New budget director delivers positive news for FY 2023

Chris Rose the county’s new director of the Office of Management and Budget, presents the forecast for FY 2023-2028 June 15 during this year’s first budget information session. Rose took over as director of the Office of Management & Budget in September 2021.

CLEARWATER — Soaring property values will keep Pinellas County’s general fund budget balanced for fiscal year 2023 without a millage rate increase, and reserves will remain well above the target of 15%.

Those were two of several heartening messages shared June 15 at the first of this year’s budget information sessions when Chris Rose the county’s new director of the Office of Management and Budget, and Jim Abernathy, Senior Financial Management & Budget Analyst, presented an overview and forecast for FY 2023-2028.

Rose took over as director of the Office of Management & Budget in September 2021. Fiscal year 2021-2022 started Oct. 1.

While Rose was there during last year’s budget preparations, he wasn’t in charge. But, former director Bill Berger left the books in good shape, despite fears that the pandemic would wipe the coffers clean. That didn’t happen, due mostly to an influx of federal grant funding. The county actually ended up in better financial shape than anyone expected.

And those federal dollars are continuing to help the county balance its budgets going into FY 2023.

Budget forecast

Abernathy explained that the county’s budget process begins in January with an update to the six-year forecast, which is used to ensure spending levels and available funds remain balanced. This is the 13th year that OM&B has created the forecast as a stand-alone document to guide the process. The forecast also helps commissioners see how decisions made today can affect the future, Abernathy said.

The forecast includes assessments of 10 of the major funds: general fund, emergency medical services fund, surface water utility fund, tourist development fund, transportation trust fund, capital projects fund, airport fund, sewer fund, solid waste fund and water fund.

This year’s assessments revealed a mix of likely short-term and long-term outcomes for each of the funds based on a number of conditions.

The general fund is probably most important because it pays many of the bills. The majority of the money comes from property taxes with lesser amounts coming from state shared half-cent sales taxes, state revenue sharing and communications services taxes.

Abernathy said property tax revenues are expected to remain strong with projections of a 12% increase in values for FY 2023, which is twice what it was last year. Higher property values allow the county to balance the general fund budget without raising millage rates; however, property owners should be aware, even though millage rates will likely stay the same, their tax bill will probably go up.

According to the forecast, property values will continue to increase year-over-year and cover general fund expenses through FY 2028.

The county has experienced steady growth in its tourist development tax fund since 2010 with the exception of FY 2020 and the slowdown of visitors due to COVID-19. However, tourism numbers quickly rebounded with record-breaking collections in FY 2021. Collections are projected to continue to increase through FY 2028 and be sufficient to pay for the Convention & Visitor’s Bureau.

The forecast for the emergency medical services fund, which is backed by property taxes and user fees, also brought good news. The millage rate has not changed since FY 2013 and should continue to bring in enough to pay expenses. Staff is proposing a slight decrease in the rate for next year.

The surface water special assessment fund is dependent on money collected from property owners in unincorporated areas of the county based on the amount of their impervious surfaces. The forecast shows revenues are not likely to be enough to cover expenses. Reserves will be used to make up the difference through at least FY 2026.

For years, the county had difficulty balancing the transportation trust fund, which receives its money from state and local fuel taxes. In FY 2022, the commission approved a dedicated millage assessment, which has stabilized the fund.

The capital projects fund is forecast to stay in balance through FY 2024. The fund is reviewed annually and adjustments are made to keep it that way, using the capital improvement program project portfolio management process. Priority is given to projects with multiple benefits.

The airport revenue and operating fund is an enterprise fund for St. Pete-Clearwater International Airport. The airport is self-supporting and receives no property tax dollars. It gets revenue from Allegiant, the primary air carrier, and other smaller carriers, and it brings in money through an agreement with a concessionaire that provides food, beverages and retail merchandise to airport visitors. The airport’s capital projects are paid for with federal and state grants. The fund is balanced through FY 2028.

The sewer funds forecast shows the multi-rate increases approved by the commission in 2019 will bring in enough revenue to pay for operating expenses and make debt payments, as well as partially paying for capital replacement and improvement projects through FY 2028. However, reserves will be needed to fund major capital projects through FY 2023 and there will be a need to finance projects in FY 2024-2028.

The forecast also shows that the solid waste fund is out of balance. The power purchase agreement with Duke Energy expires in December 2024. The power purchase agreement provides 55% of Solid Waste’s revenue, said Director Paul Sacco. The department is working on a new agreement, but it is not expected to be sufficient to cover expenditures. Staff is looking at various ways to bring in more money and cut costs to make up the difference.

The forecast for the last fund, the water fund, shows that multi-rate increases approved in 2019 will be enough to keep the fund balanced while retaining reserves through FY 2028.

Abernathy pointed out several factors that could impact the forecast including an economic slow-down or recession, rising inflation, the addition of property tax exemptions, new unfunded mandates from the state or federal government or environmental conditions.

The June 15 meeting was just the first of six budget information sessions during which time commissioners listened to department heads and budget analyst, who provided updates on their operations and needs. Commissioners heard presentations from Utilities, Solid Waste, Communications and the County Attorney.

The next day’s agenda included the Airport, Convention and Visitors Bureau, Economic Development, Pinellas Planning Council (Forward Pinellas), Housing & Community Development, Building & Development Review Services, Contractor Licensing Department and Office of Management & Budget.

On June 17, commissioners heard from Business Technology Services, Office of Asset Management, Parks & Conservation Resources, Animal Services, Emergency Management and Department of Administrative Services.

This week commissioners were scheduled to hear presentations on June 22 from the State Attorney, Public Defender, County Administration, Human Resources and Public Works. Next up on June 23 were the Health Department, Medical Examiner, Human Services, Office of Human Rights, Tax Collector, Safety & Emergency Services and General Government.

Lastly, on June 24, presentations were scheduled from the Supervisor of Elections, Property Appraiser, Board of County Commissioners, Sheriff and Clerk of the Circuit Court.

Next up in the budget process, the Property Appraiser will certify the preliminary tax roll on July 1 and OM&B will make adjustments to the budget as necessary. The county administrator is scheduled to present the proposed budget on Tuesday, July 19, 6 p.m.

Commissioners must approve tentative millage rates and notify the property appraiser by Aug. 2 so they can be included in the Truth in Millage Notices to be mailed by Aug. 22.

The first public hearing on the budget is set for Thursday, Sept. 8, 6 p.m. with the second and final hearing on Thursday, Sept. 22, at 6 p.m.

FY 2023 begins Oct. 1.

Suzette Porter is TBN’s Pinellas County editor. She can be reached at sporter@tbnweekly.com.