October 1, 1999
Members of the Board of County Commissioners:
I am pleased to present your adopted biennial budget for FY00 and FY01.
The budget is $2.3 billion for both FY00 and FY01. More importantly, the operating budget, which
pays for day-to-day services to our community, is $1.0 billion for both FY00 and FY01. The capital
budget, which reflects the first two years of our six-year capital improvement program, is $0.1 billion
for both FY00 and FY01.
The remainder of the budget is for debt service payments ($0.1 billion each year), reserves ($0.5
billion in FY00 and $0.6 billion in FY01), and the transfers that are necessary for accounting
purposes ($0.5 billion each year), but do not reflect revenues or expenditures.
For the fifth consecutive year, the budget for FY00 includes a property tax rate reduction.
This budget reflects the third biennial budget prepared for Hillsborough County - an innovative
approach to budgeting that is increasingly being used by local governments throughout the United
States. We believe we were the first to adopt this approach within the State of Florida.
The Biennial Budget Cycle
The biennial budget process required that we conduct a complete budget process for two separate
years - FY00 and FY01. The timing of the biennial process provides for a comprehensive budget
process in the year following the seating of new commissioners. This cycle allows a newly organized
Commission an early opportunity to understand and impact the budget while maintaining the efficiency
of only conducting the time consuming preparation process every other year. Unlike biennial budgets
prepared by some state governments, you have the opportunity to update your planned second year’s
budget through an abbreviated process and you formally set the millage rates each year.
Consistent with our discussions with your Blue Ribbon Committee on County Finances and our recent
reports to you, we modified this budget process to better incorporate performance measurement concepts
into the preparation process. We also focused on better identification of how completed capital projects
will impact our operating budget for each of the next two years. This is consistent with a policy
the Board adopted in 1998 stressing the importance of identifying the operating impact of capital
projects.
Tax Rate And Tax Base Issues
Tax Rate Reduction - As noted previously, the budget reduces the
property tax rate in FY00 for the fifth consecutive year. You are able to accomplish the reduction despite
levying a new operating millage for environmentally sensitive lands that, in combination with our existing debt
service millage, will allow a full quarter mill to be levied for acquisition of environmental lands -consistent with
the limits authorized by County voters.
The budget reflects strong growth in both the Countywide tax base and the unincorporated area tax base.
The growth is due to a combination of annual reassessment of existing property and the added value resulting
from continued construction activity, as illustrated in the Economic
Indicators section of this document. This budget assumes 8.7 percent growth in FY00 and a slower, but
still significant, 6.0 percent growth in FY01. The average rate of tax base growth was approximately 4 percent in
the 1990’s, but averaged over 8 percent in the past three years. The higher growth rate reflects both
construction activity and a concerted effort by the Property Appraiser’s Office to test the eligibility for exemptions.
The growth in tax revenue has been used, in part, to allow a reduction in the General Fund (Countywide). It also allows the
Board to implement a new reserve policy intended to better insulate the County’s major operating
funds from the impact of economic cycles on County revenues - particularly the new construction
component of property tax growth.
The Environmental Lands Acquisition and Protection Program - ELAPP - millage increases
from 0.1573 mills for debt service in FY99 to a total of 0.2500 mills in FY00 and in FY01 - the
maximum allowed by the ELAPP referendum. Last year, we successfully purchased a large number of parcels
and we are rapidly depleting cash available to purchase more but we are well within the $100 million
limit authorized by the referendum.
Our analysis determined we can maximize the funding for the program during the remaining
years of our 20-year authorization by levying an annual Countywide operating millage, rather than
issuing additional bonds. The actual amount of funds that will be
available under either scenario depends on the annual growth of the tax base, but
an annual operating levy for ELAPP generates the most funding under any growth scenario.
There is no change in the millage rates for day-to-day services to unincorporated residents or
for the library system. Continued population growth drives demand for additional resources -- particularly
given the Board’s support last year for a staffing ratio for Sheriff’s deputies of 1.7
deputies per 1,000 population in the unincorporated area where the Sheriff serves as the provider
of police patrol services.
In the case of the library district, the budget adds 28 positions to staff the Jan K. Platt library,
4 positions to staff the expanded Westgate Regional Library, and 3 positions to participate in a
public library partnership with the Hillsborough County School Board at the Egypt Lake Library. The
Board also approved funding for Sunday hours at the Ruskin Library. The library district will need
to use growth in the tax base to build the capacity to operate additional future facilities: a South
County Regional Library is scheduled to become operational in July 2009, and will require 40 staff
and an estimated $1.7 million annually to operate.
Overall, millage rates will decline from FY99 levels by a total of 0.1326 mills in FY00. The
decline from FY99 to FY01 is projected to be 0.1177 mills. These millage reductions from FY99
levels will save taxpayers a total of $8 million over the next two years.
Tax Base Considerations - The budget is structured to
address unique circumstances that have led to this year’s strong growth in the tax base.
The $1.2 billion increase in the FY00 tax base due to new construction reflects, in part, the proposed taxation of Raymond James Stadium, which
is owned by the Tampa Sports Authority, as well as taxation of the Ice Palace. Taxes on the Ice Palace
are contractually the responsibility of the owners of the Tampa Bay Lightning hockey team. Because
this facility is located within a City of Tampa redevelopment district, any additional County tax
revenue from that facility will go to the City of Tampa, not Hillsborough County.
Taxes on Raymond James Stadium are the responsibility of the Tampa Sports Authority, with the exception
of taxes on any future development of team space by the owners of the Tampa Bay Buccaneers football
team. It is likely that taxation of the stadium will be contested, depending on the outcome of a
case currently before the Florida Supreme Court. The former stadium was exempt from property taxes.
The Board took the responsible position of setting aside the potential tax revenue from the stadium.
If the stadium is found to be taxable, the County will be responsible for giving financial support
to the Tampa Sports Authority under an existing interlocal agreement between the Tampa Sports Authority,
the City of Tampa, and Hillsborough County. Once the Sports Authority consumes its available reserves,
we expect the County to become liable for two-thirds of any future operating deficit of the Sports
Authority, with Tampa responsible for the remainder.
Given the potential $5 million annual tax bill for the stadium, the County could become responsible
for about $3.4 million per year. Of this amount the County would receive $1.5 million of the tax
revenue from the stadium. By setting aside the potential tax revenue in both FY00 and FY01, the
Board will have $3 million available in this biennial budget. We believe that this amount
will be sufficient to meet the County’s share of any funding shortfall that results from the
Sports Authority being unable to cover the potential $10 million in taxes it could pay over the same
period. The potential net cost in future years (a $1.9 million per year subsidy) will be addressed
in the multi-year operating budget Pro Forma that staff will prepare over the next few months in
accordance with Board policy.
Other tax base considerations include our anticipation that most construction and population growth
will continue to occur in the unincorporated area of the county - a trend unlikely to change
because of the vast number of developments currently approved throughout the unincorporated area - both
residential and non-residential.
The City of Tampa did expand its boundaries this past year as a result of a voluntary annexation
of undeveloped land in its New Tampa area near the Pasco County line giving the City additional growth
potential. The New Tampa area has been the primary growth area for Tampa with the exception of some
major downtown projects such as a convention center hotel and development in the channel district,
and improvements in the West Shore business district.
The community’s successful economic development programs, coordinated with both the State
of Florida and the Chamber of Commerce’s Committee of 100, continue to attract corporate expansions
and relocations with job growth in higher paying positions that is anticipated to raise the average
income in our community.
Community Priorities
In addition to reducing property tax rates, it is critical we continue to invest resources to address
our growing community’s highest priorities. This budget does that, in part, by redirecting
resources - consistent with the recommendations of the Blue Ribbon Committee on County Finances
and the independent review last year by Florida TaxWatch.
To a great extent, the budget places its heaviest emphasis on public safety, protection of our
environment, and our ability to improve management of resources emphasizing accountability, efficiency
and effectiveness. Funding these priorities required the Board to consider making some programs more
self-sufficient by using fees rather than taxes to cover a greater portion of program costs.
The Board’s adopted budget reflects:
Public Safety as a Priority
- Adds 40 Sheriff’s positions in FY00 and 41 more in FY01. In each year, 22 patrol deputies
will be added to maintain staffing ratios as our population grows. Also reflected within the Sheriff’s
budget are 3 community service officers in FY00, 4 new bailiffs each year to serve new judges approved
by the Florida Supreme Court, 6 school resource officers in FY01, and 3 added detention deputies in FY01.
The remaining positions reflect support positions (11 in FY00 and 6 in FY01).
- Adds 27 Fire Medics in FY00, and an additional 6 in FY01. The cost of these positions is partly offset
by overtime savings. The new positions will significantly reduce the current use of firefighters trained as
emergency medical technicians to fill-in for paramedics on ambulances. The Board also increased the
average number of personnel on each piece of apparatus - improving firefighter safety when they respond
to fires. The new positions will be dual certified, that is certified as both firefighters and as paramedics.
This gives the Fire Rescue Department flexibility to meet staffing requirements for both ambulances
and fire apparatus. It also places more paramedics on the scene of accidents and structure fires improving
the advanced life support services we provide our citizens.
- Adds 10 Animal Services positions to improve responsiveness to citizen’s calls and the capability
of implementing the new Animal Control Ordinance. These costs are fully covered with a $5 per animal
tag increase. The Animal Advisory Committee supported this fee increase. This moves the Animal Services
Department towards more self-sufficiency by recovering about 30 percent of the Department’s costs
through tags and various user fees.
- Adds 4 new code enforcement inspectors. Our neighborhood meetings continue to underscore the
public’s interest in greater attention to effective code enforcement. This is the third year the Board
expanded our inspection program.
- Converts 3 temporary security guards in the Public Safety Department to permanent positions. This
enhances services they can provide, for example, temporary employees can not carry firearms. The budget
also adds 6 security guards for a controlled access point at the Edgecomb Building. Greater attention to
security has become a necessity to protect both our employees and our citizens conducting business at
County facilities.
The Environment as a Priority
- Provides continuing support of nearly $9 million over the next two years to monitor Tampa Bay
Water Authority projects within Hillsborough County and take appropriate action. The Board approved
a 3-year plan earlier this year amounting to $12.1 million. This program relies on one-time funds
available as a result of unusually high distributions of state-shared revenues in FY98 and FY99 that
are being carried forward to fund this project.
- Expands litter control programs for the unincorporated area as well as improving unincorporated residents’
access to household chemical collection programs.
- Establishes an operating ELAPP millage levy, as outlined previously, to maximize the revenue available to
that program within the 20-year timeframe authorized by County voters.
Our Children as a Priority
- Expands our Head Start program within the Children’s Services Department to serve 144
more children and families in FY00 and expands the program again in FY01 to serve an additional
100
children and families.
- Expands after-school and summer recreation programs to serve 350 more children while also
improving our staff-to-child ratio in those programs from 1:39 to 1:35.
Managing Existing Resources as a Priority
- Initiates a Quality Improvement Program in the County organization. This effort is supported
by recommendations of the Blue Ribbon Committee on County Finances.
- Establishes an energy manager, consistent with Blue Ribbon Committee recommendations, to
oversee projects to reduce County costs while conserving fossil fuels. We anticipate this position
will recover
its cost and produce substantial savings within 2 to 3 years.
- Authorizes establishment of a contract to recover court fines and fees that currently go
uncollected, at no cost to the County other than a shift of existing staff responsibilities
in the Management
and Budget Department.
- Provides funding over the next two years to implement resource management technology to take
the organization to the 21st century by maximizing how we use human capital - personnel - and
by improving the accountability we incorporate into our capital planning and
management process.
These projects primarily require one-time funding for licensing of software,
installation of necessary hardware, conversion of existing data, and staff training.
- Increases fees for licensing child care facilities by an amount necessary to raise the County’s
cost recovery from 10% in FY99 to 15% in FY00 and FY01. Childcare licensing
is a state function the County has chosen to supplement. Increasing the self-sufficiency of
this program through fees
is a means of ensuring our ability to continue providing this service.
- Reduces Health and Social Services’ Department's general assistance program expenditures
by $500,000 - not just as a conscious effort to spend less on that program, but to redirect
funding in a more targeted way for the County’s specialized transportation program. The specialized
transportation program will staff 3 additional vehicles in FY00 to supplement the
3 vehicles added during the current year.
- Redirects a small amount of funding from the Hillsborough County City-County Planning Commission.
This organization has historically shown a capacity to absorb unplanned projects,
suggesting excess resources. No material impact is anticipated on priority services.
- Phases-out the foster care group home in the Children’s Services Department in FY01.
Foster care programs are a state responsibility and our cost per client has been very high -
over
$100 per day - while the number of clients served is low - 6 per day. This change
redirects our funds and focuses on primary responsibilities rather than continuing to subsidize
this state
program. The phase-out in FY01 will prevent any disruption to current clients.
- Continues to direct available resources to overcoming a deficit in fleet replacement. In
the past two years, we sought to overcome a fleet replacement deficit of over $30 million outlined
in the
fleet audit. At the same time, we established rental payments into our budget
as fleet equipment was replaced to ensure we will be capable of minimizing the life cycle cost
of fleet equipment by
replacing vehicles when growing maintenance costs dictate replacement.
- Directs another $800 thousand to residential drug treatment programs, as requested by the
Public Safety Coordinating Council. Of that amount, $500 thousand is funded from the Indigent
Care Sales
Tax and the balance from the Countywide General Fund revenue.
Impacts Of State Legislative Actions
Actions by the 1999 Florida Legislature have substantial financial implications for this biennial
budget.
County governments are required to participate in the Florida Retirement System (FRS). For years,
the County, along with all FRS employers, has paid a significant premium for employee retirement
benefits because the consolidated FRS did not satisfy actuarial requirements. The rates did drop
slightly in 1998, but the rates dropped in July 1999 by several percentage points resulting in an
annual savings to Hillsborough County of over $16 million. About $10 million of that savings occurred
in the portion of the budget that relies on property tax revenue to provide Countywide and unincorporated
services. The balance is reflected in our enterprise operations - water, wastewater, and solid
waste - as well as in our grant-funded operations and other restricted accounts.
A portion of this savings was taken away by State action extending the FRS special risk coverage
to paramedics, which will cost Hillsborough County about $500 thousand per year.
In another action, the Legislature reversed past practice by reducing the Florida intangibles tax
- a tax on the holdings of securities and other assets - without a “hold harmless” provision
for counties1. Counties have lost close to 25 percent of their State Revenue Sharing
allocation as a result of the 25 percent reduction in the intangibles tax revenue.
The only other source of State
Revenue Sharing to counties is a one-cent cigarette tax. The annual impact to Hillsborough
County is a loss of $6.5 million in revenue. Fortunately, we saw rapid growth in
this revenue over the past
two years due to strong stock markets, and we had budgeted conservatively in case
stock market prices fell. The result is that while we will receive $6.5 million less
than we would have received in the
absence of State action, the budget for that revenue will not drop as severely due
to previous conservative estimates.
1Twice in the past decade, the Florida Legislature raised the intangibles tax but held counties
harmless - i.e., adjusted the
distribution formula to prevent a change in county revenue resulting from the rate change. A hold harmless
provision would prevent Hillsborough County from losing revenue under the current tax cut, but none was
provided.
The Legislature has not indicated how it will assume further financial responsibility for the State
court system. Florida voters approved Revision 7 to the Florida Constitution in November
1998. Under Revision 7, the State is to assume from counties additional funding of
State court costs by July
2004. The budget does not reflect any shift of court costs to the State of Florida
in either FY00 or FY01. Prior to the referendum, the Board indicated that a portion
of any County’s
savings from shifting court costs back to the State would be targeted for public
safety funding. The Board targeted uses such as the cost of operating the next phase of the Falkenburg
Road Jail
and the cost of drug treatment programs or other alternatives to incarceration. The
Board also indicated a portion of the savings should be directed to property tax relief.
Other Assumptions in the
FY00 and FY01 Budget
Some of the other major expenditure assumptions used in the budget are:
Technology - Funds were set aside in FY99 to address any remaining hardware or software
requirements to be Y2K compliant. We anticipate about one-half of the $3 million budgeted for that
issue will carry forward to FY00 to meet any remaining funding requirements. In addition, we continue
to upgrade our hardware and software to be able to interact with other organizations and our clients.
Network security will continue to be a priority, as will maximizing public access to County services
through the Internet. We continue to enhance our geographic information systems (GIS) and will be
testing video conferencing through a pilot project.
As previously mentioned, major new technology projects for the upcoming two years are a human resources
system to better manage the single largest component of our budget, and a capital projects management
information system to improve a accountability in managing our capital program. This latter project
has become more critical as we have accelerated and expanded our stormwater program and as we manage
the variety of projects funded from the Community Investment Tax.
Constitutional Officers' Requirements - The budget reflects the requested budget of each Constitutional
Officer.
Funding of Repair and Renovation of County Buildings - In keeping with Board direction, the budget
reflects a contribution of 1 percent of General Fund revenues and 1 percent of Unincorporated General
Fund revenues to capital projects to repair and renovate County buildings.
The budget shifts 3 existing positions and adds 4 new positions in the Real Estate Department to
implement an inspection program for County projects. We anticipate this focus on inspections during
construction to head off expensive corrections that may not show up until well after a project has
been completed.
Future Challenges
As innovative as a biennial budget may be in allowing you and your staff the opportunity to test
whether budget changes are affordable in not just the upcoming year, but also a second year, there
are always issues beyond the timeframe we are addressing.
The Board adopted a policy requiring County Administration to project out our major operating costs
for a period consistent with our capital improvement program, and to prepare a financial plan to
address any identified deficiencies. Those products are due by February 1, 2000 to allow you the
time to consider various issues as part of your FY01 update process next summer.
We know today of several key issues you will address as you look beyond the biennial timeframe:
the potential phasing out of State Revenue Sharing, an ongoing commitment to “backstop” any
operating deficit of the Tampa Sports Authority, the substantial cost of adding each new phase of
a jail, and the potential annual reduction in the County’s tax base if you adopt the senior
homestead exemption authorized by Constitutional Amendment last year. There will be future discussions
of what our service standards are, and what expectations our citizens have that we may not be meeting.
We also recognize our economic expansion can last only so long.
The Board has taken a long stride towards putting this County government in a position to face
those challenges through adoption of a comprehensive set of financial policies over the past two
years. In addition, this budget moves towards building the reserves necessary to meet unexpected
challenges, while recognizing the value of cutting property tax rates whenever possible.
As we move forward, we will continue to implement wherever possible the recommendations of your
Blue Ribbon Committee on County Finances. We will also work to provide you alternatives to our heavy
reliance on property taxes, as outlined in the study we presented to you in June 1999 on the value
of revenue diversification.
Respectfully Submitted,
Daniel A. Kleman
County Administrator
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