Agenda 03/14/2023 Item #11E (Resolution - establishing a deadline of May 1, 2023 for budget submittals by the Supervisor of Elections, the Sheriff's Office, and the Clerk)03/14/2023
EXECUTIVE SUMMARY
Recommendation to Adopt the FY2024 Budget Policy and adopt a Resolution establishing a deadline of May
1, 2023, for budget submittals by the Supervisor of Elections, the Sheriffs Office, and the Clerk.
OBJECTIVE: That the Board of County Commissioners (Board) adopt policies to be used in developing the
Collier County Government budget for FY 2024.
CONSIDERATIONS: The budget process consists of activities that involve the development, implementation, and
evaluation of a plan for provision of services and capital assets. The Collier County budget process is part of an
overall policy framework that guides the services and functions of the County. The budget serves a key role in that
policy framework by allocating financial resources to the programs which implement the County's overall strategic
vision and policies.
To assist the Board in making informed decisions staff develops an annual budget policy that discusses the budget
process and identifies key budget controls, responsibilities, requirements, and expectations. Budget policy is an
important step in strategic and long-term planning and is a key milestone in the FY 2024 budget process.
Attached to this Executive Summary is the Collier County FY 2024 Recommended Budget Policy. The budget
policy document is broken down into three sections:
Annual budget policies that provide core budget guidance
Continuing budget policies to be reaffirmed
Multi -year financial analysis of the General Fund (001) and the Unincorporated Area General
Fund (111). This analysis provides a longer -term financial planning horizon that aids in
understanding the impact of funding decisions.
Budget Calendar: The Board is requested to establish June budget workshop dates. Tentative dates are Thursday,
June 15, 2023, and if necessary, Friday, June 16, 2023, with meeting times scheduled from 9:00 a.m. to 5:00 p.m.
These dates do not conflict with the Florida Association of Counties annual conference scheduled for Tuesday, June
27th through Friday, June 30th, 2023, in Orlando.
Adoption of the maximum tentative millage rates is scheduled for the regular Board agenda on Tuesday, July 11,
2023. 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, 2023.
The Board is requested to establish September public hearing dates for the adoption of the FY 2024 budget. The
School Board has tentatively scheduled Monday, September 11, 2023, for their final budget hearing and the County
hearings cannot conflict with School Board hearings. The recommended dates for the Collier County budget public
hearings are Thursday, September 7, 2023, and Thursday, September 21, 2023.
Constitutional Officer Budget Submittal: Finally, consistent with past practices the Board is requested to adopt
the attached Resolution establishing a May 1, 2023, deadline for the Supervisor of Elections, the Sheriffs Office,
and the Clerk's budget submittals.
FISCAL IMPACT: The adopted policies will serve as the framework for the development of budget and ad
valorem taxation issues for FY 2024.
GROWTH MANAGEMENT IMPACT: There is no Growth Management impact.
LEGAL CONSIDERATIONS: Florida Statutes Sec. 129.03(2) provides as follows:
Packet Pg. 131
03/14/2023
On or before June 1 of each year, the sheriff, the clerk of the circuit court and county comptroller,
the tax collector subject to a resolution entered into pursuant to s. 145.022 (1), and the supervisor
of elections shall each submit to the board of county commissioners a tentative budget for their
respective offices for the ensuing fiscal year. However, the board of county commissioners may, by
resolution, require the tentative budgets to be submitted by May 1 of each year.
The remaining requests are in keeping with Chapter 129 of the Florida Statutes (County Annual Budget). With that
noted, this item is approved as to form and legality and requires majority vote for approval. -JAK
RECOMMENDATION: To adopt budget policies as detailed in the attachments to this Executive Summary,
establishes June budget workshop dates and September public hearing dates. In addition, adopt the attached
Resolution establishing a May 1, 2023, deadline for the Supervisor of Elections, the Sheriff's Office, and the
Clerk's budget submittals.
PREPARED BY: Ed Finn, Deputy County Manager
ATTACHMENT(S)
1. FY24 Budget Policy PP Final (PDF)
2. Fiscal Year 2024 Recommended Budget Policies to BCC (PDF)
3. Resolution FY24 Budget (PDF)
Packet Pg. 132
11.E
03/14/2023
COLLIER COUNTY
Board of County Commissioners
Item Number: 11.E
Doe ID: 24882
Item Summary: Recommendation to Adopt the FY 2024 Budget Policy and adopt a Resolution establishing a
deadline of May 1, 2023, for budget submittals by the Supervisor of Elections, the Sheriff's Office, and the Clerk.
(Ed Finn, Deputy County Manager)
Meeting Date: 03/14/2023
Prepared by:
Title: — Office of Management and Budget
Name: Debra Windsor
03/07/2023 10:33 AM
Submitted by:
Title: Accountant, Senior — Office of Management and Budget
Name: Christopher Johnson
03/07/2023 10:33 AM
Approved By:
Review:
Facilities Management
Paula Brethauer
Additional Reviewer
Office of Management and Budget
Debra Windsor
Level 3 OMB Gatekeeper Review
County Attorney's Office
Jeffrey A. Klatzkow Level 3 County Attorney's Office Review
County Manager's Office
Ed Finn
Additional Reviewer
Office of Management and Budget
Christopher Johnson
Additional Reviewer
Corporate Compliance and Continuous Improvement
Ed Finn Additional Reviewer
County Manager's Office
Amy Patterson
Level 4 County Manager Review
Board of County Commissioners
Geoffrey Willig
Meeting Pending
Completed 03/07/2023 10:41 AM
Completed 03/07/2023 11:01 AM
Completed 03/07/2023 11:20 AM
Completed 03/07/2023 1:38 PM
Completed 03/08/2023 10:04 AM
Skipped 03/08/2023 10:54 AM
Completed 03/08/2023 3:06 PM
03/14/2023 9:00 AM
Packet Pg. 133
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11.E.b
Fiscal Year 2024
Recommended Budget Policies
Collier County Board of County Commissioners
March 14, 2023
Policy Document Page 1
Packet Pg. 167
11.E.b
Table of Contents
Section Pages
1. Overview and General Budget Planning
3 to 8
2. General FY 2024 Annual Budget Policies — Significant Influences
9 to 12
3. FY 2024 General Governmental Initiatives
12 to 14
4. Taxable Value and Tax Rate Discussion
14 to 16
5. Conservation Collier
16 to17
6. Summary of FY 2024 Budget Strategies
17 to 21
7. County Grant Funding/Cares/ARP Funding
21 to 22
8. Local Option Infrastructure Sales Tax
22
9. Long Term Capital and Infrastructure Maintenance Reserve
22
10. General Governmental Capital Asset Management
22 to 26
11. Gas Taxes; Use of Gas Taxes and Gas Tax Pledged Debt
26
12. General Fund Allocation by Agency/Department
27
13. Millage Rate Targets for MSTU's
27 to 28
14. Revenue Centric Budgets
28 to 29
15. Mission Critical Program Enhancements (Expanded) Requests
29
16. Compensation Administration
29 to 30
17. Health Insurance
30 to 32
18. Retirement Rates and Accrued Salary Savings
32
19. Financing New and Replacement Capital Infrastructure
32 to 35
20. Storm -Water Management Funding
35
21. General Fund Capital/Debt Service Contribution and Debt Mgmt.
35 to 36
22. General Governmental; Enterprise Fund and Other Reserve Policies
36 to 42
23. CPI Based Enterprise Fee Adjustments
43
24. Suggested Scheduling Timeline
43
25. Continuing Routine Budget Policies for FY 2024
44 to 46
26. Three Year Budget Projections — General Fund
47 to 53
27. Three Year Budget Projections — Unincorporated Area GF
54 to 56
Policy Document Page 2
Packet Pg. 168
11.E.b
Overview and General Budget Planning
This policy document covers significant budget influences and provides staff s budget guidance
recommendations relative to achieving the County's strategic objectives for FY 2024 and
beyond.
The annual budget policy document consists of three (3) sections which are:
• Annual Budget Policies to be Adopted
• Continuing Routine Budget Policies to be Reaffirmed
• Three -Year Forecast for the General Fund and the Unincorporated Area General Fund
Over the past year the economic landscape has ranged from a stable growth economy to an
economy that suffered from product shortages, supply line disruptions, worker shortages,
increasing interest rates and historical levels of inflation and housing costs. These factors drive
increases in operating expenditures, capital project costs and exert significant upward pressure
on payroll. Further compounding these drivers is the unknown impact of Hurricane Ian on
taxable values as well as supporting hurricane repair cashflow pending reimbursement.
Taxable value county -wide has increased for the eleventh (11) consecutive year and is expected
to increase once again for the 2023 (FY 2024) tax year. Major general governmental revenue
sources like sales tax, state shared revenues, gas taxes and the local option infrastructure sales
tax all exceeded forecast for FY 2022 and are trending higher over budget in FY 2023.
• New construction permitting has cooled slightly from 2021, but remains consistent with
2020 averages. For calendar year 2022, new construction permitting has averaged 268
permits per month, which is below the 2021 calendar year monthly average of 365 and
more in line with the 2020 calendar year monthly average of 262 permits. Most of the
new permits issued are for one -and two-family residential units.
• New home sales activity and pricing remain seasonally strong. While inventory has
increased median home prices rising from 659K in November 2021 to $850K in
November 2022 coupled with rising interest rates drove a decrease in single-family home
sales year over year from November 2021 to November 2022.
• Collier County's unemployment rate was 3.1% in November 2022, down 0.3% from
November 2021. The State of Florida and United States unemployment rate was 2.6%
and 3.7% respectively in November 2022. Unemployment rates should continue to drop
incrementally as workers return to the work force and area demand outweighs the supply.
• Visitation to the destination for December 2022 totaled 123,700, which an increase over
December 2021 visitation for the month of 120,100 and December 2020 monthly
visitation number of 112,300. Calendar year visitation for 2022 of 1.63 million is up
slightly from 2021 calendar year visitation of 1.58 million and much higher than the 2020
figure of 1.08 million. Direct spending for the 2022 period totaled $1.87 billion which,
despite the impacts of Hurricane Ian, is 12% above 2021 total of $1.67 billion.
Policy Document Page 3
Packet Pg. 169
11.E.b
As we usher in calendar year 2023, economic indicators generally point to a healthy economic
environment as our community continues to recover from Hurricane Ian. Major employers
including Collier County are continuing to exhibit strong balance sheets and local sales tax, gas
tax, state shared revenues, impact fees, and tourist development taxes remain strong. Senior
leadership regularly evaluates all economic indicators, and the organization is always
positioned to respond, if necessary, to any softening of economic conditions.
The County is positioned to structure and issue strategic general governmental and enterprise
debt for capital projects upon review and recommendation by the Finance Committee. Projects
like expansion of the transportation grid, general governmental facilities improvements, and
phase two of the eastern expansion of the County's public utility system will likely require some
form of financing during FY 2023, FY 2024 and beyond.
The Budget as a Tactical Financial Tool and Strategic Policy Model
The annual budget document is considered a single use tactical financial plan which appropriates
dollars toward one-year initiatives, activities, and projects in furtherance of longer -term policy
strategic objectives embodied in the 2023 Strategic Plan. This tactical budgetary plan begins with
an examination of annual budget policies which describe in detail the tactical issues to be funded.
While the budget is a tactical tool, components of the budget also program dollars strategically.
Multiyear capital project funding for key infrastructure often involves a phased approach and can
span three to seven years to achieve project completion. Reserves designated for future asset
maintenance and replacement, vehicle and equipment replacement, natural disasters and
unforeseen risks are considered critical strategic requirements that emphasize the need for careful
resource allocation among competing short and long-term funding priorities.
As the County's general governmental and enterprise capital assets grow, repeatedly resourcing
long-term asset maintenance and replacement becomes increasingly important.
For FY 2023, $717.9 million or 36.6% of the County's $1.96 billion net budget is for county -wide
enterprise and general governmental capital projects and capital reserves. Planning numbers for
FY 2024 within the General Fund allocate $60.6 million or 9.4% of the recommended $643.8
million spending plan toward capital initiatives including projects, debt repayment and capital
reserves.
General Governmental Revenues — FY 2022
Fiscal year ending FY 2022 key governmental revenue sources remain strong. The County's
General Fund cash position remains within policy guidelines consistent with a stable highly rated
investment quality municipal entity as determined by all three major rating agencies. The
following is a discussion of major general governmental revenue sources.
Local regular half cent sales tax revenue is the largest non -property tax general governmental
revenue source and is deposited monthly in the General Fund. FY 2022 collections were
significantly higher than both FY 2021 collections and FY 2020 collections by 17% and 44%
respectively. The County received $45,227,690 in FY 2020, $55,732,311 in FY 2021 and
$65,042,976 in FY 2022. The following graph depicts the FY 2020 to FY 2022 relationship in
collections by month.
Policy Document Page 4
Packet Pg. 170
11.E.b
$8,000,000 Half Cent Sales Tax - States Distribution to County
$6,000,000
$4,000,000 -
$2,000,000
-2020 -2021 -2022
$0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept
Budgeted half cent sales tax collections for FY 2023 total $48,000,000 which is very conservative
when compared with State estimates at $59,050,800.
State revenue sharing is yet another key general government revenue source deposited in the
General Fund. Like regular sales tax revenue, FY 2022 collections were significantly higher than
FY 2021 and FY 2020 collections by 29% and 52% respectively. The County received
$11,707,422 in FY 2020, $13,775,594 in FY 2021 and $17,758,152 in FY 2022. FY 2023
conservative budget estimates total $12,000,000. State estimates for FY 2023 total $15,502,100.
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
State Shared Revenues
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept
-2020 -2021 -2022
Aggregate special revenue gas taxes receipts have continued to grow in FY 2022, increasing over
FY 2021 and FY 2020 by 6% and 15% respectively. Actual receipts totaled $21,004,900 in FY
2020, $22,919,700 in FY 2021 and $24,195,900 in FY 2022. For FY 2023, gas tax revenue is
budgeted conservatively at $22,503,100 which is well below the state estimates of $27,241,288.
Gas Tax Revenues
Sz,soo,aoo
52,000,000
$1,500,000
$1,000,000
$500,000
-2020 -2021 -2022
$0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept
Actual Tourist development tax collections during the COVID pandemic fiscal year of 2020
dropped to $26.1 million from $31.6 million in FY 2019. Collections in FY 2021 recovered nicely
Policy Document Page 5
Packet Pg. 171
11.E.b
to $36.2 million and increased substantially in FY 2022, with collections totaling $47.5 million. It
is expected that collections for FY 2023 will drop slightly from FY 2022 as a result of Hurricane
Ian. Actual year to date collections through December 2022 are down 3% from FY 2022. In
September 2020 Fitches rating on the County's TDT bonds remain unchanged and the outlook was
modified to stable from negative.
Natural Disaster Planning/Hurricane Ian
Since landfall of Hurricane Ian in September 2022, the County has put forth significant effort and
resources into the recovery effort. As of January 2023, the BCC has approved in excess of $125
million in recovery funding and the County has expended upward of $29 million on these efforts.
For perspective on hurricane cashflow, recovery efforts for Hurricane Irma totaled $115.2 million
and the County received $98.1 million in reimbursement revenue consisting of $72.9 million in
FEMA reimbursements and $25.2 million in insurance reimbursements. Net cost to the County
for Hurricane Irma currently totals $17.1 million. The County reallocated internal resources to
cash flow Hurricane Irma recovery. Substantial FEMA reimbursement took approximately 18
months. With reimbursements continuing to trickle in through FY 2023. The County can expect
similar timing for reimbursements for Hurricane Ian.
The following summary table for FY 2023 shows the Hurricane Ian recovery budget and actuals
by fund category as of February 27, 2023.
Fund Category
Budget
Actual
General Governmental
$43,000,000
$11,148,132
Enterprise
$55,000,000
$17,372,043
TDC
$27,050,000
$1,411,199
CATT Transit
$100,000
$40,087
Total
$125,150,000
$29,971,461
There will be a significant budgetary impact both in FY 2023 and FY 2024 from Hurricane Ian
and this impact will largely depend upon when reimbursement revenue is received. The Office of
Management and Budget (OMB) is closely monitoring the reimbursement stream with a keen eye
toward implementing any necessary FY 2023 budget adjustments to ensure that sufficient cash
balances are maintained in affected funds. Any necessary budget adjustments will mostly affect
capital budgets through reduction in capital transfers and deferring appropriate capital projects.
Upon receipt of reimbursements, when possible, budgets utilized to fund Hurricane Ian recovery
efforts will be appropriately restored.
The County is prepared to cash flow the response necessary to restore the community from natural
disasters utilizing three specific budget techniques:
• First, existing capital project budgets are reviewed, and funding is re -allocated where
appropriate.
Second, general governmental and enterprise reserves are drawn down in appropriate
and prudent amounts.
Third, in funds where enough cash balance exists, FEMA revenue is budgeted, and
corresponding expense budget appropriated anticipating some level of reimbursement in
Policy Document Page 6
Packet Pg. 172
11.E.b
the coming months/years. Planned revenue and existing fund balance is utilized for cash
flow until the receipt of FEMA deposits.
County leadership is committed to a value-added coordinated emergency management approach
which coalesces all County Agencies and external partners as future natural disasters threaten
Collier County.
General Budget Planning
The FY 2024 budget plan will allocate funding for recurring operational expenses 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 is always 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 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
2024 with several financial variables yet to be determined, including.
• Tax policy decisions by the Board will determine the level of budget flexibility and the
specific resource allocation for operations and capital transfers; the level of reserve
programmed, and payment of debt will not be affected by the Board's tax policy decision.
• While issuance of debt is not programmed within the adopted budget, the budget will be
positioned for amendment during any fiscal year to allow for financing projects like the
expansion of the transportation grid; public utilities expansion to service eastern lands
development; government facilities improvements; and other policy initiatives as
directed by the Board.
• Extent of additional gap funding to complete future construction phases of the Paradise
Coast Sports Complex and disposition of the TDC advance to support Phase II
improvements.
• Discussions are ongoing between the County and the Greater Naples Fire District
regarding the process, timeline, and updated cost of providing fire service to the Ochopee
Fire District. The Ochopee Fire District is currently funded through an MSTU and a
General Fund contribution, in recognition of the large amount of state and federal lands
within the district.
• Planning for recurring general governmental industry standard funding to maintain
storm -water infrastructure; continue a "pay as you go" capital component and payment
of debt service all totaling $16.3 million consisting of appropriations from the General
Fund and Unincorporated Area General Fund.
• Board policy guidance on issues like workforce and first responder housing; mental
health programming; continued development of the Golden Gate Golf Course property;
Hussey property and Camp Keais property; and any operational implications to
Community Priorities funded by the voter approved local option infrastructure sales tax.
• Existing taxable value dependent support of economic development innovation zones
and CRA tax increments.
Policy Document Page 7
Packet Pg. 173
11.E.b
• Funding for enforcement of illegal vehicle modification and noise pollution.
• Level of capital and operational funding connected with strategic relocation of various
governmental functions on the main campus, including implications from community
priorities funded by the local option infrastructure sales tax like constructing the mental
health facility; costs connected with back -office infrastructure replacement like the
management and accounting system, and information technology system upgrades.
• Level of General Fund transfer support to the constitutional officers and specifically the
Sheriff.
• Capital funding requests documented by the Sheriff, including improvements to the jail
facility, evidence storage and support operations facility, and the Caxambas substation.
• Amount of General Fund dollars if any required to backfill the impact fee trust funds due
to continued State Legislation restricting the use of general governmental impact fees
and/or insufficient impact fee collections.
Policy Document Page 8
Packet Pg. 174
11.E.b
Annual Budget Policies
Significant Budget Influences:
Each fiscal year based upon 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 2023 comprise about 45% of total net recurring annual operating revenue and
66% of General Fund recurring revenue sources. Seventy-five percent (75%) of General Fund
revenue is comprised of property taxes, sales tax, and state shared revenue.
Sources of Current County Government
Operating Revenues all Funds (FY 2023)
I ntergov'ta I
Revenues Service Charges
7o/
Permit!
Assessme
Fines
6%
Infrastruc
Sales Ti
9%
General Fund
80%
FY 2023 General Fund Revenue Sources
Ad Valorem
66%
es
Bond
Iroceeds/
Interest
1%
Transfers fron
Consitutional
Officers
1%
'alorem
15%
Property Tax by Major Funds
Interfund Carryforward
Transfers and 18%
Payments
2%
MSTU's 2%
Conservation
Collier 6%
Pollution
:ontrol 1%
Unincorporated
Area General
Fund 11%
Sales Tax
_7%
V State Revenue
Sharing
2%
Intergov'tal
Revenues
0.5%
Interest& LFines, Permits,
Misc. Charges
0.5% 3%
Eighty percent (80%) of all levied property taxes by Collier County Government are deposited
into the General Fund and forty five percent (45%) of those collections, including state required
Board paid components, support constitutional officer operations, including the Sheriff.
Thus, significant attention is paid to property (ad valorem) taxes and those factors that can
influence millage rate and tax levy decisions. The decision to develop the FY 2024 budget around
Policy Document Page 9
Packet Pg. 175
11.E.b
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 projected to
increase 5.75%, the FY 2024 General Fund planning levy will increase $25,068,600 over the FY
2023 adopted levy. As county -wide taxable value increases and that increase begins to slow, the
state calculation for determining the rolled back rate which is influenced directly by tax increment
district valuations and the amount of tax increment dollars contributed to these districts creates a
scenario where the rolled back rate becomes close to, or is greater than, the County's long standing
millage neutral rate of $3.5645. The following points are noteworthy in considering general
governmental tax policy for FY 2024.
The County's current General Fund millage rate of $3.5645 has been levied for the past
fourteen (14) years, since FY 2010. During the recession when taxable value dropped
some $24 billion, this millage rate adopted by the BCC pursuant to policy required
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 $219 plus million in additional dollars above
the rolled back rate to fund general governmental capital and operating programs cut or
postponed during the recession, restore levels of service deemed important by the BCC
as part of annual budget guidance, establish a long term capital maintenance reserve,
participate in various strategic economic development agreements, purchase strategic
property and related development and, pursue strategic location/relocation of certain
County facilities to closely align with expanding eastern population while
simultaneously updating/replacing these facilities.
Relying on the rolled back rate as a measure of tax relief can be problematic when the
economy softens, and taxable value increases begin to slow or decrease. 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. Rolled back rate does not provide the
marginal revenue increase needed to support maintaining the County's significant
infrastructure investment, let alone capital facility expansion and related services for an
expanding population base in this community.
• Property taxes comprise 66% of total General Fund recurring revenue.
If the Board had voted to levy the rolled back rate in FY 2023 during the September
public budget hearings, $52.9 million in General Fund capital and or operating program
cuts would have been necessary. This level of 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 unforeseen natural disasters and/or
shifts in Board policy mid -year. Cuts would have likely come from reduced capital
transfers funding transportation system improvements, stormwater, and parks;
elimination of all expanded requests funded by the General Fund required to service new
facility improvements, and current service County Manager Agency and or constitutional
officer operating reductions.
Policy Document Page 10
Packet Pg. 176
11.E.b
• Programmed within the General Fund for FY 2024 is $45.7 million supporting various
general governmental capital initiatives, not including debt payments or capital reserves,
in the areas of transportation, parks and recreation, stormwater, museums, and of course
constitutional capital requests.
• Constitutional operating transfers out of the General Fund (including Board paid
requirements) constitute 45.1 % of all FY 2023 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.
Of the $635.5 million -dollar FY 2023 General Fund Budget only about 31.9 percent, or $202.5
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.
General Governmental, 31.9% I
Roads
34,264,800
Stormwater
11,001,500
Other G&A
5,639,600
County Attorney
3,377,700
County Manager
2,025,500
Budget/Mgmt/Grants
1,612,900
Corp Compll & Int Review 1,718,300
CollierTV/Comm.
127,400
Domestic Animal Svcs
4,418900
Library
10,377:900
Museum
663,000
Veteran Sew
425,900
Parks & Rec.
20,079,900
Affordable Housing
500,000
Social Sews & Seniors
3,168,500
Univ Extension Svcs
949,200
Sports Complx-Ops&Cap
7,029,100
Facilities Mgmt
33,142,700
Other Cap Prof
24,660,500
Real Estate Svcs
1,034,600
Info Tech
3,981,600
Collier -ARP Grants
10,000,000
Employee Svcs
2,725,300
Purchasing
2,994,200
Department Admins
3,566,600
CAT/Transp. Disadvant.
5,882,300
Econ. Dev/Impact Fees
951,000
Health & Property Ins
4,000,000
Courts 2.212.600
TOTAL $202,531,500
FY 23 General Fund (001)
Budgeted Expenditures
by Category
Total $635,512,800
Health, Safety, Welfare, 55.3%
Mental Health 3,059,500
Health Dept. 1,966,600
Emergency Svcs 33,627,400
State Atty 762,200
Public Def. 377,700
Judges 68,000
Sheriff 243,407,600
Reserves 68.366.400
TOTAL $351,535,400
Debt Service 1.3%
Special Obligation Bd 7,774,700
Loans to Impact Fee Fds 757.700
TOTAL $8,532,400
Mandates, 11.5NJ
Board Office
1,485,900
Dept of Juv Justice
1,841,900
Medicaid
3,300,000
Beach Parking
500,000
Facilities (Utilities)
3,481,500
Reg. Plan. Council
0
CRAB; EcoDev & InnovZon 13,884,000
Elections
5,012,100
Prop. Appraiser
8,555,700
Tax Collector
23,476,300
Clerk of Courts
11,376.100
Property tax revenue comprises 78% 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 83%. Continued reduction in state shared communication services tax
revenue will significantly impact general governmental services appropriated in this fund.
Policy Document Page 11
Packet Pg. 177
11.E.b
FY 23 Unincorporated General Fund (111)
Budgeted Expenditures
General Governmental, by Category
75.0%
Parks & Rec. - Ops
16,350,400
Parks & Rec. - Cap
3,450,000
Landscape - Ops
2,934,500
Landscape - Cap
10,600,000
Road Maint - Ops
2,611,200
Road Maint - Cap
3,800,000
Stormwater-Ops
5,005,000
Stormwater-Cap
5,387,900
IT Capital
658,800
Other Gen&Admin
2,973,900
Public Info
2,192,900
Clam Pass
150,000
Housing
132,000
Facilities Mgt Cap
133,500
Improvement Districts 444,600
Impact Fee Office
65,000
TOTAL
$56,889,700
Total $75,873,000
Health, Safety, Welfare,
13.4%
Code Enforce L4,722,800
Div of Forestry
Reserves TOTAL
MIL
Mandates,11.6%
Zoning,Land Dev,Comp Plan 2,676,300
Other G&A (Ins&Beach Pking) 940,400
GMD rent & overhead
510,500
Cable Admin
301,900
Coastal Zone
224,200
Natural Resources
259,900
Pelican Bay
520,000
Hearing Officer
62,500
Metro Plan Counsel
5,000
CRAB' & Innov Zones
1,386,100
Property Appraiser
490,200
Tax Collector
1,426,600
TOTAL
$8,802,600
Like the General Fund, flexibility exists within the Unincorporated Area General Fund if a
response to any state shared communication services tax reduction is required. A substantial
reduction in the state shared communication services tax would require cuts to general
governmental operating programs and/or capital transfers, absent a replacement revenue source
like a franchise fee. Florida counties possess the right and power to enter into a franchise agreement
with utilities — typically electrical - which franchise establishes terms for use of rights of way and
the compensation to be received for allowing the use of rights of way. The compensation can be
up to 6% of the revenue received by a utility from customers located within the counties
unincorporated political boundary. Many Florida counties and incorporated municipalities have
entered into utility franchise agreements. Lee County reached terms of an electric franchise
agreement with FPL and LCEC. Lee County customers are currently paying a 4.5% fee on their
utility bill which raises around $18 million annually.
FY 2024 General Governmental Initiatives:
Identified general governmental capital improvements/operating initiatives over the next few years
include:
• Preliminary land use planning on the Camp Keais and Hussey property.
• Partially restore reserves utilized for Hurricane Ian recovery.
• Hardening County facilities in preparation for natural disasters and the related grant match.
• Major upgrade and hardening of the County's 800MHz radio network.
• Upgrades to IT infrastructure, including security measures and the County's various
management, financial and accounting software like SAP.
• Constructing phase three of the Paradise Coast Sports Complex including related
operations.
Policy Document Page 12
Packet Pg. 178
11.E.b
• Park system infrastructure renewal and replacement.
• Ongoing funding for the development of the Golden Gate Golf Course.
• Sheriff's capital projects including jail building envelope update, Caxambas seawall
replacement and various maintenance and substation and facility upgrades.
• Ochopee Fire service agreement with Greater Naples Fire District and necessary additional
contract funding commitments.
• Operational and maintenance implications of constructing projects funded by the local
option infrastructure sales tax.
• Ongoing funding for storm -water maintenance and continued capital infrastructure
upgrades.
• Contributions to economic development initiatives like innovation zones.
• Funding for enforcement of illegal vehicle modification and noise pollution.
• Continued funding for Affordable/Workforce housing incentives.
• Funding for unforeseen state and federal mandates.
Whether paid by cash, financed, or funded through the Local Option Infrastructure Sales Tax,
operating, and maintaining this enhanced level of infrastructure improvement and service
initiatives 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,
reserve dollars of $5 million will be replenished for FY 2024 and dedicated to maintaining the
County's future general governmental hard and soft infrastructure investment. It is envisioned that
the reserve amount will continue to grow in varying amounts but no less than $5 million annually,
with the amount ultimately tied to the Board's tax rate policy. Regular annual deposits to this fund
isolate dollars for future asset maintenance from competing programs, services and initiatives that
receive dollars from a limited resource pool. At the very least, cash on hand through this reserve
will provide a hedge against natural disasters and potentially lessen the need for government
borrowing in the future.
Each year as new general governmental capital improvements are brought online pursuant to Board
policy, the level of funding required to support these facilities grows. Additionally, the regular
contributions to CRA's and innovation zones grow annually as the tax base increases. Assuming
no change in tax rates, the cost of operating new facilities and funding CRA's/innovation zones
reduces funding otherwise available to support general governmental services.
General Fund and Unincorporated Area General Fund contributions to CRA's and innovation
zones for FY 2023 totaled $11.9 million (an increase of $2.4 million over FY 2022) and $1.4
million (an increase of $292K over FY 2022) respectively and these numbers will grow in FY
2024 with projected tax base increases.
Other factors that will be significantly impacted by general governmental tax policy include:
Extent of capital and operational transfer dollars expended by the General Fund and
Unincorporated Area General Fund.
Policy Document Page 13
Packet Pg. 179
11.E.b
• Level of service standards set by the Board for agencies and departments which are funded
within the General Fund and Unincorporated Area General Fund.
• 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.
• General Fund and/or Unincorporated Area General Fund support for new or re -prioritized
operating and capital initiatives which were described above under FY 2024 general
governmental initiatives.
• 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);
further reductions in state health care and social service funding; continued attempts to
very restrictively define how impact fee revenue can be used; as well as impacts from any
reduction in federal payment in lieu of taxes (PILT) funding.
• 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 strong beginning year General Fund and Unincorporated Area General
Fund cash balance in accordance with policy.
2. Policy driven growth in general governmental reserves.
3. Scheduled annual payment on the County's debt service; and
4. Maintaining the County's excellent market credit rating.
Discussion of Taxable Values, Millage Targets for the General Fund (County -Wide) and
Unincorporated Area General Fund and Related FY 2024 Budget and Financial Strategies
While the county -wide tax base has increased for eleven (11) consecutive years (trending to twelve
for FY 2024), maintaining a millage neutral General Fund policy position remains the
recommended management objective. When setting millage rate policy, elected leaders need to be
mindful of the following points.
A consistent millage neutral tax rate captures marginal increases in property tax
revenue when taxable values increase and provides a level of tax relief when taxable
values decline usually when the economy is softening.
Relying on a rolled back rate policy, intended to raise the same property tax revenue as
the immediate prior tax year, does not provide the consistent marginal revenue increase
needed to support capital facility expansion and related services for an expanding
population base in this community; nor does the rolled back rate provide relief during
periods of economic decline because the rolled back rate will increase when taxable
values drop.
Policy Document Page 14
Packet Pg. 180
11.E.b
The following table provides a history of Countywide and Unincorporated Area taxable values
over the past fifteen (15) years (tax year 2008-2022), as well as the budget planning projection for
tax year 2023 (FY 2024).
Tax Year
County Wide
Taxable Value
County Wide %
inc. (dec)
Unincorporated
Area Taxable Value
Unincorporated
Area % inc. (dec.)
2008 Y 2009
$78,662,966,910
--------------
$50,860,023,424
-------------
2009 Y 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 Y 2014
$60,637,773,315
3.7%
$37,207,018,234
3.3%
2014 Y 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 Y 2019
$88,286,266,672
5.6%
$54,781,508,980
5.8%
2019 Y2020
$93,175,403,621
5.5%
$58,037,803,377
5.9%
2020 FY2021
$99,159,595,002
6.4%
$62,320,804,025
7.4%
2021 FY2022
$104,679,006,577
5.6%
$65,864,893,076
5.7%
2022 Y2023
$122,310,558,113
16.85%
$77,062,200,538
17.00%
2023 (FY2024)
Planning
$129,343,415,204
5.75%
$81,493,277,069
5.75%
The August 2022 State Ad Valorem Estimating Conference Report for the 2023 tax year (FY 2024)
projects that Collier County certified taxable values (county -wide) on July 1, 2023, will increase
9.5%. This number appears to be very aggressive and is likely based upon housing values during
the first half of calendar year 2022. This projection does not include the potential effects of
Hurricane Ian on county -wide taxable values. Staff have been adept over the years at sizing the
planning budget around a conservative yet functional taxable value planning number providing for
maximum budget flexibility considering that most budget planning is over before the certified
taxable value number is received from the Property Appraiser at the end of June.
The taxable value estimate must allow for operational and capital programming needs as well as
reserve growth. Budget planning around a conservative 5.75% taxable value increase is realistic
and accomplishes the objective of budget planning flexibility. 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 66% of the General Fund (001) and 45% of the total net county
recurring revenue budget, including fund balances. According to Urban Institute, local government
general property tax collections as a percentage of all general governmental collections for
counties total 28% on average.
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.
Tax or "millage" rates for the past eighteen (18) years are shown in table form below.
Policy Document Page 15
Packet Pg. 181
11.E.b
Millage Area
FY 06
FY 07
FY 08
FY 09
FY10-FY16
FY17-FY23
FY 24
(7 Years)
(7 Years)
Planning
General Fund
$3.8772
$3.5790
$3.1469
$3.1469
$3.5645
$3.5645
$3.5645
Unincorporated
$.8069
$.8069
$.6912
$.6912
$.7161
$.8069
$.8069
Area General Fund
The following table depicts taxable values and levies at various tax base increase scenarios under
a millage neutral rate. The County Manager is proposing to maintain the General Fund tax rate at
millage neutral, or $3.5645 per $1,000 of taxable value. The Unincorporated Area General Fund
tax rate is also recommended to remain at millage neutral, or $.8069 per $1,000 of taxable value.
The respective General Fund and Unincorporated Area GF dollar values at the various scenarios
are shown below.
Current Taxable
Value Pre VAB
FY 2024 @ 2%
FY 2024 @ 4%
FY 2024 @
5.75% Policy
Planning
Numbers
FY 2024 @ 8%
FY 2024 @ 10%
General Fund /
County Wide
122,310,558,113
124,756,769,275
127,202,890,438
129,343,415,204
132,095,402,762
134,541,613,924
Unincorporated Area
General Fund
77,062,200,538
78,603,444,549
80,144,688,560
81,493,277,069
83,227,176,581
84,768,420,592
Current Levy
General Fund at
3.5645
435,975,984
444,695,504
453,415,024
461,044,603
470,584,063
479,573,583
Conservation Collier
at 0.2500
30,577,640
31,189,192
31,800,745
32,335,854
33,023,851
33,635,403
County Wide Total
1 466,553,624
1 475,884,696
1 485,215,769
1 493,380,457
1 503,877,914
1 513,208,986
Unincorporated Area
GF at $.8069
62,181,490
63,425,119
64,668,749
65,756,925
67,156,009
68,399,639
2% - Variance
from Current
Levy
4% - Variance
from Current
Levy
5.75% - Variance
from Current
Levy
8% - Variance
from Current
Levy
10% - Variance
from Current
Levy
General Fund
(millage neutral
8,719,520
17,439,039
25,068,619
34,878,079
43,597,598
Conservation Collier
at 0.2500
611,553
1,223,106
1,758,214
2,446,211
3,057,764
County Wide Total
1
1 9,331,073
1 18,662,145
1 26,826,833
1 37,324,290
1 46,655,362
Unincorporated Area
GF(mil lage neutral
1,243,630
2,487,260
3,575,436
4,974,519
=6,218,149
If taxable values fall below the five and three quarter (5.75%) 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. Staff continues to recommend 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.
Conservation Collier - On November 3, 2020, the Collier County electors approved the
Conservation Collier Re-establishment referendum with a 76.5% majority. This voter approval set
a county -wide millage rate not to exceed $.2500 mills for ten (10) years and does not include the
issuance of debt to acquire environmentally sensitive land.
Policy Document Page 16
Packet Pg. 182
11.E.b
Accordingly, the FY 2024 budget is proposed to be developed to include a Conservation Collier
Program tax levy of .25 mil that will generate up to $32,335,854. Consistent with Ordinance 2002-
63 as amended, twenty-five percent (25%) of annual gross tax receipts is deposited into the
Conservation Collier Management Trust Fund to provide for long term management of lands
acquired through or managed by the Conservation Collier Program. For FY 2023, this transfer
totals $7,262,200. Remaining tax collections will remain in the Conservation Collier Acquisition
Trust Fund (Fund 172) for use in acquiring environmentally sensitive lands. Per the FY 2021
annual report presented and accepted by the Board on April 26, 2022, it is recommended that
starting in FY 2024 up to 10% of the annual levy be allocated to fund public amenities at preserves
which may include boardwalks, facilities, parking and programing.
Summary of Significant FY 2024 Adopted Budget Strategies to Achieve a Structurally
Balanced Budget
The following table highlights certain FY 2024 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 2024 millage neutral General
Fund (001) operating budget along with service level and related budgetary and
millage implications. Planning for recurring operating cost increases of 4.25% is below
the identified CPI increase of 9.9% (see discussion below) and will result in
department reductions within strategic identified areas to meet this budget guidance.
The FY 2023 General Fund Adopted Budget appropriates dollars to fund all
constitutional agency operations which is roughly 45% of all General Fund
appropriations; County Manager agency operations; substantial capital transfers not
including capital reserves and debt service totaling $59 million to general
governmental facilities and constitutional capital needs, the regional park system, the
transportation network, stormwater maintenance, museums, and the Paradise Coast
Sports Complex. General Fund reserves for FY 2023 are within policy parameters and
currently total $54.6 million.
2
Proposed FY 2024 guidance for the Unincorporated Area General Fund (111) includes
maintaining the millage rate at $.8069. The Unincorporated Area General Fund
appropriates dollars for operating services like community parks, road maintenance,
stormwater, landscape operations and maintenance, comprehensive planning, zoning
and land use, code enforcement and coastal zone operations. Substantial capital
transfers to parks, the transportation network, landscape maintenance and stormwater
maintenance continue and for FY 2023 those capital transfer dollars totaled $23.2
million. Reserves continue to be funded at policy levels which is a minimum of 2.5%
of operating expenses.
3
County Manager agency expanded services will be limited to operating new Board
approved capital facilities, Board directed level of service adjustments, and/or
historically strained mission critical imperatives. County Manager Agency total
budgeted personal services costs for FY 2023 is $231.3 million or 50.5% of all County
personnel costs. Constitutional budgeted personal services for FY 2023 totals $227
million, or 49.5% of County Personnel costs.
Policy Document Page 17
Packet Pg. 183
11.E.b
4
Pursue a strategy in FY 2024 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, in FY 2024 an additional $5 million will be allocated to the restricted
future capital reserve created in FY 2020. These reserve dollars are dedicated to
protecting the County's future general governmental hard and soft infrastructure
investment. Regular annual deposits to this fund 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
Establish 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 expansion
initiatives; and statutory or ordinance spending limitations. A critical review of
operating and capital reserve levels versus operating and capital appropriations will be
discussed during County Manager budget deliberations with an expectation that enough
recurring resources are devoted to maintaining the utility asset at a high standard while
resources are set aside to protect cash and fulfill our fiduciary responsibility to public
protection in the event of a natural disaster.
7
Continue General Fund (001) county -wide debt and capital transfers to cover regular
special obligation revenue bond debt service; provide any necessary loans to the
impact fee trust funds to cover the debt service gap due to insufficient impact fee
collections; fund park's capital; support future airport capital grant matches; fund
constitutional officer capital needs; and help pay for needed general governmental
facility repairs.
8
The FY 2024 budget planning model under a millage neutral tax rate for FY 2024
allocates $16.3 million dollars from the General Fund and Unincorporated Area
General Fund toward existing storm -water infrastructure maintenance; pay as you go
capital; operations; and debt repayment. Debt service on the recent 2020A Special
Obligation Revenue Bond — $60 million stormwater component — totals $2.2 million
for FY 2024 thus the net amount for stormwater capital, system maintenance, and
operating components totals $14.1 million.
9
The FY 2024 planning model at millage neutral increases the park capital and
infrastructure maintenance general governmental transfer to $7.6 million; the net
amount after covering FY 2024 debt service of approximately $700K on the $20
million 2020A Special Obligation Revenue Bond component totals $6.9 million.
10
The FY 2024 budget will be planned for maximum flexibility which will allow for
quick adjustments resulting from a softening economy; natural disasters; Board policy
initiatives; issuance of debt; changing expense timing; and unforeseen unfunded
mandates.
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Policy Document Page 18
Packet Pg. 184
11.E.b
11
Establish General Fund contingency reserve at 3.0% of total budgeted appropriation
(less capital/debt transfers) and maintain the General Fund cash balance reserve at
$57.1 million bringing total General Fund reserves to $71.9 million, an increase of
$3.5 million over FY 2023. This modest 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; 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; and, if necessary tap reserves to cover any
emergency disaster expenses and/or strategic Board policy initiatives.
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, where appropriate, on future new universal and sustaining revenue
sources, like a franchise fee applicable to unincorporated area electric utility
customers, to diversify the composition of the County's recurring general
governmental revenue mix.
Component increases of 4.25% devoted to operations at the department level is planned. This
means that department operations for FY 2024, which rely on the General Fund and
Unincorporated Area General Fund for dollars, will be restricted to a four and a quarter percent
(4.25%) increase for current programs, services, and operating transfers. For FY 2024, the
percentage operating adjustment will be translated into a dollar value for each department head to
consider as priorities dictate. Mission critical program enhancements (Expanded Requests) will be
reviewed on a case -by -case basis.
Limited general governmental operational expense increases are expected and will be appropriated
to account for new programs and services instituted during FY 2023, inflationary adjusted fixed
costs and maintaining a competitive compensation package. The December 2021 over December
2022 CPI for the Miami Fort Lauderdale SMSA is 9.9 percent. It is expected that the inflation rate
will moderate over the coming months.
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
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, stormwater, and heavy equipment.
For FY 2024 planning purposes and discussion in this policy document, the total General Fund
Budget is programmed to increase by $8,275,400. The following table depicts by category the
revenue and expense positive or negative changes connected with the FY 2024 General Fund
Planning Budget and the variances from FY 2023. Also shown for comparison are the budget
variances by category between FY 2022 and 2023.
Policy Document Page 19
Packet Pg. 185
11.E.b
Major Revenue Variances:
Ad Valorem Taxes
Sales Tax & Revenue Sharing
Department Revenues
Enterprise and Federal PILT and Cost Allocation
Transfer Revenue
Constitutional Officer's Turnback/Excess Fees
Interest
Carryforward
Less 5% Required Revenue Reserve
Total Revenue Increases
Major Expenditure Variances
County Manager, Court's and Other General
Operations
Operating Transfer's
Capital & Debt Transfer's
Sheriff Transfer
Other Constitutional Transfer's
Reserves
Total Expenditure Increases
Variance between
Budget FY 2023 and
Planning FY 2024
$ 25,068,600
4,000,000
1,250,500
927,000
(1,389,400)
100,000
0
(20,160,400)
(1,520,900)
8,275,400
4,288,400
4,984,600
(24,431,600)
16,544,800
3,397400
3.491.800
8,275,400
Variance between
Budget FY 2022 and
Planning FY 2023
$ 12,787,800
8,000,000
(645,800)
462,600
(2,231,200)
(100,000)
0
17,659,400
(1,002,100)
$34,930,700
5,471,700
4,652,000
14,355,500
7,583,800
1,433,300
1.434.400
$34,930,700
Several observations can be made from this table. As discussed throughout this document, property
tax revenue dominates general governmental funding. Of significance also is 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 negative budgeted carryforward variance of $20.2 million from FY 2023 to FY 2024 is the
result of forecast operating expense above budget due to the cash -flow requirements for the
response and recovery from Hurricane Ian. Though the County has positioned itself to receive
expedited payment from FEMA for a portion of expenditure to date, due to the timing uncertainty
reimbursements coupled with potential additional funding requirements for future repairs these
revenues were not included in the forecast. This conservative position allows for flexible operating,
capital transfer and reserve appropriation planning leading into FY 2024.
The planned increase in all General Fund budgeted reserves represents a regular managed increase
of $3.5 million over FY 2023 consistent with policy planning standards. Impact Fee collections
remain stable and for FY 2024 only $1.4 million is required from the General Fund to subsidize
growth related debt. While not a trend due to the volatility of impact fee collections, increased
collections over budget is a contributing factor allowing for a greater level of General Fund capital
transfers planned in FY 2024.
Each new program, service, initiative, or capital facility has recurring funding obligations, and the
layering effect becomes magnified each fiscal year. Whether staffing and operating the Paradise
Coast Sport's Complex and Big Corkscrew Regional Park, contributing to economic development
incentive zones, satisfying approved economic development agreements, storm -water
programming, senior facility initiatives, buying land, fostering workforce housing, supporting
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11.E.b
social services, investing in our public safety facilities or the myriad of other current or future
funding requirements, the County's annual public safety investment and servicing a demanding
and growing citizenry requires stable resources and currently that stable resource is primarily
property taxes.
As a balancing measure, budget management is ongoing and 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 recognize our ongoing program, service and capital commitments which
have made Collier County "the best community in America to live, work, and play", the level of
dollars devoted to this laudable 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 appropriate General Fund cash is
always a major focus and by policy the cash position is set at a minimum of 15% of actual
expenditures. Given our current General Fund reserve levels and cash flow requirements, it has
been prudent and OMB staff strives to maintain a cash position in this fund of between 20% and
30% of actual expenses. The actual General Fund cash and cash equivalents position at year ending
9/30/22 totaled $157,929,500 or 33.5% of actual expenses for FY 2022.
Each fiscal year the cash requirements due from the General Fund during the first quarter of the
fiscal year grows and is necessary to satisfy mandated cash flow transfers to the Constitutional
Officers, meet general operating requirements, debt service, required CRA and Innovation Zone
transfers and generally sustain operations in advance of property tax receipts received in
December.
County Grant Funding:
County participation in the State and Federal grant process remains aggressive but while the
common thinking is that grants are free money, the administrative burden surrounding application;
on site post award administration; and single audit compliance notwithstanding the local match
requirements and cash flow realities must not be overlooked. Program areas where grants are
prevalent include the Metropolitan Planning Organization (MPO), Transit, Housing,
Transportation, Stormwater, Airport, COVID 19 (Pandemic), Parks, Disaster Recovery, and other
areas. As of February 2023, the County had $394.7 million in active grants plus another $48.6
million scheduled to become active. Of the total $443.3 million active or soon to be active grants,
the local match requirement totals $63.3 million which must be found through the budget
amendment process by the respective Department's from existing appropriations as part of the
grant award process.
All Cares Act, American Rescue Plan Act and other Pandemic dollars allocated to Collier
County now totals $191.1 million of which $166.7 million has been spent for individual assistance,
business assistance, transit services, aging services, and public safety. Spend down of the
remaining balance, as directed by the Board, will occur over the next few fiscal years in accordance
with federal requirements. The Board had previously approved internal transfer dollar re-
programming using Cares Act dollars to fund eligible EMS and Sheriff operations thus meeting
revised Federal and State Cares Act distribution guidelines. It is expected that this type of
budgetary action allowing maximum flexibility in how the funds are used will be recommended
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in the future. Board action has also allowed for the redirection of general governmental and
CARES dollars totaling $44 million to first address needed community support initiatives like
individual, business and nonprofit assistance and second, reimburse when appropriate, based upon
Board direction, local government expenses.
Local Option Infrastructure Sales Tax:
Local Option Infrastructure Sales Tax Capital Fund (318) provides the accounting structure for
managing all projects approved by the Board consistent with Ordinance 2018-21. Currently there
are thirty-eight (38) approved projects budgeted within funded programs including Big Corkscrew
Regional Park Phase 1; EMS stations, Mental Health Facility, VA Nursing Home, Vanderbilt
Beach Road Extension, Sidewalks, various hurricane resiliency initiatives; HVAC, roofing, and
facility upgrades; DAS shelter and the Sheriff's Forensic and Evidence Building. Once a project
is approved by the Board, the project accounting structure is set up and budget is moved from
reserves to a project budget. To date, a total of $362.5 million in infrastructure sales tax dollars
has been received. Under the same statutory spend down rules, interest income on the proceeds
received to date total an additional $3.9 million. It is expected that the $490 million will be
collected in FY 2023 and the Board will be requested to approve terminating collections effective
December 31", 2023.
Future General Governmental Capital Improvements
Long Term Capital Reserve
Recognizing the County's mounting future general governmental asset maintenance responsibility,
a Reserve Fund was created for FY 2020, fencing off dollars in incremental amounts annually
dedicated to protecting the County's future hard and soft general governmental infrastructure
investment. Regular annual deposits to this fund emphasizes the need to isolate dollars for future
asset maintenance obligation, knowing the many competing programs, services, and initiatives
must receive dollars from a limited resource pool. For FY 2024, $5 million is budgeted bringing
the total reserve amount to $10.8 million. Drawing on this reserve will of course require Board
action under guidelines developed by OMB and the County Manager. For example, in FY 2023
reserves were reduced by $30 million to provide funding to respond to Hurricane Ian.
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 nonrecurring 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
contained within the Capital Improvement Element (CIE) will require some financing component
despite the local option infrastructure sales tax.
The County issued competitive bond financing in November 2020 to maintain, replace existing
and construct new storm -water infrastructure; replace park aquatic systems and related recreation
improvements; payoff variable rate commercial paper used to purchase the Amateur Sports
complex property, and purchase strategic eastern lands property. Augmenting the annual cash and
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carry component of infrastructure maintenance are dollars set aside in a separate reserve fund for
future infrastructure replacement and maintenance. 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 currently
planned in FY 2024 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
Capital
Long Term
Replacement
Capital
Reserve
Total
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
$3,694,200
$1,040,200
$0
$10,591,500
$1,625,600
$3,200,000
$9,388,900
$4,694,400
$5,000,000
$39,234,800
FY 2021
$3,650,400
$2,192,100
$0
$12,265,900
$4,753,000
$3,350,000
$8,817,300
$4,868,800
$5,000,000
$44,897,500
FY 2022
$8,908,000
$1,832,000
$0
$20,743,600
$4,435,000
$3,070,000
$8,817,300
$2,677,800
$7,500,000
$57,983,700
FY 2023
$7,774,700
$757,700
$0
$29,918,600
$6,628,300
$3,177,500
$10,625,900
$8,271,500
$18,300,000
$85,454,200
FY 2024
$8,469,000
$1,418,600
$0
$25,535,000
$5,200,000
$3,000,000
$9,200,000
$2,800,000
$5,000,000
$60,622,600
*FY 2015: EMS Station, SOE Complex, & Sheriff Substation. FY 2016: Additional funding for Sheriff Substation. FY18: EMS Station.
FY 19 EMS Station.
For FY 2024, funding as planned above will of course be subject to Board guidance on millage
rates and taxable property values received in July 2023. For perspective, countywide capital and
debt service expenses contained within the planning model and shown above amounts to 9.4% of
all General Fund planned appropriations for FY 2024. When you include Constitutional Officer
transfers at 47.6% of planned FY 2024 General Fund expenses and reserves, which are 11.2% of
total General Fund expenses, these three components account for 68.2% of all General Fund
expenses in the planning model.
The General Fund regularly appropriates substantial dollars to new general governmental capital
and asset replacement projects benefitting 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 superior investment quality
credit rating, and paying debt service will always take priority as expenditure planning evolves.
Generally, these priorities are strategically managed, and 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. Further, the modest cost of capital environment which currently
exists provides opportunities to lock in low interest rates and capitalize on the County's exemplary
credit rating.
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11.E.b
Unincorporated Area
General Fund
Transfer
to Parks
Transfer to
Roads
Transfer to
Storm -Water
Capital
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
$2,500,000
$4,000,000
$1,300,000
$7,800 000
FY 2021
$2,950,000
$3,000,000
$3,125,200
$9,075,200
FY 2022
$3,450,000
$3,000,000
$3,125,200
$9,575 200
FY 2023
$3,450,000
$3,800,000
$5,387,900
$12,637,900
FY 2024*
$3,900,000
$13,600,000
$3,200,000
$20,700,000
* Effective in FY 2024 the transfer to Road and Bridge Fund 310 includes funding for landscaped
median renewal and maintenance.
Issuing strategic variable rate short term and/or fixed rate long-term debt is an important part of
the County's capital improvement program under the basic premise that future residents should
pay for improvements that they will enjoy and not just current residents. Further, the modest
cost of capital environment which currently exists provides opportunities to lock in low interest
rates and capitalize on the County's exemplary credit rating.
Since October 2018, the County has issued $451 million in general governmental and enterprise
debt to fund several strategic initiatives including:
• Series 2018 Tourist Development Tax bonds totaling $62.9 million dated October 2018 to
finance construction of the Paradise Sports Complex.
• Collier County Water/Sewer District revenue bonds dated April 2019 in the amount of $76.2
million to finance the acquisition, construction and equipping of various utility capital
improvements servicing the northeast area of Collier County.
• Strategic purchase in July 2019 of the Golden Gate Golf Course for $28 million through a
taxable competitive bank loan.
• Series 2020 A&B tax exempt and taxable debt in the amount of $115 million dated October
2020 for strategic eastern lands property acquisition, construction of stormwater facilities
and improvements to various park and recreation aquatic facilities.
• Collier County Water/Sewer District revenue bonds dated July 2021 in the amount of $128.9
million to finance the acquisition, construction and equipping of various utility capital
improvements servicing the northeast area of Collier County and Golden Gate City.
• In June 2021, a $10 million commercial paper line of credit to finance Pelican Bay
infrastructure improvements was authorized.
• In July 2022, a $30 million commercial paper line of credit to finance a portion of the
Vanderbilt Beach Road Extension was authorized.
The following chart provides a summary description of General Fund transfer dollars programmed
for, FY 2020 through FY 2023 and those planned for FY 2024 for various strategic general
governmental capital initiatives. This table does not include debt service transfers or the annual
long term capital reserve transfer. No projects within the table below are slated for funding
from the Local Option Infrastructure Sales Tax.
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11.E.b
General Fund Supported Capital
Category
FY 20 Budget
FY 21 Budget
FY 22 Budget
FY 23 Budget
FY 24 Budget
Medical Examiner Bldg. Expansion &
Repairs
$0
$2,500,000
$0
$500,000
$0
Jail Windows
$0
$0
$0
$950,000
$3,000,000
Jail& other Sheriff Facility Repairs
$1,000,000
$0
$1,000,000
$1,000,000
$1,000,000
Sheriff Helicopter Replacement
$0
$2,000,000
$5,000,000
$0
$0
Sheriff Forensic & Evidence Bldg.
$0
$0
$0
$0
$0
Sheriff Identification System Replacement
$0
$0
$0
$1,000,000
$0
Sheriff Caxambas Seawall
$0
$0
$0
$600,000
$1,200,000
Voting Machines
$400,000
$475,000
$0
$0
$0
Clerk's Annex Reorganization and Finance
Dept Relocation
$0
$1,800,000
$735,000
$0
$0
Financial Accounting System (SAP)
Upgrade
$2,750,000
$0
$2,000,000
$1,000,000
$1,000,000
Senior Center Renovations
$0
$500,000
$0
$0
$0
Golden Gate Golf Course
$500,000
$1,000,000
$0
$7,000,000
$2,000,000
Relocation of Campus Facilities and Office
Operations
$0
$540,700
$400,000
$0
$0
Libra — Update interior
$0
$0
$0
$630,000
$0
Library Capital/Books
$950,000
$600,000
$500,000
$900,000
$1,000,000
General Building Maintenance Repairs
$5,000,000
$5,000,000
$5,000,000
$6,922,200
$8,000,000
Major Projects & Roof Replacements
$0
$0
$5,000,000
$0
$1,500,000
Video Monitoring System replacement
$0
$0
$2,188,400
$2,545,900
$0
General Ops Business Park GOBP
$0
$0
$0
$5,000,000
$0
Great Wolf
$0
$0
$0
$2,000,000
$5,000,000
Paradise Coast Sports Complex
$0
$0
$4,235,000
$4,000,000
$0
800MHz Radio Hardening
$0
$0
$0
$1,213,000
$6,000,000
Other General Governmental
$8,500
2,149,400 *
$1,079,800*
$657,500
$835,000
Cashflow Irma for consultants' invoices —
waiting for FEMA
$3,326,500
$0
$0
$0
Museum Capital
$200,000
$0
$200,000
$200,000
$200,000
Airport Capital Grant Match
$1,425,600
$1,426,500
$0
$0
$0
Park Capital
$3,200,000
$3,350,000
$3,070,000
$3,177,500
$3,000,000
Boater improvement Capital
$0
$0
$0
$428,300
$0
Transportation Capital
$9,388,900
$8,817,300
$8,817,300
$10,625,900
$9,200,000
Stone -water Capital
$4,694,400
$4,868,400
$2,677,800
$8,271,500
$2,800,000
Total
$29,500,400
$34,055,000
39,743,700
$589621,800
$4597359000
*($2,149,400) = $50k for minor maintenance for software costs and $40k Coastal Zone Water Quality. Also, m FY20, completed projects with
residual fimding were moved to Reserves to help fund FY21 projects reducing the need for additional General Fund support.
*$(1,079,800) = $340k for minor maintenance for software costs, $50k Coastal Zone Water Quality. Also, in FY21, completed projects with residual
funding were moved to Reserves to help fund FY22 projects reducing the need for additional General Fund support
Direct general governmental capital maintenance funding for parks and stormwater related system
improvements from the General Fund and Unincorporated Area General Fund for FY 2024 under
the current planning scenario totaling $15.8 million decreased from FY 2023, and part of this
allocation, or $2.9 million, will be applied to payment of debt service on the 2020A tax exempt
Special Obligation Revenue Bond issued to finance stormwater and parks improvements. Of
course, the allocation may change as the FY 2024 budget evolves leading into the June workshop,
once taxable values are known, and budget requests are vetted.
The planned allocation shown in the table above includes transfer dollars to maintain the
transportation network, dollars for road resurfacing, intersection improvements, sheriff capital,
administrative accounting system, and an array of other capital support.
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
viewed as 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.
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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.
Use of Gas Taxes and Future Gas Tax Pledged Debt:
In July 2022 the Board approved the renewal of the 5 Cent, 6 Cent and the 9th Cent local option
gas taxes through December 31, 2055. Gas tax dollars which align with the current gas tax
ordinances not devoted to paying debt service will be available annually to support/supplement
maintenance on the roadway network.
Large scale projects and others identified in for completion in the five-year CIE between FY 23
and FY 27 have a projected shortfall of over $205,000,000. Funding strategies including issuance
of debt supported by gas tax revenues is part of the long-term plan for transportation CIE funding
Proceeds would fund identified Transportation system assets deemed "poor" in the inventory;
capacity improvements not funded by the Local Option Infrastructure Sales Tax; and expansion
of the eastern Collier County transportation grid. Large scale projects identified in the five (5)
year CIE which could be financed include Collier Boulevard (Green Boulevard to Main Golden
Gate Canal), Vanderbilt Beach Road (16th Street NE to Everglades Boulevard), Goodlette Road
(Vanderbilt Beach Road to Immokalee Road), Wilson Boulevard (Golden Gate Boulevard to
Immokalee Road) and Veterans Memorial Parkway (School to US 41). Specific project
engineering schedules will be reviewed, and the Finance Committee will continue to refine the
concept and strategy.
Gas taxes collected in FY 2022 from all sources totaled $24.2 million. Annual debt service is
$13.2M leaving, the remaining $11 million programmed for construction and maintenance of the
transportation network consistent with strict statutory guidelines.
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 2024 to Fund (310) is $9,200,000 which represents a decrease of
$1,425,900 from FY 2023 budget. The Unincorporated Area General Fund transfer planned to
Fund (310) for FY 2024 is $13,600,000 representing an increase of $9,800,000 from FY 2023
budget as a result of the median maintenance allocation being included in the transfer. These
dollars support maintenance on the roadway network including intersection improvements,
resurfacing, sidewalks, pathways, medians, 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.
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11.E.b
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.
FY 2024 General Fund Planning Budget
Property
Appraiser 1%
Clerk of Courts
Courts 1%
Sheriff 40%
Reserves 11%� Supervisor of
- Elections 1%
`Tax Collector 4%
Debt / Capital
Subsidy 8% BCC / Co
Road Program Attorney 3%
Subsidy 1% County
Managers
Agency 28%
Considering that planned transfers to the Constitutional Agencies in FY 2024 account for 48% of
total General Fund budgeted expenses and 66% 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 conservatively each year. Constitutional turn back revenue totaled $38,282,633 and
$10,270,710 across all funds for years ending FY 2021 and FY 2022 respectively. The FY 2021
figure is inflated due to the CARES sub -recipient agreement with the Sheriff which allowed for
$31,000,000 in CARES funds to be earmarked for CCSO salaries freeing up a like amount in
turnback funds for flexible general governmental use. For year ending 2022, actual collections
exceeded forecast in the General Fund by $3.7 million. The General Fund receives on average
91% to 96% of all turn back revenue.
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
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11.E.b
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 twenty-three (23) MSTU's active under Collier County's taxing umbrella. Of these,
twelve (12) have advisory boards which provide recommendations to the Board of County
Commissioners.
Recommended Budget Policy: For FY 2024, 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 or rolled back rate is higher
than millage neutral. 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 2024, revenue centric budget parameters for enterprise operations will be 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 expansion initiatives; and statutory
or ordinance spending limitations. A critical review of operating and capital reserve levels versus
operating and capital appropriations will be discussed during County Manager budget
deliberations with an expectation that enough recurring resources are devoted to maintaining the
utility asset at a high standard while resources are set aside to protect cash and fulfill our fiduciary
responsibility to public protection in the event of a natural disaster.
This concept also presumes continual monitoring of cash and receipts and, if necessary, subsequent
operational adjustments dictated by cash flow. Therefore, general governmental departmental
spending guidance 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, 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.
Policy Document Page 28
Packet Pg. 194
11.E.b
Recommended Budget Policy: Adopt this Enterprise Fund and General Governmental revenue
centric budget policy.
Mission Critical Program Enhancement (Expanded) Requests
For FY 2024, Departments will carefully consider program enhancement requests given ongoing
elevated vacancy rates and operating expenditure guidance that will likely require a significant re -
prioritization of current budget. All program enhancement requests will be limited to new capital
facility openings, Board directed service level adjustments and/or historically strained mission
critical imperatives. These program enhancement requests must identify the strategic focus area(s)
and strategic objective(s) that are being satisfied.
All budget to budget expanded requests will be considered by the County Manager with
recommendations presented as part of FY 2024 budget workshop discussions in June.
Recommended Budget Policy: Expanded requests will be limited to Board approved capital
facility openings Board approved service level adjustments and/or historically strained mission
critical imperatives with final County Manager recommendations presented at the June budget
workshop.
Compensation Administration
The philosophy of Collier County Government is to provide a market -based compensation
program that meets the following goals:
• Facilitates the hiring and retention of the most knowledgeable, skilled, and experienced
employees available.
• Supports continuous training, professional development, and enhanced career mobility.
• Establish and maintain equity in the pay plan and rates paid incumbents in those positions
• Recognizes and rewards individual and team achievements.
On January 25, 2022, the Board approved a recommendation to initiate a comprehensive overhaul
of the County's classification and compensation plan from Evergreen Solutions fixing the internal
pay plan structure and allowing the County Manager's Agency to become much more competitive
in the attraction and retention of skilled talent.
The Consumer Price Index 12-month percent change from December 2021 to December 2022 is
9.9% for the Miami -Fort Lauderdale area. It is generally expected that the inflation index will
stabilize and shrink by year end. 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. The most recently published Florida Relative Price Index
lists Collier County as having the second highest relative cost of living among the 67 counties in
the State.
In consideration of recommendations provided by the County's Pay and Classification plan Q
vendor, as well as current market conditions, for FY 2024 the County Manager is recommending
a 5% increase to base salaries within each paygrade classification and an additional 1.5% allocation
Policy Document Page 29
Packet Pg. 195
11.E.b
for a merit -based incentive program. Given the current average salary in the County Manager's
Agency is $66,300, the collective recommended pay adjustments would result in an average of
$4,310 per employee. In addition, a .5% allocation is recommended to strengthen certain targeted
classification pay grades where market imbalances exist.
Recommended Budget Policy: Appropriate dollars equivalent to a 5% base wage increase to all
classifications plus 1.5% to implement a merit -based incentive program and a .5% pay plan
maintenance component to strengthen certain targeted classification pay grades where market
balance exists. Total cost is approximately $11.9 million in FY 2024. In previous years, the Board
of County Commissioners has authorized adjustments to the compensation plan as shown within
the following table.
Program
FY 13
FY 14
FY 15
FY 16
FY 17
FY 18
FY 19
FY 20
FY 21
FY 22
FY 23
FY24
Component
General Wage
2.00%
$1,000
2.00%/
1.50%/
3.00%
2.90%
2.00%
$1,200
Greaterof
$1,000@
8%Staff;
5.00%
Adjustment
$1,000
$1,000
represents
$1,200 or
10/l/21;
6.5%
average of
2.00%
$1/HR
Directors;
2.2%
@8/l/2022
5% Dept.
Head and
Above
Merit Program
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
1.50%
Pay Plan
0.00%
0.00%
0.00%
1.50%
0.00%
0.60%
0.00%
0.50%
0.80%
Avg. 8.5%
0.00%
0.50%
Maintenance
@1/1/22
Total
2.00%
$1,000
2.00%
3.00%
3.00%
3.50%
2.00%
Average of
Average of
Average of
See Above
Average of
2.7%
2.8%
=12.5%
7%
Health Care Program and Cost Sharing
The County Health Care Program 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 unpredictability of claim cost variances.
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:
Comply with all legal and regulatory requirements for plan operation
2. Manage plan cost trends to be 30% or more below published trends
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
Prevent illness and stabilize chronic health states, when possible, by helping our
employees and their spouses become aware of their health, and act on that knowledge
Although the goals have been met and County costs have continued to show a favorable trend
compared to national and state averages over the last twelve years, medical plan costs, and the
Policy Document Page 30
Packet Pg. 196
11.E.b
premium dollars required to fund them, continue to increase annually. The County's medical plan
has been similarly impacted by these rising costs and as a result currently there are two main
challenges regarding the rates set forth in the health plan:
1. Current County and employee contributions to the fund have not covered the cost of the
plan in the last two fiscal years nor will they cover future projected costs.
2. Though current reserves likely exceed what would be considered reasonable and have been
used to cover past shortfalls in contributions to the fund, if rates are not changed, reserves
may fall below required minimums as soon as FY 2025.
The longer rate action is deferred, the greater the imbalance becomes and the greater the needed
increase will be. Assuming a 3% inflationary trend for health care costs, if rates are not increased,
the fund reserve will be exhausted sometime during FY 2027 and the shortfall would be
approximately $5.8 million. With reserves exhausted, rates would need to be increased 33% for
the FY 2028 fiscal year to align fund inflows with expected expenses.
Assumed Annual Claim Trend 3%
0.0%1norea5e in CantributionsjER 13EEI
'3122423
1Y23424
1T24425
1415428
15+ MU7
Claims
542.554.148
MB31,M0
K.146.ON
W.5X000
V7,895.00U
Expe-ses
_
34.434,138
$4.M.O00
b4,013,000
;4.70'�000
$1,799AD
Total
$46,93UB4
$48.354,000
$49.759,0N
$51.M.000
604.000
Reuenue (ne wwt pas 1 o s;
W.785.035
WM5,000
K.7M.DM
W.785.000
M70.000
Garr;Cuss)
_ (38,203,248�
;V.W,000j
(M974,000)
($10,420.000j
(#11.909,09Dj
-15.2%
18.69G
-22.0%
-25-5%
-29.2%
5wplus $33,049.152 V5.479.152 $16.505,152 $ .085AE2 49,82 .M8
The need for a dramatic rate increase can be avoided by modest action taken in FY 2024.
Therefore, it is recommended that there be a five percent (5%) program rate increase for
FY 2024. This increase will be the first step in a potential multi -year program stabilization. Trends
will be analyzed annually with the goal of adjusting rate structures to ensure coverage of plan cost
and maintenance of a reserve level that includes statutory reserves plus an amount to cover cost
variances with 99% certainty. It should be noted that employer health insurance contribution
increases are absorbed within operating appropriations and the 5% increase will result in
approximately $1.5 million in employer contributions across the County Manager's Agency. The
average employee will see bi-monthly cost increases between $3 and $8 for single coverage and
$6 and $14 for family coverage.
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. 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 the last 12 years,
participation has been consistently more than 90% for those meeting the necessary qualifiers. This
rate far exceeds those of large employers nationwide.
With the objective of mitigating necessary 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.
Policy Document Page 31
Packet Pg. 197
11.E.b
Coverage under the Plan extends to all eligible County employees, except for the Sheriff's Office,
which operates its own self -funded plan. Historically, Board budget guidance has suggested that
all agencies uniformly share health insurance contributions between employers and employees.
Recommended Budget Policy: In FY 2024, a 5% rate increase to the existing rate structure is
recommended. This rate increase will result in an employer portion funding increase of
approximately $1.5 million for the County Manager's Agency. Bi-monthly employee cost
increases will be between $3 and $8 for employees with single coverage and $6 and $14 for
employees with family coverage. It is suggested that these rate adjustments and the associated
employer and employee share be uniform across all participating 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
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. A 2% attrition rate
has been utilized since FY 2016. For FY 2024, it is suggested that the rate remain at 2%.
Recommended Budget Policy: Continue the accrued salary savings policy at a 2% rate.
Financing New and Replacement Capital Infrastructure
The issuance of debt for capital improvements is generally considered as a good alternative to pay
as you go under the philosophy that future taxpayers who will also enjoy the capital improvements
should participate in funding capital improvements rather than that burden falling solely to existing
taxpayers. Further, the modest interest rate environment, the County's superior investment quality
credit rating, a revenue to debt service ratio well below the self-imposed cap of 13%, and not
raising the millage rate to pay debt service for world class capital amenities provide further
rationale for issuing strategic debt. Total unaudited general governmental and enterprise principal
debt outstanding at 9/30/22 was $689.1 million and includes recent new debt issues from FY 2018,
through FY 2022. Debt outstanding reached a high of $788 million in FY 2008.
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.
Policy Document Page 32
Packet Pg. 198
11.E.b
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 incurring 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 — with the
January 2023 rate currently at 3.95% - and funds can be accessed within about 30-45 days of
approving the authorizing resolution.
The advantage of long term competitively issued bonded 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 bonded debt
or in the alternative competitively issued bank loans, can be issued normally within a ninety (90)
day window. The County's current general governmental long-term debt portfolio is comprised 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 will be used
under future new general governmental debt credit scenarios.
Interest rates have increased over the past year. If financing is needed for a capital project, then
long term bonded debt can still be considered knowing that when interest rates fall, there will be
opportunities to refund the higher interest rate debt.
The County is always positioned to add new strategic debt to the portfolio after embarking upon
an aggressive debt restructuring program in the summer of 2010, and to date over $531.2 million
in general governmental debt has been refinanced. As a result, the cost of borrowing has been
reduced by $3,071,488 annually with this recurring savings applied toward high priority pay as
you go operating and capital programs. Annual principal and interest payments servicing
outstanding general governmental and enterprise debt totals $66.5 million and represent 3.4% of
the County's net adopted FY 2023 budget. The County continually looks for strategic and
economically feasible debt restructuring opportunities.
Policy Document Page 33
Packet Pg. 199
11.E.b
Through the County's finance committee and financial advisor, the debt portfolio is
evaluated regularly for opportunities to generate savings through debt restructuring.
Countywide capital allocations have traditionally included new money components for general
governmental capital projects as well as maintaining and replacing existing general governmental
infrastructure.
Immediate Term New Debt StratW. Passage of the Local Option Infrastructure Sales Tax does
not eliminate the need to finance future infrastructure needs. New debt would be considered as
projects are engineered and progressing in the following circumstances:
• Short term bridge financing in the estimated amount between $35 - $50 million is
anticipated for the NCWRF Headworks project. Due to anticipated cost escalations,
additional funding will be needed. Once FEMA and insurance proceeds are received for
the hurricane, the financed amount will decrease.
• Financing in the estimated amount up to $128 million to construct the Northeast Regional
Water Reclamation Facility (4 MGD) within the next 5 years. Further financing for the
construction of the first phase (5 MGD) of Northeast Regional Water Treatment Plant is
anticipated in the upcoming 10 planning cycle.
• Any gap funding necessary to support water and wastewater system renewal and
replacement projects.
• General Sheriff replacement capital improvements based upon a phased prioritized
schedule.
• Any gap financing to complete all phases of the Sports Complex and Events Center.
• Gas Tax transportation network improvements.
The following illustrates various long-term financing scenarios, the annual debt service, and the
respective interest rates.
New Financing Scenarios
20
°; 15
U) c 10
:r� .o
5 NONE ■■■ ■
C
$50 Million $75 Million $100 Million $150 Million
Q Project Fund
■ 10 Year (3.13%) ■ 15 Year (3.75%) ■ 20 Year (3.92%) ■ 25 Year (4.05%)
Recommended Budget Policy: It is not suggested that any financing strategy be built into the FY
2024 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
Policy Document Page 34
Packet Pg. 200
11.E.b
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 2024 allocates $16.3 million
from the General Fund and Unincorporated Area General Fund toward cash and carry storm -water
infrastructure replacement ($6.0 million); maintenance and operations ($8.1 million); and annual
debt service on the November 2020 Special Obligation Revenue Bond Series A $60 million
stormwater component ($2.2 million). Annual debt service will reduce the cash and carry capital
allocation and project engineering and capital implementation is ongoing to spend down bond
proceeds on strategic projects intended to update the County's stormwater system.
Recommended Budget Policy: For FY 2024 continue general governmental funding for storm -
water maintenance and operations; cash and carry capital transfers and debt service from the
General Fund and Unincorporated Area General Fund with the component funding identified
above.
General Fund General Capital/ Debt Service Contribution
The following table identifies how General Governmental County Wide Capital contributions
appropriated within the General Fund were programmed in FY 2023 and planned in FY 2024.
General Fund transfers to Stormwater and Transportation System improvements are accounted for
separately and not included in this General Capital programming scenario.
General Appropriation
FY 2021
FY 2022
FY 2023
FY 2024
Non -Growth Debt Service
$ 3,650,400
$ 8,908,000
$ 7,774,700
$ 8,469,000
Impact Fee Trust Fund Loans
2,192,100
1,832,000
757,700
1,418,600
General Governmental Capital Projects
15,592,400
20,743,600
29,918,600
25,535,000
Park, Museum, Airport, Sport Complex Transfers
4,776,500
7,505,000
9,805,800
8,200,000
Future Capital Replacement/Maintenance Reserve
5,000,000
7,500,000
18,300,000
5,000,000
Total
$31,211,400
$46,488,600
$66,556,800
$48,622,600
Planned contributions in FY 2024 represent a decrease from FY 2023 levels and this 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.
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 2024 totals $104.2 million. 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 general governmental capital projects planned in the areas identified above which are not
paid by the Local Option Infrastructure Sales Tax. Current general governmental growth debt,
which is paid predominately from impact fees, expires in FY 2036.
General Fund loans to the Airports began on or about FY 1995 and to date various operational and
capital subsidies total $29.8 million. In recent years, loans have not been necessary to subsidize
operations or to support capital.
Payment of debt is always a top priority. Under the FY 2024 budget planning scenario dollars
allocated will cover all revenue bond debt service.
Policy Document Page 35
Packet Pg. 201
11.E.b
The cumulative net interest rate of the County's overall debt portfolio has been reduced from
approximately 5% to 2.83% and annual principal and interest payments servicing all outstanding
County debt (includes enterprise debt) totals $66.5 million and represents 3.4% of the County's
net adopted FY 2023 budget. General governmental debt service represents 2.1 % of the County's
net adopted FY 2023 budget. The following charts depicts annual debt service payments servicing
all debt and annual debt service connected with our general governmental credit.
Collier County's total un-audited principal debt outstanding at 9/30/22 totals $689.1 million of
which $357.3 million relates to infrastructure improvements driven by population growth and
related service demands. The County's principal debt is $99 million below the FY 2008 figure of
$788 million.
Recommended Budget Policy: Continue General Fund countywide capital contribution for
purposes of paying non -growth -related revenue bond debt; provide impact fee fund loans to cover
growth related debt obligations; and fund continuing 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 and General Fund
supported agencies provide the cashflow for most general governmental grant funded activities
and are 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 E
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 Q
of Collier County's overall financial management strategy and a key factor in external agency
measurement of Collier County's financial strength.
Policy Document Page 36
Packet Pg. 202
11.E.b
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 percentage of reserves against total operating expenses.
Fiscal Year
General Fund
Reserves
Unincorporated Area
General Fund Reserves
% of General
Fund Expenses
% of Unincorporated
GF Expenses
2024
$71,858,200
$5,832,700
11.2%
7.5%
2023
$68,366,400
$4,722,800
10.7%
6.2%
2022
$64,856,900
$4,189,100
13.7%
6.7%
2021
$56,798,900
$2,695,500
12.8%
4.4%
2020
$51,532,900
$2,340,600
12.1%
3.9%
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, budgeted reserves should be a minimum of $65 million. Otherwise, expense -side
management of the budget in the form of capital transfer reductions and/or reductions in operating
transfers may become necessary.
Budget management is always ongoing and more magnified at times when Hurricane events occur.
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.
Policy Document Page 37
Packet Pg. 203
11.E.b
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 Government
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 2023
budget numbers, in the $86M-$95M range.
Collier County has never attained a General Fund budgeted reserve position higher than the FY
2024 proposed position of $71.9 million. This reserve position includes a contingency reserve level
increase from 2.5% to 3% of operations for FY 2024. 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
FY 2024 planned capital transfers out representing 9.4% 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 revenues and a ceiling or maximum not to exceed
16% of operating revenues. Applying these percentages to our current FY 2024 proposed planning
budget, the reserve floor and ceiling would total $45.2 million and $90.4 million 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 $1.79 million with a ceiling or maximum of no more than one month's expenses which for
planning FY 2024 is approximately $5.9 million. FY 2024 planning reserves are $5.8 million.
Reserve requirements for other General Governmental Funds including those that receive
significant transfer revenue from the General Fund will be sized to cover operations during the
first month or until the first General Fund transfer is scheduled pursuant to the OMB Transfer
Schedule.
Reserves Policy Position for the Motor Pool Replacement Family of Funds (409, 472, 491,
523)
Policy Document Page 38
Packet Pg. 204
11.E.b
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 future 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/Stormwater (Funds 101 and 103/523).
Reserves within the four Motor Pool Replacement Funds maintain a current replacement reserve
(reserve for future capital) equal to a minimum of two (2) years' 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 fund's 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).
In addition, various bond rating agencies, particularly Fitch Ratings, recognize that the best reserve
policies provide both specificity and flexibility, accomplishing one or more of at least three main
criteria:
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11.E.b
• 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 $1.5 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 mains. 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 the 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 2023 operating expenses, would range from $24.4
million to $48.7 million. FY 2023 Working Capital resources total $29.9 million representing fifty-
eight (55) days of reserves.
Replenishment of unrestricted reserves that may drop below the targeted floor (45 days) or $24.4
million using FY 2023 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
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11.E.b
waste disposal program, the recycling program, and the management of the mandatory residential
curbside collections program. These funds also include both restricted capital reserves (Fund 471
for landfill closure and disaster debris mission) and unrestricted operating and capital
reserves. The department is responsible for the right of way disaster debris removal on County
roads and monitoring projects for Collier County in the event of a natural disaster, such as the
Hurricane Ian (Category 4, wet storm cash flow exposure of up to $45 million) event in the 41n
quarter of 2023 and the Hurricane Irma (Category 3, dry storm cash flow exposure up to $65
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 Hurricanes Ian and Irma, a restricted cash flow reserve equivalent to ten
percent (10%) of solid waste revenues as a bare minimum is being funded to be used solely for
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 mitigates 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 2023 operating expenses would range from $8.1 million to $16.2 million. FY 2023
unrestricted reserves for the Solid and Hazardous Waste Management Enterprise Funds total $15
million or eighty-three (83) days of reserves.
Replenishment of unrestricted reserves that drop below the targeted floor (45 days) or $8.1 million
would occur in succeeding budget cycles in such amounts as deemed prudent under existing
economic conditions as approved by the Board.
Contributing to a restricted reserve of ten (10%) percent of the FY 2023 budgeted charges for
services at a minimum would total approximately $6.5 million. FY 2023 restricted reserves for
disaster response total $9.8 million.
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.
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.
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11.E.b
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 cash flow for the Internal Service Funds, using a benchmark
of 90 days of the prior year's working capital.
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 adequate 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. In
addition, reserves will include an amount equal to at least the expected variance with 99%
certainty.
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. Designated reserves are established to
provide funds for a specific purpose where the actual cost is unknown.
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11.E.b
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.
Suimested Scheduling Timeline
Decisions Required
Staff Adopted Date(s)
Establish Budget Submission Dates for
May 1, 2023 by Resolution
the Sheriff, the Supervisor of Elections,
and the Clerk of Courts.
FY 2024 June Budget Workshops
(BCC Agency/Courts and Constitutional Officers Budget Workshops)
Thursday, June 15 and if necessary, Friday June 16, 2023
FAC Conference is June 27 — June 30, 2023 in Orlando/Orange
County.
Adoption of Tentative Maximum FY
July 11, 2023 (Tuesday)
2024 Milla e Rates
Submission of Tentative FY 2024
Friday, July 14, 2023.
Budget to the Board
Establish Public Hearing Dates (see note)
September 7, 2023 (Thursday at 5:05 pm)
Se tember 21, 2023(Thursday at 5:05 m
Note: The School Board has priority in establishing public hearing dates for budgets. The School
Board's final budget hearing is tentatively scheduled for Monday, September 11, 2023.
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 the attached resolution
establishing May 1, 2023 budget submittal dates for the Sheriff, the Supervisor of Elections, and
the Clerk.
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11.E.b
Continuing Routine Budget Policies for FY 2024
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 which will be funded to
include statutorily required reserves plus an amount equal to at least the expected cost variance
with 99% certainty.
Contract Agency Funding: The Board will not fund any non -mandated social service agencies.
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 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 66% of the total FY 2023 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 are 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 15% 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 15%
of actual expenditures. At year ending September 30, 2022, actual General Fund cash and cash
equivalents balance totaled $157,929,500 an increase of $29,020,700 over year ending September
30, 2021. The FY 2022 year ending cash position represents approximately 33.6% of actual FY
2022 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 2024.
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.
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.
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11.E.b
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 2023, the payment in lieu of taxes calculation was based upon a "franchise fee
equivalent basis" commonly referred to as a percentage of gross receipts. Six percent (6.0%) of
gross receipts of the Water/Sewer District were applied in FY 2023. This method and percentage
will continue for FY 2024.One and three-quarter percent (1.75%) of Solid Waste tipping fees were
applied in FY 2023 and this method and percentage is planned in FY 2024. 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 debt restructuring 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 General Fund equivalent millage
dedicated to ongoing regular general governmental capital projects, debt service, and impact fee
fund debt loans from the General Fund. The target rate is the equivalent of 0.3333 mills. (See
history below).
General Fund Capital Equivalent Millage History
(FY 1991- FY 2023)
1.2000
1.0000
0.8000
nn
0.6580
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
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11.E.b
revenue bond debt. Loans from the General Fund to the impact fee trust funds began in FY 2006
and the value of all loans made now exceeds $104 million.
Capital Improvement Program WIP) 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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11.E.b
Three -Year Budget Projections
Ad Valorem Tax Funds
(FY 2023 - FY 2025)
OMB staff prepares annually a three-year projection of General Fund and Unincorporated Area
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 2024 through FY 2026. 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.
General Fund Millage History and Recommended Millage Neutral Tax Rates
(FY 2005 to FY 2025)
4.5000
4.0000 3.8772 3.8772
3.5790 3.5645 3.5645 3.5645 3.5645
3.5000 3.1469 3.1469
3.0000
2.5000
2.0000
1.5000
1.0000
0.5000
4
While the County Manager will be recommending a General Fund millage neutral base operating
budget in FY 2024 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, as well as significant new
initiatives and devote additional future dollars which may be generated from an increasing taxable
value base to fund these recurring initiatives.
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11.E.b
Diversifying the County's tax base means in large part attempting to reduce risk. Risk of an
economic downturn which will surely 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 2024 will be
funded on par consistent with industry standards through general governmental appropriations.
The following tables depict the respective millage neutral tax rates for FY 2024, 2025 and 2026
as well as additional ad valorem dollars which could be raised under certain increasing tax base
assumptions.
General Fund
FY 24 Adopted and Recommended
Operating Millage Neutral Millage Rates
Additional Budgeted Ad Valorem
Revenue Projection Each Year
FY 23
3.5645
FY 24
3.5645
$25,068,600 5.75% TV Increase
FY 25
3.5645
$9,220,900 @ 2.0% TV Increase
FY 26
3.5645
$9,405,300 @ 2.0% TV Increase
FY 27
3.5645
For Collier County to continue providing high quality best value services; continue to address
infrastructure maintenance and replacement; replace public safety and general governmental
equipment and vehicles; and 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 an increasing taxable base. New governmental
initiatives which always seem to emerge each fiscal year also provide rationale to capture property
tax revenue from an increasing base year over year.
Failure to capture additional property tax dollars resulting from increasing taxable values will
jeopardize service levels and make it difficult to maintain the extraordinary world class
infrastructure investment which this community enjoys. As taxable values begin to slow and
investment in County innovation zones and the County and Naples CRA's grows, the margin
between rolled back rate and millage neutral will narrow. Thus, maintaining the long-standing
millage neutral philosophy must be continued knowing the level of investment required to simply
maintain our general governmental assets, and fund Sheriff operations let alone mission critical
expanded services and facilities based upon AUIR requirements and servicing the needs of an
expanding population.
The projected millage rates assume that the tax base will increase 5.75% in FY 2024 (the 2023 tax
year). Taxable value in FY 2025 is projected to also increase 2%. The Property Appraiser will
provide preliminary taxable value estimates for FY 2024 on June 1, 2023. Actual and assumed
changes in County taxable values are as follows:
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11.E.b
Historical and Projected Changeges in Collier County Taxable Values
FY 2005 - FY 2026
30.00%
25.40%
25.00%
19.90%
20.00% 16.80%
15.00% 11.90%
10.00%
10.00% 7.20% 6.50% 8.50% 8.40%u 6.40% u
5.60/05.50% 5.60% 5.75%
3.70 %
5.00% 2.00%2.00%
0.50
0.00% 1 1 1 1 _ 1 I I I I—, I I 1
-5.00%
4.70% 5.20%
10.00%
15.00%-11.00%2 20%
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Notes to Graph - FY 2007: The General Fund (001) raillage 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 2024 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:
• Appropriate dollars equivalent to a 5% base wage increase to all classifications plus a
1.5% to implement a merit -based incentive program and a .5% pay plan maintenance
component to strengthen certain targeted classification pay grades where market
balance exists. The total allocation across the County Manager Agency is
approximately $11.9 million.
• Appropriate dollars equivalent to a 5% increase in the employer health insurance cost.
• 2% attrition rate on regular salaries assumed in the County Manager's Agency.
• Motor pool replacement dollars for routine ambulance replacement on schedule.
• $8,000,000 for general County Manager Agency building maintenance, $6,000,000 for
upgrades to the 800MHz radio system, $2,000,000 for site development for the Golden
Gate Golf Course and $1,500,000 for switch gear upgrades in parking garage #1.
• $5,000,000 allocation toward long-term general governmental asset maintenance
reserve.
• Continued Social Service and Mental Health Funding.
• General Fund loans to the impact fee trust funds planned at $1,418,600 which while
low compared to the average of the previous ten years, should not be viewed as a trend
due to the volatility of impact fees.
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11.E.b
• Stormwater maintenance, operations, and transfers for capital and debt service
payments planned at $7.8 million.
• General Fund transfer dollars supporting road construction and maintenance funded at
$9.2 million.
• General Fund support of EMS Operations established at $29,392,300 — up 16.1 % from
last year reflecting an anticipated pay plan pay adjustment.
• Full support for Transportation Operations from the General Fund (001) exclusively in
the amount of $25,643,600.
• Continued corporate IT capital funding.
• Cash and carry deposit of an additional $1 million, bringing the total to $6.7 million,
as the process of implementing a new accounting system continues.
• Building maintenance funding for Sheriff Facilities totaling $1,000,000, plus
$3,000,000 for windows at the jail, and $1,200,000 for the Caxambas
Substation/Seawall repair.
• Mandates to be absorbed, if possible, within operating budgets, including
Constitutional Officers.
Significant Revenue Assumptions
• FY 2023 ad valorem tax revenue forecast is 96% of actual taxes levied. FY 2023 forecast
totals $420,060,100 — a reduction of $15,915,900 from the adopted budget. Collections
are within the 5% statutorily budgeted revenue reserve.
• A millage neutral position for FY 2024 produces a levy of $461,044,600.
• Sales tax revenue forecast for FY 2023 is projected conservatively at $50 million, an
increase of $2 million from the adopted budget. FY 2024 budgeted revenue is planned at
$52 million. Conservative revenue estimates are essential to achieving the required
beginning cash balance position.
• State Revenue Sharing forecast for FY 2023 is projected conservatively at $12 million.
The FY 2024 budget is projected conservatively at $12 million, which is in line with the
adopted 2023 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 2024
$6,600,000 is planned. Turnback to the General Fund at year ending 2022 totaled
$10,270,710.
• Measures to maintain annual beginning cash balance are 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 2024 is conservatively planned at $650,000.
EMS Fund
EMS Operations Fund (490) is another fund that impacts the General Fund. Typically, this ad
valorem support in recent years accounted for 45% to 55% of total EMS operating revenues. The
percentage varies given the instability in fee revenue collections and any Board policy directives.
The General Fund subsidy planned for FY 2024 is up $4,075,900 reflecting an anticipated pay plan
adjustment. Historical and projected General Fund support of EMS operations by fiscal year are
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11.E.b
as follows: (also added $700k in FY25 and FY26 for 2 new stations — Old US 41 and Heritage
Bay).
General Fund Support of EMS
(FY 2015 - FY 2025)
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 the
actual transfer has averaged $8.6 million annually. With taxable values projected to increase for
FY 2024, the General Fund contribution to road construction and maintenance is planned to total
$9.2 million. This transfer is subject to change based upon budget year execution patterns.
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 investment. Capital obligations necessitated by state or federal agreement, like JPA's
and DCA's will be funded.
FY 2025
A millage neutral operating budget in FY 2025 with an increase of 2% in taxable value can
continue to allow for priority funding of public safety capital initiatives and general governmental
capital programming referenced in this document with proper budget management. 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.
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11.E.b
In addition to annual inflationary cost increases, the following items were included in the FY 2025
budget analysis:
• M intain general governmental capital projects recurring funding.
• M intain General Fund support of EMS.
• Contingency reserves are maintained at policy.
• M intain General Fund road subsidy.
• M intain General Fund support for park system maintenance and replacement.
• M intain General Fund support for Transportation Operations expenses.
• Continue annual contribution to the long-term asset maintenance reserve.
In summary, the FY 2025 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 2025 without proper budgeted beginning fund balance would likely result
in a $20.5 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 2026
A millage neutral operating budget in FY 2026 coupled with a projected 2% taxable value increase
can allow for continued funding of 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 appropriate beginning fund balance.
The following items were included in the FY 2026 budget analysis:
• M intain general governmental capital projects recurring funding.
• M intain General Fund support of EMS.
• Contingency reserves are maintained at policy.
• M intain General Fund road subsidy.
• M intain General Fund support for park system maintenance and replacement
• M intain 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.
Policy Document Page 52
Packet Pg. 218
11.E.b
General Fund Trend Analysis
.doLtedBudget
Fmmra-t
Projected
Forecast
Forecast
Forecast
FY 2023
FY 2023
FY 2024
FY 2025
FY 2(126
FY 2026
TamFahieuneaEe)
(2hI'm FahreMaeaEe)
(rlTamFable IMEOEe)
Rerenum:
$Valorem
435,976,400
420,060j00
444213,500
5.7A
453,097,900
2o,/.
462,159,786
2036
Sales Tax
48,000,000
50,000P00
4.2/
52,090,000
4.0pA
52,OOOQ00
00%
52,000,000
07%
R,venueShwmg
12,400,000
12,400P00
oo°,s
12,000,000
o.o°,s
12,000900
o.m.
12,000,000
07c
Other Recenues
38,555,600
37,775JO0
-2.0°,/
39,193,700
32%
39,193,700
o.o%
39,193,736
091c
Less 54o Required byLaw
(25,689,700)
0
0
N•A
0
NA
0
NIA
Caayfam,afd
126,630,900
157,929)00
24.7%
106,51Q500
-325%
86,195,200
-is.i%
tO,744100
-2a?/.
44,741,022
ToWRetenues
635,512,900
677,764,700
653,917,700
-3-5%
642,4S6,700
-1.?%
@1,097,622
1s c
E=oeud'dures:
Depwmentsffiisions
100,900,200
99,084300
1.s
100,981,100
19"%
101,4S5,M
a.3%
101,993,300
0MA
operating Transfers
94,411,700
96,596P89
2.3°1
99,796,300
3.3%
100,725,500
oq%
101",600
LZ+
abtSenice
15,203,000
7,774,700
8,469,000
zq%
8,187�00
-3.3%
"Q1800
2.N.
Cap-L.oaus tolmpactFee Fds
3i3,300
757,700
0.0°c
1,418600
s7.2%
1,742,400
22.z%
2�25,700
335°16
a� blTransfus
&,493,500
76,92UOO
io.7/
50,735.000
a4.oA
52,235"
3.o,/.
53,235,000
L9%
c mstitu6onalofGcers
286�80�00
290,119.¢00
1.3/
34G, A500
5.5.A
31M66,100
2.o,/.
31S,530,200
2T1.
Resenes
63�66,400
0
0
NA
0
NA
0
NIA
Total Expenditures
635,512,SOO
571X4j89
-10.11A
567,722�00
-os%
576,742,500
1.e%
586,356,600
17%
Revenues less Expeuditres(Carrykrnsrd)
10£510,511
86,195,200
415,744,100
44,741,022
Total ammmtof
Caff rf—d+Equityc
um
AmmmtofEgruty(CF){rethioed}+increased
(51,418,939)
(20,315,300)
(20.451,100)
(21,001078}
()13,188,46r)
to balance the budget
BudgetedResenves
71,S5v00
71,83V00
72,074,j00
Policy Document Page 53
Packet Pg. 219
11.E.b
Unincorporated Area General Fund (111)
Unincorporated Area General Fund (111) Millne History and Projected Millage Rates
As a point of reference, the following graph plots the historical Unincorporated Area General Fund
(111) millage rate, as well as the policy proposed millage rate for FY 2024 through FY 2026,
which includes the proposed marginal millage rate increase to continue the landscape median
capital program.
0.8500
0.8000
0.7500
on
0.7000
0.6500
0.6000
Unincorporated MSTD General Fund (111) Millage History and
Recommended Millage Neutral Tax Rates
(FY 2005 to FY 2025)
Results of Unincorporated Area General Fund Analysis
For FY 2023, the Board of County Commissioners maintained the Unincorporated Area General
Fund millage rate at $.8069. The table below depicts the forecast marginal dollar increase which
will be devoted to general operations and general government capital. Incremental ad valorem
dollars obtained through tax base increases under the current $.8069 operating millage rate will
fund recurring operations and provide capital transfer dollars toward maintaining the road network,
stormwater system, median maintenance, and community parks. The Board should also note the
magnitude of our future maintenance and asset replacement responsibility and dedicate resources
gained through any tax base increase assuming a millage neutral tax rate toward this purpose.
Unincorporated
Area
General Fund
FY 24 Adopted and
Recommended future
Tax Rates
Additional Budgeted Ad Valorem
Revenue Projection Each Year
FY 23
0.8069
FY 24
0.8069
$3,575,400 5.75% TV Increase
FY 25
0.8069
$1,262,500 @ 2.0% TV Increase
FY 26
0.8069
$1,287,800 2.0% TV Increase
FY 27
0.8069
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
Policy Document Page 54
Packet Pg. 220
11.E.b
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. Obviously, a
rolled back position in the Unincorporated Area General Fund 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, including maintaining the existing landscape median assets. Additionally,
levying the rolled back rate when taxable values drop means the rolled back rate will increase
above millage neutral 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 2024
The FY 2024 budget projection is based upon a 5.75% tax base increase. Property taxes and the
state shared communications services tax represent about 94% 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 or curtail other local revenue
sources.
Capital transfers from the Unincorporated Area General Fund have grown substantially since FY
2014, and for FY 2024 $21.2 million is programmed. These transfer dollars are programmed for
Park improvements, Pelican Bay -Clam Pass, Transportation system enhancements, and
Stormwater infrastructure. Sustaining these capital appropriations and maintaining necessary
transportation, landscaping maintenance, 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.
This model is not sustainable under a rolled back millage 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 2025
If taxable values increase by 2.0% in FY 2025, a millage neutral operating budget coupled with a
reduction in beginning fund balance could result in a potential budget planning deficit of $404
thousand as depicted within the preceding trend analysis. 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.
Policy Document Page 55
Packet Pg. 221
11.E.b
FY 2026
Continuation of millage neutral operating budget into FY 2026 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. For planning purposes and assuming continued decline in beginning budgeted fund
balance, a deficit of $1.8 million is depicted. Absent real-time budget management, the model
depicts a total fund equity loss from FY 2024 through FY 2026 totaling $6.1 million.
The Unincorporated Area General Fund Trend Analysis model shown below is intended to offer a
picture of very conservative revenue projections against operating and capital expenses which will
likely be faced in the out years. Of course, financial staff manages the budget in real time and will
mitigate unplanned equity reductions. But imagine a scenario where major revenue sources like
property taxes or communication services tax revenues were cut or reduced. The obvious impact
would be subsequent expense reductions possibly coupled with new adopted revenue sources and
thus the need for budget flexibility.
Unincorporated Area General Fund Trend Analysis
Revenues
Ad Valorem
Com m un ration Sery icesTax
Other Revenue
Le$ 5% Required By LaN
Carryforward
Total Revenu es
Expenditures
Roads& Medians
Pa ks & Rec.
Code Enforcement
Other Departmertsfoivisons
Operating Transfers
Capital Transfers
Reserves
Total Expenses
Fund Balance (Revenues -Expenses)
Equity Reduction to. balance budget
(Fund Balance-Carryforward)
Budgeted Reserves
Adopted 6udtt Forecast %Chg Projected
FY 2023 FY 2023 Forecast FY 2024
Vs (Increase5.75%TV)
Bu dget
Forecast Forecast
FY 2025 FY 2026
(increase 2% TV) (Incr ease 2% TV)
Forecast
2026
62,181,540
59,694,200
-4.0%
53,126,600
5.70%
54,389,100
2.0%
55,676,900
2.0%
3,750,000
3,750,000
0.0%
3,750,000
0.00%
3,750,000
0.0%
3,750,000
0.0%
5,232,500
5,237,800
0.1%
4,141, 100
-20.94%
4,192,500
1.0%
4,224, MM
1.0%
(3,494,200j
0
-100.0%
0
N/A
0
N/A
0
N/A
8,203,200
12,365,000
50.7%
7,526,100
-39.13%
8,456,200
12.4%
8,052,000
-4.9%
6,254,500
75,973,000
81,047,000
6.9%
78,543,800
-3.09%
80,777,800
2.9%
81,705,200
1.1%
5,545,700
5,699,200
2.9%
5,492,400
-3.63%
5,B02,200
5.6%
5,118,200
5.4%
15,295,200
15,445,200
1.0%
15,946,400
3.25%
16,6fi5,500
4.5%
17,398,600
4.4%
5,382,900
5,409,100
0.5%
5,512,200
1.91%
5,622,400
2.0%
5,734,&00
2.0%
10,370,100
11,108,300
7.1%
10,519,&00
-5.30%
10,750,200
2.0%
10,944,&00
2.0%
10,554,900
11,967,700
12.2%
11,396,&00
-4.77%
11,524,700
2.0%
11,857,200
2.0%
23,891,400
23,891,400
0.0%
21,220,000
-11.19%
22,291,000
5.0%
23,395,100
5.0%
4,722,800
0
-100.0%
0
0
0
75,873,000
73,520,900
-3.1%
70,487,600
-4.67%
72,725,800
3.9%
75,448,700
3.7%
0
7,526,100
8,456,200
8,052,000
6,254,500
Total Amount of
Eq uiry Consum ai
(4,83$900)
930,100
(404,200)
(1,797,500)
(5,110,504)
5,832,700
5,832,700
5,832,700
Policy Document Page 56
Packet Pg. 222
11.E.c
RESOLUTION NO.2023-
A RESOLUTION PURSUANT TO SECTION 129.03, FLORIDA STATUTES,
REQUIRING THE FY 24 TENTATIVE BUDGETS OF THE SHERIFF, THE
SUPERVISOR OF ELECTIONS AND THE CLERK TO BE SUBMITTED TO THE
BOARD OF COUNTY COMMISSIONERS BY MAY 1, 2023.
WHEREAS, Chapter 129, Florida Statutes, addressing the County annual budget,
provides specifically in Section 129.03, Florida Statutes, that the Board of County
Commissioners may, by resolution, require the tentative budgets of the Sheriff, the Supervisor of
Elections and the Clerk to be submitted by May 1 of each year.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY
COMMISSIONERS OF COLLIER COUNTY, FLORIDA, pursuant to Section 129.03, Florida
Statutes, that the Sheriff, the Supervisor of Elections, and the Clerk of the County of Collier,
Florida, are hereby required to submit their respective tentative budgets for the FY 24 fiscal year
to the Board of County Commissioners by May 1, 2023.
This Resolution shall be effective on its adoption.
This Resolution adopted this 14th day of March 2023, after motion, second and
majority vote.
ATTEST:
CRYSTAL K. KINZEL, Clerk
, Deputy Clerk
legality:
Jeffrey A.Wlatzko+, County Attorney
BOARD OF COUNTY COMMISSIONERS
COLLIER COUNTY, FLORIDA
Rick LoCastro, Chairman
Packet Pg. 223