Naples is at a critical juncture. Naples and its taxpayers face many financial challenges: including addressing pressing stormwater management and water quality concerns, better managing growth and development and escalating infrastructure costs.
There are also significant fiscal challenges that will ultimately need to be addressed potentially via tax and/or fee increases or via the issuance of debt.
Starting today and during the next few weeks, we will be sharing some thoughts and perspectives on issues that can be expected to be front and center in the upcoming election.
The March 17, 2020 Election: Issues & Perspectives- Fiscal Challenges Ahead
Did you know that…
• Taxes- The tax base has increased over 30% since 2016- from $18.3 to $24.1 billion. The mill rate (1.18), however, is the same in 2020 as it was in 2016.
• Budget challenges- In 2019/2020 “Total revenues are budgeted at $136,768,032 and expenditures at $152,479,914, using $15,711,882 of reserves/fund balances.
• Declining Fund Balance- The “unassigned” fund balance was $16.4 M as of 9/30/2016 vs $7.1M as of 9/30/2018 (and estimated to be $7.2 M at the end of FY 2019/2020)
• Stormwater Fund dramatically underfunded. The Stormwater fund balance is expected to drop to $141,211 at the end of the FY—after accounting for Phase I (only) of the beach outflow project. The stormwater management plan identifies some $60,000,000 in stormwater projects. Given that stormwater fees currently generate approximately only $5M in revenue per year—keen attention will need to be focused on the prioritizing and the financing of these projects. Unfortunately, we have known for many years about the serious impaired condition of the Lakes (that are intended to serve an integral role in stormwater management) and the DEP directive that the beach outflows would need to be addressed as a prerequisite to permitting any future beach re-nourishment.
• Water and Sewer Revenue vs Expense Shortfall- revenues (of @ $35M annually) are not keeping pace with expenses (of @$42M annually).
• Five Year Capital Improvement Program (CIP)- the Five-Year CIP has escalated dramatically from $125M in 2016, $119M in 2017, $119M in 2018 to $174M in 2019. Approximately $26M of the projected $55M CIP increase is associated with water/sewer projects.
• City of Naples Pension Fund- the shortfall is approximately $40M albeit with an 7.4% return assumption (for the 2019/2020 fiscal year)