Martin County Fiscal Policy Recommended Additions
Prepared by Martin County Taxpayer’s Association
February 27, 2004
These recommendations follow the format of the 2004 Fiscal Policy Document. All are recommended additional language, understanding that some existing language would then be modified to be consistent.
Background
The multi-year history and forecasts of revenues and expenses will be reviewed annually prior to adoption of Fiscal Policy.
The draft annual operating and capital budgets prepared by staff and the final budgets adopted by BOCC shall be consistent with adopted Fiscal Policy.
Policy Objectives
Treat all County employees equally with regard to potential increases in pay and benefits.
Capital Projects required to maintain required Comprehensive Plan Levels of Service shall be first priority in budgeting and scheduling, those required to maintain desirable Comp Plan LOS second priority, and those unrelated to the Comp Plan third in priority.
By using coordinated Operating and Capital Budgets, provide the most cost-effective government services possible.
Financial Forecasting
Annual forecasts of revenues and expenses will include at least five years of actual historic experience for reference purposes.
Revenue Optimization and Diversification
When recalculating the cost of user fees and charges, the County shall evaluate potential for reductions and well as necessity for increases.
Enterprise funds shall not be charged more than 10% in indirect costs fees by General Government.
Use of Current Revenues
No more than 10% of ad Valorem millage may be dedicated to debt service.
Fund Balance
Excess reserve funds shall be first used to meet required Comp Plan LOS, second to reduce debt, and then used to reduce ad Valorem millage.
Revenue Manual
Revenue uses will also be documented in order to maintain a useful history of expenditures.
Capital Projects Policy
Capital Projects required to maintain required Comprehensive Plan Levels of Service shall be first priority in budgeting and scheduling, those required to maintain desirable Comp Plan LOS second priority, and those unrelated to the Comp Plan third in priority.
Growth-related Capital Projects shall be funded 100% by impacts fees. Repair and replacement Capital Projects shall be funded by recurring annual revenues. Incurring long-term debt is the least desirable funding mechanism, and will not be used unless necessary to maintain Comp Plan LOS.
Capital Program Bonding
A five year rolling historic average assessable tax base calculation will be used to maintain the 3% maximum ratio of debt to tax base, in order to guard against rapid fluctuations in real estate values.
Debt Policy
Change the debt capacity primary goals from “shoulds” to “shalls”. Reference the five year rolling average tax base.
Reserve Policy
The reserves necessary for each operating fund shall be identified and updated annually in the Operating budget, and revised and reported with every related budget amendment during the year.
Designated Reserves
If Capital and Special Revenues Reserve funds exceed those necessary to fund the priority Capital Projects required by the Comp Plan and described in the 10 year CIP, then those funds will be identified and considered in a separate public hearing for tax abatement as well as third tier Capital Projects.
Once all reserve goals are met, undesignated reserves shall be used first to reduce debt, and then to reduce ad Valorem millage.
New Long Term Policy Category: Employee Compensation
It is County Policy to treat all employees equally with respect to pay, benefits, and advancement opportunities. Annual cost of living adjustments to base pay shall be increased by the federal CPI in order to keep pace with inflation. Annual merit increases shall be budgeted at 2.5% of direct payroll, and distributed to employees by Department according to annual performance reviews. Merit increases may range from 0% to 5% of base pay, with an average of 2.5%.
Longer-term contracts with unions will be brought into conformance with these policies as they come up for renewal.
The County will periodically review all employee classifications and total payroll and benefits packages for competitiveness with similar markets and jobs, including the private sector where applicable, and make such adjustments as are necessary to maintain fair and equitable compensation for all employees.
If an employee contract provides pay and benefits greater than necessary to be market competitive, or greater than general County employment conditions, contractual adjustments will be made to correct such imbalances.
Management positions are generally not eligible for overtime pay. Overtime shall be allowed any given employee only after evaluation against federal guidelines.
New Long Term Policy Category: Ad Valorem Taxes
Ad Valorem tax revenues occasionally increase rapidly when assessed valuations increase and millage is not rolled back. When assessed valuations increase faster than the CPI, at least half of the revenues over and above the CPI shall be returned to taxpayers through millage rollbacks.
Annual Policies
The Board will first review the historic and projected revenues and expenditures, then adopt annual Fiscal Policy. Staff shall prepare the draft Operating and Capital budgets in accordance with the adopted Long Term and Annual Fiscal Policies, and additional specific Budget Guidelines.
Budget Guidelines
General Comments
Excess ad Valorem revenues generated by flat millage should be subject to the priorities above, not simply transferred to the Capital budget.
The Policies and budget are strangely silent on the necessity of maintaining Comp Plan LOS. If LOS are not maintained then moratoria are necessary until they can be met. This should be clearly stated in these policies and the associated funding priorities identified.