At the first of two budget hearings, city commissioners Tuesday night passed a budget for the 2018-19 fiscal year that keeps the millage rate unchanged, and controls costs for running the various departments.
In addition, customers will see - unless commissioners decide to make changes before the final budget hearing Sept. 25 - a steep rise in water and sewer bills.
By a 3-2 vote, with Commissioners Mitchell Bartley and Brenda Ash opposed, commissioners approved a general fund budget of about $4.6 million in revenues, more than double the roughly $2 million allocated to the fund during the current fiscal year.
The reason for this, Nalley told commissioners, is that he has done a number of budgetary shifts to ensure the city is better adhering to governmental accounting requirements for grant funding.
He has moved into the fund about $1.3 million in grants, for everything from Battery Park restrooms from the Florida Fish and Wildlife Conservation Commission, to a stormwater retrofit from the Northwest Florida Water Management District.
Nalley has also shifted the $550,000 in trash pick-up fees that were in the Enterprise Fund, and he’s secured an OK to double the utility tax, from about $100,000 to $200,000, based on a proposed rate increase (See related story).
Because Apalachicola saw a 3 percent, or roughly $4.4 million, expansion of its tax base, from $142.9 million last year to $147.3 million, the city’s 9.6043 mills will bring in about $1.34 million in ad valorem tax revenue, about $40,000 more than came in this year.
“The city has not established a local fund balance level policy, but should set a goal of retaining a fund balance level of at least 35 percent,” he told commissioners. “With a city as small as Apalachicola, it is important for the city to establish and maintain a strong fund balance.”
In his overview of personnel costs, Nalley proposes no new full or part-time positions, and no cost-of-living or merit pay increases, but does note the price tag for health and dental insurance premiums will drop by about $40,000 based on a cutting back on what he called “a Cadillac plan” from Capital Health Plan.
In addition, he said local governments now are required to pay more into the Florida Retirement System on behalf of employees.
In Nalley’s budget documents, he creates a new category out of the city’s administration budget that he terms Governing Body expenditures, which is essentially the budget for the city commission, estimated to run about $304,000.
Nearly half of this money, about $148,000, is from a grant earmarked for the Franklin County Business Support Center, with the rest going for the $38,000 cost for audit services, a $20,000 cost for legal services, a $30,000 annual cost for lobbyist Patrick Bell, and other miscellaneous costs.
The remainder of the administration budget, about $409,000, amounts to roughly the same as this year, with the main change being the addition of a $65,000 salary, plus benefits, allocated to fund the newly created city manager position. It is out of this budget the city will allocate about $37,500 to fund the Apalachicola Bay oyster licensing program, funded out of licensure payments.
The budget for public works will run about $1.6 million, boosted by the addition of the $435,000 for trash pickup, funded by customer charges. Nalley has also included two grants, for stormwater retrofit and another from the Florida Department of Transportation for beautification, totaling about $600,000.
The police department will cost the city about $623,000, more than half of that for salaries, including $36,000 for overtime costs, part of which are for Chief Bobby Varnes’ duties as the harbormaster.
The budget for zoning and code enforcement will about $306,000, larger than this year, because this budget category now includes about $90,000 in grants, for GIS mapping and technical assistance.
The budget for facilities will run about $236,000, a large chunk of that to cover the cost of utilities and insurance for the Battery Park Community Center, Holy Family Senior Center, Sixth Street Recreation Center, Mayor Van Johnson municipal complex, City Hall, public restrooms, library, police and fire station, and other structures. Included here is $62,000 to run the street lights, as well as $30,000 for repairs and maintenance.
The fire department will run about $134,000, including $17,500 for volunteer compensation, and a little more than $49,000 for payments on a fire truck and equipment. Expenditures from MSBU (municipal services benefit unit) expenses, which are restricted to providing services outside of the city limits, will be about $30,000.
The library will cost the city about $95,400 this year, with the cost of salary and benefits for the librarian and clerks running about $80,000, books funded at about $6,000 and the rest for various other expenses.
The budget for parks will be about $477,000, nearly all from a Florida Fish and Wildlife Conservation Commission grant. The budget for recreation will be about $434,000, with about $384,000 of that accounted for in Project Impact funding, and about $40,000 of it due to funding for the Apalachicola Center for History, Culture and the Arts.
As expected, the discussion Tuesday night, which drew only a handful of local residents, centered on the roughly $2.1 million Enterprise Fund, the monies used fund to run the water and sewer system,
Based on a recommendation that came out of last year’s budget workshop, Nalley provided commissioners details on possibly ratcheting down the proposed across-the-board SUF (sewer user fee) increase to accommodate those residences and businesses that use less water.
As it stands now, the SUF is on track to jump from the current rate of $10.75 to $29 for all residential customers, a hike of $18.25, or about 170 percent. For commercial users, the SUF would go to $95, an increase of $74.25, or about 358 percent, from the current rate of $20.75.
In addition, a 13.5 percent increase in the base rate, and the per 1,000-gallon charges, is in store for both residential and commercial water and sewer users.
Nalley said a three-tiered plan for the SUF could be put in place for residential customers ($22, $25 and $29), and commercial users ($50, $75 and $95), but it would not go the distance of tackling the debt service and default payment obligations to the Florida Department of Environmental Protection.
He said about 70 percent of the city’s water customers use under 5,000 gallons per month, and estimated that lowering the SUF would still leave the city about $150,000 short next year in paying off over the next seven years the roughly $800,000 it owes in default. The city would be able to make its current $430,000 annual debt service payment, however, he said.
“I could certainly see some value in changing that commercial rate,” he said, adding that he didn’t think it would effect a significant difference in residential billings.
“I’m not trying to kick the issue down the road but I still would like to see the SUF based on a usage schedule,” said Ash, citing that as a key reason for her no vote.
Bartley said he voted no not due to any opposition to Nalley, but because he felt the funding for the city manager position (which he opposed) should go towards eliminating the sewer debt. He also voted no last year to hiring a new full-time librarian, at a higher salary than her predecessor.