County Administrator Bob Weisman's Outlook for 2014 Budget

March 28, 2013

On Thursday March 28, the County Budget Task Force of the Town of Palm Beach, a TAB coalition partner, chaired by Mayor Gail Coniglio, hosted County Administrator Bob Weisman, OFMB Director Liz Bloeser and Budget Director John Wilson for some insight into the coming budget cycle.

Robert Weisman

After several years of increasing millage, last year was significant in that the millage was unchanged, and the slight (0.7%) uptick in valuations after 5 years of declines yielded a few million more in revenue. Although it is still early, the departments have not done their budget estimates, and the Sheriff (2/3 of the ad-valorem county-wide budget) will not make his request until May, Mr. Weisman intends to seek flat millage once again. (Note: With the property appraiser’s early forecast at + 1.5%, that could generate an additional $9M in property taxes.)

In a wide-ranging presentation, the Administrator highlighted some situations that have bearing on the 2014 budget:

The communications workers and transit workers (Palm Tran) unions were offered a small increase for September but are holding out for more. The county does not plan to change their offer.
The Palm Tran worker’s pensions are in a separate plan from FRS (Florida Retirement System) used by the rest of the county, and are underfunded. The county is on the hook for $9M ($3M per year for three years) to increase its funding level.
His general instruction to staff departments is to hold the line – no refill of vacant positions again this year.
The Sheriff (as usual) is the biggest variable, spending $400M (mostly on employee pay and benefits), compared to $270M for the county staffs.
Fire Rescue is about to conclude a new contract next month, for two years with no increases and 3% in the third year. New hire salaries will be reduced going forward, although there have been no new hires in four years. The contract will be less expensive than the previous period.
Clerk Sharon Bock, who is in charge of the county investment portfolio has shifted much of the balance from relatively high performing instruments (primarily mortgage backed Frannie Mae securities) to short term bonds. This reflects a changing outlook on the future economy (presumably higher interest rates), but will present a shortfall in portfolio earnings this year.
The Mecca Farms deal with the South Florida Water Management District appears to be dead. The $30M offered is less than the property is worth, and conditions have changed in two years. With Vavrus likely to be developed next door, Mecca may be worth something closer to the $60M that was paid for it, and several developers have approached the county to discuss options.
Overall debt levels (and carrying costs) are declining.
Supervisor of Elections Susan Bucher has under spent her budget and returned a million or so.
The sequestor will affect the county in two areas – Head Start and Senior Services (meals, etc.) By eliminating bus service for the Head Start students, they can absorb the cuts without reducing the program.
A relatively new expense going forward is $5M per year for the Homeless Resource Center, off-budget at inception but strongly supported by the Board of Commissioners.

The meeting was upbeat and provided a good snapshot at this point in the cycle, and was much appreciated by the task force members.

Some dates to keep in mind: On May 1, the Sheriff will deliver his budget request. On June 1, the Property Appraisor will have his estimate of valuations. Then on June 11, the first budget workshop will take place at 6:00pm in the commission chambers, 301 North Olive.