The anatomy of a budget: Part One – A variable millage rate

The anatomy of a budget: Part One – A variable millage rate


The FY2022 Apopka Budget

Editor’s Note – The City of Apopka’s budget for fiscal year 2021-22 is a grueling process that started in March, then through three days of workshops in July, two hearings and two votes in September and culminates in the adoption of a budget on October 1st. A budget guides a city’s spending for the coming year. It is a fiscal roadmap for a municiplaity, and it can tell you a lot about the leaders who enact it. In the coming days, The Apopka Voice will publish a three-part series entitled Anatomy of a Budget. 

By Reggie Connell, Managing Editor

Oh, the difference 48 days can make.

On July 21st, the Apopka City Council concluded its three-day budget workshop, and then voted 5-0 to keep the millage rate of 4.2876 from the previous budget despite City Administrator Edward Bass proposing a millage rate of 4.1876.

Those are the facts, but as you might suspect, there are a lot of variables that got them there.

However on September 7th, Bass presented a budget with the millage rate back at 4.1876, but this time it was approved on a 4-1 vote.

Confused? Well, sometimes you have to go back a few weeks to understand the present.

July 21st

“It’s been a long week,” said City Administrator Edward Bass. “You’ve had three workshops, finished up all the line items, heard all the requests, heard their needs, and heard their issues.”

Originally, Bass proposed a rate of 4.1876, which would have been a 0.1-mill decrease from FY2021. The proposal would have been a $400,000 reduction in revenues. But members of the City Council were skeptical.

“Sometimes the millage rate gets a lot of focus,” said Commissioner Kyle Becker. Right now, it’s at 4.2876. We are the lowest of any full-service city in the area. I hate even saying that that because if we’re sacrificing work quality or efficiency for our residents, it’s pointless to talk about having the lowest tax rate… I just want my opinion to be known. I want to keep the millage rate at 4.2876. Because I would be tone-deaf from the last few days if after hearing from directors and the staff on their staff that has addressed me personally. The verbatims that we’ve heard on this dais [Council]… ‘we’re doing this on the cheap or we’re rubbing two nickels together to get things done’. We’re a town of 53,000 people and we have big demographics and we should be able to provide services to our citizens, and we have a low tax rate. I don’t know what we’re arguing about here. Nothing in the budget presentations I saw in the last three days had a sustainability plan for their fleet… we don’t have employee sustainability in place. We aren’t marching towards certain staffing levels we want to see in place in a city we know is growing in the very immediate future. I fully support keeping the millage rate where it is at.”

Bass pushed back on Becker’s assertions that they did not fully fund each department.

“I will tell you from a staff standpoint, we’ve listened to each one and each staff member pretty much received something out of this budget this year,” Bass said. “Facilities are a significant placeholder. We’ve had to put some funding there. It’s a decision we have to make to keep up with our facilities. We listened to the presentation from the police department. We know that their response times are down. We’re hoping to get the grant to help us with that funding. If not, you’re right, we’ll have to come back and find that piece. We have reserves, and that’s why we have reserves… to fill the gaps. So the millage rate that you’re setting will fill those services. So if you’re wanting to put more money into these services, then the rate will go to this.”

Mayor Bryan Nelson was in agreement with the lower rate.

“If you’re a homeowner, you’re going to pay 3% more,” said Nelson. “If you’re homesteaded, you’ll pay 3%. If you’re not you’ll pay 10% more because of the market today. The guys that are getting hurt the worst… we’re going to try to give them some of that money back by reducing the ad valorem.”

But Commissioner Doug Bankson’s concerns with the unknowns of City expenses outweighed his optimism to drop the tax rate.

“To keep them where they’re at, we’d have to go back to the rollout rate. However, we’ve got all this uncertainty. We’ve got to give ourselves a buffer. If there’s something we’re missing, and we don’t realize it. We don’t want to leave ourselves short… so that’s why I am leaning on that higher side because of all the uncertainty… I think we’ve got to give ourselves that wiggle-room.

Commissioner Diane Velazquez was also in favor of keeping the millage rate the same as it was in FY2021.

“We just did all these budget workshops. There are still some things hanging. Especially the police department. We don’t know if they’ll give us a grant for five or 10 officers. That’s an unknown expense. If we roll back from where we are, we just end up back where we were. We just barely make it. Service still stays the same, yet we’re still growing. So keeping [the millage] the same would give us that small buffer.”

Commissioner Alexander Smith was also in favor of leaving the millage rate the same, but with some add-ons.

“I’m in favor of leaving it where it is, and if we need to in September roll it back. I would like to see the position the [City] Clerk asked for become a full-time position. And the fire department asked for additional personnel. So let’s see what we can do for them.”

Despite a spirited debate, the Council voted 5-0 in favor of the 4.2876 millage rate and were scheduled to vote again at a September 8th budget hearing. It was at that hearing that things seemed to change.

September 7th

Despite a clear consensus at the July budget vote, Bass returned to the podium to present the tentative budget with a millage rate back at 4.1876. The total budget was over $130 million, while the reserves in the general fund had dipped from 31.7% in FY2020 to a still-healthy 22-25% in FY 2022.

That was enough to flip Bankson’s vote.

“Everybody knows I’ve kind of championed having reserves,” said Bankson. I brought a proposal about six years ago about aiming at that 25%. “There are three main reasons to have reserves – storms, which is an issue Florida has. Number two is state-level governmental decisions that can affect us. The third is being in a position to acquire things, to be able to move on things like Camp Wewa. It’s not like we can never touch [reserve] that if we need to. And because of that position, we were able to say ‘we need to do it this year for our police’ and for places we want to go in our fire department… baby steps in some of those areas. As you [Bass] said, we would like to give everyone everything they want now, but the bottom line is the taxpayers are paying for that, so I think being responsible there – they have suffered. They have faced challenges… and so I think we are at a good number… we’re decreasing in millage. I just think it’s a responsible move right now. I think we are on target. I think it’s a good budget.”

Becker was the first to question the change in millage.

“It seemed like Council was comfortable with the 4.2876 rate, and then staff recommendation reverted back to the 4.1876 rate… and we use phrases like needed people, we’re stretched, things are always going up… there are things we need to have contingencies for than just what’s in our general reserve fund balance. So why are we saying ‘we don’t have money, we’re stretched, we need people, we need to upgrade our facilities’, and yet we’re going to reduce our millage rate one-tenth of a mill? It doesn’t make sense to me.”

And after the commissioner’s concluded, Nelson stated his reasons for the change in millage.

“A lot of people have suffered in the last 18 months due to COVID. And so I think when we look at our budget… do we have a lot of wants and needs? Absolutely. But I think we need to look at the taxpayers and you know what? We raised some fees… obviously, we’re getting 8% more in taxes anyway, so just give them that little sense of hope… that little tenth of a percent will go a long way in making them feel better and making them feel we’re in their camp and we feel what they’re feeling. I think that’s what our taxpayers deserve. They need a little help. I think they deserve it. I think 8% is still a great increase. I don’t know how you argue that’s not a significant amount of dollars coming in. I hope I get somebody to make a motion for a one-tenth mill decrease and help our taxpayers, who are paying the bills, with a little relief.”

Bankson was happy to oblige.

“For myself, I think it’s a sound move forward,” said Bankson. “I think we’ve taken some solid steps, and I think that does speak to taxpayers. I’m definitely willing to make that motion.”

Smith followed Bankson, and he too was convinced to vote for the lower millage rate because of another funding source that is being researched to increase its revenue stream.

“I was in favor of leaving the millage rate where it was,” he said. “But if I heard Mr. Bass correctly, we’re looking into impact fees. That rate increase, which will bring some additional dollars to the City, and that if we don’t receive the grants we’ll still get the firefighters, and police officers, then I will be in agreement with the one-tenth mill reduction.”

Becker, however, was not sold.

“I just want to put it in the right lense too,” he said. “Property taxes out of the general fun make up 28-29% of that overall contribution revenue, so when we talk about property taxes being the end-all-be-all, it’s not. 72% comes from other funding sources. So what we control is that property tax, and if the rest of that revenue is volatile in nature, what we’re doing is protecting a revenue stream that is going to critical needs in our City. Based on the workshops that we had. Based on hearing from director-level staff and their staff, I don’t think reducing it [millage rate], I think that keeping it at 4.2876; keeping it at the same rate. If the Wewa stuff doesn’t come to fruition if the grants don’t come to fruition everybody is going to come knocking at the general fund reserve fund door. And we’ve got to protect on a contingency fund basis. And that’s why I feel like we keep it at 4.2876 is fiscally responsible.”

The presentation by Bass, questions by commissioners, public comments, and Nelson’s remarks took nearly three hours, and the frustration showed once the voting process began.

After Bankson’s motion, there was an ask for a second, and then 11 seconds of silence before Smith finally seconded the motion.

Then Bankson, Nelson, and Smith all answered in the affirmative to the motion, but Velazquez called for a voice vote.

“Rolling back the one-tenth millage, which is $400,000 I just feel like we’re staying the same,” she said. “This is…”

“Is that a yes or a no?” Nelson asked before Velazquez could finish her thought.

“I would agree if we didn’t have so many advances as we made in many areas,” said Bankson to Velazquez. “Just as food for thought for you. Had we not done that, I think that I’d be saying the same but we really did do a lot to beef up and strengthen in a difficult time. When we get beyond that, I think we’re really going to be able to sail and move forward.”

“Yes but then next year’s budget,” Velazquez said. “We’ll find ourselves in…”

“We’re down to the vote,” Nelson said before Velazquez could finish her statement. “We’ve already…”

I know, Velazquez said.

“So we have three yes… and?”

“I’m going to vote for it because…,” Velazquez said.

“Okay, so we’ve got four votes in favor,” said Nelson.

The meeting ended after Becker voted no, and the budget and variable millage rate of 4.2876 moved on to the final hearing on September 15th.

* * * * *

In part two of Anatomy of a Budget, The Apopka Voice features perhaps the most contentious issue during the entire budget process –  the three-person crew on fire engines. Part two is entitled Where’s the Fire?



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