The Palm Beach County Commission met for a budget workshop Tuesday to address a possible $50 million shortfall next year.
Commissioner Hal Valeche asked for the workshop, in which major department heads made presentations aimed at suggesting possible cuts to avoid a tax increase.
Palm Beach County Mayor Melissa McKinlay said the workshop was similar to her experience in Sarasota County, where department heads met in workshops to ease the budget process.
“This is something that when I first ran in 2014, I made a commitment on the campaign trail… to try to make our budget process even more transparent than it was at that time,” McKinlay said. “One of the things I wanted to do was model what I had learned through working in the budget department over in Sarasota County. Once a year, the departments came before the county commission in a workshop setting… to hear departmental budgets.”
She said part of the workshop’s purpose was to hear about possible actions the state legislature might take that would affect the county’s budget, and get the process started much earlier than the commissioners did last year.
County Administrator Verdenia Baker said her staff had prepared projections out to fiscal year 2020-21 with assumptions to reflect the impact of laws passed a few years ago requiring the utilization of the maximum millage rate with a simple majority vote, as well as an additional $25,000 homestead exemption, and how it would affect the 2018-19 county budget.
“Now is definitely the time for us to hear from you on your priorities, so that when we start to develop our budget manual for 2019, we will have your input already, as opposed to having to change them at a later date,” Baker said, stressing that projected budget deficits at the beginning of the process are normal.
“Last year, we were looking at almost a $50 million deficit with departments submitting their base budget, plus any additional supplements just to maintain their budgets and to improve programs. It also included capital improvements for renewal and replacements,” Baker said, adding that although the county administrator is responsible for providing a budget, the county commission gives final approval. “You have a number of times to direct me to either take something out or include others.”
Highlighting the 2018 budget, she said property values are 4 percent above their peak in 2008 at $176.8 billion, and the tax rate has remained flat at 4.7815 mills for the past seven years.
“When we look at our funded positions since 2008, we are still down about 700 positions,” she said. “Approximately 250 of those positions were associated with our Head Start program that we contracted out, but the remaining departments are still down by approximately 500 positions, so we again are doing more with less.”
She said part of that has been through automation, and that the county has long-term employees who are capable of doing more due to their experience, but it is starting to lose many of those employees, and it takes time for new employees to come up to speed.
“We are also losing employees to municipalities and other entities [where] they’re getting paid a little bit more for a little less work, so we still need to remain competitive as we fill our positions,” Baker said.
Since 2007, the general fund budget has increased from about $1.031 billion to $1.304 billion.
The Palm Beach County Sheriff’s Office budget, which the county commission has little control over, has increased proportionally in the county budget from 36 percent ($371 million) in 2007 to 48 percent ($631 million) in 2018. The commission’s discretionary budget has decreased from 32 percent ($330 million) to 26 percent ($332 million). Reserves have decreased from 12 percent ($125 million) to 8 percent ($107 million). The capital budget has decreased from 8 percent ($86 million) to 2 percent ($31 million). Funding for other constitutional officers has remained about the same at 5 percent, with $51 million in 2007 and almost $64 million in 2018.
The county incurred a debt service for the 2018 budget of 5 percent ($61 million) that did not exist in 2007. Community redevelopment agencies remained at 3 percent at $28 million in 2007 and $39 million in 2018. Other mandated costs decreased from 4 percent ($40 million) to 3 percent ($40 million).
“We have definitely seen a switch in how the ad valorem dollars have been allocated over the years,” Baker said. “The brunt of that cost has been borne by the [commission-controlled] departments.”
Breaking down to separate departments, ISS, which innovated many cost-saving procedures, increased slightly from $21 million to $24 million. Facilities was reduced from $43 million to $39 million. Parks went down from $58 million to $53 million. Palm Tran went up from $46 million to $64 million. Engineering went down from $61 million to $43 million.
Baker added that staff has pursued the county commission’s priorities set in 2013 to address jobs, water quality, agricultural/environmental protection, public safety, road repair funding, improve public trust, housing in the Glades and fight poverty.
Based on recent direction by the commissioners, she made a list of priorities for 2019 that include economic development, housing/homelessness, environmental protection, infrastructure, public safety and the heroin/opioid epidemic.
“That does not reflect significant changes from prior years with the exception of the heroin/opioid epidemic, so I am asking the board to take this list that I put together based upon the directions over the last couple of years, and ask if there are other items that you would like to add or take off this list,” Baker said.
Vice Mayor Mack Bernard asked whether the county was going to be able to sustain the increases in the PBSO budget, and Baker said that was a decision that the board would have to make.
“As your administrator, if we are going to maintain our existing millage and maintain our level of service, we are either going to have to… raise millage and/or other fees, and reduce levels of service across the board,” she said. “That includes the sheriff as well, because we’re not going to be able to balance the deficit only on the backs of the [commission-controlled] departments.”