Agenda 02/25/2020 Item #11A (Adopting the FY2021 Budget Policy)02/25/2020
EXECUTIVE SUMMARY
Recommendation to Adopt the FY2021 Budget Policy.
OBJECTIVE: That the Board of County Commissioners (Board) adopt policies to be used in
developing the Collier County Government budget for FY2021.
CONSIDERATIONS: For staff to begin preparation of the FY2021 budget, direction is needed from the
Board on major policy issues.
Attached to this Executive Summary is a listing of pertinent policy issues that will affect preparation of
the FY2021 budget. The budget policy document is broken down into three distinct elements. The first
consists of budget policies proposed in FY 2021 that require policy direction from the Board. The second
element consists of routine budget policies that the Board has endorsed for several fiscal years. The thi rd
element consists of a three-year analysis of the General Fund (001) and the Unincorporated Area General
Fund (111). Establishing broad goals to guide governmental decision makers is the first of four budget
process principles developed by the National Advisory Council on State and Local Budgeting (NACSLB)
and endorsed by the Governmental Finance Officers Association (GFOA).
The Board needs to establish June budget workshop dates. Tentative dates are Thursday, June 18, 2020
and if necessary, Friday, June 19, 2020 with meeting times scheduled from 9:00 a.m. to 5:00 p.m. The
Florida Association of Counties annual conference is scheduled for June 9th through June 12 th, 2020 in
Orlando.
For informational purposes, adoption of the maximum tentative millage rates is scheduled for Tuesday,
July 14, 2020. 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, 2020 to prepare the Notice of Proposed Property Taxes.
Finally, the Board needs to establish September public hearing dates for the adoption of the FY2021
budget. The School Board has tentatively scheduled September 8th, 2020 for their final budget hearing.
Recommended dates for the Collier County budget public hearings are Thursday September 3, 2020 and
Thursday September 17, 2020.
FISCAL IMPACT: The adopted policies will serve as the framework for the development of budget and
ad valorem taxation issues for FY2021.
GROWTH MANAGEMENT IMPACT: There is no Growth Management impact.
LEGAL CONSIDERATIONS: The County Attorney has approved this item as to form and legality.
Majority support is required for Board approval. - JAK
RECOMMENDATION: That the Board adopts budget policies as detailed in the attachments to this
Executive Summary, establishes June budget workshop dates and September public hearing dates and
adopts the attached Resolution establishing a May 1, 2020 deadline for the Supervisor of Elections, th e
Sheriff’s Office and the Clerk’s budget submittals.
PREPARED BY: Mark Isackson, Director of Corporate Financial and Management Services
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02/25/2020
ATTACHMENT(S)
1. Resolution FY 2021 Budget Policy and Constitutionals (PDF)
2. FY21 Budget Policy PowerPoint (PDF)
3. Fiscal Year 2021 Recommended Budget Policies(PDF)
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02/25/2020
COLLIER COUNTY
Board of County Commissioners
Item Number: 11.A
Doc ID: 11720
Item Summary: Recommendation to adopt the FY2021 Budget Policy. (Mark Isackson,
Corporate Financial and Management Services Division Director)
Meeting Date: 02/25/2020
Prepared by:
Title: – Office of Management and Budget
Name: Debra Windsor
02/19/2020 9:50 AM
Submitted by:
Title: Division Director - Corp Fin & Mgmt Svc – Budget and Management Office
Name: Mark Isackson
02/19/2020 9:50 AM
Approved By:
Review:
Office of Management and Budget Debra Windsor Level 3 OMB Gatekeeper Review Completed 02/19/2020 9:50 AM
Budget and Management Office Mark Isackson Additional Reviewer Completed 02/19/2020 9:57 AM
County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 02/19/2020 10:51 AM
County Manager's Office Leo E. Ochs Level 4 County Manager Review Completed 02/19/2020 11:15 AM
Board of County Commissioners MaryJo Brock Meeting Pending 02/25/2020 9:00 AM
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11.A.aPacket Pg. 166Attachment: Resolution FY 2021 Budget Policy and Constitutionals (11720 : Recommedation to adopt the FY 2020 Budget Policy)
Collier County
FY 2021
BCC Budget Policy
Fe bruar y 25,2020
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Packet Pg. 167 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
FY 2021 Budget Policy Highlights
1.Ke y Annual Policies for Consideration and
Board Direction (Policy Document Pages 3-38)
2.Continuing Policies to be Endorsed by
the Board (Policy Document Pages 39-41)
3.Three (3) Ye ar General Fund and
Unincorporated Area General Fund
Analysis (Policy Document Pages 42-52)
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Packet Pg. 168 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Suggested Board Budget Guidance Action
After due consideration it is recommended that;
The Board approve all recommended Budget
Po licies with any changes dealt with on an
exception basis.
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Packet Pg. 169 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Millage Rate Policy
—Ta xable Value! Budget Planning Around a 3% TV Increase
—General Fund Millage Neutral Rate of $3.5645 per $1,000 of Ta xable Value; Why?
ü Property taxes comprise on average 65% to 70% of general governmental
revenues
ü FY 2021 sample funding initiatives include potential BCC directed strategic land
purchases;re curring enhanced funding for storm-water maintenance and capital;
school safety officer mandates;back office IT and financial management system
upgrades;hurricane hardening and related grant matches;strategic main campus
and satellite facility relocations and improvements
ü Grow reserve s to ensure sufficient year end cash and provide a buffer against
unexpected expenses or Board policy shifts
ü Ensure that dollars are available to cash flow any natural disaster in FY 2021
ü Continue investment in public safety operations and infrastructure
ü Continued investment in capital infrastructure including strategic financing for
bridge and transportation network improvements,expansion of the storm-water
network,replacing and upgrading park aquatic systems
ü Operate and maintain new capital facilities constructed like staffing new EMS
facilities and the Sheriff ’s Evidence Facility
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Packet Pg. 170 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Millage Rate Policy
Continue Unincorporated Area General Fund (111) Millage Neutral
Rate at $0.8069 per $1,000 of Ta xable Value
ü Allocate $0.0908 (amount increased by) to maintain
constructed median landscaping
ü Capital transfer from the Unincorporated Area GF (111) to
storm-water maintenance and capital programming for
projects benefitting the unincorporated area
ü Maintain commitment to community parks;code enforcement;
zoning and land use;natural resources;and road maintenance;
ü Continue capital commitment to community parks;and the
transportation network;
Why? Maintain Budget Flexibility;Public
Health,Safety and We lfare Program
Investment;Continuing Infrastructure
Investment;Human Capital Investment and;
Reser ves
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Packet Pg. 171 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Millage Rate Policy -MSTU’s
MSTU’s –Assuming Increasing Taxable Value
•With Advisor y Board Oversight –Ta x Neutral
(Rolled Back Rate –same revenue as last year) or
other rate upon Advisor y Board recommendation
and BCC approval
•No Advisor y Board –Rolled Back Rate or lowe r
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Packet Pg. 172 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Unincorporated Area Proper ty Tax Impact
(Homestead Proper ty)
7
FY 20
Pa rcel
Ta xable
Va lue
Example
FY 21
Ta x Base
Esc. P roj.
(Cap 3%)
FY 21
Parcel
Ta xable
Va lue
Example
General
Fund
Ta x Rate
Unincorp.
Area GF
Ta x Rate
FY 20
County GF
and
Unincorp.
GF Tax
Example
FY 21
County GF
and
Unincorp.
GF Tax
Example
Difference
Between
FY20 &
FY21
100,000 1.020 102,000 3.5645 0.8069 437.14 445.88 8.74
125,000 1.020 127,500 3.5645 0.8069 546.43 557.35 10.93
175,000 1.020 178,500 3.5645 0.8069 765.00 780.29 15.30
225,000 1.020 229,500 3.5645 0.8069 983.57 1,003.24 19.67
250,000 1.020 255,000 3.5645 0.8069 1,092.85 1,114.71 21.86
275,000 1.020 280,500 3.5645 0.8069 1,202.14 1,226.18 24.04
300,000 1.020 306,000 3.5645 0.8069 1,311.42 1,337.65 26.23
325,000 1.020 331,500 3.5645 0.8069 1,420.71 1,449.12 28.41
500,000 1.020 510,000 3.5645 0.8069 2,185.70 2,229.41 43.71
600,000 1.020 612,000 3.5645 0.8069 2,622.84 2,675.30 52.46
287,500 1.020 293,250 3.5645 0.8069 1,256.78 1,281.91 25.14AVG
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Packet Pg. 173 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Unincorporated Area Proper ty Tax Impact
(Non Homestead Proper ty)
8
FY 20
Parcel
Ta xable
Va lue
Example
FY 21
Ta x Base
Esc. P roj.
(Cap 10%)
FY 21
Parcel
Ta xable
Va lue
Example
General
Fund
Ta x Rate
Unincorp.
Area GF
Ta x Rate
FY 20
County GF
and
Unincorp.
GF Tax
Example
FY 21
County GF
and
Unincorp.
GF Tax
Example
Difference
Between
FY20 &
FY21
100,000 1.050 105,000 3.5645 0.8069 437.14 459.00 21.86
125,000 1.050 131,300 3.5645 0.8069 546.43 573.96 27.54
175,000 1.050 183,800 3.5645 0.8069 765.00 803.46 38.47
225,000 1.050 236,300 3.5645 0.8069 983.57 1,032.96 49.40
250,000 1.050 262,500 3.5645 0.8069 1,092.85 1,147.49 54.64
275,000 1.050 288,800 3.5645 0.8069 1,202.14 1,262.46 60.33
300,000 1.050 315,000 3.5645 0.8069 1,311.42 1,376.99 65.57
325,000 1.050 341,300 3.5645 0.8069 1,420.71 1,491.96 71.25
500,000 1.050 525,000 3.5645 0.8069 2,185.70 2,294.99 109.29
600,000 1.050 630,000 3.5645 0.8069 2,622.84 2,753.98 131.14
287,500 1.050 301,900 3.5645 0.8069 1,256.78 1,319.73 62.95AVG
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Packet Pg. 174 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
FY 2021New or Recurring Funding Initiatives/Requirements
General
Fund
Unincorp. Area
General Fund
Golden Gate Golf Course Bank Loan (FY 2021 Debt Service)769,000 0
Golden Gate Golf Course Development Planning & Maintenance 1,000,000 0
School Safety Officer Program 3,000,000 0
Big Corkscrew Regional Park Operations & Maintenance 3,400,000 0
Amateur Sports Complex Operations 3,000,000 0
Increases in Stormwater Maintenance & Capital Funding over FY 20 0 2,000,000
General Grant Matches including Hurricane Hardening 2,000,000 0
Marco Airport Te rminal;Everglades Sea Base;and Immokalee
Airport Runway Rehab –Grant Matches
1,400,000 0
Collier Area Transit Subsidy Addition 500,000 0
Information Tech Hardening & Mgt Software Upgrades 2,500,000 0
Compensation Recommendation 664,100 363,600
Future Long-Te rm Asset Maintenance Reserve 5,000,000 0
Facility Relocation/Expansion/Upgrades (Constitutional/CM Agency)4,300,000 0
Operating New Public Safety Capital Facilities 600,000 0
Vo ting Machines 500,000 0
To tal 28,633,100 2,363,600
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Packet Pg. 175 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Sample of Cer tain Planned Capital Initiatives Not Funded
from the Local Option Infrastructure Sales Ta x
Major Capital Initiatives Under
Consideration
Est.Cost Funding Source Approx.
Timing
Amateur Sports Complex –Construction
Completion Gap Funding
$10 million TDT, G eneral Governmental FY 2021
Golden Gate Golf Course –Land Use Planning $1 million General Governmental FY 2021
Park’s –Aquatic’s Pump and Infrastructure
Replacement
$10 million Debt Service -General
Governmental
FY 2021
Big Corkscrew Island Park –Phase 2 $30 million Regional Park Impact Fees FY 2023
Strategic Eastern Lands Property Acquisition
(Board Directed)
$6 million General Governmental FY 2021
Randall Curve Improvements $7 million General Governmental (Por tion not
covered by local option infrastructure
sales tax)
FY 2022
Replacement of Eleven (11) Bridges East of SR 29 $30 million Debt Ser vice –Gas Taxes
(Por tion not covered by local option
infrastructure sales tax)
FY 2021
Storm-Water Capital Improvements; Palm River,
Naples Park, Goodlette Frank, Gordon River, etc…
$60 million Debt Service -General
Governmental
FY 2021–FY 2024
Replacement of Financial Management Software $7 to $10
million
General Governmental FY 2021–FY 2024
Public Utilities Eastern Lands Water/Sewer
Capacity Expansion
$104 million Debt Ser vice –Wa ter/Sewer
Impact Fees & User Fees
FY 2022–FY 2023
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Packet Pg. 176 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
FY 2020 Adopted Gross Budget
by Fund Type
To tal Budget $2,059,994,300
11
General Fund,
$478,706,900, 23%
General Fund -
Constitutional
Officers, $245,884,600,
12%
Special Revenue Funds,
$351,619,700, 17%
General Gov't Debt Service
Funds, $45,265,400, 2%
General Gov't Capital Projects
Funds, $310,151,400, 15%
Enterprise Funds,
$481,144,600, 24%
Internal Service Funds,
$144,407,600, 7%
Permanent (Trust)
Funds, $2,814,100, 0%
Unincorporated Gen Fd,
Conservation Collier, TDC,
Planning & Development Services,
Road & Bridge, MSTU's, Pelican
Bay, Grants
Water / Sewer;EMS, Solid
Waste, Public Transit Services
(This fund type includes
Operations, W/S Debt, and
Capital)
Executive Offices, County Attorney,
Economic Devel., Domestic Animal
Serv., Library, Parks, Health Dept,
Transit, Facilities Mgt,, Courts,
Purchasing, Human Resources,
Emergency Mgt,, Medical Examiner
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Packet Pg. 177 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
General Fund Expense Slide
by Categor y
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Packet Pg. 178 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
General Fund Cash Planning and
Obser vations
—Ye ar ending cash balance influences budget planning.
—FY 19 and FY 20 budget management designed to increase year
end cash.
—First two months cash flow requirements in new FY (October
and November) now totals between $95 -$105 million.
—Reser ves growing to protect year ending cash;hedge against
unanticipated expenses and/or policy shifts;safety net in the
event of natural disasters;signal of financial strength;and
important component of budget flexibility strateg y.
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Packet Pg. 179 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Agency Allocations
—Premise is that all agencies will work together
and cooperatively should the need arise for
budget reductions due to taxable values below
the planning threshold;re ductions in proper ty
tax reve nue;any state tax reform legislation;
re ductions in state shared reve nue;or unfunded
mandates.
—Conve rsely –increases in reve nue above the
planning threshold will also be allocated based
upon Board direction.
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Packet Pg. 180 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Reve nu e Centric
—Enterprise Funds;Internal Ser vice Funds;Special
Reve nue Funds and other Operational Funds
which are suppor ted by fees with no reliance
upon ad valorem reve nue will be allowed to
establish budgets and conduct operations around
reve nue centric guidelines dictated by cash on
hand and anticipated receipts.
—Within the General Fund and Unincorporated
Area General Fund,net cost to these funds offset
by fee reve nue will be monitored and negative fee
variances will be addressed through expense cuts
and not subsidized by ad valorem reve nue .
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Packet Pg. 181 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Agency Positions
—Expanded position requests limited to Board
approved capital facility openings and/or Board
directed ser vice leve l adjustments.
—All budget to budget expanded requests will be
rev iewe d by the County Manager and final
re commendations presented as par t of the FY
2021 budget workshop in June .
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Packet Pg. 182 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Compensation
—Appropriate a 2% or $1,200 Cost of Living Adjustment (COLA)
whicheve r is greater across all pay ranges with the structure of such
adjustment deve loped by the County Manager and presented at the
Ju ne budget workshop.
—FY 2021 Recommended COLA for the CM Agency is valued at $3.5
million
—Ta rgeted pay plan maintenance appropriation for FY 2021 equivalent
to .8% or $1,000,000 is re commended to strengthen certain lower
and strategic classification pay grades where a market imbalance
exists.
—Cost of Living December ove r December 2019 is 2.0%
—Compensation Administration Philosophy:
ü Facilitate retention and hiring of knowledgeable , s killed and experienced staff
ü Suppor t professional development and career progression
ü Reward individual and team achievements 17
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Packet Pg. 183 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Health Care
—Maintain for the County Manager Agency an ave rage cost
distribution between the Board and Employees at 80%
(Employe r) 20% Employee.
—For FY 2020,the County experienced no (0%) health
insurance rate increase . D ue to continued exceptional
plan performance and plan reser ve s which exceed
statutor y minimums,no (0%) health insurance rate
increase is proposed for FY 2021.
—Due to regular ongoing health maintenance and
aw areness initiatives,risk factors for covere d employees
and family members continue to drop.
—More than 93% par ticipation in the preve ntive
maintenance and qualifier process.
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Packet Pg. 184 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Retirement Rates
—Adherence to OMB rates published within the
OMB budget instructions.
—Rates Established based upon State Guidance .
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Packet Pg. 185 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Storm-Wa ter Funding
—FY 2020 general governmental storm-water operating and capital funding
totaled $13.5 million.
—FY 2021 planning model increases funding by $2,000,000 to $15.5
million.
—County Manager committed to recurring general governmental storm-
water maintenance funding consistent with industr y standards with the
final amount depending upon receipt of actual taxable value numbers;
overall budget submissions and Board Direction.
—Eligible replacement and new capital projects will be evaluated with the
potential for special obligation revenue bond financing up to $60 million
in projects in lieu of the current cash and carr y methodology.
—Legally available non ad-valorem revenue will be used to fund any debt
ser vice which is estimated at approximately $3.8 million annually.
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Packet Pg. 186 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Uses of Gas Ta xe s
—Continue Board policy where pledged gas taxes pay debt service on the gas tax revenue bonds
which have final maturities in June 2023 and 2025 respectively;remaining gas tax funds
programmed to support construction and transportation network improvements.
—Tr ansfer dollars totaling $9.4 million planned in FY 2021 from the General Fund to Tr ansportation
Capital Fund (310) will provide funding support for maintenance of the roadway network and
other transportation related expenses.
—Tr ansfer dollars from the Unincorporated Area GF planned at $3.0 million in FY 21 to
Tr ansportation Capital Fund (310) augmented by a $2.6 million direct budget appropriation in this
fund for road maintenance.
—Gas Taxes collected from all sources totaled $22.3 million in FY 2019 up 7.7% from $20.7M in FY
2018.Forecast FY 2020 and planning FY 2021 revenue will be in the $23M range.
—$1M in gas taxes freed up annually for transportation network improvements beginning in FY 2015
due to restructuring of the gas tax debt.
—One financing strategy is using available constitutional gas tax bond coverage above adds bonds
test of 1.35x to issue wrapped debt of $25 million covering necessary bridge replacement not
covered by the local option infrastructure sales tax.
—Parallel strategy is to consider early extension of local option gas taxes before December 2025
capitalizing on low interest rates,greater coverage ratios,and an extended repayment horizon to
finance strategic transportation network road assets deemed poor in the inventory as well as
certain capacity improvements.
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Packet Pg. 187 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
General Fund General Capital/Debt
Ser vice and Debt Management
—Tr ansfer dollars for county-wide capital purposes;
paying non-growth related reve nue bond debt;
provide impact fee trust fund loans to cover
growth related debt obligations and to fund
much needed general governmental priority
re placement capital projects within the parks
system and general governmental facilities.
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Packet Pg. 188 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
General Gove rnmental,Enterprise
Fund and Other Reser ve Po licies
—GF –floor ; 8 % of operating expenses or $33.9 million –Ceiling;16% of operating expenses or
$67.8 million;current planning reserve for FY 2021 is $56.5 million an increase of $5.0 million.
—Other Gen.Govt.Funds –Generally 2.5% of operating expenses with a ceiling of no more than
one months expenses.Ceiling for the Unincorporated Area GF is $5.1 million;current planning
reserve for FY 2020 is $2.3 million.
—Other general governmental funds that receive transfer revenue from the GF will have reser ves
sized to cover the first month of operations or until the first GF transfer is scheduled.
—Reser ve policy for Pelican Bay Ser vices Division (PBSD) operating fund (109) set between 15-
30 percent of operating expenses given the districts coastal nature,level of infrastructure
investment,natural assets and commitment to maintenance and resource protection.
—CCWSD user fee reserves established minimally between 5% and 15% of revenues with
working capital resources set between 45 days and 90 days.Within the family of CCWSD family
of user fee operating and capital funds reser ves will range between $20.6 and $41.1 million
while working capital resources will total roughly $26.0 million or 57 days of reserves.
—Establish over a three to five year period,a solid waste restricted reserve of ten (10) percent of
the FY 2020 budgeted charges or $5.2 million.
—Ta rgeted reserves within the GMD building permit fund (113) and planning fund (131) set at 18
months and 24 months of total budget appropriations respectively.
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Packet Pg. 189 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Financing New and Replacement Capital
Infrastructure
—Finance Committee is engaged and continually reviewing all appropriate
capital financing options.
—FY 21 budget planning does not program issuance of debt as part of the
adopted budget.
—Any new debt issue recommendation will include a consolidated financing
plan based upon the number of current and future capital projects and
initiatives to be financed,the timing of project implementation,expected
payout schedule, t he appropriate type of debt and existing market
conditions.
—Issuance of debt in the areas financed would reduce the cash and carry
component by the amount of debt service.
—Cost to finance always a concern,but County’s credit rating will reduce the
interest expense.
—Long term debt means that future users of capital facilities and infrastructure
and not just current users will participate in paying for facilities.
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Packet Pg. 190 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
School Resource Officer Funding
—County Commission through the Sheriff's Agency has funded a program
providing coverage in many schools for years.
—SB 7026 passed in 2018
—Legal responsibility to comply with SB 7026,including funding is the
responsibility of the Collier County School District
—Current program costs are approximately $7 to $9 million annually and
the Sheriff has a presence in ever y County public school facility and
charter school in compliance with the current State law.
—Sheriff will likely ask for additional recurring funding of $3,000,000 over
two to three years.
—The School District returns to the County dollars received from the State
which last year totaled $1.8 million.
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Packet Pg. 191 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Schedule
—Resolution requiring FY 2021 budget submittals by the
Sheriff;Super visor of Elections and Clerk of Courts on May
1st.
—FY 2021 June Budget Wo rkshop Dates –Thursday June 18th
and if necessar y Friday June 19th
—Adopt Tentative Maximum FY 2021 Millage Rates on Tu esday
Ju ly 14,2020
—Board Receives Tentative FY 2021 Budget Document on
Friday July 17,2020
—First FY 2021 Public Budget Hearing on Thursday
September 3rd with the Final FY 2021 Budget Hearing on
Thursday September 17th
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Packet Pg. 192 Attachment: FY21 Budget Policy PowerPoint (11720 : Recommedation to adopt the FY 2020 Budget
Policy Document Page 1
Fiscal Year 2021
Recommended Budget Policies
Collier County Board of County Commissioners
February 25, 2020
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Packet Pg. 193 Attachment: Fiscal Year 2021 Recommended Budget Policies (11720 : Recommedation to adopt the FY 2020 Budget Policy)
Policy Document Page 2
Table of Contents
Section Pages
1. Overview and General Budget Planning 3 to 5
2. General FY 2021 Budget Planning – Significant Influences 5 to 8
3. New General Governmental Initiatives 8 to 9
4. Taxable Value and Tax Rate Discussion 9 to 12
5. Summary of FY 2021 Budget Strategies 12 to 16
6. County Grant Funding 16
7. Local Option Infrastructure Sales Tax 16
8. Future General Governmental Capital Improvements 16 to 19
9. Gas Taxes; Use of Gas Taxes and Gas Tax Pledged Debt 19 to 21
10. Safe School Officer Program 21
11. General State Legislative Update 21
12. General Fund Allocation by Agency/Department 22 to 23
13. Millage Rate Targets for MSTU’s 23
14. Revenue Centric Budgets 23 to 24
15. Expanded Positions and Programs 24
16. Compensation Administration 24 to 25
17. Health Insurance 25 to 27
18. Retirement Rates and Accrued Salary Savings 27
19. Financing New and Replacement Capital Infrastructure 27 to 29
20. Storm-Water Management Funding 29 to 30
21. General Fund Capital/Debt Service Contribution and Debt Mgmt. 30 to 31
22. General Governmental; Enterprise Fund and Other Reserve Policies 31 to 37
23. CPI Based Enterprise Fee Adjustments 37 to 38
24. Suggested Scheduling Timeline 38
25. Florida Counties used for Comparative Budget Data 38
26. Regular Routine Budget Policies for FY 2021 39 to 41
27. Three Year Budget Projections – General Fund 42 to 48
28. Three Year Budget Projections – Unincorporated Area GF 49 to 52
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Packet Pg. 194 Attachment: Fiscal Year 2021 Recommended Budget Policies (11720 : Recommedation to adopt the FY 2020 Budget Policy)
Policy Document Page 3
Overview and General Budget Planning
Historically, the annual budget policy approved by the Board of County Commissioners (Board),
has consisted of three (3) sections which are “annual budget policies to be adopted”, “continuing
budget policies to be reaffirmed” and a “three-year forecast for the General Fund and the
Unincorporated Area General Fund”. Annual policy adopted are highlighted in gray on policy
document pages 21 thru 25; 27 & 29, 30 thru 31; and 33 thru 38. While it is suggested that this
format continue, the policy document will also cover significant budget influences and discuss the
strategies which may be utilized to address these influences as the budget document and budget
planning evolves for FY 2021 and beyond.
The regional economic environment remains relatively stable among key financial, housing,
employment, visitation and demographic indicators. Taxable value County Wide has increased
for eight (8) consecutive years, through FY 2020, and the tax base is at an all-time high. The
County’s credit rating is consistently “investment quality” among all three major rating agencies
under a stable outlook, general governmental and enterprise fund cash balances are strong, and
reserves meet policy standards for a coastal community. County median home prices remain in
the low to mid $400K value into the fourth quarter of calendar 2019 with the November 2019
value at 435,000; Single family home sales totaled 385 units in November 2019, 42 units more
than November 2018. Calendar year visitation to the destination through December 2019 is up
5.8%. Direct visitor spending also increased for the January to December 2019 period by 8.1%.
Visitation remains strong and the destination marketing program is expected to keep Collier
County a prime location for tourists. New construction permitting for calendar 2019 through
December 2019 averaged 258 permits per month slightly above the average of 254 monthly
permits for the same 2018 period. The County’s unemployment rate is 2.6% in November 2019
which continues below the state and national averages.
The County is positioned to structure and issue strategic general governmental and enterprise
debt for capital projects while borrowing costs remain low upon recommendation by the Finance
Committee. Projects in the area of storm-water, bridges, parks and utilities will likely require
financing during FY 2021 and FY 2022.
While the regional economy continues to remain stable, senior leadership regularly evaluates
all economic indicators and the organization is always positioned financially to respond quickly
to softening economic conditions.
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
objectives. 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. Reserves designated for future asset
maintenance and replacement, vehicle and equipment replacement, natural disasters and
unforeseen risks are considered critical strategic positions and emphasize the need for careful
resource allocation among competing short term and long-term funding priorities.
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As the County’s general governmental and enterprise capital assets grow, regularly resourcing
long-term asset maintenance and replacement becomes increasingly important. For FY 2020,
$498.8 million or 24% of the County’s $2.060 billion Gross Budget represented capital projects
and capital reserves.
Natural Disaster Planning
Since landfall of Hurricane Irma over two years ago, the County has put forth significant
effort and resources in a continuing effort to harden critical public safety and utility
infrastructure. Financially, the County is always prepared to cash flow and expend
appropriated dollars to restore the community from any natural disaster and County leadership
remains committed to a value-added coordinated emergency management approach which
coalesces all County Agencies and external District partners as future natural disasters
threaten Collier County.
As a reminder, to cash flow a natural disaster, three specific budget techniques are utilized. First,
in funds where sufficient cash exists, FEMA revenue is budgeted, and corresponding expense
budget appropriated anticipating some level of reimbursement in the coming months/years. Note
that there is no cash behind budgeting FEMA revenue. Existing and routine incoming fund cash is
relied upon until the receipt of FEMA revenue. Second, existing capital project budgets are
reviewed and re-allocated were appropriate. Third, general governmental and enterprise reserves
are drawn down in appropriate and prudent amounts.
For perspective, as of January 2020, the County has spent $120.9 million (not including salaries)
recovering from Hurricane Irma. The County has received $83.8 million in reimbursement revenue
consisting of $57.4 million in FEMA reimbursement and $26.4 million in insurance
reimbursements. The County can expect in the future to front substantial resources recovering from
a major natural disaster for 18-24 months before any reimbursement revenue is received. Debris
removal is the most expensive community restoration component generally accounting for 60% to
65% of all recovery costs.
General Budget Planning
The FY 2021 budget plan will allocate funding for recurring operational expenses albeit limited
and continue funding for replacement capital infrastructure and maintenance as well as new capital
initiatives not funded through the local option infrastructure sales tax. Capital and operational
programming continue to compete for limited resources which always is a pressure point as
appropriation decisions are made for the General Fund (001) and Unincorporated Area General
Fund (111). That said, the budget document must continue to remain flexible - a key component
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
2021 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 likely not be affected by the Board’s tax policy
decision.
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• While issuance of debt is not programmed within the adopted budget, the budget will be
positioned for amendment during an FY to allow for financing projects like storm-water
system expansion; bridge replacement; park system improvements and other policy
initiatives as directed by the Board.
• Extent of gap funding to complete construction of Amateur Sports Complex Facilities.
• Planning for recurring general governmental industry standard funding to maintain
storm-water infrastructure and a “pay as you go” capital component totaling at least
$13.5 million which is the FY 2020 appropriation from the General Fund and
Unincorporated Area General Fund.
• Board policy guidance on issues like workforce and first responder housing; mental
health; and development of the Golden Gate Golf Course property.
• Level of funding connected with strategic relocation of various governmental functions
on the main campus; costs connected with back office infrastructure replacement like the
management and accounting system, and information technology system upgrades.
• Construction of the Heritage Bay east of CR 951 governmental facilities campus.
• Level of General Fund transfer support to the constitutional officers and specifically the
Sheriff.
• 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.
Annual Budget Policies Adopted
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 2020 comprise about 40% of total net recurring annual operating revenue and
67% of General Fund recurring revenue sources. Seventy-seven (77%) of General Fund revenue
is comprised of property taxes, sales tax and state shared revenue (percentages do not include
revenue reserve).
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Thus, significant attention is paid to ad valorem taxes and those factors that can influence millage
rate and tax levy decisions. The decision to develop the FY 2021 budget around the rolled back
rate, millage neutral rate or other rate is a key decision made by the Board and this decision will
determine the level and extent of operational, capital and constitutional funding. Under millage
neutral policy guidance applied to the tax base planning scenario, the FY 2021 General Fund levy
will increase $9,952,700 over FY 2020. Under a tentatively calculated rolled back tax rate policy,
the General Fund Levy will increase $7,756,500 which is a $2,196,200 levy loss from millage
neutral. The following points are noteworthy in considering general governmental tax policy for
FY 2021.
• The County’s current General Fund millage rate of $3.5645 has been levied for the past eleven
(11) years or 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 $115.3 million in additional dollars above the rolled back rate to fund general
governmental capital and operating programs cut during the recession or to maintain levels of
service deemed important by the BCC as part of annual budget guidance.
• Levying the rolled back rate in FY 2021 based upon a planned 3% increase in the tax base
would result in a $7.7 million dollar increase over the FY 2020 levy, but a reduction of $2.2
million if millage neutral was applied to the planned tax base increase. The concern is no t 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
Ad Valorem
40%
Gas/Sales Tax
7%
Infrastructure
Sales Tax
9%
Permits/
Assessments/
Fines
7%
Intergov'tal
Revenues
2%
Service Charges
28%Impact Fees
5%
Bond
Proceeds/
Interest
2%
Sources of Current County Government
Operating Revenues all Funds (FY 2020)
Ad Valorem
67%
Sales Tax
8%
State Revenue
Sharing
2%
Intergov'tal
Revenues
1%
Fines,
Permits,
Charges
3%
Interest &
Misc.
1%
Carryforward
15%
Interfund
Transfers and
Payments
2%
Transfers from
Consitutional
Officers
1%
FY 2020 General Fund Revenue Sources
General Fund
85%
MSTU's 2%
Pollution
Control 1%
Unincorporated
Area General
Fund 12%
Property Tax by Major Funds
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decreases, and millage neutral then becomes the tax policy becau se the rolled back rate
increases as the tax base declines.
• Property taxes comprise 67% of total General Fund recurring revenue.
• If the Board had voted to levy the rolled back rate in FY 2020 during the September public
budget hearings, $8.8 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, storm-water
and parks; elimination of all expanded requests funded by the General Fund required to service
new facility improvements and current service County Manager Agency and or constitutional
officer operating reductions.
• Programmed within the General Fund for FY 2020 is over $30 million dollars supporting
various general governmental capital initiatives in the areas of transportation, parks and
recreation, storm-water, airports, museums and of course all constitutional capital requests.
• Constitutional operating transfers out of the General Fund (less paid by Board requirements)
constitute 49.2% of all General Fund appropriations. While the Board can control these
appropriations, based upon history it is not likely that cuts would be made to constitutional
officer operations, especially the Sheriff. School safety officer programming will impact the
sheriff’s budget significantly adding about $3.0 million per year over the next three (3) years.
• Of the $475.5 million-dollar FY 2020 General Fund Budget only about 29 percent or $135.6
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.
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Property tax revenue comprises 72% of Unincorporated Area General Fund recurring operating
revenue sources and when including the Communication Services revenue sharing from the State
the revenue mix jumps to 79%. Continued reduction in state shared communication services tax
revenue or worse will significantly impact general governmental services appropriated in this fund.
Like the General Fund, flexibility exists within the Unincorporated Area General Fund if a
response to any state shared revenue reduction is required. This response would have an impact to
general governmental operating programs and capital transfers.
FY 2021 General Governmental Initiatives:
New general governmental capital improvements/initiatives over the next few years include:
planning for and developing the Golden Gate Golf Course and other strategic opportunity land
purchases like certain eastern lands property; hardening County facilities in preparation for natural
disasters and the related grant match; upgrades to IT infrastructure and the County’s various
management, financial and accounting software like SAP; constructing and operating amateur
sports complex facilities; Big Corkscrew Regional Park phase two capital and operations; Park
system aquatic pump and other infrastructure replacement; Sheriff’s capital projects including a
new evidence facility; school safety officer recurring funding; Greater Naples Fire District
Management Contract incentives to achieve Ochopee annexation; David Lawrence Center
expansion and operations; Vanderbilt Beach Road extension; Randall curve improvements; bridge
rehabilitation and replacement; enhancements in storm-water maintenance service levels as well
as capital infrastructure upgrades; Airport system capital grant matches for runway rehabilitation,
terminals, etc.; strategic relocation of campus facilities and office operations, including
constitutional office operations; new satellite government facilities east of CR 951; contributions
to economic development initiatives like innovation zones; and of course constant pressure from
unfunded state and federal mandates.
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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,
an additional $5 million will be programmed for FY 2021 bringing the total to $10 million in
reserve dollars dedicated to protecting the County’s future general governmental hard and soft
infrastructure investment. It is envisioned that the reserve amount will grow by $5 million annually
with the amount ultimately tied to the Board’s tax rate policy. Regular annual deposits to this fund
– like the County’s vehicle replacement funds- emphasizes the need to isolate dollars for this future
asset maintenance obligation knowing the many competing programs, services and initiatives must
receive dollars from a limited resource pool.
Each year as new general governmental capital improvements are brought on line pursuant to
Board policy, the level of operations required to support these facilities grows. Not lost are the
regular contributions to CRA’s and innovation zones which grow annually as the tax base
increases, assuming no change in tax rates, and these dollars while supporting development and
incentives in targeted areas represents reduced dollars to support general governmental services.
General Fund and Unincorporated Area General Fund contributions to CRA’s and innovation
zones for FY 2020 total $7.1 million (an increase of $1.8 million over FY 2019) and 757K (an
increase of $284K over FY 2019) respectively and these numbers will grow in FY 2021.
Other factors that will be significantly impacted by general governmental tax policy include;
1. Extent of capital, debt and operational transfer dollars expended by the General Fund and
Unincorporated Area General Fund. In the numbers estimate above, a $2.2 million General
Fund revenue loss between millage neutral and rolled back will impact mostly capital
transfers and recurring operations.
2. Level of service standards set by the Board for agencies and departments which are funded
within the General Fund and Unincorporated Area General Fund.
3. Proper level of resources to cover the organization’s current and future asset maintenance
responsibility. Competing priorities between operating and capital expenses within a
revenue structure heavily reliant upon property taxes.
4. General Fund and/or Unincorporated Area General Fund support for new or re-prioritized
operating and capital initiatives which were described above under FY 2021 general
governmental initiatives.
5. Impacts of potential unfunded mandates including continued state legislative attacks to
limit a counties home rule ability to raise property tax revenue and repeated attempts to
reduce existing shared revenue sources like the Communication Services Tax (CST);
school safety officer mandates without recurring state funding; further reductions in state
health care and social service funding; 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.
6. Level of General Fund Ad Valorem operating support extended to constitutional officers
and specifically the Sheriff.
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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. Payment on the County’s debt service; and
4. Maintaining the County’s excellent investment quality credit rating.
Discussion of Taxable Values, Millage Targets for the General Fund (County-Wide) and
Unincorporated Area General Fund and Related FY 2019 Budget and Financial Strategies
While the county-wide tax base has increased for eight (8) consecutive years (trending to nine for
FY 2021), maintaining a millage neutral policy position remains the recommended management
objective.
The following table provides a history of Countywide and Unincorporated Area taxable values
over the past thirteen (13) years (tax year 2007-2019) as well as the budget planning projection for
tax year 2020 (FY 2021).
Tax Year
County Wide
Taxable Value
County Wide %
inc. (dec)
Unincorporated
Area Taxable Value
Unincorporated
Area % inc. (dec.)
2007 (FY 2008) $82,542,090,227 -------------- $53,397,231,747 -------------
2008 (FY 2009) $78,662,966,910 (4.7%) $50,860,023,424 (4.8%)
2009 (FY 2010) $69,976,749,096 (11.0%) $44,314,951,279 (12.8%)
2010 (FY 2011) $61,436,197,437 (12.2%) $38,146,886,403 (13.9%)
2011 (FY 2012) $58,202,570,727 (5.2%) $36,013,774,963 (5.6%)
2012 (FY 2013) $58,492,762,303 .50% $36,026,786,779 .04%
2013(FY 2014) $60,637,773,315 3.7% $37,207,018,234 3.3%
2014 (FY 2015) $64,595,296,747 6.5% $39,634,174,211 6.5%
2015 (FY 2016) $70,086,389,131 8.5% $43,075,586,559 8.7%
2016 (FY 2017) $77,115,163,725 10.0% $47,455,161,371 10.2%
2017 (FY 2018) $83,597,615,791 8.4% $51,754,136,138 9.1%
2018 (FY 2019) $88,286,266,672 5.6% $54,781,508,980 5.8%
2019 (FY 2020) $93,072,190,452 5.4% $58,089,098,206 6.1%
2020 (FY2021)
Planning $95,864,356,166 3.0% $59,831,771,152 3.0%
The December 2019 State Ad Valorem Estimating Conference Report was released in January
2020 for the 2020 tax year (FY 2021). The report projects that Collier County certified taxable
values on July 1, 2020 will increase 5.8%. This number is aggressive. 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 3.0% taxable value increase is realistic and
accomplishes the objective of maximum 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.
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Property tax revenue comprises 67% of the General Fund (001) and 40% of the total net county
recurring revenue budget, including fund balances. According to the Urban Institute web site local
government general property tax collections as a percentage of all general governmental
collections for municipalities total 30% 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 fifteen (15) years are shown in table form below.
Millage Area FY 06 FY 07 FY 08 FY 09 FY10-FY16 FY17-FY20 FY 21
Planning
General Fund $3.8772 $3.5790 $3.1469 $3.1469 $3.5645 $3.5645 $3.5645
Unincorporated
Area General Fund
$.8069 $.8069 $.6912 $.6912 $.7161 $.8069 $.8069
The following table depicts taxable values and levies at various tax base increase scenarios under
a millage neutral rate and one scenario which depicts the projected roll back rate at the policy
planning scenario. The County Manager is proposing to maintain the General Fund tax rate at
millage neutral or $3.5645 per $1,000 of taxable value. Likewise, the Unincorporated Area General
Fund tax rate will be recommended at $.8069 with the incremental rate above current millage
neutral or $.0908 earmarked to fund the unincorporated area landscape median program. The
respective General Fund and Unincorporated Area GF dollar values at the various scenarios are
shown below.
Current
Taxable Value
Pre VAB
FY 2021 @ 3%
applying projected
FY 2021 RB Rate
FY 2021 @ 2% FY 2021 @ 3%
Policy Planning
Numbers
FY 2021 @ 4% FY 2021 @ 5%
General Fund 93,072,190,452 95,864,356,166 94,933,634,261 95,864,356,166 96,795,078,070 97,725,799,975
Unincorporated Area
GF 58,089,098,206 59,831,771,152 59,250,880,170 59,831,771,152 60,412,662,134 60,993,553,116
Current Levy
General Fund 331,755,823 339,532,377 338,390,939 341,708,498 345,026,056 348,343,614
Unincorporated Area
GF (Operating) 41,597,603 42,785,700 42,429,555 42,845,531 43,261,507 43,677,483
Unincorporated Area
GF (Landscape Cap) 5,274,490 2,686,447 5,379,980 5,432,725 5,485,470 5,538,215
Unincorporated Area
GF at $.8069 46,872,093 45,531,978 47,809,535 48,278,256 48,746,977 49,215,698
3% - Variance
applying the
projected FY 2021
RB Rate from
Current Levy
2% - Variance
from Current Levy
3% - Variance
from Current
Levy
4% - Variance
from Current
Levy
5% - Variance
from Current
Levy
General Fund
(millage neutral)
7,756,554 6,635,116 9,952,675 13,270,233 16,587,791
Unincorporated Area
GF (Operating)
1,247,928 831,952 1,247,928 1,663,904 2,079,880
Unincorporated Area
Landscape Median
Program at $.0908
millage neutral
(2,588,044) 105,490 158,235 210,980 263,725
Total Unincorporated
Area GF
(1,340,115) 937,442 1,406,163 1,874,884 2,343,605
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If taxable values fall below the three (3.0) percent planning scenario, budget planning will be
reduced accordingly. Conversely if taxable values exceed the planning benchmark, additional ad
valorem dollars can be used to increase reserves and/or applied to programs and services as
directed by the Board. It is likely that budgeted ad valorem revenue will be millage rate driven
rather than a strategy of setting the millage rate based upon a targeted ad valorem revenue number.
Summary of Significant FY 2021 Adopted Budget Strategies to Achieve a Structurally
Balanced Budget
The following table highlights certain FY 2021 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 2021 millage neutral General
Fund (001) operating budget along with service level and related budgetary and
millage implications. Designate approximately sixty-six (66) percent of the planned
property tax revenue increase after constitutional transfers and satisfying reserve
requirements to capital initiatives with the remaining thirty-three (33) percent after
constitutional transfers and satisfying reserve requirements to cover operations and
recurring costs due to any expanded services. Planning for recurring operating cost
increases of 1.0% is below the identified CPI increase of 2.0% and will result in
department reductions within strategic identified areas to meet this budget guidance.
2 Proposed guidance for the Unincorporated Area General Fund (111) includes
maintaining the millage rate at $.8069 and earmarking $.0908 or the marginal increase
above the current operating millage rate plus the recurring maintenance component to
continue funding the median landscape program. The operating millage rate of $.7161
will be used to fund reserves at policy levels and fund recurring and/or any expanded
operations as well as an expanding capital transfer component.
3 County Manager agency expanded services will be limited to staffing new Board
approved capital facilities or Board directed level of service adjustments. County
Manager Agency personal services for FY 20 grew by $8.1 million to $188.7 million or
49.7% of total Collier Co. government personal services. Constitutional budgeted
personal services for FY 20 grew by 9.3 million to $191.3 million.
4 Pursue a strategy in FY 2021 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, the capital reserve fund, created in FY 2020 will grow by $5.0 million
to $10.0 million for FY 2021 fencing off dollars in incremental amounts 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.
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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 loans to the impact fee trust
funds to cover the debt service gap due to insufficient impact fee collections; fund
park’s capital; support airport capital grant matches; fund constitutional officer capital
needs; and to help pay for critically needed general governmental facility repairs.
8 The FY 21 budget planning model under a millage neutral tax rate for FY 2021
allocates $15.5 million dollars from the General Fund and Unincorporated Area
General Fund toward existing storm-water infrastructure maintenance; pay as you go
capital; and operations under the assumption that certain strategic replacement and
new storm-water capital projects would be financed as part of a general governmental
debt issue. Debt service connected with any debt issue would reduce the pay as you go
annual funding component. This represents a $2.0 million increase over FY 2020 for
maintenance, capital and operations.
9 The FY 2021 planning model at millage neutral increases the park capital general
governmental transfer by $250K to $5.95 million. Debt service on any financing
would reduce the planned annual transfer.
10 The FY 2021 budget will be planned for maximum flexibility which will allow for
quick adjustments resulting from a softening economy; natural disasters; unanticipated
Board policy initiatives; issuance of debt; changing expense timing; and unforeseen
unfunded mandates.
11 Establish General Fund contingency reserve at 2.5% of total budgeted appropriation
(less capital/debt transfers) and grow the General Fund cash balance reserve by
$4,800,000, bringing total General Fund reserves to $56.5 million. This growth in the
General Fund reserves is extremely important to protect the funds beginning FY cash
position, present a position of financial strength to the rating agencies, avoid more
aggressive expenditure controls as budget margins tighten and position the County to
become more self-reliant knowing that federal and state funding as well as funding
guidelines will continue to tighten and become more onerous.
12 Use gas tax revenue to support road capital, maintenance and debt (with an emphasis
on debt) consistent with budget planning and statutory requirements; and begin
discussion on the strategies to extend local option gas taxes before expiration at
calendar year ending 2025.
13 Continue dialog where appropriate on future new sustaining revenue sources intended
to diversify the composition of the County’s recurring general governmental revenue
mix.
Component increases of 1.0% devoted to operations at the department level is planned. This means
that department operations for FY 2021, which rely on the General Fund and Unincorporated Area
General Fund for dollars, will be restricted to a one percent (1.0%) increase for current programs
and services as well as any expanded services.
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This includes operating transfers. For FY 2021, the percentage operating adjustment will be
translated into a dollar value for each department head to consider as priorities dictate.
Limited general governmental operational expense increases are expected and will be appropriated
to account for new programs and services instituted during FY 2020, inflationary adjusted fixed
costs and maintaining a competitive compensation package. The December 2018 over December
2019 CPI is 2.0 percent.
A significant portion of remaining budget planning dollars will be applied to Agency wide capital
equipment, asset replacement and new capital projects not covered by the local option
infrastructure sales tax or impact fees. This will manifest itself primarily through General Fund
and Unincorporated Area General Fund capital transfers for general governmental and
constitutional facilities, the transportation network, parks, storm-water and heavy equipment.
For FY 2021 planning purposes and discussion in this policy document, the total General Fund
Budget is represented to increase by $19,824,500. The following table depicts by category the
revenue and expense positive or negative changes connected with the FY 2021 General Fund
Planning Budget and the variances from FY 2020. Also shown for comparison are the budget
variances by category between FY 2019 and 2020.
Major Revenue Variances: Variance between Budget FY
2020 and Planning FY 2021
Variance between
Budget FY 2019 and
Planning FY 2020
Ad Valorem Taxes $ 9,952,700 $16,982,200
Sales Tax & Revenue Sharing 0 0
Department Revenues 0 (55,200)
Enterprise and Federal PILT and Cost Allocation 657,200 775,100
Transfer Revenue (1,688,800) (10,532,800)
Constitutional Officer’s Turnback/Excess Fees (4,000,000) 0
Interest 500,000 255,000
Carryforward 14,726,000 32,940,300
Less 5% Required Revenue Reserve (322,600) (859,100)
Total Revenue Increases $19,824,500 $39,505,500
Major Expenditure Variances
County Manager, Court’s and Other General
Operations $ 847,900 $ 3,750,900
Operating Transfer’s (546,300) 7,660,100
Capital & Debt Transfer’s 7,495,500 7,618,900
Sheriff Transfer 5,968,000 10,703,200
Other Constitutional Transfer’s 1,103,900 2,720,700
Reserves 4,955,500 7,051,700
Total Expenditure Increases $19,824,500 $39,505,500
Several observations can be made from this table. As we have noted continuously throughout this
document, property tax revenue dominates general governmental funding. Of significance also is
the importance of a healthy carry-forward (fund balance) at year end which influences expenditure
planning and the respective capital and operating allocations. Maintaining a healthy fund balance
requires priority funding of reserves as indicated in the analysis above.
The increase in General Fund budgeted carryforward planned at year ending 9/30/20 is directly
related to proactive budget planning and management knowing that actual cash and cash
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equivalents at year ending 9/30/20 must be in the $95 million to $105 million range. The plethora
of new general governmental initiatives over the past three years; cash flow requirements
connected with grants; constitutional officer statutorily required cash flow; steadily increasing
asset replacement and maintenance recurring requirements; reserving dollars for future asset
replacement and maintenance; positioning the budget to issue debt if necessary during the budget
cycle; and insuring budget flexibility demands that adequate cash be on hand at year end.
The positive carryforward variance of $27.5 million from FY 2020 budget (estimated for YR end
9/30/19) and actual year ending 9/30/19 cash is the result of actual operating revenue received
during FY 2019 over forecast of $17.3 million. Operating expenses in FY 2019 were $7.8 million
less than forecast and certain capital transfers totaling $2.4 million were not made and remained
within the General Fund. The result was a cash and cash equivalents General Fund actual balance
of $102 million at year ending 9/30/19. This position allows for flexible operating, capital transfer
and reserve appropriation planning leading into FY 2021.
The increase in all General Fund budgeted reserves represents a regular managed increase of $4.9
million over FY 2020 consistent with policy planning standards. Constitutional turn-back revenue
is reduced by $4.0 million due to the various facility upgrades and moves planned during FY 2020
and FY 2021. Impact Fee collections remain stable and for FY 2021 only $1.7 million is required
from the General Fund to subsidize growth related debt. While not a trend due to the extreme
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 2021 to Storm-Water
and Parks.
Each new program, service, initiative or capital facility has recurring funding obligations and the
layering effect becomes magnified each fiscal year. Whether staffing the Sport’s Complex and Big
Corkscrew Regional Park, contributing to economic development incentive zones, storm-water
programming, senior facility initiatives, buying land, fostering workforce housing, supporting
social services, investing in our public safety facilities, school safety officer funding or the myriad
of other current or future funding requirements; the County’s investment in public safety and
servicing a demanding citizenry requires stable resources and currently that stable resource is
primarily property taxes.
As a balancing measure, budget management is always ongoing and close expenditure controls are
always in place and monitored continually. Likewise, execution patterns are scrutinized along with
transfer dollars to make sure that appropriations are properly executed and spent for the intended
purpose.
While it is important to always recognize our ongoing program, service and capital commitments
which have made Collier County a World Class location 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 to maintain a cash position in this fund of between 20% and 30% of actual expenses
and based upon year ending FY 2019 numbers that cash position would be between $95 million
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and $105 million. The actual General Fund cash and cash equivalents position at year ending 2019
totaled $102,024,000 or 26.4% of actual expenses.
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. Currently, the County has $234.2
million in active grants plus another $33.1 million scheduled to become active. Of the total $267.3
million active or soon to be active grants, the local match requirement totals $49.8 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.
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 fifteen (15) approved projects budgeted within funded programs including Big Corkscrew
Regional Park Phase 1; various hurricane resiliency initiatives; HVAC, roofing and facility
upgrades; and DAS shelter improvements. 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 $67.1 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 $417,900.
It is expected that adequate cash flow will be available and therefore bridge financing will not be
likely. The key project which will reduce cash is Vanderbilt Beach Road and due to this projects
timing - while cash will be drawn down - bridge financing will likely not be necessary.
Future General Governmental Capital Improvements
Long Term Capital Reserve
Recognizing the County’s mounting future general governmental asset maintenance responsibility,
a new Reserve Fund was created for FY 2020 fencing off dollars in incremental amounts up to $5
million annually dedicated to protecting the County’s future hard and soft general governmental
infrastructure investment. Regular annual deposits to this fund 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 2021, another $5.0 million
will be allocated bringing the total reserve amount to $10.0 million. Drawing on this reserve will
of course require Board action under guidelines developed by OMB and the County Manager.
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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 non recurring 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 new general governmental debt component
will likely finance identified replacement and new storm-water capital projects; payoff the variable
rate commercial paper draw used to purchase the Amateur Sports complex property and other
identified Board initiatives that might be ripe for financing like bridges and parks infrastructure.
Augmenting the annual cash and carry component of infrastructure maintenance are dollars set
aside in a separate reserve fund for future infrastructure replacement and maintenance. Despite the
challenge, available resources will continue to be allocated in the most prudent and economical
manner to fund operations at required service levels and construct and maintain strategic capital
improvements.
The following table provides a description of historical budget allocations and what is currently
planned in FY 2021 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 2014 $3,657,700 $4,342,300 $0 $6,841,400 $3,800,000 $0 $8,768,800 $4,730,100 $0 $32,140,300
FY 2015 $3,079,600 $3,307,100 $7,813,200 $7,788,600 $3,441,200 $500,000 $9,499,900 $4,627,600 $0 $40,057,200
FY 2016 $3,077,500 $5,376,500 $900,000 $10,677,500 $4,333,100 $750,000 $14,559,800 $1,549,600 $0 $41,224,000
FY 2017 $3,073,000 $2,476,900 $0 $10,697,500 $4,000,000 $2,495,700 $8,460,000 $2,525,000 $0 $33,728,100
FY 2018 $2,855,200 $3,306,800 $2,000,000 $12,006,000 $4,313,500 $1,100,000 $11,650,400 $1,627,000 $0 $38,858,900
FY 2019 $3,479,400 $3,958,700 $216,200 $11,160,800 $645,000 $1,100,000 $8,555,800 $2,500,000 $0 $31,615,900
FY 2020 $3,694,200 $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 $3,655,600 $1,697,200 $0 $15,167,700 $3,926,500 $3,200,000 $9,388,900 $4,694,400 $5,000,000 $46,730,300
*FY 2015: EMS Station, SOE Complex, & Sheriff Substation. FY 2016: Additional funding for Sheriff Substation. FY18: EMS Station.
FY 19 EMS Station.
For FY 2021, funding as planned above will of course be subject to Board guidance on millage
rates and taxable property values received in July 2020. Factoring out planned Constitutional
Officer transfers, countywide capital and debt service expenses contained within the planning
model amounts to 18.8% of General Fund planned appropriations for FY 2021.
The General Fund regularly appropriates substantial dollars to new general governmental capital
and asset replacement projects benefitting all countywide residents. This level of capital planning
which generally translates into approved budget appropriations provides part of the highly
desirable budget flexibility which is essential to sound fiscal management. Preserving General
Fund cash, maintaining adequate reserves, protecting the County’s investment quality credit rating
and paying debt service will always take priority as expenditure planning evolves. Generally, these
priorities are strategically managed, and 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.
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The following table depicts these planned capital contributions.
Category Unincorp.
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 $1,250,00
0
$4,000,000 $4,267,900 $9,517,900
FY 2019 $2,750,00
0
$4,250,000 $3,000,000 $10,000,000
FY 2020 $2,500,00
0
$4,000,000 $1,300,000 $7,800,000
FY 2021 $2,750,00
0
$3,000,000 $3,125,200 $8,875,200
On October 24, 2018, the County issued $62.96 million (Par) in new tourist development tax
bonds for purposes of constructing a tournament caliber amateur sports complex. Subsequently,
the Board of County Commissioners on July 9, 2019 decided to proceed with the strategic
purchase of 165 acres known as the Golden Gate Golf Course for $28 million with intent on
evaluating the property for various public and private uses consistent with land use plans which
are currently under consideration. New general governmental financing also will be considered
to update and replace storm-water infrastructure, rehabilitate bridges, replace and add new park
and recreation facilities and other various transportation system improvements.
The County is positioned to add new strategic debt to the portfolio after em barking upon an
aggressive debt restructuring program in the summer of 2010 and to date over $422 million in
general governmental debt has been refinanced. As a result, the cost of borrowing has been
reduced by $1,896,000 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 debt totals $37.8 million and represent 2.6% of the County’s
net adopted FY 2020 budget.
Through the County’s debt restructuring and normal debt retirement, non-growth-related annual
revenue bond debt service paid from the General Fund has decreased from $8,154,400 in FY 2010
to $3,655,600 in FY 2021, a 55% decrease.
Countywide capital allocations have traditionally included new money components for general
governmental capital projects as well as maintaining and replacing existing general governmental
infrastructure.
The following chart provides a summary description of General Fund dollars programmed for
transfer in, FY 2017, FY 2018, FY 2019, FY 2020 and that planned for FY 2021 for various
strategic general governmental capital initiatives. This table does not include debt service transfers
or the capital reserve transfer. No projects within the table below are slated for funding from the
Local Option Infrastructure Sales Tax.
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General Fund Supported Capital
Category
FY 17 Budget FY 18 Budget FY 19 Budget FY 20 Budget FY 21 Budget
Medical Examiner’s Bldg Expansion &
Repairs $0 $0 $0 $0 $2,500,000
EMS Station and Ambulance $0 $2,000,000 $2,100,000 $0 $0
Helicopter $2,000,000 $1,250,000 $0 $0 $0
800 MHz Public Safety Communication
System $3,525,000 $850,000 $0 $0 $0
Jail & other Sheriff Facility Repairs $1,059,500 $4,100,000 $1,000,000 $1,000,000 $1,000,000
Voting Machines $0 $345,000 $350,000 $400,000 $550,000
Clerk’s Annex Reorganization and
Finance Dept Relocation $0 $0 $0 $0 $1,200,000
Financial Accounting System (SAP)
Upgrade/Replacement $0 $0 $0 $2,750,000 $2,000,000
Domestic Animal Control Shelter $0 $500,000 $0 $0 $0
Relocation of Campus Facilities and
Office Operations $0 $0 $0 $0 $540,700
State & Regional Eco Development $500,000 $0 $0 $0 $0
Library Capital/Books $450,000 $550,000 $850,000 $950,000 $1,000,000
General Building Maintenance and A/C
Repairs not Sales Tax Funded $4,090,500 $5,250,000 $6,000,000 $5,000,000 $5,000,000
Other General Governmental $1,072,500 $411,000 $1,077,000 ($8,500) $377,000*
Museum Capital $200,000 $313,500 $200,000 $200,000 $200,000
Airport Capital (Grant Match) $300,000 $1,000,000 $445,000 $1,425,600 $1,426,500
General Governmental Vehicle
Replacement Supplement $1,500,000 $1,750,000 $0 $0 $0
Park Capital $2,495,700 $1,100,000 $1,100,000 $3,200,000 $3,200,000
Sports Complex $0 $0 $0 $0 $2,300,000
Golden Gate Golf Course $0 $0 $0 $500,000 $1,000,000
Transportation Capital $9,935,500 $11,650,400 $8,555,800 $9,388,900 $9,388,900
Storm-water Capital $2,525,000 $1,627,000 $2,500,000 $4,694,400 $4,694,400
Total $29,653,700 $32,696,900 $24,177,800 $29,500,400 $36,377,500
*$377,000 = $277k for minor maintenance for software costs and $100k Coastal Zone Water Quality.
Direct capital maintenance funding for parks and storm-water related system improvements and
operations from the General Fund and Unincorporated Area General Fund will increase modestly
in FY 2021 under the current planning scenario from that budgeted in FY 2020 by $1,232,700 to
$33,821,600. This includes operations maintenance in storm-water Fund (103) Of course, the
allocation may change as the FY 2021 budget evolves leading into the June workshop, once taxable
values are known, and budget requests are vetted. This allocation includes dollars to maintain the
transportation network, dollars for road resurfacing, intersection improvements, bridges, storm-
water, and regional/community park system improvements.
Management has the flexibility to allocate these General Fund and Unincorporated Area General
Fund transfer dollars to mission critical projects or initiatives at the expense of those efforts not
deemed a high priority. This has and will continue to be the management strategy given the
competition for general government resources, uncertainty with the communication services tax,
heavy reliance upon property taxes and the natural hazards which can impact coastal communities.
Use of Gas Taxes and Future Gas Tax Pledged Debt:
Restructuring of the gas tax debt in FY 2012 and FY 2014 at substantially lower interest costs,
reduced debt service by $1.0 million and this additional money has been applied to system
maintenance and improvements above that transferred from the General Fund and Unincorporated
Area General Fund. Gas tax dollars which align with the current gas tax ordinances not devoted to
paying debt service will be available annually until the debt expires in 2023 and 2025 unless
additional wrapped debt after satisfying the adds bond test is issued for bridge replacement.
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One potential strategy for the Board to consider is using the available constitutional gas tax bond
coverage above the add bonds test of 1.35x and apply this marginal additional coverage to issuing
wrapped debt in an amount up to $25 million funding necessary bridge replacement east of SR 29
where the structures are considered functionally obsolete and structurally deficient. Paralleling this
approach is Board consideration to extending each local option gas tax ordinance in the full 12
cent amount which can be accomplished by local authority. The first 11 cents (commonly referred
to as the 1 cent to 5 cents and 1 cent to 6 cents series) can be extended by a simple majority vote
of the Board while the 9th cent requires a super majority vote. The County approved three separate
ordinances levying the maximum local option gas taxes of 12 cents for purposes of paying debt
service and maintaining the roadway system. All three ordinances which extend for twenty (20)
years are set to expire on or about December 31, 2025. Gas taxes are the pledged source of
repayment on the current Series 2012 and Series 2014 Gas Tax Refunding Bonds.
The strategy behind an early extension before December of 2025 involves capitalizing on low
interest rates; greater coverage ratios; and an extended repayment horizon which increases funding
capacity. Proceeds would fund identified Transportation system assets deemed “poor” in the
inventory as well as capacity improvements not funded by the Local Option Infrastructure Sales
Tax. Large scale projects identified in the five (5) year CIE which could be financed include Pine
Ridge Road (Livingston to I-75), Randall Curve improvements, Airport Road (Vanderbilt to
Immokalee), Goodlette Road (Vanderbilt to Immokalee) and Wilson Boulevard (GG to
Immokalee). Interest rates on investment quality bonds remain low especially for Collier County.
These large-scale projects and others identified for completion in the five-year CIE between FY
22 and FY 24 have a projected shortfall in recurring funding approaching $40,000,000. Specific
project engineering schedules will be reviewed during the succeeding 12-month period and the
Finance Committee will continue to refine the concept and strategy and further information will
be forthcoming.
Previously, the Board directed through policy that all available uncommitted gas taxes will be used
to support maintenance of the transportation network and related capital initiatives. Beginning in
FY 2019, no general governmental dollars were transferred to the Gas Tax Fund (313). Instead,
general governmental dollars will be transferred to Capital Fund (310) supporting the maintenance
and improvement of the transportation network. This change was made to specifically track use of
gas tax proceeds in accordance with state statutes without any comingling of general governmental
money.
Gas taxes collected in FY 2019 from all sources in totaled $22.3 million. When you consider the
payment of annual debt service ($13.1M), the remaining $9.2 million is 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 2021 to Fund (310) is $9,388,900 which represents no change from FY
2020. The Unincorporated Area General Fund transfer planned to Fund (310) for FY 2021 is
$3,000,000 a decrease of $1,000,000 from FY 2020. These dollars support maintenance on the
roadway network including intersection improvements, resurfacing, sidewalks, pathways, asset
management and traffic control software, and other critical maintenance needs which are not
eligible for gas tax funding by statute. Capital recurring transfer dollars for FY 2021 has placed a
greater emphasis on storm-water and parks maintenance and replacement.
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Recommended Budget Policy: Continue the Board’s policy applying gas tax revenue to pay for
debt service on the Gas Tax Revenue Bonds, and that the remaining gas tax revenue and transfer
dollars from the General Fund and Unincorporated Area General Fund continue to
support/supplement maintenance on the roadway network.
Safe School Officer’s and School Guardians:
The program of placing a school safety officer in some Collier County Schools has been in place
for decades and this program has been elevated to greater public attention since the Parkland
shooting and State passage of SB 7026 which requires the placement of safe school officers or
public guardians at each school facility within the District, including charter schools. It is
important to note that legal responsibility to comply with the requirements of SB 7026, including
funding rests with the Collier County School District. Collier County is compliant with the state
law and the priority is always continued compliance through enhanced protocols, strategies and
personnel.
Current Sheriff’s Youth Relations Bureau funding which is approaching $10 million annually
includes a sworn deputy in each school district and charter school building. The County receives
from the School District pass through dollars remitted by the state and this amount has totaled
approximately $1.8 million annually and is dependent upon state appropriation each year.
General State Legislative Update
Governor DeSantis’ total budget recommendation for FY 2021 is $91.4 billion, $35 billion of
which is general revenue. General revenue funds available for FY 2021 increased 4.3% over the
previous year. Florida’s total reserves are $5.6 billion, more than 6% of the total
recommended budget.
In mid-January, the State’s Revenue Estimating Conference delivered revised estimates for State
general revenue providing lawmakers with an additional $306 million for the current fiscal year,
and $86 million for the 2021 budget cycle, mostly driven by increased corporate income tax
collections. However, the Conference also warned that long-term state and national economic
forecasts were weaker in several key respects and that international political uncertainty could
affect future forecasts.
During the 2020 Regular Session, Collier County submitted five State Appropriation Project
Requests and, by Board resolution for the City of Naples, formally endorsed one additional
request, for a total of $12.5 million in state funding requests. With a 50% local funding
commitment on all project requests, total investments in Collier County, should all projects be
approved, would be $25 million.
The County’s lobbying team continues to monitor and address any legislation containing
unfunded mandates, preemption of local regulation to the State, government accountability and
transparency, and any initiative that may impact local tax collections.
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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.
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.
Considering that planned transfers to the Constitutional Agencies in FY 2021 not including the
Tax Collector account for 48% of total General Fund budgeted expenses and 71% of the General
Fund ad valorem budgeted revenue, their participation in any necessary reductions due in part to
unexpected ad valorem revenue shortfalls, tax rate reductions or unforeseen unfunded mandates is
essential.
It should be noted that these expense percentages are gross figures and do not account for
statutorily required year ending constitutional officer turn back. This turn back revenue is budgeted
and forecast each year. Constitutional turn back revenue totaled $10,033,400 and $11,718,900
respectively across all funds for years ending FY 2018 and FY 2019 respectively. For year ending
2019, actual collections exceeded forecast in the General Fund by $3.5 million. The General Fund
receives on average 85% to 90% of all turn back revenue. Turn back revenue from the Tax
Collector accounted for 81% of all fund turn back revenue in FY 2018 and 75% of all fund turn
back revenue in FY 2019.
BCC / Co
Attorney 3%
County
Managers
Agency 26%
Road Program
Subsidy 2%
Debt / Capital
Subsidy 8%
Reserves 11%
Courts 0%
Clerk of Courts
2%
Property
Appraiser 1%
Sheriff 42%
Supervisor of
Elections 1%
Tax Collector 4%
FY 2021 General Fund Planning Budget
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This level of turn-back revenue is not expected nor is planned at year ending FY 2020 and FY
2021 due to facility upgrades and office reconfigurations by the Tax Collector and Clerk of Courts.
Recommended Budget Policy: Continue this policy.
Millage Targets for Collier County MSTU’s, MSTD’s
A Municipal Service Taxing Unit (MSTU) is a mechanism by which a county can fund a service
from a levy of ad valorem taxes, not countywide, but within all or a portion of the county. In the
County budget, an MSTU is used to segregate the ad valorem taxes l evied 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-one (21) MSTU’s and dependent districts active under Collier County’s taxing
umbrella. Of these, fourteen (14) have advisory boards which provide recommendations to the
Board of County Commissioners.
Recommended Budget Policy: For FY 2021, it is suggested that those existing MSTU’s without
advisory board oversight be limited to a rolled back millage rate position unless staff presents a
compelling reason for additional funds during budget presentations. Additionally, it is suggested
that existing MSTU’s with advisory board oversight be allowed to consider tax rate options
ranging from tax neutral (rolled back rate) to millage neutral depending upon program
requirements and taxable values with specific advisory board recommendations offered during the
budget review cycle.
Revenue Centric Budgets
It is generally recognized that all budgets and expense disbursements regardless of fund or activity
are revenue and cash dependent. This concept establishes that enterprise funds, internal service
funds, certain special revenue funds and other operational funds which rely solely on fee for service
income with zero reliance upon ad valorem revenue should be allowed to establish budgets and
conduct operations within revenue centric guidelines dictated by cash on hand and anticipated
receipts.
For FY 2021, 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.
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Certain cost centers or functions have a net cost to the General Fund (001) or Unincorporated Area
General Fund (111). In these instances where fee for services offset the ad valorem impact, then
the budget reduction guidance should account for this positive impact upon the net cost to the
General Fund (001) or to the Unincorporated Area General Fund (111). Under this revenue centric
approach, Departments will be held to their fee for service projections and any negative fee
variances will be addressed through expenditure cuts and not subsidized by Ad Valorem taxes.
Department Head discretion upon guidance by the County Manager should be afforded in these
scenarios.
Recommended Budget Policy: Adopt this Enterprise Fund and General Governmental revenue
centric budget policy.
Expanded Positions
For FY 2021, Departments will carefully consider expanded positions since proposed operating
expenditure guidance will likely require a significant re-prioritization of current budget. Any
expanded requests will be limited to new capital facility openings and/or Board directed service
level adjustments. All budget to budget expanded positions and programs will be reviewed by the
County Manager and his recommendations will be presented as part of FY 2021 budget workshop
discussions in June.
Recommended Budget Policy: Expanded position requests will be limited to Board approved
capital facility openings and/or Board approved service level adjustments with final County
Manager recommendations presented at the June budget workshop.
Compensation Administration
The philosophy of Collier County Government is to provide a market-based compensation
program that meets the following goals:
1. Facilitates the hiring and retention of the most knowledgeable, skilled and experienced
employees available.
2. Supports continuous training, professional development and enhanced career mobility.
3. Establish equitability in position pay ranges and to rates paid incumbents in those positions
4. Recognizes and rewards individual and team achievements.
The Consumer Price Index 12-month percent change from December 2018 to December 2019 is
2.0% for the Miami-Fort Lauderdale area. This is one of the indices that Collier County
traditionally uses when considering a general wage adjustment. The annual Florida Relative Price
Index, an index comparing the relative cost of living among the State’s 67 counties, is also used
as a basis for compensation plan recommendations.
Like last year, rather than waiting to appropriate dollars for a compensation adjustment on an event
driven basis, the County Manager proposes to appropriate dollars for the adjustment as part of
budget planning for FY 2021 with the recommended structure submitted for Board consideration
at the June Workshop meeting.
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For FY 2021, the County Manager is recommending the greater of $1,200 or a two percent (2%)
pay adjustment applied to all ranges. This recommended COLA adjustment is estimated at $3.5
million for the County Manager’s Agency.
In addition, a .8% or $1,000,000 allocation is programmed to strengthen certain targeted lower
classification pay grades where a market imbalance exists. Pay plan adjustments to the
compensation plan was last completed in FY 2020 at a cost of $538,000.
The recommended compensation adjustment and pay plan maintenance allocation is estimated to
total $4.5 million for the County Manager’s Agency.
Recommended Budget Policy: Appropriate the greater of $1,200 or a 2% base wage increase to
all classifications plus a .8% or $1,000,000 pay plan maintenance component to strengthen certain
targeted lower classification pay grades where a market imbalance exists. In previous years, the
Board of County Commissioners has authorized adjustments to the compensation plan as shown
within the following table.
Program Component FY 10 –
FY 12
FY 13 FY 14 FY 15 FY 16 FY 17 FY 18
FY 19 FY 20 FY 21
General Wage
Adjustment
0.00% 2.00% $1,000 2.00% / $1,000 1.50% / $1,000 3.00% 2.90% 2.00% $1,200
represents
average of
2.2%
Greater of
$1,200 or
2.00%
Awards Program 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Pay Plan Maintenance 0.00% 0.00% 0.00% 0.00% 1.50% 0.00% 0.60% 0.00% 0.50% 0.80%
Total 0.00% 2.00% $1,000 2.00% 3.00% 3.00% 3.50% 2.00% Average of
2.7%
Average of
2.8%
Health Care Program and Cost Sharing
The County is self-funded and seeks to operate the health plan with the same diligence as a small
insurance company. Like an insurance company, the County faces a significant budget risk within
the health plan due to the potential for a statistical claim cost variance of 10% around the expected
mean claims cost. Such variance is normal statistically and has its roots in the fact that total
medical costs are extremely sensitive to the number of claimants who experience catastrophic
losses. The expected number and size of large claimants is by nature extremely random and
volatile. To manage and prevent this variability, the County reinsures catastrophic losses and
maintains a prudent reserve to comply with Florida Department of Insurance requirements as well
as to protect the General Fund from this volatility.
There are several goals that guide how the County operates the plan within the small insurance
company context. These are:
1. Comply with all legal and regulatory requirements for plan operation
2. Manage plan cost trends to be 30% or more below published trends
3. Maintain overall controllable expenses, reinsurance costs, network fee arrangements and
reserves at prudent levels
4. Protect our employees from the economic impacts of illness or injury
5. Prevent illness when possible by helping our employees and their spouses become aware
of their health, and act on that knowledge
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Coverage under the Plan extends to all eligible County employees, except for the Sheriff’s Office,
which operates its own self-funded plan. Nationally, as well as here in Florida, medical plan costs,
and the premium dollars required to fund them, continue to increase annually. The County’s
medical plan has the potential to be similarly impacted by these rising costs.
Due to exceptional plan performance over the past eight (8) plan years, plan reserves exceed
statutory minimums. Therefore, it is recommended that there be no (0%) rate increase for
FY 2021. It should be noted that employer health insurance contribution increases are absorb ed
within operating appropriations.
Since 2009, Collier County Government has invested in processes to heighten employees and
spouse’s awareness of their health and make available resources to assist covered employees and
spouses in improving and maintaining their health. These programs have achieved meaningful
reductions in risk and improvements in outcomes for the covered participants.
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 ten (10) 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 increases to the plan, the County will continue to emphasize
participation in existing wellness program, proper structuring of reinsurance to manage adverse
plan impacts and prudent plan management.
Historically, Board budget guidance has required all agencies to uniformly share health insurance
contributions between employers and employees. If all agencies maintained the recommended
cost distribution percentages of 80% employer and 20% employee, the FY 2020 savings through
reduced General Fund constitutional transfers would have totaled $2.02 million as depicted below.
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Recommended Budget Policy: In FY 2021, no rate increase is recommended and the average
cost distribution of health insurance premiums between the Board of County Commissioners and
employees will remain 80% (employer) and 20% (employee). It is still recommended that the 80%
employer share and 20% employee share be uniform across all 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 bil l
into law at the end of May. The preliminary retirement rates that will be published in the
instructions are based on proposed House and/or Senate Bills (Florida Statute Chapter 121).
Recommended Budget Policy: Adherence to the OMB rates published within the OMB budget
instructions.
Accrued Salary Savings
Today’s economic climate has led to an increased movement of employees to and from the
organization. When employees leave, they are generally replaced, and the process of replacement
takes varying lengths of time depending on the position being recruited. This fact coupled with
the full budgeted amounts for health insurance and worker’s compensation being transferred to the
self-insurance funds, impacts the amount of accrued salary savings due to position vacancies. For
FY 2016, this rate was established at 2%. For FY 2021, it is suggested that the attrition rate remain
at 2%.
Recommended Budget Policy: Continue the accrued salary savings policy at a 2% rate.
Financing New and Replacement Capital Infrastructure
The County in April 2018 made a commercial paper draw of $12 million to purchase property on
which to construct the Amateur Sports Complex. Subsequently, $62.9 million in new Series 2018
Tourist Tax debt to finance construction of Amateur Sports Complex facilities was issued in
October 2018. In July 2019, the Board decided to proceed with the strategic purchase of 165 acres
known as the Golden Gate Golf Course for $28 million with the intent on evaluating the property
for various public and private uses consistent with land use plans currently under consideration.
Prior to the financing activity described above, the last time Collier County issued debt for capital
improvements was through various commercial paper loans between September 2007 (FY 2007)
and September 2008 (FY 2008) totaling $78.4 million to finance various general government and
public safety projects. All commercial paper loans outstanding at the time were refinanced through
long term debt in July 2010 and again in December 2017.
The issuance of debt for capital improvements is generally considered as a good alternative to pay
as you go under the philosophy that future tax payers who will also enjoy the capital improvements
should participate in funding capital improvements rather than that burden falling solely to existing
tax payers. Further, the low interest rate environment, the County’s investment quality credit
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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 general governmental and enterprise principal debt outstanding
dropped $332 million over the ten (10) year period from a high of $788 million in FY 2008 prior
to the recent new debt issues of FY 2018.
Pursuant to the Collier County Debt Management Policy, several guiding principles have been
identified that provide the framework within which the issuance, management, continuing
evaluation of and reporting on all debt obligations issued by the County takes place.
Asset Life: The County will consider long-term financing for the acquisition, maintenance,
replacement or expansion of physical assets (including land) only if they have a useful life of at
least five (5) years. Debt will be used only to finance capital projects and equipment, except in
case of emergency. County debt will generally not be issued for periods exceeding the useful life
or average useful lives of the project or projects financed.
Capital Financing: Debt of longer amortization periods will be issued for capital projects when it
is an appropriate means to achieve a fair allocation of costs between current and future
beneficiaries. Debt shall not, in general, be used for projects solely because insufficient funds are
budgeted at the time of acquisition or construction.
To the degree possible, the County will rely on specifically generated funds and or grants and
contributions from other governments to finance its capital needs on a pay as you go basis. To
achieve this, it may become necessary to secure short term (not exceeding 5 years amortization)
construction funding. Such financing is anticipated and allows maximum flexibility in CIP
implementation.
A decision to issue some component of short or long-term debt is based upon level of service
standards, the timing of any capital improvement, ability to execute, the credit market
environment, and cost of capital. The County had pursued a strategy in recent history (FY 2008
and prior years) by 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 – currently
at 2.45% 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 debtor
in the alternative competitively issue bank loans can be issued normally within a ninety (90) day
window. The County’s current general governmental long-term debt portfolio is comprised
primarily of special obligation revenue bond debt under a covenant to budget and appropriate all
legally available non- ad valorem revenue. It is anticipated that this type of long- term debt will be
used under future new credit scenarios.
New Debt Strategy: Passage of the Local Option Infrastructure Sales Tax does not eliminate the
need to finance future infrastructure needs. At the very least, new debt would be considered as
projects are engineered in the following circumstances;
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• Potential financing of an estimated $60 million to fund substantial maintenance of the
existing storm-water network as well as prudent expansion of the system in conjunction
with enhanced general governmental industry standard maintenance funding which the
Board may determine.
• Park system infrastructure financing up to $20 million for pool, similar aquatic and other
infrastructure improvements.
• Replacement of eleven bridges totaling $30 million in the area east of SR 29.
• Connected with the above financings, repay the $12 million variable rate commercial paper
draw used to purchase the amateur sports complex property.
The following illustrates various long-term financing scenarios, the annual debt service and the
respective interest rates.
Recommended Budget Policy: It is not suggested that any financing strategy be built into the FY
2021 adopted budget. It is recommended that the Finance Committee continue to work with the
County’s various agency department stakeholders regarding project scope, timing and execution
patterns and with our debt issuance team to develop a strategy and be ready to pursue a debt
issuance plan based upon Board direction.
Storm Water Management Funding
The budget planning model under a millage neutral tax rate for FY 2021 allocates $15.5 million
dollars from the General Fund and Unincorporated Area General Fund toward existing storm-
water infrastructure maintenance and replacement ($7.8 million) and industry standard operations
($7.7 million) with the assumption that replacement and new storm-water capital projects would
be financed as part of a larger general governmental debt issue. This is a $2.0 million increase for
maintenance and operations over the base FY 2020 funding scenario which was based upon certain
industry standards for system maintenance.
0
5
10
15
20
$50 Million $75 Million $100 Million $150 Million
Annual Debt Service ($ Millions)Project Fund
New Financing Scenarios
10 Year (1.60%)15 Year (2.14%)20 Year (2.64%)25 Year (3.00%)
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Recommended Budget Policy: For FY 2021 continue general governmental funding for industry
standard storm-water maintenance and operations and capital transfers from the General Fund and
Unincorporated Area General Fund with the amount of such funding above the FY 2020 base of
$13.5 million determined by Board policy. Any capital financing for new and replacement
infrastructure will reduce the planned capital transfer by the amount of debt service.
General Fund General Capital/ Debt Contribution
The following table identifies how General Governmental County Wide Capital contributions
appropriated within the General Fund were programmed in FY 2020 and planned in FY 2021.
General Fund transfers to Storm-Water and Transportation System improvements are accounted
for separately and not included in this General Capital programming scenario.
General Appropriation FY 2020 FY 2021
Non-Growth Debt Service $3,694,200 $3,655,600
Impact Fee Trust Fund Loans $1,040,200 $1,697,200
General Governmental Capital Projects $10,591,500 $15,167,700
Park’s, Museums, and Airport Transfers $4,825,600 $7,126,500
Future Capital Replacement Reserve $5,000,000 $5,000,000
Total $25,151,500 $32,647,000
Planned contributions in FY 2021 represent a significant increase from FY 2020 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 2020 totals $102.8 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 in this
paragraph 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 $26.4 million. Recent loans have not been necessary to subsidize operations
but to support capital grant matches.
Payment of debt is always a top priority. Under the FY 2021 budget planning scenario dollars
allocated will cover all revenue bond debt service.
The cumulative net interest rate of the general governmental debt portfolio has been reduced from
approximately 5% to roughly 3.5% and annual principal and interest payments servicing all
outstanding County debt represents 4.2% of the County’s net adopted FY 2020 budget. General
governmental debt outstanding represents 2.6% of the County’s net adopted FY 2020 budget. The
following charts depicts annual debt service payments servicing all debt and annual debt service
connected with our general governmental credit.
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Collier County’s total un-audited principal debt outstanding at 9/30/19 totals $598.7 million of
which $308 million relates to infrastructure improvements driven by population growth and related
service demands. The County’s principal debt is $198 million below the FY 2008 figure of $788
million. All outstanding debt (general governmental and enterprise) at 9/30/19 includes $12.0
million in Commercial Paper drawn to pay for property on which the Amateur Sports Complex
will be constructed; Tourist Development Tax (TDT) financing at par of $62.9 million to construct
the Amateur Sports Complex; $28 million to purchase the 165-acre Golden Gate Golf Course
property; and $76.2 million of Public Utilities Debt for system northeast area system
improvements.
Recommended Budget Policy: Continue General Fund County Wide Capital contribution for
purposes of paying non-growth-related revenue bond debt; to provide impact fee fund loans to
cover growth related debt obligations; and to fund much needed regular ongoing general
governmental priority capital needs.
General Governmental, Enterprise Fund, and Other Fund Reserve Policies
General Fund: Reserve is a budget/policy term referring to resources set aside to provide a
financial barrier against risk. Likewise, reserves may also be referred to as a portion of fund
balance – only on the expense side of the equation. Reserves are the cornerstone of financial
flexibility and provide government with options for responding to unexpected issues and a buffer
against shocks and other forms of risk. One such un-planned risk may for example include the
potential for a grant award to be rescinded after work on the activity begins.
Grant revenues are appropriated at the time of award with the expectation of future cash inflows
from the grantor agency. Until reimbursements are received, the General Fund provides the
cashflow for general governmental grant funded activities and is responsible for financing grant
related activities in full, should the County default on any grant provisions or a grantor agency
cancels, revokes, or de-obligates an award.
It is essential for governments to maintain adequate levels of fund balance to mitigate current and
future risks such as revenue shortfalls, natural disasters and unanticipated expenditures. As such,
budgeted reserves serve to protect beginning cash position in a fund and are an essential component
of Collier County’s overall financial management strategy and a key factor in external agency
measurement of Collier County’s financial strength.
$0
$20
$40
$60
$80
$100
MillionsTotal Annual Debt Service Payments
$0
$20
$40
$60
$80
MillionsGeneral Governmental
Annual Debt Service Payments
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Various bond rating agencies recognize that the best reserve policies provide both specificity and
flexibility accomplishing one or more of at least the following three criteria:
• establishing a target level of reserves or a reserve floor
• specifying the appropriate circumstances for drawing down reserves
• directing the replenishment of reserves
In general, rating agencies view positively higher reserve levels, although local governments can
maintain high credit ratings with lower reserve levels if other indicators of financial flexibility
such as revenue raising ability, stable diverse revenue structure, expenditure flexibility and
conservative budgeting practices are strong.
A reserve for contingency is typically budgeted in all operating funds, except for the Constitutional
agency funds. Reserves for the Constitutional Agency funds shall be appropriated within the
County General Fund.
The following is a history of budgeted reserves within the General Fund and Unincorporated Area
General Fund since FY 2008 as well as the % of reserves against total operating expenses.
Fiscal Year General Fund
Reserves
Unincorporated Area
General Fund Reserves
% of General
Fund Expenses
% of Unincorporated
GF Expenses
2021 $56,488,400 $2,292,600 12.8% 3.7%
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
of at least $95 to $105 million, budgeted reserves should be a minimum of $50 million. Otherwise,
expense side management of the budget in the form of capital transfer reductions and or reductions
in operating transfers may become necessary.
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.
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Florida State Statutes: In all respects, budgeted reserves shall conform to requirements of Florida
State Statutes. The State establishes maximum limitations on certain reserves. The maximum
limitations for contingency reserves and for cash flow reserves are 10% and 20% of a fund’s total
budget respectively. There is no statutory limit on capital reserves.
Recommended Budgeted Policy Reserve Position for the General Fund: The Governmental
Finance Officers Association (GFOA) recommends as a baseline, or floor, that General Fund
reserves be set at 16% of regular operating revenues or 2 months of regular operating expenses.
This would put Collier County’s General Fund reserve floor (minimum) based upon FY 2020
budget numbers in the $66M-$68M range.
Collier County has never attained a General Fund budgeted reserve position higher than the FY
2021 proposed position of $56.5 million This reserve position includes a contingency reserve set
at the recurring policy level equivalent to 2.5% of operations. While Collier County is vulnerable
to extreme weather events given its coastal location, the County’s revenue sources are relatively
stable and expenditure patterns are not volatile. Further, the General Fund budget is flexible with
capital transfers out representing on average ten (10) percent of appropriations. In addition, the
County’s total all funds reserve position is stable and will be used in part to cash flow a significant
weather event or other natural disaster. These factors suggest a less aggressive reserve position
with a floor or minimum of 8% of operating expenses and a ceiling or maximum not to exceed
16% of operating expenses. Applying these percentages to our current FY 2021 proposed planning
budget, the reserve floor and ceiling would total $33.9 million and $67.8 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 $1.53 million with a ceiling or maximum of no more than one month’s expenses which for
planning FY 2021 is approximately $5.12 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)
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.
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In FY 2016, the Motor Pool Replacement Fund was established for the various General
Governmental Funds (523), Water/Sewer District (409), and Solid Waste (472).
In FY 2017, the balance of user Divisions were included in the appropriation plan, i.e.: EMS (491)
and Road and Bridge (Funds 101/523).
Reserves within the four Motor Pool Replacement Funds maintain a current replacement reserve
(reserve for future capital) equal to a minimum of one year’s estimated replacement cost of
vehicles currently in service.
Reserve Policy Position for the Pelican Bay Services Division Family of Funds (109, 778, 320
and 322).
Operating Reserves Fund (109) – It is recommended that the funds reserve position be established
at between 15% and 30% of operating expense. This is particularly important given the districts
coastal nature, level of infrastructure investment, natural assets and commitment to maintenance
and resource protection.
Street Lighting Fund (778) – The level of reserves in this fund will be established in such amounts
necessary to set aside funding to accomplish lighting projects consistent with the Pelican Bay
Community Improvement Plan.
Capital Project Funds (320 & 322) – Reserve levels are generally minimal with most budgeted
dollars appropriated within defined and active projects.
Reserve Policy Position for Enterprise Funds, including the Collier County Water-Sewer
District Fund (408, 412, 414) and the Solid and Hazardous Waste Management Funds (470,
471, 473, 474).
General: According to the GFOA, it is essential that a government maintain adequate levels of
Reserves in its enterprise funds to mitigate current and future risks like revenue shortfalls and
unanticipated expenses and to ensure stable services and fees.
Collier County Water-Sewer District (CCWSD) Funds 408, 412, and 414: Like a General Fund
reserve, a utility system reserve position may be measured as a percent of regular revenues or
regular expenditures, depending on the predictability or volatility of each.
The Collier County Water-Sewer District reserve policies should be based on sound fiscal
principles designed to enable the utility to maintain continuity of operations in adverse conditions
and avoid user rate shock (rate stabilization).
In addition, various bond rating agencies, particularly Fitch Ratings, recognizes that the best
reserve policies provide both specificity and flexibility, accomplishing one or more of at least three
main criteria:
• Establishing a target level of reserves,
• Specifying the appropriate circumstances for drawing down reserves, and
• Directing the replenishment of reserves
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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 $1.4 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 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 2020 operating expenses would range from $20.6
million to $41.1 million. FY 2020 Working Capital resources total $26 million representing fifty-
seven (57) days of reserves.
Replenishment of unrestricted reserves that may drop below the targeted floor (45 days) or $20.6
million using FY 2020 numbers would occur in succeeding budget cycles in such amounts as
deemed prudent under existing economic conditions as approved by the Board.
Solid and Hazardous Waste Management Enterprise Funds 470, 471, 473, and 474: The Solid and
Hazardous Waste program in Collier County includes the operation of the solid and hazardous
waste disposal program, the recycling program, and the management of the mandatory residential
curbside collections program. These funds also include both restricted capital 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
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monitoring project for Collier County in the event of a natural disaster, such as the Hurricane Irma
(Category 3, dry storm cash flow exposure up to $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 Hurricane Irma, the Solid Waste Division should establish a restricted
cash flow reserve equivalent to ten percent (10%) of solid waste revenues, to be used solely to
fund the upfront cash needs that accrue with significant natural disasters. This amount should
begin to approximate reimbursements that would not be forthcoming from FEMA and the State of
Florida (typically twelve and one-half percent (12.5%) of the cost of the debris removal mission).
Such a restricted reserve balance beginning in Fiscal 2020 would begin to eliminate the need to
borrow from other Enterprise Funds and/or the General Fund while awaiting reimbursements from
FEMA and the State.
Recommended Reserve Policy for the Solid and Hazardous Waste Enterprise Funds: Forty-
five (45) to ninety (90) days of unrestricted reserves based on Fund (470), (473), and (474)
budgeted FY 2020 operating expenses would range from $6.2 million to $12.3 million. FY 2020
unrestricted reserves for the Solid and Hazardous Waste Management Enterprise Funds total $6.6
million or forty-eight (48) days of reserves.
Replenishment of unrestricted reserves that drop below the targeted floor (45 days) or $6.2M
would occur in succeeding budget cycles in such amounts as deemed prudent under existing
economic conditions as approved by the Board.
Establish a restricted reserve of ten (10%) percent of the FY 2020 budgeted charges for services
would total approximately $5.2 million. Most likely this restricted reserve will be funded over a
three to five-year period.
Growth Management Division (GMD) - Planning & Regulation Enterprise Fund 113 and
Development Services Enterprise Fund 131: Fund (113), referred to as the Building Department
Fund, collects revenues primarily related to building permit activities, including building permits,
structural, electrical, plumbing, and mechanical inspections, plans reviews, and the licensing and
oversight of building contractors.
GMD Building Permit Fund (113) Adopted Reserve: Targeted reserves for this fund shall be
18 months of the total budgeted expenses of the current fiscal year.
The Growth Management Division/Planning & Regulation Fee Schedule, adopted by resolution of
the Board of County Commissioners, provides the guidelines to implement fee adjustments if total
reserves rise or fall below established thresholds.
Fund (131), referred to as the Land Development Services Fund, collects revenues primarily
related to land development permit activities, including planning and zoning, engineering, and
environmental and natural resources.
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GMD Planning Fund (131) Adopted 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.
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.
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
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reviewed by the Board during the budget process. This allows the Board discretion in approving
the CPI adjustment and not simply passing the adjustment on automatically.
Recommended Budget Policy: Provide the Board with an annual report on potential enterprise
rate and fee adjustments in accordance with CPI changes as indicated above and that any rate or
fee adjustments be included within the proposed budget for Board consideration.
Suggested Scheduling Timeline
Decisions Required Staff Adopted Date(s)
Establish Budget Submission Dates for the
Sheriff, the Supervisor of Elections and the
Clerk of Courts.
May 1, 2020 by Resolution
FY 2021 June Budget Workshops (BCC Agency/Courts and Constitutional Officers Budget
Workshops) Thursday, June 18 and if necessary, Friday June 19,
2020
FAC Conference is June 9 – June 12, 2020 in Orlando/ Orange
County.
Adoption of Tentative Maximum FY 2021
Millage Rates
July 14, 2020 (Tuesday)
Submission of Tentative FY 2021 Budget to
the Board
Friday July 17, 2020.
Establish Public Hearing Dates (see note) September 3, 2020 (Thursday at 5:05 pm)
September 17, 2020 (Thursday at 5:05 pm)
Note: The School Board has priority in establishing public hearing dates for budgets. The School
Board’s final budget hearing is tentatively scheduled for Tuesday September 8, 2020.
The Commission chambers are reserved for the tentative dates for Collier County Government
budget public hearings.
Recommended Budget Policy: Approve the dates identified above and attached resolution
establishing May 1, 2020 budget submittal dates for the Sheriff, the Supervisor of Elections and
the Clerk.
Comparative Budget Data
Provide comparative budget data using FY 2020 adopted budget data (cost and employees per
capita based on unincorporated area population) by Agency with Budget Submittals for Similar
Sized Florida Counties.
Recommended Budget Policy: Counties for comparison purposes include:
• Sarasota County
• Lee County
• Charlotte County
• Manatee County
• Martin County
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Regular Routine Budget Policies for FY 2021
Grant Funded Positions: Any positions formerly funded with grant funds being recommended
for inclusion in a general (non-grant funded) operating budget shall be treated as expanded service
requests.
Self-Insurance: To conduct an actuarial study of the self-insured Workers’ Compensation,
Property and Casualty, and Group Health Insurance programs. Program funding to be based upon
an actuarial based confidence interval of 75%, except for group health to which a confidence
interval is not applicable.
Contract Agency Funding: The Board will not fund any non-mandated social service agencies.
Median Maintenance: Recognize the Unincorporated Area General Fund MSTD (111) as the
appropriate, dedicated funding source for median beautification maintenance costs.
Carry forward (Fund Balance): All funds that are unexpended and unencumbered at the end of
the fiscal year will be appropriated as carry forward revenue in the following year. Carry forward
revenue represents not only operating funds but also previously budgeted operating, debt service,
and capital reserves that are "carried forward" to fund these same reserves in the new year or to fund
capital projects in the current or future years. The largest sources of carry forward are the capital,
debt service, and enterprise funds. In both the General Fund and Unincorporated Area General Fund,
carry forward is maintained to provide cash flow for operations prior to the receipt of ad valorem
taxes and other general revenue sources.
Proper General Fund carryforward 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 70.0% of the total FY 2020 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, 2019, actual General Fund cash and cash
equivalents balance totaled $102,024,000, an increase of $27,406,700 over year ending FY 2018.
The FY 2019 year ending cash position represents approximately 26.4% of actual FY 2019
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 2021.
The basis of these charges is a detailed indirect cost allocation plan prepared , periodically, by a
consultant and adjusted by staff to reflect the organizational environment on a real-time basis.
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Impact Fees: Collier County will assess impact fees at such levels as allowed by law, established
by the Board of County Commissioners and supported by impact fee studies.
Enterprise Fund Payment In lieu of Taxes: The Solid Waste Fund and the Collier County
Water-Sewer District will once again contribute a payment in lieu of taxes (PILT) to the General
Fund. For FY 2020, the payment in lieu of taxes calculation was based upon a “franchise fee
equivalent basis” commonly referred to as a percentage of gross receipts. Five and one quarter
percent (5.25%) of gross receipts of the Water/Sewer District were applied in FY 2020 with an
additional .5% added to augment Facilities operations. This method and percentage will continue
for FY 2021. One and three-quarter percent (1.75%) of Solid Waste tipping fees were applied in
FY 2020 and this method and percentage is planned in FY 2021. 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).
1.0000
0.6580
0.5474
0.5426
0.4148
0.3040
0.3713
0.2354
0.3333 0.3530
0.1931
0.3520
0.2495
0.2701
0.2329
0.3406
0.0000
0.2000
0.4000
0.6000
0.8000
1.0000
1.2000
MillageGeneral Fund Capital Equivalent Millage History
(FY 1991 -FY 2021)
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The General Fund continues to loan money to impact fee funds to pay their annual debt service
payments. This of course is in addition to normal and customary debt service on non-growth
revenue bond debt. Loans from the General Fund to the impact fee trust funds began in FY 2006
and the value of all loans made now exceed $102 million.
Capital Improvement Program (CIP) Policies : On an annual basis, the County shall prepare
and adopt a five-year Capital Improvement Element (CIE) consistent with the requirements of the
Growth Management Plan.
• Capital projects attributable to growth will be funded, to the extent possible, by impact
fees.
• Capital projects identified in the five-year CIE will be given priority for funding. The five-
year plan for water and wastewater CIE projects will be based on projects included in the
adopted master plans.
Unlike operating budgets that are administered at the appropriation unit level, capital project
budgets will continue to be administered on a total project budget basis. The minimum threshold
for projects budgeted in capital funds is $25,000.
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Three-Year Budget Projections
Ad Valorem Tax Funds
(FY 2021 - FY 2023)
OMB staff prepares annually a three-year projection of General Fund and MSTD General Fund
revenues and expenditures to improve financial planning and to understand the long-term impact
of funding decisions. These projections are complimented by a trend analysis of revenues and
expenses which conclude the General Fund and Unincorporated Area General Fund sections
respectively.
The following 3-year budget projections are for the General Fund (001) and the MSTD General
Fund (111).
General Fund
General Fund (001) Millage History and Projected Millage Rates
As a point of reference, the following graph plots the historical General Fund millage rate, as well
as tax rates for FY 2021 through FY 2023. These rates do not include any marginal increase which
the Board may direct by policy for a specific program or initiative. Millage neutral rather than tax
neutral rates for general operations are used for planning purposes considering the belief that
taxable value will continue to increase modestly in the future.
While the County Manager will be recommending a General Fund millage neutral base operating
budget in FY 2021 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.
Diversifying the County’s tax base means in large part attempting to reduce risk. Risk of an
economic downturn which surely will stagnate resources and organizational risk where the risk of
3.8772 3.8772
3.5790
3.1469 3.1469
3.5645 3.5645 3.5645 3.5645 3.5645
-
0.5000
1.0000
1.5000
2.0000
2.5000
3.0000
3.5000
4.0000
4.5000
General Fund Millage History and Recommended Millage Neutral Tax Rates
(FY 2005 to FY 2023)
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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 21 will be funded at an
increased level through general governmental appropriations.
The following tables depict the respective millage neutral tax rates for FY 2021, 2022 and 2023
as well as additional ad valorem dollars which could be raised under certain increasing tax base
assumptions.
General Fund
FY 20 Adopted and Recommended
Operating Millage Neutral Millage Rates
Additional Budgeted Ad Valorem
Revenue Projection Each Year
FY 20 3.5645
FY 21 3.5645 $9,952,700 @ 3.0% TV Increase
FY 22 3.5645 $6,834,200 @ 2.0% TV Increase
FY 23 3.5645 $6,970,800 @ 2.0% TV Increase
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 an example, in FY 2021, the projected
rolled back rate within the General Fund is $3.5418 which would raise $2,176,100 less than millage
neutral or levying the current planning operating rate of $3.5645. While the FY 2021 estimated
rolled back rate would produce $7,776,500 more than the FY 2020 levy due to new construction
taxable value and a higher taxable value base, this is not a sustainable model going forward
knowing the level of investment required to simply maintain our general governmental assets, and
fund Sheriff operations let alone expand services and facilities based upon AUIR requirements and
servicing the needs of an expanding population. Further, the policy temptation to continue with
levying the rolled back rate beyond year 1 becomes even more problematic in an economic
downturn when taxable value drops and the rolled back rate increases.
The projected millage rates assume that the tax base will increase 3.0% in FY 2021 (the 2020 tax
year). Taxable value in FY 2022 is projected to also increase 2%. The Property Appraiser will
provide preliminary taxable value estimates for FY 2021 on June 1, 2020. Actual and assumed
changes in County taxable values are as follows:
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Notes to Graph - FY 2007: The General Fund (001) millage rate adopted in FY 2007 was based upon a 16% increase in taxable
value pursuant to BCC direction. FY 2008: As part of the Florida Legislative Property Tax Reform package implemented in FY
2008, Collier County adopted its final millage rate at 91% of the rolled back rate.
FY 2021 Significant Expense Assumptions
A millage neutral operating budget, again assuming no marginal adjustment for special policy
initiatives of the BCC, assuming an increasing taxable value base provides the County with
those important additional ad valorem dollars necessary to maintain our assets, invest in our
personnel, and service those who live and visit Collier County. Significant expense
assumptions include;
• Allocation for compensation administration – 2.0% COLA adjustment across all pay
classifications plus a .8% pay plan maintenance component.
• 2% attrition rate on regular salaries assumed in the County Manager’s Agency.
• Motor pool replacement dollars for routine ambulance replacement on schedule.
• $5,000,000 for general County Manager Agency building maintenance.
• $5,000,000 allocation toward long-term general governmental asset maintenance
reserve
• New voting machines totaling $550,000.
• Continued Social Service and Mental Health Funding.
• General Fund loans to the impact fee trust funds planned at $1,697,200 which while
low compared to previous years should not be viewed as a trend due to the volatility of
impact fees.
• Storm-water maintenance, operations and capital transfers planned at $15.5 million; an
increase of $2 million over FY 2020.
• General Fund transfer dollars supporting road construction and maintenance funded at
$9,388,900 which is flat from the FY 2020 adopted budget.
• General Fund support of EMS Operations established at $18,798,800 – up 4.3% from
last year reflecting staffing of new facilities planned for opening.
• Full support for Transportation Operations from the General Fund (001) exclusively.
Continue transfer of dollars from the General Fund to the Motor Pool Replacement
Fund for Road and Bridge vehicles.
• Airport capital grant match funding totaling $1,426,500.
• Continued corporate IT capital funding.
19.9%
25.4%
7.2%
-4.7%
-11.0%-12.2%
-5.2%
0.5%
3.7%6.5%8.5%10.0%8.4%
5.6%5.4%3.0%2.0%2.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23MillageHistorical and Projected Changes in Collier County Taxable Values
(FY 2005 -FY 2023)
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• Cash and carry deposit of an additional $2 million bringing the total to $4.7 million as
the process of evaluating a new accounting system continues.
• Building maintenance funding for Sheriff Facilities totaling $1,000,000.
• Mandates to be absorbed if possible, within operating budgets, including Constitutional
Officers.
Significant Revenue Assumptions
• FY 2020 ad valorem tax revenue forecast is 96% of actual taxes levied. FY 2020 forecast
totals $316,908,600 – a reduction of $14,847,200 from the adopted budget. Collections
are within the 5% statutorily budgeted revenue reserve.
• A millage neutral position for FY 2021 produces a levy of $341,708,500.
• Sales tax revenue sharing forecast for FY 2020 is projected conservatively at $41,000,000
which represents no change from the adopted budget. FY 2021 budgeted revenue is also
planned at $41,000,000 which is no change from the adopted 2020 budget. Conservative
revenue estimates are essential to achieving the required beginning cash balance position.
• State Revenue Sharing forecast for FY 2020 at $11,000,000 is also projected
conservatively at budget. FY 2021 budgeted revenue is planned at $11,000,000 which is
no increase over the adopted 2020 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 2021
$2,000,000 is planned. This number is low and reflects various facility moves and upgrades
by the Tax Collector and Clerk of Courts. Turnback to the General Fund at year ending
2019 totaled $10,120,200 - $3,520,200 over forecast.
• Measures to maintain beginning cash balance at between $95 million and $105 million is
necessary and includes continued growth in budgeted reserves coupled with any
combination of revenue receipts over budget and expense side budget management.
• Interest income for FY 2021 is planned to increase by $500,000 to $1,500,000 indicative
of consistently higher investment returns on cash balances.
EMS Fund
EMS Operations Fund (490) is another fund that impacts the General Fund. Typically, this ad
valorem support in recent years accounted for 50% to 55% of total EMS operating revenues. The
percentage varies given the instability in fee revenue collections and any Board policy directives.
The General Fund subsidy planned for FY 2021 is up $780,200 reflecting an additional six (6)
FTE’s required to staff new facilities. Historical and projected General Fund support of EMS
operations by fiscal year is as follows:
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Use of General Fund dollars to support this life/safety function has and continues to be a priority.
Road Construction Program
Board approved budgets have recently supplemented funding for the transportation network with
general governmental dollars transferred from the General Fund to Transportation Capital Fund
(310). This transfer is sized annually based upon the anticipated growth in taxable value and the
recurring need to fund other strategic capital commitments. Over the past four (4) fiscal years the
actual transfer has averaged $7.8 million annually. With taxable values projected to increase
modestly for FY 2021, the General Fund contribution to road construction and maintenance is
planned to total $9.4 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 2022
A millage neutral operating budget in FY 2022 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.
In addition to annual inflationary cost increases, the following items were included in the FY 2022
budget analysis:
$10.9
$9.2
$11.0
$13.3
$12.0
$10.7
$11.3 $12.8 $11.3 $11.6
$13.3 $13.8 $15.0
$17.6 $18.0 $18.0 $18.8 $19.0 $19.2
$0
$5
$10
$15
$20
$25
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23MillionsGeneral Fund Support of EMS
(FY 2005 -FY 2023)
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• Maintain general governmental capital projects recurring funding.
• Maintain General Fund support of EMS.
• Contingency reserves are maintained at policy.
• Fund operation of the Amateur Sports Complex
• Maintain General Fund road subsidy.
• Maintain General Fund support for park system maintenance and replacement
• Maintain General Fund support for Transportation Operations expenses.
• Continue annual contribution to the long-term asset maintenance reserve.
In summary, the FY 2022 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 2022 without proper budgeted beginning fund balance would likely result
in a $6.9 million budget planning deficit as depicted in the trend analysis below. Of course, regular
annual budget management to eliminate any actual equity reduction would occur in real time.
FY 2023
A millage neutral operating budget in FY 2023 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 2023 budget analysis:
• Maintain general governmental capital projects recurring funding.
• Maintain General Fund support of EMS.
• Contingency reserves are maintained at policy.
• Fund operations of the Amateur Sports Complex.
• Maintain General Fund road subsidy.
• Maintain General Fund support for park system maintenance and replacement
• Maintain General Fund support for Transportation Operations expenses.
• Continue annual contribution to the long-term asset maintenance reserve.
The General Fund Trend Analysis model shown below is intended to offer a picture of very
conservative revenue projections against operating and capital expenses which will likely be faced
in the out years. Of course, financial staff manages the budget in real time and will mitigate
unplanned equity reductions. But, imagine a scenario where major revenue sources like property
taxes or state shared revenues were cut or reduced. The obvious impact would be subsequent
expense reductions possibly coupled with new adopted revenue sources and thus the need for
budget flexibility.
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General Fund Trend Analysis
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Unincorporated Area General Fund (111)
Unincorporated Area General Fund (111) Millage 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 2021 through FY 2023,
which includes the proposed marginal millage rate increase to continue the landscape median
capital program.
Results of Unincorporated Area General Fund Analysis
For FY 2020, the Board of County Commissioners maintained the Unincorporated Area General
Fund millage rate at $.8069 or that rate levied in FY 2007 and earmarked the marginal increase
above the operating millage rate of $.7161 or $.0908 toward recurring dollars for maintenance of
the landscape investment. Due to escalating costs, constructing new landscape medians deferred
during the recession ceased in FY 2020 and the program is transitioning to maintaining the
landscape assets constructed.
The table below depicts the forecast marginal dollar increase which will be devoted to general
operations and general government capital as well as that component allocated toward continuing
the median landscape program. Incremental ad valorem dollars obtained through tax base increases
under the current $.7161 operating millage rate will fund recurring operations and provide capital
transfer dollars toward maintaining the road network, storm-water system, and community parks.
The marginal rate increase to $.8069 or $.0908 will be used exclusively to fund median landscape
maintenance going forward. The Board should also note the magnitude of our future maintenance
and asset replacement responsibility and dedicate resources gained through any tax base increase
assuming a millage neutral tax rate toward this purpose.
0.8069 0.8069 0.8069
0.6912 0.6912
0.7161
0.8069 0.8069 0.8069 0.8069 0.8069
0.6000
0.6500
0.7000
0.7500
0.8000
0.8500
MillageUnincorporated MSTD General Fund (111) Millage History and
Recommended Millage Neutral Tax Rates
(FY 2005 to FY 2023)
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Unincorporated Area
General Fund
FY 20 Adopted and
Recommended future Tax Rates
Additional Budgeted
Ad Valorem Revenue Projections Each Year –
Operations and General Capital
Additional Budgeted
Ad Valorem Revenue Projections Each
Year – Median Landscape Program
FY 20 0.8069
FY 21 0.8069 $1,198,000 @ 3.0% TV Increase $151,900 @ 3.0% TV Increase
FY 22 0.8069 $822,600 @ 2.0% TV Increase $104,300 @ 2.0% TV Increase
FY 23 0.8069 $839,100 @ 2.0% TV Increase $106,400 @ 2.0% TV Increase
For Collier County to continue providing high quality best value services; continue to address
infrastructure maintenance; replace equipment and vehicles; maintain its reserve and cash
positions pursuant to policy and representative of an investment quality credit rated organization,
it is essential to capture those additional ad valorem dollars generated by increasing taxable values
as shown above. Failure to do so will jeopardize service levels and make it very difficult to
maintain the wonderful infrastructure investment which this community enjoys. As an example,
in FY 2021, the projected rolled back rate within the Unincorporated Area General Fund is $.7610.
If the operating rate is left at $.7161, the marginal rate devoted to the landscape program drops
from $.0908 to $.0449. This could result in $2.5 million less for the landscape maintenance
program, unless cuts in operations soften the landscape program levy loss. 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 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 2021
The FY 2021 budget projection is based upon a 3.0% tax base increase. Property taxes and the
state shared communications services tax represent over 97% of the budgeted operating revenue
(less transfers) within the Unincorporated Area General Fund (111). Once again, changes to
distribution and structure of the communication services tax could be discussed as part of any state
legislative budget proposal. Also, there is the assumption that no legislation will be passed further
eroding a local government’s ability to set and raise ad valorem taxes or curtail other local revenue
sources.
Capital transfers from the Unincorporated Area General Fund have grown substantially since FY
2014 and for FY 2021 $8.9 million is programmed representing a $1.1 million increase over last
year. These transfer dollars are programmed for Park improvements, Transportation system
enhancements, and Storm-Water 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.
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FY 2022
If taxable values increase by 2.0% in FY 2022, a millage neutral operating budget coupled with a
reduction in beginning fund balance could result in a potential budget planning deficit of $9.2
million as depicted within the preceding trend analysis. This analysis assumes a state
communication services tax reduction and substantial expense side increases to support landscape
median maintenance and capital transfers. The model presents conservative revenue projections
and aggressive expense projections in the maintenance and capital areas which results in a
continued erosion of the funds cash position. The model is certainly not sustainable and real-time
budget management would always ensure that any equity erosion beyond that planned would be
curtailed.
FY 2023
Continuation of millage neutral operating budget into FY 2023 under a 2.0% increase in taxable
value would generate a modest increase in ad valorem revenue. This increase is certainly not
enough to compensate for the loss in fund equity and planned capital asset maintenance depicted
in the model. Increased funding for median landscape maintenance is anticipated. For planning
purposes and assuming continued decline in beginning budgeted fund balance, a deficit of $9.9
million is depicted. Absent real-time budget management the model depicts a total fund equity
loss from FY 2020 through FY 2023 totaling $28.4 million.
The Unincorporated Area General Fund Trend Analysis model shown below is intended to offer a
picture of very conservative revenue projections against operating and capital expenses which will
likely be faced in the out years. Of course, financial staff manages the budget in real time and will
mitigate unplanned equity reductions. But, imagine a scenario where major revenue sources like
property taxes or state shared revenues were cut or reduced. The obvious impact would be
subsequent expense reductions possibly coupled with new adopted revenue sources and thus the
need for budget flexibility.
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Packet Pg. 243 Attachment: Fiscal Year 2021 Recommended Budget Policies (11720 : Recommedation to adopt the FY 2020 Budget Policy)
Policy Document Page 52
Unincorporated Area General Fund Trend Analysis
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Packet Pg. 244 Attachment: Fiscal Year 2021 Recommended Budget Policies (11720 : Recommedation to adopt the FY 2020 Budget Policy)