Fund Accounting & Revenue Overview Tuesday, April 25th, 2017 Christopher M. Quinn, MACC, CPA, CFE, CGFO, CGMA Finance Director Lina Williams Budget Coordinator Helena Alves, CIA, MBA Chief Accountant

Budget Preparation Timeline January - March First Quarter Review Annual Financial Audit Presentation of Annual Progress Report Survey Results to City Council Annual Update of the Strategic Action Plan April Revise 10 Year Infrastructure Plan Year to Date Budget Results Presentation Fund Accounting & Revenue Presentation Second Quarter Review Departments Begin FY 2018 Budget Preparation

Budget Preparation Timeline May – June Long Term Financial Planning Presentation Property Tax Review Presentation July - August General Fund Budget Workshop Adopt Maximum Millage Rate (August 4th deadline) Third Quarter Review Proprietary, Special Revenue & Capital Funds Budget Workshop Final Proposed Budget Presentation

Budget Preparation Timeline September Public Hearing to Tentatively Adopt Millage Rate & Budget Public Hearing to Adopt Final Millage Rate & Budget October – December FY 2017 Year End Close-out End of Year Review with Departments

Presentation Overview Regulatory Authorities Classification of Funds Revenue Overview Restricted vs. Unrestricted

Regulatory Authorities Governmental Accounting Standards Board (GASB) Exposure Drafts Statements Technical Bulletins Accounting and Financial Reporting Guidance Federal Government (IRS, SEC, GAO) Payroll taxes Debt issuance Grant compliance 1099 reporting Yellow Book State Government (Statutes, Department of Revenue, Rules of the Auditor General) Truth in Millage (TRIM) Annual reporting requirements

Fund Accounting A fund is a segregated accounting entity (checkbook) Tracks activities according to regulations, restrictions, or limitations. Revenue, restricted for a specific purpose, cannot be used for general operations Funds are divided into various types according to legal restrictions or their uses.

DO NOT TOUCH Restricted Fund Revenue Restrictions Must comply with legal and external requirements. Small County Surtax Capital projects Utility Revenues Operation and expansion of utility system Impact Fees Infrastructure capacity improvements related to growth Grants Specific programs/projects DO NOT TOUCH Restricted Fund

Fund Types Governmental Proprietary Fiduciary General fund Special revenue funds Capital projects funds Debt service funds Permanent funds Proprietary Enterprise funds Internal services funds Fiduciary Trust funds Agency funds

Fund Classifications Proprietary Funds Governmental Funds Primarily supported by taxes Proprietary Funds Primarily supported by user fees Fiduciary Funds Not the City’s money

Fund Classifications Proprietary Funds Governmental Funds General Fund Capital Projects Fund Special Revenue Funds Proprietary Funds Utility Fund Stormwater Fund Building Fund Fiduciary Funds VFF Pension Fund

Fund Classifications Proprietary Funds Governmental Funds Administration & Finance Public Safety (Fire & Police) Community Development (excluding Building) Streets & Parks Maintenance Parks & Recreation Proprietary Funds Utility Stormwater Building Information Technology Solid Waste Fleet Facilities

Fund Balance Definition Use Policy Accumulated revenues over expenditures Use For emergencies or one time expenditures (capital project) Not meant to fund continuing operations Policy General Fund Utility Fund Stormwater Fund Solid Waste Fund Disaster Reserve Self Insured Fund Fleet Fund

Revenue Classifications Taxes Permits, Fees and Special Assessments Inter-governmental Revenue Charges for Services Judgments Fines and Forfeits Miscellaneous Revenues & Other Sources

2017 Revenues by Source THIS IS OUR REVENUES BY SOURCE FOR THE FY 2017 BUDGET – YOU CAN SEE AD VALOREM TAXES IS ONLY 11% OF TOTAL REVENUE. CHARGES FOR SERVICE IS OUR LARGEST REVENUE SOURCE.

Discretionary Sales Surtaxes (Small County Surtax) Ad Valorem Tax (Property Tax) Based on taxable value of property Considered general revenue Local Option Fuel Tax Currently 6 cents per gallon on fuel purchased in Flagler County Distributed per Inter-local agreement based on road miles Restricted to transportation expenditures Currently allocated to the Streets Improvement Fund Discretionary Sales Surtaxes (Small County Surtax) Replaced Local Government Infrastructure Surtax .5 percent of the 7% sales tax collected in Flagler County Pursuant to an ordinance enacted by Flagler County Currently allocated to Capital Projects Fund

Communications Services Tax Taxes Communications Services Tax Applies to telecommunications, video, satellite and related services Rate of 5.22% Currently allocated to General Fund Business Tax Receipt Local Considered general revenue Public Service Taxes (Not currently in use) Electricity Water Natural Gas Propane

Intergovernmental Revenue State Revenue Sharing Portion of State sales and use tax collections & one-cent municipal fuel tax (a)76.20% Sales & Use Tax collections (b) 23.80% Fuel Tax and User Fees collections Currently allocated to General Fund (a) & Streets Improvement Fund (b) Local Government Half-Cent Sales Tax Distributes a portion of the state 6% sales tax Taxable sales within Flagler County Currently allocated to General Fund Fire Insurance Premium Tax Volunteer Firefighters’ Pension Other Grants County Business Tax Receipts Alcoholic Beverage License tax

Permits, Fees, Special Assessments Franchise Fees Solid Waste Natural Gas Utility (not in use) Special Assessments Old Kings Road Code Nuisance

Charges for Service Utility Fees Impact Fees Other Fees Water and Sewer Solid Waste Stormwater Impact Fees Water and Wastewater Transportation Parks Fire School (remitted to Flagler County Schools) Other Fees Annual Fire Inspections State Road Maintenance Recreation Fees Planning Fees Building Permits & Inspections

Judgements, Fines and Forfeitures Citations & Violations Traffic Citations Local Ordinance Violations Parking Tickets Code Fines Animal Control

Other Sources Inter-fund Transfers Debt Proceeds Internal Charges Payment-In-Lieu-of-Taxes (PILOT) Tax Increment for the CRA Debt Proceeds Loans Bonds Internal Charges Fleet Replacement & Maintenance Facilities Maintenance IT Allocation

Restricted Revenue Sources State Restricted Fire Insurance Premium Tax Volunteer Firefighters pension Fuel Tax Refund Construction & maintenance of roads Police Education Law Enforcement Building Permit & Inspection Fees Applied solely to BPI costs Local Option Fuel Tax Transportation expenditures

Restricted Revenue Sources State Restricted State Revenue Sharing (b) 24.86% Transportation expenditures Tax Increment Revenue (CRA) Per CRA plan Impact Fees Capacity improvements Special Assessments Purpose of assessments

Restricted Revenue Sources Other Water & Sewer Charges Restricted by Bond Covenants & City Council Used to maintain system & debt service Small County Surtax Restricted by Flagler County Ordinance Used for construction & improvement of public facilities, operating expenses etc… Stormwater Fee Restricted by loan covenants & City Council Disaster Reserve Restricted by City Council Used for costs related to a disaster

Unrestricted Revenue Sources Unrestricted revenue can be used for general purpose and at the discretion of the governing body In Use Ad Valorem Tax Alcoholic Beverage License Business Tax Receipts Communication Services Tax Natural Gas Franchise Fee Half-Cent Sales Tax Solid Waste Franchise Fee State Revenue Sharing (a) 76.20% Not Currently in Use Utility Franchise Fee Public Service (Utility) Tax

Looking Ahead May 15th Long Term Financial Planning Presentation June 13th Property Tax Presentation July 11th Budget Workshop - General Fund July 18th Adopt Maximum Millage Rate (August 4th deadline) August 8th Budget Workshop – Proprietary Special Revenue Funds & Capital Funds August 29th Final Proposed Budget Presentation September: Public Hearing to adopt tentative millage rate and Budget & Final Public Hearing to adopt final millage and budget