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Indian River County, Florida Management's Discussion and Analysis For the Year Ended September 30, 2020 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES COVID-19 has had a significant impact on the proposed budget. The County has incurred additional expenses to respond to this public health crisis. Additionally, it has caused a significant reduction in various revenues that the County depends upon to fund the provision of services to the community. County staff has constructed the budget based upon conservative revenue estimates, per our normal practice. However, there is much more uncertainty in future projections due to many unknowns about COVID-19 and its potential impact on the economy going forward. The County has received a CARES Act allocation that may be used to fund some of the additional expenses necessitated by COVID-19. Staff continues to develop the CARES Act funding plan and will adjust the budget as appropriate as details are finalized. For FY 2020/2021 the tax roll is increasing 5.33% countywide, which provides an additional $5.9 million. However, due to COVID-19, this increase is offset by losses in other revenues, such as sales tax, state revenue sharing, gas tax, tourist taxes and other revenues, which are expected to decrease by $5.5 million collectively. Unfortunately, the County's CARES Act allocation cannot be used to supplant revenue losses and therefore, the burden of these lost revenues is realized in the reduction of expenditures or the dependence on other revenue sources to balance the budget. The County continues to focus on catching up on deferred maintenance and capital item replacement in the proposed budget. Funding for these items was drastically reduced to absorb the funding reduction during the previous economic downturn. White a concerted effort has been made to catch up on these items over the last several years, a substantial amount of work remains. The approved budget, which is the second year into the original five-year plan, includes $8,681,900 in funding for these projects. Although challenging to fund given the current reduction in major revenues, staff continues to prioritize these projects. The approved budget for FY 2020/2021 is $393,534,815, a decrease of $36,964,116 or 8.59% from the prior year. The largest individual expense in the budget is Personnel Services. In total, there is a decrease 0.95 net full-time (FT) positions for FY 2020/2021; BCC departments are decreasing one FT position, while Constitutional Officers reflect a net increase of 0.05 FT positions. There are changes in the miltage rates for fiscal year 2020/2021. Overall, the countywide miltage rate is decreasing by 6.75%; this is reflective of the General Fund miltage rate remaining the same, combined with the elimination of the Land Acquisition Bond miltage of 0.2568 mills. The M.S.T.U. Fund miltage rate remains unchanged at 1.1506, while the Emergency Services District miltage is at 2.3531 mills, which is a 0.0124 or 0.52% decrease. Within the Solid Waste Fund, residential assessment rates are increasing by $3.47 or 2.87% to $124.37 per Equivalent Residential Unit. Commercial rates are increasing by $2.29 or 5.45% to $44.29 per Waste Generation Unit (W.G.U). The readiness -to -use fee is $27.42 per W.G.U., an increase of $2.73 or 11.06% from last fiscal year. 17