Highlights: Recommended Budget - FY22 BUDGET RETREAT APRIL 15 & 16 2021 JOHN T. RHODES MYRTLE BEACH SPORTS CENTER
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Highlights:
Recommended Budget
F Y 2 2 B U D G E T R E T R E AT
APRIL 15 & 16 2021
J O H N T. R H O D E S M Y R T L E B E A C H S P O R T S C E N T E R
FY22 Budget Challenges
2
Budget Reduction Measures Employed in FY21:
Budget
Challenges
A number of near-term
treatments were employed
when forming the FY21 budget
to mitigate the economic impact
of Covid-19. While these FY22 Reinstatement of Expenditures Paused:
measures were necessary to
achieve budgetary goals and • RHRA Funding
maintain the fiscal health of the • Health Insurance Premiums
City, the measures are not
sustainable on a long term basis • Holiday Bonus
and prolonged employment will • Overtime & Temporary Wages
ultimately effect service • Fleet Replacement Program
delivery.
• Capital Outlay
• Operating Supplies & Materials
3
Other Budget Challenges for FY22
As mentioned in the Economic Outlook Presentation:
• Fourth Spike in Covid cases
• Social distancing restrictions remain and are augmented to address the outbreaks
• Continued high levels of unemployment
• Consumer spending habits
• Consumer prices
• Inflation
In order to respond to economic disruptions, the budget must be prepared to:
• Maintain Flexibility
• Sustain Essential Services to the Community & Visitors
4
FY22 Budget Highlights
5
Manger’s
Fiscal Year 2022 Proposed Budget
Recommended
Budget
FY2019-20 FY2020-21 FY2021-22
Actual Rev. Budget Recommended Budget %Δ
The FY22 Manager’s Recommended Governmental Operations $ 217,832,371 $ 204,547,872 $ 218,959,925 7.0%
Budget contains: Enterprise Operations 62,834,106 41,151,913 45,486,008 10.5%
Total Operating Budget 280,666,477 245,699,785 264,445,933 7.6%
Increases in:
General Government – 7.0%
Enterprise Operations – 10.5% Governmental Capital Projects 6,104,286 24,188,234 14,509,578 -40.0%
Reconciling Items
Enterprise Capital Projects 2,382,700 3,799,300 2,990,000 -21.3%
Overall Budget Increase: 6.9%, or Total Reconciling Items 2,382,700 3,799,300 2,990,000 -21.3%
$14.8m
Less: Interfund Transfers (78,106,615) (57,181,347) (50,608,796) -11.5%
The FY21 Budget contained an overall Grand Total Appropriations $ 211,046,848 $ 216,505,972 $ 231,336,715 6.9%
decrease from FY20 of 4.1%
6
Revenue Highlights FY 22 Recommended Revenue Budget:
• No proposed Property Tax Increase (TDF credit will
The FY22 Proposed Budget has remain at 76.01%)
been prepared with no increase in
General Fund taxes, fees, or
charges.
• No proposed rate increases for Recreation, Sports
Adoption of the new Business
License ordinance will result in no Tourism, MB Convention Center
increase in Business License rates.
Rate Studies have been
commissioned to evaluate the • No proposed Business License Increase
need for and level of rate/fee
increases necessary to fund the
operations and capital needs of
the Storm Water and Water & • No proposed Solid Waste Increase
Sewer utilities. Those increases
are not reflected in this budget
pending Council’s direction upon
presentation of the rate study • Proposed Increases in Water & Sewer Rates and
results during retreat.
Storm Water Fee based on rate studies
7
FY 22 Recommended Budget includes reinstatement of
items temporarily paused to offset the economic impact of
Covid 19:
Manager’s • Temporary pause in Rhra funding and catch-up contribution: $1.5m
Recommended •
•
Temporary pause in Health Insurance Premium funding: $2.0m
Holiday Bonus: $1m
Budget • Temporary pause in Fleet Replacement Funding: $3.9m
• Market Increase (3% for all but Police, Police at 4%): $805K
The formation of the FY 21 • Positions held but not eliminated: $404K
Budget Included a number of • Budget Manager $80k
measures designed to mitigate • Planner $64K
the economic impact of the Covid • Property Maint. Inspector $64K
19 pandemic. Those measures • Project Coordinator $65k
largely include the temporary • City Engineer $87K
suspension of a number of items. • Equipment Operator. Snr $44k
Budget increase attributable to Reinstatements: $7.8m
8
FY 22 Recommended Budget includes expenditure
Manager’s increases in areas that were reduced in an effort to
Recommended
Budget mitigate the impact of Covid 19:
• Temporary Wages $ 596k
• Overtime $ 401k
The formation of the FY 21
Budget Included a number of • Retirement $ 140k
measures designed to mitigate • Property & Liability Insurance $ 2.1m
the economic impact of the Covid • Professional Fees $ 473k
19 pandemic. In addition to • Tipping Fees $ 183k
temporary funding suspensions,
operating and capital outlay • Uniforms $ 167k
allocations were greatly reduced • Travel $ 46K
in anticipation of lost revenue • Advertising $ 113k
and lower demand for certain • Software Maintenance $ 491k
services.
• Small Tools, Equip., Supplies $ 556k
• M&R Buildings $ 230k
• Construction M&I $ 45k
• Computer Replacements $ 53k
Total Other Increases: $5.6m
9
FY 22 Allocation Increases:
• Capital Outlay: $ 1.2m
• FY22 Reinstatements: $ 7.8m
Manager’s • FY22 Operating Increases: $ 5.6m
Recommended $14.6m
Budget
Voluntary Separation Program Update:
The formation of the FY 21 Budget
Included a number of measures
designed to mitigate the economic The FY21 Budget also included the implementation of the Voluntary
impact of the Covid 19 pandemic. Separation Program (VSP). The VSP, along with the usual savings
In addition to temporary funding
suspensions, operating and capital achieved from regular retirements and separations, resulted in salary
outlay allocations were greatly savings of $767,000 in the FY22 Budget.
reduced in anticipation of lost
revenue and lower demand for The program also allowed for a review of many position allocations
certain services.
that have created opportunities for redistribution of our workforce to
enhance service or productivity.
10Revenue Highlights FY 22 Recommended Governmental Revenue Budget:
Revenues and Other Governmental
Financing Sources Revenue
Property Taxes $ 40,240,000
Other Taxes 33,026,215
Licenses & Permits 32,730,000
Fines & Forfeitures 965,000
Local Option Tourism Fees 29,000,000
Intergovernmental Revenue 21,180,936
Charges for Current Services 11,089,253
Miscellaneous Revenue 8,135,975
Transfers from Other Funds 42,592,546
$ 218,959,925
11FY18 FY19 FY20 FY21 FY22
Tourism Driven Revenue Actual Actual Actual Estimate Estimate
Business License $ 25,508,342 $ 26,234,896 $ 24,917,279 $ 20,138,000 $ 26,045,000
Tourism Development Fee 28,763,095 29,699,387 28,846,468 25,300,000 29,000,000
Tourism Driven Hospitality Fee 11,908,884 12,165,644 10,019,963 8,521,100 12,024,265
Hospitality Tax 11,463,229 10,260,505 18,500,000
Revenue Local Accommodations Tax 2,698,332 2,722,785 2,247,765 2,001,450 2,501,950
State Accommodations Tax 9,935,103 10,242,815 8,876,513 8,500,000 10,100,000
With the Tourism Driven Revenues are
expected to come in at or near pre-
Totals 78,813,756 81,065,527 86,371,217 74,721,055 98,171,215
pandemic levels. Budget estimates fall
between FY19 and FY20 actual
collections.
FY19 was a strong collection year, but
FY20 was on pace to be one of the
highest collection years on record
before March of 2020, which actually
helped to mitigate the decimation of
the tourism economy for the last
quarter of the fiscal year.
12Expenditure FY 22 Recommended Governmental Expenditure Budget:
Highlights
Revenues and Other Governmental
Financing Uses Expenditures
Public Safety $ 54,505,262
Community & Econ. Dev. 40,325,426
Transfers Out 48,073,876
Parks Recreation & Sports Tou 22,237,167
General Government 15,370,016
Public Works 1,736,205
Principal Retirement 10,780,808
Transportation 8,282,760
Interest/Fiscal Charges 6,168,097
Capital Outlay 10,536,750
Increase in Fund Net Assets 943,558
$ 218,959,925
13FY22 Service Level Changes
14Service
Level Service Level Change Summary FY22
Department Enhancement Amount
Changes City Attorney Administrative Legal Assistant $ 49,693
Assistant City Attorney 138,899
Service Level Changes included in the City Manager DEI Director 134,150
FY22 Manager’s Recommended
Budget address Council’s Strategic Information Services Chief Innovation Officer 172,100
Initiatives. Police, Special Ops 4 Police Officers (Net- $00k Grant) 432,816
Police, Patrol 6 New Officers 531,312
Fire, Administration Fire Department R&R Adjustment 19,399
Fire, Emergency Services Fire Department R&R Adjustment 680,334
Fire, Techinical Services Fire Department R&R Adjustment 34,919
Downtown Development Fund Place Management Organization 1,185,615
Grand Total: $ 3,379,237
* Fire Recruitment & Retention Program $ 734,652
15FY22 Capital Outlay
16CAPITAL OUTLAY SUMMARY FY22
Capital Outlay Fund Department Description Cost
Sports Tourism
John T. Rhodes MB Sports Center 4 Portable Basketball Goals $ 50,000
General Fund
Public Information Video & Audio Equipment 30,000
Information Services Explorer 33,000
Building Maintenance Mobile 1000 Gallon Refueling System 21,000
Police Support Services 24 Portable Radios ( Replacements ) 50,000
Security Gates at LEC 50,000
3 Camera Servers 362,000
City-Wide Camera Replacement Plan 90,000
Fire, Emergency Services
Self Contained Breathing Apparatus
(2-year replacement) 447,500
2 Jet Skis with Rescue Boar & Tow Trailer 40,000
2 Type 1 Ambulance 560,000
Right of Way Maintenance Trash Dumpster for Broyhill Load and Pack 9,500
Zero Turn Radius Mower 10,000
Cemetery Zero Turn Radius Mower 10,000
Solid Waste
Special Services - Regulatory Knuckleboom 150,000
Water & Sewer
Utility Location Pickup Truck 38,000
Construction Push Camera 43,200
Sewer 4 Inch Dry Prime Backup Pump 71,280
Stormwater
Stormwater Maintenance Towmaster Tilt Deck Trailer 9,280
GRAND TOTAL $ 2,074,760
17General Fund balance is in within the City’s minimum
policy objective with current Unassigned Fund Balance
as a percentage of expenditures at 15.7% for FY22
City Fund Balance Hospitality Fee Fund Balance is at $2.1m
Highlights Hospitality Tax Fund Balance is at $925k, 5% of
revenues
Convention Center Fund is in balance inclusive of
funding for coverage of the Hotel Debt Service Reserve
of $1.3m
18Revenue & Revenue and Expenditure Assumptions & Expectations
Expenditure Forecast Tourism driven tax and fee revenues are expected to be at or near pre-
pandemic levels
Business License Revenues are expected to come in at or near pre-pandemic
levels
Construction Permitting shows no sign of slowing however it is unknown
how long the rapid growth will continue
PRST & MB Convention Center revenues are expected to come in at pre-
pandemic levels
Property Tax revenues will remain steady as much of the residential and
commercial growth will be occurring in the MBAFB TIF, Mutli-County
Business Park, and the Ocean Front/Downtown Redevelopment TIF.
Expenditures will continue to increase as the demand for service continues
to grow.
19Managing
Flexibility through:
Uncertainty
Continual monitoring of revenues and expenses
A great deal of uncertainty remains regarding
and its impact on the world, national and local
• If revenues are impacted to a greater degree than
economy. expected:
Questions remain: • Freeze Capital Spending
• Will enough people get vaccinated to reach • Freeze Vacancies
Herd Immunity by mid-summer as some
predict? • Reduce Temporary & Part Time Employment
• Will we see another spike as places reopen
• Freeze non-essential operating expenditures
and people begin to relax mask wearing
and social distancing habits?
• If revenues are impacted to a lesser degree than
• Will travel rebound or will hesitancy
remain? expected:
• What impact will the anemic workforce • Consider building reserves to manage future
have on local businesses to operate at full
capacity? economic disruptions
• How will inflation affect buying power?
• Consider additional Capital Outlay and Capital
Improvements
• Consider fully reinstating RHRA contribution
• Shore up the Property & Casualty Insurance Fund
Balance
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