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SET_"
HOME OF PELICAN ISLAND
SEBASTIAN CITY COUNCIL SPECIAL MEETING
1ST BUDGET HEARING
AGENDA
FY2019/2020 Proposed Millage and Tentative Budget
MONDAY, SEPTEMBER 16, 2019 - 6:00 P.M.
CITY COUNCIL CHAMBERS
1225 MAIN STREET, SEBASTIAN, FLORIDA
Public input is limited to the item on the agenda
1. CALL TO ORDER
2. PLEDGE OF ALLEGIANCE — Led by Council Member Dodd
3. ROLL CALL
4. PUBLIC HEARING/ADOPTION OF TENTATIVE MILLAGE AND FY2019/2020 BUDGET
A. City Attorney Advises City Council on Procedure for Millage/Budget Hearing and
Reads Titles of Resolutions No. R-19-23 - Tentative Millage and R-19-24 -
Tentative Budget
B. City Manager Announcement that the Proposed Millage Rate of 2.9399 Mills is
Equal to the "Rolled -Back Rate"
C. Budget Overview of Proposed Tentative Millage and Tentative Budget by CFO
Ken Killgore (PowerPoint)
D. Mayor Opens Public Hearing on Tentative Millage and Tentative Budget
pgs 4-5 E. Resolution No. R-19-23 Tentative Millage for Calendar Year 2019 (Transmittal, R-
19-23)
A RESOLUTION OF THE CITY OF SEBASTIAN, INDIAN RIVER COUNTY, FLORIDA, ADOPTING
A TENTATIVE MILLAGE OF 2.9399 MILLS FOR THE CALENDAR YEAR 2019; PROVIDING FOR
CONFLICT; PROVIDING FOR SCRIVENER'S ERRORS; AND PROVIDING FOR AN EFFECTIVE
DATE.
pgs 6-23 F. Resolution No- R-19-24 - FY 2019/2020 — Tentative Budget (Transmittal, R-19-
24, Schedule A, PowerPoint)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEBASTIAN, INDIAN RIVER
COUNTY, FLORIDA ADOPTING THE TENTATIVE BUDGET FOR THE FISCAL YEAR
BEGINNING OCTOBER 1, 2019 AND ENDING SEPTEMBER 30, 2020; MAKING
APPROPRIATIONS FOR THE PAYMENT OF OPERATING EXPENSES, CAPITAL EXPENSES,
AND FOR THE PRINCIPAL AND INTEREST PAYMENTS ON INDEBTEDNESS OF THE CITY IN
THE CITY'S GENERAL FUND, SPECIAL REVENUE FUNDS, DEBT SERVICE FUND, CAPITAL
IMPROVEMENT FUNDS, GOLF COURSE FUND, AIRPORT FUND, AND BUILDING
DEPARTMENT FUND AS PROVIDED FOR IN SCHEDULE "A", ATTACHED HERETO,
ESTABLISHING AUTHORITY OF THE CITY MANAGER TO IMPLEMENT THE BUDGET;
PROVIDING FOR CONFLICT; PROVIDING FOR SCRIVENER'S ERRORS; AND PROVIDING
FOR AN EFFECTIVE DATE.
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pgs 24-35 G. Mayor Announces that the Final Public Hearing on Millage and Budget is to be
held on Wednesday, September 25, 2019 at the Regular City Council Meeting at
6:00 p.m.
5. NEW BUSINESS
A. Resolution No. R-19-25 - Adopting Amended Financial Policies for Fiscal Year
2019-2020 (Transmittal, R-19-25)
A RESOLUTION OF THE CITY OF SEBASTIAN, FLORIDA, ADOPTING AMENDED FINANCIAL
POLICIES GOVERNING VARIOUS AREAS OF BUDGET AND FINANCE AS PROVIDED FOR IN
ATTACHMENT "A"; PROVIDING FOR CONFLICTS; PROVIDING FOR SCRIVENER'S ERRORS;
AND PROVIDING FOR AN EFFECTIVE DATE.
6. ADJOURN (All meetings shall adjourn at 9:30 p.m. unless extended for up to one half
hour by a majority vote of City Council)
HEARING ASSISTANCE HEADPHONES ARE AVAILABLE IN THE COUNCIL CHAMBERS FOR ALL GOVERNMENT
MEETINGS.
All City Council Meetings are aired live on Comcast Channel 25, ATT UVerse Channel 99 and streamed on City of
Sebastian Website www.rityofsebastian.org.
ANY PERSON WHO DECIDES TO APPEAL ANY DECISION MADE WITH RESPECT TO ANY MATTER CONSIDERED
AT THIS MEETING WILL NEED A RECORD OF THE PROCEEDINGS AND MAY NEED TO ENSURE THAT A
VERBATIM RECORD OF THE PROCEEDINGS IS MADE, WHICH RECORD INCLUDES THE TESTIMONY AND
EVIDENCE UPON WHICH THE APPEAL IS TO BE HEARD. (F.S.286.0105)
IN COMPLIANCE WITH THE AMERICAN WITH DISABILITIES ACT (ADA), ANYONE WHO NEEDS A SPECIAL
ACCOMMODATION FOR THIS MEETING SHOULD CONTACT THE CITY'S ADA COORDINATOR AT 589-5330 AT
LEAST 48 HOURS 1N ADVANCE OF THIS MEETING.
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PROCEDURES FOR PUBLIC INPUT IN ACCORDANCE WITH RESOLUTION R-95-10
Regular Citv Council Meetings
Public input is ALLOWED under the headings:
✓ Consent Agenda
✓ Public Hearings
✓ Unfinished Business
✓ New Business
✓ Public Input
Public input is NOTALLOWED under the headings:
✓ Proclamations, Awards, Brief Announcements (except for individuals giving or accepting
proclamations or awards);
✓ Committee Reports and Appointments (except for committee members giving reports and
applicants being interviewed for committee appointments);
✓ City Council Matters
✓ Charter Officer Matters
Council may, by majority vote, call upon an individual to provide input if desired.
Workshops and Special Meetinas.
Public input is limited to the item on the agenda
Time Limit
Input on agenda items where public input is permitted on agendas is FIVE MINUTES; however, City
Council may extend or terminate an individual's time by majority vote of Council members present.
Input Directed to Chair
Speakers shall address the City Council IMMEDIATELY PRIOR TO CITY COUNCIL DELIBERATION of
the agenda item and ALL INPUT SHALL BE DIRECTED TO THE CHAIR, unless answering a question of
a member of City Council or City staff. Individuals shall not address City Council after commencement of
City Council deliberation on an agenda item after public input has concluded, provided, however, the
Mayor and members of City Council may recall an individual to provide additional information or to answer
questions.
Certain Remarks Prohibited
Personal, impertinent, and slanderous remarks, political campaigning and applauding are not permitted
and may result in expulsion from the meeting. The Chair shall make determinations on such remarks,
subject to the repeal provisions below.
Appealing Decisions of Chair
Any member of Council may appeal the decision of the Chair to the entire Council. A majority vote of City
Council shall overrule any decision of the Chair.
Public Input Heading on Aaenda
The heading on Regular Meeting agendas "Public Input" provides an opportunity for individuals to bring
NEW INFORMATION OR REQUESTS TO CITY COUNCIL NOT OTHERWISE ON THE PREPARED
AGENDA. Individuals are asked to attempt to resolve matters with staff prior to meetings. Individuals are
asked to provide copies of material for Council one week prior to the meeting if they intend to refer to
specific material. City Council will not debate an issue during Public Input but may by consensus direct a
Charter Officer in regard to the item if necessary or place a requested item on a future agenda.
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01) LF
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HOME OF PELICAN ISLAND
CITY COUNCIL AGENDA TRANSMITTAL FORM
COUNCIL MEETING DATE
AGENDA ITEM TITLE
RECOMMENDATION:
BACKGROUND:
September 16, 2019
Resolution to Adopt a Tentative Millage of 2.9399 for
Calendar Year 2019.
Move to Consider Resolution R-19-23 Adopting a
Tentative Millage of 2.9399, which is the computed
"Rolled -Back Rate".
In accordance with Florida Statute 200.065 (7)(a)(1.), the
City Council is required to tentatively adopt a millage rate for calendar year 2019 and budget
year beginning October 1, 2019 and ending September 30, 2020 at the first public hearing in
which the budget is presented.
Staff is recommending the tentative millage be set at the
"Rolled -Back Rate" of 2.9399. This and other General Fund revenue sources will be sufficient
to: 1.) provide for wage adjustments and other personnel adjustments; 2.) maintain current
spending levels for operational expenditures and budget for a Comprehensive Plan Consultant
and the costs of the election; and 3.) provide funding for certain equipment that could not be
funded from other special revenues.
IF AGENDA ITEM REQUIRES EXPENDITURE OF FUNDS,:
Total Cost: NIA
Amount Budgeted in Current FY: NIA
Amount of Appropriation Required: None
Fund to Be Utilized for Appropriation: NIA
Administrative Services Department Review:
ATTACHMENTS:
Resolution R-19-23
The Recommended Budget Document is available on the City's Website.
City Mataag1r Aut ariza on:
Date:
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RESOLUTION NO. R-19-23
A RESOLUTION OF THE CITY OF SEBASTIAN, INDIAN RIVER
COUNTY, FLORIDA, ADOPTING A TENTATIVE MILLAGE OF
2.9399 MILLS FOR THE CALENDAR YEAR 2019; PROVIDING
FOR CONFLICT; PROVIDING FOR SCRIVENER'S ERRORS;
AND PROVIDING FOR AN EFFECTIVE DATE.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
SEBASTIAN, INDIAN RIVER COUNTY, FLORIDA, that:
Section 1. MILLAGE RATE LEVY. There is hereby proposed to levy an Ad
Valorem Tax of TWO POINT NINE THREE NINE NINE (2.9399) MILLS against all real and
tangible personal property for the calendar year (January 1, 2019 through December 31, 2019)
and the resulting tax revenue is to be appropriated for the General Operating Fund of the City of
Sebastian for the fiscal year beginning October, 1, 2019 and ending September 30, 2020.
Section 2. ROLLED -BACK RATE. The tax rate established in Section 1 is equal
to the computed "rolled -back" tax rate of 2.9399 mills.
Section 3. CONFLICT. All resolutions or parts of resolutions in conflict herewith
are hereby repealed.
Section 4. SCRIVENER'S ERRORS. Sections of this resolution may be
renumbered or re -lettered and corrections of typographical errors which do not affect the intent
may be authorized by the City Manager, or the City Manager's designee, without need of further
action of City Council by filing a corrected copy of same with the City Clerk.
Section 5. EFFECTIVE DATE. This resolution shall take effect immediately upon
its adoption.
The foregoing Resolution was moved for adoption by Councilmember . The
motion was seconded by Councilmember and, upon being put into a vote,
the vote was as follows:
Mayor Jinn Hill
Vice -Mayor Linda Kinchen
Councilmember Bob McPartlan
Councilmember Ed Dodd
Councilmember Albert lovino
The Mayor thereupon declared this Resolution duly passed and adopted this 16'h day of
September 2019.
ATTEST:
Jeanette Williams, City Clerk
CITY OF SEBASTIAN, FLORIDA
ma
Jim Hill, Mayor
Approved as to form and legality for the
reliance by the City of Sebastian only:
James Stokes, City Attorney
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SERAST
HOME OF PELICAN ISLAND
CITY COUNCIL AGENDA TRANSMITTAL FORM
COUNCIL MEETING DATE:
AGENDA ITEM TITLE:
RECOMMENDATION
BACKGROUND:
September 16, 2019
Resolution to Adopt a Tentative Budget for Fiscal Year
2019-20.
Move to Consider Resolution R-19-24 Adopting Tentative
Fiscal Year 2019-20 Budget.
Staff has compiled a balanced Recommended Budget for
Fiscal Year 2019-20 that assumes a millage being set at the rolled -rack rate of 2.9399. Over the
past several months, Staff has presented our budget recommendations to the Citizen's Budget
Review Advisory Board, Planning and Zoning Commission and City Council. We believe that
funding has been included in amounts sufficient to meet those needs we anticipate will be the most
important to address over the next fiscal year.
A complete copy of the recommended budget is available on
the City's website. Schedule "A" of the Resolution summarizes the budget. The required public
hearing and adoption of the final millage and budget is scheduled for the regular City Council
meeting on September 25, 2019.
IF AGENDA ITEM REOUIRES EXPENDITURE OF FUNDS:
Total Cost: N/A
Amount Budgeted in Current FY: N/A
Amount of Appropriation Required: As per Schedule "A"
Fund to Be Utilized for Appropriation: N/A
Administrative Services Department Review: -i
ATTACHMENTS:
Resolution R-19-24 with Exhibit "A".
Power Point
The Recommended Budget Document is available on the City's Website at:
http://public.citycfsebastian.org/PRFs/Budget/FY1920/20190808 DRAFT FY20 Budget CIP.pdt
City Manager Authorization:
"Z"�//X
Date: '9 // 3 // �,
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RESOLUTION NO. R-19-24
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SEBASTIAN, INDIAN RIVER COUNTY, FLORIDA ADOPTING THE
TENTATIVE BUDGET FOR THE FISCAL YEAR BEGINNING OCTOBER
1, 2019 AND ENDING SEPTEMBER 30, 2020; MAKING
APPROPRIATIONS FOR THE PAYMENT OF OPERATING EXPENSES,
CAPITAL EXPENSES, AND FOR THE PRINCIPAL AND INTEREST
PAYMENTS ON INDEBTEDNESS OF THE CITY IN THE CITY'S
GENERAL FUND, SPECIAL REVENUE FUNDS, DEBT SERVICE FUND,
CAPITAL IMPROVEMENT FUNDS, GOLF COURSE FUND, AIRPORT
FUND, AND BUILDING DEPARTMENT FUND AS PROVIDED FOR IN
SCHEDULE "A", ATTACHED HERETO, ESTABLISHING AUTHORITY
OF THE CITY MANAGER TO IMPLEMENT THE BUDGET; PROVIDING
FOR CONFLICT; PROVIDING FOR SCRIVENER'S ERRORS; AND
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City Manager has submitted a Proposed Budget for the City of Sebastian for
the fiscal year beginning October 1, 2019, and ending September 30, 2020; and
WHEREAS, on September 16, 2019, the City Council has conducted a Public Hearing on the
Tentative Budget.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEBASTIAN, INDIAN RIVER COUNTY, FLORIDA, that:
Section 1.. The Tentative Budget is hereby adopted for the Fiscal Year beginning October 1,
2019 and ending September 30, 2020, subject to final hearing on September 25, 2019.
Section 2. The amounts shown on the attached Schedule "A" are appropriated out of the
Treasury of the City, including any revenues accruing to the City available for purposes of the
City's budgetary accounts.
Section 3. The City Manager shall be authorized and directed to proceed with the
implementation of the service programs and projects provided for in the budget. Such
implementation is to be consistent with the provisions of the City Code of Ordinances and policies
established by the City Council.
Section 4. The City Manager shall be authorized to make budget adjustments within budgetary
accounts shown on Schedule "A" as he deems appropriate. He shall also be authorized to make
budget adjustments between budgetary accounts shown on Schedule "A", when necessary to
implement programs, projects, and expenditures authorized by the City Council or for purposes of
clarification and enhancement of accounting and reporting requirements. He shall be further
authorized to make adjustments to project allocations from remaining balances in other projects or
from other available funds when necessary to satisfactory complete requisite projects. All other
budgetary adjustments will require prior approval by the City Council.
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Section 5. CONFLICT. All Resolutions or parts of Resolutions in conflict herewith are
hereby repealed to the extent of such conflict.
Section 6. SCRIVENER'S ERRORS. Sections of this resolution may be renumbered or re -
lettered and corrections of typographical errors which do not affect the intent maybe authorized by
the City Manager, or the City Manager's designee, without need of further action of City council
by filing a corrected copy of same with the City Clerk.
Section 7. EFFECTIVE DATE. This Resolution shall become effective upon passage.
The foregoing Resolution was moved for adoption by Councilmember . The
motion was seconded by Councilmember and, upon being put into a vote,
the vote was as follows:
Mayor Jim Hill
Vice -Mayor Linda Kinchen
Councilmember Bob McPartlan
Councilmember Ed Dodd
Councilmember Albert lovino
The Mayor thereupon declared this Resolution duly passed and adopted this 16th day of
September, 2019.
am
ATTEST:
Jeanette Williams, City Clerk
CITY OF SEBASTIAN, FLORIDA
Jim Hill, Mayor
Approved as to form and legality for the
reliance by the City of Sebastian only:
James Stokes, City Attorney
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ATTACHMENT TO RESOLUTION R-19-24
SCHEDULE "A"
BUDGET SUMMARY
FISCAL YEAR 2019/2020
GENERALFUND
INW041IN
001501
Taxes and franchise fees
$
8,371,186
001501
Licenses and permits
162,200
001501
Intergovernmental
3,102,538
001501
Charges for services
698,866
001501
Fines and forfeits
39,800
001501
Miscellaneous
472,870
001501
Transfers in
25,000
Total Revenues
$
12,872,460
EXPENDITURES:
010001
City Council
$
63,080
010005
City Manager
276,327
010009
City Clerk
229,311
010010
City Attorney
106,291
010020
Administrative Services
694,267
010021
Management Information System
535,860
010041
Police Administration
1,085,879
010043
Police Operations
3,419,316
010047
Police Detective Division
1,046,336
010049
Police Dispatch Unit
651,282
010045
Code Enforcement Division
190,709
010052
Roads and Maintenance
954,867
010054
Fleet Management
211,549
010056
Facilities Maintenance
525,178
010057
Leisure Services
1,154,740
010059
Cemetery
179,176
010080
Community Development
586,324
010099
Non -departmental
961,968
Total Expenditures
S
12,872,460
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1
ATTACHMENT TO RESOLUTION R-19-24
SCHEDULE "A"
BUDGET SUMMARY
FISCAL YEAR 2019/2020
SPECIAL REVENUE FUNDS
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2
LOCAL OPTION GAS TAX FUND
120010
REVENUES
Taxes
736,320
Miscellaneous
19,041
Total Revenues
$
755,361
120051
EXPENDITURES
Operating
$
5,400
Capital Outlay
$
106,000
Debt service
243,802
Transfers out
211,160
Unappropriated
188,999
Total Expenditures
$
755,361
DISCRETIONARY SALES TAX FUND
130010
REVENUES
Taxes
$
3,659,032
Miscellaneous
73,272
Appropriation from prior year
2,079,624
Total Revenues
S
5,811,928
130051
EXPENDITURES
Transfers out
S
5,811,928
Total Expenditures
$
5,811,928
RECREATION IMPACT FEE FUND
160010
REVENUES
hnpact fee
$
141,050
Miscellaneous
5,134
Restricted cash balance carryforward
146,816
Total Revenues
$
293,000
160051
EXPENDITURES
Transfers out
$
293,000
Total Expenditures
$
293,000
STORMWATER UTILITY FUND
163010
REVENUES
Stormwater utility fee
$
1,940,000
Miscellaneous
36,083
Total Revenues
$
1,976,083
163051
EXPENDITURES
Operating
$
1,550,647
Capital Outlay
$
145,000
Transfers out
275,000
Unappropriated
5,436
Total Expenditures
$
1,976,083
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2
ATTACHMENT TO RESOLUTION R-19-24
SCHEDULE"A"
BUDGET SUMMARY
FISCAL YEAR 2019/2020
SPECIAL REVENUE FUNDS - CONTINUED
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3
PARKING IN -LIEU -OF FEE FUND
190010
REVENUES
Miscellaneous
$
1,342
Total Revenues
$
1,342
490051
EXPENDITURES
Unappropriated
1,342
Total Expenditures
$
1,342
LAW ENFORCEMENT FORFEITURE FUND
190010
REVENUES
Fines and forfeits
$
1,000
Miscellaneous
250
Total Revenues
$
1,250
190051
EXPENDITURES
Unappropriated
$
1,250
Total Expenditures
$
1,250
COMMUNITY REDEVELOPMENT AGENCY FUND
163010
REVENUES
Tax Increment - Sebastian
$
182,732
Tax Increment - Indian River County
215,084
Miscellaneous
54,750
Restricted cash balance carryforward
61,334
Total Revenues
$
513,900
163051
EXPENDITURES
Operating
S
404,268
Grants and Aids
109,632
Total Expenditures
$
513,900
DEBT SERVICE FUND
STORMWATER UTILITY REVENUE BOND_ S
263010
REVENUES
Miscellaneous
$
3,500
Transfers in
40I,355
Total Revenues
$
404,855
263051
EXPENDITURES
Debt service
$
402,138
Unappropriated
2,717
Total Expenditures
$
404,855
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3
ATTACHMENT TO RESOLUTION R-19-24
SCHEDULE "A"
BUDGET SUMMARY
FISCAL YEAR 2019/2020
CAPITAL PROJECTS FUNDS
REVENUES
Transfers from Other Funds
6,079,733
Grants
1,645,000
Total Revenues
$ 7,724,733
EXPENDITURES
Operating expenses
Transportation
$ 5,225,733
Recreation facilities projects
333,000
Stonnwater Improvements/Physical Environment
1,314,000
Public Safety
692,000
General Government
160,000
Total Expenditures
$ 7,724,733
ENTERPRISE FUNDS
GOLF COURSE FUND
410010 REVENUES:
Charges for services $ 1,370,828
Transfer from Discretionary Sales Tax Fund 110,000
Total Revenues $ 1,480,828
EXPENSES:
GOLF COURSE ADMINISTRATION
410110 Personal services
$
295,125
Operating expenses
305,671
Capital Outlay
60,000
Repayment of Building Fund Loan
38,367
Total Administration
$
699,163
GOLF COURSE GREEN DIVISION
410120 Operating expenses
$
577,433
Capital Outlay
50,000
Total Golf Course Green Division
$
627,433
GOLF COURSE CARTS DIVISION
410130 Personal services
$
95,897
Operating expenses
I,944
Debt Service on Cart Lease/Purchase
56,391
Total Golf Course Carts Division
$
154,232
Total Golf Course Expenses
$
1,480,828
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ATTACHMENT TO RESOLUTION R-19-24
SCHEDULE "A"
BUDGET SUMMARY
FISCAL YEAR 201.912020
ENTERPRISE FUNDS - CONTINUED
AIRPORT FUND
$ 12,872,460
SPECIAL REVENUE FUNDS
450010 REVENUES
DEBT SERVICE FUNDS
404,855
Charges for services
$
544,313
Miscellaneous revenues
TOTAL BUDGET FOR ALL FUNDS
25,370
Total Revenues
$
569,683
450110 EXPENSES:
Personal services
$
73,409
Operating expenses
273,656
Debt service
30,500
Capital Outlay
43,800
Transfer out
25,000
Unappropriated
123,318
Total Expenses
$
569,683
BUILDING DEPARTMENT
480010 REVENUES
Charges for services
$
789,200
Miscellaneous revenues
52,137
Total Revenues
$
841,337
480110 EXPENSES:
Personal services
$
663,901
Operating expenses
133,592
Capital Outlay
22,573
Unappropriated
21,271
Total Expenses
$
841,337
TOTAL BUDGET SUMMARY
GENERAL FUND
$ 12,872,460
SPECIAL REVENUE FUNDS
9,352,864
DEBT SERVICE FUNDS
404,855
CAPITAL PROJECT FUNDS
7,724,733
ENTERPRISE FUNDS
2,891,848
TOTAL BUDGET FOR ALL FUNDS
S 33,246,760
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5
R
2020 Budget and Capital Program
First Public Hearing on Budget
And Capital Improvement Program
Monday September 16, 2019
Prepared By:
Ken Killgore
Administrative Services Director/CFO
11
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S
S
Draft 2020 General Fund Budget
Versus Current 2019 Budget
7521P994
Personnel Costs
126,324 Operating Expenses
(137,264) Capital Spending
(144,915) Transfers to Other Funds
597,139
4.86% Over 2019 Budget
2
Property Values and Millage:
Estimated Values/Roll-Back Rate
o Taxable Values Increased $113,949,483 or
9.03% from Prior Year Final Values.
$23,351,814 Additions Are an Increase of
1.85% from Prior Year Final Values.
(Generates $134,552 at Roll -Back Rate.)
$90,597,669 Reassessments Increased
7.18% from Prior Year -Final Values.
(Homesteads Limited by Lesser of 1.6%CPI or 3%.)
o Roll -Back is Calculated to be 2.9399 Mills.
3
3.1514 Mills in 2019
Versus 2.9399 Rolled -Back in 2020
ASSESSED VALUES
TAXABLE VALUES
TAXES
CHANGE
$300,000 $304,800
$250,000 $254,800
$803 $749
$(54)
$300,000 $330,000
$300,000 $330,000
$945 $970
$25
0
1.6% On
Homestead:
10% On Others:
2019
2020
2018
2019
ASSESSED VALUES
$200,000
$203,200
$200,000
$220,000
TAXABLE VALUES
$150,000
$153,200
$200,000
$220,000
TAXES
$473
$450
$630
$647
CHANGE
.............................................................................................................................................................................
$(23)
$17
..................
ASSESSED VALUES
$2507000
$2541000
$250,000
$275,000
TAXABLE VALUES
$2001000
$2041000
$2501000
$2751000
TAXES
$630
$600
$788
$808
CHANGE
.........................................................................................................................................................................................................
$(30)
$20
ASSESSED VALUES
TAXABLE VALUES
TAXES
CHANGE
$300,000 $304,800
$250,000 $254,800
$803 $749
$(54)
$300,000 $330,000
$300,000 $330,000
$945 $970
$25
0
Enterprise Funds:
o Golf Course:
Making Payments on Building Fund Loan.
Forecasting Long-term Reduction in Deficit.
o Airport:
Repaying Last $25,000 of General Fund Loan.
Making Payments on Loans from DST Fund.
Deficit Expected to be Positive by 2020.
o Building:
Projecting Level Revenue, Reorganizing Staff.
5
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Special Revenue and Other Funds:
Special Revenue Funds
o Local Option Gas Tax:
$211,160 Allocated for Road Resurfacing Work.
o Parking In Lieu Of Fund:
$55,908 At Year End - No New Agreements.
o Discretionary Sales Tax:
Allocations for MIS Upgrades, Police Vehicles.
$333,323 for Major Road Reconstruction Work.
Relocation of Public Works Compound.
Required Matching on Hangar D Construction.
1.1
Special Revenue and Other Funds:
Special Revenue Funds
o Riverfront CRA Fund:
Working Waterfront, Special Events, Sign & Sewer
Connection Grants.
Landscaping Contract, Signage and Tree Program.
o Recreation Impact Fee Fund:
Complete Pickle Ball Facility, Park Signage, Barber
Street Bleachers, Dugouts and Fencing.
Playground Improvements (All Inclusive Features).
o Stormwater Utility Fund:
N Stonecrop Project Assuming 75% by FEMA Grant.
0
W
Work Associated With Road Reconstruction.
N
O
W
CD
Special Revenue and Other Funds:
Special Revenue/Trust Funds
o Law Enforcement Forfeiture Fund:
Only for Unbudgeted Items Approved by Council.
o Cemetery Trust Fund:
Expendable on Expansions or Additions.
for Operations and Maintenance.
oTransferring $50,000 per Year to General Fund.
o Keeping Substantial Balances in Reserve.
F',
N
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Cn
Proposed
Capital Improvement Program
Stormwater $6,324,000 27
P/F Compound
Roads Department
Police Department
Parks/Recreation
Computer Systems
All Other
Enterprise
5,025,250
3,317,613
2,765,000
1,039,500
940,000
303,000
3,526,373
22
14
12
5
4
1
15
Discretionary Sales Tax
Grants
Local Option Gas Tax
Stormwater Fund
Recreation Impact
General Fund
Airport
Building
$12,363,430
3,545,000
2,450,433
3,179,000
6401000
7461500
293,800
22t573
9
Next Steps in Budget Process and
Questions
o State Required Newspaper Advertisement
on Millage and Budget on 09/21/19.
o Final Public Hearing to be Held 09/25/19 for
Vote on Final Millage and Budget.
o Questions?
10
MLf
$E,T.: �
HOME OF PELICAN ISLAND
CITY COUNCIL AGENDA TRANSMITTAL FORM
COUNCIL MEETING DATE: September 16, 2018
AGENDA ITEM TITLE: Resolution No. R-19-25 Adopting Amended Financial Policies for
Fiscal Year 2019-2020
RECOMMENDATION: Move to Approve Resolution R-19-25
BACKGROUND: Pursuant to City of Sebastian Resolution 06-20, the City's financial
policies shall be readopted annually. These policies incorporate relevant statutory requirements and
authoritative guidance provided for sound and responsible governmental financial management. They
are incorporated into the Annual Budget document and provide a ready reference to how significant
financial matters need to be addressed.
This document generally contains the same provisions as last year's
financial policies except for the following areas:
In Section II.A. adjust the policy to have the Community
Redevelopment Agency pay General Fund for administration
based on 75% of the pay and benefits of the Community
Development Director/CRA Manager, which better corresponds
with the time devoted to administrative support for the CRA.
2. Section II.A.8. was restated to better describe the policy on paying
into the employee retirement or deferred compensation plans.
3. All other changes were minor and insignificant for the purpose of
clarification, correcting grammatical errors or updating titles.
IF AGENDA ITEM REQUIRES EXPENDITURE OF FUNDS:
Total Cost: NIA
Amount Budgeted in Current FY: NIA
Amount of Appropriation Required: None
Fund to Be Utilized for Appropriation: NIA
Administrative Services Department Review:
ATTACHMENTS:
Resolution R-19-25 and Attachment "A" Financial Policies
City 9 M na er Aut rizat'
��
Date: g / -71
24 of 35
RESOLUTION NO. R-19-25
A RESOLUTION OF THE CITY OF SEBASTIAN, FLORIDA, ADOPTING
AMENDED FINANCIAL POLICIES GOVERNING VARIOUS AREAS OF
BUDGET AND FINANCE AS PROVIDED FOR IN ATTACHMENT "A";
PROVIDING FOR CONFLICTS; PROVIDING FOR SCRIVENER'S ERRORS;
AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the Government Finance Officers Association of the United States and Canada
recommends best practices in various areas for Finance and Budget; and
WHEREAS, the City Council deems it to be necessary to adopt and readopt such financial
policies on an annual basis,
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
SEBASTIAN, FLORIDA, as follows:
SECTION 1. AMENDING FINANCIAL POLICIES: The City Council of the City of
Sebastian hereby readopts amended Financial Policies governing the Operating Budget, Financial
Reserves, Use of Surplus, Performance Measurement, Capital Improvement Program, Debt
Management, Revenue, and Investment, which are attached hereto.
SECTION 2. CONFLICT. All resolutions or parts of resolutions in conflict herewith are
hereby repealed.
SECTION 3. SCRIVENIER'S ERRORS; Sections of this resolution may be renumbered or
re -lettered and corrections of typographical errors which do not affect the intent may be authorized by
the City Manager, or the City Manager's designee, without need of further action of City Council by
filing a corrected copy of same with the City Clerk.
SECTION 4. This Resolution shall take effect upon adoption.
The foregoing Resolution was moved for adoption by Council Member
Motion was seconded by Council Member and, upon being put to a vote, the vote
was as follows:
Mayor Jim Hill
Vice -Mayor Linda Kinchen
Councilmember Bob McPartlan
Councilmember Ed Dodd
Councilmember Albert Iovino
The Mayor thereupon declared this Resolution duly passed and adopted this 16'" day of September,
2019.
ATTEST:
Jeanette Williams, City Clerk
CITY OF SEBASTIAN, FLORIDA
By:
Jim Hill, Mayor
Approved as to Form and Legality for
Reliance by the City of Sebastian Only:
Jaynes Stokes, City Attorney
25 of 35
SCHEDULE "A" OF RESOLUTION R-19-25
City of Sebastian, Florida
Financial Policies
City of Sebastian's financial policies set forth the basic framework for overall fiscal planning and management
and set forth guidelines for both current activities and long-range planning. These policies are reviewed
annually to assure the highest standards of fiscal management and were formally adopted by the City Council at
a public meeting on September 16, 2019. The City Manager and the Management Team has the primary role of
reviewing financial actions and providing guidance on financial issues to the City Council.
I. Overall Goals
The overall financial goals underlying these policies are:
1. Fiscal Conservatism: To ensure the city is in a solid financial condition at all times. This can be defined as:
A. Cash Solvency —the ability to pay bills
B. Budgetary Solvency — the ability to balance the budget
C. Long Term Solvency — the ability to pay future costs
D. Service Level Solvency— the ability to provide needed and desired services
2. Flexibility: To ensure that the city is in a position to respond to changes in the economy or new service
challenges without an undue amount of financial stress.
3. Compliance with All Statutory Requirements: As set forth by the State of Florida and the City ordinances.
4. Adherence to the highest Accounting and Management Practices: As set by the Government Finance
Officers' Association standards for financial reporting and budgeting, the Government Accounting
Standards Board and other professional standards.
II. Operating Budget Policies
The City Administrative Services Department, with support and general direction from the City Manager,
coordinates the budget process. The formal budgeting process begins in March and ends in September and
provides the primary mechanism by which key decisions are made regarding the levels and types of services to
be provided, given the anticipated level of available resources. Revenues and expenditures are projected on the
basis of information provided by City departments, outside agencies, current rate structures, historical data and
statistical trends.
A. Budget Process
The development of the budget is guided by the following budget policies:
1. A budget calendar will be designed each year to provide a framework within which the interactions
necessary to formulate a sound budget could occur and ensure that the City complies with State legal mandates.
2. The budget must be balanced for all funds. Total revenues and other available funds must equal total
estimated expenditures for each fund (Section 166.241 Florida Statutes requires all budgets to be balanced).
3. All operating funds are subject to the annual budget process and reflected in the budget document.
4. The enterprise operations of the City are intended to be self-supporting; i.e., current revenues are hoped to
cover current expenditures, including debt service.
An administrative service fee will be paid to the General Fund by each enterprise fund. This assessment is
calculated based upon a percentage (ratio of both the number of full-time equivalent employees of the enterprise
fund/total number of full-time equivalent employees of the City and ratio of the operating budget of the
enterprise funds/total operating budget of the City) of total budgeted General Fund administration expenditures
(includes City Council, City Manager, City Attorney, City Clerk, Administrative Services, Management
Information Systems, Community Development and Facilities Maintenance). An administrative service fee is
assessed by the General Fund against the Community Redevelopment Agency (CRA) Fund of the City. This
assessment will be based on 75% of the pay and benefits of the Community Development Director/CRA
Manager and corresponds with the amount of time devoted to administrative support for the CRA.
26 of 35
SCHEDULE "A" OF RESOLUTION R-19-25
City of Sebastian, Florida
Financial Policies
5. Pursuant to Ordinance 05-16, stormwater utility fees can be utilized to fund stormwater operations, in
addition to capital improvements. Stormwater operations were previously accounted for in the General
Fund and partially reimbursed with transfers from the Stormwater Fund. However, since the FY 2019
Budget, stormwater operating expenditures are directly accounted for within the Stormwater Fund to better
disclose how the fees are being used.
6. In no event will the City of Sebastian levy ad valorem taxes against real property and tangible personal
property in excess of 10 mills, except for voted levies (Section 200.081 of Florida Statutes places this
millage limitation on all Florida municipalities.)
7. The City will budget 96 percent of anticipated gross ad valorem proceeds to provide an allowance for
discounts for early payment of taxes (Section 200.065 of Florida Statutes states that each taxing authority
shall utilize not less than 95 percent of the taxable value.)
8. Employees covered by the Coastal Florida Public Employee Labor Agreement will have 9% of their wages
contributed to a pension plan offered by the Communication Workers of America. The locally administered
defined benefit pension plan for police officers will be funded in accordance with the required annual
contribution calculated by an independent actuary but no less than 14.6% of the covered payroll. All other
employees will have 9% of their wages contributed to a deferred compensation retirement program
sponsored by the International City Management Association.
9. The City will coordinate development of the capital improvement budget with the development of the
annual operating budget. Each item included in the capital improvement budget is reviewed for its impact
on the operating budget. The review quantifies four main factors, which are maintenance costs, improved
efficiency, reduction in liability exposure and savings from taking replaced items out of service. Other
considerations include the expectation of generating additional revenue, changes in personnel requirements
and consistency with the City's Comprehensive Plan,
B. Basis of Budgeting
The basis of budgeting for governmental funds (General, Special Revenue, Debt Service Funds, and Capital
Project funds) shall be prepared on a modified accrual basis of accounting. This means unpaid financial
obligations, such as outstanding purchase orders, are immediately reflected as encumbrances when the cost is
estimated, although the items may not have been received. However, in most cases revenue is recognized only
after it is measurable and actually available.
The budgets for the proprietary funds — Golf Course, Airport and Building Department — are prepared using the
accrual basis of accounting. Proprietary funds also recognize expenses as encumbered when a commitment is
made (e.g., through a purchase order). Revenues, on the other hand, are recognized when obligated to the City.
Purchase orders for goods and services received prior to the end of the current fiscal year will be eligible for
payment immediately following the close of the fiscal year. Encumbrances for all other purchases, excluding
the capital projects funds purchases, will automatically lapse at the close of the fiscal year.
The Comprehensive Annual Financial Report (CAFR) presents the status of the City's finances on the basis of
Generally Accepted Accounting Principles (GAAP). Since FY 2001, the CAFR has been prepared in
compliance with Governmental Accounting Standards Board (GASB) Statement 34 requirements. The CAFR
shows fund expenditures and revenues on both a GAAP basis and budget basis for comparison purposes. In
most cases, this conforms to the way the City prepares its budget with the following exceptions:
1. Any principal payments on long-term debt within the enterprise funds are applied to the outstanding
liability on a GAAP basis as opposed to being expended when paid on a budget basis.
2. Capital outlay within the proprietary funds are recorded as assets on a GAAP basis and expended on a
budget basis.
3. Depreciation expense is not budgeted.
4. Inventory is expensed at the time it is used.
27 of 35
SCHEDULE "A" OF RESOLUTION R-19-25
City of Sebastian, Florida
Financial Policies
Compensated absences liabilities that are expected to be liquidated with expendable available financial
resources are accrued as earned by employees on a GAAP basis as opposed to being expended when paid
on a budget basis.
C. Guidelines
The Comprehensive Annual Financial Report (CAFR) presents the status of the City's finances on a basis
consistent with Generally Accepted Accounting Principles (GAAP). Therefore, a statement of net assets and a
statement of activities are presented for total governmental funds and total proprietary funds on an accrual basis
of accounting. Additional statements then identify major governmental funds and individual proprietary funds,
with the modified accrual basis of accounting used for Governmental funds and accrual basis of accounting
used for the proprietary and trust funds. In order to provide a meaningful comparison of actual results to the
final budget, the CAFR presents the City's operations on a GAAP basis with a reconciliation to presentations
of fund revenue and expenditures on a budget basis for the General, Special Revenue, and Debt Service funds.
Current revenues shall be sufficient to support current expenditures. The Administrative Services Department
will monitor each fund and make timely budgetary recommendations and adjustments to be sure no
expenditures are in excess of appropriations at fiscal year end, which is not permitted under Florida State
Statutes. The budget process and format shall be performance-based and focus on goals, objectives, programs,
and performance indicators. The budget will provide adequate funding for maintenance and replacement of
capital plant and equipment.
D. Budget Amendment
1. Changes to total fund appropriations and uses of contingency appropriations may only be approved by the
City Council.
2. Shifts in appropriations within fund totals may be done administratively on the authority of the City
Manager. In most cases the City Manager will request City Council's approval, since any significant item
prompting the change will usually go to the City Council (e.g., award of contract, additions to staff, contract
change order). Procedures for transfers between appropriations and delegation of budget responsibility will
be set by the City Manager.
3. A Budgetary Control System will be maintained to ensure compliance with the budget. Monthly operating
statements are provided to all Department Heads and Quarterly budget status reports will be provided to the
Citizen's Budget Review Board and the City Council comparing actual versus budgeted revenue and
expense activity for all budgeted funds.
E. Planning
The City will annually prepare and distribute to departments and the City Council a Five -Year Forecast for the
period beyond the next fiscal year. The forecast will include estimated revenues, operating costs and future
capital improvements included in the capital improvement plan, as well as projected fund balances.
III. Revenue Policies
A. Revenue Projections
The City shall estimate its annual revenues by objective and analytical processes. The City shall maintain a
diversified and stable revenue system to the extent provided by law to insulate it from short-term fluctuations in
any one revenue source.
B. User Fees
The City shall recalculate on an annual basis the full cost of selected activities currently supported by user fees
and charges to identify the impact of inflation and other cost increases. The City shall set fees and user charges
for the Golf Course and Building Enterprise Funds with the intent to have them fully support the total direct and
indirect costs of their respective operations, including any debt service and depreciation.
28 of 35
SCHEDULE "A" OF RESOLUTION R-19-25
City of Sebastian, Florida
Financial Policies
IV. Performance Measurement Policies
A. Establishing Performance Requirements
Annually, each department shall develop departmental performance measures that correspond with the
department programs and file them with the City Manager's Office. Goals should be related to core services of
the department and should reflect stakeholder needs. The measures should be of a mix of different types,
including effectiveness, efficiency, demand and workload. Measures should have sufficiently aggressive
"stretch" goals to ensure continuous improvement.
➢ Workload — Measures the quantity of activity for a department (e.g., number of calls responded to).
➢ Demand — Measures the amount of service opportunities (e.g.. total number of caIls).
➢ Efficiency — Measures the relationship between output and service cost (e.g., average cost of the response to
a service call).
➢ Effectiveness — Measures the impact of an activity (e.g., percent of people who feel safe).
Department Directors shall establish performance measures for each program within their department. These
must be linked to the department wide goals and objectives being supported. Systematic and cost effective
methodologies must also be developed to monitor and project the established performance measures.
Supervisors shall insure that fair, objective and aggressive performance measures are identified for each
employee or work group that directly supports program goals and objectives and that an evaluation of the
success in accomplishing departmental measures are part of the employee's annual performance review.
B. Reporting Performance
Quarterly summaries of progress on goals and objectives and departmental performance measures will be
provided to the Administrative Services Director for publishing in the City Council's Quarterly Budget to
Actual Report.
V. Investment Policies
A. Investment Management
The City Administrative Services Department shall perform a cash flow analysis of all funds on a regular basis.
Disbursement, collection, and deposit of all funds will be scheduled to insure optimum cash availability. When
permitted by law, the City shall pool cash from each respective fund for investment purposes. The
Administrative services Director, as the City's Chief Financial Officer, shall select and manage all City
investments. Investments shall always be made with the priority focused on achieving safety, liquidity and
optimal return of the investments, in that order. Further detail on allowed investments is contained in a
separately published investment policy.
B. Investment Analysis
The Administrative Services Director shall review the investment policy established for investing surplus funds
to account for changes in legislation and market conditions on a regular basis. The Administrative Services
Director shall prepare quarterly investment portfolio reports containing information on the securities being held
and the returns of each investment category. The City's Chief Financial Officer shall meet and discuss any
changes in investment strategies or differences in investment holdings with an Investment Committee consisting
of the Administrative Services Director, the City Manager and a third person selected by the City Manager.
29 of 35
SCHEDULE "A" 4F RESOLUTION R-19-25
City of Sebastian, Florida
Financial Policies
V.I. Capital Improvement Program Policies
A. Capital Improvement Plan
The City shall adopt an annual Capital Budget based on the Capital Improvement Plan and make all capital
improvements in accordance with it. Future capital improvement expenditures necessitated by changes in
population, real estate development, or in economic base will be calculated and included in the capital
improvement plan projections. The City will determine and use the most prudent financial methods for
acquisition of capital improvement projects based upon market conditions at the time of acquisition.
Capital Replacement Programs — The City shall forecast capital replacement and maintenance needs for at least
five-year periods beyond the budget year and update this projection each year. From this, a maintenance and
replacement schedule shall be developed and implemented. Funding for capital replacement may be obtained
through excess year-end surpluses as identified in the Use of Surplus Policies. Maintenance programs shall be
paid for on a pay-as-you-go basis. The City will determine and use the most prudent financial methods for
acquisition of capital equipment, based upon market conditions at the time of acquisition.
B. Definition
Capital improvements include streets, buildings, building improvements, park expansions/improvements, new
parks, airport runways, infrastructure improvements, and acquisitions of equipment. Projects in the Capital
Improvement Program generally cost more than $750 and last at least five years (with the exception of
computer software if $5,000 or greater). For accounting purposes, these lesser cost capital items are often
included, in order to easily reconcile the initial year with the capital accounts budgeted in that year's Operating
Budget. Significant allocations to some programs that do not meet the definition of capital items may also be
reflected in the Program in order to present the complete financial plan, although they may ultimately be
accounted for as operating expenditures.
C. Alignments
The City shall coordinate the development of the Capital Improvement Program plan with the development of
the Operating Budget, as well as ensuring compliance with the Comprehensive Plan Capital Improvement
Element. Future operating expenditures and revenues associated with new capital improvements will be
projected and included in the Capital Improvement Program Forecasts.
D. Project Approvals
Capital projects submitted for approval must be justified in terms of how the project supports the achievement
of the City's strategic priorities. The originating department of the capital improvement project will identify the
estimated costs and impacts on revenue and operating costs for each capital project proposal. Projects are
prioritized and approved based on the relevancy of the project to the City's strategic plan and the impact on the
end stakeholder(s).
E. Maintenance
The City shall maintain all capital assets at a level adequate to protect the City's capital investment and
minimize future maintenance and replacement costs.
F. Physical Inventory
An annual physical inventory will be conducted to ensure that all capital assets listed in the City's financial
system are accounted for, and that sufficient internal control over capital items is exercised. Further detail on
capital purchases and dispositions is detailed in a separately published policy.
30 of 35
SCHEDULE "A" OF RESOLUTION R-19-25
City of Sebastian, Florida
Financial Policies
VII. Debt Management Policies
A. Market Review
The City's Administrative Services Director, in conjunction with the Financial Consultant, shall review its
outstanding debt annually for the purpose of determining if the financial marketplace will afford the City the
opportunity to refund an issue and incur less debt service costs. In order to consider the possible refunding of an
issue, a present value savings of at least three percent (3%) over the life of the respective issue should be
attained.
B. Debt Financing for Capital Assets
1. Short-term Borrowing
Short -terra borrowing or lease/purchase contracts should only be considered for financing major operating
capital equipment when the Administrative Services Director, along with the City's Financial Consultant,
determines that this is in the City's best financial interest. Lease/purchase decisions should have the
concurrence of the appropriate department/division head and should consider the net cost after factoring in
anticipated maintenance expenditures.
2. Issuance of Long-term Debt
When the City finances capital projects or purchases by issuing long-term debt, it shall amortize the debt over a
term not to exceed the average useful life of the project(s) financed. Financing utilizing bank notes will be
preferred to avoid the higher issuance cost typically incurred with bonded debt. Except in the most unusual
instances, the City will seek competitive bids to assure it selects the financial institution with the most
advantageous terms.
If General Obligation Bonds are issued, the City's goal will be to limit the maturity to fifteen (15) years. When
possible, the City shall use a special assessment or self-supporting financing instead of general obligation
bonds, so those benefiting from the improvements will bear all or part of the cost of the project financed.
C. Debt Service Levels
Annual General Fund debt service expense, if any, will be limited to eight percent (S%) of the General Fund
expenditures budget.
The City will limit its total outstanding General Obligation debt, if any, to five percent (5%) of the assessed
valuation of taxable property.
The City will limit the amount of Variable Rate debt to fifteen percent (15%) of the total debt outstanding.
D. Bond Ratings and Full Disclosure
The City recognizes the importance of favorable bond ratings by the various rating agencies. Bond ratings will
be obtained when bonds are issued and will be regularly updated for the term of the issue. The Administrative
Services Director, along with the Financial Consultant, shall periodically review possible actions to maintain or
improve its bond ratings and shall maintain good communications with bond rating agencies and its bond
insurers about its financial condition. The Administrative Services Director shall coordinate all communications
to ensure a professional and factual response to any inquiries.
The City shall follow a policy of "full disclosure" in its Comprehensive Annual Financial Report and bond
prospectuses. The Administrative Services Director shall assure that all legally required filings are made in
regard to outstanding financings.
31 of 35
SCHEDULE "A" OF RESOLUTION R-19-25
City of Sebastian, Florida
Financial Policies
E. Decision Making and Analysis
The City's strategic planning and budgeting decisions are based on a number of processes currently in place.
The specific tools used are:
Citizen Advisory Boards (e.g., Citizens Budget Review Board) are teams made up of Residents and City
staff to address specific concerns and provide direction and feedback;
❖ Master Planning — Specific functions and processes are included in written plans, such as the
Comprehensive Plan, Storrnwater Master Plan, Community Redevelopment Agency Master Plan and the
Airport Master Plan;
❖ Fiscal Impact Model — Allocation methodology that quantifies average and marginal revenues and the costs
of new development by land use type;
Revenue Forecasting Model Statistical time series analysis and tracking model of major revenue sources;
❖ Performance Measurement System -- Quarterly performance evaluations and reports;
❖ Capital Budgeting Tools — Present Value Payback, Net Present Value Analysis, Own/Lease Analysis, and
Return on Investment (ROI) Analysis;
❖ Five -Year Financial Plan — Multi-year forecasting of revenues and expenditures beyond the next budget
year for all major City funds;
❖ Ten -Year Fleet Replacement Program — Equipment maintenance and replacement schedule covering the
useful life of all vehicle classes;
❖ Ten -Year Equipment and Maintenance Program - maintenance and replacement schedule covering the
useful life of all major equipment, other than vehicles;
❖ Financial Trend Monitoring System — Systematic analysis of major financial indicators;
VIII. Fund Balance Policies
On an annual basis, after the year-end audit has been completed, but no later than April 1, the City's Chief
Financial Officer shall update schedules of all fund surpluses and deficits, with projections of reserve
requirements and any plan for the use of any excess surplus for the current year in accordance with the
Financial Balance Policies and Use of Surplus Policies. This will be reviewed to ensure compliance with stated
and adopted policies, but also to analyze the total reserve and surplus picture to ensure that the policies as
adopted do not inadvertently create adverse effects. The City's Administrative Services Director shall provide
recommendations to the City Manager for any changes to the Fund Balance Policies and Use of Surplus Policies
based on needs identified in this analysis.
A. General Fund uncomrnitted and unassigned fund balances will be maintained at a target amount of five
million dollars ($5,000,000) as a reserve for declared natural disasters. This approximates an amount
calculated to sustain City operations in the aftermath of unforeseen or emergency events, such as hurricanes
declared to be natural disasters. Key assumptions of this calculation are:
a. That damage to City -owned and private property will amount to a loss of no greater than 30% in overall
property values;
b. That the damage occurs after the maximum proposed millage is established for the next fiscal year,
resulting in up to a year's delay before there is the option of increasing property tax revenues;
c. Property taxes, franchise fees, utility service taxes and other revenues will decline;
d. There would be significant public safety and public works employee overtime; large outlays for debris
removal; plus expenditures for repairing and replacing City facilities,
e. Reimbursements from insurance claims will occur within six months and FEMA claims will occur
within a year;
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SCHEDULE "A" OF RESOLUTION R-19-25
City of Sebastian, Florida
Financial Policies
B. In addition, the City shall assign any General Fund operating surplus for the fiscal year (revenues in excess
of expenditures) to restore the Capital Renewal and Replacement Reserve to a balance no greater than
$275,000. This Reserve is assigned for the purpose of allowing the City Manager to immediately proceed
with repairing or replacing essential equipment or facilities in instances where those items have not been
budgeted. Such expenditures shall be governed by the purchasing thresholds set by City Code Section 2-10.
The necessary budget adjustments for these items shall be reported to and approved by the City Council
along with the next Quarterly Financial Report.
C. Consideration shall also be given to establishing extra cushions for unanticipated events or extraordinary
expenditures, such as:
a. Uncontrollable shortfalls in intergovernmental revenue occurring due to poor economic conditions at
the State and National levels or the willful political action of those attempting to undermine home rule
and the effectiveness of City government. (General Fund receives about $3.7 million each year from
Communication Service Taxes, State Revenue Sharing, Motor Fuel Taxes and the Half cent Sales
Taxes which is about 29% of its total revenues);
b. Significant payouts of unused employee leave accruals at the time they terminate. These are typically
manageable by covering them from the relevant department's other budgeted funds but the departure of
100% of the employees would create a total payout of about $1.4 million in wages alone. In response to
some emergency situations, the City could be faced with excessive voluntary departures or perhaps
mandatory layoffs due to the financial situation.
c. Unanticipated expenditures on capital outlays or capital replacements of such a magnitude that are
beyond the possibility of immediately funding within any legal or normally reasonable means.
(1) Although financing from financial institutions may be feasible in certain isolated cases, this
possibility may not be available should those creditors have to also consider other events the City
could be dealing with at the time.
(2) Additional cushions could be established in certain Special Revenue Funds (Local Option Gas Tax,
Discretionary Sales Tax, Community Redevelopment Agency and Stormwater Utility Funds) as a
capital reserve for this purpose.
d. The unfunded Police Pension Fund Actuarial Accrued Liability is also something that could possibly be
a concern. Annual contributions to the pension plan are calculated to cover the vested benefits being
accumulated by the Police Officers but the deficit occurs when plan changes are made or when
assumptions are changed or when certain assumptions such as investment income do not materialize.
An immediate payout is not required, since repayment of the deficit is allowed to be amortized and
calculated into future annual payment requirements. Some consideration could be given to either paying
more than required on the annual requirement or establishing another cushion of cash reserves in case
political forces create a mandate in the future to pay off the deficit.
e. Localized emergencies that may not be eligible for insurance or FEMA reimbursement, such as
flooding, tornados, sink holes, earth quakes, civil disorders, terrorism, explosions, fires, etc.
Emergencies of this nature would most likely impact operational accounts such as overtime pay
expenditures and utility tax and franchise fee revenues. To the extent possible without increasing tax
rates, a cushion of some amount would be warranted.
D. Target amounts should be established and reviewed annually during the budgeting process for each of the
above. Generally, the targets would be calculated as a reasonable percentage of the total based on a
rational analysis of the perceived likelihood of the event actually occurring and amounts that would be
sufficient to reduce the negative impact of the event to acceptable levels. At the discretion of the City
Council, the creation or replenishment of established target amounts will occur as soon as reasonably
possible without tax rate increases or further damaging ongoing levels of service to the public.
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SCHEDULE "A" OF RESOLUTION R-19-25
City of Sebastian, Florida
Financial Policies
E. In some instances, the City's Golf Course, Airport and Building Enterprise Funds may be impacted by the
foregoing emergency conditions. Certainly, the Golf Course and Airport may not have the resources that
might be necessary to effectively restore their operations. While considering the level of targeted cash
reserve balances in the General Fund and Special Revenue Funds, it must be recognized that these
operations may also need financial assistance to recover.
F. In conclusion, the following Fund Balance Policies for funding amount targets will be in effect:
a. Declared National Disasters - $5,000,000 Target Balance.
b. Capital Renewal and Replacement Reserve — Replenished Up to $275,000 from Operating Surpluses.
c. Shortfalls in Intergovernmental Revenues — $370,000 Based on 10% of Annual State Revenues.
d. Employee Leave Accrual Payouts $350,000 Based on 25% of Accumulated Liability.
e. Capital Outlay Reserve — Set Aside 5% in Certain Special Revenue Funds:
i. Local Option Gas Tax — $37,000 based on 5% of budget of gas taxes.
ii. Discretionary Sales Tax — $176,000 based on 5% of budget for sales taxes.
iii. Community Redevelopment Agency — $19,700 based on 5% of budget for tax increment receipts.
iv. Stormwater Utility — $97,000 based on 5% of budget for stormwater fee receipts.
f. Unfunded Police Pension Liability — Address this by increasing annual contribution when possible.
g. Localized Emergencies — The severity of such events is difficult to envision, thus it is assumed that
other balances would have to be utilized.
h. The total funding target for General Fund to cover items a, b, c and d. would be $5,995,000, which
exceeds current balances. These are to be fully funded as soon as possible by using accumulated
Operating Surpluses that result from revenues exceeding expenditures.
IX. Use of Surplus Policies
It is the intent of the City to use all uncommitted or unassigned surpluses to accomplish three primary goals:
meeting fund balance policies, avoidance of future debt, and reduction of outstanding debts or liabilities. The
City will always avoid using fund balances or year-end surpluses to cover ongoing operating expenses.
A. Any surpluses realized in the General Fund may, at the discretion of the City Council, be used to restore
fund balance targets or other purposes in the following order of priority:
1. $5,000,000 target reserve for declared national disasters.
2. $275,000 maximum start of the fiscal year Capital Renewal and Replacement Reserve.
3. $370,000 target reserve for shortfalls in intergovernmental revenues.
4. $350,000 target reserve for payouts of terminating employee leave accruals.
5. Additional payments to reduce the Police Pension Trust Fund Unfunded Actuarial Accrued Liability.
B. After fully satisfying the fund balance targets or additional payments, surpluses may be used for the
following purposes, listed in order of priority:
1. Additional Cash Payments for Capital Improvement Program Projects. Using cash to purchase
capital items that may otherwise to be purchased with the proceeds from debt will reduce the future
debt burden of the City. This strategy may be beneficial but a financial analysis should be
performed to determine the greatest net present value savings.
2. Cemetery Permanent Trust Fund. After all other needs have been satisfied, excess surpluses may be
transferred to the Cemetery Permanent Trust Fund established to care for the Cemetery. The
amounts transferred shall be deemed corpus to the Cemetery Trust fund for funding Cemetery care
and maintenance.
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SCHEDULE "A" OF RESOLUTION R-19-25
City of Sebastian, Florida
Financial Policies
3. Riverfront Redevelopment Agency. After all other needs have been satisfied; excess surpluses may
be transferred to the Riverfront Redevelopment Agency that has been established to provide
infrastructure and public facility needs in that area that will result in increased property values.
C. Special Revenue Fund Surpluses
Local Option Gas Tax Revenue Fund — A target reserve will be maintained in an amount equal to five percent
(5%) of the annual budgeted gas tax receipts to alleviate the impact of a decline in amounts of collected revenue
and to provide sufficient funds for unanticipated transportation expenditures. Surpluses projected five years
beyond the budget year may exceed the target or be allocated toward additional eligible projects or programs.
Discretionary Sales Surtax Revenue Fund — A target reserve will be maintained in an amount equal to five
percent (5%) of the annual budgeted sales tax receipts to alleviate the impact of decline in amounts of collected
revenue and to provide sufficient funds for unanticipated replacements of eligible capital improvements or
equipment. Surpluses projected five years beyond the budget year may exceed the target or also be programmed
toward additional eligible capital infrastructure, payoff of the outstanding Stormwater Bank Notes or
forgiveness of some of the advances made for the construction of Airport Hangars A and B.
Community Redevelopment Agency — A target reserve will be maintained in an amount equal to five percent
(5%) of the annual budgeted tax increment receipts to alleviate the impact of a decline in amounts of collected
revenue and to provide sufficient funds for unanticipated projects or programs. Surpluses projected five years
beyond the budget year may exceed the target or also be programmed toward additional eligible projects or
programs that may be identified in the future.
Padang In -Lieu -Of Fund — Surpluses will be used to fund projects that add vehicle parking facilities or may
be held in reserve for projects that may be identified in the future.
Recreation Impact Fee Fund — Surpluses will be used toward additional projects to provide additions or
improvements to Parks and Recreation facilities or may be held in reserve for projects that may be identified in
the future. (Note that impact fee payments must be refunded if not appropriated within seven years).
Stormwater Utility Revenue Fund — A target reserve will be maintained in an amount of five percent (5%) of
the annual budgeted Stormwater fee receipts for the purpose of alleviating the impact of an unanticipated
decline in amounts of collected revenue and to provide sufficient funds for unanticipated capital improvements.
Surpluses projected five years beyond the budget year may exceed the target or be programmed toward
additional programs or eligible capital proj ects or be used for paying off the Stormwater Bank Notes.
X. Reporting and Analysis
To ensure compliance with the adopted financial policies, the Administrative Services Department shall prepare
analyses in conjunction with the annual budget process to assist departments/divisions with budget projections.
The analyses include the following:
➢ Five -Year Forecast of Revenues and Expenditures — Planning tool used by the Administrative Services
Department to forecast and project various funds (General, Local Option Gas Tax, Discretionary Sales Tax,
Recreation Impact Fees, Riverfront CRA, Stormwater Utility, Golf Course, Building, and Airport).
➢ Financial Trend Monitoring System Set of financial trends and ratios used as leading indicators and as a
measurement of relative performance.
Revenue Manual — Guide to the major revenue sources that indicates the source, calculation, legal
requirements, historical trends and accounting guidelines. Updated annually and included in the annual
budget document.
1> Fund Balance and Reserve Analysis The City's Administrative Services Director will review the fund
balance and reserve levels and produce a report annually on reserve levels as compared to policy goals.
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