Source: https://townofpalmbeach.com/DocumentCenter/View/10094/FY-18-Final-Budget-Book-HTML?bidId=
Timestamp: 2019-06-25 02:02:11
Document Index: 190790245

Matched Legal Cases: ['art 106', 'art 124', 'art 134', 'art 146', 'art 168', 'art 186', 'art 218', 'art 346']

FY 18 Final Budget Book HTML
TOWN OF PALM BEACH, FLORIDA‌
COMPREHENSIVE ANNUAL BUDGET FISCAL YEAR 2018
Richard M. Kleid, Town Council President Danielle H. Moore, Town Council President Pro-Tem
Julie Araskog, Town Council Member Bobbie Lindsay, Town Council Member Margaret Zeidman, Town Council Member
Town Manager Thomas G. Bradford
For the Fisca l Year Beginning
Town Overview/Demographics 28
Assessed Valuation and Millage Rate 29
Town History 33
Financial Policies 35
Budget Preparation Process 40
Budget Calendar 45
Financial Structure 46
Long Term Financial Plan Forecast 51
Fund Budget Overview 65
Budget Summary by Fund Type, Revenues and Expenditures 66
Summary of Major Revenues by Fund Type 68
Summary of Expenditure Classifications by Fund Type 70
Reserve Analysis 73
Capital Expenditures 79
General Fund Revenues and Expenditures Budget Comparison 81
General Fund Revenues 83
Major Revenue Sources 87
General Fund Expenditures 97
Legislative (111) 102
General Government (113) 104
Town Manager’s Office Organization Chart 106
Administrative Management (121) 108
Records Management (131) 112
Advice and Litigation (122). 116
Information Technology (125) 118
Human Resources Organization Chart 124
Human Resources (123) 127
Finance Organization Chart 134
Finance Department Revenue and Expenditure Summary 136
Financial Management (141) 138
Purchasing (144) 142
Planning, Zoning and Building Organization Chart 146
Planning, Zoning and Building Department Revenue and Expenditure Summary 148
Planning and Zoning (211) 150
Permit Issuance (212) 154
Inspection and Compliance (213) 157
Landmarks Preservation (214) 159
Fire Prevention (215) 161
Code Enforcement (216) 163
Fire-Rescue Department Organization Chart 168
Fire-Rescue Department Revenue and Expenditure Summary 171
Fire Administration (411) 173
Operations (417) 176
Training (418) 180
Ocean Rescue (419) 182
Police Department Organization Chart 186
Police Department Revenue and Expenditure Summary 189
Administrative Management (421) 191
Organized Crime Vice and Narcotics – OCVAN (422) 195
Records Information System Unit (423) 197
Training and Community Relations Unit – TCR (424) 199
Communications Unit (425) 203
Crime Scene/Evidence Unit (426) 205
Patrol (428) 207
Criminal Investigation Unit (429) 212
Parking Control Unit (430) 214
Public Works Department Organization Chart 218
Public Works Department Revenue and Expenditure Summary 223
Administrative Management (511) 225
Street Repair and Maintenance (521) 227
Traffic Control (523) 229
Street Lighting (524) 231
Storm Sewer Maintenance (531) 233
Sanitary Sewer Maintenance (532) 236
Sanitary Sewage Treatment (533) 239
Residential Collection (541) 240
Commercial Collection (542) 242
Refuse Disposal (543) 244
Yard Trash Collection (544) 245
Recycling (545) 247
Beach Cleaning (546) 249
Landscape Maintenance (551) 251
Facility Maintenance (554) 253
Meter Maintenance and Collection (558) 256
General Engineering Services (561) 257
Right of Way Inspections (565) 260
Equipment Operation and Maintenance (571) 262
Library Services (321) 266
Transfers to Other Funds (611 to 625) 267
Emergency Management (710) 268
Contingent Appropriations (711) 269
Town-wide Underground Utilities Fund 271
Debt Administration 275
2016A and 2013 Revenue Bonds (Fund 205) 280
2016B Worth Avenue Revenue Bond (Fund 206) 281
Capital Funds 283
Impact of Capital Investments on Operating Budget 284
Capital Projects by Project Type and Fund 285
Five Year Capital Improvement Pay-as-you-go/Facilities Program 287
Pay-as-you-go Capital Improvement Fund 288
CCMP FY16 Accomplishments and FY17 Action Plan 291
Comprehensive Coastal Management Project Fund 305
Coastal Management Program Budget 308
Worth Avenue Maintenance 309
2013 Accelerated Capital Projects Fund. 311
Accelerated Capital Improvement Program Budget Report 312
West Palm Beach Shared Force Main Lining 313
Australian Avenue Sanitary Sewer Modifications 314
Debris Transfer Station Sanitary Pump Station Improvements (Construction) 315
Sanitary Pump Station Improvements (Construction) 316
Sanitary Pump Station Improvements (Design) 319
The Breakers Sanitary Pump Station Improvements (Design) 321
Royal Poinciana Way (South of S-2) Sanitary Pump Station Improvements (Design)... 322
North End Paving and Drainage Improvements 323
North End Paving and Drainage Improvements – Onondaga Avenue 324
Lake Trail Improvements from Royal Palm Way to Reef Road 325
La Puerta Way Drainage 326
Storm Drain Improvements Ibis Isle 327
D-16 (Jungle Road) Stormwater Pump Station Improvements (Design) 328
D-18 (El Brillo Way) Stormwater Pump Station Improvements (Design) 329
D-4/D-6 Pump Station Improvements (Construction) 330
D-14 Pump Station Improvements 331
400 Worth Avenue 332
Ocean Outfall Abondonments 333
Landfill/Facility Improvements 334
Town Hall Square 335
Sunrise/Sunset and North County Mast Arm Replacements/Upgrades 336
Clarke Avenue and Cocoanut Row Mast Arm Replacements/Upgrades 337
Pendleton Avenue and Cocoanut Row Mast Arm Replacements/Upgrades 338
Seabreeze Avenue and Cocoanut Row Mast Arm Replacements/Upgrades 339
Bradley Place Mast Arm Replacements/Upgrades 340‌
Town-wide Street Lighting Replacements (Less Bradley & Town Hall Square) 341
Bradley Place – Royal Poinciana Way to Wells Road Street Lighting Replacements ... 342
Street Lighting Upgrades – South Ocean Boulevard, Sloan’s Curve to Lake Avenue ... 343
Recreation Enterprise Fund Organization Chart 346
Recreation Enterprise Fund Revenue and Expenditure Summary 349
Marina 351
Golf Course 356
Recreation Center 368
Capital Program 374
Five Year Capital Improvement Plan 375
Depreciation Program 376
Equipment Replacement 377
Self Insurance Fund – Risk Management (Fund 501) 379
Self Insurance Fund – Health Benefit (Fund 502) 383
Equipment Replacement Fund (Fund 320) 385
Retirement Fund 391
Employees Retirement Fund 399
Health Insurance Trust 401
Retiree Sliding Scale Insurance Premium Rates 2017 405
Authorized Positions 409
Donation Reserve Account Summary 414
Fund Balance 415
Budgetary Control 421
Designation of General Fund Balance - Liability Related to Compensated Absences Leave Balances 422
Contingency Reserve – General Fund 423
Reserve for Encumbrances, Continuing Appropriations, and Prepaid Expenses 424
Revenue Shortfall Plan 425
Debt Management Policy 427
Contingency Reserve – Capital Fund 428
Contingency Reserve – Equipment Replacement Fund 429
Equipment Replacement Reserve 430
Contingency Reserve – Recreation Enterprise Fund – Capital Fund 431
Contingency Reserve – Recreation Enterprise Fund 432
Dock Replacement Reserve – Recreation Enterprise Fund 433
Equipment Replacement Reserve – Recreation Enterprise Fund 434
Recreation Enterprise Fund – Maintenance and Improvement Reserves 435
Recreation Enterprise Fund Reserve 436
Contingency Reserve – Risk Fund 437
Reserve for Catastrophic Exposures/Emergencies – Risk Fund 438
Index‌
Contingency Reserve – Health Insurance Fund 439
Funding Policy for the Town of Palm Beach Retirement System 440
Index… 441
TOWN OF PALM BEACH BUDGET MESSAGE
Honorable Mayor and Town Council
I am pleased to submit this budget message, pursuant to the Town Charter, and to enable you to focus on the highlights of the proposed FY2018 budget.
The total proposed FY2018 town-wide budget including all funds is $249,285,005. The total proposed General Fund operating budget is $80,489,229.
FY18 Town-wide Goals
On April 13, 2017, the Town Council adopted Town manager goals for 2017 and 2018. These goals have been integrated into the FY18 budget. The approved goals are as follows:
Develop a proposed General Fund budget for FY18 that does not reduce service levels and is less than the Long Term Financial Plan (LTFP) General Fund assumptions for FY18. The FY18 budget excluding the extraordinary transfer to the pension fund is $176,337 less than the LTPF.
In conjunction with the Underground Utilities Task Force, develop a recommended financing plan and the associated initial assessment for the Underground Utility Project. Hire the Underground Utilities Coordinator after the Town Council approves the project to facilitate better project area communications and monitoring of project milestones, budget and expenditures in conjunction with Public Works assigned staff project engineer. An underground utilities coordinator has been hired and project is underway. The financing plan has been delayed by a lawsuit.
Develop and recommend a plan to improve enforcement of rules pertaining to construction related parking and related job site traffic impacts. Develop and implement a computer/software based traffic management tool to be used by staff to facilitate up-to-date data in the determination of ROW permit issuance to avoid conflicts in north/south roadway corridors, to facilitate the approval process, and notification to the public of pending road closures and detours. Develop a matrix, listing “large” public and private construction projects, identifying traffic impacts on residents for each project and delineating if the project is anticipated to impact an arterial roadway. Based upon final matrix content ascertain feasibility of modifying schedule of Town controlled projects to minimize traffic impacts. Review data and ascertain need for construction moratorium on Fridays when POTUS comes to Town for large projects defined as any project generating more than 10 trips per day. The FY18 budget includes an additional .5 FTE to bring up a vacant right of way inspector from part time to full time for a total of 2 full time inspectors.
Compete Master Plan for the Town Docks, with budget, projected revenues and expenses compared to existing budget, drawings, schedule for replacing docks with state-of-art facility, with no marina amenities, and identify grant funding sources and grant program funding amounts. Consider hiring marina expert to oversee process. Consultant has been hired to complete the master plan as well as a marina expert to oversee the process.
If the new Recreation Center is approved, develop a financing plan for the Town’s share of the cost. The Recreation Center construction has been delayed due to a lawsuit.
Staff prepared the FY18 budget using Zero Line Item Budgeting. This method of budgeting did not start with last year’s budget. Rather, departments were given a blank budget request form for each line item, instead of last year’s budget or actual expenditures as the starting point – hence, the label of zero – line item is applied. Departments then rebuild their budgets from the ground up, justifying each line item. Where possible, departments were asked to provide the drivers of cost. However, not providing sufficient detail for an expenditure can be an invitation for increased scrutiny of the request.
Department requests and justifications were sent to the Finance Department and Town Manager's Office (Administration) who review them in a series of meetings with staff using the justifications, rather than what was spent last year, as the point of comparison. The budget program requests are often accompanied by a program description to gauge purpose and intended output for the program. The Administration considers the requests, further discusses them with departments as necessary, and then develops a final recommended budget. You or the public never see the process and the forms used. This year we shared these forms with the Town Council at the July 11th Special Town Council meeting so you could see the level of detail this work entails. The information can be found on our website in the preliminary budget document.
The millage rate has been reduced by 2.05% resulting in a $4 increase per million of value for homestead property owners.
A Communication Specialist position has been included in the FY18 budget. Costs have been split between the General Fund, the Coastal Protection Fund and the Underground Utility Fund.
The open part-time Right of Way Inspector position has been increased to a full time position. Offsetting revenue provided by an increase in building permit fees.
Merit pay increases are included for all employees that are not at the top of their ranges and we have included an adjustment to the pay ranges of 2.5% these increases total
$543,696.
Health insurance costs have increased by 4.54% for the first time in 5 years. This will result in an increase to premiums that will be shared between the Town and our employees. The increase for the fund totaled $242,549.
Estimated costs for POTUS and dignitary protection in FY18 of $226,980 have been included in the General Government section of the budget. We are using this program for these expenses in order to highlight them and track them separately from the Police Department expenditures.
An extraordinary transfer to the Retirement Fund from the Town unassigned fund balance of $4,700,000 is included. Additional funds over and above the ARC for both FY17 and FY18 have been transferred and an additional $300,000 was transferred from the FY17 budget for a total transfer to the Retirement Fund UAAL of $5,420,000.
The General Fund is the only fund to directly use property taxes as a revenue source. Property taxes (ad valorem taxes) represent the largest revenue source. Appearing on the following page is a millage rate table to help facilitate a discussion of where we are and what is proposed. The proposed FY18 millage rate of 3.2037 provides a $4 tax increase per million of value to homesteaded property owners, is a decrease of 2.05% from FY17.
The State of Florida requires the Town to calculate a rolled-back millage rate. The rolled- back rate is defined as that millage rate which provides the same property tax revenue for each taxing authority as was levied during the previous year (exclusive of new construction, additions, rehabilitative improvements increasing assessed value by at least 100%, annexations, deletions). The adopted millage is 3.29% over the rolled back rate of 3.1018.
FY17 Millage Rate
FY18 Final Adopted
$49,374,406
$51,470,033
Millage % Increase/Decrease from FY17
Increase/(Decrease) over FY17
There are a number of revenue types in the General Fund. These are categorized in the table on the following page:
$ 49,494,500
1,255,646
$ 3,636,852
Based upon the Property Appraiser's Preliminary Certification issued June 1, 2017, existing property taxable values in the Town have risen 6.42% over the prior year.
The proposed budget reflects property tax revenues based on the millage rate of 3.2037 which result in a $4 increase per million of value for homestead property owners.
Non Ad Valorem Taxes have increased due to the improved trend in water and gas
utility tax revenue.
An increase in the Building permit fee is proposed to offset the cost of the additional positions for Right of Way inspector for the Communication specialist.
During the past year, the Departments conducted a thorough review of all of the fees associated with their Departments. We also reviewed all fees that had not been increased in over 5 years. The fee increases are expected to generate $134,825 per year and are reflected in the Licenses & Permits or Charges for Services category of revenues.
Charges for services have increased due to improved revenue collection for parking meters, an increase in the solid waste collection fees and the above mentioned fee increases.
Investment income revenue is declining due to the current interest rate environment.
Miscellaneous revenue is increasing due to the expected increase in the Town’s DC contribution forfeiture revenue based on the current level of forfeitures available
from recent high turnover. This revenue is to be used to add to the transfer to the Retirement Fund to reduce the UAAL.
We are recommending a decrease of $100,000 in the transfer from the Recreation Enterprise Fund for the third year in a row. The revised transfer to the General Fund will be $585,000. The Town Docks are planned to be replaced within the next 2 to 5 years. We are annually accruing funds in the Dock Replacement Reserve, which after the FY17 accrual will total $3,710,480. The current annual accrual of $353,700 will not be enough to have sufficient funds set aside to fund the estimated $10 to $12 million cost. The budget proposal will decrease the transfer to the General Fund and increase the annual accrual to the dock replacement fund to $453,700. The proposed accrual will also bolster a revenue stream needed to fund debt service for the cost of the dock replacement in excess of the future Dock Replacement Reserve.
$ 1,264,283
18,442,265
17,995,007
74,352,377
75,730,213
Extraordinary Transfer to Retirement Fund (*)
*The true total for FY18 is $5,059,016, and the remaining balance is included in the pension benefit amounts for FY17 and FY18.
For all departments of the Town, the overall increase in operating expenditures is 1.85% over FY17, after the extraordinary transfer to the Retirement fund the total expenditure budget increased 4.73% over FY17. Highlights of the General Fund expenditures changes are as follows:
The salary and wage increase is due to the following reasons:
There are 1.5 proposed new positions included in the FY18 budget. The positions include a proposed Communication Specialist to be charged to the General Fund, Coastal Protection Fund, and Underground Utility Project Fund and a .5 FTE to
increase the part time vacant Right of Way inspector position in Public Works to a full time position.
During FY17, three Firefighter Lieutenant positions were added when the Kelly day for the lieutenants was approved by the Town Council early in the fiscal year. In addition, at the June 13, 2017, Town Council meeting the firefighter’s union contract was approved, and three additional firefighter positions were approved due to the change in the Kelly day policy that was negotiated in the contract. The recently approved firefighter union contractual pay increases were added to the proposed budget. The additional costs for the Kelly day and contractual pay increases total
$615,187.
The budget includes merit pay increases for the employees not yet at the top of their range who have performed satisfactorily or above totaling $434,799, and a 2.5% adjustment to the pay ranges costing $108,897. The CPI index for All Urban Consumers for the Miami-Ft. Lauderdale, FL Area (that area the Bureau of Labor Statistics says is applicable to the West Palm Beach – Boca Raton metro area) reflected a year over year increase in February of 3.95%. This increase helps ensure competitive salary ranges relative to our surrounding markets.
Overtime funding for POTUS and dignitary visits has increased the salary and wage budget by $204,000. We are including these expenses in the General Government section of the budget so that the costs can be tracked separately and highlighted for at least the next 4 years.
The increase in total pension benefits of $753,293 is a combination of an increase in DB funding of $1,151,730 due in part to the smoothing of the lower returns in FY15 for the pension fund and additional funding for the changes in the mortality tables. The pension amount reflects the benefit changes for the general employees and lifeguard benefit changes that became effective May 1, 2017, and the union firefighters benefit changes that became effective August 12, 2017. Included in the pension amount are the savings that would have been generated if the town had paid out the 8% mandatory and discretionary DC contributions that were in place before the plan change. This “savings” amount totaled
$123,202 and is an additional contribution into the Retirement Fund and is part of the
$5,420,000 extraordinary contribution to the UAAL.
The DB pension increase was offset by reductions in the DC plan. The DC plan for union firefighters was eliminated with their benefit change and the Town’s DC costs for general employees and ocean rescue have decreased with their new benefit change. The DC reductions total $398,437.
Health insurance costs increased (4.5%) or ($242,549) for FY18 after 5 years without an increase. This will result in an increase to premiums that will be shared between the Town’s Health Insurance Reserve and Town employees.
Contractual costs increased $185,240 due to increases in the IT budget for consulting assistance, improved internet access and additional software services described in the IT budget. Landscape and building maintenance costs increased.
Cost increases in commodities totaling $138,249 include uniform cost for the new firefighter positions, lockers for telecommunicators, patrol officer equipment and uniform items. In addition, travel and per diem costs were moved from the contractual area to the training costs under commodities to reflect a more accurate accounting for these costs.
Capital outlay decreased $235,075 due to purchases of new equipment made in FY17.
Coastal funding decreased $145,300 due to the elimination of two projects and the recent notice of grant funding available to the Town.
The transfer to the Capital Improvement Fund decreased $172,176 from FY17. The decrease is due to the transfer of projects from the Capital Improvement Fund to the Accelerated Capital Improvement Fund. Unspent bonded groin funds will be used for these projects.
The actuarially determined transfer to the OPEB trust fund decreased by $390,000 due to favorable investment and actuarial results in the fund.
The General Fund Unassigned Fund Balance as of September 30, 2016 was $21,615,082. This amount was $5,415,788 above the policy required minimum. The FY18 budget includes a transfer of $655,877 from unassigned fund balance to fund the contingency reserve and
$577,900 from the reserve for compensated absences to fund the compensated absence payouts. After the contingency transfer, the remaining balance in the unassigned fund balance will be $4,759,911.
A transfer of $3,832,893 from the General Fund unassigned fund balance to the Retirement Fund as a supplemental Town contribution to reduce the unfunded liability is included in the FY18 budget. This amount includes an amount equal to the contingency reduction that was funded from unassigned reserves and is part of the $5,420,000 extraordinary contribution. This transfer would represent the second year in a row that we were able to make an additional transfer to the Retirement Fund. In FY17 the transfer to the Retirement Fund from unassigned reserves was $2.5 million. The Town Council adopted a policy in October, 2017, to fund on an annual basis $5,420,000 over the required contribution to begin to pay down the UAAL. The policy caps the total retirement funding at $16 million per year.
The total personnel complement (for all funds Townwide) for FY18 is 369.87 full-time equivalent personnel (FTEP), which is an increase of 7.0 FTEP from the adopted FY17 budget. The increase represents the addition of 3 firefighters and 3 lieutenants in Fire- Rescue, a underground utilities project coordinator, a communications specialists and ½ of a right of way inspector. These increases are offset by position changes in the Police Department including the elimination of a lieutenant position, the records systems manager, lead telecommunications supervisor and call-taker position offset by the addition of a Major, communications manager, .5 of telecommunicator. A chart of the FTEP by department is shown below:
Townwide Underground Fund
Below are highlights from the budgets for other Town funds. Additional information can be found at the tabs in the back of the Budget Document behind the General Fund information. The Town’s other funds include: Special Revenue, Debt Service, Capital Improvement Funds, Recreation Enterprise Fund, Internal Service Funds (Health, Risk, Equipment Replacement), and Trust Funds (Pension and OPEB Trust).
The Town’s outstanding debt as of September 30, 2017 is shown below:
Issued September 30, 2017 Purpose
$111,635,000
As of September 30, 2017, the Town’s net bonded debt will amount to 13.2% of the legal limit of $845,575,941 (5% of preliminary FY18 taxable value of $16,911,518,815).
The 2016A and 2013 Series Revenue Bonds debt service is funded from non-ad valorem revenues. A portion of each ($198,263) is funded through the Recreation Enterprise Fund for the Town’s portion of the Par 3 golf course and clubhouse renovation, and a portion is funded through the Coastal Management Fund ($736,038). The non-ad valorem revenue transfer from the General Fund for FY18 is $5,982,332.
The 2016B Series Revenue Bonds debt service appropriation of $708,212 is funded through non ad valorem assessments on the property owners within the Worth Avenue Assessment District.
For FY18, the following items totaling $2,721,450 are included in the Capital Improvement Fund (307):
Facility improvements - $896,450
The transfer to the Capital Improvement Fund has decreased by $172,176.
Bonds funds in the ACIP II fund will be used to fund the remaining capital projects outlined in the ACIP II budget section of this document.
The Coastal Management Fund (309) is used in part to fund the construction costs of the coastal projects. The details of the FY18 budget for Coastal Management can be found in the Annual Budget Document. This plan has been updated by Public Works to include estimates for future projects based upon current costs. The transfer to the Coastal Management Fund increased $145,300.
The Recreation Enterprise Fund (REF) comprises all municipal recreation activities and facilities in the Town, including the Par 3 Golf Course, Seaview Park and Phipps Ocean Park Tennis Centers, the Recreation Center, and the Town Docks. The preparation of the budget was guided by the department mission of providing outstanding recreation programs, facilities and services which enrich and enhance the lives of its Palm Beach residents and visitors.
The 2018 spending plan is 2.27% lower than the FY2017 adopted budget, while revenue estimates are projected to increase by 7.85%. Continuous cost control measures will be incorporated into the operational efficiencies of each division, throughout the fiscal year, to ensure fiscally responsible decisions are made in an attempt to minimize expenses and improve upon established cost recovery goals.
Tennis revenue projections are slightly higher for FY18. The restructuring of the tennis instruction contract and the assumption by the Town of the Pro Shop merchandise operation resulted in an increase in revenue. Fiscal year 2017 saw a significant growth in tennis instruction and pro shop net revenue. Growth in revenue from these sources are expected to continue to show modest increases for fiscal year 2018.
Restructuring of the 12 Play Pass is anticipated to increase the tennis revenue stream. The previous 12 Play Pass was comprised of buy 10 daily pays and receive two free. The approved pass structure change to buy 12 daily plays, receive 1 free will produce an increase in revenue for daily play passes of 20% for each 12 Play Pass sold. In addition, revenue growth created as a result of the increase to the Maintenance and Improvement Fee is expected to show an increase of over 70%. Creative programming opportunities will also be explored in an effort to continue to grow participation.
Recreation Center revenue projections reflect the assumption of the current center remaining operational during the fiscal year. A change in this direction will result in a modification of the revenue estimations for fiscal year 2018. The revenue focus for the Recreation Center will remain on the implementation of new programs, revitalization of existing programs and the development of marketing strategies to raise awareness of program offerings. Projections for fiscal year 2018 anticipate a 2.48% increase in revenue.
Town Dock revenues are expected to increase in fiscal year 2018. This increase can be attributed to the creation of a separate reserve within the Recreation Enterprise Fund to fund the costs of non-routine maintenance and improvement (M&I) projects at the Town Docks. These funds could initially be used to supplement the Dock Replacement Reserve. Upon the completion of the dock replacement project, these funds could be utilized to support capital improvement projects and unanticipated maintenance projects necessary to keep the facility in exceptional condition. In addition, the elimination of seasonal leases, the establishment of a Utility Fee and the rise in the dockage rates are all factors in the projected revenue growth.
Golf Course revenue projections are expected to increase during FY18. The Golf Instructor contract was restructured in fiscal year 2017. This resulted in an increase in revenue of 9% from fiscal year 2016. It is anticipated that this revenue stream will continue to show positive growth. Fee changes for fiscal year 2018 include: the creation of a non-resident riding cart fee, which is $2.50 over the resident rate, the elimination of the guest/hotel rate for greens fees, increases to the non-resident (regular) rate for single, double and junior annual passes and an adjustment to the rental fee of pull carts to $7.00, regardless of season or 18/9 hole play. It is anticipated that these fee adjustments would generate revenue growth of over 15%.
Improvements being made at the Clubhouse, which include the installation of improved weather screening, are expected to heighten patronage at the on- site restaurant. This increase in restaurant patrons will positively impact revenue paid to the Town through the Food and Beverage Agreement. Additional creative revenue generating programs are currently being investigated for implementation during fiscal year 2018, this includes the launch of a new website, which would include an on-line store and the ability for residents to book tee times 30 days in advance.
Increases in expenditures comes from increasing commodity prices, personnel costs and the desire to consistently improve operations and infrastructure. The staff take a thoughtful approach to all expenditures to ensure that these decisions are made in a fiscally responsible manner. The operating plan for fiscal year 2018 represents an overall decrease of 2.27% from the fiscal year 2017 budget.
The Administration Section proposed budget for fiscal year 2018 exhibits an increase in expenses due to the rise in personnel costs. This can be attributed to increases in salaries and wages and employee benefits. In addition, the cost for software maintenance is reflected in the Recreation/Administration budget for the first time this year. Previous years this cost had been absorbed within the budget of Information Technology. The Tennis Programs and Facilities expense budget will see a minimal budgetary decrease of .374%. The retirement of a long time tennis employee during fiscal year 2017, caused a reduction in our expenditures, within salaries and wages. The Recreation Center budget is projected to remain static for fiscal year 2018. Expenditures are being proposed utilizing the assumption of a 12 month operation for the current facility. The forward movement of the proposed new Recreation Center would result in a modification of this budget to reflect the reduction in operating costs. Budgeted funds within the Special Recreation Contracts account are directly related to the revenues credited to the youth and adult program fees. Increases to registration in programs will result in increased expenditures and conversely a decrease in registrations result in a reduction in expenditures. This is due to the structure of instructor program agreements, in which payment is based upon a percentage of revenue generated. Expenses in the Marina budget show a decrease in operating expenses. This is due to a reduction in anticipated expenses in Other Contracted Services from fiscal year 2017. During the budget development process for fiscal year 2017, it had been anticipated that alternate arrangements would need to be made for security services. Staff was able to positively resolve issues with the current firm, facilitating the continuation of the existing agreement. The estimation for electric service was budgeted at a level that was higher than necessary in fiscal year 2017. This account has been corrected, assisting in the reduction of the overall budget for fiscal year 2018. The Par 3 expenditure reduction can be attributed to the removal of expenses previously budgeted through the maintenance & improvement fund to the capital improvement program in fiscal year 2018.
The transfer to the Risk Fund (501) has decreased by $9,562 (-.52%) from FY17 to FY18. The decrease is related to reductions in the fixed costs for liability and property insurance.
The Health Insurance Fund (502) experienced an increase of 4.54%, or $242,549 which will be funded through an increase in employee contribution and reserves of the Health Fund.
The Equipment Replacement Fund (320) contains the accumulated depreciation of all fixed assets over the established thresholds of $2,500 for capital equipment and $1,500 for computer equipment. The annual depreciation transfer for FY18 is $2,276,600. This amount represents a decrease of $21,533. In FY18, the total expenditures for equipment purchases will be $2,980,896. A detailed listing of planned equipment purchases is located in the Internal Service Funds section of the Annual Budget Document.
The FY18 actuarially determined contribution to the DB plan is $9,320,235.
As mentioned earlier, an extraordinary transfer of $5,420,000 was approved by the Town Council to the Retirement Fund. A new policy was adopted that would require annual appropriations of the annual required contribution plus $5,420,000 to be capped at $16 million. The extraordinary contribution is made up of $4,759,016 from the General Fund budget including $3.5 million from reserves, excess contributions above the ARC totaling
$360,984 and $300,000 from the FY17 budget DC savings and forfeiture revenue.
The Town annual contribution comparison for FY17 vs. FY18 is shown in the table below:
Town Retirement Contribution
(395,129)
$9,117,042
$9,955,063
$838,021
The actuarially determined transfer to the OPEB trust from the General Fund in the FY17 budget is $960,000. This amount is $379,000 (28.3%) less than FY16. The trust was established to account for and fund the liability for the Town’s share of retiree health benefits. The contributions are funded like pension benefits, taking into account the accrued cost for current employee benefits as well as the costs of retired employee benefits. The Town’s balance in the OPEB trust fund continues to be well ahead of other government agencies across the country.
The estimated inventory of parts, supplies, fuel and materials on hand as of October 1, 2017, was $349,706 and the total fixed asset inventory (which includes machinery, equipment, and vehicles with a value over $2,500 and computer equipment with a value over $1,500) was
$22,119,264.
The Town has 20 formally adopted financial policies. The establishment of specific reserve policies is an important part of prudent financial management and the practice is strongly recommended by the Government Finance Officers Association (GFOA) and the National Advisory Committee on State and Local Budgeting (NACSLB).
For FY18, The Town Council adopted a funding policy for the Town of Palm Beach Retirement System to ensure that additional funds will be appropriated in future budgets to reduce the Town’s Unfunded Actuarially Accrued Liability.
In 2003, the Town of Palm Beach developed and adopted a strategic plan. The development of the strategic plan involved input from elected officials, citizens, the business community, and staff. In conjunction with the Town’s strategic plan, staff developed an organizational vision statement which included input from all employees. Both the strategic plan and the vision statement, in addition to annually adopted Townwide goals, help us to form our department and program goals. Outlined in the following pages is a summary of our strategic plan, organizational vision, and departmental goals for FY18.
Townwide Budget Priorities for FY2018
The Town Council’s annual budget priorities for FY2018 are outlined below. These priorities were developed with input from the Mayor and Town Council, Town Manager, Department Directors, and staff.
Once the Mayor and Town Council set the FY2018 priorities, the Departments developed goals and objectives that would accomplish the priorities. In addition, the Departments developed other major initiatives for the year. The Council priorities and Departmental goals will be reviewed on a continual basis throughout the fiscal year.
The following is a breakdown of the Town Council Priorities, Town Manager goals and a listing of the departmental objectives that address the Council’s agenda. The table below shows the linkage between the Council’s priorities and the Department objectives that will be implemented during the year. A detailed listing of all departmental objectives and performance measurements can be found in the Department sections of this document.
Develop a proposed General Fund budget for FY18 that does not reduce service levels and is less than the Long Term Financial Plan (LTFP) General Fund assumptions for FY18.
Work with the Town Manager and Directors to prepare a budget that meets the Town Council goal.
Review FY2018 department budget and functions to achieve possible cost savings and revenue sources for future budgets.
In conjunction with the Underground Utilities Task Force, develop a recommended financing plan and the associated initial assessment for the Underground Utility Project. Hire the Underground Utilities Coordinator after the Town Council approves the project to facilitate better project area communications and monitoring of project milestones, budget and expenditures in conjunction with Public Works assigned staff project engineer.
Work with the UUTF, consultants and the Town Council to prepare a cost effective and comprehensive financing plan for the underground utilities project.
Develop and recommend a plan to improve enforcement of rules pertaining to construction related parking and related job site traffic impacts. Develop and implement a computer/software based traffic management tool to be used by staff to facilitate up-to-date data in the determination of ROW permit issuance to avoid conflicts in north/south roadway corridors, to facilitate the approval process, and notification to the public of pending road closures and detours. Develop a matrix, listing “large” public and private construction projects, identifying traffic impacts on residents for each project and delineating if the project is anticipated to impact an arterial roadway. Based upon final matrix content ascertain feasibility of modifying schedule of Town controlled projects to minimize traffic impacts. Review data and ascertain need for construction moratorium on Fridays when POTUS comes to Town for large projects defined as any project generating more than 10 trips per day.
To monitor and mitigate any effects from heavy traffic caused by all bridge closures, and/or Presidential visits.
Monitor the allocation of resources to ensure the public’s safety, address traffic flow issues, and provide timely communications.
Right-of-way maintenance and enforcement ensuring all Town right-of-ways are managed to meet the Town’s standards applicable to public rights-of-way and easements within the Town of Palm Beach.
Provide all necessary traffic control devices and markings to ensure safe pedestrian and vehicle operation.
Compete Master Plan for the Town Docks, with budget, projected revenues and expenses compared to existing budget, drawings, schedule for replacing docks with state-of-art facility, with no marina amenities, and identify grant funding sources and grant program funding amounts. Consider hiring marina expert to oversee process.
Develop a strategic plan for changes in Town Recreation programs, services and facilities. Engage with patrons, parents, and community groups to incorporate feedback and ideas in programming services and facilities. Develop a public awareness plan for recreation programs. Prioritize recreation needs.
If the new Recreation Center is approved, develop a financing plan for the Town’s share of the cost.
Work with the Town Manager, Financial Advisors and staff to develop a low cost financing plan for the Town’s share of the cost.
Location FY2018
FY2018 General Fund Budget $80.5 Million
Taxable Property Valuation $16.9 Billion
Population 2016 (Univ of Florida Est) 2015 (Univ of Florida Est) 2014 (Univ of Florida Est) 2013 (Univ of Florida Est)
67.6 yrs.
Public Elementary School Public Library
Bicycle Paths Picnic Tables Outdoors Grills Recreation Areas Phipps Ocean Park Seaview Park Neighborhood Parks Bradley Park
Kaplan Park Special Use Parks
The Town Council approved a millage rate of 3.2037 for FY18, a decrease from the FY17 millage rate of 3.2706. Taxable value increased 6.42% to $16,911,518,815 for FY18. Ad Valorem revenue of $51,470,500 is included in the FY18 budget. Town adopted final millage rate is above rollback but below maximum millage rates. The increase in tax revenue from the rollback rate is $1,637,158. The chart below identifies the millage rate options available to the Town and the Town’s adopted final millage rate.
$49,833,342
$51,492,954
$56,642,088
Town Adopted Final Millage Rate 3.2037 $51,470,500
The majority maximum millage rate is the prior year rolled-back rate adjusted to the rolled back rate if the prior year majority vote rate had been levied. This newly calculated rolled-back rate is then adjusted by the percentage change in per capita Florida personal income to arrive at the current year majority vote rate. This year the percentage change is Florida personal income was 3.11%. The 2/3 vote maximum rate is 110% of the majority maximum rate.
The Town’s taxable value declined by 15% from FY09 through FY12, and since then values have increased to all-time highs. The FY15 millage rate increased to supplement the budget for funding of the coastal protection program. Since that time, the millage rate had declined due to increasing values. The tax revenue trend is shown on the chart on the following page.
The Town millage rate represents 19.23% of the total tax bill. The table below illustrates the difference between the FY17 vs. FY18 total tax bill by taxing district for a Palm Beach property owner with a taxable value of $1 million.
FY18 Tax Change Per
-$543.30
The Town has a total of 9,434 total parcels. Residential units total 8,879 or 94% of all parcels. Condominiums and Cooperatives represent the greatest percentage of total parcels in the Town at 68% or 6,372 parcels. Single family residential parcels are the second largest group at 2,303 parcels or 24% of the total. Commercial and industrial parcels total 400 and the balance is made up of multi- family, government, institutional and miscellaneous parcels. Properties with a Homestead exemption represent 35% of the total parcels in the Town.
$16.9 billion. Residential parcels represent 91% of the total value of parcels and single family residential represents 64% of the total value. Commercial and industrial properties represent 8% of the total value of parcels.
Properties with a homestead exemption represent $6.5 billion (38.6%) of the total taxable value.
During FY17, permit applications decreased from two historically high prior years. A total of 9,132 permits were issued in FY17, compared to 9,896 for FY16. Total permit valuation for FY17 was $238,640,151 compared to $289,645,824 in FY16. The decrease in permit activity in FY17, represents a slow-down in activity, but it is still much higher than it was in FY12 and prior. We expect the current levels to be maintained in FY18.
In 1893 millionaire industrialist Henry M. Flagler and his second wife honeymooned in St. Augustine. Impressed with the beauty and history of the area, he envisioned an “American Riviera”. Flagler left home at age 14 with an eighth-grade education. Later, with John D. Rockefeller and Samuel Adams, he founded Standard Oil, and the rest is history. Having invested large sums in several hotels in the St. Augustine area, Flagler extended his holdings southward.
He bought and improved existing railways anticipating the tremendous potential for South Florida. His railway was named the Florida East Coast Railway.
Flagler’s agents soon were buying acres of land on the island of Palm Beach. Many early homesteaders found themselves very wealthy, as orders had been given to buy “at any price”. Ground was broken May 1, 1893, and on February 11, 1894, the Royal Poinciana Hotel, the largest wood structure in the world, opened in Palm Beach and welcomed 17 guests. A month after the opening, the first train pulled from the station on Loftin Street (later used as an office and warehouse by the Town of Palm Beach) in West Palm Beach on the newly built bridge across Lake Worth to deliver vacationing residents, some in their own private railway cars, to the new hotel. Henry Flagler built his own house in 1902, Whitehall, as a wedding present for his third wife, Mary Lily Kenan. Whitehall is now the Henry Morrison Flagler Museum and is open to the public.
On April 17, 1911, a meeting of the registered and qualified voters of Palm Beach, Florida, was held at the Palm Beach Hotel for the purpose of incorporating the Town of Palm Beach. Thirty- four qualified voters voted to incorporate the Town.
In 1918, before the end of World War I, Addison Mizner, an established New York architect who was born in California and studied in Spain, accepted an invitation from Paris Singer to recuperate from a leg injury in Palm Beach. As Mizner’s health improved his boredom turned into creativity, and he transformed Singer’s bungalow into a Chinese villa. The conversion was a success, but Singer looked forward to a larger project. Having established two hospitals in France, Paris Singer decided to build a convalescent home in Palm Beach for service men returning from the war. The buildings were completed, but before the opening of the club house in January 1919, the “Touchstone Convalescent Club” had been transformed into the exclusive Everglades Club on Worth Avenue where it still is today. Mizner’s era had begun and was to continue along the southeast Florida coast through the 1920's.
The Town of Palm Beach had 7,785 registered voters in 2017, with approximately 8,160 full- time residents. The population swells to approximately 25,000 during “season,” which is from November to April. Residents and visitors enjoy the very best in dining, shopping, and luxurious surroundings. Shops on Worth Avenue attract visitors worldwide.
Annually appropriate additional funding policy for the Town of Palm Beach Employee Retirement Fund per policy.
Establish and maintain a high degree of accounting competency. Financial accounting and reporting will be done in accordance with methods prescribed by the
Governmental Accounting Standards Board and the Government Finance Officers Association, or their equivalents.
Maintain a contingency reserve in the General Fund equal to 1.0% of the proposed General Fund budget to address unexpected needs that occur throughout the year, subject to the formal affirmative vote of the Town Council.
Maintain a reserve for funding the maintenance and improvement projects for the Par 3 clubhouse and golf course, tennis centers and Town Docks.
Flow Chart of Budget Process FY2018
FY2018 Budget Calendar‌
Finance to distribute FY18 Budget instructions
Town Council Meeting – Adoption of the Town Manager’s Goals for FY18
Town Council Meeting – Discussion of FY18 Budget Plan and LTFP
Distribution of Proposed FY18 Budget Document
Town Council Meeting to Consider Proposed FY18 Budget and Initial Resolutions(s) Adopting Special Non-Ad Valorem Assessments
05/16/2017GF
5/23/17-CIP/
Town Council Meeting – Second Public Hearing to Adopt FY18 Budget and Tax Rate
tember 2017
The Human Resources Department is responsible for the recruitment, screening, and selection of employees to serve the Town. The Department is also responsible for
employee benefits administration and compensation analysis. The Town’s Occupational Health Clinic is operated under this Department. The Human Resources Director is also the Plan Administrator for the Town’s General Employee Retirement System.
(205) Revenue Bond Series 2010A and 2013 – This fund accounts for the debt service for the accelerated capital improvement program.
(206) Revenue Bond Series 2010B – This fund accounts for the debt service for the Worth Avenue Special Assessment District Construction Project.
Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises; where the intent of the government’s board is that the costs of providing goods and services to the general public on a continuing basis
are financed or recovered primarily through user charges; or where the government’s board has decided that periodic determination of net income is appropriate for accountability purposes.
Financial forecasts are the foundation of a long term financial plan. These forecasts provide the Mayor, Town Council and staff with information they need to more effectively determine future levels of service and methods of funding. This forecast of General Fund revenues and expenditures includes the FY17 budget and a 9 year forecast through FY26. This forecast was used to prepare the FY18 budget. It will be updated with FY18 budget amounts and used to prepare the FY19 budgets.
The assumption for inflation of 2.1% is based upon the forecast in the Livingston Survey issued by the Federal Reserve Bank of Philadelphia, this estimate for the rate of inflation has remained constant since the 2013 forecast. The salary and wage assumption is based upon the average annual increases for all employee groups and forecasted retirements. The health insurance forecast assumption is based upon input from our health consultant’s actuary. The pension forecast assumption was updated by the Town’s pension actuary. The other employee benefit assumptions have been calculated based upon anticipated retirements and other inflation factors and does not include health insurance. Property, Liability and Workmen’s Compensation insurance assumptions are based upon information received from our brokers regarding potential increases.
The forecast charts shown on the following pages include a comparison the forecasts prepared in 2015 and 2016 to the current 2017 forecast. In recent years, staff and the Town Council have been able to make major reductions in expenditures and to slow future growth to sustainable levels. The 2017 forecast shows steady progress with meeting the Town’s needs and funding coastal projection and capital projects.
The forecast for revenues is conservative and should allow for minor fluctuations in various revenue sources. The forecast details for each major revenue category are included in this analysis.
Rather than using a complex formula anticipating taxable value and personal income growth, we forecast the increase in ad valorem revenues based upon a basic percentage increase estimate. The 2017 forecast includes the FY17 budget plus a 9 year forecast. Property tax revenues in FY17 increased by 5.01%. Over the past 5 years, taxable value has increased by 33% an average of 6.54% per year. We increased the forecast slightly since FY15, due to the recent trends in taxable value increases.
Non ad valorem taxes include local option gas taxes, franchise fees and utility service taxes. The forecast for 2016 and 2017 has declined because recent revenue collections have not been as high as had been anticipated in recent forecasts. The forecast trend chart is shown below:
FY15 was a record year for permit revenue and FY16 revenues remained at high levels, but did not meet the levels of FY15. The FY17 forecast shows a conservative revenue forecast for 2018 and beyond that more closely aligns with actual receipts. The forecast is lower in 2016 and growth in the near future is relatively flat.
The forecast for intergovernmental revenues has remained flat based on revenues received from the State of Florida for sales tax and revenue sharing. The FY17 budget contains anticipated grant funds, but the forecast does not plan for any grant revenue. The forecast anticipates a small inflationary increase per year in the State revenues.
Charges for services include public safety fees, solid waste fees, parking meter collections and other small fees such as copy charges and lien searches. The forecast for these revenues decreased in 2015 due to lower public safety revenues and solid waste collection revenues.
The forecast for 2016 and 2017 reflects slight increases in these revenue sources.
Revenues from these sources have decreased since the 2016 forecast. Parking ticket fines and moving violation revenue have decreased and the 2017 forecast has been adjusted to reflect the recent actual activity. The downward trend in these revenues reflect improved parking compliance.
We are forecasting investment returns will increase in FY18 from FY17 budget levels and gradually improve through the forecast period. Recent increases in rates over the long term should have a positive impact on revenues. In the short term certain bond funds may experience market losses. The Investment Advisory Committee and our investment consultants are monitoring the situation closely and will adjust the duration of the portfolios as required to mitigate the losses.
Miscellaneous revenue includes rents and royalties, the sale of fixed assets and other revenue. Transfers include transfers from the Recreation Enterprise Fund. The decrease in the 2016 and 2017 forecast is due to the termination of a lease for a cellular tower and anticipated decreases in the transfer from the Recreation Enterprise Fund. The Recreation Enterprise Fund transfer to the General Fund will decrease through 2020 and instead the funds will be directed to the Dock Replacement Fund to reduce the amount of borrowing for this project.
The 2016 forecast reflects increases in pension costs and the transfer to the CIP fund. The 2017 forecast is slightly less than the 2016 forecast in total. Changes in the forecast by category are described in the balance of this section.
Since the high in 2007 Town staffing has decreased by 52.36 FTEP. A combination of actions (changing pay policies, reducing staffing, etc.) has improved the salary forecast significantly. The 2016 forecast for salaries is lower than 2015 due to the retirement of 20 employees. There has been very little change in the 2017 forecast.
The Town’s Retirement Board recommended a change in the investment assumption from 7.5% to 7.0% over a 5-year period. This change will require additional funding for the pension plan.
The higher amounts of increase through 2021 are based on the .1% annual reductions to the investment assumption. The updated forecast also reflects changes in the wage assumption and the new mortality tables. The FY17 budget included the changes to the public safety
retirement program. The FY18 estimate includes the benefit changes for the General Employee’s based on the actuary’s impact statements. The FY18 amount also includes the amount of “savings” from the General Employee pension change added to the total based on the Town Council’s actions.
The forecast includes the updated lower DC contribution amounts for General Employees throughout the 9-year period. The new benefit changes eliminated the DC contributions for non- union public safety employees. The total DB and DC changes for FY18 together represent a 8.66% increase from the FY17 budget.
Other Employee Benefits includes all other benefits including health insurance. Health insurance costs have remained flat for four years. To be conservative, the health insurance forecast reflects an increase of 7% for FY18, then 6.5% increases thereafter and other employee benefits (including FICA, longevity, incentives, and allowances) are expected to increase at a much lower rate. The forecast decreased from 2015 due to reduced longevity and FICA costs due to recent retirements and turnover.
Contractual expenditures are forecasted to increase by the rate of inflation. The contractual forecast since 2015 has increased due to increases in the FY17 budget. These increases include, additional funding for lobbying, landscape maintenance costs, utility service, contractual plan review, landfill costs and training and professional development. There was no change between the 2016 and 2017 forecast.
The commodity forecast is based upon the assumed rate of inflation. Commodity budgets include fuel, supplies, dues, software, some computer hardware and vehicle maintenance and uniforms. The 2016 forecast decreased based upon budget savings in these areas and there was no change in the 2017 forecast.
This category includes depreciation on Town vehicles and equipment that is charged to the departments and transferred to the Equipment Replacement Fund. It also includes purchases of new equipment that is not replacement equipment. The 2016 forecast increase is due to depreciation on new equipment and a specific increase in the estimated replacement value of 3 fire-rescue pumpers due to higher than anticipated increases in the cost of these vehicles. The 2017 forecast is less due to replacements made during the year less than the estimated replacement cost.
The FY17 budget includes a transfer to the Capital Improvement Program of $2,290,200 for Capital projects. The increase of $1,330,200 is intended to begin to increase the transfer to build reserves for capital projects once the ACIP bond funds have been spent and to fund costs related to the underground utility project. In subsequent years the forecast assumes a 10% increase per year until 2023 then a 5% increase thereafter. The increase are in anticipation of the expenditure of all of the bond proceeds in 2018 and the need to increase funding in the Capital Improvement fund going forward to move toward pay-as-you-go funding for capital improvement projects.
The Town Council approved a 10 year $84 million Coastal Protection program in 2013. The first year funding in FY15 was approved at $4,777,000. The transfer increased to
$8,015,220 due to increased beach renourishment project costs. In FY17, the transfer
was lowered to $7,265,000 due to the reduction in scope of some projects. The forecast for FY18 forward assumes a 3% increase per year in funding.
Risk insurance premium increases have been estimated as follows: Property Insurance 5% per year, Liability Insurance 5% per year, and Worker’s Compensation 3% per year throughout the forecast period. The 2017 forecast also included the increased stop loss claim reserve.
The General Fund contingency appropriation has been estimated to be 1.5% of the forecasted operating expenditures as required by Town policy. The General Fund contingency is funded through a transfer from fund balance rather than through operating revenues.
In FY17, an extraordinary transfer of $2,500,000 to the Retirement Fund was included in the budget. The transfer was funded from the Town’s unassigned fund balance. This transfer is not included in the forecast for future years. This will be an item for the Town Council to consider each year if reserves are available to fund a transfer
Due to the deep cuts in expenditures the projection of the annual surplus/deficit has changed dramatically since the 2009 forecast. Deficits were originally forecast to begin in 2012 and continue throughout the forecast period, peaking at $20.2 million in 2020. Compared to the 2015 forecast, the 2017 forecast contains projected surpluses through most of the forecast period. There are small manageable deficits in 2025 and 2026.
Fund Budget Overview FY2018‌‌
FY 18 Budget Summary by Fund Type, Revenues and Expenditures‌
8,385,450
19,483,025
5,719,016
51,998,972
20,489,638
21,978,137
34,118,235
206,264,429
26,468,236
7,298,496
43,020,576
$34,118,235
$249,285,005
$26,001,862
$28,023,626
16,412,187
5,665,310
2,078,115
24,901,424
20,360,277
54,863,951
41,926,623
11,341,137
2,980,896
58,708,263
7,823,109
23,058,146
55,629,184
34,568,300
7,644,846
46,957,874
16,229,888
29,276,633
22,572,288
237,739,058
$34,118,535
$249,285,305
percentage of total fund budget
Ad Valorem Taxes per capita (8,040 population)
Total expenditures per capita (8,040 population)
Personnel as a percentage of the total budget
Capital expenditures as percentage of total fund budget
Capital expenditures per capita (8,040 population)
Interfund Transfers 20.9%
20.6% Sales and Use Taxes
Licenses and Permits 4.0%
Intergovernmental Revenue 3.4%
Commercial Paper 5.8%
7.2% Fines and Forfeitures
Charges for Services 7.8%
Interest Miscellaneous Earnings
Contractual 22.0%
Capital Outlay 23.6%
Debt Service 3.1%
Employee Benefits 10.0%
Personnel 11.2%
Interfund Transfers 22.3%
$43,869,888
10,657,677
8,240,833
3,957,601
70,439,386
72,886,147
73,862,724
$70,634,653
$76,153,123
1725.84%
4261.26%
2,991,465
$4,084,487
3143.26%
7,814,629
7,845,045
$67,016,840
17,321,594
10,775,280
10,453,713
22,623,403
25,243,308
13,706,992
$39,944,997
$39,340,440
$10,573,881
$5,827,203
$6,070,700
$6,330,921
13042.31%
6,505,512
$5,851,830
$6,505,512
$1,137,065
$8,667,668
$9,343,645
$8,950,870
$9,054,170
$8,911,975
10,043,552
10,396,582
9,143,370
9,324,643
5,753,043
$10,043,552
$10,396,582
$9,324,643
-11,711,790
8,152,803
8,653,545
26,268,629
31,418,309
26,236,582
$26,674,296
$26,268,629
8,539,446
18,452,472
19,571,533
18,838,120
19,066,717
520.08%
3,726,953
3,270,081
3,555,276
59,484,671
25,438,850
21,064,368
21,955,333
22,220,874
Contribution/Grants
8,710,715
11,014,695
10,354,588
49,227,730
25,848,975
5,402,032
$161,136,435
$225,805,701
$145,926,871
FY18 Budget by Revenue Type - All Funds
Interfund Transfers, 20.9%
Miscellaneous, 0.2%
Gain/(Loss) on Investments, 6.2%
Interest Earnings, 1.2%
Special Assessment Revenue, 2.4%
Contribution/Grants, 7.2% Approp. from Fund Bal/Ret
Earngs, 17.3%
Forfeitures, 0.5% Charges for Services, 7.8%
Commercial Paper, 5.8%
Intergovernmental Revenue, 3.4%
Licenses and Permits, 4.0%
Ad Valorem Taxes, 20.6%
Sales and Use Taxes, 2.7%
Summary of Expenditure Classifications by Fund Type
$23,478,696
$23,581,855
$24,128,637
14,844,270
15,120,843
16,575,852
10,064,496
10,810,912
11,488,978
1,844,787
Capital Outlay+B81
17,840,832
18,710,969
2,929,090
72,000,124
76,153,123
4,056,072
1933.87%
4,084,487
$7,976,404
$7,622,897
$7,109,860
$7,624,846
58,630,491
67,016,840
7,749,222
7,119,146
38,430,752
22,424,557
39,719,997
39,340,440
24,482,272
10,573,881
$1,354,465
$1,276,005
5,542,760
5,950,982
6,850,517
5,764,757
2,137,977
7,818,473
7,739,170
14,896,413
9,095,019
2,373,588
24,476,214
18,829,846
19,627,577
18,612,443
20,359,977
26,674,296
21,250,356
21,113,325
22,571,988
5,018,273
10,304,984
$24,997,569
$25,239,015
$26,540,292
$25,866,936
$21,951,379
$22,566,815
$25,277,087
$24,250,398
$24,901,424
37,546,671
33,705,118
37,505,939
54,863,651
1,840,989
41,157,717
40,997,592
26,283,470
12,869,684
8,184,657
8,180,504
7,295,827
19,357,237
26,063,778
20,887,582
11,814,450
12,023,133
3,709,443
Transfer to Fund Bal/Ret Earnings 4.6%
Salaries and Wages 11.2%
3.1% Deposit to
Escrow 0.0%
Pursuant to adopted policy, the unassigned fund balance for the General Fund is to be maintained at a minimum level of 25% of current
year General Fund budgeted expenditures. This minimum level is to be maintained to protect the Town against economic downturns, temporary revenue shortfalls, unpredicted one-time expenditures, and for tax rate stabilization purposes. Twenty-five percent of the FY17 General Fund operating budget (General Fund budget less CIP, coastal and extraordinary retirement transfer) is $16,199,294. The FY16 ending fund balance was $21,615,082. The unassigned fund balance exceeds the minimum requirement by $5,415,788.
In FY16, the Town Council authorized the transfer of $2,530,250 to begin to fund the underground utility project. In addition, contained in the FY17 budget is a extraordinary transfer of $2,500,000 to the Retirement Fund to begin to reduce the UAAL. The fund balance amount of $21,615,082 is net of these two transfers.
$8,458,781 as of September 30, 2016. Out of this reserve balance, the Town funds the Reserve for Catastrophic Exposures/Emergencies - Risk Fund in the amount of $2,500,000 and the Contingency Reserve for $500,000. The trend for the Risk Fund Reserve is shown in the table. In 2014 the Town Council approved a transfer of $2,000,000 from the reserves of the Risk Fund to the Coastal Protection Fund.
The Recreation Enterprise Fund reserve is to be maintained at a minimum level of 25% of budgeted revenues totaling $1,551,975 for FY17. The purpose of the reserve is to provide an adequate level of net assets for unanticipated financial impacts as well as to provide for one- time expenditures to improve the facilities.
At the end of FY16, the net asset balance for the Recreation Enterprise Fund (REF) was
$4,999,782. Separate reserves have been set aside from this amount for the dock replacement, Par 3 Improvements, tennis improvements and equipment replacement.
At the end of FY16, $3,356,781 had been set aside in the Dock Replacement Reserve. The Dock Replacement reserve was created to fund the replacement cost of the construction of the Town’s docks whenever it is determined they must be replaced. The replacement reserve is to be maintained at 100% of accumulated depreciation plus accumulated interest earned on the reserve. In FY16, the Town committed to lowering the transfer to the General Fund each year by $100,000 and add these funds each year to the Dock Replacement Reserve.
The Par 3 Golf Course charges an additional $2 per round to fund a maintenance and improvement reserve. At the end of FY16, the balance is $388,132.
In FY15, the Town established a Maintenance and Improvement fund for the Par 3 Clubhouse. This reserve is funded each year based on 50% of the net income from the operations of the Par 3 Golf Course. At the end of FY16, the balance is $327,485.
In FY10, a maintenance and improvement fee was implemented for the Tennis program. This reserve at the end of FY16 is $53,852 and has been set aside for improvements to the tennis centers.
The Recreation Enterprise Fund’s equipment replacement reserve allows for the purchase of capital equipment and is funded with accumulated replacement cost depreciation from Recreation Net Assets. The balance in the REF Equipment Replacement Fund for FY16 is
$583,475.
The Town-wide Equipment Replacement Fund is intended to fund the replacement cost of existing equipment, vehicles and computers when they reach the end of their useful life. This reserve significantly reduces the budgetary fluctuations due to purchases of large pieces of equipment and ensures compliance with the
fixed asset inventory and depreciation schedule required by GASB34.
The balance in the Equipment Replacement Fund Reserve for year-end FY16 is
$14,918,663. In FY13, the Town Council approved the use of up to $4,867,019 from this reserve for internal financing for small underground utility projects financed by special assessments. To date, a balance of
$1,354,221 remains available. In FY14, the Town Council authorized a transfer of
$2,858,913 in excess reserves to the coastal protection fund.
For FY17, income including the depreciation transfer will total $2,414,133 and expenditures for capital equipment are budgeted at $2,135,219.
A Reserve for Compensated Absences reduces the budgetary fluctuations due to the payout of accrued leave time to employees when they leave Town service. This reserve is funded at a rate of 100% of the fiscal year end accrued leave balances. Funds are appropriated annually from this reserve based upon estimates of pay-outs of eligible accrued vacation, sick and compensatory time and the related payroll tax liability. The balance in the reserve as of September 30, 2016, was $3,061,180. The FY17 appropriation for the pay-out of eligible accrued vacation, sick and compensatory time from this reserve is $505,930.
The balance of the reserve in the Health Fund at the end FY16 is $6,507,339. These reserves guard against any deficiencies in the Town’s self- insurance health fund for active employees’ insurance expenditures. The trend in the reserve balance is shown in the chart. Since FY13, the Town has maintained level funding of health insurance benefits due to good claims experience and the wellness program. These reserves have
also provided cushion in case claims unexpectedly increase.
For many years, the Town funded all of the capital infrastructure improvements through pay-as-you-go financing. In 2010, the Town issued the first of two bonds for capital improvements to accelerate many large scale capital improvement projects identified in the 20 year plan. Since 2012, the Capital Improvement Fund transfer from the General Fund was reduced to $1,000,000. In FY17, the transfer was increased to $2,290,200 to begin to build up the reserves for projects once the bond proceeds have been spent. Once the bond proceeds have been spent on the remaining projects, it is proposed to return to pay-as-you-go financing.
The Town’s OPEB Trust Fund was established in 2007 to comply with GASB Statements 43 and 54, which required the establishment of a liability for actuarially determined costs of retiree health benefits. This fund’s investments are overseen by the Town’s Investment Advisory Committee. The net asset balance in this trust is $28,401,183 as of September 30, 2016. The actuarially determined transfer from the General Fund for the OPEB liability for FY17 is $1,339,000. The Town continues to be well ahead of other government agencies in funding this liability.
The Town provides pension benefits for General Employees, Lifeguards, Police Officers, and Firefighters. The funds were separately managed by 3 pension boards until the consolidation on April 1, 2012, into the Employee’s Retirement Fund.
The Retirement Board oversees all of the Town’s pension assets and retirement programs. The net assets of the consolidated retirement fund at the end of FY16 were $194,010,680. The decline from FY14 to FY15 was due to investment losses.
Contingency reserves were established for the General Fund, Capital Fund, Equipment Replacement Fund, Recreation Enterprise Fund, Risk Insurance Fund and Health Insurance Fund to provide for unanticipated unbudgeted expenditures of a nonrecurring nature. The amount of the General Fund Contingency has been funded at 1.5% of the FY17 operating budget. The Capital Fund Contingency is appropriated at 10% of the capital budget, while the
Equipment Replacement Fund, Risk, and Health Contingency Reserves are appropriated at
$500,000 each. The Recreation Enterprise Fund Contingency is funded at 5% of the operating expenses. All of the contingency reserves are annually appropriated in the budget process from the net asset reserves of each of the funds. Amounts from the contingency are appropriated for expenditures through an affirmative vote of the Town Council.
The table below identifies the contingency budgets and actual expenditures for the fiscal years 2013 through YTD 2017.
All reserves are at or over the policy established minimum. The financial strength of the Town can be measured by the health of its reserves. Bond rating agencies look closely at the reserve levels and the financial policies in place when rating a municipality. In 2010, 2013, and 2016 the rating agencies reviewed the Town’s credit ratings in preparation for the issuance of the 2010, 2013 and 2016 Bonds. They cited the Town’s healthy reserves, solid fiscal policies, and conservative management practices as some of the reasons for our exceptional bond ratings.
Moody’s Investors Service gave the Town an Aa1 for the Revenue Bonds and confirmed the Town’s Aaa issuer credit rating. Standard and Poor’s issued a AA+ credit rating on the Revenue bonds confirmed the Town’s issuer credit rating of AAA. These Revenue Bond ratings and issuer credit ratings are the highest ratings these two services issue and represent the highest quality investment grade debt.
The table and the chart on the following page summarize the trend of the unassigned net position, compensated absence, and replacement reserve balances for fiscal year ending FY12 through FY16.
Reserve Balances Fiscal Years 2012 – 2016
21,615,082