Revenue Projection Discussion

2:15:53Okay. Okay. Okay. All right. We'll move on to the right-of-way.

2:16:04R forty presentation.

2:16:10Hi, good afternoon. Amy Farrell, Budget Director with the Office of Management and Budget. Um I'm here to present OMB 240016. It is a presentation only going over our revenue forecast and some key economic indicators while we build out our fiscal year twenty-five budget. Exciting stuff, right? All right, so our agenda for today. First we want to re-ground ourselves and our priorities for building R25 budget. There are a couple outstanding inquiries

2:16:40from our January Board workshop that we want to close the loop on. We're gonna look at a few economic indicators, as well as our internal projections for taxable assessed values, other major revenues that hit the general fund, and then a couple other major funds as well, some key expense drivers, and then we'll show you the remaining budget calendar.

2:17:07All right, so January we workshopped. And we got some board direction on targeted redevelopment on the US 19 corridor. Pedestrian safety such as sidewalks and streetlights, small business incentives and process streamlining, looking to maintain our current reserve limit within the general fund. And we'd like to assign millage to two new MSTUs, parks and paving.

2:17:40All right.

2:17:42So when we were um discussing the reserve limits in the general fund, we were talking about um the GFOA standard of 60 operating days as well as two catastrophic events. So two inquiries that the board had were Um, some of those counties that were impacted by Ian in September of 22, how were they impacted? So we're still working through some of those details, but what we were able to get from then to now is their current reserve policies. And you'll see

2:18:12that theirs are much more restrictive and aggressive than what we're operating with. Um

2:18:21And so preliminary looks, they did take some hit to their reserves, but we're still digging through some of those details.

2:18:32The second thing that you all asked us for, what happens if we have a catastrophic event? So here are some figures. We have two different figures here. If we lose property west of US 19 on our tax rolls, and then if we lose all of the properties west of Little Road. So $39 million if Our properties fall flat west of US 19 and are no longer on our tax rules. And then worse, worse,

2:19:02worst case, 112 million. So then just double that for the cost of two. No big deal. Yeah. Mm-hmm. Just making sure you're listening.

2:19:15All right. So now we're going to fast forward and look at some of our key economic indicators that we're looking at while building our 25 budget and then how those indicators drive us towards our internal projections for taxable assessed values.

2:19:31All right, so here we're looking at real GDP. And so this lets us know: are people still buying things? Right? So we're looking at consumer spending. It's this particular um economic indicator is less about how much items are costing and more about the quantity, um, because inflation could Could impact it if we were just looking at how much does it cost, right? But we want to know are people still buying things? And good news is that is up for the past few quarters, so we are still looking good there.

2:20:02People are still wanting to spend some money. Um and so this particular indicator points us towards our sales tax and how we project that revenue.

2:20:13All right. So we're also looking at low unemployment. Um Pretty much what this means is it costs more to hire good people because we have a competitive labor market. So this particular indicator and other like indicators have um Made us relook our timing of our pay plan. So we have accelerated that from a three-year cycle to a two-year cycle to make sure that we are staying competitive

2:20:44in this market.

2:20:47All right. So earlier today you um The clerk's office pr um did a presentation and they were talking about our US Inflation, what you'll see at a more localized level is our inflation is still higher than that of the national level. So we're looking at roughly 5.2% regionally. And so this really impacts us in terms of capital projects, our cost of equipment, and then our service contracts. That's where we really feel this inflation still.

2:21:19All right. So Another indicator. We look at our new home permits. So we are starting to see these level off a little bit. I did get some intel from my friends in building that while these are tapering down, we are seeing a slight spike up in renovation permits. So it looks as if people are investing in their homes rather than jumping into new ones.

2:21:46And then let's look at the history of our new construction values. So What this is telling us is that we probably can expect to have these continued high levels of growth were just not expecting this. Um So then on the next slide, we're going to take a look at how this translates into our taxable assessed value growth over the last few years.

2:22:13So last two years we had a big spike in our taxable assessed value growth. Um

2:22:22And so we have come up with some three scenarios. And it's important to note here that these three scenarios that we're going to show you on the next slide are um the budget office's internal projections based off of historically how we've been performing. It's far too soon in the right-of-way.

2:22:37We're not sending these to the sheriff or to anyone else to start making their budgets, right? Yeah. Well this is

2:22:44public.

2:22:44So we've we've we've instructed uh constitutional offices including the sheriff is that we're we're targeting our budget to be between eight and twelve percent increase in TAV. So

2:22:55Right. We just got caught last year a little hiccup.

2:23:01Right.

2:23:03Again, it's important to note that this is our internal projection from the budget office. It is far too early in the process for the property appraiser's office to give us any kind of preliminary numbers. We don't get those numbers till June. So we're looking at, like Mike had said, between an 8 and 12% range with the understanding that it could come in lower, it could come in higher, but we do need some guardrails for building the budget. So we're um we're shooting for a mid-range of 10%, but while also

2:23:34scenario planning an 8% and 12%, just so we're ready to expand or contract as the property appraiser. Yeah. All right, so It's important to note that while we're looking here at remaining projected increases before other factors, there are many other factors in the general Excuse me, in the general fund that will tell us truly how much money we think we have at the end of the day for additional recurring um business plan initiatives. So

2:24:04this is just one factor in how do we think the general fund's gonna shake out.

2:24:12All right, so let me orient you to these slides because the next few are gonna look very similarly. The tan bars are our current performance in all of the revenues that we're about to look at. The darker bar is what we thought we were gonna be doing this time last year. And then the light one again, those are going to be how we're shaking out with our current estimates given the new performance of the revenue,

2:24:42right? So we thought this time last year our half cent sales tax was gonna be performing a little bit higher than it's coming in right now. And same thing with our 25 projection. Um Still growing but not at the same pace that we thought it was going to.

2:24:59Wait, isn't that Your colors are a little similar to me. So um

2:25:08Which is which is the one that what is that downward sloping line?

2:25:13The downward sloping line is our year over year growth. So you see that we're not growing at the same pace. So it's growing but a little bit, not as much as it had grown the previous year. So that just shows

2:25:26going down.

2:25:27Yes.

2:25:27So how d how do you say it's growing?

2:25:29Well because the trend. So we're up from twenty one to So the projection to twenty five we will have more.

2:25:38So if we had a big spike in 21 in our sales tax, and then a smaller spike in 22, an even smaller spike in 23, and then we're projected an even smaller spike in 24.

2:25:52Interesting

2:25:53question.

2:25:53Yes.

2:25:54So we went two point seven. There was Carbal was there. That's a weird few other people from Canada. We went to the s the state of the region address at USF last week. Very fascinating. There's there's a website, it's worth reading. And it was highlighted, and I sat with one of the Luma College of Business Professors have worked work through a lot of the data they pulled of from our region. He stated fifty seven cents of every dollar. is going into housing, insurance, in all encompassing in this

2:26:25current economy in our region, fifty-seven cents of every earned dollar goes into housing. In a balanced market, about a third, thirty, thirty-three percent of your of every dollar earned. should be going into housing. So if that's the case, if fifty seven cents of every dollar people are are going in and they're just trying to afford to live and have a roof over their head. I don't know. It shows why the spending is down. Because they're just trying to pay taxes and

2:26:55insurance and And ba based on that, when it comes time to talk taxes, I I really hope that folks take a look at the state of the region and and how folks money is being spent. and what they're doing with it. So that I think that Well Tim Pitt there really Helps us identify why th your sales tax dollars are underperforming. I think. I don't know. I'm just guessing what's the Mr.

2:27:20Well and it's so also coupled with the fact that we are seeing some cooling in inflation, so that will also translate into less sales tax when inflation is higher, it sales tax also goes up. So you'll see that slight decline with the cooling of the inflation.

2:27:35Interesting.

2:27:44I'm I'm I'm not I'm not a big fan of your colors.

2:27:47Okay. Noted. Noted. All right. They're all

2:27:50browns.

2:27:51I'm hearing bright colors next time. You're speaking my love language,

2:27:53Commissioner.

2:27:57You colorblind? You guys?

2:28:01No, I'm just boring.

2:28:09Alright, my preferred color palette is rainbow and bright, so I will do better next time. All right, so our county revenue sharing um is overperforming. So while we've got some slight underperforming and half cent sales tax, we are uh a bit overperforming and our county revenue share um

2:28:28What does that mean?

2:28:30We're

2:28:31oversharing with our constitutionals or what

2:28:34information. So so these these are the revenues that the state collects is and that collects and then they divvy them out to the counties. So this is our cigarette tax collections, net sales, and our use tax.

2:28:46So we're doing really well with our cigarette sales, is that what you're saying?

2:28:50Uh throughout the state of Florida it would appear.

2:28:54Yeah.

2:28:56This is funner than I thought it was gonna be.

2:29:03All right, so our ambulance fee revenue is also holding steady. This is about roughly five percent of our general fund recurring revenue.

2:29:12Well, what is this crazy line? Growth here, beer.

2:29:16The year of your growth. It's the same line on all of them. I will take that out next time too, Commissioner Starkey does not like those things. Noted. Noted.

2:29:28Mm-hmm. All right, so then our commute communication service tax. So this one actually lives in our municipal service fund, but since our general fund supports our municipal services fund, it is important to look at this one and know that it is a bit volatile and unsteady and unpredictable at best.

2:29:47All right. So before we move on to expense drivers, any more questions on Amy's fun years the nine one charts. Um so while this one is predominantly used for emergency services, it's not necessarily for emergency services. The 911 has its own fund. Um, that is a separate tax.

2:30:08Isn't Amy, isn't this the one that the legislature gave us when they took away our ability to franchise the cable? companies and Dan Dan's going yes.

2:30:19My Dan says yes. So that was that was a Marcy Thunder. We

2:30:23y we used to we used to be able to do franchise fees across the cable industry. And that's another thing the legislature took away from you and they said, We'll do it for you and pass it

2:30:39And that's so this is what you got a little piece later.

2:30:47All right. So now just some reminders. Again, this is not new information. We talked about this in January at the budget workshop. But we've got to operationalize our detention center expansion. We've got the pay study happening. There, we are tracking closely the retirement bill to see how that's going to shake out. So all of these. Expense pressures still exist, and it's what we are keeping at top of mind when we're going through looking at building our 25 budget.

2:31:19So your key takeaways for the general fund um Besides, Amy's gonna make charts much prettier and easier to read, is we've got a mixed look on our revenues. So we are going into this budget cycle very conservatively. Um, we have some large must-pays on the horizon a couple years out, not just in 25, such as the D shift starting for fire rescue. We need to make sure that we're planning for, um, continuing to Staff the expansion of the detention

2:31:50centers that continues through phase two and future fire stations that we know we need. We're also maintaining an intentional focus on staying competitive in the labor markets, and so we're really just looking for some strategic and targeted additions of recurring expenses as it relates to business plan initiatives and the general fund.

2:32:12All right, so how are some of our other major revenues performing? Um So our local option fuel taxes, so these are our first and second local option fuel taxes, so that funds some of public works OM and our Capital Road construction.

2:32:32So those are again, we're seeing the year-over-year growth is trending unfavorably, some might say.

2:32:43And our penny for Pasco is also looking a bit lower than we had projected. It's still high. It's just not as high as we thought it was going to be.

2:32:55All right, so where are we in the budget calendar? Well, right now we're in February and we're talking revenues and economic indicators and some key expenses. In March, you guys will get to hang out with me again while we talk about the status of the general fund, municipal service fund, and our fire MSTU. The county is deep in budget scrub mode and building our budgets for fiscal year 25 from an operational standpoint. What do we need for the next five years for capital? and what kind

2:33:25of business plan initiatives are we looking at. In June, we're gonna get the preliminary numbers from the property appraiser's office. We will also be workshopping with you all. Um and continue to refine those priorities. In July, we'll get the final taxable assessed values. We will um

2:33:46get our tentative millage rates and adopt our tentative budget and then in September we get to hang out again for our first and final public hearing where we adopt final millages and final budget numbers. What questions do you guys have for me?

2:34:05No.

2:34:05Right, well I'm not gonna stay up too long for you guys to have some.

2:34:10Thank you. All right, thank you.