2015-063-63A - Laserfiche WebLink

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Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2014 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES The County tax roll is increasing by approximately 4.5% from last year. This follows a slight increase last year, after several years of decline in the wake of the "Great Recession". During this time period, many County revenues declined such as: sales taxes, gas taxes, interest earnings, and user fees. Additionally, ad valorem revenues were cut by over $33 million due to a 31% decline in the taxroll. Based upon Board direction, millage rates were essentially flat in an effort to reduce the tax burden on taxpayers already struggling through a difficult economy. In order to achieve the necessary cuts in expenditures, all efforts were made to improve the efficiency of the organization. The County explored and enacted privatizations, re -negotiated existing contracts, paid down debt, and reduced staffing levels by about 27%. These measures resulted in a leaner, more efficient organization that is better prepared to provide services to the public at a reduced cost going forward. In addition to the changes mentioned above, however, some temporary measures were needed to maintain the lower tax levies, such as the moderate use of fund balance and delayed replacement of capital items. As discussed in last year's budget message, the County began a two-year phase-out of fund balance usage. This plan will be completed in the proposed budget, which is fully balanced without the planned usage of fund balance in any taxing funds. The FY 2014/2015 budget also includes a substantial increase in funding for replacement capital items such as vehicles and heavy equipment. During the last few years, capital replacement was delayed wherever feasible. At this time, staff recommends that the County return to a sustainable replacement schedule for necessary capital equipment to provide essential services. These two proposals ensure that the County is adopting a structurally blended budget that will help maintain the long-term financial health of the County. The increase in the tax roll for the next year provides approximately $3.3 million in additional revenues. These funds have allowed for increased capital replacement funding and ending the use of fund balance as mentioned above. Staff recommends funding these changes prior to committing to additional operating expenditures. The total proposed budget for FY 2014/2015 is $260,379,973, a decrease of $42,838,568 or 14.1% from the prior year. This represents a drop of 44.9% from the approved FY 2006/2007 amount of $472,420,328. The General Fund millage rate is increasing slightly primarily due to a funding increase for the Sheriff and the phase-out of fund balance usage. The M.S.T.0 Fund and Emergency Services District millage rates remain the same as the current year and the Land Acquisition Fund millage is decreasing slightly. After accounting for the ad valorem increases proposed, the County's total ad valorem taxes are still down about $24 million since FY 2006/2007 (from $103.3 million to $79.5 million). The single greatest individual expense in the budget is Personnel Services. In total, eight (8) additional full-time (FT) positions are proposed for FY 14/15. BCC departments are increasing by seven (7) full- time positions, while Constitutional Officers show a net increase of one (1) position. This results in an additional cost of $369,130 (BCC only). Many of these positions are being added to keep pace with increasing development. Four (4) out of the seven (7) BCC positions are in non -taxing funds. 17