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Background On January 21, 2014, Althea McKenzie made a presentation to the Board of County Commissioners regarding the Gifford Neighborhood Plan. During this presentation, Ms. McKenzie presented a docurnent she had completed which calculated that the County was only expending between 0.2% and 1.0% of the total budget in the Gifford area. An extensive discussion regarding the County's provision of services and infrastructure in Gifford followed. Ms. McKenzie asserted that the County was underserving Gifford. In support of this point, it was asserted that the residents were paying more in taxes than the County was spending in the area and that the area did not receive services in proportion to the other areas of the County. Staff has prepared an analysis of County revenues and expenses associated with the Gifford area in an effort to address some of the concerns raised by Ms. McKenzie. For many years, Gifford community leaders have requested an accounting of projects completed in Gifford. The Office of Management & Budget periodically provides a report of these expenditures ("Gifford Expenses" report). It appears that the annual totals from this report were used as the basis for analyzing the County's expenditures on Gifford in the document presented by Ms. McKenzie on January 21, 2014. These amounts ($463,824 for fiscal year 2012/13) were divided by the total County budget to arrive at a percentage of the total budget expended for Gifford. This analysis is flawed. The"Gifford Expenses" report was not intended to provide the total of all County expenses for Gifford. This report focuses primarily on capital improvements and operating expenses associated with those improvements in the Gifford area. Valuing Government Services—Challenges and Limitations The question of whether taxpayers are receiving value from the taxes paid is a legitimate concern and is asked frequently by taxpayers. However, it can be difficult to quantify the value received by taxpayers individually or collectively in a neighborhood. Most of the services provided by government, including Indian River County, are public goods (e.g. law enforcement, fire protection, road construction and maintenance, etc.). These services are available for use by all citizens and even visitors to the area. The actual value of public goods (services)for each individual or neighborhood is difficult to measure, and can only be estimated based upon an allocation of expenses based upon some metric (e.g. population, calls for service, usage of service, etc.). Such analyses always have limitations. For example, Fire Rescue expenses may be valued and allocated to an area based upon the number of calls for service. However, each individual may value these services differently. It should be noted that taxes are not fees for service. According to the Merriam-Webster dictionary, tax is defined as: "an amount of money that a government requires people to pay according to their Income, the value of their property, etc., and that is used to pay for the things done by the government." Additionally, Merriam-Webster's definition provides: "Taxes are a general obligation of taxpayers and are not paid in exchange for any specific benefit." It is important for proper government and fiscal management to ensure that tax dollars are expended efficiently, and that the taxpayers receive a good level of service for their tax dollars. However, payment of a tax is not a fee for service and there Is no guarantee that a taxpayer receives services equivalent to the amount of tax paid. For example, all property owners in the County pay school district taxes. Many of these taxpayers have no children in the school system. Others that pay a February 27,2014 FABudgetUason\MISC\Gifford Expense as Portion of Budget Analysis.doc 110