The following is the unedited, annual Budget Message prepared by staff that was presented to the Budget Committee.
May 1, 2020
BUDGET MESSAGE
2020-2021
Welcome to the Budget Committee meetings for the fiscal year 2020-2021. It is our privilege to present the proposed budget for the next fiscal year.
We understand there are potential budgetary impacts from the COVID-19 Pandemic. The City’s fiscal prudence of previous years has prepared us for impacts such as this. We have taken in to account potential decreased revenue from State Shared Revenues, such as OLCC Tax and Highway Tax and on a local level in Transient Lodging Taxes and Admission Tax, which we have accounted for in the carry over for next fiscal year beginning fund balances. Between the beginning fund balances from last fiscal year and the unappropriated ending fund balance in all funds, we are confident that the budget for fiscal year 2020-2021 is balanced and provides for the basic needs and requirements of the City. We will be closely monitoring both revenues and expenditures in fiscal year 2020-2021, as the potential impacts are becoming a reality, and will make appropriate adjustments in the 2021-2022 fiscal year budget.
This year’s proposed budget started with review of the financial analysis for all departments as well as three-year projections.
In all funds you will see the interest revenue has been increased substantially. This increase is based on actuals over the last few years. City funds are kept in the Local Government Investment Pool and the interest rate has increased each year over the last several years.
Salaries for all personnel are reflected in the budget with a CPI-U increase of 2.3%, per the bargaining agreement. PERS rates remain the same, however this year PERS guidelines changed requiring employers to pay contributions on PERS retirees, which PERS is applying to unfunded liability. The City however does not have to pay the employees 6% contribution therefore we still see a nice savings through hiring retirees.
Other notable changes are as follows:
General Fund: We will continue to carry a budget item for Contract Services for Planning for RVCOG to continue as a resource, as we continue to work through the revisions to the Comprehensive Plan and Land Use Codes through the CCI. We have increased the Buildable Lands Analysis as we will begin working on the revised look at our building and lands inventory through the RVCOG.
The General Fund is the only Fund within the City Budget that can support other Funds and the main source of revenue for the General Fund is property taxes. We still are continuing the transfers to other funds to help supplement operations.
Police Protection Fund: The Police Protection Fund was established in the FY 2018-2019 budget. In the first year of this fund, the surcharge revenue was lower than anticipated. With the surcharge beginning in July 2019, the first collections of that revenue began in August, therefore missing an entire month of surcharge revenue. We also established and widely publicized a Surcharge Relief Program, which many of our citizens have utilized.
This fiscal year we are beginning to see the surcharge revenue start to come in line with budget and anticipate with carry over to the beginning fund balance we will see the unappropriated ending fund balance come in line as well. The General Fund has increased the transfer for FY 2020-2021 to help facilitate this.
This fund was impacted significantly by the PERS change in guidelines requiring contributions for retirees. PERS contributions were not budgeted for three employees who are PERS retirees. Even with the change in contributions, it is still a benefit to the City as the contributions are made on the City side only, not employee side of 6%.
Fire Protection Fund: The budget continues to reflect the $35 surcharge. While sustaining the fund it is not building capital for the future. The General Fund will again transfer $50,000 to the Fire Protection Fund. Interim Fire Chief Painter has been successful in obtaining several grants which will be utilized to offset budget expenditures. The city has submitted a Seismic Grant application to be utilized for renovation of the Fire Hall should we be awarded the grant. Although the fire department budget is sustainable this year, the $35 surcharge will not be sufficient in the near future. The Budget Committee will need to begin steps to ensure its stability.
Cemetery Fund: Overall, the Cemetery Fund is holding its own and with the help of the Friends of the Jacksonville Cemetery continues to improve in maintenance and in making the Cemetery more citizens friendly. The City may begin the survey of the 11 acres this fiscal year. The Jewish section is possibly in need of additional property and this may allow an opportunity to portion a section of the 11 acres off, which could be sold to them. The General Fund will continue with a transfer of $10,000 to the Cemetery Fund to help with the overall needs of this Fund.
Street Fund: The City will continue doing major street work this fiscal year. The decrease in the cost of petroleum significantly decreases the City’s cost for paving. This would be the time to evaluate and take care of some overlays etc. to some of our worse condition streets. We will be paving the section of Bybee Drive that is gravel this year also.
Water Fund: Per the ordinance in 2017, the base water rate will be increased by $1 each year, in July. We continue building capital in reserves for the major projects identified in the Water Master Plan. The City has begun working on projects identified in the Water Master Plan, through the Safe Drinking Water Revolving Loan Fund. The payment on this loan will begin in FY 2021-2022 and will be approximately $75,000 per year.
Parks & Visitor Services Fund: The $75,000 transfer from the General Fund has sustained the fund as shown in the three-year projections. One area of significant concern is the admission tax.
Admissions Tax comes primarily from Britt Festivals, which has significantly altered their schedule for the 2020 season and at this time we do not know the monetary impact. Per Resolution, Admissions Tax for Britt is capped at $70,000. We have been receiving well over this amount the last several years, therefore we have kept the admissions tax budgeted the same. We do know that there will be an impact on this revenue. When the 2020 season is over, we will look at the actual monetary impact and make appropriate changes to the Parks & Visitors Services Fund for fiscal year 2021-2022.
Transient Lodging Taxes are also anticipated to be impacted. Per Jacksonville Municipal Code this revenue is used to fund Transient Lodging Tax Grants as well as the Visitors Information Center. We will be closely monitoring this revenue in 2020-2021 and funding the grants and Visitors Information Center based on the actual revenue.
Urban Renewal Fund: The tax increment revenues continue to build significantly. We obtained a $1,500,000 loan at the end of last fiscal year to fund additional Urban Renewal projects.
Capital Project Fund: This Fund will continue to be utilized for ongoing projects that have been designated, such as the elevator for the 2nd floor of the courthouse, which is near completion. We have begun the process of completing the 2nd floor of the courthouse as well. The city has submitted a Seismic Grant application to be utilized for renovation of the Fire Hall should we be awarded the grant.
With ongoing efforts this year’s budget continues to reflect how well City staff and Department Heads are doing to manage their prospective budgets. Due to the COVID-19 Pandemic we will be closely monitoring the potential impacts.
Now let’s begin!