Town hashes out budget in final session
The Fort Myers Beach Town Council and Town staff members discussed different ways to combat a financial gap in the 2010-11 budget and use reserve strategy for upcoming debt projects during a down economy.
With an estimated closure gap of just over $32,000, Town officials are confident this year’s budgetary process will balance efficiently leading up to the budget hearings. According to Town Manager Terry Stewart’s opening report, the standing tax rate with the presented budget (with 1.0 mils as a tentative millage rate) is 0.9403 and the roll forward rate is 0.9281 to measure a $32,352 gap. The roll forward rate is the millage rate that enables the Town to collect the same dollars in tax that was collected during the previous year.
“We are pretty comfortable with the budget right now,” said Stewart. “The goal was to work back from the tentative millage rate in order to come down to the roll forward rate and more if possible. We have some recommendations to get you to that rate or lower if you choose to do so.”
Stewart mentioned the gap could be shrunken from reserve money which the Council has developed in past years or interest earnings from an existing beach re-nourishment fund. Those reserves and the actual re-nourishment fund are certain reserves which the Town officials talked about prioritizing. The fund stands at $1 million and the investment earnings for it is roughly $245,000 minus the $110,000 for the Town’s share of the current beach renourishment project on the north end of Estero Island.
“The preference to bridge that gap is to use the interest earnings off of that fund,” said Stewart. The gap at the start of the budgetary process was projected to be an estimated $809,000.
The Council began discussions on the following year’s budget and revenue diversity. The consensus appeared to favor not having such a significant reliance on ad valorem taxes.
“My goal is to reduce the ad valorem taxes,” said Councilman Tom Babcock. “We should at least get to the roll forward rate and, if we can do better than that, we should.”
“As soon as this budget is set, I think it’s our obligation to focus on the budget for the following year in late October or November, and really work on specific topics within the budget,” said Councilman Alan Mandel. “This would help balance the revenue sources, find new revenue sources and deal with the county to find more dollars to allow them to have a playground for people of the county here. We need to look at our expenses like the Bay Oaks rate structure or how to fund it and how our cultural and historic structures will operate. We need to start early.”
Mayor Larry Kiker agreed early projections are needed.
“The way you do that is with cash flows,” he said. “As you make assumptions on how you’re going to spend money during the year, monthly changes will show up automatically in the cash flow. That will make you see how it’s going to affect your projections for the end of the year. I really think that the most important thing we have to deal with is how much money are we going to go in debt.”
With long-term capital projects such as the island’s water utility, storm water treatment, and Estero Boulevard, debt may be needed to fix the poor conditions of the Beach’s infrastructure. Then, there is that aforementioned money which continues to sit in a fund for a re-nourishment project which may not be re-introduced for another few years.
“It is probably not wise to keep that money sitting there, when you could be using it towards something which may provide better value for this community,” said Stewart.
Councilwoman Jo List suggested each council member develop a ‘wish list’ to comprise a plan on how the ‘re-nourishment money’ should be spent.
“If we have a project, capitalization should be worked into the budget of that project,” she said. “That’s tax dollars that’s been collected from our constituents and stashed away for specific purposes. Personally, I can think of several different programs and projects that I would like to see invested with that money.”
Council applauded that approach and agreed to share each other’s lists to define the best ways to invest money during a scheduled Management & Planning meeting on Sept. 20..