Bullock prepares for tight budget

Longboat Key Town Manager Dave Bullock informed the Longboat Key Town Commission at its regular meeting Monday night that the 2014-15 fiscal year budget “has some interesting challenges.”

Those challenges, Bullock said, translate into another “tight budget” that town staff is already preparing for in advance.

“We are not looking for new positions to be established,” Bullock said. “We want the operating budget to be flat and we’re asking for department heads to do what it takes to help make that happen.”

Actuarial reports reveal that taxpayers must pay $205,000 for defined pension plans in the coming year that have been frozen.

“Combine that with a health insurance cost increase and some interesting capital challenges and we’re looking at another tight year,” Bullock said.

Finance Director Sue Smith and Bullock informed the town’s Investment Advisory Committee at its Jan. 15 meeting that revenues haven’t come in as anticipated to date for the fiscal year 2013 budget.

That budget ended Sept. 30, but revenue items such as gas and electricity franchise fees are still coming in for that fiscal year and are lower than expected. The results of the budget are still subject to audit adjustments.

Franchise fees have been declining for years, and town staff said it has to start doing a better job of estimating more realistic revenue numbers moving forward. The decrease in utility revenues, staff said, might be attributed to seasonal residents coming to the island for shorter periods of time.

The Investment Advisory Committee, Bullock said, will work with staff to come up with more realistic revenue projections. Smith will also be providing the commission with quarterly revenue and budget updates.

To counterbalance the problem, the town has used more of its fund balance. Bullock’s preferred operating budget, with a 90-day minimum operating fund balance in place in case of an emergency, has now dropped by 15 days to 75 days.

Bullock told the commission staff will present a two-year plan to return the budget to the 90-day operating budget he prefers this summer.

While the news concerns Bullock, he said the town anticipates property values to continue to increase as the economy recovers to help offset the deficit as well.

“Property values have been rising,” Bullock said in March. “It’s the other revenues that are off.”

BUDGET BOOK PREPARATIONS
Longboat Key department heads have been told to prepare lean budgets.
Town Manager’s Guidelines for Fiscal Year 2014-15 Budget:
No new positions
Budget shall be flat with 2014 budget, or reduced
Maintain publicly visible
service levels
Seek more efficient methods to accomplish the mission
Identify any potential
reductions or efficiencies

Summary of Fiscal Year 2013 Results
• Revenue came in $655,967 lower than expected.
• The town carried over $50,898 of prior year purchase orders (an assignment of fund balance in the prior year), which were transferred to the operating budget.
• Expenditures came in $258,961 lower than budgeted.
• Use of fund balance is $447,906 higher than expected.

Estimated Summary of Fiscal Year 2013 Budget
Total Revenue $14,711,173
Total Expenses $16,103,491
Total Deficit -$1,392,318
* The preliminary results of operations for the fiscal year that ended Sept. 30 is expected to end with a deficit amount of $1,392,319, which is higher than expected when the town crafted the 2014 fiscal year budget.

Increases in Budget Expected in 2014-15 Budget
• Health insurance cost increase estimated at 10%
• Defined benefit pension contributions of $205,000
• Longboat Key Police Union Contract provides for 2% wage increase

Longterm Liabilities
Existing Liabilities as of Sept. 30, 2012                                      Amount
Facility Improvements Bond ........................................................$1,850,000
Water and Sewer Capital Projects Bond (2009) .....................$8,464,300
Water and Sewer Capital Projects Note ...................................$4,380,815
Fire Rescue Pension Unfunded Liability ..................................$14,949,888
Police Pension Unfunded Liability ............................................$6,151,883
General Pension Unfunded Liability .........................................$5,457,726
Other Payables ..............................................................................$1,735,804
Net OPEB Obligation ....................................................................$163,431
Compensated Absences .............................................................$543,257
TOTAL LIABILITIES .......................................................................$43,697,104
TOTAL ASSETS .............................................................................$116,944,628

Contact Kurt Schultheis at [email protected]