Budget Overview

• Predicated on the concept of fund accounting

• Separates accounting of monies for purpose of performing specific functions in accordance with special regulations, restrictions or limitations

• Allows governments to demonstrate compliance with these restrictions

General Government Finance

• Segregated into six fund types:– General– Special Revenue– Capital projects– Debt Service– Proprietary– Fiduciary

General Government Finance

• Year 1– Prepare complete budget document for years one and two– Adopt budget for year one and set millage rate– Approve year two plan

• Year 2– Adjustments to the plan– Set tentative millage rate– Adopt year two budget

Budget Process

General Fund

General Fund• Accounts for those resources and their uses traditionally

associated with government• Funded by general revenues including property taxes,

licenses and permits, fines, utility taxes, GRU transfers, sales tax and state revenue sharing

• Includes expenditures for all departments providing government services

• Expenditures are not specifically tied to revenue sources

•7

• Four revenue sources make up over 75% of General Fund revenue– General Fund transfer– Property tax– Utility Tax– Intergovernmental revenue

• Growth rate of these revenues over past years declining or flat

• Don’t predict increase in this growth rate in the foreseeable future

General Fund Revenues

General Fund Revenues

Total FY15 Budget $106 million

33%

23%9%

11%

5%

9%

4%6% Utility Transfer

Property Taxes

Utility Taxes

Intergovernmental

Fire Assessment

Charges for Services

Other

Other Taxes

• Proxy for what GRU would pay if they were private utility– Property tax– Franchise fee– Return on investment to stockholders

• Single largest General Fund revenue source, approximately 35% of budget

• FY15 Transfer Formula• Base equals FY14 GFT level as determined by prior GFT formula methodology• Growth @ 1.5% per year• GFT reduced by biomass plant property tax revenue received• A decrease of more than $3 million

Utility Transfer

• Second largest General Fund revenue source at 23% of budget

• Recent legislative changes and economic downturn have combined to both reduce this revenue stream and make it more variable

• Gainesville faces unique challenges to ad valorem revenue generation– High percentage of government and public education owned property

creates tax base with the lowest percentage of taxable property in state

Property Tax

• Millage Rate– Tax rate set by the taxing authority each year– Voter approved millage for debt– Rate per $1000 value– FY15 rate is 4.5079

• Taxable Value– Determined by the Property Appraiser– Various exemptions

• Up to $25,000 - Homestead Exemption• $25,000 - Senior Homestead Exemption• $500 - Widows/Widowers, Disability and Blind Persons • $5,000 - Veteran Disability

Property Taxes

Trend in Millage Rates

3.8

4

4.2

4.4

4.6

4.8

5

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

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• Revenues are generated through taxes levied on electric, water, and natural gas utility customers who reside within City’s corporate limits

• Traditionally a function of three variables: number of customers, consumption per customer, and price

Utility Tax

• Account for 11% or $11.7m of revenue budget– Half Cent Sales Tax and State Revenue Sharing is $9.6m

• Dramatically effected by recession– FY09-FY13 are approximately $6.10M or 12.4% less than FY04-

FY08– FY18 is when we return to same level as our peak in FY06

• Recovery is beginning and projections include about 3% growth each year based on a combination of population growth and CPI growth

Intergovernmental Revenues

General Fund Expenditures

• General Government service delivery intensive organization

• Almost 60% of expenditures are personal services

• More than 50% of expenditure budget goes to Public Safety

General Fund Expenditures

FY15 General Fund Budget

• From FY08-FY12, cuts to General Fund budget totaled $15M– $9.5M in departmental cuts– $5.6M in city-wide cuts and organizational efficiencies– 81 Full Time Equivalent position reductions

• FY13-14– Relatively stable– Implemented Pension reform

• FY15 - another $2.2M in expenditure reductions– 13 Full Time equivalent position reductions– No raises budgeted for employees

General Fund Expenditures

Questions