By Reggie Connell, Managing Editor
Gov. Jon Huntsman is a prominent figure in American politics and well-regarded for his ability to bridge divides and deliver candid truths to those in power. His career, marked by a blend of diplomatic finesse and political acumen, provides numerous instances of his skills in these areas.
As Governor of Utah from 2005 to 2009, Huntsman, a Republican, demonstrated a pragmatic approach to his administration, often working with a Democratic-majority state legislature to pass significant reforms. His ability to deliver hard news is perhaps best exemplified by his service as U.S. Ambassador to Russia from 2017 to 2019. In this role, he navigated one of the most challenging diplomatic landscapes, often having to convey tough messages to the Russian government amidst heightened tensions between the two countries.
It seems as though Jacob Smith is cut from that same cloth.
Smith, the new Apopka City Administrator, worked with Huntsman (and the State of Utah) from 2008 to 2012 as the Finance/Grants/Budget Manager. This is his first budget cycle in Apopka, and although he didn't say much, what he did say cut to the core of the challenges facing the City Council.
A stark and sobering answer
During the first day of the budget workshops, Apopka resident Rod Olsen asked Smith a question.
"Can you please tell me that this budget encompasses everything you need in people and supplies in order to get the job done to make our taxpayers happy and furthermore to address the growth we have," Olsen asked. It was a question he also asked most of the department heads, who answered in the affirmative. Smith, however, had a different take.
"Well, that's something we can discuss later, and I'll let you know, but no, it's not enough."
Surprised at his answer, Olsen walked away but then asked a follow-up question.
"What areas is it not enough?"
"Every single one," Smith replied.
It was a stark and sobering answer that seemed to set the tone for day one.
"Taking $8.1 million from reserves to balance the budget is really concerning," said Commissioner Nick Nesta near the end of the meeting. "And according to City Administrator Smith, it's not nearly enough... so that's even more concerning."
We don't currently have a plan. We have an issue
Day two did nothing to minimize the alarm.
Deodat Budho, the Apopka Public Services Director, described a lack of staffing and the need for repairs, maintenance, and required upgrades to the water treatment, sewer, streets, and sidewalks.
During the Street Maintenance Division presentation, he put up a slide that read, in part, "Roadways not in great shape - No Funding"
"You as the Public Service Director, I mean, what direction can you give us? Commissioner Diane Velazquez asked. What advice can you give us?"
"I don't know, I don't have a bank account big enough [to fund it]," Budhu said, laughing.
"This fund has been functioning in a deficit for many years," said Finance Director Blanche Sherman. "We are transferring $3.4 million to this fund to balance this budget after $5.9 million out of the general fund that is causing us to use the reserves. That is a part of that use of reserves. So when we get down to it, we're going to have to make a decision because this is reoccurring. This is just bare bones. And the gas tax revenue is flat. Now we do have an increase in the electric tax revenue. Of course, that allowed us to transfer more over to the Streets Fund. But we do have to be, you know, that program was funded with one-time money. That one-time money does not exist anymore. So we do need to look at how we can increase the revenues for streets, but it is coming from the general fund right now, which is coming out of the reserves."
"But the millage isn't going to be the end all be all to this," Commissioner Nick Nesta said. "Even increasing the millage—the maximum we could increase isn't even close."
"Correct," Sherman responded. "There are other factors as well."
"So what's the plan?" Nesta asked.
"Well, we don't currently have a plan," said Sherman. "We have an issue. So currently, we're funding it with reserves. What we need to discuss is a plan on how we're going to go forward."
'We don't currently have a plan, we have an issue' is probably not going to end up on a bumper sticker for anyone's mayoral campaign or as a motto for a municipality, but Sherman's candor on the subject was both shocking and refreshing.
At the end of the presentation, Velazquez summed up the tone of the room.
"I feel like we're just kind of trying to stay afloat, and my concern is we're growing, and I not only want to meet the needs, but I want to provide efficient service to the taxpayers, but not off the backs of the understaffed departments."
An unsustainable trend in Apopka's budgets
On day three, after the Apopka Fire and Police Departments presented their budgets, and then Smith added more reality to the process by reminding the City Council of a massive unfunded issue looming in the near future.
"So one of the things that we haven't seen in the budget we haven't discussed yet, and Commissioner Nesta brought it up in the last session as we are in the middle of negotiations with fire (AFD)," Smith said. "We don't have an exact number on that, but that is something that has not been counted into this current budget. Now, you see, we have a balanced budget, but we're using quite a bit of reserves."
Smith went back in time to explain the reason why Apopka is in the budgetary crisis it finds itself in.
"I want to give a little bit of history of what I've seen, and I don't want anybody here to take offense... people, anybody that's on the dais, because this is purely numbers. And I'm just looking at trends. I don't know who did what or what policy decisions were made. But I just want to give you an example; first of all, when it comes to the millage rate itself, I found out that it increased in 2018. It was increased in 2020. The last time anything happened to the millage rate was actually in 2021. And it was actually rolled back to what it is today. So there hasn't been any change in the millage rate for the last four years. In that same time period, we've had increases in the ad valorem. I counted some of the larger revenue sources... sales and the shared taxes with the county and the state. Of course, there are some governmental policies that affect fire employees and planning, but these are the big ones. And this is what I found out: from 2021 to 2022, we had about a $1.8 million increase in revenue. At that same time, public safety combined, which takes up right now 60% of our budget, had a $3.5 million increase in operations, and personnel. From 2022 to 2023, the city had about a $4.2 million increase in revenue from the year prior to the next year in the public safety budget. It went up $6.4 million. And then this last year, 2023 to 2024, we had an increase of about $5.0-5.5 million, and the budget for public safety went up $7.7 million. So you can see the trend there."
It was a realization that a new strategy was needed. Smith continued his presentation with the first step in that new strategy.
"This revenue ad valorem, as well as the sales-related taxes, are not keeping up with the amount that's being put into 60% of the budget, which is public safety. So there's a trend here, and now we've hit that point where we've crossed over, where we've been using reserves. Expenses have caught up to that revenue line, and now it's crossing. And that's that's the issue we have here. To complicate that more, we have not included in this budget those union negotiations, which could be in the neighborhood of $2-3 million."
Despite the five-alarm Smith was describing, he remained calm and objective, referring to comparable cities nearby with slightly higher millage rates as a possible model for Apopka.
So it's always a good idea to look to see how we're doing compared to the cities that are nearby. What their millage rate is right now. You can see here that this is from Orange County. We're at 4.18, which is one of the lowest, and what we're asking for tonight... the recommendation is to increase to 4.43, which is actually more of a 15% increase over what it is currently; if you include the rollback, it's 31.2%. But that would generate about $1.7 million. Now, that won't help us catch up with our revenue, but at least will keep us where we're at right now. So I'm saying my recommendation this evening is at least 4.4376. I know it can hurt when you're having all these increases, but the truth of the matter is, we've got these increased costs, personnel costs, you know, the inflation has been through the roof, and our revenue has not followed that same trajectory."
Mr. Smith Goes to Washington (Apopka)
In the classic 1930s movie, "Mr. Smith Goes to Washington," Jimmy Stewart plays Jefferson Smith, a naive youth leader who is appointed to fill a vacancy in the U.S. Senate. His idealistic plans promptly collide with corruption at home and subterfuge from his hero in Washington, but he tries to forge ahead despite attacks on his character. In the end, Smith makes his case and wins the day in classic black-and-white style.
Certainly, Jacob Smith is far from a young, naive, idealistic leader, but there is something connective to the Stewart character. It would have been easy to sit out this budget cycle and start fresh in 2025/26. Instead, he analyzed a chronic issue and delivered a tough message to a City Council and administration that needed to hear it.
Besides, how many opportunities will I get to use 'Mr. Smith goes to Apopka' in a headline?
Ultimately, the Council tabled the decision to approve the tentative millage rate for the FY24/25 budget until its July 17th meeting, but in a show of good faith and understanding of the budget crisis, Commissioner Alexander Smith suggested raising the millage to 4.6876, which would give the City an additional $1.7 million.
Although suggested, recommended, written about, and demanded throughout the last few years, it appears the City Council may be on track to finally sustain itself by investing in its community this year and in the coming years.
Smith mirrored his old boss with a blend of diplomatic finesse and political acumen to make the Council see what was right in front of them. His use of history, comparables, data, and candor was exactly what a good city administrator should provide to his Council.
He spoke truth to power at a time it urgently needed to hear it.
