City Manager's cover letter with budget for 2010-2011

City Manager's Message for Proposed FY2010/2011 Budget
July 7, 2010

Mayor John P. "Jack" SeilerVice-Mayor Romney RogersCommissioner Bruce G. RobertsCommissioner Charlotte E. RodstromCommissioner Bobby B. DuBose

Honorable Mayor and Commissioners:

It is my privilege to present the proposed budget for fiscal year 2011 for your review, as is my duty under the City Charter.

For the sixth consecutive year, I am presenting the City Commission with a budget that includes tax relief for residents of this City. This budget proposes no increase in the current operating millage rate of 4.1193. Taxpayers with a homestead exemption will see an average savings of $124 and those without the exemption will average a $202 reduction on the City portion of their tax bills. At the direction of the Commission, this budget proposes no increase in the fire assessment fee, no layoffs, and no major reductions to vital services. Our reserve fund will remain strong and at levels higher than the national standard.

If adopted, the proposed millage rate will remain the lowest millage rate in 25 years. It continues our ranking among the lowest tax rate in Broward County and among the lowest of Florida’s 20 largest cities. Our bond rating, at Aa1, is just one notch below the highest rating Moody’s Investors Service offers and is among the highest of Florida’s largest cities. Our insurance fund continues to remain healthy, with a $10 million surplus. At a time when most other governments are forced to either raise taxes or impact the most vulnerable members of their population, our city will once again have the ability to resist both options.

Last year, Fort Lauderdale was one of only four Broward County cities that did not propose a tax increase. The City of Fort Lauderdale overcame unprecedented challenges in 2009 during economic times in our nation that have been the most difficult since the Great Depression. To weather this storm, the City cut spending, streamlined operations, initiated innovative cost savings, sought non-tax revenue enhancements, aggressively pursued grant funding and established even stricter financial controls.

As a result, the City produced a budget last year that was thought by many to be impossible. Record-level revenue reductions and non-discretionary expenditure increases were absorbed by this organization, requiring no property tax increases, no fire assessment increase, no reductions in critical services nor layoffs, and all while preserving our healthy financial reserves. I am grateful for the Commission’s leadership and for staff’s tireless efforts and sacrifices, all of which made the impossible possible. We protected our citizens from further economic constraint and made the City of Fort Lauderdale the envy of local governments.

This year, the economic storm has raged on, both nationally and throughout this state. Revenues have continued to fall while pension costs and non-discretionary expenses have continued to soar. In dealing with these issues, the City faces two options; glide strategically and responsibly to a solution or jump hastily and recklessly to a new course that would inflict maximum damage onto taxpayers, city employees and city services. I am very grateful to the City Commission for choosing to remain on course at its annual Goal Setting Session. The Commission once again asked this staff to make do with less and cut operational expenses while doing everything it can to prevent layoffs. The Commission’s philosophy of “no one left behind” has inspired even more creativity from the staff as they sought to meet the Commission’s challenge.

Yes, there will be doom and gloomers who perennially and incorrectly predict worst case scenarios and who likely will again argue that this City should abandon our prudent course and instead lay off employees, increase taxes, slash city services and destabilize an organization that runs effectively, accomplishes its mission, and regularly wins national awards of excellence. However, though such alarming predictions and calls to arms are effective at garnering attention, they have proven inaccurate year after year. It may be that one day, if revenues continue to drop in years to come, if new expenses are imposed, and if sound fiscal decisions are abandoned, then these more drastic – even destructive actions may become necessary. But not now!

We have the ability to remain on course, to purposefully and strategically glide through the economic storm. This budget proposes cutting operational expenses that will not impact major services, reducing vacant positions and making use of our rainy day fund. All while safeguarding the principals of responsible government established by this Commission. Is this the time to layoff employees and send them to the already long unemployment lines when we have the resources to avoid it? Not now, and hopefully not ever.

Is this the time to raise taxes and/or raise the fire assessment fee to make up revenue shortfalls like most other communities have been doing when the City has worked hard to build up reserve funds to prevent drastic spikes in taxes? Not now!

Is this the time to close parks, shut down City Hall every Friday, and neglect our infrastructure like many other cities are doing? Not now! If in years to come the worst case scenarios somehow come true, then there is plenty of time to tear at the fabric of this government. But not now, and hopefully not ever.

Make no mistake, this budget calls for sacrifices. It contains a commitment to continued restraint in spending, additional cuts to discretionary accounts, capital projects postponed and elimination of vacant positions. Ultimately however, this budget pursues the stable and prudent course of managing the safe passage of this government through these financial challenges in a manner that preserves vital services and safeguards our citizens.

The General Fund proposed budget is $324.1 million, which represents a 1.0% decrease under the current year’s General Fund budget. The proposed budget, including all funds, totals $611.7 million, which is a 1.7% increase over the adopted budget for the current fiscal year. The proposed millage for operating and debt purposes is 4.3366, which is a 1.95% increase to the current rate. In terms of the requirements to finance the ongoing operations of the City (excluding debt service), the proposed millage is 4.1193, which represents an 11.35% decrease below the rolled-back rate.

The total estimated 2010 taxable value of property is estimated to have declined approximately 10.0%, from $27.4 billion in 2009 to $24.7 billion in 2010. The City is well prepared to face the revenue shortfall by sharply focusing on priorities, continued streamlining and utilization of a surplus in the rainy day fund that exceeds the Commission goal of maintaining reserves of 10-15% of the operating budget.

This proposed budget for fiscal year 2010/2011 addresses the five key priorities of the City Commission: (1) no property tax increase; (2) no increase in fire assessment fee; (3) maintenance of adequate reserve funds; (4) no reductions in vital City services; and, (5) no layoffs. Under your leadership and with the support of City staff, the Budget Advisory Board and the community-at-large, we continue to diligently focus on these priorities:

I. No Property Tax Increase

Like every family, we must continue to manage our City budget with attention to every line-by-line expense. This aggressive budgeting has been the cornerstone of our success in keeping City property taxes among the lowest in both Broward County and the State of Florida. In fact, despite plummeting revenues, fiscal year 2011 will mark the sixth consecutive year that the City of Fort Lauderdale has not raised our tax rate.

While other cities face the haunting choices of raising taxes and cutting vital services, the City of Fort Lauderdale is positioned to weather the storm. The budget proposes no increase to the current operating millage rate of 4.1193.

II. No Increase in Fire Assessment Fee

Fort Lauderdale Fire-Rescue operates some of the nation's busiest fire stations, handling more than 41,000 calls last year. Through operational efficiencies enhanced by new technologies, the City was successful in holding the line on costs, which resulted in no fire assessment fee increase.

The City is vigilantly analyzing fire-rescue expenses to ensure cost recovery. Fort Lauderdale residents and businesses should not subsidize, through City property taxes, the services used by those outside of our taxing jurisdiction. The City also aims to recoup costs for expensive false alarm calls.

III. Maintenance of Adequate Reserve Funds

The Commission adopted a policy this year to maintain reserve funds at a conservative 10 - 15% of the operating budget. A sizable reserve fund, along with a low debt load, enhances bond ratings, saving residents and businesses millions of dollars in interest costs.

Present economic conditions have weakened many cities and counties, and their bond ratings have been lowered to reflect that. In contrast, the City of Fort Lauderdale’s bond rating has gone from Aa3 to Aa1. Standard and Poor's maintained the City's excellent AA rating. The City's bond ratings are among the best of Florida's largest cities.

IV. No Reductions in Vital City Services

This budget funds public safety and quality of life priorities established by the City Commission. Resources are allocated to continue the fight to reduce crime, which is presently at a 30-year low. Resources are also dedicated to enhance emergency response and bolster code enforcement measures.

Infrastructure projects, including completion of the award-winning WaterWorks 2011 project as well as improvements to roads, bridges, fire stations and waterways, have been strategically selected to maximize the economic development and quality of life impact on the City.

The infrastructure improvements and comprehensive master plan initiatives provide a portal to the City’s vision for the future as we work together to protect neighborhoods, reduce carbon emissions and preserve the environment.

The health and safety of our residents continues to be the top funding priority.

V. No Layoffs

The news for teachers, sheriff's deputies and other civil servants across the region has been bleak. This proposed budget continues our City Commission’s commitment to protect service levels and to not add to the already long unemployment lines by requiring not a single layoff.

By reducing the number of budgeted vacancies and allowing the process of attrition to run its course, the City has significantly shrunk its labor pool and managed to prevent adverse impacts on essential services.

This year, I am recommending that we eliminate 47 vacant positions. Additionally, I am recommending that the 135 positions that we have already defunded be permanently eliminated from our table of organization.

Determination and Leadership

The City's diverse economic base remains solid, providing an excellent foundation for the future. Our pro-business, entrepreneurial culture and the quality of life assets that make Fort Lauderdale one of the world's most desirable locations remain unchanged. The spirit of community service that shaped Fort Lauderdale is stronger than ever.

By working together as a united community, we will continue to rise above the challenges, proving again that the City of Fort Lauderdale need not suffer as most other cities and counties have. Not here. Not now. Instead, let us continue enjoying living in this wonderful city and working to make it even better for future generations.

The public hearing dates recommended for review of this budget are September 7th and 21st, at 6 p.m. in the City Hall Commission Chambers. The public is encouraged to attend and participate.

Sincerely,

George GretsasCity Manager

NOTE: The Proposed FY2010/2011 Budget is available on the City's website at http://www.fortlauderdale.gov/documents/budget.htm.

The Proposed FY2010/2011 Budget will be presented at the City Commission Conference Meeting on Wednesday, July 7, 2010. The Conference Meeting will begin with a Closed Door Session from 1:30pm to approximately 2:30pm. The Conference Meeting agenda is available at http://www.fortlauderdale.gov/documents/agenda.htm.