Agenda 02/23/2021 Item #11A (Resolution - FY22 Budget Policy)02/23/2021
EXECUTIVE SUMMARY
Recommendation to Adopt the FY 2022 Budget Policy.
OBJECTIVE: That the Board of County Commissioners (Board) adopt policies to be used in
developing the Collier County Government budget for FY 2022.
CONSIDERATIONS: For staff to begin preparation of the FY 2022 budget, direction is needed from
the Board on major policy issues.
Attached to this Executive Summary is a listing of pertinent policy issues that will affect preparation of
the FY 2022 budget. The budget policy document is broken down into three distinct elements. The first
consists of budget policies proposed in FY 2022 that require policy direction from the Board. The second
element consists of routine budget policies that the Board has endorsed for several consecutive fisca l
years. The third element consists of a three-year analysis of the General Fund (001) and the
Unincorporated Area General Fund (111). Establishing broad goals to guide governmental decision
makers is the first of four budget process principles developed b y 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 17, 2021
and if necessary, Friday, June 18, 2021 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 29th through July 2nd, 2021 in
Orlando.
For informational purposes, adoption of the maximum tentative millage rates is scheduled for Tuesday,
July 13, 2021. 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, 2021 to prepare the Notice of Proposed Property Taxes.
Finally, the Board needs to establish September public hearing dates for the adoption of the FY 2022
budget. The School Board has tentatively scheduled September 7th, 2021 for their final budget hearing
and the County hearings cannot conflict with School Board hearings. Recommended dates for the Collier
County budget public hearings are Thursday September 9, 2021 and Thursday September 23, 2021.
FISCAL IMPACT: The adopted policies will serve as the framework for the development of budget and
ad valorem taxation issues for FY 2022.
GROWTH MANAGEMENT IMPACT: There is no Growth Management impact.
LEGAL CONSIDERATIONS: The County Attorney has approved this item as to form and legality.
Majority support is required for Board approval. - JAK
RECOMMENDATION: That the Board adopts budget policies as detailed in the attachments to this
Executive Summary, establishes June budget workshop dates and September public hearing dates. In
addition, the Board needs to adopt the attached Resolution establishing a May 1, 2021 deadline for the
Supervisor of Elections, the Sheriff’s Office, and the Clerk’s budget submittals.
PREPARED BY: Mark Isackson, Director of Corporate Financial and Management Services, Office of
Management and Budget
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02/23/2021
ATTACHMENT(S)
1. Fiscal Year 2022 Recommended Budget Policies(PDF)
2. Resolution FY 2022 Budget Policy and Constitutionals (PDF)
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02/23/2021
COLLIER COUNTY
Board of County Commissioners
Item Number: 11.A
Doc ID: 14678
Item Summary: Recommendation to adopt the FY2022 Budget Policy. (Mark Isackson,
Corporate Financial and Management Services Division Director)
Meeting Date: 02/23/2021
Prepared by:
Title: – Office of Management and Budget
Name: Debra Windsor
02/12/2021 9:43 AM
Submitted by:
Title: Division Director - Corp Fin & Mgmt Svc – Budget and Management Office
Name: Mark Isackson
02/12/2021 9:43 AM
Approved By:
Review:
Office of Management and Budget Laura Wells Level 3 OMB Gatekeeper Review Completed 02/12/2021 9:44 AM
County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 02/12/2021 11:23 AM
Budget and Management Office Mark Isackson Additional Reviewer Completed 02/16/2021 7:32 AM
County Manager's Office Dan Rodriguez Level 4 County Manager Review Completed 02/16/2021 10:51 AM
Board of County Commissioners MaryJo Brock Meeting Pending 02/23/2021 9:00 AM
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Policy Document Page 1
Fiscal Year 2022
Recommended Budget Policies
Collier County Board of County Commissioners
February 23, 2021
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Table of Contents
Section Pages
1. Overview and General Budget Planning 3 to 7
2. General FY 2022 Budget Planning – Significant Influences 8 to 10
3. New General Governmental Initiatives 11 to 13
4. Taxable Value and Tax Rate Discussion 13 to 15
5. Conservation Collier 15
6. Summary of FY 2022 Budget Strategies 16 to 20
7. County Grant Funding/Cares Funding 20
8. Local Option Infrastructure Sales Tax 20
9. Future General Governmental Capital Improvements 20 to 24
10. Gas Taxes; Use of Gas Taxes and Gas Tax Pledged Debt 24 to 25
11. Safe School Officer Program 25 to 26
12. General State Legislative Update 26
13. General Fund Allocation by Agency/Department 26 to 27
14. Millage Rate Targets for MSTU’s 27 to 28
15. Revenue Centric Budgets 28
16. Expanded Positions and Programs 29
17. Compensation Administration 29 to 30
18. Health Insurance 30 to 31
19. Retirement Rates and Accrued Salary Savings 31
20. Financing New and Replacement Capital Infrastructure 32 to 33
21. Storm-Water Management Funding 34
22. General Fund Capital/Debt Service Contribution and Debt Mgmt. 34 to 35
23. General Governmental; Enterprise Fund and Other Reserve Policies 35 to 41
24. CPI Based Enterprise Fee Adjustments 41 to 42
25. Suggested Scheduling Timeline 42
26. Florida Counties used for Comparative Budget Data 42
27. Regular Routine Budget Policies for FY 2022 43 to 45
28. Three Year Budget Projections – General Fund 46 to 52
29. Three Year Budget Projections – Unincorporated Area GF 53 to 56
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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 24 and 25; 27 thru 31; 33 thru 35; and 37 thru 42. 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 2022 and beyond.
The economic landscape for the January to December 2020 period ranged from a pre-pandemic
thriving economy to complete economic shutdown to economic recovery. Prior to the
pandemic, Collier County’s economy was thriving with employment at record highs; bell
weather industries performing well; median income remaining one of the highest in the State;
strong real estate market; robust new construction permitting and; increasing taxable values for
the ninth consecutive year. From March 2020 until May 2020 when the pandemic induced
economic shutdown occurred unemployment skyrocketed when businesses were ordered to
close and non-essential personnel remained at home; local hospitality and restaurant sectors
were devastated when tourist visitation to the destination dropped 92% year over year and direct
visitor spending dropped 94% from April 2019; similar impacts to local government revenues
with declines in sales tax revenues, state shared revenues, gas taxes, tourist taxes and local
option infrastructure sales taxes. As we usher in 2021, all economic matrixes point to a
continued gradual recovery with employment increasing, aspects of the restaurant and
hospitality industry re-opening and local government sales tax, gas tax and state shared
revenues stabilizing. Senior leadership regularly evaluates all economic indicators and the
organization is always positioned to respond, if necessary, to any softening of economic
conditions.
The County is positioned to structure and issue strategic general governmental and enterprise
debt for capital projects while borrowing costs remain low upon recommendation by the Finance
Committee. Projects in the area of general governmental facilities including the government
operations business park; and eastern expansion of the County’s public utility system will likely
require some form of financing during FY 2022 and FY 2023.
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.
As the County’s general governmental and enterprise capital assets grow, repeatedly resourcing
long-term asset maintenance and replacement becomes increasingly important.
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For FY 2021, $572.9 million or 14.9% of the County’s $2.2 billion Gross Budget represented
capital projects and capital reserves.
COVID 19
Fiscal year ending matrixes point to a gradual recovery from the complete economic shutdown
due to the COVID pandemic as the FY 2021 fiscal year begins with minimal impacts to County
general governmental revenue streams at year ending September 30, 2020.
Local regular half cent sales tax revenue is the largest non-property tax general governmental
revenue source and is deposited monthly in the General Fund. FY 2020 collections were lower
than FY 2019 collections but only by 2.4%. The County received $46,354,649 in FY 2019 and
$45,227,690 in FY 2020. The loss in half cent sales tax revenue in FY 2020 versus FY 2019 is
only $1,126,959. Of course, our budget and forecast estimates were very conservative and covered
this minor shortfall. Due to COVID, collections in March, April and May 2020 received from the
state in May, June and July were down and was the reason for the FY 20 reduction. For those three
months, collections were down $3,165,957 year over year, which means that collections for the
other months were up. The following graph depicts the FY 2020 versus FY 2019 relationship in
collections by month.
Regular half cent sales tax collections budgeted for FY 2021 are conservative at $38,000,000.
Budgeted collections for FY 2022 total $41,000,000 which are in line with State estimates at
$42,240,400.
State revenue sharing is yet another key general government revenue source deposited in the
General Fund and the impact due to COVID is like regular sales tax revenue. Revenue sharing
dropped $607,595 when compared to FY 2019 to $11,707,422 representing a 5% decrease with
significant reductions booked for collections received in May, June, and July. Those three months
saw a total reduction of $1,017,056. This revenue source has now stabilized and FY 2021
conservative budget estimate total $9,500,000. Budgeted collections for FY 2022 total
$11,000,000 which is in line with State estimates at $11,254,800.
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Aggregate special revenue gas taxes while down 7.5% year over year FY 2019 to FY 2020 only
dropped 3.9% compared to the net budget which includes the statutorily required 5% revenue
reserve. Gas tax revenue received in FY 2020 totaled $21,004,900 which is a drop of $1,703,900
from the FY 2019 total of $22,708,800. For FY 2021, budgeted gas tax revenue totals $22,800,000.
Factoring in the state required five (5) % revenue reserve, the target number is $21,660,000.
Actual Tourist development tax collections recovered nicely from a significant loss year over
year during the months of March, April, and May 2020. For the first five (5) months of FY 2020,
October – February, actual collections were up $1,723,700 compared to the same period in FY
2019. Then the complete economic shutdown was imposed and revenues for March, April and
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May fell $5,580,200 compared to FY 2019. For the final four (4) months of FY 2020 revenue
stabilized and only decreased $755,300 bringing the total revenue decline year over year to
$4,611,800. In September 2020 Fitches rating on the County’s TDT bonds remain unchanged and
the outlook was modified to stable from negative.
Natural Disaster Planning
Since landfall of Hurricane Irma in September 2017, 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 enough cash balance 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 revenue is relied upon until the receipt of any FEMA deposits. 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 2021, the County has spent $115.2 million recovering from
Hurricane Irma. The County has received $87.3 million in reimbursement revenue consisting of
$65.7 million in FEMA reimbursement and $21.6 million in insurance reimbursements. Net cost
to the County for the natural disaster totals $27.9 million. 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 2022 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. A shift from an emphasis
on operations to capital planning, programming, and implementation continues and the FY 2022
budget will reflect this emphasis. 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
2022 with several financial variables yet to be determined, including.
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• Tax policy decisions by the Board will determine the level of budget flexibility and the
specific resource allocation for operations and capital transfers; the level of reserve
programmed, and payment of debt will not be affected by the Board’s tax policy decision.
• While issuance of debt is not programmed within the adopted budget, the budget will be
positioned for amendment during any fiscal year to allow for financing projects like
public utilities expansion to service eastern lands development; government facilities
improvements and relocation like the government operations business park project; and
other policy initiatives as directed by the Board.
• Extent of any additional gap funding to complete future construction phases of the
Amateur Sports and Events Center Facility.
• Board policy decision to fund Mile Marker 63 fire and rescue operations in lieu of the
any State decision to cut/remove funding. Discussions still ongoing between the State
and Greater Naples Fire.
• Planning for recurring general governmental industry standard funding to maintain
storm-water infrastructure; continue a “pay as you go” capital component and payment
of debt service totaling $15.4 million which is on par with the FY 2021 appropriation
from the General Fund and Unincorporated Area General Fund.
• Board policy guidance on issues like workforce and first responder housing; mental
health programming; continued development of the Golden Gate Golf Course property;
Hussey property improvements; potential Camp Keais property development; and any
operational implications to Community Priorities funded by the local option
infrastructure sales tax.
• Economic development Innovation Zone and CRA incentives.
• Board directed funding for arts and culture.
• Level of funding connected with strategic relocation of various governmental functions
on the main campus, including implications from community priorities funded by the
local option infrastructure sales tax like constructing the mental health facility; costs
connected with back office infrastructure replacement like the management and
accounting system, and information technology system upgrades.
• Construction of the Heritage Bay east of CR 951 governmental facilities campus.
• Government Operations Business Park (GOBP) funding.
• Level of General Fund transfer support to the constitutional officers and specifically the
Sheriff.
• Capital funding requests documented by the Sheriff, including a new helicopter
• 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.
• Compensation program considerations
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Annual Budget Policies
Significant Budget Influences:
Each fiscal year based upon conservative budgetary guidance, limited resources are allocated to
competing services, programs, projects, and capital initiatives. Within the pyramid of service and
program delivery, significant resources have and will continue to be devoted to public safety,
public health, debt management and replacement of priority mission critical infrastructure and
equipment. Property (ad valorem) taxes will once again dominate the County’s budgetary revenue
mix which for FY 2021 comprise about 41% of total net recurring annual operating revenue and
67% of General Fund recurring revenue sources. Seventy-six (76%) of General Fund revenue is
comprised of property taxes, sales tax, and state shared revenue (percentages do not include
revenue reserve).
Eighty-five (85) percent of all levied property taxes by Collier County Government are deposited
into the General Fund and fifty (50) percent of those collections including state required Board
paid components support constitutional officer operations, including the Sheriff.
Ad Valorem
41%Gas/Sales Tax
7%
Infrastructure
Sales Tax
9%
Permits/
Assessments/
Fines
6%
Intergov'tal
Revenues
2%
Service Charges
28%Impact Fees
4%
Bond
Proceeds/
Interest
3%
Sources of Current County Government
Operating Revenues all Funds (FY 2021)
Ad Valorem
67%
Sales Tax
7%
State Revenue
Sharing
2%
Intergov'tal
Revenues
0%Fines,
Permits,
Charges
3%
Interest &
Misc.
1%
Carryforward
17%
Interfund
Transfers and
Payments
2%
Transfers from
Consitutional
Officers
1%
FY 2021 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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Thus, significant attention is paid to property (ad valorem) taxes and those factors that can
influence millage rate and tax levy decisions. The decision to develop the FY 2022 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 projected to
increase 2%, the FY 2022 General Fund levy will increase $7,069,700 over FY 2021. As county-
wide base taxable value increases and that increase begins to slow, the state calculation for
determining the rolled back rate which is influenced directly by tax increment district valuations
and the amount of tax increment dollars contributed to these districts creates a scenario where the
rolled back rate actually becomes close to or actually is greater than the County’s long standing
millage neutral rate of $3.5645. The following points are noteworthy in considering general
governmental tax policy for FY 2022.
• The County’s current General Fund millage rate of $3.5645 has been levied for the past twelve
(12) 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 $135.8 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.
• Relying on the rolled back rate as a measure of tax relief can be problematic when the economy
softens, and taxable value increases begin to slow or decrease. The concern is not year one of
levying the rolled back rate, it is the cumulative effect should the Board decide that rolled back
rate is the new normal; or the rolled back rate is abandoned when the tax base decreases, and
millage neutral then becomes the tax policy because the rolled back rate increases as the tax
base declines. Rolled back rate does not provide the marginal revenue increase needed to
support maintaining the County’s significant infrastructure investment, let alone capital facility
expansion and related services for an expanding population base in this community.
• Property taxes comprise 67% of total General Fund recurring revenue.
• If the Board had voted to levy the rolled back rate in FY 2021 during the September public
budget hearings, $10.5 million in General Fund capital and or operating program cuts would
have been necessary. This level of budget adjustment would not be accomplished by reducing
reserves since reserves are an integral component of preserving General Fund cash at year end;
provide a signal of financial strength to the rating agencies; and serve as financial leverage for
unforeseen natural disasters and/or shifts in Board policy mid-year. Cuts would have likely
come from reduced capital transfers funding transportation system improvements, stormwater
and parks; elimination of all expanded requests funded by the General Fund required to service
new facility improvements and current service County Manager Agency and or constitutional
officer operating reductions.
• Programmed within the General Fund for FY 2021 is over $34 million dollars supporting
various general governmental capital initiatives in the areas of transportation, parks and
recreation, stormwater, airports, museums, and of course constitutional capital requests.
• Constitutional operating transfers out of the General Fund (less paid by Board requirements)
constitute 49.6% 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 by adding $3.0 million in FY 2021.
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• Of the $502 million-dollar FY 2021 General Fund Budget only about 27 percent or $137.3
million is considered somewhat discretionary. The remaining appropriations are classified as
Health, Safety and Welfare; Debt Service and or Mandates where there is very limited to no
discretion over appropriations.
Property tax revenue comprises 78% of Unincorporated Area General Fund recurring operating
revenue sources and when including the Communication Services revenue sharing from the State
the revenue mix jumps to 84%. Continued reduction in state shared communication services tax
revenue or worse will significantly impact general governmental services appropriated in this fund.
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Like the General Fund, 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 2022 General Governmental Initiatives:
New general governmental capital improvements/initiatives over the next few years include:
• Planning for and developing the Golden Gate Golf Course
• Hussey property and other strategic opportunity land purchases like the Camp Keais
property
• Hardening County facilities in preparation for natural disasters and the related grant match
• Upgrades to IT infrastructure including security measures and the County’s various
management, financial and accounting software like SAP
• Constructing final phases of the amateur sports complex and event facilities including
related operations
• Big Corkscrew Regional Park phase two capital and operations
• Park system infrastructure replacement
• Sheriff’s capital projects like a new helicopter and various maintenance and sub facility
upgrades
• Mile marker 63 fire and rescue subsidy to replace any state funding shortfall
• Greater Naples Fire District management contract incentives to achieve Ochopee
annexation
• Operational implications of constructing community priorities funded by the local option
infrastructure sales tax like the new mental health facility
o *David Lawrence Center operations
• Vanderbilt Beach Road extension
• Randall curve improvements
• Bridge rehabilitation and replacement
• Enhancements in storm-water maintenance service levels as well as continued 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 – Government Operations Business Park
• New Heritage Bay satellite government facilities east of CR 951
• Contributions to economic development initiatives like innovation zones
• Board directed arts and culture funding
• Pressure from unfunded state and federal mandates.
Whether paid by cash, financed, or funded through the Local Option Infrastructure Sales Tax,
operating and maintaining this enhanced level of infrastructure improvement and service initiatives
will require substantial investment of scarce and limited general governmental operating revenue
which is predominately property taxes.
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Recognizing the County’s growing future general governmental asset maintenance responsibility,
an additional $5 million will be programmed for FY 2022 bringing the total to $15 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. At the very least, cash on hand through this reserve
pool will lessen the need for additional government borrowing in the future.
Each year as new general governmental capital improvements are brought online 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
2021 totaled $8.7 million (an increase of $1.6 million over FY 2020) and 957K (an increase of
$200K over FY 2020) respectively and these numbers will grow in FY 2022 with projected tax
base increases.
Other factors that will be significantly impacted by general governmental tax policy include.
1. Extent of capital and operational transfer dollars expended by the General Fund and
Unincorporated Area General Fund.
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 2022 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. Scheduled annual payment on the County’s debt service; and
4. Maintaining the County’s excellent market credit rating.
Discussion of Taxable Values, Millage Targets for the General Fund (County-Wide) and
Unincorporated Area General Fund and Related FY 2022 Budget and Financial Strategies
While the county-wide tax base has increased for nine (9) consecutive years (trending to ten for
FY 2022), maintaining a millage neutral policy position remains the recommended management
objective. When setting millage rate policy, elected leaders need to be mindful of the following
points.
• A consistent millage neutral tax rate captures marginal increases in property tax
revenue when taxable values increase and provides a level of tax relief when taxable
values decline usually when the economy is softening.
• Relying on a rolled back rate policy while intended to raise the same property tax
revenue as the immediate prior tax year does not provide the consistent marginal
revenue increase needed to support capital facility expansion and related services for
an expanding population base in this community; nor does the rolled back rate provide
relief during periods of economic decline because the rolled back rate will increase
when taxable values drop.
The following table provides a history of Countywide and Unincorporated Area taxable values
over the past fourteen (14) years (tax year 2007-2020) as well as the budget planning projection
for tax year 2021 (FY 2022).
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) $93,175,403,621 5.5% $58,037,803,377 5.9%
2020 (FY2021) $99,168,131,887 6.4% $62,326,892,771 7.4%
2021 (FY2022)
Planning $101,151,494,524 2.0% $63,573,430,626 2.0%
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The December 2020 State Ad Valorem Estimating Conference Report was released in January
2020 for the 2021 tax year (FY 2022). The report projects that Collier County certified taxable
values on July 1, 2021 will increase 3.2%. This number seems consistent with valuation trends in
Collier County. Staff have been adept over the years at sizing the planning budget around a
conservative yet functional taxable value planning number providing for maximum budget
flexibility considering that most budget planning is over before the certified taxable value number
is received from the Property Appraiser at the end of June.
The taxable value estimate must allow for operational and capital programming needs as well as
reserve growth. Budget planning around a conservative 2.0% taxable value increase is realistic and
accomplishes the objective of budget planning flexibility. Any positive difference in taxable value
above the planning ceiling assuming a resulting increase in ad valorem revenue at millage neutral
can be used to strengthen the Board’s General Fund and Unincorporated Area General Fund
reserves and/or be applied to recurring and new programs, services and initiatives as directed by
the Board.
Property tax revenue comprises 67% of the General Fund (001) and 41% of the total net county
recurring revenue budget, including fund balances. According to taxpolicycenter.org local
government general property tax collections as a percentage of all general governmental
collections for municipalities total 30% on average. Further, the Urban Land Institute cites that
property taxes in general represent 29% of general governmental revenue.
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 sixteen (16) years are shown in table form below.
Millage Area FY 06 FY 07 FY 08 FY 09 FY10-FY16 FY17-FY21 FY 22
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. 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.
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Current
Taxable Value
Pre VAB
FY 2022 @ 1% FY 2022 @ 2%
Policy Planning
Numbers
FY 2022 @ 3% FY 2022 @ 4%
General Fund 99,168,131,887 100,159,813,206 101,151,494,525 102,143,175,844 103,134,857,162
Unincorporated Area
GF 62,326,892,771 62,950,161,699 63,573,430,626 64,196,699,554 64,819,968,482
Current Levy
General Fund 353,484,806 357,019,654 360,554,502 364,089,350 367,624,198
Unincorporated Area
GF (Operating) 44,632,288 45,078,611 45,524,934 45,971,257 46,417,579
Unincorporated Area
GF (Landscape Cap) 5,659,282 5,715,875 5,772,468 5,829,060 5,885,653
Unincorporated Area
GF at $.8069 50,291,570 50,794,486 51,297,402 51,800,317 52,303,232
1% - Variance from
Current Levy
2% - Variance from
Current Levy
3% - Variance from
Current Levy
4% - Variance
from Current Levy
General Fund
(millage neutral)
3,534,848 7,069,696 10,604,544 14,139,392
Unincorporated Area
GF (Operating)
446,323 892,646 1,338,969 1,785,292
Unincorporated Area
Landscape Median
Program at $.0908
millage neutral
56,593 113,186 169,778 226,371
Total Unincorporated
Area GF
502,916 1,005,832 1,508,747 2,011,663
If taxable values fall below the two (2) 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.
Conservation Collier - Pursuant to Board direction, staff placed a non-binding referendum on the
November 3, 2020, general election ballot regarding the Conservation Collier program.
Specifically, the voters were asked to approve or disapprove re-establishing a not to exceed .2500
mil ad valorem levy for ten (10) years to fund Conservation Collier’s acquisition and management
of environmentally sensitive lands. On November 3, 2020, the Collier County electors approved
the Conservation Collier Re-establishment referendum with a 76.5% majority. This voter approval
does not include the issuance of debt to acquire environmentally sensitive land.
Accordingly, the FY 2022 budget is proposed to be developed to include a Conservation Collier
Program tax levy of .25 mil that will generate up to $25,287,900. For State Truth In Millage
(TRIM) purposes, the established Conservation Collier Taxing District will be activated. The FY
2022 budget will appropriate Conservation Collier tax proceeds to repay approximately
$3,700,000 to the Conservation Collier Management Trust Fund for monies advanced to acquire
strategic properties prior to the referendum. Further, consistent with Ordinance 2002-63 as
amended, twenty-five percent (25%) of annual gross tax receipts will be deposited into the
Conservation Collier Management Trust Fund to provide for long term management of lands
acquired through or managed by the Conservation Collier Program. The balance of tax receipts
will be deposited into the Conservation Collier Acquisition Trust Fund for use in acquiring
environmentally sensitive lands. The Conservation Collier Land Acquisition Advisory Committee
recommends that the Board authorize an Acquisition Cycle to start in March 2021 for properties
to be ranked by the Board in January 2022 to be acquired in FY2022.
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Summary of Significant FY 2022 Adopted Budget Strategies to Achieve a Structurally
Balanced Budget
The following table highlights certain FY 2022 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 2022 millage neutral General
Fund (001) operating budget along with service level and related budgetary and
millage implications. Designate approximately seventy-five (75) percent of the
planned property tax revenue increase after constitutional transfers and satisfying
reserve requirements to capital initiatives with the remaining twenty-five (25) 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 0.5% is below the identified CPI increase of 1.1% 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 2021 increased by $6.1 million to $194.8
million or 49.4% of all County personnel costs. Constitutional budgeted personal
services for FY 2021 grew by 8.1 million to $199.4 million.
4 Pursue a strategy in FY 2022 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 from $10.0
million to $15.0 million for FY 2022 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.
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.
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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 2022 budget planning model under a millage neutral tax rate for FY 2022
allocates $15.4 million dollars from the General Fund and Unincorporated Area
General Fund toward existing storm-water infrastructure maintenance; pay as you go
capital; operations and debt repayment. Debt service on the recent 2020A Special
Obligation Revenue Bond – $60 million stormwater component – totals $2.2 million
for FY 2022 thus the net amount for stormwater capital and operating components
totals $13.2 million.
9 The FY 2022 planning model at millage neutral increases the park capital and
infrastructure maintenance general governmental transfer marginally to $6.1 million
and the net amount after covering FY 2022 debt service on the $20 million 2020A
Special Obligation Revenue Bond component totals $5.4 million.
10 The FY 2022 budget will be planned for maximum flexibility which will allow for
quick adjustments resulting from a softening economy; natural disasters; Board policy
initiatives; issuance of debt; changing expense timing; and unforeseen unfunded
mandates.
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 $6.6
million bringing total General Fund reserves to $63.8 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; position the County to
become more self-reliant knowing that federal and state funding as well as funding
guidelines will continue to tighten and become more onerous; and if necessary tap
reserves to cover any emergency disaster expenses and/or strategic Board policy
initiatives.
12 Use gas tax revenue to support road capital, maintenance and debt (with an emphasis
on debt) consistent with budget planning and statutory requirements; 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 0.5% devoted to operations at the department level is planned. This means
that department operations for FY 2022, which rely on the General Fund and Unincorporated Area
General Fund for dollars, will be restricted to a one-half percent (0.5%) increase for current
programs and services as well as any expanded services.
This includes operating transfers. For FY 2022, 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 2021, inflationary adjusted fixed
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costs and maintaining a competitive compensation package. The December 2019 over December
2020 CPI is 1.1 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, stormwater, and heavy equipment.
For FY 2022 planning purposes and discussion in this policy document, the total General Fund
Budget is represented to increase by $23,676,300. The following table depicts by category the
revenue and expense positive or negative changes connected with the FY 2022 General Fund
Planning Budget and the variances from FY 2021. Also shown for comparison are the budget
variances by category between FY 2020 and 2021.
Major Revenue Variances: Variance between Budget FY
2021and Planning FY 2022
Variance between
Budget FY 2020 and
Planning FY 2021
Ad Valorem Taxes $ 8,231,400 $20,567,300
Sales Tax & Revenue Sharing 4,500,000 (4,500,000)
Department Revenues (1,917,500) 1,115,400
Enterprise and Federal PILT and Cost Allocation 849,300 646,100
Transfer Revenue (165,000) (403,100)
Constitutional Officer’s Turnback/Excess Fees 4,000,000 (4,000,000)
Interest (300,000) 900,000
Carryforward 9,203,700 12,918,900
Less 5% Required Revenue Reserve (725,600) (704,200)
Total Revenue Increases $23,676,300 $26,540,400
Major Expenditure Variances
County Manager, Court’s and Other General
Operations $ 427,600 $ 4,120,100
Operating Transfer’s 2,899,700 (3,630,800)
Capital & Debt Transfer’s 5,871,600 5,662,700
Sheriff Transfer 6,218,400 9,142,100
Other Constitutional Transfer’s 1,281,500 5,980,300
Reserves 6,977,500 5,266,000
Total Expenditure Increases $23,676,300 $26,540,400
Several observations can be made from this table. As discussed 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 9/30/21 is directly
related to proactive budget planning and management knowing that actual cash and cash
equivalents at year ending 9/30/22 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
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cycle; COVID pandemic effects on general governmental revenues including departmental
revenue and; insuring budget flexibility demands that adequate cash be on hand at year end.
The positive carryforward variance of $26.4 million from FY 2021 budget (estimated for YR end
9/30/20) and actual year ending 9/30/20 cash is the result of actual operating revenue received
during FY 2020 over forecast of $19.2 million. Operating expenses in FY 2020 were $7.2 million
less than forecast. The result was a cash and cash equivalents General Fund actual balance of
$113.7 million at year ending 9/30/20. This position allows for flexible operating, capital transfer
and reserve appropriation planning leading into FY 2022.
The planned increase in all General Fund budgeted reserves represents a regular managed increase
of $6.97 million over FY 2021 consistent with policy planning standards. After various facility
upgrades and moves during FY 2020 and FY 2021, constitutional turn-back revenue is projected
back at normal conservative levels which represents a $4.0 million increase over FY 2021. Impact
Fee collections remain stable and for FY 2022 only $1.5 million is required from the General Fund
to subsidize growth related debt. While not a trend due to the volatility of impact fee collections,
increased collections over budget is a contributing factor allowing for a greater level of General
Fund capital transfers planned in FY 2022.
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 and OMB staff strives to maintain a cash position in this fund of between 20% and
30% of actual expenses. The actual General Fund cash and cash equivalents position at year ending
2020 totaled $113,718,100 or 27.9% 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
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transfers and generally sustain operations in advance of property tax receipts received in
December.
County Grant Funding:
County participation in the State and Federal grant process remains aggressive but while the
common thinking is that grants are free money, the administrative burden surrounding application;
on site post award administration; and single audit compliance notwithstanding the local match
requirements and cash flow realities must not be overlooked. Program areas where grants are
prevalent include the Metropolitan Planning Organization (MPO), Transit, Housing,
Transportation, Stormwater, Airport, CARES, Parks, Disaster Recovery, and other areas. As of
February 3, 2021, the County had $367.1 million in active grants plus another $30.1 million
scheduled to become active. Of the total $397.2 million active or soon to be active grants, the local
match requirement totals $56.3 million which must be found through the budget amendment
process by the respective Department’s from existing appropriations as part of the grant award
process.
Cares Act dollars allocated to Collier County now totals $99.5 million and recently the Board
approved internal transfer dollar re-programming using Cares Act dollars to fund eligible EMS
and Sheriff operations thus meeting revised Federal and State Cares Act distribution guidelines.
This action allowed for the redirection of General Fund dollars in the amount of $44 million to
first address needed community assistance priorities and second reimburse when appropriate
based upon Board direction, local government expenses.
To date, $35.9 million has been spent and $34.1 million of the total spent has been directed to
community support.
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 twenty-six (26) approved projects budgeted within funded programs including Big Corkscrew
Regional Park Phase 1; EMS stations, Sidewalks, various hurricane resiliency initiatives; HVAC,
roofing, and facility upgrades; DAS shelter improvements and the Sheriff’s Forensic and Evidence
Building. Once a project is approved by the Board, the project accounting structure is set up and
budget is moved from reserves to a project budget. To date, a total of $148.8 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 $1.4 million. 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 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
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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 2022, another $5.0 million
will be allocated bringing the total reserve amount to $15.0 million. Drawing on this reserve will
of course require Board action under guidelines developed by OMB and the County Manager.
Capital Asset Management
Each year a significant portion of available annual resources are devoted to the maintenance and
management of the County’s general governmental infrastructure base. This strategy will continue
knowing that nonrecurring proceeds from the Local Option Infrastructure Sales Tax can only be
used for capital construction not maintenance and that the proceeds will be applied to specifically
identified and strategic capital projects. The current pay as you go strategy recognizes that
satisfying all new planned and programmed capital requirements over the next five (5) years
contained within the Capital Improvement Element (CIE) will require some financing component
despite the local option infrastructure sales tax.
The County issued competitive bond financing in November 2020 to maintain, replace existing
and construct new storm-water infrastructure; replace park aquatic systems and related recreation
improvements; payoff variable rate commercial paper used to purchase the Amateur Sports
complex property and purchase strategic eastern lands property. Augmenting the annual cash and
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 2022 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 $3,650,400 $2,192,100 $0 $12,265,900 $4,753,000 $3,350,000 $8,817,300 $4,868,800 $5,000,000 $44,897,500
FY 2022 $8,605,300 $1,547,800 $0 $21,300,900 $200,000 $2,620,000 $8,817,300 $2,677,800 $5,000,000 $50,769,100
*FY 2015: EMS Station, SOE Complex, & Sheriff Substation. FY 2016: Additional funding for Sheriff Substation. FY18: EMS Station.
FY 19 EMS Station.
For FY 2022, funding as planned above will of course be subject to Board guidance on millage
rates and taxable property values received in July 2021. For perspective, countywide capital and
debt service expenses contained within the planning model and shown above amounts to 9.6% of
all General Fund planned appropriations for FY 2022. When you include Constitutional Officer
transfers at 49.0% of planned FY 2022 General Fund expenses and reserves which are 12.1% of
total General Fund expenses, these three components account for 70.7% of all General Fund
expenses in the planning model.
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The General Fund regularly appropriates substantial dollars to new general governmental capital
and asset replacement projects benefitting countywide residents. This level of capital planning
which generally translates into approved budget appropriations provides part of the highly
desirable budget flexibility which is essential to sound fiscal management. Preserving General
Fund cash, maintaining adequate reserves, protecting the County’s superior investment quality
credit rating, and paying debt service will always take priority as expenditure planning evolves.
Generally, these priorities are strategically managed, and allocations are made in harmony with
other capital and operating spending appropriations.
Robust capital contributions are also appropriated within the Unincorporated Area General Fund
to augment the County’s commitment to capital programming.
The following table depicts these planned capital contributions.
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 $1,250,000 $4,000,000 $4,267,900 $9,517,900
FY 2019 $2,750,000 $4,250,000 $3,000,000 $10,000,000
FY 2020 $2,500,000 $4,000,000 $1,300,000 $7,800,000
FY 2021 $2,950,000 $3,000,000 $3,125,200 $9,075,200
FY 2022 $2,700,000 $3,000,000 $3,000,000 $8,700,000
Issuing strategic short term and/or long-term debt is an important part of the County’s capital
improvement program under the basic premise that future residents should pay for
improvements that they will enjoy and not just current residents. Further, the historically low
cost of capital environment which has and currently exists provides a unique opportunity to lock
in very low interest rates and capitalize on the County’s exemplary credit rating.
As such the County has issued since April 2018, $294.1 million in general governmental and
enterprise debt to fund several strategic initiatives including.
• April 2018 commercial paper draw of $12 million to purchase 60 acres for construction
of an amateur sports complex.
• Series 2018 Tourist Development Tax bonds totaling $62.9 million dated October 2018
to finance construction of amateur sports complex facilities
• Collier County Water/Sewer District revenue bonds dated April 2019 in the amount of
$76.2 million to finance the acquisition, construction and equipping of various utility
capital improvements servicing the northeast area of Collier County
• Strategic purchase in July 2019 of the Golden Gate Golf Course for $28 million
through a taxable competitive bank loan
• Series 2020 A&B tax exempt and taxable debt in the amount of $115 million dated
October 2020 for strategic eastern lands property acquisition, construction of
stormwater facilities and improvements to various park and recreation aquatic facilities
The County is always positioned to add new strategic debt to the portfolio after embarking upon
an aggressive debt restructuring program in the summer of 2010 and to date over $422 million in
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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 and enterprise debt totals $63.5 million and represent 4.1% of
the County’s net adopted FY 2021 budget.
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 transfer dollars programmed
for FY 2018, FY 2019, FY 2020, FY 2021, and that planned for FY 2022 for various strategic
general governmental capital initiatives. This table does not include debt service transfers or the
annual $5 million long term capital reserve transfer. No projects within the table below are
slated for funding from the Local Option Infrastructure Sales Tax.
General Fund Supported Capital
Category
FY 18 Budget FY 19 Budget FY 20 Budget FY 21 Budget FY 22 Budget
Medical Examiner’s Bldg. Expansion &
Repairs $0 $0 $0 $2,500,000 $0
EMS Station and Ambulance $2,000,000 $2,100,000 $0 $0 $0
EMS Helicopter $1,250,000 $0 $0 $0 $0
800 MHz Public Safety Communication
System $850,000 $0 $0 $0 $0
Jail & other Sheriff Facility Repairs $4,100,000 $1,000,000 $1,000,000 $0 $1,000,000
Sheriff Helicopter Replacement $0 $0 $0 $2,000,000 $4,000,000
Voting Machines $345,000 $350,000 $400,000 $475,000 $0
Clerk’s Annex Reorganization and
Finance Dept Relocation $0 $0 $0 $1,800,000 $700,000
Financial Accounting System (SAP)
Upgrade/Replacement $0 $0 $2,750,000 $0 $2,000,000
Domestic Animal Control Shelter $500,000 $0 $0 $0 $0
Senior Center Renovations $0 $0 $0 $500,000 $0
Golden Gate Golf Course $0 $0 $500,000 $1,000,000 $1,000,000
Relocation of Campus Facilities and
Office Operations $0 $0 $0 $540,700 $530,900
Library Capital/Books $550,000 $850,000 $950,000 $600,000 $950,000
General Building Maintenance and A/C
Repairs not Sales Tax Funded $5,250,000 $6,000,000 $5,000,000 $5,000,000 $5,000,000
Major Roof Replacements $0 $0 $0 $0 $5,000,000
Other General Governmental $411,000 $1,077,000 ($8,500) (2,149,400)* $1,120,000**
Cashflow Irma for consultants’ invoices –
waiting for FEMA $3,326,500 $0
Museum Capital $313,500 $200,000 $200,000 $0 $200,000
Airport Capital (Grant Match) $1,000,000 $445,000 $1,425,600 $1,426,500 $0
General Governmental Vehicle
Replacement Supplement $1,750,000 $0 $0 $0 $0
Park Capital $1,100,000 $1,100,000 $3,200,000 $3,350,000 $2,620,000
Transportation Capital $11,650,400 $8,555,800 $9,388,900 $8,817,300 $8,817,300
Storm-water Capital $1,627,000 $2,500,000 $4,694,400 $4,868,400 $2,677,800
Total $32,696,900 $24,177,800 $29,500,400 $34,055,000 35,616,000
*($2,149,400) = $50k for minor maintenance for software costs and $40k Coastal Zone Water Quality. Also, in FY20, completed projects with
residual funding was moved to Reserves to help fund FY21 projects reducing the need for additional General Fund support.
**$1,120,000 = $270k for minor maintenance for software costs, $50k Coastal Zone Water Quality, and $800k to replenish reserves.
Direct general governmental capital maintenance funding for parks and stormwater related system
improvements and operations from the General Fund and Unincorporated Area General Fund for
FY 2022 under the current planning scenario totaling $21.5 million is flat from that budgeted in
FY 2021 and part of this allocation or $2.9 million will be applied to payment of debt service on
the 2020A tax exempt Special Obligation Revenue Bond issued to finance stormwater and parks
improvements. This allocation includes operations maintenance in storm-water Fund (103). Of
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course, the allocation may change as the FY 2022 budget evolves leading into the June workshop,
once taxable values are known, and budget requests are vetted.
This allocation includes transfer dollars to maintain the transportation network, dollars for road
resurfacing, intersection improvements, sheriff capital, clerk facility capital, administrative
accounting system and IT capital support, and an array of other capital support identified above.
Management has the flexibility to allocate these General Fund and Unincorporated Area General
Fund transfer dollars to mission critical projects or initiatives at the expense of those efforts not
viewed as a high priority. This has and will continue to be the management strategy given the
competition for general government resources, uncertainty with the communication services tax,
heavy reliance upon property taxes and the natural hazards which can impact coastal communities.
Recommended Budget Policy: Develop a General Fund (001) operating budget at the millage
neutral rate of $3.5645 and provide the Board with a summary divisional description of what
millage neutral purchases in terms of services and the progress made in devoting dollars to asset
maintenance and strategic capital initiatives.
Approve guidance for the Unincorporated Area General Fund (111) which includes maintaining
the millage rate at $.8069.
Use of Gas Taxes and Future Gas Tax Pledged Debt:
Restructuring of the gas tax debt in FY 2012 and FY 2014 at substantially lower interest costs,
reduced debt service by $1.0 million annually and this additional money has been applied to system
maintenance and improvements.
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 identified transportation/road related improvements.
Remember that $26 million of the $60 million set aside as part of the local option infrastructure
sales tax initially for construction of new bridges were redirected to fund replacement of existing
bridges due to project timing.
One potential strategy for the Board to consider is using the annual 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 and planned
transportation system and road improvements. 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
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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 Collier
Boulevard (Green Boulevard to Main Golden Gate Canal), Vanderbilt Beach Road (16th Street
NE to Everglades Boulevard), Goodlette Road (Vanderbilt Beach Road to Immokalee Road) and
Wilson Boulevard (Golden Gate Boulevard to Immokalee Road). Interest rates on superior
investment quality bonds - like Collier County credit - remain low. 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 $100,000,000. 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 2020 from all sources in totaled $21.0 million. When you consider the
payment of annual debt service ($13.1M), the remaining $7.9 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 2022 to Fund (310) is $8,817,300 which represents no change from FY
2021. The Unincorporated Area General Fund transfer planned to Fund (310) for FY 2022 is
$3,000,000 representing no change from FY 2021. These dollars support maintenance on the
roadway network including intersection improvements, resurfacing, sidewalks, pathways, asset
management and traffic control software, and other critical maintenance needs which are not
eligible for gas tax funding by statute.
Recommended Budget Policy: Continue the Board’s policy applying gas tax revenue to pay for
debt service on the Gas Tax Revenue Bonds, and that the remaining gas tax revenue and transfer
dollars from the General Fund and Unincorporated Area General Fund continue to
support/supplement maintenance on the roadway network.
Safe School Officer’s and School Guardians:
The program of placing a school safety officer in 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.
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Current Sheriff’s Youth Relations Bureau funding which is now approaching $13 million annually
includes a sworn deputy in each school district and charter school building. This is the preferred
public safety approach to compliance with state statute as agreed upon between school district
leadership and the Sheriff.
Despite challenges in recruitment, the Sheriff’s Agency is on track to fill 30 deputies; 10 per year
since 2019 and FY 2022 will be the final year of providing funding for 10 deputies, a total of 40
in all. For FY 2022, a new Immokalee charter school is scheduled to be operational. State
reimbursement, while helpful, only covers a fraction of program costs. The County receives from
the School District pass through dollars remitted by the state and this amount totaled $1.6 million
in FY 2019 and $1.8 million in FY 2020. Annual pass through dollars is dependent upon state
appropriation each year.
General State Legislative and Budget Update
The State of Florida faces a $2.7 billion budget deficit for the FY 2022 fiscal year, a $1.8 billion
projected shortfall the year after and a projected $927million funding gap the year after that.
With Health Care and Education comprising roughly 80% of state spending, cuts in these
services is inevitable. The projected deficits are directly attributable to the COVID pandemic. It
is doubtful that these deficits will be closed through revenue increases. The state did receive $5.8
billion in CARES money from the federal government at the beginning of the pandemic and most
of those funds were dispensed by the Governor through emergency orders in response to the
crisis. These shortfalls noted above account for federal CARES money received.
The Governor’s FY 2022 budget totals $96.6 billion has the following noteworthy highlights.
• $6.6 billion in total reserves ($2.2 billion in unallocated general revenue)
• $625 million continued environmental commitment, including $473 million for
Everglades, $25 million for algal blooms, $45 million for targeted water quality
o New program: $1 billion over next four years for “Resilient FL Program”
providing moneys to state/local entities to address flooding, sea level rise, high
rainfall events
• $31 million for adult and child mental health
• $110 million for mental health in schools
• $170 million in state/fed funding for opioid abuse
• Fully funding the FDOT Work Program
• New Program: “Governor’s Road Fund” $50 million for targeted infrastructure
improvement
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.
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
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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 2022 account for 49% 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 conservatively each year. Constitutional turn back revenue totaled $11,173,500 and
$11,134,100 respectively across all funds for years ending FY 2019 and FY 2020 respectively. For
year ending 2020, actual collections exceeded forecast in the General Fund by $2.8 million to
$10,364,600. The General Fund receives on average 85% to 90% of all turn back revenue. Turn
back revenue from the Tax Collector accounted for 78.6% of all fund turn back revenue in FY
2019 and 82.0% of all fund turn back revenue in FY 2020. This level of turn-back revenue is not
expected nor is planned at year ending FY 2021 and potentially FY 2022 due to facility upgrades,
new facilities 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 levied within the taxing unit
to ensure that funds derived from such levy are used to provide the contemplated services within
the boundaries of the taxing unit as required.
BCC / Co
Attorney 3%
County
Managers
Agency 25%
Road Program
Subsidy 2%
Debt / Capital
Subsidy 8%
Reserves 12%
Courts 1%
Clerk of Courts
2%
Property
Appraiser 1%
Sheriff 41%
Supervisor of
Elections 1%
Tax Collector 4%
FY 2022 General Fund Planning Budget
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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-two (22) MSTU’s and dependent districts active under Collier County’s taxing
umbrella. Of these, thirteen (13) have advisory boards which provide recommendations to the
Board of County Commissioners.
Recommended Budget Policy: For FY 2022, it is suggested that those existing MSTU’s without
advisory board oversight be limited to a rolled back millage rate position unless staff presents a
compelling reason for additional funds during budget presentations or rolled back rate is higher
than millage neutral. Additionally, it is suggested that existing MSTU’s with advisory board
oversight be allowed to consider tax rate options ranging from tax neutral (rolled back rate) to
millage neutral depending upon program requirements and taxable values with specific advisory
board recommendations offered during the budget review cycle.
Revenue Centric Budgets
It is generally recognized that all budgets and expense disbursements regardless of fund or activity
are revenue and cash dependent. This concept establishes that enterprise funds, internal service
funds, certain special revenue funds and other operational funds which rely solely on fee for service
income with zero reliance upon ad valorem revenue should be allowed to establish budgets and
conduct operations within revenue centric guidelines dictated by cash on hand and anticipated
receipts.
For FY 2022, revenue centric budget parameters for enterprise operations will be tied to working
capital guidelines established by GFOA; capital obligations from the capital improvement element
(CIE); any rate or fee studies stipulations; priority agency wide expansion initiatives; and statutory
or ordinance spending limitations. A critical review of operating and capital reserve levels versus
operating and capital appropriations will be discussed during County Manager budget
deliberations with an expectation that enough recurring resources are devoted to maintaining the
utility asset at a high standard while resources are set aside to protect cash and fulfill our fiduciary
responsibility to public protection in the event of a natural disaster.
This concept also presumes continual monitoring of cash and receipts and, if necessary, subsequent
operational adjustments dictated by cash flow. Therefore, general governmental departmental
spending guidance will not apply.
Certain cost centers or functions have a net cost to the General Fund (001) or Unincorporated Area
General Fund (111). In these instances where fee for services offset the ad valorem impact, 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.
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Expanded Positions
For FY 2022, Departments will carefully consider expanded positions since proposed operating
expenditure guidance will likely require a significant re-prioritization of current FY 2021 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 2022 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 2019 to December 2020 is
1.1% 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. The most recently published Florida Relative
Price Index lists Collier County as having the highest relative cost of living among the 67 counties
in the State.
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 2022 with the recommended structure submitted for Board consideration
at the June Workshop meeting.
For FY 2022, the County Manager is recommending a cost of living base pay adjustment equal to
$1,000 across all pay classifications. The average County Manager Agency salary totals $57,400
and this cost of living adjustment represents a 1.7% increase on this average salary. This
recommended COLA adjustment is estimated to cost $2.5 million for the County Manager’s
Agency.
In addition, a .54% or $750,000 allocation is programmed to strengthen certain targeted front line
employee pay grade classifications where a market imbalance exists. More importantly, after
twenty (20) years, the county will embark on a complete professionally managed industry standard
classification and compensation plan overhaul to determine if the current plan is consistent with
the County’s compensation goals, best practices and meets current labor market standards.
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The recommended FY 2022 compensation adjustment and pay plan maintenance allocation is
estimated to total $3.25 million for the County Manager’s Agency which is $1.3 million less than
last year’s funding levels.
Recommended Budget Policy: Appropriate a $1,000 base wage increase to all classifications plus
a .54% or $750,000 pay plan maintenance component to strengthen certain targeted front line
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 FY 22
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%
$1,000
represents
average of
1.7%
Awards Program 0.00% 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% .54%
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%
Average of
2.24%
Health Care Program and Cost Sharing
The County is self-funded and seeks to operate the health plan with the same diligence as a small
insurance company. Like an insurance company, the County faces a significant budget risk within
the health plan due to the potential for a statistical claim cost variance of 10% around the expected
mean claims cost. Such variance is normal statistically and has its roots in the fact that total
medical costs are extremely sensitive to the number of claimants who experience catastrophic
losses. The expected number and size of large claimants is by nature extremely random and
volatile. To manage and prevent this variability, the County reinsures catastrophic losses and
maintains a prudent reserve to comply with Florida Department of Insurance requirements as well
as to protect the General Fund from this volatility.
There are several goals that guide how the County operates the plan within the small insurance
company context. These are:
1. Comply with all legal and regulatory requirements for plan operation
2. Manage plan cost trends to be 30% or more below published trends
3. Maintain overall controllable expenses, reinsurance costs, network fee arrangements and
reserves at prudent levels
4. Protect our employees from the economic impacts of illness or injury
5. Prevent illness when possible by helping our employees and their spouses become aware
of their health, and act on that knowledge
Coverage under the Plan extends to all eligible County employees, except for the Sheriff’s Office,
which operates its own self-funded plan. Nationally, as well as here in Florida, medical plan costs,
and the premium dollars required to fund them, continue to increase annually. The County’s
medical plan has the potential to be similarly impacted by these rising costs.
Due to exceptional plan performance over the past nine (9) plan years, plan reserves significantly
exceed statutory minimums. Therefore, it is recommended that there be no (0%) rate increase
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for FY 2022. It should be noted that employer health insurance contribution increases are
absorbed 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 suggested that all agencies uniformly share health
insurance contributions between employers and employees.
Recommended Budget Policy: In FY 2022, no rate increase is recommended, and staff will
endeavor to keep the average cost distribution of health insurance premiums between the Board
of County Commissioners and employees at 80% (employer) and 20% (employee). It is still
suggested 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 bill
into law at the end of May. The preliminary retirement rates that will be published in the
instructions are based on proposed House and/or Senate Bills (Florida Statute Chapter 121).
Recommended Budget Policy: Adherence to the OMB rates published within the OMB budget
instructions.
Accrued Salary Savings
When employees leave, they are generally replaced, and the process of replacement takes varying
lengths of time depending on the position being recruited. This fact coupled with the full budgeted
amounts for health insurance and worker’s compensation being transferred to the self-insurance
funds, impacts the amount of accrued salary savings due to position vacancies. For FY 2016, this
rate was established at 2%. For FY 2022, it is suggested that the attrition rate remain at 2%.
Recommended Budget Policy: Continue the accrued salary savings policy at a 2% rate.
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Financing New and Replacement Capital Infrastructure
The issuance of debt for capital improvements is generally considered as a good alternative to pay
as you go under the philosophy that future 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 superior investment quality
credit rating, a revenue to debt service ratio well below the self-imposed cap of 13%, and not
raising the millage rate to pay debt service for world class capital amenities provide further
rationale for issuing strategic debt. Total unaudited general governmental and enterprise principal
debt outstanding at 9/30/20 was $558 million compared to a high of $788 million in FY 2008.
prior to the recent new debt issues of FY 2018, FY 2019, and FY 2020.
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 – with the
January 2021 rate currently at 1.31% - and funds can be accessed within about 30-45 days of
approving the authorizing resolution.
The advantage of long term competitively issued bonded debt especially in a low interest rate
environment is that budget certainty for the cost of credit is achieved. Generally, a project should
be ready for construction and proceeds must reasonably be expected to be spent within a three-
year window from debt issuance or adverse tax consequences may occur. Long term bonded debt
or in the alternative competitively 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 of
special obligation revenue bond debt under a covenant to budget and appropriate all legally
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available non- ad valorem revenue. It is anticipated that this type of long- term debt will be used
under future new general governmental debt credit scenarios.
Immediate Term New Debt Strategy: Passage of the Local Option Infrastructure Sales Tax does
not eliminate the need to finance future infrastructure needs. New debt would be considered as
projects are engineered and progressing in the following circumstances.
• Financing in the estimated amount up to $138 million to update the Golden Gate
wastewater and water facilities and transmission pipe network and starting additional utility
infrastructure servicing the Northeast Service Area including new raw water wells for
future water treatment, deep injection and monitoring wells; transmission piping and
landscape treatments buffering neighboring residential areas.
• Government Operations Business Park located on County property by the landfill with
phase one currently ongoing to prepare the land and underground in the approximate
amount up to $40.5 million in advance of locating/relocating transportation and stormwater
facilities, public utility facilities, pollution control facilities, and Sheriff’s evidence facility.
Current budget on hand is funding this initial land and underground prep work. The Sheriff
evidence facility in the amount of $33 million is funded from the local option infrastructure
sales tax. Constructing the facilities other than the Sheriff’s evidence facility is estimated to
cost $55 million with the construction phase scheduled to begin in FY 2022/FY 2023.
Financing will be required.
• General Sheriff replacement capital improvements based upon a phased prioritized
schedule.
• Any gap financing to complete all phases of the Sports Complex and Events Center
• Gas Tax transportation network improvements
The following illustrates various long-term financing scenarios, the annual debt service, and the
respective interest rates.
Recommended Budget Policy: It is not suggested that any financing strategy be built into the FY
2022 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.
0
5
10
15
20
$50 Million $75 Million $100 Million $150 MillionAnnual Debt Service ($ Millions)Project Fund
New Financing Scenarios
10 Year (0.94%)15 Year (1.63%)20 Year (2.21%)25 Year (2.64%)
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Storm Water Management Funding
The budget planning model under a millage neutral tax rate for FY 2022 allocates $15.4 million
from the General Fund and Unincorporated Area General Fund toward cash and carry storm-water
infrastructure replacement ($5.5 million); industry standard maintenance and operations ($7.7
million); and annual debt service on the November 2020 Special Obligation Revenue Bond Series
A $60 million stormwater component ($2.2 million). Annual debt service will reduce the cash and
carry capital allocation and project engineering and capital implementation is ongoing to spend
down bond proceeds on strategic projects intended to update the County’s stormwater system.
Recommended Budget Policy: For FY 2022 continue general governmental funding for industry
standard storm-water maintenance and operations; cash and carry capital transfers and debt service
from the General Fund and Unincorporated Area General Fund with the component funding
identified above.
General Fund General Capital/ Debt Service Contribution
The following table identifies how General Governmental County Wide Capital contributions
appropriated within the General Fund were programmed in FY 2021 and planned in FY 2022.
General Fund transfers to Stormwater and Transportation System improvements are accounted for
separately and not included in this General Capital programming scenario.
General Appropriation FY 2020 FY 2021 FY 2022
Non-Growth Debt Service $3,694,200 $3,655,600 $8,605,300
Impact Fee Trust Fund Loans $1,040,200 $2,192,100 $1,547,800
General Governmental Capital Projects $10,591,500 $15,592,400 21,300,900
Park’s, Museums, and Airport Transfers $4,825,600 $4,776,500 2,820,000
Future Capital Replacement Reserve $5,000,000 $5,000,000 $5,000,000
Total $25,151,500 $31,216,600 39,274,000
Planned contributions in FY 2022 represent a significant increase from FY 2021 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 2021 totals $105 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 2022 budget planning scenario dollars
allocated will cover all revenue bond debt service.
The cumulative net interest rate of the County’s overall debt portfolio has been reduced from
approximately 5% to 2.83% and annual principal and interest payments servicing all outstanding
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County debt (includes enterprise debt) totals $63.5 million and represents 4.1% of the County’s
net adopted FY 2021 budget. General governmental debt service represents 2.6% of the County’s
net adopted FY 2021 budget. The following charts depicts annual debt service payments servicing
all debt and annual debt service connected with our general governmental credit.
Collier County’s total un-audited principal debt outstanding at 9/30/20 totals $558.2 million of
which $288 million relates to infrastructure improvements driven by population growth and related
service demands. The County’s principal debt is $230 million below the FY 2008 figure of $788
million. Principal debt outstanding at 9/30/20 listed above does not include the most recent $115
million 2020 A&B series issue for stormwater, parks, and strategic property acquisition.
Recommended Budget Policy: Continue General Fund countywide 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 continuing general governmental priority capital
needs.
General Governmental, Enterprise Fund, and Other Fund Reserve Policies
General Fund: Reserve is a budget/policy term referring to resources set aside to provide a
financial barrier against risk. Likewise, reserves may also be referred to as a portion of fund
balance – only on the expense side of the equation. Reserves are the cornerstone of financial
flexibility and provide government with options for responding to unexpected issues and a buffer
against shocks and other forms of risk. One such un-planned risk may for example include the
potential for a grant award to be rescinded after work on the activity begins.
Grant revenues are appropriated at the time of award with the expectation of future cash inflows
from the grantor agency. Until reimbursements are received, the General Fund and General Fund
supported agencies provides the cashflow for most 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.
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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
2022 $63,776,400 $2,467,800 13.8% 4.0%
2021 $56,798,900 $2,695,500 12.8% 4.4%
2020 $51,532,900 $2,340,600 12.1% 3.9%
2019 $44,481,200 $2,982,300 11.4% 5.3%
2018 $40,450,300 $3,255,000 10.8% 5.5%
2017 $33,899,700 $2,432,900 9.6% 4.8%
2016 $27,890,800 $1,905,600 8.4% 4.4%
2015 $26,670,700 $2,220,100 8.5% 5.6%
2014 $26,217,400 $1,715,000 8.9% 4.5%
2013 $24,844,400 $1,596,200 8.7% 4.3%
2012 $18,180,900 $1,739,500 6.2% 4.5%
2011 $14,210,200 $2,925,100 4.7% 7.4%
2010 $15,569,100 $3,422,400 4.9% 7.2%
2009 $17,541,200 $2,853,500 5.0% 5.8%
2008 $20,506,000 $6,336,600 5.5% 12.9%
Optimally, and to achieve a regular and sustained General Fund beginning fiscal year cash position
of at least $95 to $105 million, budgeted reserves should be a minimum of $55 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.
Florida State Statutes: In all respects, budgeted reserves shall conform to requirements of Florida
State Statutes. The State establishes maximum limitations on certain reserves.
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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 2021
budget numbers in the $69M-$74M range.
Collier County has never attained a General Fund budgeted reserve position higher than the FY
2022 proposed position of $63.8 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 revenues and a ceiling or maximum not to exceed
16% of operating revenues. Applying these percentages to our current FY 2022 proposed planning
budget, the reserve floor and ceiling would total $35.3 million and $70.7 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 2022 is approximately $5.11 million. FY 2022 planning reserves are $2.46 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 (1) year’s estimated replacement cost of
vehicles currently in service, although these funds are currently trending toward 200% or two (2)
years of replacement costs based upon vehicles 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 $1.5 billion, should maintain a reserve
position necessary to ensure the maintenance of life sustaining services to the public during non-
routine and unforeseen disaster situations such as hurricanes or other related weather events, other
environmental or natural disasters, or other events that cause disruptions in public services, such
as system failures and line breaks.
Collier County lies within a coastal zone highly susceptible to hurricane and storm damage to
water and sewer treatment facilities, transmission lines and distribution/collection mains. Many
of the buried water and wastewater lines sit in sandy soil that is prone to shifting during heavy rain
events. Uncertainty in economic markets with regards to 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 2021 operating expenses would range from $22.0
million to $44.0 million. FY 2021 Working Capital resources total $32.8 million representing
sixty-seven (67) days of reserves.
Replenishment of unrestricted reserves that may drop below the targeted floor (45 days) or $22.0
million using FY 2021 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.
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The department is responsible for the right of way disaster debris removal on County roads and
monitoring project for Collier County in the event of a natural disaster, such as the Hurricane Irma
(Category 3, dry storm cash flow exposure up to $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 2021 operating expenses would range from $6.3 million to $12.5 million. FY 2021
unrestricted reserves for the Solid and Hazardous Waste Management Enterprise Funds total $8.6
million or sixty-two (62) days of reserves.
Replenishment of unrestricted reserves that drop below the targeted floor (45 days) or $6.3 million
would occur in succeeding budget cycles in such amounts as deemed prudent under existing
economic conditions as approved by the Board.
Contributing to a restricted reserve of ten (10%) percent of the FY 2021 budgeted charges for
services would total approximately $5.4 million. Most likely this restricted reserve will be funded
over a three to five-year period.
Growth Management Division (GMD) - Planning & Regulation Enterprise Fund 113 and
Development Services Enterprise Fund 131: Fund (113), referred to as the Building Department
Fund, collects revenues primarily related to building permit activities, including building permits,
structural, electrical, plumbing, and mechanical inspections, plans reviews, and the licensing and
oversight of building contractors.
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.
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Fund (131), referred to as the Land Development Services Fund, collects revenues primarily
related to land development permit activities, including planning and zoning, engineering, and
environmental and natural resources.
GMD Planning Fund (131) 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) –
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Miami, Fort Lauderdale SMSA. Rather than going through time consuming and potentially costly
rate studies, the Board suggested that the CPI adjustment be programmed and subsequently be
reviewed by the Board during the budget process. This allows the Board discretion in approving
the CPI adjustment and not simply passing the adjustment on automatically.
Recommended Budget Policy: Provide the Board with an annual report on potential enterprise
rate and fee adjustments in accordance with CPI changes as indicated above and that any rate or
fee adjustments be included within the proposed budget for Board consideration.
Suggested Scheduling Timeline
Decisions Required Staff Adopted Date(s)
Establish Budget Submission Dates for
the Sheriff, the Supervisor of Elections,
and the Clerk of Courts.
May 1, 2021 by Resolution
FY 2022 June Budget Workshops (BCC Agency/Courts and Constitutional Officers Budget Workshops)
Thursday, June 17 and if necessary, Friday June 18, 2021
FAC Conference is June 29 – July 2, 2021 in Orlando/ Orange County.
Adoption of Tentative Maximum FY
2022 Millage Rates
July 13, 2021 (Tuesday)
Submission of Tentative FY 2022
Budget to the Board
Friday July 16, 2021.
Establish Public Hearing Dates (see note) September 9, 2021 (Thursday at 5:05 pm)
September 23, 2021 (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 7, 2021.
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 2022
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 67.0% of the total FY 2021 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, 2020, actual General Fund cash and cash
equivalents balance totaled $113,718,100, an increase of $11,694,100 over year ending FY 2019.
The FY 2020 year ending cash position represents approximately 27.9% of actual FY 2020
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 2022.
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 2021, 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 three quarters
percent (5.75%) of gross receipts of the Water/Sewer District were applied in FY 2021. This
method and percentage will continue for FY 2022. One and three-quarter percent (1.75%) of Solid
Waste tipping fees were applied in FY 2021 and this method and percentage is planned in FY
2022. 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
0.3883
0.0000
0.2000
0.4000
0.6000
0.8000
1.0000
1.2000
MillageGeneral Fund Capital Equivalent Millage History
(FY 1991 -FY 2022)
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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 $105 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 2022 - FY 2024)
OMB staff prepares annually a three-year projection of General Fund and Unincorporated Area
General Fund revenues and expenditures to improve financial planning and to understand the long-
term impact of funding decisions. These projections are complimented by a trend analysis of
revenues and expenses which conclude the General Fund and Unincorporated Area General Fund
sections respectively.
The following 3-year budget projections are for the General Fund (001) and the MSTD General
Fund (111).
General Fund
General Fund (001) Millage History and Projected Millage Rates
As a point of reference, the following graph plots the historical General Fund millage rate, as well
as tax rates for FY 2022 through FY 2024. 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 2022 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 2024)
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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 22 will be funded at an
increased level through general governmental appropriations.
The following tables depict the respective millage neutral tax rates for FY 2022, 2023 and 2024
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 21 3.5645
FY 22 3.5645 $7,069,700 @ 2.0% TV Increase
FY 23 3.5645 $7,211,100 @ 2.0% TV Increase
FY 24 3.5645 $7,355,300 @ 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 taxable values begin to slow and
investment in County innovation zones and the County and Naples CRA’s grows the margin
between rolled back rate and millage neutral will narrow. Thus, maintaining the long standing
millage neutral philosophy must be continued knowing the level of investment required to simply
maintain our general governmental assets, and fund Sheriff operations let alone expand services
and facilities based upon AUIR requirements and servicing the needs of an expanding population.
The projected millage rates assume that the tax base will increase 2.0% in FY 2022 (the 2021 tax
year). Taxable value in FY 2023 is projected to also increase 2%. The Property Appraiser will
provide preliminary taxable value estimates for FY 2022 on June 1, 2021. 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 2022 Significant Expense Assumptions
A millage neutral operating budget, again assuming no marginal adjustment for special policy
initiatives of the BCC, assuming an increasing taxable value base provides the County with
those important additional ad valorem dollars necessary to maintain our assets, invest in our
personnel, and service those who live and visit Collier County. Significant expense
assumptions include.
• Allocation for compensation administration – $1,000 base COLA adjustment across all
pay classifications plus a .54% 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 plus an
additional $5,000,000 for the Jail’s roof replacement.
• $5,000,000 allocation toward long-term general governmental asset maintenance
reserve
• Continued Social Service and Mental Health Funding.
• General Fund loans to the impact fee trust funds planned at $1,547,800 which while
low compared to previous years should not be viewed as a trend due to the volatility of
impact fees.
• Stormwater maintenance, operations, and transfers for capital and debt service
payments planned at $7.5 million.
• General Fund transfer dollars supporting road construction and maintenance funded at
8.8 million.
• General Fund support of EMS Operations established at $18,708,700 – up 3.8% from
last year reflecting staffing of new facilities planned for opening.
11.9%
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%2.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Historical and Projected Changeges in Collier County Taxable Values
FY 2005 -FY 2024
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• Full support for Transportation Operations from the General Fund (001) exclusively in
the amount of $21,183,300
• Continued corporate IT capital funding.
• 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.
• Second installment of $4 million toward replacing the Sheriff’s helicopter, bring the
total to $6 million.
• Mandates to be absorbed if possible, within operating budgets, including Constitutional
Officers.
Significant Revenue Assumptions
• FY 2021 ad valorem tax revenue forecast is 96% of actual taxes levied. FY 2021 forecast
totals $336,801,200 – a reduction of $15,521,900 from the adopted budget. Collections
are within the 5% statutorily budgeted revenue reserve.
• A millage neutral position for FY 2022 produces a levy of $360,554,500.
• Sales tax revenue sharing forecast for FY 2021 is projected conservatively at $42.2 million
which represents the State’s estimate, an increase of $4.2 million from the adopted budget.
FY 2022 budgeted revenue is planned at $41,000,000. Conservative revenue estimates are
essential to achieving the required beginning cash balance position.
• State Revenue Sharing forecast for FY 2021 is based on the State’s estimate of $11.2
million. The FY 2022 budget is projected conservatively at $11,000,000 which is an
increase of $1.5 million over the adopted 2021 budget.
• Property taxes, sales taxes and revenue sharing deposited in the General Fund represent
92% of all recurring operating revenue which excludes carry-forward (fund balance).
• Constitutional Officer turn-back is a conservative budget estimate and for FY 2022
$6,600,000 is planned. Turnback to the General Fund at year ending 2020 totaled
$10,364,600.
• 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 2022 is conservatively planned to decrease by $300,000 to
$1,600,000.
EMS Fund
EMS Operations Fund (490) is another fund that impacts the General Fund. Typically, this ad
valorem support in recent years accounted for 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 2022 is up $690,100 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 $6.9 million annually. With taxable values projected to increase
modestly for FY 2022, the General Fund contribution to road construction and maintenance is
planned to total $8.8 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 2023
A millage neutral operating budget in FY 2023 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 2023
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$18.0$18.7$18.8$18.9
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24MillionsGeneral Fund Support of EMS
(FY 2005 -FY 2024)
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• Maintain general governmental capital projects recurring funding.
• Maintain General Fund support of EMS.
• Contingency reserves are maintained at policy.
• Maintain General Fund road subsidy.
• Maintain General Fund support for park system maintenance and replacement
• Maintain General Fund support for Transportation Operations expenses.
• Continue annual contribution to the long-term asset maintenance reserve.
In summary, the FY 2023 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 2023 without proper budgeted beginning fund balance would likely result
in a $18.1 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 2024
A millage neutral operating budget in FY 2024 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 2024 budget analysis:
• Maintain general governmental capital projects recurring funding.
• Maintain General Fund support of EMS.
• Contingency reserves are maintained at policy.
• Maintain General Fund road subsidy.
• Maintain General Fund support for park system maintenance and replacement
• Maintain General Fund support for Transportation Operations expenses.
• Continue annual contribution to the long-term asset maintenance reserve.
The General Fund Trend Analysis model shown below is intended to offer a picture of very
conservative revenue projections against operating and capital expenses which will likely be faced
in the out years. Of course, financial staff manages the budget in real time and will mitigate
unplanned equity reductions. But, imagine a scenario where major revenue sources like property
taxes or state shared revenues were cut or reduced. The obvious impact would be subsequent
expense reductions possibly coupled with new adopted revenue sources and thus the need for
budget flexibility.
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General Fund Trend Analysis
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Unincorporated Area General Fund (111)
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 2022 through FY 2024,
which includes the proposed marginal millage rate increase to continue the landscape median
capital program.
Results of Unincorporated Area General Fund Analysis
For FY 2021, the Board of County Commissioners maintained the Unincorporated Area General
Fund millage rate at $.8069 and earmarked the marginal increase above the operating millage rate
of $.7161 or $.0908 toward recurring dollars for maintenance of the median 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, stormwater 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 2024)
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Unincorporated Area
General Fund
FY 21 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 21 0.8069
FY 22 0.8069 $892,600 @ 2.0% TV Increase $113,200 @ 2.0% TV Increase
FY 23 0.8069 $910,500 @ 2.0% TV Increase $115,400 @ 2.0% TV Increase
FY 24 0.8069 $928,700 @ 2.0% TV Increase $117,800 @ 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. Obviously, a
rolled back position in the Unincorporated Area General Fund is not a sustainable model going
forward knowing the level of expanded funding commitment required to operate and maintain the
County’s current and future capital infrastructure investment enjoyed by our Unincorporated Area
residents and visitors, including maintaining the existing landscape median assets. Additionally,
levying the rolled back rate when taxable values drop means the rolled back rate will increase
above millage neutral and of course the temptation will be to revert to the millage neutral rate
levied in the prior year which will raise even less property tax revenue.
FY 2022
The FY 2022 budget projection is based upon a 2.0% 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 2022 $8.7 million is programmed. While this represents a slight decrease from
FY 2021, bond proceeds were issued which will significantly strengthen the County’s stormwater
and parks infrastructure investment. These transfer dollars are programmed for Park
improvements, Transportation system enhancements, and Stormwater infrastructure. Sustaining
these capital appropriations and maintaining necessary transportation, landscaping maintenance,
park, code, planning and general operations in this fund requires at the very least a millage neutral
tax position along with continued state shared communication services tax revenue.
This model is not sustainable under a rolled back millage rate and/or loss of the communication
services tax without mid – year budget reductions or the introduction of replacement revenue
sources like a franchise fee. Any required mid-year cuts will likely affect transportation operations,
park and recreation programs and other non-public safety services.
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FY 2023
If taxable values increase by 2.0% in FY 2023, a millage neutral operating budget coupled with a
reduction in beginning fund balance could result in a potential budget planning deficit of $7.5
million as depicted within the preceding trend analysis. This analysis assumes a state
communication services tax reduction and substantial expense side increases to support landscape
median maintenance and capital transfers. The model presents conservative revenue projections
and aggressive expense projections in the maintenance and capital areas which results in a
continued erosion of the funds cash position. The model is certainly not sustainable and real-time
budget management would always ensure that any equity erosion beyond that planned would be
curtailed.
FY 2024
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 $8.1
million is depicted. Absent real-time budget management the model depicts a total fund equity
loss from FY 2021 through FY 2024 totaling $23.3 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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Unincorporated Area General Fund Trend Analysis
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Packet Pg. 124 Attachment: Fiscal Year 2022 Recommended Budget Policies (14678 : Recommedation to adopt the FY 2022 Budget Policy)
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Packet Pg. 125 Attachment: Resolution FY 2022 Budget Policy and Constitutionals (14678 : Recommedation to adopt the FY 2022 Budget Policy)