"ALEX'S"BUDGET NARRATIVE REVIEW

I ended up reading the Budget Narrative indoors because the brisk cool weather I was enjoying on the St. John’s River turned bitter cold. We returned home to find West Palm Beach had suffered from a cold wind blowing through as well...

Here’s the Budget Narrative as recently posted online.
If you want to read along with me, maybe we can compare notes?
Please send me an email with your thoughts.
There’s a lot of great information here (ALL 315 pages are must read) and I encourage you all to take a peek.

For those of you who prefer cliff notes, I will try to provide the highlights.
For most of this week I will be speaking to the budget, because that’s where the story should always begin.

The Finance Department has done a superb job with clearly stating the facts.
I appreciate their professionalism, courtesy and accuracy.
Anytime I have had a question, they have responded quickly and clearly.
So where should we begin?

First a few "DID YOU KNOW" facts directly from the Budget Narrative Message
(my comments will be in red and if you read the budget as we go through this, the first excepts begin on page 3):

"The FY 2008 budget reflects the recent changes in legislative actions which required the City to roll-back taxes. Property tax revenues within the City’s General Fund decreased $2.4 million, along with expenditure increases; the City faced a $6 million shortfall."

"Property Values within the City did not increase in the double-digit range of recent years – an indication of the City’s economic condition, as well as throughout the state. ... The Property Appraiser is projecting a decline in value of 4% in existing values, which may constrain future budgets."

"The operating millage rate for FY 2008 decreased .6584 mills to 7.1916 mills. The debt service millage rate for FY 2008 is .2967 mills and funds the debt service associated with the City’s general obligation bonds. The total City millage rate for FY 2008 is 7.4883 mills, which is the lowest in almost two decades.."

Outlook :if you don’t read any other part of this report, you owe it to yourself to read the OUTLOOK (Pg. 5 & 6)

The total FY 2008 Budget for all funds is $359,506,336 with the breakdown by fund type as follows:

General Fund: $187,139,761
Special Revenue Funds: 18,538,074
Debt Service Funds: 14,802,107
Capital Project Funds: 3,204,125 (1)
(1) Amounts contained herein for the Capital Project
Funds represent new appropriations for FY 2008. Unexpended FY 2007
appropriations for prior year capital projects such as park improvements,
fire stations, etc. will roll-over via Commission action (i.e. as provided
through budget resolution) into FY 2008 for the same designated projects.
Enterprise Funds: 92,733,819
Internal Service Funds: 43,071,080
Miscellaneous Trust Fund: 17,370
Total $359,506,336

As discussed above, the General Fund faced a $6 million shortfall due largely to the following factors:
Decrease in Property Tax Revenues - $2.4 million
Increase in Police & Fire Overtime - $1 million
Increase in Police & Fire Pensions - $0.84 million
Funding of Fire Salaries per Union Contract - $0.85 million
Increase in Property Insurance - $0.74 million


$2.7 million of the shortfall was due to increases mostly within the police and fire department pensions and overtime. These are union contract agreements that where adopted many years ago and are now maturing.

We knew this was coming. Tom Harris (our former City Finance Director who resigned last March, 2007) told us WE WOULD HAVE THIS ISSUE IN OUR FUTURE OUTLOOK when it was adopted back in 2004.

"Several changes to the budget were required to close the $6 million gap and balance the budget. Changes included:
Eliminated 40 positions, : Somewhere it stated that 36.6 were unfilled positions: Did we budget money for positions which were never filled or did we lose 36.6 employees over the year and not replaced them? Could this mean we didn’t really need that staff? I don’t know, I’m just asking. (Also note that the personnel expenses went up even though our number of full-time employees went down. This was due to pay increases and pensions.) For a more detailed look at what positon were cut look on pages 40 & 41.

Suspended funding of the General Employee’s Voluntary Employee Benefit Accounts (VEBA) This issue was approved before the budget had even come to the City commission. In other words, they added it as a funded issue in the budget, before they even knew what the budget projections were going to be. Thank goodness they removed it as soon as they saw they over-spent. My opponent voted "YES" to this before having a full understanding of the pending financial shortfall we knew was coming at us. Is that good decision making?

Limit Health Insurance Increases This increase is out of our hands, plus it was anticipated. I did get the impression they did not think it would be so high.

Reduced the annual Capital Funding; Look on page 189 to see if your neighborhood project is funded this year.)

Reduced Travel & Training funds ; This was an easy one to identify I believe this one came from the Budget Task Force? I 'm not sure, because those meetings were closed to the public. (Some legal hogwash about if they are only doing research they can meet in private. My question was why meet in private to begin with.)
What ALL they had they reported?
Where is their report?
Who was on that committee?
I asked to be on it as did Al Vasquez.
I would have suggested they look into other line items as well...stay tuned for more on this.

Reduced Fleet replacement funds : This cut needs to be better thought out. I must agree that the employee should not be able to take home the car, except in certain situations where an emergency vehicle used by a sworn officer may be beneficial to the residents.

However, because this privilege was abused (although they say it was part of their employment agreement) and due to a lack of a clear take-home vehicle policy, the City Commission approved a budget reduction which cuts take home vehicles. What I would have suggested is a comprehensive policy to address those times when the car is a mandatory tool for the employee and that there are provisions for privileges when earned, not just awarded.

The next 4 pages give you an excellent highlights of the larger funds.
One question kept coming up for me.
If a commissioner votes to approve a budget which is based on additional rate increases, does this mean that they voted to raise taxes? (I think so.)

I read the following statements under the subheading on page 8 & 9.
(Building Permitting Fund, Water & Sewer Fund, and Storm Water Fund)

Each area stated that the revenue projections approved in the 2007-2008 budget included "an additional rate increase to be presented to the City Commission during FY 2008." it also states that "The budget (referring to the Water and Sewer Fund) may need to be adjusted depending on City Commission action regarding rates."

This statement was made under the Outlook heading and referring to our water department revenues: "The City is considering increasing rates to cover operating deficits caused by the above items. A rate study is expected in mid year and will be presented to the City Commission for approval."

Seems to me, my opponent has already voted to increase taxes when she approved this budget.
Am I wrong here?
Read it for yourself.
Share your thoughts or perspectives with me.
I want to hear from you.

What do you think of this information?
Do you want me to continue to share these rather dry topics?
(Or should we talk about a bar’s grand opening on Clematis?)

Congratulations to all who have gotten this far...
We have just completed the Budget Message from the Finance Director Randy Sherman.
Great job Mr. Sherman...

That leaves only 305 pages to go!

Stay tuned for more on where I would cut taxes...
my suggestion will come at the end of my "Alex’s" Budget Narrative Review...