City Managers Budget Message
May 19, 2015 The Honorable Billy Keyserling, Mayor, and Members of the Beaufort City Council Proposed FY 2016 Budget Message Dear Mayor and Members of Council: This year's Proposed Operating Budget is similar to prior years' documents. It is presented in a manner to enable the reader to appreciate the internal workings of the city thus ensuring transparency, to demonstrate accountability on the part of city employees and elected officials, and to present a realistic financial picture for the community's future.We are committed to the implementation of our Civic Master Plan and the concept of sustainability. The manner in which all this is achieved is also similar. This year's budget process has necessitated staff holding spending levels flat and making decisions early enough in the process to affect outcomes by detecting changes in revenues and expenditures that will affect the city overall, not just individual departments. What is different about this document is the recognition that we cannot keep "kicking the can" down the road - we have reached the end of a dead-end road. We must find a new direction that is fair and equitable to all residents, businesses, and non-taxable organizations alike. We cannot keep cutting back on needed repairs, maintenance, equipment purchases, expenditures, and staffing levels and continue to maintain our reputation as one of the "best small towns" in America. Without increased revenue and much needed expenditures in the near future, we will begin to lose the ability to attract residents, tourists and businesses should the quality of life in Beaufort and its unique character, the things that make Beaufort so special, deteriorate. As required by law, we have balanced the budget. We have also held the tax cost to our taxpayers neutral for the coming fiscal year. We have achieved that, however, by increasing our allowable millage and by cutting back on needed expenses and delaying capital expenditures that we will have to face in the very near future. We believe that, in the interests of both our fiscal responsibility and our moral responsibility to the citizens of Beaufort, it is time for the City to recognize that we cannot operate on these types of budgets indefinitely. To address our future challenges, we propose a series of initiatives that we ask all of you to carefully and actively consider. These initiatives, when taken together, will help the City focus on the needs of the entire community, thus ensuring revenue stabilization, job retention, and economic development, while maintaining social equityand protecting and preserving our infrastructure, waterfront, parks, and the environment. As we have stated in a previous presentation of our goals, creating a budget that best serves the varied need of our community is similar to fitting the pieces of a puzzle together. The following initiatives will help us attain our objectives. Initiative #1: Review of Committees and improve relationships with county and state representatives Council will conduct a comprehensive review of all our committees and their pertinent ordinances, streamlining them where necessary and setting clear goals with established measureable objectives for the upcoming year. The Council will also work to improve relationships and communications with our county and state representatives in order to develop better understandings on the importance of issues like the Local Option Sales Tax, (which raises revenue while providing guaranteed credits to everyone's tax bill) , business license amendment, and others as they develop. Initiative #2: Tax-Exempt Real Property Council members and staff will meet with the major owners of property that is not on our tax rolls. Today, the value of these properties is over $320,000,000, representing almost twenty (20%) of our taxable value. These properties use all our City services and in many cases, the owners are landlords or operate commercial businesses and pay no city taxes or business license fees. In addition, several have purchased taxable property and/or businesses and made them non-taxable.If all were taxable properties, they would generate over one million dollars ($1,000,000) of revenue to the City; funds that would help alleviate the tax burden of our taxed property owners.This initiative is to be completed by the end of this calendar year. If there is no success with this, staff, with the assistance of a committee of citizens will draft an ordinance establishing a fee system for all property in this group for Council to consider as part of next year's budget. Again, this ordinance would propose a more equitable fee structure to fairly reflect the use of city services, which are now funded primarily by our residential taxpayers. Initiative #3: Review of Fees Staff will prepare recommendations regarding all fees and cost for licenses, permits, events, banners, staff special duty, tour buses,and use of city facilities by the end of September, 2015. Many of the current fees have not been adjusted in over ten (10) years. Council will then review staff's recommendations and approve the adjustments it deems necessary. All changes to the fees shall take effect by November 1, 2015. Initiative #4: Engage Beaufort's Employers The leadership of the city must effectively engage with the leadership of its employer base. The need for reaching out in order to retain and grow our employer base has never been greater. We must do all we can to retain the jobs we currently have in the community, and to take the actions necessary to attract new opportunities to the area. The Redevelopment Commission will take the lead in the initiative. Its work will begin immediately and will be ongoing. Initiative #5: Review of Regulatory Processes Staff shall conduct a comprehensive review and streamlining of all our regulatory processes in order to better address the needs of our customers. Many of the processes have been in place for a very long time and have not been updated to reflect the changing needs of our customers and advances in technology. The intent is to have a more concise and easier-to-understand process in which the regulatory requirements are tied to a desired outcome identified by the Cityas a way to improve customer service. This review shall be completed by the end of the fiscal year. Initiative #6: Use of the Accommodations Tax ("A-Tax") While we must, as always, continue to follow the requirements of the law regarding the use of A-Tax proceeds, staff is recommending that the total amount of money allocated to our various community organizations be frozen at the Fiscal Year 2015 (FY15) expenditure level for the next three (3) year period. All revenues earned beyond the FY 2015 level will be used to offset our operating cost for tourism-related expenditures as defined by state law.This will be accomplished by the A-Tax committee and overseen by the City Clerk and Director of Finance. Initiative #7: "Beaufort Pride of Place" Staff shall create a "wish list" of items that members of the community and civic organizations requested or areexpectingto see in the budget,but that had to be eliminated due to lack or revenue. Staff will ask Council to approve the establishment of a special fundto accept monetary donations and/ or needed materials. This initiative, "Beaufort Pride of Place", will be a community improvement and beautification program that we hope will be supported by members of our community, businesses, tourists, and civic organizations. The initiative's purpose is to enhance and maintain the appearance and infrastructure of Beaufort while building on the pride and community spirit that has been part of our social fabric for many years. An ongoing donor recognition procedure will be created to thank those who contribute. Over time, our parks and public facilities have grown, with the beauty and tranquility they offer enjoyed by people of all ages from around the world. When someone chooses to participate in our program, their philanthropic contribution makes them a partner in our ongoing work to sustain our parks, trails and facilities for everyone to enjoy. Beaufort Pride of Place will seek to improve, expand, and connect the City of Beaufort to the past and to the future by helping us build a more vibrant community. Staff has identified a preliminary list of key projects as needed and ready, once sufficient funds have been identified and received: Playground equipment Park maintenance Flowers & shrubs for parks and roadsides Trail extension at Pigeon Park Spanish Moss Trail Improvements Street lighting upgrades Park benches & tables Bike racks Solar operated electric auto charging stations Outdoor art Public safety equipment (Fire & Police) Way finding signage Youth engagement / employment programs Downtown holiday decorations Light pole flower baskets Additional Public Safety personnel cost This program will enable us to continue the development and maintenance of quality parks, public facilities, and needed infrastructure projects throughout the City. It allows individuals, non-profit entities, for-profit businesses, and civic groups to donate money or needed supplies to specific areas of interest to them or for general use. The possibilities are endless. If we are successful with this program, it will help spread the cost to those who enjoy and use our resources, but are not necessarily Beaufort taxpayers. All contributions will be tax deductible, to the extent allowed by law.
Summary The most difficult part of our budget proposal is for Council and staff to demonstrate the courage and commitment to implement and follow through on all these initiatives and to convince our residents to join us in accomplishing them. For us to be truly successful and get off the dead-end road, this must be a community-supported effort. I present for your consideration the Operational and Capital Budgets for the Fiscal Year 2016 (FY16). This budget is proposed with the full knowledge that we are facing continued revenue shortages, aging and deteriorating facilities which if not properly maintained will cost more to repair in the future, lack of population and job growth, a need for additional public safety personnel, increasing costs passed down to municipalities by the state such as retirement and insurance costs, and lack of state funding for the proper maintenance and improvements of roads, highways, and sidewalks. The City of Beaufort is spending in excess of $750,000 to maintain state assets located within the city limits of Beaufort. We are a city with a population of 12,300, but we are paying for services that serve a population in excess of 65,000 every day. This is not sustainable and changes must be made. Our budgets for the last three (3) years have been flat and all our departments have been stretched to their limits. The fact that this is our third year that our employees have not had a COLA increase, even though other area municipalities are making adjustments, reduces our ability to stay competitive and keep our key employees. This is not sustainable. We must find ways to increase our revenue and ask all of our community to help us accomplish this goal in the most fair and equitable way for all involved. The Budget for FY16 is recommended at $17,409,662. This is $318,889 less than requested by our department heads. It is $444,784 less than the current (FY15) amended budget. The explanations of all the budget details are found in the following FY 2016 Budget Presentation section. As the budget process now moves from the staff level, the formation and recommendation phase, to the Council level, for public input, Council review and adoption phase, I express my sincere appreciation for the time, energy and creativity our department heads and their staffs have dedicated to meeting priorities in this challenging fiscal environment. The continued hard work of the Mayor, City Council, and staff and our commitment to the City's strategy and initiatives will advance a fiscal plan for the upcoming year that does our best to satisfy the City's needs and priorities. I also wish to express my appreciation to Kathy Todd, our Finance Director, for all she has done to make this budget understandable and a reality. Truly, it would not have come together as it did without her efforts. Respectfully submitted, William A. Prokop City Manager | 
