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ITEM: FIRST PUBLIC HEARING FOR PROPOSED FISCAL YEAR 2023/2024 MILLAGE RATE, BUDGET AND ADOPTION OF THE FISCAL YEAR 2023/2024 CAPITAL IMPROVEMENT PLAN
REQUEST: Council approval of the proposed Fiscal Year 2023/2024 operating and capital budget including balances brought forward. This is the first public hearing on the proposed budget and the corresponding ad valorem millage rate in accordance with the Wellington Charter and Florida Statutes Chapter 200.065. The second public hearing and adoption is to be held on September 20, 2023.
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EXPLANATION: Florida Statutes Chapter 200.065 sets forth the procedure to follow for each local government in adoption of the annual property tax millage, levy, and budget. In accordance with these regulations, the June 27, 2023 certified total taxable value of $11.58 billion is applied to calculate the millage rate and ad valorem revenue for the FY 2023/2024 budget. The proposed millage rate of 2.47 mills is the same as the preliminary TRIM rate adopted on July 11, 2023 and 11.15% above the rollback rate of 2.22 mills. The proposed millage rate generates property tax revenues of $27.16 million, which is an increase of $2.74 million from FY 2022/2023 property tax revenues.
The proposed expenditure budget for all funds totaling $137.70 million continues Wellington’s commitment to stable budgeting for sustainability while meeting local economic challenges. The FY 2023/2024 provides funding to maintain exceptional levels of service and maintenance, added recreation and event funding, community grants, and investment in facility capital improvement. The total budget is proposed at $9.14 million more than the FY 2023 budget of $128.55 million. The increase is attributable to inflationary pressures, new debt service on the Wellington Athletics Center construction, recreation, and added federal allocations for grants. Use of fund balances totaling $5.93 million is required to balance the budget in the General, Capital, and Utilities Funds.
Council held budget workshops on July 10th and August 7th to discuss the proposed operating and capital budgets, and adopted the annual budgets for Acme, Solid Waste and the Professional Centre on August 8th, 2023. Staff now presents a balanced budget for the governmental funds, excluding Acme and balances brought forward totaling $92.52 million, an increase of $9.50 million from the prior year.
The first public hearing includes tentative adoption of the governmental budget (excluding Acme), and the recommended Capital Improvement Plan for FY 2024. The FY 2024 Governmental and Utility CIP totals $21.09 million for all projects and programs. The Plan further utilizes prior years’ remaining budgets carried forward and reallocates approximately $2.5 million between projects.
The $92.52 million governmental budget presented herein for tentative adoption includes:
• A recommended governmental Capital Improvement Plan (CIP) totaling $13.69 million, $140,000 less than the FY 2023 plan. The Plan allocates:
o $4.96 million in ongoing governmental capital programs
o $8.73 million in one-time capital projects, including $5.13 million in Sales Surtax funding
o Use of $476,000 in Gas Tax Capital and $296,000 Road Impact Capital fund balance to fund transportation improvements
• New and replacement fixed assets of $1.26 million
• General Fund Unassigned Fund Balance at or exceeding the 25-30% range per Council policy after budgeted use of $1.78 million for FY 2023 and $2.18 million assigned to balance the FY 2024 budget:
o Rate Stabilization Reserves of $2.79 million
o Emergency Reserves of $3.00 million
o Insurance Reserves of $1.53 million
o Facility & Infrastructure Reserves of $4.73 million. 20% of excess unassigned fund balance determined by the FY 2023 audit will be added to this reserve during FY 2024.
• Establish a Capital Reserve in the Building Fund for future office space construction and vehicle replacement. Commit and assign $5,250,000 of operating fund balance to the Capital Reserve per the Building Fee Study recommendations and Section 553.80 Florida Statutes.
• Reserve use or increases in other governmental funds are budgeted as follows:
o Gas Tax Capital Fund uses $476,000
o Road Impact Capital Fund uses $296,000
o Recreation Impact Capital Fund adds $100,000 to fund balance
• Roll forward of unspent budget balances for ongoing projects and programs in the following areas:
o Major maintenance, bridge maintenance and capital projects
o Technology services for projects not completed in FY 2023, including software enhancements and integration, app development, and security cameras
o CDBG, CDBG CARES, and SHIP program funding
o Personnel expense balances for insurance benefit increases and wage adjustments
o Building department balances for unsafe structures, outside inspections, and workstations
o Public Works balances to cover expected mowing contract increases
o Utility professional services for surveys, engineering, and GIS
o Fixed asset purchases, Human Resources consulting, and Planning & Zoning studies not completed in FY 2023
• Personnel funding in the total budget for:
§ 314 permanent positions, up 4, and includes funding for 16 full-time supplemental positions, 12 part-time positions, and 73,000 part-time hours.
o 246 governmental positions, up 2 for conversions from supplemental to permanent status in Purchasing and Code Enforcement
o 68 permanent positions in the enterprise funds, up 2 for the conversions from supplemental to permanent status in Utilities
o Part-time hours are increasing for recreation programming
o Funding for 3% wage adjustments
o Health and Dental insurance increases budgeted 5% higher on January 1, 2024
The required legal advertisement will be placed in local newspapers 2-5 days prior to the second budget hearing, per TRIM requirements. On September 20, 2023, the final budget and ad valorem millage rate will be adopted.
BUDGET AMENDMENT REQUIRED: NO
PUBLIC HEARING: YES QUASI-JUDICIAL: NO
FIRST READING: YES SECOND READING:
LEGAL SUFFICIENCY: YES
FISCAL IMPACT: At 2.47 mills, $27,160,812 in property tax revenues are generated, as adjusted for discounts. The budget appropriates a total of $92,523,928 for governmental funds excluding Acme and balances brought forward.
The FY 2023/2024 budget appropriates a total of $21.09 million for capital improvement projects in governmental and enterprise funds. Approval of the plan includes redistribution of approximately $2.5 million among previously budgeted capital projects resulting in no net fiscal impact.
WELLINGTON FUNDAMENTAL: Responsive Government
RECOMMENDATION: Tentative adoption of the Fiscal Year 2023/2024 millage rate and budget, approval to advertise the second Public Hearing, and authorization for staff to make the necessary accounting entries to complete reallocation of prior year Operating and Capital Outlay balances, and commitment of fund balances. The second hearing will be held on September 20, 2023 for final adoption of the FY 2023/2024 budget and Capital Improvement Plan as presented.