City Explores Ways to Balance Budget
Service Delivery, Steady Property Tax Rate Remain Focus Despite Revenue Loss
July 08, 2020
The COVID-19 pandemic has impacted every aspect of life, every level of government and every community the world over. Through these events, the City of Tallahassee continues to prioritize the health, safety and welfare of the community and has taken steps operationally and financially to ensure the continuation of vital services despite a total projected revenue loss of approximately $23.4 million.
At today’s workshop, City Manager Reese Goad presented a budget update for the third quarter of Fiscal Year 2020 (FY20) and received direction from the City Commission on the development of the Fiscal Year 2021 (FY21) operating and capital budgets. To guide the development of the FY21 budget, the City Commission voted to hold the property tax rate at 4.1000 mills, where it has been for the last four years. Tallahassee maintains the lowest property rate among Florida’s 25 most populous cities.
With direction from the City Commission, the City has already taken prompt action on a variety of fronts to protect the public and provide financial relief to residents. Some of those actions include establishing the COVID-19 Emergency Disaster Relief grant (CEDR) for businesses and Local Emergency Assistance for Non-profits (LEAN) through the Blueprint Intergovernmental Agency; transitioning to online services, including permitting; establishing the Utility Relief Program, which provided bill deferrals and a six-month payment plan option; delaying utility disconnects; and providing a 27 percent utility bill discount in May.
As a step toward balancing the FY20 budget, modifications discussed include adjusting budgeted revenues by a net $17.7 million, appropriating available federal relief funding in the amount of $11.3 million and reducing budgeted expenditures by $6.4 million. Staff will continue to monitor and recommend final adjustments in the fourth quarter.
“In the face of this evolving, worldwide pandemic, our focus is on mitigating long-term impacts and ensuring the City has the resources necessary to support the community now and in the future,” City Manager Reese Goad said. “We made significant operational changes early on in this pandemic that have enabled us to continue delivering affordable, high-quality services to our residents. Looking forward, we will continue enhancing our operational efficiencies and maximizing the use of existing resources to meet the needs of Tallahassee residents.”
While other communities consider layoffs, furloughs or service cuts, the City has made a commitment to maintain filled positions at current salary and service levels dedicated to supporting the organization’s priorities: quality of life, public trust, public safety, public infrastructure, organizational effectiveness, economic development and impacts on poverty.
Workshop discussions also included the City’s bond ratings, which are a reflection of the City’s sound financial management. In connection with the Energy System (electric and gas utilities) issuance, the City has received ratings from Moody’s Investors Services and S&P of Aa3 and AA. The City also received ratings of its Consolidated Utility Systems (water, sewer, stormwater) bonds from Fitch and Standard & Poor’s Financial Services of AA+ and AA, respectively. With the benefit of strong ratings and the current low interest rate environment, the planned transactions will generate substantial reductions in debt service costs for the City’s utilities. Annual savings for the Energy System and Consolidated Utilities Systems are expected to exceed $3,000,000 and $300,000 per year, respectively for the next six to eight years.
The City remains committed to a transparent budget process. This workshop was part of the City’s ongoing budget series. The next budget update is scheduled for August 19. Public hearings for the proposed FY21 budget will take place during the City Commission meetings scheduled for September 9 and September 23. Pending a reduction in the local number of COVID-19 cases and a return to in-person meetings, these hearings will begin at 6 p.m. in the Commission Chambers, second floor, City Hall, 300 South Adams Street. FY21 begins on October 1.
City Commission meetings are open to the public, air live on WCOT (Comcast and CenturyLink channel 13) and stream live on Talgov.com and Facebook.com/CityofTLH.
Information about the City’s financials are available year-round through OpenGov and the City’s online budget, both accessible through Talgov.com.
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