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Is the Apopka budget process a foregone conclusion?


Is the City Council resigned to a bare bones approach?

News Analysis/Opinion

By Reggie Connell/Managing Editor of The Apopka Voice

In 2016, the Apopka City Council had five budget meetings with city staff and department leaders for 20-plus hours. They went page-by-page through the budget. They argued. They debated. They agreed. They disagreed. They negotiated. They cut department spending in certain places, and they accepted their proposals in others. The major expenditures – public safety, additional firefighters and police officers, a fire station and a communications tower were agreed upon with unanimous support. They also had a great debate on millage rates, reserve (general funds) management and how to balance those with economic development and the future trajectory of Apopka. There was passion; there was a lively and healthy exchange of ideas and ideologies on a range of subjects. In the end, the Council voted 3-2 to approve a modest millage rate increase and its 2016-17 fiscal year budget of $104,083,516 passed by a 4-1 vote. To balance the budget, the Council also voted to take $1.7 million from reserves.

Mayor Joe Kilsheimer displayed a robust defense of last year's budget at workshops and the City Council meetings, as did the City Commissioners. He detailed the work put into this it not only by the Council but the effort of City staff led by City Administrator Glenn Irby and Finance Director Pamela Barclay.

“The budget as proposed by the administration… by Pam, by Glenn... it is the compilation of work that began last February. Our department heads submitted budgets, and there were requests, and we cut millions of dollars from what our department heads said they needed to operate their budget at what they consider to be a reasonable level. And let me reinforce the point that virtually all of our department heads live in the city of Apopka. They are members of this community. The majority of our department heads have worked for the City of Apopka for their entire careers, and they’re not spendthrifts. They don’t come to Glenn and Pam with wild budget ideas. They come to Glenn and Pam and say ‘this is what we need to run the city responsibly.'”

Commissioner Kyle Becker also defended the Fiscal 2017 budget with his typical eye of an analyst.

“If we don’t move in accord with our population growth and what our residents expect in service we will fail,” he said. “And it is worth mentioning that our taxes are low… even at 3.7876 it’s 12% lower than Winter Garden, 33% lower than Maitland, 16% lower than Belle Isle, 15% lower than Winter Park, 71% lower than Ocoee, 75% lower than Orlando, 43% lower than Altamonte Springs, 45% lower than Longwood, 93% lower than Sanford, and 28% lower than Winter Springs… and I will tell you that we have better services than any of those I just mentioned and what that tells us is that our staff is working at a very lean rate, and very successful with the resources that they have available to them. If our employees aren’t being paid like they are in other cities, then they’re going to go to those other cities. We are going to lose talent. People are going to leave. What positions are we willing to go without if we freeze our spending? It’s not realistic in my opinion."

Commissioner Doug Bankson saw common ground with Becker, but the reserve ratio still concerned him.

“I do agree with Commissioner Becker. There are things that have been left too long that we have to address and that’s something we cannot ignore. I’m a very fair-minded person. I believe and I was convinced there are things we cannot do without. We have to build a (communications) tower. We have to do certain things. My concern is the next few years beyond this. And this is why my sticking point is to make sure we’re looking at those reserves. We’re not any other city. We’re us. We have to function as we function. In Winter Park they have a different set of structures and resources. However, they have reserves at 24.6% with a goal to reach 30%. I’d like to see us move more in that direction.”

The public was given two opportunities to weigh-in, and they did so with their usual spirit and candor. City Commissioners took their thoughts seriously to the point of starting debates on the Council level that originated from a public speaker that engaged not only commissioners and the mayor, but city staff as well. In a way, the budgeting process worked exactly as it was supposed to. Consensus moved the outcome, but no one’s opinions or thoughts were discounted…and in the end, the City Council passed a budget on time.

So why isn't this budget cycle mirroring the Fiscal 2016-17 budget? Why do things seem to be already decided? Why do the points made by the City Council in 2016 appear to be off the table in 2017?

Here is how Kilsheimer opened the first budget meeting Monday:

“Everything that is being requested by department heads is needed,” he said. “However, if we are not going to raise taxes, and we’re not going into reserves, there’s just no money for some of the things our department heads have asked for. This is an austere budget.”

In lean times, belt-tightening is necessary when it comes to the budgets of families, cities, states and even the federal government. Austere, bare bones budgets are the only option. But most everyone agrees that sometimes there are periods when things just cannot be put off. Economies recover. Understaffed departments have to be brought up to appropriate levels. Aging equipment has to be replaced. A city has to match the growth it is experiencing.

So is Apopka in lean times or do the debates of 2016 still apply?

Glenn Irby, the Apopka City Administrator, was asked to assess this budget at the beginning of the Monday budget meeting. His comments were sobering.

“I’ve been putting budgets together like this for over 20 years, and usually there is fat… and you learn over the years where departments tend to store it, and you go and extract it,” he said. “We found that this year. It’s no different. But what I noticed this year that I’ve never seen before is these budgets weren’t extravagant. We have things that are wearing out. We have police cars with over 100,000 miles on them. Pursuit vehicles of that type are dangerous. They need to be retired. This is the first time in my career that I had to face the directors and tell them ‘I can’t give you any of this’. And I do understand why and that’s what I told them. We have marching orders from last year. And just to get a half-mil rate increase was difficult. So what you have is a no-frills, bare bones budget. There is no padding – none. And I’ve said this to Council before – this is not sustainable. Something has to give. And what that is I don’t know.”

Irby elaborated on what specifically might happen if the City stayed on this budget trajectory for years to come.

"While reserves would increase by some increment, capital equipment will fail due to age and use," he said. "This includes fire trucks, ambulances, and police cars."

If Irby is correct and the 2017-18 Fiscal Budget has a trajectory that cannot be sustained, then why isn't there a debate on the merits of raising the millage rate, utilizing reserves, or exploring debt service? Why does this budget, going in a direction the City Administrator calls unsustainable, seem to be cut-and-dried?

At the Wednesday meeting, Kilsheimer addressed this concern by calling for the Council to champion the idea of spending more in this budget.

"We've got to figure out a way to accommodate growth with the resources we have," he said. "I personally don't believe there's an appetite here for raising taxes. Unless somebody else here on this Council is going to be advocating to raise taxes or to go into reserves or to borrow money... we're just not there. So a call has to come from the Council. I can say all day long - this is what we need, but unless there is political will from the rest of this Council, we're going to have to tell our staff - do the best you can with what we have. The political will has to come from the five of us, not one of us."

There was no answer to Kilsheimer's request, but at the Monday meeting, Commissioner Kyle Becker certainly left the door open to explore those options.

"I think it's good to have the context in mind as we look at this budget is understanding "what if"," he said. "What if we do need to look at reserves? If we do need to look at debt service? What makes sense there? And establishing that first. Obviously, we've socialized the idea of reserves, and what a healthy reserve looks like. I think the generally accepted practice is two months worth of expense or 16.7% of expenditures...and so that's generally accepted as the benchmark. I want to make a clarifying point too... when we say operating expenses we are truly saying that... operating expense. And so when we look at what you have budgeted here too really that 21.8% is close to 23% because if you take out the capital outlay as a capital expense, you're closer to 23% in terms of your reserve ratio. So if you just do a 3% premium...take it down to 19.8%, that frees up $1.3 million that we could put to use for this budget. I'm not saying we need to do that right now, but something to keep in the back of our minds as we go through this."

No discussion on spending, tax increases, and reserve management is going to go unchallenged by Commissioner Doug Bankson. He is the budget hawk on the City Council, and his approach has not changed since 2016. He advocates for necessary spending, stronger reserves, and slow growth.

"I just wanted to bring up some things you've heard me propose before, and that's a higher reserve. 16.7% is the base, and then you add to it depending on other factors. But it's not 'the sky is falling' mentality. It's very healthy when you look at some of the other administrations that are doing this and aiming for this. I want to present something that gives us the wiggle-room if we had to deal with it, there's room to deal with it, but then we need to bring it back up and here's why. We all want Apopka to win... we love it and that's what we're here for. But my resistance and objections aren't against the things we're doing... I think we're doing some really great things and I like the analogy as a pilot of a glide slope and I just think that's where we're at. We're at that place where if we pull it any higher or any faster, we'll be hanging on the prop and we'll be stuck."

Bankson makes good points in regards to building up the reserves in case of emergencies. He made these same points in the minority last year, and he continues to remain consistent in his beliefs in this budget cycle. Certainly, any discussion of raising taxes, spending reserves, or borrowing money will not go unchecked with Bankson in the mix. So what is stopping this healthy debate akin to the 2016 version from happening?

In fairness, there are four more budget meetings (12 more hours of discussion and analysis), City Council meetings, public comments, and votes to be taken before this budget is etched-in-stone. There is still time to have those conversations, but the early tone seems different.

Nothing is more important in city government than planning how a city will grow, and how it will spend the taxpayer's money. This current City Council has proven worthy of a spirited, substantive debate on effectively crafting a balanced budget. Let's hope the Fiscal Budget of 2017-18 merits the same passionate exchange of thoughts and ideas as last year.

Apopka City Council, Fiscal 2017-18 Budget


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