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Analysis

By Reggie Connell/Managing Editor of The Apopka Voice

The Budget Debates: Part Four – Kilsheimer and Nelson bring a vastly different approach to a budget process

Don’t tell me what you value, show me your budget, and I’ll tell you what you value.”

–United States Vice President Joe Biden (2008-2016)

 There is nothing more important to a city than its budget. It’s a road map of how the coming fiscal year is going to go. That’s probably why discussions about budgets, reserves, and how to spend the Apopka taxpayer’s money create such passionate debates on the City Council.

And no one will have more impact on a budget than the mayor.

Apopka is approximately five months away from choosing a mayor. Incumbent Joe Kilsheimer, and Orange County Commissioner Bryan Nelson are squaring-off in the 2018 Apopka mayoral election, and their approaches to creating a budget could not be further apart.

Nelson’s attitude is forged in the experiences he had during the recession years while he was a member of the Florida Legislature. At that time he was forced to make tough decisions, and still watched a healthy reserve evaporate.

“Before commenting on the financial condition of the City of Apopka, I think it would be prudent to share my experience in the area of public finance,” he wrote to The Apopka Voice. “Having served in the Florida Legislature during the great recession I understand the value of reserves. During those devastating years our reserves dropped from FIVE billion dollars to almost zero in 4 short years. I was a member of the Government Operations budget committee and will never forget having to lay-off hundreds of employees; thankfully mostly unfilled positions but to not even know their names before letting them go was a heart wrenching exercise for me. Each budget cycle we asked the department heads to bring us a budget with a 10% reduction in spending just to keep from depleting our reserves. Our state budget went from $72 billion all the way down to $66 billion in the depths of the recession. I never want anyone at the State, County or Municipal level to have to grapple with that type of financial disaster.”

As an Orange County Commissioner, Nelson has also been involved in its budgeting process as well. And its this approach that he would like to bring to Apopka.

“While serving on the County Commission we have made reserves a top priority and have added each year to the reserves without raising taxes. We have also instituted a $300 million dollar INVEST bond program adding additional long term capital improvements to the county without touching our reserves. This program only invests in projects that have a 10 year life span or longer. Our current reserves are $1.05 billion with a $4.0 billion dollar budget which is just north of a 25% reserve.”

Orange County Commissioner Bryan Nelson

Nelson has watched the budget in Apopka increase, and according to his figures it is trending towards a reserve amount that concerns him.

“For the last three years the City of Apopka’s revenues have increased but expenses have consistently outpaced the additional revenue. To bridge the gap, the city has seen fit to spend reserves while at the same time, increase property taxes in order to meet the ever increasing obligations. It is detrimental to continue to dip into reserves for wants (not needs) and to borrow money for assets with such a short useful life. Without reserves how do you pay for debris removal if FEMA doesn’t reimburse you for several years? Four years ago we had $41 million in reserves with $28 million in unrestricted dollars. According to the September 24, 2017 public notice in the Orlando Sentinel, the city of Apopka recently passed a budget that will essentially erase the reserves and leave a reserve balance of only $3.7 million at the end of this budget year, none of which will be in the unrestricted general fund. This is financially dangerous when one considers that Apopka has a population of 50,000. In comparison Winter Garden has reserves of $105 million with a population of 38,000 and Kissimmee has a population of 65,000 and reserves of $39 million. Based on current budgets Kissimmee has reserves of 23% of their spending and Winter Garden has 61% reserves based their 2017 spending. When compared to its spending levels, Apopka’s reserves are now less than 3%.

His plan to rebuild the reserve to a healthy percentage is a simple allocation of a specified amount each budget cycle.

“With spending increasing and reserves plummeting we must first stop digging Apopka into a hole. Allocating $500,000 to $1,000,000 each year to replenish reserves would go a long way toward a healthy rainy day fund.”

Over the past two budget cycles, Kilsheimer’s approach is to begin the process at the staff level, and through a series of workshops go line-by-line through each item until it arrives at a budget that all key staff members, department heads, and a consensus of the City Council can agree on. He maintains that a two-month reserve is essential (as outlined in the Government Finance Officers Association standards), but does not believe its essential to go beyond that reserve amount.

“The City of Apopka’s policy is to maintain an unrestricted general-fund budget reserve adequate to meet unforeseen events,” he wrote to The Apopka Voice. “That was the case when I took office and it remains the case today.

 Apopka Mayor Joe Kilsheimer

The reserve policy is expressed in Apopka’s approved 2017-18 budget this way: “The City’s practice is to maintain a reserve equivalent to two month’s operating needs in the General Fund and three month’s operating needs in the Utility Fund.” (Page 18). It should be noted that the standard established by the Government Finance Officers Association is exactly the same: two month’s worth of spending.

In practice, two month’s worth of spending equals about 16 percent of the City’s general fund budget. In reality, according to the 2017-18 budget, the City’s reserves stand at about 20 percent of the general-fund budget, or four percent above the standard.”

Kilsheimer also points out several projects that the City has taken on during his tenure that he believes are essential to Apopka’s future that go beyond a debate about reserve amounts.

“Those numbers are important guideposts, but by themselves don’t tell the entire story in Apopka. Here is some context to consider:

  • In the past two budget cycles, the City of Apopka has budgeted for the staffing and operation of two additional fire stations from its general-fund budget. We are building and equipping Fire Station No. 5 off Jason Dwelley Parkway. We will open Fire Station No. 6 this year in temporary quarters at the new Florida Hospital Apopka in December. These public safety improvements are vitally needed to cover our growing city and so that we can maintain our fire department’s ISO-1 status.
  • Many cities pay for the construction of facilities like new fire stations from an impact-fee fund. These are funds paid by builders and developers when they pull building permits. The purpose of an impact-fee fund is to make new construction bear the burden of providing expanded facilities. In Apopka, we established public-safety impact fee funds in 2017. It will take several years to build up the savings in these accounts to pay for the cost of additional facilities. In the meantime, we have to rely on the general fund, which is supported by all taxpayers.
  • We have also budgeted for additional police officers and planning staff in the Community Development Department. These are all general fund obligations.
  • The attached chart shows that Apopka is in the middle of the pack among similarly sized cities in Central Florida with regards to a reserve policy. At the same time, the chart also shows that the City of Apopka has a lower millage rate than most similarly sized cities in Central Florida. Additionally, Apopka has a larger population and a larger geographic area to cover than its contemporaries.
  • From Orange County’s 2017-18 budget document – available at Orange County’s website – it appears that Orange County’s policy target for unrestricted fund balances is “no less than 7%.” See page 72.”

He also believes other revenue streams the City is about to realize will bolster any potential crisis that could threaten the general fund reserves.

“Finally, it should be noted the Apopka City Council recently voted to proceed with the sale of surplus land at the intersection of Park Avenue and Sandpiper Road. This sale will return this vacant parcel to the tax rolls, as opposed to generating no property tax revenue today. Moreover, the expected $1.3 million sales price – when put back into the general-fund reserve, will boost the City’s reserve ratio in the 2017-18 budget to 23 percent.”

To review the Apopka budget for fiscal year 2017-18, go here.

28 COMMENTS

  1. Of course sell off city owned land so developers can get it at a cheap price and build overpriced houses. Why is the land at the intersection of 436 & 441 up for sale, I was told many times that it was going to be used for parking for the new city center, another outfits falsehood put out by this administration.

  2. Of course sell off city owned land so developers can get it at a cheap price and build overpriced houses. Why is the land at the intersection of 436 & 441 up for sale, I was told many times that it was going to be used for parking for the new city center, another outlandish falsehood put out by this administration.

  3. So this is a question….I take the city’s operating budget amount for the current year, I then divide it by 12 for the 12 months of the year, and this gives me an amount per month, then I take that figure times 2 for two months, and that is the amount that the city needs, at least, in the general fund for reserves…..is this correct?

  4. I do the math, and 16% and the above 2 months formula aren’t even close…. Unless you call 86.66% of a million dollars close….Hahahaha…..my daddy used to be an night auditor, and he had to balance the books of the big hotels every night before he went home, down to a penny mistake! LOL

  5. Don’t ask me, however, I am not an auditor….just asking. Anyway, do we have that 2 months much in there? Just asking, not pointing fingers…..

  6. The sad part on the election process is that everyone can’t win, someone will win, and someone will lose, that is the facts, on each and every election race in this country. No matter how great, each and every candidate’s intentions are, that is the way the mop will flop, someone will win and someone will lose……I have no doubt that both Mayor Kilsheimer and Bryan Nelson both believe they have the best ideas as to how to run the city, even though they have differing views.

  7. Yes, it was ALL George W. Bush’s fault. He started the economic downturn, and things have NEVER been the same since with his “weapons of mass destruction.”

  8. I am happy to report the city’s truck just came around, and got all of the old fencing that was blown down in the hurricane, and that was piled way up and out into our street, and hauled it all away! My husband then went and picked up all the nails from the street, that he saw, where the nails, would not ruin someone’s tires coming down the street. They also got all the bagged up leaf matter too. Things are looking better around. It looks incredibly better down Thompson Road too, as there was an enormous amount of tree debris there, that has been picked up already.

  9. Over on 436 at the Seventh Day Adventist property, there are big semi trucks that have an open top and they are loading up, the ground up mulch and hauling it away going somewhere with it. It is one big truck after another. They pull out of there, the debris drop area, and go straight across the road somewhere. I have seen a bunch of those open top semis that have” wholesale mulch” written on the back of the trucks. I wonder where they are headed?

  10. They have one humongous mulcher sitting over there on the Seventh Day Adventist property mulching it up as fast as it comes in!

  11. October will officially be gone as of today’s end, and tomorrow will be November 1st. My favorite month will be gone, and it will soon officially be Christmas season. Hard to believe! Where did summer go? That’s okay, because December is my month too, my birthday month. I love the Christmas season too!

  12. Oh these charges, and indictments, issued by special counsel, Robert Mueller…..that is something else! Of all these different alleged charges, to me, conspiracy against the United States, sounds the worse! God awful, if you ask me, considering this was Trump’s inner circle of people, directly connected with his campaign….uh uh uh…..!!! SMH

  13. Also now that one of them has plead guilty to the charges, Trump now says that that man who worked for Trump campaign, was just a ” young volunteer”, and basically just a “coffee boy”??? Uh uh uh….SMH

  14. Shooting going on near the World Trade Center in NYC, and also someone drove down a bike trail there in NYC, and ran over some people. NYC mayor says don’t worry, as a suspect has been taken into custody…. How can the NYC mayor tell people not to worry, as there could be more people involved, and it could be terrorism?????? I would worry, if I was there! Six people dead, more injured, by a truck, a Home Depot rental truck, and drove right down the bike trail on purpose! Ran people down as he drove to them, then exited the bike trail and hit another vehicle, and then opened fire with a gun shooting! 3:15 am this morning, I believe, I could be wrong, about the time…..he had two guns, and was a younger man. That is all I know at this time……

  15. The person who is in custody in NYC is 29 years old, and is from Tampa! Could the suspect in NYC possibly be the same person, as the serial killer in Tampa, that has fatally shot several people there in Tampa? In Tampa, there have been photos released of a “person of interest” that looks tall and slender. I saw the cell phone video of the NYC suspect, running after the bike trail massacre, and he also looks tall and slender. This makes me wonder…. did the Tampa serial killer travel to NYC to carry out further killings? Could it be the same person? I am not saying that they are the same person, just wondering……

  16. I pray that all the little children tonight will be safe if out and about trick-or-treatin’. So many bad things can happen to them. Please Mommy and Daddy, watch out for those little tricksters, and go with them, and hold their hands, as they go up to the houses. Happy Halloweening!

  17. This is a little information for the Apopka City Council members: Remember back when the gentleman that came and spoke about the utility fee study, and he was the representative of his company, that made determinations about utility rates, and impact fees??? Do you all remember when he suggested that a “Roundup Program” could be implemented, at the city, to help people who were having hardships paying their utility bills? True hardship cases, not just people claiming it, to get freebie help. Remember? The gentleman stated that people paying their utility bills could, if they wanted to help hardship cases, could donate their change up to the next dollar, on their payments for their utility bills, and that it would be strictly volunteer and not mandatory. Well, I just want you all to know, that I went into the St. Paul’s Catholic Thrift Store on 441 today in Apopka (where Art Grindell’s Car Lot used to be) and as I paid for some things at the register, they had a sign up and they participate in the “Round-up Program” to help people in the community, and their sign stated, that last year, they raised $10,314.76 just from people willing to round up their change to the next dollar amount on their purchases! Looks like the city, could give it a try, at least, then if it didn’t work out, then discontinue the program….why not? Grow a heart, and help some hardship cases who need help! You all have heard this before.

  18. St. Paul’s Thrift Store also has senior citizen day on Thursdays, and the older you are, the more discount you get. I love it! It was like 55-something, is like 10 percent, 65- something, more, and if you are even older, more, more, more, and here is the best part…… if you are 100 years old or older, it is FREE on Thursday, because they said, if you are 100 or older, you deserve it free! That’s cool thinking!

  19. Two million people are going to be in NYC for the Halloween festivities that were already planned, before the terrorist ran over people today killing them, and they said that the festivities would go on, as planned, with heightened security. What a sad state the world has become!

  20. I still have been waiting for the trick or treaters. No others came around, just that first little girl and her daddy, and NONE since then. I think I can go ahead and turn off the lights, I am certain no one else is coming at 10:09 pm. Halloween trick or treatin’ isn’t what it used to be around here, but I sure don’t blame the parents, with the way the world is now! Oh well.

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