TREASURE ISLAND — While Treasure Island remains in good financial standing, city fiscal advisers note the city’s revenue streams have been “relatively static,” which could pose difficulties if another recession occurred.
In presenting her fiscal overview for the year, Finance Director and Assistant City Manager Amy Davis said Treasure Island has been able to recover from the Great Recession and most revenue streams are growing slightly or remaining flat.
“The city’s tax base experienced an 8.68 percent increase during the fiscal year; However, the taxable value of the city’s tax base is still 7 percent less than it was in 2008, at the start of the housing decline. This has placed more dependence on the city’s other revenues, of which have showed stabilization with a growing economy,” she said.
During the City Commission meeting April 16, Davis advised that for the city to be able to fund the many capital projects needed, including maintaining the Treasure Island Causeway and bridges, revenues will need to increase more significantly over time.
In presenting his yearly audit David Alvarez, a partner with the CPA firm of Carr, Riggs and Ingram, told city commissioners a 10-year revenue chart of government funds, excluding enterprise funds shows there has been some growth in ad valorem taxes.
Of the city’s three revenue choices this is the one it has the most control over and is the largest revenue stream, he said.
However, Alvarez added other main revenue streams have been relatively static.
“It’s something that all local governments are dealing with, where a large portion of revenue streams are somewhat static and expected services are continuing to grow. Overall, it’s just something to deal with,” Alvarez said.
Davis said overall city finances look positive.
Tourism continued to increase during 2018, helping to sustain the city’s hotel, motels, food service and retail establishments, she said.
“Generally, the city is optimistic about the continuing economic growth, but the cyclical nature of the economy means that we cannot ignore the eventual next recession,” she advised.
To prepare the future Davis explained as part of the regular budget monitoring process, the Finance Department prepares periodic reports that the city manager and City Commission can use to follow the actual performance of revenue and expenditure estimates. At the end of July, an analysis of the budget estimates versus the actual expenditures is performed to assess the need for any supplemental appropriations
At that time, if necessary, the City Commission may consider passing a supplemental appropriations resolution prior to the end of the fiscal year. The city will continue to monitor the financial status and current performance in all its funds, she said.
At the start of 2018 the city’s general fund budget was more than $12.4 million. With supplemental appropriations included, the general fund’s final budget grew to more than $14.5 million
The city took action to control costs. In the water and sewer enterprise fund, a wastewater rate increase was implemented in December 2017 to cover an increase to the bulk sewer rate charged to Treasure Island St. Petersburg for treatment. A 10 percent rate increase was also implemented in December 2017 to fund the required infrastructure improvements to the stormwater management system.
In other revenue funds, building permit revenue exceeded operational costs of the building division, thereby increasing the restricted building division fund balance by $361,426 due to another year of higher building activity. In addition, police, fire, building and municipal services all came in under budget.
In a one-time revenue boost, Treasure Island received $880,000 as a result of the city filing a lawsuit to reconstruct the Central Beach Trail; it cost the city $654,954 to repair cracking concrete for a net gain of $225,046.
The local option sales tax fund ended the fiscal year with a fund balance of $974,352, which is a slight decrease from the prior year due to revenue and expenditures being relatively close, Davis said.
The capital projects fund ended the year with a fund balance of $221,020, representing a decrease of $727,178 due to debt service payments for the bridge loan and the project winding down to a close in the following year.
The remaining non-major governmental funds, which consist of the county gas tax, transportation and police forfeiture funds had little change in the fund balance, with a slight increase of $38,081 due to revenues and expenditures remaining relatively the same as the prior year.
The city reduced its long-term debt last year, Davis reported. A loan with BB&T for the construction of the Central Beach Trail, for the original principal amount of $1.5 million was paid in full during fiscal year 2018, thereby reducing the number of active loan agreements from five to four.
The city has four existing loan agreements outstanding, including, two loans with the Florida Department of Environmental Protection Clean Water State Revolving Fund for a principal amount of $517,612 and $1 million, another loan with BB&T for the Palm & Capri bridges for $4 million and with Hancock Bank for the Gulf Boulevard Undergrounding and Beautification project for $1.8 million
City commissioners will vote on the city’s yearly fiscal report at their regular meeting April 30.