Budget Address 2007-2008 Mayor John Peyton Consolidated City of Jacksonville July 16, 2007

Tradition Of Fiscal Responsibility 11.31 9.64 8.48 6.85* * Effective millage rate with proposed Constitutional Amendment

Tradition Of Fiscal Responsibility Millage rate includes operating, voted debt service, land preservation, and hospital

Tradition Of Fiscal Responsibility

Tradition Of Fiscal Responsibility

A New Day For Local Governments Governor Crist pledged property tax reform Legislature failed to reach agreement in regular session Special session convened for property tax reform Passed two phases of cuts: Statutory rollback effective Oct. 1, 2007 Constitutional Amendment before voters Jan. 29, 2008 – To be effective Oct. 1, 2008

Impact Of Tallahassee Legislation On Budget Revenue for 07/08 determined by new formula Roll back revenue to 06/07 level Add in new construction Subtract 3 percent New millage rate equals 8.48 mills Revenue minus projected expenses leaves budget $65 million out of balance

Options To Balance The Budget Road to a balanced budget Option A: Cut Departmental Funding Option B: Generate New Revenue Option C: Hybrid – Cuts & New Revenue

Guiding Principles For Preparing New Budget Prioritize core government services Diversify revenue and reduce reliance on property taxes Aggressively capture cost savings Make surgical reductions in public safety budgets excluding first responders Prioritize public service grant funding Prepare for impact of Constitutional Amendment

Key Factors In Preparing Budget Focus on core services to the community Identify ways to increase service and decrease cost Factor in fixed expenses Collectively bargained wages and benefits Pension costs Debt service Internal costs: technology, legal, insurance Ensure acting responsibly with taxpayers’ money

Flexibility To Reduce Expenses Fiscal Year 06/07

Government Reorganization Reorganize 17 previous departments and executive agencies into 8 new business units Abolish 55 positions Eliminate duplications in services Results in approximately $3 million savings

Public Service Grants Worked to minimize reductions to non-profit community Developed more stringent criteria Tiered reductions based on type of services provided

Total Reductions and Adjustments Capital Maintenance $5.5 Million Public Service Grants $4.2 Million Children's Commission $2.7 Million Mayport Ferry $738,000 Constitutional Officers $1.2 Million Reorganization $3.0 Million State Health Department $1.9 Million Public Library $2.1 Million Fire and Rescue $4.0 Million Sheriff's Office $8.3 Million Other Cuts and Adjustments $4.9 Million Total Savings $38.5 Million

Budget Breakdown By Department

Public Works Department Responsible for: Solid Waste Right-of-way and grounds maintenance Engineering and construction management Real Estate Public Buildings 12 %

Recreation and Community Services Department Responsible for: Recreational and Community programs Behavioral and Human Services 6%

Commissions and Quasi-Executive Departments Includes: Jacksonville Public Library Jacksonville Children’s Comm. Jacksonville Human Rights Comm. Medical Examiner Jacksonville Economic Development Comm. 8%

Sustainable Communities Responsible for: Planning and Development Housing and Neighborhoods Environmental and Compliance 2%

Cuts Alone Are Not Enough $26.5 million out of balance after cuts Non-public safety departments absorbed significant reductions in prior years Further cuts significantly diminish service Next year, more than $100 million shortfall with passage of Constitutional Amendment

Forced To Make A Difficult Decision Road to a balanced budget Option A: Override Statutory Rollback Option B: Diversify Revenue

Overriding Statutory Rollback: Bad Idea Penalties built in for overriding cap Creates one time money Cannot be used for reoccurring expenses Maintains reliance on unreliable source of revenue

Tradition Of Fiscal Responsibility 12 Straight Years of Locally Driven Millage Rate Reductions 11.31 9.64 8.48 6.85* * Effective Millage rate with passage of Constitutional Amendment

Diversifying Revenue: Good Idea Property tax revenue no longer reliable source Public safety and non-public safety related costs continue to grow Non-public safety has absorbed significant reductions in prior years Cannot continue to cut funding and provide quality services Property Tax Revenue 51% Non-Property Tax Revenue 49%

DIVERSIFICATION is key to positioning community for the future. 25

Diversifying Revenue: New Fee Structure Modest in scale Phased in over time Balanced approach to minimize impact on taxpayers Proportionate application to avoid unfair burden

Franchise Fee 3 percent of utility bill starting April 1, 2008 JEA will continue to be low cost provider Join comparable cities across Florida including St. Petersburg, Tampa, Orlando, St. Augustine and Tallahassee Neighbor to Neighbor program

Residential Solid Waste Fee $5 per month for homeowners starting April 1, 2008 Offsets costs of residential solid waste collection Join 24 other largest cities in Florida in assessment of similar fee Atlantic, Jacksonville and Neptune Beaches all currently pay residential solid waste fees

Stormwater Fee Average $5 per month for homeowners starting July 1, 2008 Formula-based impact with credit for onsite improvements for commercial properties Offsets costs related to stormwater runoff and drainage Join approximately 80 percent of urbanized Florida that already has a stormwater fee Includes more than 100 cities

Estimated Impact To Average Homeowner Assessed Home Value of $160,000* Annual Savings from Property Tax Reform $156 Franchise Fee 4/1/08-9/30/08 $32 Residential Solid Waste Fee 4/1/08-9/30/08 $30 Stormwater Fee 7/1/08- 9/30/08 $15 HOMEOWNER SAVINGS $79 * $160,000 is median home value in Duval County

How We Balanced The Budget

Balanced Budget With Combination Of Reductions and New Revenue Out of Balance - $65 Million Net Adjustment and Reductions $38.5 Million Estimated Revenue from New Fees $26.5 Million Balanced Budget

What This Budget Does Prioritizes core government services Diversifies revenue and ensures sustainability Reduces reliance on property taxes Aggressively captures cost savings Makes surgical reductions in public safety budgets excluding first responders Prioritizes public service grant funding Positions for impact of Constitutional Amendment