Andrew Thompson, CGFO
Chief Financial Officer

Rhea Rivera, CGFM
Asst. Director, Financial Services

Issue Statement: The City Commission is required to adopt and provide to the County Property Appraiser by August 4, 2022 the preliminary millage, fire, storm water and solid waste assessment rates to be reflected on the truth-in-millage (TRIM) notices mailed to all property owners in August.

Recommended Action: Staff will provide a summary of the FY 23 Recommended Budget.  Under separate agenda items, the Commission will adopt the FY 23 preliminary millage rates (operating and debt service) and the fire, stormwater and solid waste assessment rates to be displayed on the TRIM notices.

In accordance with State statutes, the City is required to provide the County Property Appraiser with preliminary millage and assessment rates by August 4, 2022,  and then conduct three hearings in September. The preliminary millage and assessment rates forwarded to the County Appraiser for inclusion on the TRIM Notice are upper limits of what the Commission may ultimately choose to adopt. There is no requirement that these preliminary rates be adopted. The rates provided on the TRIM notice may be lowered, but cannot be increased without significant additional advertising efforts, costs and potential time delays by the City. 

The current schedule to adopt the FY 23 budget, including millage and assessment rates is:

• July 13 - Distribution of the FY 23 Recommended Budget book.
• July 20 - FY 23 budget presentation; Adoption of preliminary millage and assessment rates for inclusion on the TRIM Notice. Tentative budget hearing date set.   
• August 4 - Deadline for providing preliminary millage and assessment rates to the Property Appraiser for inclusion on the TRIM Notice.
• August 24 - Deadline for Property Appraiser to mail TRIM Notices (Appraiser has advised notices will be mailed beginning August 12).
• September 7 (Wednesday) - Public hearing and adoption of tentative millage rate and tentative FY 23 budget; 1st reading of solid waste commercial rates ordinance.  Final budget hearing date set.  CRA Board adoption of tentative CRA budget.
• September 12 (Monday) - Public hearing and adoption of the fire, stormwater and residential solid waste assessment rates (to be held at 6:00 PM).
• September 21 (Wednesday) - Public hearing and adoption of final millage rate and final FY 23 budget, CIP, staff class and compensation plan, and fiscal policies; 2nd reading of solid waste commercial rates ordinance. CRA Board adoption of final CRA budget.

The Recommended FY 23 Annual City Budget is provided for the Commission's review.  An overview will be presented at the Commission meeting.

Staff recommends the Commission reduce the operating millage rate from the FY 2022 rate of 5.8890 to 5.8550  mills for FY 2023.  If adopted, this operating millage rate will be the lowest rate in over a decade and would be the eighth reduction in operating millage over nine years.  

Staff also recommends that the Commission adopt a debt service millage rate of 0.4628  mills for the Series 2020 ($26 million) G.O. Bonds; and 0.2344 mills for the Series 2022 ($14 million) G.O. Bonds, for a total debt service millage rate of 0.6972 mills for the voter-approved issuance of $40 million G.O. Bonds.  This debt millage rate will cover the debt service of principal and interest of about $3 million due in FY 2023. The first tranche of $26 million was issued in June 2020 (Series 2020).  Subsequently, in February 2022, the remaining $14 million (Series 2022) was issued for a total of $40 million, as approved.  The City received an AA credit rating for both issuances. 

The total for both operating and debt millage would be 6.5522 mills, an increase  of 0.1434 from the combined total of 6.4088 last year.  Two separate millage rates will appear on the TRIM notices and tax bills - for the operating millage and for the combined debt service millage.   

In preparing the recommended budget, staff utilized Commission direction and guidance as the basis for determining the programs and levels of services being proposed in the budget.  The FY 2023 recommended budget is the first budget to incorporate the Strategic Plan's updated Strategic Performance Areas that were approved by City Commission earlier this year.  These priorities determine the funding levels that determine the preliminary millage rates and the preliminary fire, stormwater and solid waste assessment rates that are being recommended for adoption in subsequent items on the agenda.  

Staff recommends the Commission consider the FY 23 Recommended Budget and provide guidance and direction as warranted.  Attached to this agenda item are copies of the City Manager's Recommended FY 23 Budget Message, a listing of FY 23 business plan initiatives and non-infrastructure capital outlay, the draft of FY 23 Capital Improvement Program (CIP) Plan, FY 23 vehicle replacement schedule and FY 23 staffing summary by division.

Budget data will be posted to the City's OpenGov transparency platform.  Electronic copies of the budget are available upon request by contacting the City Clerk's Office or the Department of Financial Services.

The Recommended Budget for all funds is $138.2 million, and includes a General Fund budget of $66.0 million; CRA Fund budget of $675 thousand; Debt Service Fund of $5.3 million; Special Revenue Funds of $ 36 thousand; Water-Sewer Fund budget of $23.3 million; Solid Waste Fund budget of $9.1 million; Storm Water Fund budget of $8.1 million; and a General Fund Capital Fund of $25.7 million which was included in the CIP presentation made to the City Commission on June 15, 2022. Total CIP including the Enterprise Funds amounts to $30.2 million.  The final CIP will be presented along with the budget in September.