety Officer Program 3,000,000 0
Big Corkscrew Reg Pk –Phase 1 Operations & Maintenance 1,000,000 0
Amateur Sports Complex Operations 2,000,000 0
Marginal Increase in Stormwater Maintenance and Capital Funding 2,500,000 2,500,000
Loss of Communication Services Revenue Sharing Dollars 0 500,000
General Grant Matches including Hurricane Hardening 2,000,000 0
Marco Airport Te rminal;Everglades Sea Base;and Immokalee
Airport Runway Rehab –Grant Matches
1,000,000 0
Everglades City Utilities 200,000 0
Collier Area Transit Subsidy Addition 1,000,000 0
Information Tech Hardening & Mgt Software Upgrades 2,000,000 0
Compensation Administration 380,600 152,000
Future Long-Te rm Asset Maintenance Reserve 5,000,000 0
To tal 23,764,100 3,502,000
9
11.A.b
Packet Pg. 105 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
FY 2020 New Funding Initiatives/Requirements
(continued)
General
Fund
Unincorp. Area
General Fund
New Funding Initiatives & Requirements Total 23,764,100 3,502,000
FY 20 Millage Neutral Property Tax Increase 12,587,900 1,768,100
Constitutional Officer Po rtion of New Property Tax Dollars 6,294,000 0
New Millage Neutral Property Taxes to Fund New Initiatives 6,293,900 1,768,100
Funding Shortfall at Millage Neutral (less Constitutional portion)(17,470,200)(1,733,900)
FY 20 Projected Rolled Back Rate Revenue Loss from Millage
Neutral
(4,866,400)(415,900)
FY 20 Projected Rolled Back Rate Revenue 7,721,500 1,352,200
Constitutional Officer Po rtion of New Property Tax Dollars @
Rolled Back Rate
3,860,800 0
New Millage Neutral Property Taxes to Fund New Initiatives @
Rolled Back Rate
3,860,700 1,352,200
Funding Shortfall at Potential Rolled Back Rate (less
Constitutional portion)
(19,903,400)(2,149,800)
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11.A.b
Packet Pg. 106 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Hurricane Irma Expenses (Recover y Budget) and
Budget Management Process
Fund Category FEMA Revenue
Budgeted
Capital Project
Deferral
Reserves
(Reduced)
Total
Budget
Deferrals
General
Governmental
$15,547,600 $14,834,900 $26,990,700 $57,573,200
Enterprise $7,500,000 $41,557,700 $22,300,000 $71,357,700
Constitutional -
Sheriff
$4,500,000 $4,500,000
Total $23,247,600 $56,392,600 $53,790,700 $133,430,900
11
•17 months since Hurricane Irma landfall and the County has spent $105
million through Januar y 2019 with an additional $34 million budgeted in
FY 19 for remaining clean up efforts.
•Reimbursement received totals $27.8 million.
•Approximately 60.0% of actual expenses is connected with community
wide debris removal;7.6% for debris removal from canals;and the
remaining 32.4% paid for various structural repairs and damage to the
transportation network,parks system,general governmental buildings,
landscaping and water and wastewater systems.
•Budget management will include monitoring all reimbursement proceeds
and directing those proceeds to the appropriate capital accounts where
expenses were incurred and/or reser ve s.
•Corresponding review of available Hurricane budgeted appropriations
and when appropriate , r edirecting budget back to the appropriate capital
accounts and/or reser ve s.
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Packet Pg. 107 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
FY 2019 Adopted Gross Budget
by Fund Type
12
General Fund
25%
General Fund -
Constitutional Officers
13%
Special Revenue Funds
19%
General Gov't Debt
Ser vice Funds
2%
General Gov't Capital
Projects Funds
9%
Enterprise Funds
24%
Internal Service Funds
8%
Permanent (Trust)
Funds
0%
Unincorporated Gen Fd,
Conservation Collier, TDC,
Planning & Development Services,
Road & Bridge, MSTU's, Pelican
Bay, Grants
Water / Sewer;EMS, Solid
Waste, Public Transit
Services (This fund type
includes Operations, W/S
Debt, and Capital)
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Packet Pg. 108 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
General Fund Expense Slide
by Categor y
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Packet Pg. 109 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
General Fund FY 2020 Planning
Proforma
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Packet Pg. 110 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
General Fund Cash Planning and
Obser vations
—Ye ar ending cash balance influences budget planning.
—FY 18 and FY 19 budget management designed to increase cash.
—Still positioning budget to manage Hurricane Irma expenses and
deferred capital projects while waiting for reimbursement
reve nue.
—First two months cash flow requirements in new FY (October
and November) now totals $71 million and growing.
—Reser ves growing to protect year ending cash;hedge against
unanticipated expenses and/or policy shifts;safety net in the
event of natural disasters;signal of financial strength;and
important component of budget flexibility strateg y.
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11.A.b
Packet Pg. 111 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Agency Allocations
—Premise is that all agencies will work together
and cooperatively should the need arise for
budget reductions due to taxable values below
the planning threshold;re ductions in proper ty
tax reve nue;any state tax reform legislation;
re ductions in state shared reve nue;or unfunded
mandates.
—Conve rsely –increases in reve nue above the
planning threshold will also be allocated based
upon Board direction.
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Packet Pg. 112 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Reve nu e Centric
—Enterprise Funds;Internal Ser vice Funds;Special
Reve nue Funds and other Operational Funds
which are suppor ted by fees with no reliance
upon ad valorem reve nue will be allowed to
establish budgets and conduct operations around
reve nue centric guidelines dictated by cash on
hand and anticipated receipts.
—Within the General Fund and Unincorporated
Area General Fund,net cost to these funds offset
by fee reve nue will be monitored and negative fee
variances will be addressed through expense cuts
and not subsidized by ad valorem reve nue .
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Packet Pg. 113 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Agency Positions
—Expanded position requests limited to Board
approved capital facility openings and/or Board
directed ser vice leve l adjustments.
—All budget to budget expanded requests will be
rev iewe d by the County Manager and final
re commendations presented as par t of the FY
2020 budget workshop in June .
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11.A.b
Packet Pg. 114 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Compensation
—Appropriate a general wage adjustment (GWA) of $1,200 to all base
salaries which represents an average of 2.2% off the average agency
salar y of $55,500 as part of FY 2020 budget planning with the
structure of such adjustment developed by the County Manager and
presented at the June budget workshop.
—FY 2020 GWA for the CM Agency valued at $3.0 million
—Ta rgeted pay plan maintenance appropriation for FY 2020 equivalent
to .5% or $565,000 is re commended to strengthen certain lower
classification pay grades where a market imbalance exists.
—Cost of Living December ove r December 2018 is 2.9%
19
11.A.b
Packet Pg. 115 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Health Care
—Maintain for the County Manager Agency an
average cost distribution between the Board and
Employe es at 80% (Employe r) 20% Employe e.
—Fo r FY 2019,the County experienced no (0%)
health insurance rate increase . D ue to continued
exceptional plan performance and plan reser ve s
which exceed statutor y minimums,no (0%)
health insurance rate increase is proposed for FY
2020.
20
11.A.b
Packet Pg. 116 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Retirement Rates
—Adherence to OMB rates published within the
OMB budget instructions.
—Rates Established based upon State Guidance .
21
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Packet Pg. 117 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Storm-Wa ter Funding
—FY 2019 general governmental storm-water operating and capital funding
totaled $8.2 million.
—FY 2020 planning model increases funding by $1,000,000 to $9.2 million.
—With the Board decision to not pursue a storm-water utility in FY 2020,
County Manager committed to increasing general governmental
maintenance funding above the planning model consistent with industr y
standards with the final amount depending upon receipt of actual taxable
value numbers;overall budget submissions.;and Board Direction.
—Eligible replacement and new capital projects will be evaluated with the
potential for special obligation revenue bond financing up to $30 million
in projects in lieu of the current cash and carr y methodology.
—Legally available non ad-valorem revenue will be used to fund any debt
ser vice which is estimated at approximately $2.7 million annually.
22
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Packet Pg. 118 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Uses of Gas Ta xe s
—Continue Board policy where pledged gas taxes pay debt service on the gas
tax revenue bonds which have final maturities in June 2023 and 2025
respectively;remaining gas tax funds programmed to support construction
and transportation network improvements.
—Tr ansfer dollars totaling $9.6 million planned in FY 2020 from the General
Fund to Tr ansportation Capital Fund (310) will provide funding support for
maintenance of the roadway network and other transportation related
expenses.
—Tr ansfer dollars from the Unincorporated Area GF planned at $3.5 million in
FY 20 to Tr ansportation Capital Fund (310) augmented by a $2.6 million
direct budget appropriation in this fund for road maintenance.
—Gas Taxes grew modestly up 4.1% to $22.7M in FY 18.Forecast FY 19 and
planning FY 20 revenue will be in the $23M range.
—$1M in gas taxes freed up annually for transportation network improvements
beginning in FY 2015 due to restructuring of the gas tax debt.
23
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Packet Pg. 119 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
General Fund General Capital/Debt
Ser vice and Debt Management
—Tr ansfer an equivalent planning sum of up to
.3333 mils for county-wide capital purposes;
paying non-growth related reve nue bond debt;
provide impact fee trust fund loans to cover
growth related debt obligations and to fund
much needed general governmental priority
re placement capital projects within the parks
system and general governmental facilities.
24
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Packet Pg. 120 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
General Gove rnmental,Enterprise
Fund and Other Reser ve Po licies
—GF –floor ; 8 % of operating expenses or $32.9 million –Ceiling;16% of operating expenses or
$65.9 million;current planning reserve for FY 2020 is $50.1 million an increase of $5.6 million.
—Other Gen.Govt.Funds –Generally 2.5% of operating expenses with a ceiling of no more than
one months expenses.Ceiling for the Unincorporated Area GF is $4.7 million;current planning
reserve for FY 2020 is $2.46 million.
—Other general governmental funds that receive transfer revenue from the GF will have reser ves
sized to cover the first month of operations or until the first GF transfer is scheduled.
—Reser ve policy for Pelican Bay Ser vices Division (PBSD) operating fund (109) set between 15-
30 percent of operating expenses given the districts coastal nature,level of infrastructure
investment,natural assets and commitment to maintenance and resource protection.
—CCWSD user fee reserves established minimally between 5% and 15% of revenues with
working capital resources set between 45 days and 90 days.Within the family of CCWSD family
of user fee operating and capital funds reser ves will range between $17.4 and $34.7 million
while working capital resources will total roughly $26.2 million or 68 days of reserves.
—Over a three to five year period,establish a solid waste restricted reser ve of ten (10) percent
of the FY 2019 budgeted charges or $4.4 million.
—Ta rgeted reserves within the GMD building permit fund (113) and planning fund (131) set at 18
months and 24 months of total budget appropriations respectively.
25
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Packet Pg. 121 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Financing New and Replacement Capital
Infrastructure
—Finance Committee is engaged and continually reviewing all appropriate
capital financing options.
—FY 20 budget planning does not program issuance of debt as part of the
adopted budget.
—Any new debt issue recommendation will include a consolidated financing
plan based upon the number of current and future capital projects and
initiatives to be financed,the timing of project implementation,expected
payout schedule, t he appropriate type of debt and existing market
conditions.
—Issuance of debt in the areas financed would supplement the cash and carry
approach and funding would be redirected from the respective program
areas to fund debt ser vice.
—Cost to finance always a concern,but County’s credit rating will reduce the
interest expense.
—Long term debt means that future users of capital facilities and infrastructure
and not just current users will participate in paying for facilities.
26
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Packet Pg. 122 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
School Resource Officer Funding
—Program functional in some County school for decades.
—County Commission through the Sheriff's Agency has funded a program
providing coverage in many schools for years.
—SB 7026 passed in 2018
—Legal responsibility to comply with SB 7026,including funding is the
responsibility of the Collier County School District
—Current program costs are approximately $7.0 million annually and since
enactment of the Statute, t he Sheriff has a presence in ever y County public
school facility and charter school in compliance with the current State law.
—Additional recurring funding of $3,000,000 expected over next four (4)
years.
—Continue discussions with all stakeholders at the conclusion of the
legislative session with the goal of developing a recurring funding formula
that splits equally the cost of the program between the Collier County
School District and Collier County for Board consideration.
27
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Packet Pg. 123 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Schedule
—Resolution requiring FY 2020 budget submittals by the
Sheriff;Super visor of Elections and Clerk of Courts on May
1st.
—FY 2020 June Budget Wo rkshop Dates –Thursday June 20th
and if necessar y Friday June 21th
—Adopt Tentative Maximum FY 2020 Millage Rates on Tu esday
Ju ly 9,2019
—Board Receives Tentative FY 2020 Budget Document on
Friday July 12,2019
—First FY 2020 Public Budget Hearing on Thursday
September 5th with the Final FY 2020 Budget Hearing on
Thursday September 19th
28
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Packet Pg. 124 Attachment: FY20 Budget Policy PowerPoint (8235 : Recommendation to adopt the FY 2020 Budget
Policy Document Page 1
Fiscal Year 2020
Proposed Budget Policies
Collier County Board of County Commissioners
March 12, 2019
11.A.c
Packet Pg. 125 Attachment: Fiscal Year 2020 proposed budget policies (8235 : Recommendation to adopt the FY 2020 Budget Policy)
Policy Document Page 2
Table of Contents
Section Pages
1. Overview and General Budget Planning 3 to 5
2. General FY 2020 Budget Planning – Significant Influences 5 to 8
3. New General Governmental Initiatives 8 to 9
4. Taxable Value and Tax Rate Discussion 9 to 11
5. Summary of FY 2020 Budget Strategies 12 to 15
6. Local Option Infrastructure Sales Tax and FY 2020 Planning 16 to 17
7. Future General Governmental Capital Improvements 17 to 20
8. Gas Taxes; Use of Gas Taxes and Gas Tax Pledged Debt 20 to 21
9. Safe School Officer Program 21
10. General State Legislative Update 21 to 22
11. General Fund allocation by Agency/Department 22 to 23
12. Millage Rate Targets for MSTU’s 23 to 24
13. Revenue Centric Budgets 24
14. Expanded Positions and Programs 24
15. Compensation Administration 25
16. Health Insurance 26 to 28
17. Retirement Rates and Accrued Salary Savings 28
18. Financing New and Replacement Capital Infrastructure 28 to 30
19. Storm-Water Management Funding 30 to 31
20. General Fund Capital/Debt Service Contribution and Debt Mgmt. 31 to 32
21. General Governmental; Enterprise Fund and Other Reserve Policies 32 to 39
22. CPI Based Enterprise Fee Adjustments 39
23. Suggested Scheduling Timeline 39
24. Comparative Budget Data 40
25. Regular Routine Budget Policies for FY 2020 41 to 43
26. Three Year Budget Projections – General Fund 44 to 50
27. Three Year Budget Projections – Unincorporated Area GF 51 to 54
11.A.c
Packet Pg. 126 Attachment: Fiscal Year 2020 proposed budget policies (8235 : Recommendation to adopt the FY 2020 Budget Policy)
Policy Document Page 3
Overview and General Budget Planning
Historically, the annual budget policy approved by the Board of County Commissioners (Board),
has consisted of three (3) sections which are “annual budget policies to be adopted”, “continuing
budget policies to be reaffirmed” and a “three-year forecast for the General Fund and the
Unincorporated Area General Fund”. Annual policy adopted are highlighted in gray on policy
document pages 21 thru 25; 28 & 30 thru 32; 34 thru 39. While it is suggested that this format
continue, the policy document will also cover significant budget influences and discuss the
strategies which may be utilized to address these influences as the budget document and budget
planning evolves for FY 2020 and beyond.
The regional economic environment remains relatively stable among key financial, housing,
employment, visitation and demographic indicators. Taxable value County wide has increased
for the seventh (7th) consecutive year and the tax base is at an all-time high. The County’s credit
rating remains “investment quality” among all three major rating agencies under a stable
outlook; general governmental and enterprise fund cash balances are strong, despite funding a
$140 million-dollar Hurricane clean-up; reserves meet policy standards for a coastal
community; and the County is positioned when necessary to access the credit market for
strategic capital projects.
County median home prices have consistently reached the low to mid $400K value for most of
calendar 2018 and, the November 2018 value totaled $427K. Single family home sales have
dropped consistently from a high of 530 units in May 2018 to 343 in November 2018. November
2018 destination visitation is up 4.7% year over year, and the January to November 2018
visitation is up 2.2% over the same 2017 period. Direct visitor spending also increased for the
January to November 2018 period by 3.9%. Visitation remains strong and the destination
marketing program is expected to keep Collier County a prime location for tourists. While
trending down from a 2018 high of 368 permits issued in July 2018, new construction permitting
for November 2018 is consistent with typical fall period numbers at 242 permits issued albeit
below the 12-month average of 283 issued permits. The County’s unemployment rate remained
at 3.0% in November 2018 which continues below the state and national averages.
While the regional economy continues to remain stable, senior leadership regularly evaluates
all economic indicators and the organization is always positioned financially to respond quickly
if necessary to softening economic conditions.
Hurricane Irma Budgetary and Financial Impact
It’s been 17 months since landfall of Hurricane Irma and the County through the end of January
2019 has spent $105.5 million on restoration of the community in the aftermath with an
additional $32.3 million appropriated in FY 2019 for remaining clean-up activities.
Reimbursement revenue from insurance proceeds and FEMA received through 1/31/19 total
$27.8 million. The timing of further reimbursements will be monitored in FY 2019 and budget
management decisions within the General Fund and Unincorporated Area General Fund
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including paring back $13 million in General Fund cash support appropriated for public utilities,
parks and facilities capital will be considered. The challenging part with any major tropical event
is the level of coordination and preparedness required and engaging the community from a
readiness standpoint. Financially, the County is always prepared to cash flow and expend
appropriated dollars to restore the community from any natural disaster.
As a reminder, to cash flow a natural disaster, three specific budget techniques are utilized. First,
in funds where sufficient cash exists, FEMA revenue is budgeted, and corresponding expense
budget appropriated anticipating some level of reimbursement in the coming months/years. Note
that there is no cash behind budgeting FEMA revenue. Existing and routine incoming fund cash is
relied upon until the receipt of FEMA revenue. Second, existing capital project budgets are
reviewed and re-allocated were appropriate. Third, general governmental and enterprise reserves
are drawn down in appropriate and prudent amounts.
The following summary table updates the extent of budget deferrals necessary to fund Hurricane
Irma recovery as of January 22, 2019.
Fund Category FEMA Revenue
Budgeted
Capital Project
Deferral
Reserves
(Reduced)
Total
Budget
General Governmental $15,747,600 $14,834,900 $26,990,700 $57,573,200
Enterprise $7,500,000 $41,557,700 $22,300,000 $71,357,700
Constitutional - Sheriff $4,500,000 $4,500,000
Total $23,247,600 $56,392,600 $53,790,700 $133,430,900*
*Does not include $4.3 million in payroll expense
Of the $105.5 million spent through the January 22, 2019, approximately 60.0% is associated with
community wide debris removal; 7.6% is appropriated for debris removal from canals; and the
remaining 32.4% was spent for various structural repairs and damage to the transportation network,
parks system, general governmental buildings, landscaping and water and wastewater systems.
The County has been awaiting a partial reimbursement exceeding $45 million from FEMA through
the State of Florida for months to pay for debris clean-up which underscores the importance of
local governments ability to cash flow natural disasters.
If reimbursement revenue is delayed further – well into the last quarter of FY 2019 and FY 2020,
typical operational and capital transfers out of the General Fund and Unincorporated Area General
Fund may be cut/delayed protecting cash balances and existing capital dollars deferred will not be
restored until reimbursement revenue is received. Likewise, delays in receipt of FEMA
reimbursements which are funneled through the State will mean that certain enterprise capital
projects will continue to be postponed.
General Budget Planning
The FY 2020 budget plan will allocate funding for recurring operational expenses albeit limited
and continue funding for replacement capital infrastructure and maintenance as well as new capital
initiatives not funded through the local option infrastructure sales tax. Capital and operational
programming continue to compete for limited resources which always is a pressure point as
appropriation decisions are made for the General Fund (001) and Unincorporated Area General
Fund (111). That said, the budget document must continue to remain flexible - a key component
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of the budget management process and widely recognized by those agencies who are consumers
of the County’s budget data and offer financial ratings of our agency.
The budget as a flexible financial planning document will be subject to many changes in FY
2020 with several financial variables yet to be determined, including;
• Tax policy decisions by the Board will determine the level of budget flexibility which
may be achieved with passage of the Local Option Infrastructure Sales Tax.
• With no storm-water utility and related fee for FY 2020, the General Fund and
Unincorporated Area General Fund will be the default funding source. Depending upon
the Board’s desired storm-water service level, actual taxable value and overall budget
submissions capital transfers in other general governmental areas like transportation,
parks, facilities and operating transfers may be reduced.
• Board policy guidance on issues like workforce housing and mental health.
• Timing of FEMA and other Hurricane Irma reimbursement revenue.
• Level of General Fund transfer support to the constitutional officers and specifically the
Sheriff.
Annual Budget Policies Adopted
Significant Budget Influences:
Each fiscal year based upon fiscally conservative budgetary guidance, limited resources are
allocated to competing services, programs, projects and capital initiatives. Within the pyramid of
service and program delivery, significant resources have and will continue to be devoted to public
safety, public health, debt management and replacement of priority mission critical infrastructure
and equipment. Property (ad valorem) taxes will once again dominate the County’s budgetary
revenue mix which for FY 2019 comprise about 44% of total net recurring annual operating
revenue and 69% of General Fund recurring revenue sources (less the revenue reserve). Eighty
(80%) of General Fund revenue is comprised of property taxes, sales tax and state shared revenue.
Ad Valorem
44%Gas/Sales Tax
7%
Permits/
Assessments/
Fines
8%
Intergov'tal
Revenues
2%
Service
Charges
31%
Impact Fees
5%
Bond
Proceeds/
Interest
3%
Sources of Current County Government
Operating Revenues all Funds (FY 2019)
Ad Valorem
69%
Sales Tax
9%
State Revenue
Sharing
2%
Intergov'tal
Revenues
1%
Fines,
Permits,
Charges
3%
Inter
est &
Misc.
0%
Carryforward
9%
Interfund
Transfers and
Payments
5%
Transfers from
Consitutional
Officers
2%
FY 2019 General Fund Revenue Sources
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Thus, significant attention is paid to ad valorem taxes and those factors that can influence millage
rate and tax levy decisions. The decision to develop the FY 2020 budget around the rolled back
rate, millage neutral rate or other rate is a key decision made by the Board and this decision will
determine the level and extent of operational, capital and constitutional funding. Under millage
neutral policy guidance applied to the tax base planning scenario, the FY 2020 General Fund levy
will increase $12,587,900 over FY 2019. Under a rolled back tax rate policy, the General Fund
Levy will increase $7,721,500 which is a $4,866 400 levy loss from millage neutral. The following
points are noteworthy in considering general governmental tax policy for FY 2020.
• The County’s current General Fund millage rate of $3.5645 has been levied for the past ten
(10) years or since FY 2010. During the recession when taxable value dropped some $24
billion, this millage rate levy adopted by the BCC pursuant to policy r equired General Fund
budget reductions totaling $123 million between FY 2009 and FY 2013. Conversely, keeping
the millage rate neutral since FY 2014 when taxable value began increasing has allowed the
County to raise $98.3 million in additional dollars above the rolled back rate to fund general
governmental capital and operating programs cut during the recession or to maintain levels of
service deemed important by the BCC as part of annual budget guidance.
• Levying the rolled back rate in FY 2020 based upon a planned 4% increase in the tax base
would result in a $7.7 million dollar increase over the FY 2019 levy, but a reduction of $4.9
million if millage neutral was applied to the planned tax base increase. The concern is not year
one of levying the rolled back rate, it is the cumulative effect should the Board decide that
rolled back rate is the new normal; or the rolled back rate is abandoned when the tax base
decreases, and millage neutral then becomes the tax policy because the rolled back rate
increases as the tax base declines.
• Property taxes comprise 69% of total General Fund revenue.
• If the Board had voted to levy the rolled back rate in FY 2019, $9 million in General Fund
capital and or operating program cuts would have been necessary. This level o f budget
adjustment would not be accomplished by reducing reserves since reserves are an integral
component of preserving General Fund cash at year end; provide a signal of financial strength
to the rating agencies; and serve as financial leverage for unfo reseen natural disasters and/or
shifts in Board policy mid-year. Cuts would have likely come from reduced capital transfers
funding transportation system improvements, storm-water and parks; elimination of all
expanded requests funded by the General Fund required to service new facility improvements
and current service County Manager Agency operating reductions.
General Fund
85%
MSTU's 2%
Pollution
Control 1%
Unincorporated
Area General
Fund 12%
Property Tax by Major Funds
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• Programmed within the General Fund for FY 2019 is roughly $18 million dollars supporting
various general governmental capital initiatives in the areas of transportation, parks and
recreation, storm-water, airports, museums and of course all constitutional capital requests.
• Constitutional operating transfers out of the General Fund (less paid by Board requirements)
constitute 50.7% of all General Fund appropriations. While the Board can control these
appropriations, based upon history it is not likely that cuts would be made to constitutional
officer operations, especially the Sheriff. School safety officer programming will impact the
sheriff’s budget significantly adding about $3.0 million per year over the next four (4) years
unless some level of offset is offered by the State and/or School District.
• Of the $435.9 million-dollar FY 2019 General Fund Budget only about 27 percent or $119.3
million is considered somewhat discretionary. The remaining appropriations are classified as
Health, Safety and Welfare; Debt Service and or Mandates where there is very limited to no
discretion over appropriations.
Property tax revenue comprises 72% of Unincorporated Area General Fund recurring operating
revenue sources and when including the Communication Services revenue sharing from the State
the revenue mix jumps to 79%. Continued reduction in state shared communication services tax
revenue or worse will significantly impact general governmental services appropriated in this fund.
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Like the General Fund, a significant amount of flexibility exists within the Unincorporated Area
General Fund if a response to any state shared revenue reduction is required. This response
would have an impact to general governmental operating programs and capital transfers.
New General Governmental Initiatives:
New general governmental capital improvements/initiatives over the next few years include:
potential acquisition of the Golden Gate Golf Course or other strategic opportunity land
purchases; hardening County facilities in preparation for natural disasters and the related grant
match; upgrades to IT infrastructure and the County’s various management, financial and
accounting software like SAP; constructing and operating amateur sports complex facilities; Big
Corkscrew Regional Park capital and operations; Sheriff’s capital projects including a new
evidence facility; school safety officer recurring funding; Vanderbilt Beach Road extension;
bridge rehabilitation and replacement; anticipated Board enhancements in storm-water
maintenance service levels as well as capital infrastructure upgrades; increasing Collier Area
Transit subsidy; Airport system capital grant matches for runway rehabilitation, terminals, etc.; .
Whether paid by cash, financed or funded through the Local Option Infrastructure Sales Tax,
operating and maintaining this enhanced level of infrastructure improvement will require
substantial investment of scarce and limited general governmental operating revenue which is
predominately property taxes.
Recognizing the County’s growing future general governmental asset maintenance
responsibility, a new fund will be created for FY 2020 fencing off dollars in incremental amounts
up to $5 million annually dedicated to protecting the County’s future hard and soft infrastructure
investment. Regular annual deposits to this fund – like the County’s vehicle replacement funds-
emphasizes the need to isolate dollars for this future asset maintenance obligation knowing the
many competing programs, services and initiatives must receive dollars from a limited resource
pool.
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Each year as new general governmental capital improvements are brought on line pursuant to
Board policy, the level of operations required to support these facilities grows. Not lost are the
regular contributions to CRA’s and innovation zones which grow annually as the tax base
increases, assuming no change in tax rates, and these dollars while supporting development and
incentives in targeted areas represents reduced dollars to support general governmental services.
General Fund and Unincorporated Area General Fund contributions to CRA’s for FY 2019 total
$5.3 million and 473K respectively and these numbers will grow in FY 2020 with two more
innovation zones activated.
Other factors that will be significantly impacted by general governmental tax policy include;
1. Extent of capital, debt and operational transfer dollars expended by the General Fund and
Unincorporated Area General Fund. In the numbers estimate above, a $4.9 million General
Fund revenue loss between millage neutral and rolled back will impact mostly capital
transfers and recurring operations. Levying the rolled back rate in the Unincorporated Area
General Fund will result in a loss of $415,900 to capital transfer appropriations.
2. Level of service standards set by the Board for agencies and departments which are funded
within the General Fund and Unincorporated Area General Fund.
3. Proper level of resources to cover the organization’s current and future asset maintenance
responsibility. Competing priorities between operating and capital expenses within a
revenue structure heavily reliant upon property taxes.
4. General Fund and/or Unincorporated Area General Fund support for new or re-prioritized
operating and capital initiatives like general governmental facilities maintenance;
transportation system improvements, storm-water, median landscaping, asset management,
equipment replacement, economic development; tax increment financing initiatives; EMS
capital; Constitutional capital; workforce housing; amateur sports complex management
and maintenance; natural disaster hardening including wildfire mitigation; social service
programming; IT hardening and management software upgrades; and/or other unforeseen
operational or capital policy directives.
5. Impacts of potential unfunded mandates including continued state legislative attacks to
limit a counties home rule ability to raise property tax revenue and repeated attempts to
reduce existing shared revenue sources like the Communication Services Tax (CST);
school safety officer mandates without recurring state funding; further reductions in state
health care and social service funding as well as impacts from any reduction in federal
payment in lieu of taxes (PILT) funding.
6. Level of General Fund Ad Valorem operating support extended to constitutional officers
and specifically the Sheriff.
What will not be impacted by the Board’s tax policy decisions are:
1. Maintaining sufficient beginning year General Fund and Unincorporated Area General
Fund cash balance;
2. Policy driven growth in general governmental reserves;
3. Payment on the County’s debt service; and
4. Maintaining the County’s excellent investment quality credit rating.
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Discussion of Taxable Values, Millage Targets for the General Fund (County-Wide) and
Unincorporated Area General Fund and Related FY 2019 Budget and Financial Strategies
While the county-wide tax base has increased for seven (7) consecutive years, maintaining a
millage neutral policy position remains the recommended objective.
The following table provides a history of Countywide and Unincorporated Area taxable values
over the past twelve (12) years (tax year 2007-2018) as well as the budget planning projection for
tax year 2019 (FY 2020).
Tax Year
County Wide
Taxable Value
County Wide %
inc. (dec)
Unincorporated
Area Taxable Value
Unincorporated
Area % inc. (dec.)
2007 (FY 2008) $82,542,090,227 -------------- $53,397,231,747 -------------
2008 (FY 2009) $78,662,966,910 (4.7%) $50,860,023,424 (4.8%)
2009 (FY 2010) $69,976,749,096 (11.0%) $44,314,951,279 (12.8%)
2010 (FY 2011) $61,436,197,437 (12.2%) $38,146,886,403 (13.9%)
2011 (FY 2012) $58,202,570,727 (5.2%) $36,013,774,963 (5.6%)
2012 (FY 2013) $58,492,762,303 .50% $36,026,786,779 .04%
2013(FY 2014) $60,637,773,315 3.7% $37,207,018,234 3.3%
2014 (FY 2015) $64,595,296,747 6.5% $39,634,174,211 6.5%
2015 (FY 2016) $70,086,389,131 8.5% $43,075,586,559 8.7%
2016 (FY 2017) $77,115,163,725 10.0% $47,455,161,371 10.2%
2017 (FY 2018) $83,597,615,791 8.4% $51,754,136,138 9.1%
2018 (FY 2019) $88,286,266,672 5.6% $54,781,508,980 5.8%
2019 (FY 2020)
Planning $91,817,717,339 4.0% $56,972,769,339 4.0%
The December 2018 State Ad Valorem Estimating Conference Report was released recently for
the 2019 tax year (FY 2020). The report projects that Collier County certified taxable values on
July 1, 2019 will increase 6.1%. This number is aggressive. Staff hav e been adept over the years
at sizing the budget around a conservative yet functional taxable value planning number
considering that most budget planning is over before the certified taxable value number is received
from the Property Appraiser.
The taxable value estimate must allow for operational and capital programming needs as well as
reserve growth. Budget planning around a 4.0% taxable value increase is realistic. Any positive
difference in taxable value above the planning ceiling assuming a resulting increase in ad valorem
revenue at millage neutral can be used to strengthen the Board’s General Fund and Unincorporated
Area General Fund reserves and/or be applied to recurring and new programs, services and
initiatives as directed by the Board.
Property tax revenue comprises 69% of the General Fund (001) and 31% of the total net county
recurring revenue budget, including fund balances. From new money sources, which excludes fund
balance, property taxes comprise 44% of available total net operating revenue sources. According
to the Tax Foundation web site local government property tax collections as a percentage of all
general governmental collections for municipalities within the Southeast region total 66.4%.
The General Fund and Unincorporated Area General Fund tax or “millage” rate has varied over
the years and has been influenced by the taxable value environment and State legislation.
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Tax or “millage” rates for the past fourteen (14) years are shown in table form below.
Millage Area FY 06 FY 07 FY 08 FY 09 FY10-FY16 FY17-FY19 FY 20
Planning
General Fund $3.8772 $3.5790 $3.1469 $3.1469 $3.5645 $3.5645 $3.5645
Unincorporated
Area General Fund
$.8069 $.8069 $.6912 $.6912 $.7161 $.8069 $.8069
The following table depicts taxable values and levies at various tax base increase scenarios under
a millage neutral rate and one scenario which depicts the roll back rate at the policy planning
scenario. The County Manager is proposing to maintain the General Fund tax rate at millage
neutral or $3.5645 per $1,000 of taxable value. Likewise, the Unincorporated Area General Fund
tax rate will be recommended at $.8069 with the incremental rate above current millage neutral or
$.0908 earmarked to fund the unincorporated area landscape median program which will
temporarily shift to solely a maintenance program for cost reasons after three years of capital
construction. The respective General Fund and Unincorporated Area GF dollar values at the
various scenarios are shown below.
Current Taxable
Value Pre VAB
FY 2020 @ 4%
applying projected
FY 2020 RB Rate
FY 2020 @ 3% FY 2020 @ 4%
Policy Planning
Numbers
FY 2020 @ 5% FY 2020 @ 6%
General Fund 88,286,266,672 91,817,717,339 90,934,854,672 91,817,717,339 92,700,580,006 93,583,442,672
Unincorporated Area
GF 54,781,508,980 56,972,769,339 56,424,954,249 56,972,769,339 57,520,584,429 58,068,399,519
Current Levy
General Fund 314,696,398 322,417,914 324,137,289 327,284,253 330,431,217 333,578,181
Unincorporated Area
GF (Operating) 39,229,039 40,382,299 40,405,910 40,798,200 41,190,491 41,582,781
Unincorporated Area
GF (Landscape Cap) 4,974,161 5,173,127 5,123,386 5,173,127 5,222,869 5,272,611
Unincorporated Area
GF at $.8069 44,203,200 45,555,426 45,529,296 45,971,328 46,413,360 46,855,392
4% - Variance
applying the
projected FY 2020
RB Rate from
Current Levy
3% - Variance
from Current Levy
4% - Variance
from Current Levy
5% - Variance
from Current Levy
6% - Variance from
Current Levy
General Fund
(millage neutral)
7,721,517 9,440,892 12,587,856 15,734,820 18,881,784
Unincorporated Area
GF (Operating)
1,153,260 1,176,871 1,569,162 1,961,452 2,353,742
Unincorporated Area
Landscape Median
Program at $.0908
millage neutral
198,966 149,225 198,966 248,708 298,450
Total Unincorporated
Area GF
1,352,226 1,326,096 1,768,128 2,210,160 2,652,192
If taxable values fall below the four (4.0) percent planning scenario, budget planning will be
reduced accordingly. Conversely if taxable values exceed the planning benchmark, additional ad
valorem dollars can be used to increase reserves and/or applied to programs and services as
directed by the Board. It is likely that budgeted ad valorem revenue will be millage rate driven
rather than a strategy of setting the millage rate based upon a targeted ad valorem revenue number.
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Summary of Significant FY 2020 Proposed Budget Strategies to Achieve a Structurally
Balanced Budget
The following table highlights certain FY 2020 budget strategies which will be detailed within this
document and which the Board will consider as part of Adopted Budget Policies.
1 The County Manager is proposing to submit one FY 2020 millage neutral General
Fund (001) operating budget along with service level and related budgetary and
millage implications. Designate approximately sixty-three (63) percent of the planned
property tax revenue increase after constitutional transfers and satisfying reserve
requirements to capital initiatives with the remaining thirty-seven (37) percent after
constitutional transfers and satisfying reserve requirements to cover operations and
recurring costs due to any expanded services. Planning for recurring operating cost
increases of 1.5% is below the identified CPI increase of 2.9% and will result in
department reductions within strategic identified areas to meet budget guidance.
2 Proposed guidance for the Unincorporated Area General Fund (111) includes
maintaining the millage rate at $.8069 and earmarking $.0908 or the marginal increase
above the current operating millage rate to continue funding the median landscape
program which will temporarily shift to solely a maintenance program for cost reasons
after three years of constructing capital medians deferred during the recession. The
operating millage rate of $.7161 will be used to fund reserves at policy levels and fund
recurring and/or any expanded operations as well as capital transfers.
3 County Manager agency expanded services will be limited to staffing new Board
approved capital facilities or Board directed level of service adjustments. County
Manager Agency personal services for FY 19 grew by $9.3 million to $180.6 million or
49.8% of total Collier Co. government personal services. Constitutional budgeted
personal services for FY 19 grew by 12.5 million to $181.9 million.
4 Pursue a strategy in FY 2020 which continues to place a premium on current
infrastructure replacement/maintenance on a pay as you go basis and integrate capital
financing where prudent and economically appropriate pursuant to the Debt
Management Policy. No debt will be programmed as part of the adopted budget.
Instead, any financing will be part of the amended budget based upon policy
directives.
5 Recognizing the County’s mounting future general governmental asset maintenance
responsibility, a new capital reserve fund will be created for FY 2020 fencing off
dollars in incremental amounts up to $5 million annually dedicated to protecting the
County’s future hard and soft infrastructure investment. Regular annual deposits to this
fund – like the County’s vehicle replacement funds- emphasizes the need to isolate
dollars for this future asset maintenance obligation knowing the many competing
programs, services and initiatives must receive dollars from a limited resource pool.
6 Continue budget parameters for enterprise operations which are tied to working capital
guidelines established by GFOA; capital obligations from the capital improvement
element (CIE); any rate or fee studies stipulations; priority agency wide initiatives; and
statutory or ordinance spending limitations. A critical review of reserve levels versus
capital appropriations will be discussed during budget deliberations especially
considering the recent hurricane.
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7 Continue General Fund (001) county-wide debt and capital transfers at an amount
equal to or less than a 1/3rd mil equivalent to cover regular special obligation revenue
bond debt service; provide loans to the impact fee trust funds to cover the debt service
gap due to insufficient impact fee collections; fund park’s capital; support airport
capital grant matches; fund constitutional officer capital needs; and to help pay for
critically needed general governmental facility repairs.
8 The FY 20 budget planning model under a millage neutral tax rate for FY 2020
allocates $9.2 million dollars from the General Fund and Unincorporated Area General
Fund toward existing storm-water infrastructure maintenance and operations under the
assumption that replacement and new storm-water capital projects would be financed
as part of a larger general governmental debt issue. This represents a $1.0 million
increase over FY 2019 for maintenance and operations. Increases for maintenance and
operations above the planning model based upon Board direction.
9 The FY 2020 planning model at millage neutral increases the park capital general
governmental recurring transfer by $1.0 million to $3.85 million.
10 The method for cash flowing the projects earmarked for funding as part of the Local
Option Infrastructure Sales Tax initiative may involve a fiscal year draw on General
Fund Reserves and gap financing through the issuance of Commercial Paper through
the Florida Local Government Finance Commission – which the County is a charter
member. Most important is continuing to increase General Fund reserves consistent
with policy. A separate section of this policy document will discuss the budgeting and
cash flow process to ensure smooth execution of funded sales tax projects.
11 Establish General Fund contingency reserve at 2.5% of total budgeted appropriation
(less capital/debt transfers). Grow the General Fund cash balance reserve by
$5,600,000, bringing total reserves to $50.1 million. This growth in the General Fund
reserves is extremely important to protect the funds beginning FY cash position,
present a position of financial strength to the rating agencies, avoid more aggressive
expenditure controls as budget margins tighten and position the County to become
more self-reliant knowing that federal and state funding as well as funding guidelines
will continue to tighten and become more onerous. Also, as much as $20 million of
reserves may be drawn each year during FY 19 and FY 20 to cash flow certain projects
funded as part of the local option infrastructure sales tax program. Any reserves drawn
would be re-paid within two to three months as sales tax proceeds are received.
12 Use gas tax revenue to support road capital, maintenance and debt (with an emphasis
on debt) consistent with budget planning and statutory requirements.
13 Continue dialog on future new sustaining revenue sources intended to diversify the
composition of the County’s general governmental revenue mix.
Component increases of 1.5% devoted to operations at the department level is planned. This means
that department operations for FY 2020, which rely on the General Fund and Unincorporated Area
General Fund for dollars, will be restricted to a one and one-half percent (1.5%) increase for current
programs and services as well as any expanded services. This includes operating transfers. For FY
2020, the percentage operating adjustment will be translated into a dollar value for each department
head to allocate as priorities dictate.
Limited general governmental operational expense increases are expected and will be appropriated
to account for new programs and services instituted during FY 2019, inflationary adjusted fixed
costs and maintaining a competitive compensation package. The December 2017 over December
2018 CPI is 2.9 percent.
A significant portion of remaining budget planning dollars will be applied to Agency wide capital
equipment, asset replacement and new capital projects not covered by the local option
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infrastructure sales tax or impact fees. This will manifest itself primarily through General Fund
and Unincorporated Area General Fund capital transfers for general governmental and
constitutional facilities, the transportation network, parks, storm-water and heavy equipment.
For FY 2020 planning purposes and discussion in this policy document, the total General Fund
Budget is represented to increase by $32,093,500. The following table depicts by category the
revenue and expense positive or negative changes connected with the FY 2020 General Fund
Planning Budget and the variances from FY 2019. Also shown for comparison are the budget
variances by category between FY 2018 and 2019.
Major Revenue Variances: Variance between FY 2019
and Planning FY 2020
Variance between
FY 2018 and FY 2019
Ad Valorem Taxes $12,510,700 $16,786,800
Sales Tax 0 2,000,000
Revenue Sharing 0 1,000,000
Department Revenues (95,000) 35,500
Enterprise and Federal PILT and Cost Allocation 393,700 1,854,600
Transfer Revenue (12,685,400) 11,332,200
Carryforward 32,590,300 (10,050,500)
Less 5% Required Revenue Reserve (620,800) (1,008,600)
Total Revenue Increases $32,093,500 $21,950,000
Major Expenditure Variances
County Manager, Court’s and Other General
Operations $1,166,800 $4,923,600
Operating Transfer’s 3,141,300 2,823,200
Capital Transfer’s 4,042,000 (4,243,000)
Sheriff Transfer 10,540,700 12,568,700
Other Constitutional Transfer’s 1,375,000 1,846,600
Reserves 11,827,700 4,030,900
Total Expenditure Increases $32,093,500 $21,950,000
Several observations can be made from this table. As we have noted continuously throughout this
document, property tax revenue dominates general governmental funding. Of significance also is
the importance of a healthy carry-forward (fund balance) at year end which influences expenditure
planning and the respective capital and operating allocations. Maintaining a healthy fund balance
requires priority funding of reserves as indicated in the analysis above.
The increase in General Fund carryforward planned at year ending 9/30/19 is directly related to
proactive budget management knowing that reimbursement revenue from FEMA and the State
covering certain eligible Hurricane Irma expenses will not be timely. Most of this positive
carryforward variance is the result of actual operating revenue received during FY 2018 over
forecast of $8.3 million. Operating expenses in FY 2018 were $4.3 million less than expected in
forecast and certain capital transfers totaling $5.3 million were deferred. Money budgeted to be
transferred out of the General Fund to various capital project funds for Hurricane Irma cash flow
purposes totaling $14.7 million were not made because sufficient cash exists within the designated
funds. However, these cash flow transfers have been re-budgeted in FY 2019 should the need arise.
The increase in reserves represents a regular managed increase of $5.8 million consistent with
policy planning standards plus a set aside of $6 million to support if necessary transportation
capital projects like intersection improvements and bridge rehabilitation which were deferred to
cash flow canal debris removal associated with Hurricane Irma. Receipt of reimbursement revenue
for canal clean up if any may take months and certain postponed projects may require funding
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which is sourced from the General Fund. A positive outcome for FY 2018 and that forecasted in
FY 2019 is the increase in impact fee collections which has lowered projected FY 2020 General
Fund contributions to the impact fee trust funds necessary to growth related debt service by $1.4
million. While not a trend due to the extreme volatility of impact fee collections, these increased
collections over budget is a contributing factor allowing for a greater level of capital transfers
planned in FY 2020 to Parks, Storm-Water and the Transportations System.
Each new program, service, initiative or capital facility has recurring funding obligations and the
layering effect becomes magnified each fiscal year. Whether staffing the Eagle Lakes recreational
complex, Big Corkscrew Regional Park, economic development incentive zones, Storm-Water
programming, senior facility initiatives, buying land, affordable housing, social services, public
safety facilities, school safety officer funding or the myriad of other current or future funding
requirements; the County’s investment in public safety and servicing a demanding citizenry
requires stable resources and currently that stable resource is primarily property taxes.
As a balancing measure, budget management is always ongoing and more magnified as the County
awaits its due reimbursements from paid expenses associated with Hurricane Irma. Close
expenditure controls are always in place and monitored continually. Likewise, execution patterns
are scrutinized along with transfer dollars to make sure that appropriations are properly executed
and spent for the intended purpose.
While it is important to always recognize our ongoing program, service and capital commitments
which have made Collier County a premier location to “Live, Work and Play”, the level of dollars
devoted to this crucial goal must be measured against the continued need to maintain prudent
reserve levels; protect against any revenue shortfalls; guard against any assault by the state
legislature on the ad valorem and general county tax/revenue structure; and fulfill public
expectation to maintain/enhance service levels. Maintaining sufficient General Fund cash is
always a major focus and by policy the cash position is set at a minimum of 10% of actual
expenditures. Given our current General Fund reserve levels and cash flow requirements, it has
been prudent to maintain a cash position in this fund of between 15% and 20% of actual expenses
and based upon year ending FY 2018 numbers that cash position would be between $55 million
and $72 million. The actual General Fund cash position at year ending 2018 totaled $62,924,200.
-$40
-$30
-$20
-$10
$0
$10
$20
$30
$40
FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY19MillionsGeneral Fund Budget Reductions
Changes in the Adopted Budget Mid-Year Budget Reductions
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Local Option Infrastructure Sales Tax:
The Office of Management and Budget continues to work collaboratively with the Clerk of
Court’s Finance section to set up the appropriate account structure necessary to budget, track,
manage and report on all aspects related to collecting and spending Local Option Infrastructure
Sales Tax proceeds. Sales Tax Capital Fund (318) has been created and a base budget will be set
up consisting of at least thirteen (13) cost centers within Fund (318) intended to capture capital
expenses by functional area such as public safety; physical environment; transportation; culture
and recreation and general governmental consistent with generally accepted accounting
principles. Funded programs will be created within each cost center to specifically capture
detailed expenses by designated projects which will be approved by the Board and provide the
necessary budget, and reporting structure to reconcile actual expenses against budget. Sales Tax
proceeds will be deposited within one cost center sufficient for reporting purposes.
It is expected that initial sales tax revenue will be received toward the end of March 2019. It is
expected that many projects will be ready for Board approval and subsequent award before there
is sufficient sales tax revenue available. Therefore, the ability to cash flow projects as part of the
appropriation process will be necessary. Using Commercial Paper (CP) is the obvious approach
with the intent on paying off any CP issued promptly upon the receipt of sufficient sales tax
proceeds to avoid payment of interest for an unreasonable length of time. The exact amount of
any bridge financing will be determined based upon the specific timing of projects set for
approval and execution, the amount of budget required, and specific sales tax proceeds received.
Most likely, staff will approach the Board with a general CP resolution in the summer/fall in a
not to exceed amount in the $200 million range and then draw funds as necessary for cash flow
purposes. Adopting the general CP resolution does not obligate the County to draw funds. It
simply positions the County to draw funds timely in incremental amounts as necessary to
expedite setting up the required budget and required contract approval.
It is too early to tell what level of budget flexibility might be achieved from the Local Option
Infrastructure Sales Tax. But from the list below, it is reasonable to think that cash and carry
transfers typically dedicated as part of general governmental capital transfers for EMS facilities
and general governmental facility maintenance would depending upon spending patters provide
the best opportunity for near term flexibility.
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The following projects are slated for funding pursuant to Ordinance 2018-21.
Future General Governmental Capital Improvements
Long Term Capital Reserve
Recognizing the County’s mounting future general governmental asset maintenance
responsibility, a new Reserve Fund will be created for FY 2020 fencing off dollars in
incremental amounts up to $5 million annually dedicated to protecting the County’s future hard
and soft general governmental infrastructure investment. Regular annual deposits to this fund –
like the County’s vehicle replacement funds- emphasizes the need to isolate dollars for this
future asset maintenance obligation knowing the many competing programs, services and
initiatives must receive dollars from a limited resource pool.
Capital Asset Management
Each year a significant portion of available annual resources are devoted to the maintenance and
management of the County’s general governmental infrastructure base. This strategy will continue
knowing that proceeds from the Local Option Infrastructure Sales Tax can only be used for capital
construction not maintenance and that the proceeds will be applied to specifically identified and
strategic capital projects. The current pay as you go strategy recognizes that satisfying all new
planned and programmed capital requirements over the next five (5) years will require some level
of financing despite the local option infrastructure sales tax. The new general governmental debt
component will likely finance identified replacement and new storm-water capital projects; phase
two of the Big Corkscrew Regional Park; payoff the variable rate commercial paper draw used to
purchase the Amateur Sports complex property and other identified Board initiatives that might be
ripe for financing.
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Augmenting the annual cash and carry component of infrastructure maintenance is the new FY
2020 initiative to set aside dollars in a separate reserve fund for future infrastructure maintenance.
Despite the challenge, available resources will continue to be allocated in the most prudent and
economical manner to fund operations at required service levels and construct and maintain
strategic capital improvements.
The following table provides a description of historical budget allocations and what is currentl y
planned in FY 2020 from the General Fund budget to support ongoing asset maintenance, strategic
new capital requirements; and fund growth and non-growth debt obligations.
Category
General Fund
Non-Growth
Debt
Loans to
Impact Fee
Funds -
Debt
Loans to
Impact Fee
Funds –
Projects*
County
Wide
Capital
Transfer for
other Capital
Transfer to
Parks
Transfer to
Road
Network
Transfer to
Storm-
Water
Long Term
Replacement
Capital
Reserve
Total
FY 2014 $3,657,700 $4,342,300 $0 $6,841,400 $3,800,000 $0 $8,768,800 $4,730,100 $0 $32,140,300
FY 2015 $3,079,600 $3,307,100 $7,813,200 $7,788,600 $3,441,200 $500,000 $9,499,900 $4,627,600 $0 $40,057,200
FY 2016 $3,077,500 $5,376,500 $900,000 $10,677,500 $4,333,100 $750,000 $14,559,800 $1,549,600 $0 $41,224,000
FY 2017 $3,073,000 $2,476,900 $0 $10,697,500 $4,000,000 $2,495,700 $8,460,000 $2,525,000 $0 $33,728,100
FY 2018 $2,855,200 $3,306,800 $2,000,000 $12,006,000 $4,313,500 $1,100,000 $11,650,400 $1,627,000 $0 $38,858,900
FY 2019 $3,479,400 $3,958,700 $216,200 $11,160,800 $645,000 $1,100,000 $8,555,800 $2,500,000 $0 $31,615,900
FY 2020 $3,609,400 $2,799,000 $0 $9,427,000 $1,666,700 $2,100,000 $9,555,800 $3,500,000 $5,000,000 $37,657,900
*FY 2015: EMS Station, SOE Complex, & Sheriff Substation. FY 2016: Additional funding for Sheriff Substation. FY18: EMS Station.
FY 19 EMS Station.
For FY 2020, funding as planned above will of course be subject to Board guidance on millage
rates and taxable property values received in July 2019. Factoring out planned Constitutional
Officer transfers, countywide capital and debt service expenses contained within the planning
model amounts to 16.8% of General Fund planned appropriations for FY 2020. The General Fund
regularly appropriates substantial dollars to new general governmental capital and asset
replacement projects benefitting all countywide residents. This level of capital planning which
generally translates into approved budget appropriations provides part of the highly desirable
budget flexibility which is essential to sound fiscal management. Preserving General Fund cash,
maintaining adequate reserves, protecting the County’s investment quality credit rating and paying
debt service will always take priority as expenditure planning evolves. Generally, these priorities
are strategically managed and sufficient allocations are made in harmony with other capital and
operating spending appropriations.
Robust capital contributions are also appropriated within the Unincorporated Area General Fund
to augment the County’s commitment to capital programming. The following table depicts these
planned capital contributions.
Category Unincorp.
Area General Fund
Transfer
to Parks
Transfer
to Roads
Transfer to
Storm-Water
Total
FY 2014 $0 $0 $1,300,000 $1,300,000
FY 2015 $500,000 $3,860,000 $1,050,000 $5,410,000
FY 2016 $500,000 $2,427,300 $4,011,800 $6,939,100
FY 2017 $750,000 $3,300,000 $4,172,000 $8,222,000
FY 2018 $1,250,000 $4,000,000 $4,267,900 $9,517,900
FY 2019 $2,750,000 $4,250,000 $3,000,000 $10,000,000
FY 2020 $1,750,000 $3,500,000 $3,000,000 $8,250,000
Non-growth-related debt serviced by legally available non-ad valorem revenue from the General
Fund ticked up in FY 2019 due to the issuance of Commercial Paper to purchase property where
the Amateur Sports Complex will be constructed. Through the County’s debt restructuring and
normal debt retirement, non-growth related annual revenue bond debt service paid from the
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General Fund has decreased from $8,154,400 in FY 2010 to $3,609,400 in FY 2020, a 56%
decrease.
Cumulatively since FY 2011 across all debt types (General Governmental and Business), non-
growth related annual debt service has dropped 37.8%. The FY 2020 impact fee loan projection
from the General Fund is planned to decrease year over year due primarily to an increase in general
governmental impact fee receipts over forecast.
Countywide capital allocations have traditionally included new money components for general
governmental capital projects as well as maintaining and replacing existing general governmental
infrastructure. The following chart provides a summary description of dollars programmed for
transfer in FY 2016, FY 2017, FY 2018, FY 2019 and that planned for FY 2020 for various
strategic general governmental capital initiatives. Except for the Domestic Animal Services shelter
improvement project and future EMS stations no projects within the table below are slated for
funding from the Local Option Infrastructure Sales Tax.
General Fund Supported Capital
Category
FY 16 Budget FY 17 Budget FY 18 Budget FY 19 Budget FY 20 Budget
Sheriff Orange Tree Sub-Station $900,000 $0 $0 $0 $0
EMS Station and Ambulance $0 $0 $2,000,000 $2,100,000 $0
Helicopter $2,000,000 $2,000,000 $1,250,000 $0 $0
Jail & other Sheriff Facility Repairs $664,200 $1,059,500 $4,100,000 $1,000,000 $1,000,000
Sheriff’s Accounting System Replacement $1,000,000 $0 $0 $0 $0
Voting Machines $0 $0 $345,000 $350,000 $350,000
800 MHz Public Safety Communication
System
$6,200,000 $3,525,000 $850,000 $0 $0
Domestic Animal Control Shelter $0 $0 $500,000 $0 $0
State & Regional Eco Development $475,000 $500,000 $0 $0 $0
Library Capital/Books $350,000 $450,000 $550,000 $850,000 $950,000
General Building Maintenance and A/C
Repairs not Sales Tax Funded
$1,500,000 $4,090,500 $5,250,000 $6,000,000 $5,000,000
Other General Governmental $488,300 $1,072,500 $411,000 $1,077,000 $2,127,000*
Museum Capital $200,000 $200,000 $313,500 $200,000 $200,000
Airport Capital (Grant Match) $313,100 $300,000 $1,000,000 $445,000 $1,466,700
General Governmental Vehicle
Replacement Supplement $1,500,000 $1,500,000 $1,750,000 $0 $0
Park Capital $1,070,000 $2,495,700 $1,100,000 $1,100,000 $2,100,000
Transportation Capital $14,559,800 $9,935,500 $11,650,400 $8,555,800 $9,550,800
Storm-water Capital $1,549,600 $2,525,000 $1,627,000 $2,500,000 $3,500,000
Total $32,770,000 $29,653,700 $32,696,900 $24,177,800 $26,249,500
*$2,127,000 = $1m SAP; $800k replenish reserves; balance is minor maintenance $327k for software costs.
Due to Hurricane Irma, capital dollars allocated within certain projects were repositioned in FY
2019 to cash flow repairs and/or soft costs for FEMA consulting services connected with the
reimbursement process. For example, while $2,100,000 was allocated to construct a new EMS
facility in FY 2019, a delay in execution of the project to FY 20 meant that $1,883,800 was re-
appropriated toward the Maguire FEMA consulting contract which is eligible for FEMA
reimbursement. Future EMS stations will be funded through the Local Option Infrastructure Sales
Tax. Likewise, $6,000,000 was originally allocated to Facilities Management for general building
repair and maintenance, $1,563,400 was diverted to cash flow hurricane repair efforts.
Direct capital maintenance funding for parks, transportation and storm-water related system
improvements and operations from the General Fund and Unincorporated Area General Fund will
increase modestly in FY 2020 under the current planning scenario from that budgeted in FY 2019
by $1,250,000 to $23,405,800. Of course, the allocation may change as the FY 2020 budget
evolves leading into the June workshop, once taxable values are known, and budget requests are
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vetted. This allocation includes dollars to maintain the transportation network, dollars for road
resurfacing, intersection improvements, bridges, storm-water, airport capital grant matching and
regional/community park system improvements.
Management has the flexibility to allocate these General Fund and Unincorporated Area General
Fund transfer dollars to mission critical projects or initiatives at the expense of those efforts not
deemed a high priority. This has and will continue to be the management strategy given the
competition for general government resources, uncertainty with the communication services tax,
heavy reliance upon property taxes and the natural hazards which can impact coastal communities.
Gas Taxes and Future Gas Tax Pledged Debt:
Gas tax dollars within Gas Tax Fund (313) totaling $1,000,000 annually have been freed up and
are available for system maintenance and improvements above that transferred from the General
Fund and Unincorporated Area General Fund beginning in FY 2015 due to restructuring of the gas
tax debt in FY 2012 and FY 2014 at substantially lower interest costs. These gas tax dollars not
devoted to paying debt service will be available annually until the debt expires in 2023 and 2025.
The County approved three separate ordinances levying the maximum local option gas taxes of 12
cents for purposes of paying debt service and maintaining the roadway system. All three
ordinances which extend for twenty (20) years are set to expire on or about December 31, 2025.
The Board should begin to consider extending each local option gas tax ordinance in the full 12
cent amount which can be accomplished by local authority. The first 11 cents (commonly referred
to as the 1 cent to 5 cents and 1 cent to 6 cents series) can be extended by a simple majority vote
of the Board while the 9th cent requires a super majority vote.
The strategy behind an early extension before December of 2025 involves capitalizing on greater
coverage ratios to wrap new debt of roughly $30 plus million around the existing low interest rate
maturities to fund necessary major transportation network improvements to segments like
Livingston Road, Airport Road, etc. which are approaching 20 years of useful life. Interest rates
on investment quality bonds remain low especially for Collier County. The Finance Committee
will continue to refine the concept and strategy and further information to the Board will be
forthcoming.
Use of Gas Taxes
Previously, the Board directed through policy that all available uncommitted gas taxes will be used
to support maintenance of the transportation network and related capital initiatives. Beginning in
FY 2019, no general governmental dollars will be transferred to the Gas Tax Fund (313). Instead,
general governmental dollars will be transferred to Capital Fund (310) supporting the maintenance
and improvement of the transportation network. This change was made to specifically track use of
gas tax proceeds in accordance with state statutes without any comingling of general governmental
money. Gas taxes are the pledged source of repayment on the current Series 2012 and Series 2014
Gas Tax Refunding Bonds.
Gas taxes collected in FY 2018 from all sources in totaled $22.7 million. When you consider the
payment of annual debt service ($13.1M), the remaining $9.6 million is programmed for
construction and maintenance of the transportation network consistent with strict statutory
guidelines.
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Augmenting transportation network improvements budgeted in Gas Tax Fund (313) are regular
general governmental transfers to Transportation Capital Fund (310). The General Fund capital
transfer planned for FY 2020 to Fund (310) is $9,555,800 representing a $1,000,000 increase from
FY 2019. The Unincorporated Area General Fund transfer planned to Fund (310) for FY 2020 is
$3,500,000 a decrease of $750,000 from FY 2019. These dollars support maintenance on the
roadway network including intersection improvements, resurfacing, sidewalks, pathways, asset
management and traffic control software, and other critical maintenance needs which are not
eligible for gas tax funding by statute.
Recommended Budget Policy: Continue the Board’s policy applying gas tax revenue to pay for
debt service on the Gas Tax Revenue Bonds, and that the remaining gas tax revenue and transfer
dollars from the General Fund and Unincorporated Area General Fund continue to
support/supplement maintenance on the roadway network.
Safe School Officer’s and School Guardians:
The program of placing a school safety officer in some Collier County Schools has been in place
for decades and this program has recently been elevated to greater public attention since the
Parkland shooting and State passage of SB 7026 which requires the placement of safe school
officers or public guardians at each school facility within the District, including charter schools. It
is important to note that legal responsibility to comply with the requirements of SB 7026, including
funding rests with the Collier County School District. Collier County is compliant with the state
law and the priority is always continued compliance through enhanced protocols, strategies and
personnel.
Recently, all stakeholders have been meeting to discuss partnership funding of the program on a
recurring basis. Currently and for many years, the County Commission through the Sheriff’s
agency has provided funding for safety officer presence in some of our schools. It is not known at
this time whether the State will commit to recurring funding for this legislative initiative.
Pre-Parkland, school safety officer expenses were roughly $5.8M annually. This cost has escalated
to about $7.0 million currently. From a policy funding standpoint, the County can continue to fund
the program with zero contributions from the School District; or negotiate some cost sharing
arrangement. With the program funded for FY 2019, conversations with the stakeholders have
been on hold pending the 2019 state legislative process and what funding may be available to local
entities. Staff will continue discussions at the end of the current legislative session with the goal
of developing a recurring funding formula that splits program costs between the School District
and the County.
General State Legislative Update
Currently, executive and legislative branch economists have projected a $465 million increase in
revenues to finish out this fiscal year and a $380 million projected increase during the next fiscal
year. This total projection is predominately based upon increased collections in sales and
corporate income taxes. Governor DeSantis will likely craft his first budget with these figures in
mind. However, another set of projections will be released as legislative appropriators
deliberate on the budget bill.
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In addition to our own State project appropriations requests to improve our environment and the
economy it drives, Collier has also partnered with municipalities to support their project
requests to improve water quality in the County and the Gulf. The total investments for all these
projects would be over $21 million when all federal, state, and local funds are applied.
Collier County is also seeking to restore the original 2011 statutory language that prompts the
Florida Department of Transportation to provide ongoing reimbursement funds for operational
costs of the Public Safety Center at Mile Marker 63, from toll revenues generated on Alligator
Alley. These reimbursement funds currently expire on June 30, 2019 and would result in a cost-
shift to taxpayers in the Ochopee Fire District, and/or additional contributions from the General
Fund from Federal Payment In lieu of Taxes (PILT) proceeds. Station operations total
approximately $1.8 million. Toll proceeds were originally dedicated as a proper “user fee” to
finance the Public Safety Center’s exclusive services to the Alley as it is surrounded by state and
federal lands with no localized tax base. Collier County pays the Greater Naples Fire District to
manage the rest of the Ochopee Fire District from MSTU generated property tax revenue and
Federal PILT funds.
Various Bills have been filed which preempt local regulations on businesses and business
entities; redefining the local tax referenda process including requiring that a referendum be
passed by a specific voter percentage; regulating CRA’s; reducing the communication services
tax rate; redefining government accountability; and revising local government transparency
standards.
Discussions and actions regarding maintaining or enhancing state funds supporting school
public safety officers will be monitored.
Recommended Budget Policy: Develop a General Fund (001) operating budget at the millage
neutral rate of $3.5645 and provide the Board with a summary divisional description of what
millage neutral purchases in terms of services and the progress made in devoting dollars to asset
maintenance and strategic capital initiatives.
Approve guidance for the Unincorporated Area General Fund (111) which includes maintaining
the millage rate at $.8069 and earmarking $.0908 or the marginal increase above the current
operating millage rate to continue the median landscape program which has transitioned to median
maintenance due to escalating costs. The existing millage rate of $.7161 will be used to fund
existing and expanded operations as well as capital transfers.
General Fund Budget Allocations by Agency and Component
The purpose of this allocation is to identify those agency appropriation components within the
General Fund. All agencies work diligently with the County Manager in support of budget policies
adopted by the Board. Equally important is the premise that all agencies would share in any budget
reductions necessitated by taxable values below the planning threshold, reductions in property tax
revenues, new state tax reform initiatives, reductions in state shared revenue and unfunded
mandates.
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Considering that transfers to the Constitutional Agencies in FY 2019 account for 52% of total
General Fund budgeted expenses and 72% of the General Fund ad valorem budgeted revenue, their
participation in any necessary reductions due in part to unexpected ad valorem revenue shortfalls,
tax rate reductions or unforeseen unfunded mandates is essential.
It should be noted that these expense percentages are gross figures and do not account for
statutorily required year ending constitutional officer turn back. This turn back revenue is budgeted
and forecast each year. Constitutional turn back revenue totaled $10,084,838 and $10,033,387
respectively across all funds for years ending FY 2017 and FY 2018 respectively. For year ending
2018, actual collections exceeded budget in the General Fund by $2.2 million. The General Fund
receives on average 85% to 90% of all turn back revenue. Turn back revenue from the Tax
Collector accounted for 62% of all fund turn back revenue in FY 2017 and 81% of all fund turn
back revenue in FY 2018.
Recommended Budget Policy: Continue this policy.
Millage Targets for Collier County MSTU’s, MSTD’s
A Municipal Service Taxing Unit (MSTU) is a mechanism by which a county can fund a service
from a levy of ad valorem taxes, not countywide, but within all or a portion of the county. In the
County budget, an MSTU is used to segregate the ad valorem taxes levied within the taxing unit
to ensure that funds derived from such levy are used to provide the contemplated services within
the boundaries of the taxing unit as required.
MSTU’s are created by ordinance and generally there are provisions governing the maximum
millage rate that can be levied. Local ordinance is the control, even if the rolled back rate exceeds
the ordained millage cap.
There are eighteen (18) dependent MSTU’s active under Collier County’s taxing umbrellas. Of
these, eleven (11) have advisory boards which provide recommendations to the Board of County
Commissioners.
BCC / Co
Attorney 1%
County
Managers
Agency 29%
Road Program
Subsidy 2%
Debt / Capital
Subsidy 5%
Reserves 10%
Courts 1%
Clerk of Courts
2%
Property
Appraiser 1%
Sheriff 44%
Supervisor of
Elections 1%
Tax Collector 4%
FY 2019 Percent of General Fund Budget
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Recommended Budget Policy: For FY 2020, it is suggested that those existing MSTU’s without
advisory board oversight be limited to a rolled back millage rate position unless staff presents a
compelling reason for additional funds during budget presentations. Additionally, it is suggested
that existing MSTU’s with advisory board oversight be allowed to consider tax rate options
ranging from tax neutral (rolled back rate) to millage neutral depending upon program
requirements and taxable values with specific advisory board recommendations offered during the
budget review cycle.
Revenue Centric Budgets
It is generally recognized that all budgets and expense disbursements regardless of fund or activity
are revenue and cash dependent. This concept establishes that enterprise funds, internal service
funds, certain special revenue funds and other operational funds which rely solely on fee for service
income with zero reliance upon ad valorem revenue should be allowed to establish budgets and
conduct operations within revenue centric guidelines dictated by cash on hand and anticipated
receipts. For FY 2019, the following budget priorities must be satisfied for enterprise and special
revenue operations; working capital guidelines established through policy or best practices; capital
obligations from the capital improvement element (CIE); any fee or rate stud y expense
stipulations; priority agency wide initiatives; any statutory or ordinance spending restrictions.
This concept also presumes continual monitoring of cash and receipts and, if necessary, subsequent
operational adjustments dictated by cash flow. As such, ad valorem agency limitations suggested
above will not apply.
Certain cost centers or functions have a net cost to the General Fund (001) or Unincorporated Area
General Fund (111). In these instances where fee for services offset the ad valorem impact, then
the budget reduction guidance should account for this positive impact upon the net cost to the
General Fund (001) or to the Unincorporated Area General Fund (111). Under this revenue centric
approach, Departments will be held to their fee for service projections and any negative fee
variances will be addressed through expenditure cuts and not subsidized by Ad Valorem taxes.
Department Head discretion upon guidance by the County Manager should be afforded in these
scenarios.
Recommended Budget Policy: Adopt this Enterprise Fund and General Governmental revenue
centric budget policy.
Expanded Positions
For FY 2020, Departments will carefully consider expanded positions since proposed operating
expenditure guidance will likely require a significant re-prioritization of current budget. Any
expanded requests will be limited to new capital facility openings and/or Board directed service
level adjustments. All budget to budget expanded positions and programs will be reviewed by the
County Manager and his recommendations will be presented as part of FY 2020 budget workshop
discussions in June.
Recommended Budget Policy: Expanded position requests will be limited to Board approved
capital facility openings and/or Board approved service level adjustments with final County
Manager recommendations presented at the June budget workshop.
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Compensation Administration
The philosophy of Collier County Government is to provide a market-based compensation
program that meets the following goals:
1. Facilitates the hiring and retention of the most knowledgeable, skilled and experienced
employees available.
2. Supports continuous training, professional development and enhanced career mobility.
3. Establish equitability in position pay ranges and to rates paid incumbents in those positions
4. Recognizes and rewards individual and team achievements.
The Consumer Price Index 12-month percent change from December 2017 to December 2018 is
2.9% for the Miami-Fort Lauderdale area. This is one of the indices that Collier County
traditionally uses when considering a general wage adjustment. The annual Florida Relative Price
Index, an index comparing the relative cost of living among the State’s 67 counties, is also used
as a basis for compensation plan recommendations.
Like last year, rather than waiting to appropriate dollars for a compensation adjustment on an event
driven basis, the County Manager proposes to appropriate dollars for the adjustment as part of
budget planning for FY 2020 with the recommended structure submitted for Board consideration
at the June Workshop meeting.
For FY 2020, the County Manager is recommending a flat $1,200 increase to base salaries within
each pay grade classification. The average salary paid within the County Manager’s Agency is
$55,500 and the $1,200 increase represents a 2.2% increase on this average salary which is below
the 2.9% cost of living for 2018. In addition, a .5% or $565,000 allocation is programmed to
strengthen certain targeted lower classification pay grades where a market imbalance exists. Pay
plan adjustments to the compensation plan was last completed in FY 2018 at a cost of $727,700
with no adjustments occurring in FY 2019.
This compensation adjustment and pay plan maintenance allocation is estimated to total $3.6
million for the County Manager’s Agency.
Recommended Budget Policy: Appropriate dollars equivalent to a $1,200 base wage increase to
all classifications representing an average 2.2% increase plus a .5% or $565,000 pay plan
maintenance component to strengthen certain targeted lower classification pay grades where a
market imbalance exists. In previous years, the Board of County Commissioners has authorized
adjustments to the compensation plan as shown within the following table.
Program Component FY 09 FY 10 –
FY 12
FY 13 FY 14 FY 15 FY 16 FY 17 FY 18
FY 19 FY 20
General Wage
Adjustment
4.20% 0.00% 2.00% $1,000 2.00% / $1,000 1.50% / $1,000 3.00% 2.90% 2.00% $1,200
represents
average of
2.2%
Awards Program 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Pay Plan Maintenance 0.00% 0.00% 0.00% 0.00% 0.00% 1.50% 0.00% 0.60% 0.00% 0.50%
Total 4.20% 0.00% 2.00% $1,000 2.00% 3.00% 3.00% 3.50% 2.00% Average of
2.7%
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Health Care Program and Cost Sharing
The County is self-funded and seeks to operate the health plan with the same diligence as a small
insurance company. Like an insurance company, the County faces a significant budget risk within
the health plan due to the potential for a statistical claim cost variance of 10% around the expected
mean claims cost. Such variance is normal statistically and has its roots in the fact that total
medical costs are extremely sensitive to the number of claimants who experience catastrophic
losses. The expected number and size of large claimants is by nature extremely random and
volatile. To manage and prevent this variability, the County reinsures catastrophic losses and
maintains a prudent reserve to comply with Florida Department of Insurance requirements as well
as to protect the General Fund from this volatility.
There are several goals that guide how the County operates the plan within the small insurance
company context. These are:
1. Comply with all legal and regulatory requirements for plan operation
2. Manage plan cost trends to be 30% or more below published trends
3. Maintain overall controllable expenses, reinsurance costs, network fee arrangements and
reserves at prudent levels
4. Protect our employees from the economic impacts of illness or injury
5. Prevent illness when possible by helping our employees and their spouses become aware
of their health, and act on that knowledge
Coverage under the Plan extends to all eligible County employees, except for the Sheriff’s Office,
which operates its own self-funded plan. Nationally, as well as here in Florida, medical plan costs,
and the premium dollars required to fund them, continue to increase annually. The County’s
medical plan has the potential to be similarly impacted by these rising costs.
Due to exceptional plan performance over the past seven (7) plan years, plan reserves exceed
statutory minimums. Therefore, it is recommended that there be no (0%) rate increase for
FY 2020. It should be noted that employer health insurance contribution increases are abs orbed
within operating appropriations.
Since 2009, Collier County Government has invested in processes to heighten employees and
spouse’s awareness of their health and make available resources to assist covered employees and
spouses in improving and maintaining their health. These programs have achieved meaningful
reductions in risk and improvements in outcomes for the covered participants. In addition, the
County was recently approved as a Blue Zones Workplace.
The trend in cohort data in the form of the number of population health risks is positive. The
number of participants with 4-5 risk factors is decreasing (Yr. 2018 15.7% vs. Yr. 2016 19.6%).
The number of participants with 0-2 risk factors is increasing (Yr. 2018 34.2% vs. Yr. 2016
31.1%). Seventy-two percent (72%) of the diabetic population improved their A1c value with
60% achieving goal range of 7% or lower; 38% improved Triglycerides, 45% improved LDL; 76%
improved at least 1 risk factor.
Employees and spouses have embraced the County’s preventive educational and qualifier
processes which have contributed greatly toward the financial strength of the health program. Over
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the last nine (9) years, participation has been consistently more than 93% for those meeting the
necessary qualifiers. This rate far exceeds those of large employers nationwide.
With the objective of mitigating increases to the plan, the County will continue to emphasize
participation in existing wellness program, proper structuring of reinsurance to manage adverse
plan impacts and prudent plan management.
Historically, Board budget guidance has required all agencies to uniformly share health insurance
contributions between employers and employees. If all agencies maintained the recommended
cost distribution percentages of 80% employer and 20% employee, it is estimated that for FY 2019,
$1.94M in General Fund constitutional transfer savings would have been realized as depicted
below.
Since the Presidential and Congressional elections of 2016, limited changes were made to the
Affordable Care Act. Staff will monitor the activities of federal policy makers and adjust the
County’s health plan accordingly. But for now, certain provisions of the current federal Affordable
Care Act (ACA) impact Collier County if not managed properly. The most penal is the “Pay or
Play” provision. This provision imposes a $2,320 penalty per eligible employee (less the first 30)
working more than 30 hours per week or 130 hours per month if the employer does not offer
coverage to 95% of the eligible population. The 95% provision took effect on January 1, 2016
with penalties, if any, being assessed beginning in calendar year 2018 or the County’s FY 2018.
To date, no penalties have been assessed. These compliance provisions will continue until
rescinded or amended and present the potential for federal penalties.
Currently, the employee group which must be managed is the “job bank” pool. These employees
are generally classified as temporary in nature, are not eligible for health insurance and are not
considered FTE’s approved by the Board. However, for ACA purposes they are considered part
of the eligible health insurance population if they work more than 30 hours per week or 130 hours
per month. Based upon the December 2019 census, current compliance is 99.9%. If somehow the
County failed to satisfy the 95% provision, the fine could total approximately $5.7 million.
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This issue will require ongoing management and the Board should be aware that job bank
employees working 30 hours a week or more may transition to FTE status as part of the budget
process or via separate executive summary and others may have their hours reduced depending
upon operational considerations.
Recommended Budget Policy: In FY 2020, no rate increase is recommended and the average
cost distribution of health insurance premiums between the Board of County Commissioners and
employees will remain 80% (employer) and 20% (employee). It is still recommended that the 80%
employer share and 20% employee share be uniform across al l agencies, including the
Constitutional Officers. This policy treats all county employees equally in terms of cost sharing
for health insurance premiums.
Retirement Rates
All agencies including Constitutional Officers must use the retirement rates published within the
OMB budget instructions. OMB is monitoring all proposed bills. The legislature usually
establishes the new retirement rates in the beginning of May with the Governor signing the bill
into law at the end of May. The preliminary retirement rates that will be published in the
instructions are based on proposed House and/or Senate Bills (Florida Statute Chapter 121).
Recommended Budget Policy: Adherence to the OMB rates published within the OMB budget
instructions.
Accrued Salary Savings
Today’s economic climate has led to an increased movement of employees to and from the
organization. When employees leave, they are generally replaced, and the process of replacement
takes varying lengths of time depending on the position being recruited. This fact coupled with
the full budgeted amounts for health insurance and worker’s compensation being transferred to the
self-insurance funds, impacts the amount of accrued salary savings due to position vacancies. For
FY 2016, this rate was established at 2%. For FY 2020, it is suggested that the attrition rate remain
at 2%.
Recommended Budget Policy: Continue the accrued salary savings policy at a 2% rate.
Financing New and Replacement Capital Infrastructure
The County in April 2018 made a commercial paper draw of $12 million to purchase property on
which to construct the Amateur Sports Complex. Monthly service on this paper is paid from the
General Fund. Subsequently, $62.9 million in new Series 2018 Tourist Tax debt to finance
construction of Amateur Sports Complex facilities was issued in October 2018.
Prior to this activity, the last time Collier County issued debt for capital improvements was through
various commercial paper loans between September 2007 (FY 2007) and September 2008 (FY
2008) totaling $78.4 million to finance various general government and public safety projects.
All commercial paper loans outstanding at the time were refinanced through long term debt in July
2010 and again in December 2017. The issuance of debt for capital improvements is generally
considered as an alternative to pay as you go under the philosophy that future tax payers who will
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also enjoy the capital improvements should participate in funding capital improvements rather than
that burden falling solely to existing tax payers.
Pursuant to the Collier County Debt Management Policy, several guiding principles have been
identified that provide the framework within which the issuance, management, continuing
evaluation of and reporting on all debt obligations issued by the County takes place.
Asset Life: The County will consider long-term financing for the acquisition, maintenance,
replacement or expansion of physical assets (including land) only if they have a useful life of at
least five (5) years. Debt will be used only to finance capital projects and equipment, except in
case of emergency. County debt will generally not be issued for periods exceeding the useful life
or average useful lives of the project or projects financed.
Capital Financing: Debt of longer amortization periods will be issued for capital projects when it
is an appropriate means to achieve a fair allocation of costs between current and future
beneficiaries. Debt shall not, in general, be used for projects solely because insufficient funds are
budgeted at the time of acquisition or construction.
To the degree possible, the County will rely on specifically generated funds and or grants and
contributions from other governments to finance its capital needs on a pay as you go basis. To
achieve this, it may become necessary to secure short term (not exceeding 5 years amortization)
construction funding. Such financing is anticipated and allows maximum flexibility in CIP
implementation.
A decision to issue some component of short or long-term debt is based upon level of service
standards, the timing of any capital improvement, ability to execute, the credit market
environment, and cost of capital.
The County had pursued a strategy in recent history (FY 2008 and prior years) by inc urring short
term commercial paper loans for capital projects and refinancing that short-term debt with longer
term bonds or other long-term credit instruments which match the asset’s useful life. Short term
commercial paper loans carry a low variable interest rate – currently about 2.85% and funds can
be accessed within about 30-45 days of approving the authorizing resolution.
The advantage of long term debt especially in a low interest rate environment is that budget
certainty for the cost of credit is achieved. Generally, a project should be ready for construction
and proceeds must reasonably be expected to be spent within a three-year window from debt
issuance or adverse tax consequences may occur. Long term debt can be issued normally within a
90-120-day window. The County’s current general governmental long-term debt portfolio is
comprised primarily of special obligation revenue bond debt under a covenant to budget and
appropriate all legally available non- ad valorem revenue. It is anticipated that this type of long
term debt would be used under future new credit scenarios.
New Debt Strategy: Passage of the Local Option Infrastructure Sales Tax will not eliminate the
need to finance future infrastructure needs. At the very least, new debt would be considered in the
following circumstances;
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• Potential financing of an estimated $30 million to fund substantial maintenance of the
existing storm-water network as well as prudent expansion of the system in conjunction
with enhanced general governmental maintenance funding which the Board may determine.
• Financing Phase 2 of the Big Corkscrew Regional Park in an estimated amount of $30
million.
• Connected with the above financings, repay the variable rate commercial paper draw used
to purchase the amateur sports complex property.
• Other long-term financing needs like the potential gas tax wrapping concept; and strategic
opportunity land purchases
The following illustrates various long-term financing scenarios, the annual debt service and the
respective interest rates.
Recommended Budget Policy: It is not suggested that any financing strategy be built into the FY
2020 adopted budget. It is recommended that the Finance Committee continue to work with the
County’s various agency department stakeholders regarding project scope, timing and execution
patterns and with our debt issuance team to develop a strategy and be ready to pursue a debt
issuance plan based upon Board direction.
Storm Water Management Funding
The budget planning model under a millage neutral tax rate for FY 2020 allocates $9.2 million
dollars from the General Fund and Unincorporated Area General Fund toward existing storm-
water infrastructure maintenance ($6.5 million) and operations ($2.7 million) with the assumption
that replacement and new storm-water capital projects would be financed as part of a larger general
governmental debt issue. This is a $1.0 million increase for maintenance and operations over FY
2019.
Recommended Budget Policy: For FY 2020 continue the general governmental equivalency
millage method as the basis for funding storm-water operations and capital transfers from the
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General Fund and Unincorporated Area General Fund with the amount of such funding if any
above the current $9.2 million planning appropriation determined by Board policy.
General Fund General Capital/ Debt Contribution and Debt Management
The General Fund (001) has provided via transfer the sum equivalent of up to 1/3 mil to non-
impact fee eligible county wide capital functions and a debt payment component since FY 2006.
For FY 2019, the equivalency rate was $.2329 and for FY 2020 the equivalency rate is planned at
$.2135. During the economic downturn, most of this transfer evolved into a debt service payment.
However, restructuring the debt portfolio has significantly eased the debt burden freeing up budget
to support county-wide capital projects and necessary maintenance (Fund 301).
For FY 2019, $12,905,800 of the $20,560,100 equivalency transfer was planned for capital
projects. For FY 2020, $13,193,700 of the $19,602,100 equivalency transfer is devoted to capital
projects. This contribution represents a modest increase from FY 2019 and this planned allocation
may change depending upon Board adopted millage rate policy; changes in the tax base; Board
adopted operational service level changes; or other reprioritized initiatives.
For FY 2020, the General Fund (001) transfer (loan) will be sized to cover debt service which
cannot be covered by impact fees. This amount totals $2,799,000 and currently does not
contemplate new impact fee eligible capital projects such as EMS facilities (covered by local
option sales tax proceeds); land purchases or other projects. The loan amount for FY 2020
represents a $1.16 million decrease over FY 2019, reflective of modest gains projected in impact
fee collections for FY 2020. Total loans outstanding to the impact fee trust funds (i.e. EMS,
Libraries, Corrections, Law Enforcement and General Government Facilities) from the General
Fund since inception (FY 2005) through FY 2019 totals $103.2 million.
Payment of debt is always a top priority. Under the FY 2020 budget planning scenario dollars
generated from the up to 1/3rd mil equivalent allocation will be sufficient to cover all revenue
bond debt service.
Of the $19.6 million projected transfer in FY 2020, $2.8 million will be required to cover the
growth-related debt service gap due to insufficient impact fee revenue; and $3.6 million is
budgeted to cover non- growth-related debt. Going forward, the level of General Fund loan subsidy
is heavily dependent upon the level of impact fee collections and any new eligible growth-related
capital projects planned.
Collier County embarked upon an aggressive debt restructuring program in the summer of 2010
and to date $422.8M in general governmental debt has been refinanced. As a result, the cost of
borrowing has been reduced by $1,895,900 annually with this recurring savings applied toward
high priority general governmental operating and capital programs. The cumulative net interest
rate of the general governmental debt portfolio has been reduced from approximatel y 5% to
roughly 3.5% and annual principal and interest payments servicing all outstanding County debt
represents 4.5% of the County’s net adopted FY 2019 budget. General governmental debt
outstanding represents 2.8% of the County’s net adopted FY 2019 budget. The following charts
depicts annual debt service payments servicing all debt and annual debt service connected with
our general governmental credit.
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Collier County’s total audited principal debt outstanding at 9/30/18 totals $470.1M of which
$268.3M relates to infrastructure improvements driven by population growth and related service
demands. The County’s principal debt has been reduced by $322M since FY 2008. Outstanding
debt at 9/30/18 includes $12.0 million in Commercial Paper drawn to pay for property on which
the Amateur Sports complex will be constructed. Total principal debt outstanding will jump to
$494 million adjusted at fiscal year ending 2019 when including the new TDT financing.
Recommended Budget Policy: Transfer an equivalent sum of up to 1/3 mil to the County Wide
Capital Fund for purposes of paying non-growth-related revenue bond debt; to provide impact fee
fund loans to cover growth related debt obligations; and to fund much needed regular ongoing
general governmental priority capital needs.
General Governmental, Enterprise Fund, and Other Fund Reserve Policies
General Fund: Reserve is a budget/policy term referring to resources set aside to provide a
financial barrier against risk. Likewise, reserves may also be referred to as a portion of fund
balance – only on the expense side of the equation. Reserves are the cornerstone of financial
flexibility and provide government with options for responding to unexpected issues and a buffer
against shocks and other forms of risk. One such un-planned risk may for example include the
potential for a grant award to be rescinded after work on the activity begins. Grant revenues are
appropriated at the time of award with the expectation of future cash inflows from the grantor
agency. Until reimbursements are received, the General Fund provides the cashflow for general
governmental grant funded activities and is responsible for financing grant related activities in full,
should the County default on any grant provisions or a grantor agency cancels, revokes, or de-
obligates an award.
It is essential for governments to maintain adequate levels of fund balance to mitigate current and
future risks such as revenue shortfalls, natural disasters and unanticipated expenditures. As such,
budgeted reserves serve to protect beginning cash position in a fund and are an essential component
of Collier County’s overall financial management strategy and a key factor in external agency
measurement of Collier County’s financial strength.
$0
$20
$40
$60
$80
$100
MillionsTotal Annual Debt Service Payments
$0
$20
$40
$60
$80
MillionsGeneral Governmental
Annual Debt Service Payments
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Various bond rating agencies recognize that the best reserve policies provide both specificity and
flexibility accomplishing one or more of at least the following three criteria:
• establishing a target level of reserves or a reserve floor
• specifying the appropriate circumstances for drawing down reserves
• directing the replenishment of reserves
In general, rating agencies view positively higher reserve levels, although local governments can
maintain high credit ratings with lower reserve levels if other indicators of financial flexibility
such as revenue raising ability, stable diverse revenue structure, expenditure flexibility and
conservative budgeting practices are strong.
A reserve for contingency is typically budgeted in all operating funds, except for the Constitutional
agency funds. Reserves for the Constitutional Agency funds shall be appropriated within the
County General Fund.
The following is a history of budgeted reserves within the General Fund and Unincorporated Area
General Fund since FY 2008 as well as the % of reserves against total operating expenses.
Fiscal Year General Fund
Reserves
Unincorporated Area
General Fund Reserves
% of General
Fund Expenses
% of Unincorporated
GF Expenses
2020 $50,112,700 $2,463,600 12.2% 4.3%
2019 $44,481,200 $2,982,300 11.4% 5.3%
2018 $40,450,300 $3,255,000 10.8% 5.5%
2017 $33,899,700 $2,432,900 9.6% 4.8%
2016 $27,890,800 $1,905,600 8.4% 4.4%
2015 $26,670,700 $2,220,100 8.5% 5.6%
2014 $26,217,400 $1,715,000 8.9% 4.5%
2013 $24,844,400 $1,596,200 8.7% 4.3%
2012 $18,180,900 $1,739,500 6.2% 4.5%
2011 $14,210,200 $2,925,100 4.7% 7.4%
2010 $15,569,100 $3,422,400 4.9% 7.2%
2009 $17,541,200 $2,853,500 5.0% 5.8%
2008 $20,506,000 $6,336,600 5.5% 12.9%
Optimally, and to achieve a regular and sustained General Fund beginning fiscal year cash position
of at least $55 to $72 million, budgeted reserves should be a minimum of $50 million. Otherwise,
expense side management of the budget in the form of capital transfer reductions and or reductions
in operating transfers may become necessary.
Due to Hurricane Irma, budget management leading into year ending 2018 was prudent to ensure
sufficient cash exists in the General Fund and certain capital funds receiving General Fund dollars.
General Fund capital transfers budgeted to support transportation system projects were reduced by
$3.5 million to boost year ending General Fund cash. The importance of achieving sufficient year
ending General Fund cash cannot be overstated. In addition, $13 million in structural cash flow
transfers from the General Fund to public utilities capital, facilities capital and park’s capital funds
were not made due to sufficient cash in these respective funds at year ending 2018. These same
transfers were re-programmed as part of the FY 2018 adopted budget in the event cash flow
becomes an issue prior to the receipt of Hurricane re-imbursement revenue. Budget management
is always ongoing and more magnified at times when Hurricane events occur.
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Expenditures and revenues are monitored continually, and any budget adjustments are made
accordingly. Likewise, execution patterns are scrutinized along with transfer dollars – specifically
out of the General Fund to make sure that appropriations are properly executed and spent for the
intended purpose.
Florida State Statutes: In all respects, budgeted reserves shall conform to requirements of Florida
State Statutes. The State establishes maximum limitations on certain reserves. The maximum
limitations for contingency reserves and for cash flow reserves are 10% and 20% of a fund’s total
budget respectively. There is no statutory limit on capital reserves.
Recommended Budgeted Policy Reserve Position for the General Fund : The Governmental
Finance Officers Association (GFOA) recommends as a baseline, or floor, that General Fund
reserves be set at 16% of regular operating revenues or 2 months of regular operating expenses.
This would put Collier County’s General Fund reserve floor (minimum) based upon FY 2019
budget numbers in the $63M-$65M range.
Collier County has never attained a General Fund budgeted reserve position higher than the FY
2020 proposed position of $50,112,700. This reserve position includes a contingency reserve set
at the recurring policy level equivalent to 2.5% of operations. While Collier County is vulnerable
to extreme weather events given its coastal location, the County’s revenue sources are relatively
stable and expenditure patterns are not volatile. Further, the General Fund budget is flexible with
capital transfers out representing on average ten (10) percent of appropriations. In addition, the
County’s total all funds reserve position is stable and will be used in part to cash flow a significant
weather event or other natural disaster. These factors suggest a less aggressive reserve position
with a floor or minimum of 8% of operating expenses and a ceiling or maximum not to exceed
16% of operating expenses. Applying these percentages to our current FY 2020 proposed planning
budget, the reserve floor and ceiling would total $32,935,000 and $65,870,000, respectively.
Planned reserves within the General Fund fall within this range.
Replenishment of reserves that drop below the targeted floor (minimum) would occur in
succeeding budget cycles in such amounts as deemed prudent under existing economic conditions
as approved by the Board. The goal will be to recover at least 25% of the reserve shortfall in year
one; 25% in year two; and the remaining shortfall in year three.
Recommended Budgeted Reserve Position for Other General Governmental Funds
including the Unincorporated Area General Fund: The Unincorporated Area General Fund is
primarily an operating fund. While capital transfers have increased over the past few years, the
Unincorporated Area General Fund and for that matter other general governmental funds do not
have nearly the cash flow requirements of the General Fund. Thus, the reserve requirements for
the Unincorporated Area General Fund should be set at a minimum of 2.5% of operating expenses
or $1.42 million with a ceiling or maximum of no more than one month’s expenses which for FY
2020 is approximately $4.72 million.
Reserve requirements for other General Governmental Funds including those that receive
significant transfer revenue from the General Fund will be sized sufficient to cover operations
during the first month or until the first General Fund transfer is scheduled pursuant to the OMB
Transfer Schedule.
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Reserves Policy Position for the Motor Pool Replacement Family of Funds (409, 472, 491,
523)
The Motor Pool Replacement Funds were re-established in FY 2016. The annual funding of the
Reserve will be through an annual billing to the applicable user Divisions in an amount equal to
the cost of the vehicle divided by the useful life of the vehicle.
In FY 2016, the Motor Pool Replacement Fund was established for the various General
Governmental Funds (523), Water/Sewer District (409), and Solid Waste (472).
In FY 2017, the balance of user Divisions were included in the appropriation plan, i.e.: EMS (491)
and Road and Bridge (Funds 101/523).
Reserves within the four Motor Pool Replacement Funds maintain a current replacement reserve
(reserve for future capital) equal to a minimum of one year’s estimated replacement cost of
vehicles currently in service.
Reserve Policy Position for the Pelican Bay Services Division Family of Funds (109, 778, 320
and 322).
Operating Reserves Fund (109) – It is recommended that the funds reserve position be established
at between 15% and 30% of operating expense. This is particularly important given the districts
coastal nature, level of infrastructure investment, natural assets and commitment to maintenance
and resource protection.
Street Lighting Fund (778) – The level of reserves in this fund will be established in such amounts
necessary to set aside funding to accomplish lighting projects consistent with the Pelican Bay
Community Improvement Plan.
Capital Project Funds (320 & 322) – Reserve levels are generally minimal with most budgeted
dollars appropriated within defined and active projects.
Reserve Policy Position for Enterprise Funds, including the Collier County Water-Sewer
District Fund (408, 412, 414) and the Solid and Hazardous Waste Management Funds (470,
471, 473, 474).
General: According to the GFOA, it is essential that a government maintain adequate levels of
Reserves in its enterprise funds to mitigate current and future risks like revenue shortfalls and
unanticipated expenses and to ensure stable services and fees.
Collier County Water-Sewer District (CCWSD) Funds 408, 412, and 414: Like a General Fund
reserve, a utility system reserve position may be measured as a percent of regular revenues or
regular expenditures, depending on the predictability or volatility of each.
The Collier County Water-Sewer District reserve policies should be based on sound fiscal
principles designed to enable the utility to maintain continuity of operations in adverse conditions
and avoid user rate shock (rate stabilization).
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In addition, various bond rating agencies, particularly Fitch Ratings, recognizes that the best
reserve policies provide both specificity and flexibility, accomplishing one or more of at least three
main criteria:
• Establishing a target level of reserves,
• Specifying the appropriate circumstances for drawing down reserves, and
• Directing the replenishment of reserves
For enterprise funds, the GFOA recommends starting with an assumption of 90 days and adjusting
based on relevant risks with 45 days as a bare minimum and recognizes the difference between
enterprise funds that are supported from the general government and those that are not.
The utility system, with gross assets of approximately $1.3 billion, should maintain a reserve
position necessary to ensure the maintenance of life sustaining services to the public during non -
routine and unforeseen disaster situations such as hurricanes or other related weather events, other
environmental or natural disasters, or other events that cause disruptions in public services, such
as system failures and line breaks.
Collier County lies within a coastal zone highly susceptible to hurricane and storm damage to
water and sewer treatment facilities, transmission lines and distribution/collection mai ns. Many
of the buried water and wastewater lines sit in sandy soil that is prone to shifting during heavy rain
events. Uncertainty in economic markets with regards to cost of construction materials, interest
rates, personnel and health costs add to the risk factors facing the utility. In the CCWSD, user fee
revenue is used to support the operating budget as well as the capital repair and rehabilitation
program for the horizontal (in-ground) and vertical (above ground) assets.
Reserves can be classified as either “restricted” or “unrestricted”:
• Restricted Reserves - are those established for specific purposes only, such as debt
reserves required by bond covenants, and/or reserves for growth in the impact fee
funds which can be utilized only for growth projects.
• Unrestricted Reserves – are available to ensure continuity of services as identified
above.
Unrestricted reserves in the CCWSD include general contingencies reserves (i.e. “rainy day”
significant unforeseen events), cash flow reserves in the event of revenue disruptions, or capital
reserves for necessary but unforeseen repair and rehabilitation projects.
Recommended Reserve Policy for the CCWSD: At a minimum, the unrestricted reserves should
be budgeted within a range of 5% to 15% of budgeted revenues (revenues are stable but may be
subject to temporary disruptions from hurricanes or natural disasters), or within a range of 45-90
days of budgeted operating expenses (operating expenses are more volatile given aging utility
infrastructure and unforeseen events). Forty-five (45) to ninety (90) days of reserves based on
Fund (408), (412), and (414) budgeted FY 2019 operating expenses would range from $17.4
million to $34.7 million. FY 2019 Working Capital resources total $26.2 million representing
sixty-eight (68) days of reserves.
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Replenishment of unrestricted reserves that may drop below the targeted floor (45 days) or $17.4
million using FY 2019 numbers would occur in succeeding budget cycles in such amounts as
deemed prudent under existing economic conditions as approved by the Board.
Solid and Hazardous Waste Management Enterprise Funds 470, 471, 473, and 474: The Solid and
Hazardous Waste program in Collier County includes the operation of the solid and hazardous
waste disposal program, the recycling program, and the management of the mandatory residential
curbside collections program. These funds also include both restricted capital reserv es (fund 471
for landfill closure) and unrestricted operating and capital reserves. The department is responsible
for the right of way disaster debris removal on County roads and monitoring project for Collier
County in the event of a natural disaster, such as the Hurricane Irma (Category 3, dry storm cash
flow exposure up to $100 million) event in the 4th quarter of 2017.
As such, the Solid Waste Division should maintain unrestricted reserves of 45 to 90 days of
operating expenditures to be used to ensure the maintenance of on-going health and safety services
to the public during non-routine and unforeseen disaster situations such as hurricanes and other
weather-related events, as well as other environmental or other natural disasters that cause
disruptions in public services.
Further, due to the magnitude of the impact that Collier County experienced in the Right of Way
debris mission following Hurricane Irma, the Solid Waste Division should establish a restricted
cash flow reserve equivalent to ten percent (10%) of solid waste revenues, to be used solely to
fund the upfront cash needs that accrue with significant natural disasters. This amount should
begin to approximate reimbursements that would not be forthcoming from FEMA and the State of
Florida (typically twelve and one-half percent (12.5%) of the cost of the debris removal mission).
Such a restricted reserve balance beginning in Fiscal 2019 would begin to eliminate the need to
borrow from other Enterprise Funds and/or the General Fund while awaiting reimbursements from
FEMA and the State.
Recommended Reserve Policy for the Solid and Hazardous Waste Enterprise Funds: Forty-
five (45) to ninety (90) days of unrestricted reserves based on Fund (470), (473), and (474)
budgeted FY 2019 operating expenses would range from $6.7 million to $13.3 million. FY 2019
unrestricted reserves for the Solid and Hazardous Waste Management Enterprise Funds total $9.6
million or sixty-five (65) days of reserves.
Replenishment of unrestricted reserves that drop below the targeted floor (45 days) or $6.7M
would occur in succeeding budget cycles in such amounts as deemed prudent under existing
economic conditions as approved by the Board.
Establish a restricted reserve of ten (10) percent of the FY 2019 budgeted charges for services
would total approximately $4.4 million. Most likely this restricted reserve will be funded over a
three to five-year period.
Growth Management Division (GMD) - Planning & Regulation Enterprise Fund 113 and
Development Services Enterprise Fund 131: Fund 113, referred to as the Building Department
Fund, collects revenues primarily related to building permit activities, including building permits,
structural, electrical, plumbing, and mechanical inspections, plans reviews, and the licensing and
oversight of building contractors.
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GMD Building Permit Fund (113) Recommended Reserve: Targeted reserves for this fund shall
be 18 months of the total budgeted expenses of the current fiscal year.
The Growth Management Division/Planning & Regulation Fee Schedule, adopted by resolution of
the Board of County Commissioners, provides the guidelines to implement fee adjustments if total
reserves rise or fall below established thresholds.
Fund 131, referred to as the Land Development Services Fund, collects revenues primarily related
to land development permit activities, including planning and zoning, engineering, and
environmental and natural resources.
GMD Planning Fund (131) Recommended Reserve: Targeted reserves for this fund shall be 24
months of the total budgeted expenses of the current fiscal year. The extra 6 months of targeted
reserves required in comparison to Fund 113 reflects the unpredictable nature and length of
processing time for land development related activities.
Internal Service Fund Reserves
Reserves for Internal Service funds reflect amounts that are intended for and must be used to meet
a specific purpose.
The restriction can be set by legal agreement, statute, regulations, and/or mandatory reserves. For
purposes of this policy emphasis is placed on the risk management group of funds and information
technology.
Recommended Policy: To establish sufficient cash flow for the Internal Service Funds, a
benchmark of 90 days of the prior year’s working capital is calculated.
Contingency reserves represent amounts available for appropriation by the Board to meet any
lawful, unanticipated need of that fund. These reserve amounts are limited by Florida Statutes and
cannot exceed 10% of the total appropriations of the fund.
Collier County is self-insured and is subject to mandatory reserves for losses. Each year an
actuarial study is completed for each of the County’s self-insurance funds and the present value of
all outstanding losses is determined. This amount represents the first level of restricted reserves
for our Risk Management Funds. Within the Risk Management’s restricted reserve balance, the
Board has designated $5,000,000 for wind deductible maximum limits coverage for potential
catastrophic losses associated with named storm events.
A margin based upon a confidence interval is then added to this base amount to assure that the
estimate is sufficient to meet future claim payments. The Board of County Commissioners has
traditionally adopted, as contained within budget policy, a 75% confidence interval.
The Group Life and Health Insurance Fund within Risk Management have additional statutory
reserve requirements that are calculated each year and added to the restricted reserve category.
The Information Technology Capital Fund’s restricted reserve amounts are determined by the total
of committed capital projects they have in progress at the end of the year. Once the projects are
completed, any remaining funds may be re-appropriated.
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Designated reserves are established to provide funds for a specific purpose where the actual cost
is unknown.
CPI Based Enterprise Fee Adjustments
On June 10, 2014, the Board during discussions on the water, wastewater, irrigation quality water
and bulk potable water rate study provided unanimous guidance to index all enterprise fees
annually equal to the year over year December adjustment in the Consumer Price Index (CPI) –
Miami, Fort Lauderdale SMSA. Rather than going through time consuming and potentially costly
rate studies, the Board suggested that the CPI adjustment be programmed and subsequently be
reviewed by the Board during the budget process. This allows the Board discretion in approving
the CPI adjustment and not simply passing the adjustment on automatically.
Recommended Budget Policy: Provide the Board with an annual report on potential enterprise
rate and fee adjustments in accordance with CPI changes as indicated above and that any rate or
fee adjustments be included within the proposed budget for Board consideration.
Suggested Scheduling Timeline
Decisions Required Staff Adopted Date(s)
Establish Budget Submission Dates for the
Sheriff, the Supervisor of Elections and the
Clerk of Courts.
May 1, 2019 by Resolution
FY 2020 June Budget Workshops (BCC Agency/Courts and Constitutional Officers Budget
Workshops) Thursday, June 20 and if necessary Friday June 21,
2019
FAC Conference is June 11 – June 14, 2019 in Orlando/ Orange
County.
Adoption of Tentative Maximum FY 2020
Millage Rates
July 9, 2019 (Tuesday)
Submission of Tentative FY 2020 Budget to
the Board
Friday July 12, 2019.
Establish Public Hearing Dates (see note) September 5, 2019 (Thursday at 5:05 pm)
September 19, 2019 (Thursday at 5:05 pm)
Note: The School Board has priority in establishing public hearing dates for budgets. The School
Board’s final budget hearing is tentatively scheduled for September 10, 2019.
The Commission chambers are reserved for the tentative dates for Collier County Government
budget public hearings.
Recommended Budget Policy: Approve the dates identified above and attached resolution
establishing May 1, 2019 budget submittal dates for the Sheriff, the Supervisor of Elections and
the Clerk.
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Comparative Budget Data
Provide comparative budget data using FY 2019 adopted budget data (cost and employees per
capita based on unincorporated area population) by Agency with Budget Submittals for Similar
Sized Florida Counties.
Adopted Budget Policy: Counties for comparison purposes include:
• Sarasota County
• Lee County
• Charlotte County
• Manatee County
• Martin County
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Regular Routine Budget Policies for FY 2020
Grant Funded Positions: Any positions formerly funded with grant funds being recommended
for inclusion in a general (non-grant funded) operating budget shall be treated as expanded service
requests.
Self-Insurance: To conduct an actuarial study of the self-insured Workers’ Compensation,
Property and Casualty, and Group Health Insurance programs. Program funding to be based upon
an actuarial based confidence interval of 75%, except for group health to which a confidence
interval is not applicable.
Contract Agency Funding: The Board will not fund any non-mandated social service agencies.
Median Maintenance: Recognize the Unincorporated Area General Fund MSTD (111) as the
appropriate, dedicated funding source for median beautification maintenance costs.
Carry forward (Fund Balance): All funds that are unexpended and unencumbered at the end of
the fiscal year will be appropriated as carry forward revenue in the following year. Carry forward
revenue represents not only operating funds but also previously budgeted operating, debt service,
and capital reserves that are "carried forward" to fund these same reserves in the new year or to fund
capital projects in the current or future years. The largest sources of carry forward are the capital,
debt service, and enterprise funds. In both the General Fund and Unincorporated Area General Fund,
carry forward is maintained to provide cash flow for operations prior to the receipt of ad valorem
taxes and other general revenue sources.
Proper General Fund carryforward (defined as cash only for purposes of this section) is necessary
to meet significant constitutional transfer, public safety and priority operating needs for October
and November, prior to the receipt of any significant ad valorem tax revenue (ad valorem taxes
represent 69.0% of the total FY 2019 General Fund adopted recurring operating revenues).
Carryforward balance is also an important measure used by bond rating agencies in determining
the County’s credit worthiness. Specific concerns for Florida communities were reliance on the
tourism industry and sales tax revenue, and the ongoing threat from hurricanes and wildfires. For
Florida coastal communities, a minimum cash balance of 10% of total General Fund expenditures
was recommended by the ratings agencies. Of course, this figure and recommendation was general
in nature and subject to each county’s individual cash flow needs. A higher percentage would be
considered positive – especially during any ratings surveillance.
The recommended level of year ending cash in the General Fund should be a minimum of 10% of
actual expenditures. At year ending September 30, 2018, actual General Fund cash balance totaled
$62,924,200, an increase of $16,367,600 over year ending FY 2017. The FY 2018 year ending
cash position represents approximately 17.3% of actual FY 2018 expenses.
Indirect Cost Allocation Plan: The policy of charging enterprise, special revenue, and grant
funds for support services provided by General Fund departments will be used again in FY 2020.
The basis of these charges is a detailed indirect cost allocation plan prepared , periodically, by a
consultant and adjusted by staff to reflect the organizational environment on a real-time basis.
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Impact Fees: Collier County will assess impact fees at such levels as allowed by law, established
by the Board of County Commissioners and supported by impact fee studies.
Enterprise Fund Payment In lieu of Taxes: The Solid Waste Fund and the Collier County
Water-Sewer District will once again contribute a payment in lieu of taxes (PILT) to the General
Fund. For FY 2019, the payment in lieu of taxes calculation was based upon a “franchise fee
equivalent basis” commonly referred to as a percentage of gross receipts. Five and one quarter
percent (5.25%) of gross receipts of the Water/Sewer District were applied in FY 2019 with an
additional .5% added to augment facilities operations. This method and percentage is planned for
in FY 2020. One and three-quarter percent (1.75%) of Solid Waste tipping fees were applied in
FY 2019 and this method and percentage is planned in FY 2020. This method is a common
approach used by local governments and is generally consistent with fees paid by private utilities
operating in a local government jurisdiction.
Prior to FY 2013, PILT was based upon the prior year General Fund millage rate multiplied by the
prior year gross (non-depreciated) value of property, plant, and equipment.
Debt Service: Any capital projects financed by borrowing money shall limit the repayment period
to the useful life of the asset.
Interim Financing: Collier County may also borrow funds on an interim basis to fund capital
projects. In these cases, a repayment source shall be identified and the financing source that has
the lowest total cost shall be employed.
The Collier County Debt Management Policy provides that advance refunding for economic
savings will be undertaken when a present value savings of at least five percent of the refunded
debt can be achieved. The policy also states that five percent savings is often considered a
benchmark and that any refunding that produces a smaller net present value savings may be
considered on a case by case basis. A smaller net present value savings may be prudent for
example when the intent is to eliminate old antiquated and limiting bond covenant language.
Ad Valorem Capital and Debt Funding: Continuation of a fixed General Fund equivalent
millage dedicated to ongoing regular capital projects, debt financing and impact fee fund debt
loans from the General Fund. The recommended rate is up to the equivalent of 0.3333 mills. (See
history below).
1.0000
0.6580
0.5474
0.5426
0.4148
0.3040
0.3713
0.2354
0.3333 0.3530
0.1931
0.3520
0.2495
0.2701
0.2329
0.2135
0.0000
0.2000
0.4000
0.6000
0.8000
1.0000
1.2000
MillageGeneral Fund Capital Equivalent Millage History
(FY 1991 -FY 2020)
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The General Fund continues to loan money to impact fee funds to pay their annual debt service
payments. This of course is in addition to normal and customary debt service on non-growth
revenue bond debt. Loans from the General Fund to the impact fee trust funds began in FY 2005
and the value of all loans made now exceed $103 million.
Capital Improvement Program (CIP) Policies : On an annual basis, the County shall prepare
and adopt a five-year Capital Improvement Element (CIE) consistent with the requirements of the
Growth Management Plan.
• Capital projects attributable to growth will be funded, to the extent possible, by impact
fees.
• Capital projects identified in the five-year CIE will be given priority for funding. The five-
year plan for water and wastewater CIE projects will be based on projects included in the
adopted master plans.
Unlike operating budgets that are administered at the appropriation unit level, capital project
budgets will continue to be administered on a total project budget basis. The minimum threshold
for projects budgeted in capital funds is $25,000.
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Three-Year Budget Projections
Ad Valorem Tax Funds
(FY 2020 - FY 2022)
OMB staff prepares annually a three-year projection of General Fund and MSTD General Fund
revenues and expenditures to improve financial planning and to understand the long-term impact
of funding decisions. These projections are complimented by a trend analysis of revenues and
expenses which conclude the General Fund and Unincorporated Area General Fund sections
respectively.
The following 3-year budget projections are for the General Fund (001) and the MSTD General
Fund (111).
General Fund
General Fund (001) Millage History and Projected Millage Rates
As a point of reference, the following graph plots the historical General Fund millage rate, as well
as tax rates for FY 2020 through FY 2022. These rates do not include any marginal increase which
the Board may direct by policy for a specific program or initiative. Millage neutral rather than tax
neutral rates for general operations are used for planning purposes considering the belief that
taxable value will continue to increase modestly in the future.
While the County Manager will be recommending a General Fund millage neutral base operating
budget in FY 2020 and while this millage neutral budget will contain funding for priority public
safety and other significant asset maintenance/replacement initiatives, the Board should note the
magnitude of our current and future asset maintenance responsibility and devote additional future
dollars which may be generated from an increasing taxable value base to maintaining and or
replacing corporate assets.
3.8772 3.8772 3.5790
3.1469 3.1469
3.5645 3.5645 3.5645 3.5645 3.5645
-
0.5000
1.0000
1.5000
2.0000
2.5000
3.0000
3.5000
4.0000
4.5000
General Fund Millage History and Recommended Millage Neutral Tax Rates
(FY 2005 to FY 2022)
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Diversifying the County’s tax base means in large part attempting to reduce risk. Risk of an
economic downturn which surely will stagnate resources and organizational risk where the risk of
stagnate resources exponentially impacts operations and capital resource allocation. Significant
future resources must be devoted to capital maintenance in numerous areas. We have addressed
our future heavy equipment, public safety ambulance and general vehicle replacement needs. But
there remains substantial asset maintenance and replacement needs, not the least of which is
general governmental building maintenance, park’s system infrastructure, constitutional officer
capital requirements and other general governmental capital functions like, information technology
upgrades, accounting system replacement, and other soft infrastructure needs. Then there is the
issue of maintaining existing storm-water infrastructure which for FY 20 will be funded
through general governmental appropriations. Risk reduction and revenue diversification is
certainly not achieved under a tax policy that reduces a general, flexible revenue source like
property taxes which can and will be used to offset the funding needs stated above when a very
narrow and statutorily restricted new revenue source like a storm-water utility fee is introduced.
The following tables depict the respective millage neutral tax rates for FY 2020, 2021 and 2022
as well as additional ad valorem dollars which could be raised under certain increasing tax base
assumptions. Again, the table does not account for any marginal rate increase which may be
earmarked by BCC policy for a specific program or initiative or for that matter any Board
policy decision reducing tax rates.
General Fund
FY 19 Adopted and Recommended
Operating Millage Neutral Millage Rates
Additional Budgeted Ad Valorem
Revenue Projection Each Year
FY 19 3.5645
FY 20 3.5645 $12,587,900 @ 4.0% TV Increase
FY 21 3.5645 $9,818,500 @ 3.0% TV Increase
FY 22 3.5645 $6,742,000 @ 2.0% TV Increase
For Collier County to continue providing high quality best value services; continue to address
infrastructure maintenance; replace public safety and general governmental equipment and
vehicles; maintain its reserve and cash positions pursuant to policy and representative of an
investment quality credit rated organization, it is prudent to capture those additional ad valorem
dollars generated by increasing taxable values. Further, tax policy should continue to account for
the County’s effort to cash flow expenses connected with Hurricane Irma due to the significant
delay in receiving FEMA reimbursements which may extend late into FY 2019 and likely into FY
2020 – a full 24 to 30 months post event. This delay will cause capital projects to be postponed
and require the General Fund budget to appropriate structural cash flow transfers should it become
necessary.
Failure to capture additional property tax dollars resulting from increasing taxable values will
jeopardize service levels and make it difficult to maintain the extraordinary infrastructure
investment which this community enjoys. As an example, in FY 2020, the projected rolled back
rate within the General Fund is $3.5115 which would raise $4,866,300 less than millage neutral or
levying the current planning operating rate of $3.5645. While the FY 2020 estimated rolled back
rate would produce $7,721,500 more than the FY 2019 levy due to new construction taxable value
and a higher taxable value base, this is not a sustainable model going forward knowing the level
of investment required to simply maintain our general governmental assets, and fund Sheriff
operations let alone expand services and facilities based upon AUIR requirements and servicing
the needs of an expanding population.
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The projected millage rates assume that the tax base will increase 4.0% in FY 2020 (the 2019 tax
year). Taxable value in FY 2021 is projected to also increase 3%. The Property Appraiser will
provide preliminary taxable value estimates for FY 2020 on June 1, 2019. Actual and assumed
changes in County taxable values are as follows:
Notes to Graph - FY 2007: The General Fund (001) millage rate adopted in FY 2007 was based upon a 16% increase in taxable
value pursuant to BCC direction. FY 2008: As part of the Florida Legislative Property Tax Reform package implemented in FY
2008, Collier County adopted its final millage rate at 91% of the rolled back rate.
FY 2020 Significant Expense Assumptions
A millage neutral operating budget, again assuming no marginal adjustment for special policy
initiatives of the BCC, assuming an increasing taxable value base provides the County with
those important additional ad valorem dollars necessary to maintain our assets, invest in our
personnel, and service those who live and visit Collier County. Significant expense
assumptions include;
• Allocation for compensation administration – $1,200 base salary increase representing
an average of 2.2% based upon the average agency salary.
• 2% attrition rate on regular salaries assumed in the County Manager’s Agency.
• Motor pool replacement dollars for continued regular routine ambulance replacement.
• $5,000,000 for general County Manager Agency building maintenance.
• $5,000,000 allocation to a new long-term asset maintenance reserve
• New voting machines totaling $350,000.
• Continued Social Service and Mental Health Funding.
• General Fund loans to the impact fee trust funds planned at $2,799,000 representing a
reduction from last year’s budget allocation.
• Ahead of the Board’s guidance on the proposed Utility and Fee, storm-water capital
funding increased $1,000,000 to $3,500,000 for continued countywide storm-water
projects and storm-water operations.
• General Fund transfer dollars supporting road construction and maintenance funded at
$9,555,800, an increase of $1,000,000 over the FY 2019 adopted budget.
19.9%
25.4%
7.2%
-4.7%
-11.0%-12.2%
-5.2%
0.5%
3.7%6.5%8.5%10.0%8.4%
5.6%4.0%3.0%2.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22MillageHistorical and Projected Changes in Collier County Taxable Values
(FY 2005 -FY 2022)
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• General Fund support of EMS Operations established at $18,288,900 – up 1.5% from
last year reflecting recurring costs to equalize response times county-wide plus costs to
operate new facilities.
• Full support for Transportation Operations from the General Fund (001) exclusively.
Continue transfer of dollars from the General Fund to the Motor Pool Replacement
Fund for Road and Bridge vehicles.
• Airport capital grant match funding totaling $1,466,700.
• Continued corporate IT capital funding totaling $738,000.
• Initial cash and carry deposit of $1,000,000 as the process of evaluating a new
accounting system begins.
• Capital funding for Sheriff Facilities totaling $1,000,000.
• Mandates to be absorbed if possible within operating budgets, including Constitutional
Officers.
Significant Revenue Assumptions
• FY 2019 ad valorem tax revenue forecast is 96% of actual taxes levied. FY 2019 forecast
totals $303,207,500 – a reduction of $11,566,100 from the adopted budget. Collections
are within the 5% statutorily budgeted revenue reserve.
• A millage neutral position without any marginal increase which the BCC may apply for a
specific program or initiative for FY 2020 produces a levy of $327,284,300.
• Sales tax revenue sharing forecast for FY 2019 is projected conservatively at $41,000,000
which represents no change from the adopted budget. FY 2020 budgeted revenue is also
planned at $41,000,000 which is no change from the adopted 2019 budget. Conservative
revenue estimates are essential to achieving the required beginning cash balance position.
• State Revenue Sharing forecast for FY 2019 at $11,000,000 is also projected
conservatively at budget. FY 2020 budgeted revenue is planned at $11,000,000 which is
no increase over the adopted 2019 budget.
• Property taxes, sales taxes and revenue sharing deposited in the General Fund represent
93% of all recurring operating revenue which excludes carry-forward (fund balance).
• Constitutional Officer turn-back is a conservative budget estimate and for FY 2020
$6,600,000 is planned. Turnback to the General Fund at year ending 2018 totaled
$8,806,000 - $2,206,000 over forecast.
• Measures to maintain beginning cash balance at between $55 million and $72 million
continue to be necessary and include continued growth in budgeted reserves coupled with
any combination of revenue receipts over budget and expense side budget management.
• Interest income for FY 2020 is planned to increase by $250,000 to $1,000,000 indicative
of consistently higher investment returns on cash balances.
EMS Fund
EMS Operations Fund (490) is another fund that impacts the General Fund. Typically, this ad
valorem support in recent years accounted for 50% to 55% of total EMS operating revenues. The
percentage varies given the instability in fee revenue collections and any Board policy directives.
Historical and projected General Fund support of EMS operations by fiscal year is as follows:
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Use of General Fund dollars to support this life/safety function has and continues to be a priority.
Road Construction Program
Board approved budgets have recently supplemented funding for the transportation network with
general governmental dollars transferred from the General Fund to Transportation Capital Fund
(310). This transfer is sized annually based upon the anticipated growth in taxable value and the
recurring need to fund other strategic capital commitments. Over the past four (4) fiscal years this
commitment has averaged $9.5 million annually. With taxable values projected to increase
modestly for FY 2020, the General Fund contribution to road construction and maintenance is
expected to total $9.5 million.
As future budgets are planned, and scarce resources allocated, infrastructure maintenance and non-
growth-related improvements will certainly require a dedicated commitment of general revenue to
protect this important investment. Capital obligations necessitated by state or federal agreement,
like JPA’s and DCA’s will be funded.
FY 2021
A millage neutral operating budget in FY 2020 with an increase of 3% in taxable value will
continue to allow for priority funding of public safety capital initiatives and general governmental
capital programming referenced in this document. This of course is in addition to the many new
initiatives and program enhancements, Board directed or otherwise required to support an
expanding service base, all of which compete for limited general governmental resources.
In addition to annual inflationary cost increases, the following items were included in the FY 2021
budget analysis:
$10.9
$9.2
$11.0
$13.3
$12.0
$10.7
$11.3
$12.8
$11.3$11.6
$13.3$13.8$15.0
$17.6$18.0$18.3$18.6$18.8
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22MillionsGeneral Fund Support of EMS
(FY 2005 -FY 2022)
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• Maintain general governmental capital projects funding in an equivalency up to 0.3333 mills.
• Maintain General Fund support of EMS.
• Contingency reserves are maintained at policy.
• Maintain General Fund road subsidy.
• Maintain General Fund support for park system maintenance and replacement
• Maintain General Fund support for Transportation Operations expenses.
• Continue annual contribution to the long-term asset maintenance reserve.
In summary, the FY 2021 analysis signals caution especially when critical variables like taxable
value, market conditions and general revenues are difficult to predict. Pursuing a millage neutral
operating budget in FY 2021 without a sufficient budgeted beginning fund balance would likely
result in a $9.9 million budget planning deficit as depicted in the trend analysis below. Of course,
regular annual budget management to eliminate any actual equity reduction would occur in real
time.
FY 2022
A millage neutral operating budget in FY 2022 coupled with a projected 2% taxable value increase
allows for continued funding of backlog asset maintenance and replacement while funding those
programs and services enjoyed by an expanding population base. Once again, management of the
budget will be important to achieve a sufficient beginning fund balance.
The following items were included in the FY 2022 budget analysis:
• Maintain general governmental capital projects funding in an equivalency up to 0.3333 mills.
• Maintain General Fund support of EMS.
• Contingency reserves are maintained at policy.
• Maintain General Fund road subsidy.
• Maintain General Fund support for park system maintenance and replacement
• Maintain General Fund support for Transportation Operations expenses.
• Continue annual contribution to the long-term asset maintenance reserve.
The General Fund Trend Analysis model shown below is intended to offer a picture of very
conservative revenue projections against operating and capital expenses which will likely be faced
in the out years. Of course, financial staff manages the budget in real time and will mitigate
unplanned equity reductions. But, imagine a scenario where major revenue sources like property
taxes or state shared revenues were cut or reduced. The obvious impact would be subsequent
expense reductions possibly coupled with new adopted revenue sources and thus the need for
budget flexibility.
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General Fund Trend Analysis
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Unincorporated Area General Fund (111)
MSTD General Fund (111) Millage History and Projected Millage Rates
As a point of reference, the following graph plots the historical MSTD General Fund (111) millage
rate, as well as the policy proposed millage rate for FY 2020 through FY 2022, which includes the
proposed marginal millage rate increase to continue the landscape median capital program.
Results of Unincorporated Area General Fund Analysis
For FY 2019, the Board of County Commissioners maintained the Unincorporated Area General
Fund millage rate at $.8069 or that rate levied in FY 2007 and earmarked the marginal increase
above the operating millage rate of $.7161 or $.0908 to continue the median landscape capital
program and allocate recurring dollars for maintenance of the landscape investment. Due to
escalating costs, constructing capital medians deferred during the recession is programmed to
cease in FY 2020 and the program will transition to maintaining the landscape assets constructed.
The table below depicts the marginal dollar increase which will be devoted to general operations
and general government capital as well as that component allocated toward continuing the median
landscape program. Incremental ad valorem dollars obtained through tax base increases under the
current $.7161 operating millage rate will fund recurring operations and provide capital transfer
dollars toward maintaining the road network, storm-water system, and community parks. The
marginal rate increase to $.8069 or $.0908 will be used exclusively to fund median landscape
maintenance going forward. The Board should also note the magnitude of our future maintenance
and asset replacement responsibility and dedicate resources gained through an y tax base increase
assuming a millage neutral tax rate toward this purpose.
0.8069 0.8069 0.8069
0.6912 0.6912
0.7161
0.8069 0.8069 0.8069 0.8069 0.8069
0.6000
0.6500
0.7000
0.7500
0.8000
0.8500
MillageUnincorporated MSTD General Fund (111) Millage History and
Recommended Millage Neutral Tax Rates
(FY 2005 to FY 2022)
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Policy Document Page 52
Unincorporated Area
General Fund
FY 19 Adopted and
Recommended future Tax Rates
Additional Budgeted
Ad Valorem Revenue Projections Each Year –
Operations and General Capital
Additional Budgeted
Ad Valorem Revenue Projections Each
Year – Median Landscape Program
FY 19 0.8069
FY 20 0.8069 $1,569,200 @ 4.0% TV Increase $199,000 @ 4.0% TV Increase
FY 21 0.8069 $1,223,900 @ 3.0% TV Increase $155,200 @ 3.0% TV Increase
FY 22 0.8069 $840,500 @ 2.0% TV Increase $106,600 @ 2.0% TV Increase
For Collier County to continue providing high quality best value services; continue to address
infrastructure maintenance; replace equipment and vehicles; maintain its reserve and cash
positions pursuant to policy and representative of an investment quality credit rated organization,
it is essential to capture those additional ad valorem dollars generated by increasing taxable values
as shown above. Failure to do so will jeopardize service levels and make it very difficult to
maintain the wonderful infrastructure investment which this community enjoys. As an example,
in FY 2020, the projected rolled back rate within the Unincorporated Area General Fund is $.7996
which would raise $415,900 less than levying the current millage rate of $.8069. While the rolled
back operating rate would produce $1,153,300 more than the FY 2019 budgeted levy due to new
construction taxable value and a higher taxable value base, this is not a sustainable model going
forward knowing the level of expanded funding commitment required to operate and maintain the
County’s current and future capital infrastructure investment enjoyed by our Unincorporated Area
residents and visitors. Additionally, levying the rolled back rate when taxable values drop means
the rolled back rate will increase and of course the temptation will be to revert to the millage neutral
rate levied in the prior year which will raise even less property tax revenue.
FY 2020
The FY 2020 budget projection is based upon a 4.0% tax base increase. Property taxes and the
state shared communications services tax represent over 97% of the budgeted operating revenue
(less transfers) within the Unincorporated Area General Fund (111). Once again, changes to
distribution and structure of the communication services tax could be discussed as part of any state
legislative budget proposal. Also, there is the assumption that no legislation will be passed further
eroding a local government’s ability to set and raise ad valorem taxes.
Capital transfers from the Unincorporated Area General Fund have grown substantially since FY
2014 and for FY 2020 $8.9 million is programmed representing a $4.8 million decrease over last
year. These transfer dollars are programmed for Parks, Transportation, Storm-Water infrastructure,
landscaping capital and heavy vehicles and equipment. The reduction is attributable to funding
one-time turf conversions in FY 2019 which was not re-budgeted in FY 2020 and reducing
substantially the landscape capital transfer in favor of maintaining existing built medians
beginning in FY 2020. Sustaining these capital appropriations and maintaining necessary
transportation, landscaping, park, code, planning and general operations in this fund requires at the
very least a millage neutral tax position along with continued state shared communication services
tax revenue.
The Board’s ultimate decision on whether to establish a storm-water utility and fee will impact
budget planning for FY 2020 and beyond. Depending upon Board established tax rate policy, the
planned $3.5 million transfer for storm-water programming could be re-prioritized to increase
reserves; support much needed transportation network improvements; increase contributions to
park capital projects and make a final one-time contribution to replace road and bridge heavy
equipment deferred during the recession. This model is not sustainable under a rolled back millage
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rate and/or loss of the communication services tax without mid – year budget reductions or the
introduction of replacement revenue sources like a franchise fee. Any required mid-year cuts will
likely affect transportation operations, park and recreation programs and other non-public safety
services.
FY 2021
If taxable values increase by 3.0% in FY 2021, a millage neutral operating budget coupled with a
reduction in beginning fund balance could result in a potential budget planning deficit of $3.5
million as depicted within the preceding trend analysis. This analysis assumes a state
communication services tax reduction and substantial expense side increases to support landscape
median maintenance and capital transfers. The model presents conservative revenue projections
and aggressive expense projections in the maintenance and capital areas which results in a
continued erosion of the funds cash position. The model is certainly not sustainable and real-time
budget management would always ensure that any equity erosion beyond that planned would be
curtailed.
FY 2022
Continuation of millage neutral operating budget into FY 2022 under a 2.0% increase in taxable
value would generate a modest increase in ad valorem revenue. This increase is certainly not
enough to compensate for the loss in fund equity and planned capital asset maintenance depicted
in the model. Increased funding for median landscape maintenance is anticipated. For planning
purposes and assuming continued decline in beginning budgeted fund balance, a deficit of $6.5
million is depicted. Absent real-time budget management the model depicts a total fund equity
loss from FY 2019 through FY 2022 totaling $13.7 million.
The Unincorporated Area General Fund Trend Analysis model shown below is intended to offer a
picture of very conservative revenue projections against operating and capital expenses which will
likely be faced in the out years. Of course, financial staff manages the budget in real time and will
mitigate unplanned equity reductions. But, imagine a scenario where major revenue sources like
property taxes or state shared revenues were cut or reduced. The obvious impact would be
subsequent expense reductions possibly coupled with new adopted revenue sources and thus the
need for budget flexibility.
11.A.c
Packet Pg. 177 Attachment: Fiscal Year 2020 proposed budget policies (8235 : Recommendation to adopt the FY 2020 Budget Policy)
Policy Document Page 54
Unincorporated Area General Fund Trend Analysis
11.A.c
Packet Pg. 178 Attachment: Fiscal Year 2020 proposed budget policies (8235 : Recommendation to adopt the FY 2020 Budget Policy)