Last Updated: 3:08 p.m.
Flagler County government’s overview of next year’s budget was a good-news-bad-news sort of thing as County Administrator Craig Coffey analyzed the numbers for the county commission in a workshop this morning.
The better news is that property values are improving for the second year running. This year, taxable values are expected to rise 4.5 percent, generating $2.25 million more if the property tax rate remains the same.
But while the county could generate $2.25 million in additional revenue without raising the tax rate, it still faces $5 million in what Coffey calls “major budgetary challenges.” Those include a 2 percent cost of living raise for all employees ($1 million), necessary investments in information technology, equipment repairs and capital maintenance projects ($1.15 million), the need to rebuild the county’s reserves ($1 million), and a few other sundry costs.
Not so sundry is the inescapable increase in health costs. That’s the bad news. The county faces an increase in health insurance costs of $1.5 million. “We had a really bad year last year,” Coffey said, with 14 employees responsible for 29 percent of the costs of the entire system. “Cancer will still happen, bad things will still happen to good people,” Coffey said.
Commissioners have several options. They can absorb the entire cost increase. But that’s not likely. County government’s share of insurance premiums has been among the most generous among neighboring government agencies. Flagler pays over $700 of the premium share (whether it’s for a single employee or for employee and family or spouse), compared to $404 at the school board or $506 in Palm Coast government. So commissioners are looking at possibly increasing the share that employees pay. But they did not determine this morning what that share will be.
And they may find a way to keep individual employees’ costs relatively low. “I believe our obligation as far as health care is to our employee, not necessarily to their spouse or family,” Commissioner Barbara Revels said. In other words, it’s possible the county will choose to make coverage for spouses and families more expensive while limiting increases, as much as possible, on employees.
Still, that’s not certain, either. Premiums have been steady for six years, but they will have to change, Coffey said. “If there’s a shared burden there, the question is how do you share that burden and address other issues that we have to address as a county government,” Coffey said.
Unrelenting demands on county government make more spending all but certain.
“We should be looking out for our employees first,” Commissioner Frank Meeker said, noting that county employees’ salaries are already about 15 percent behind that of neighboring agencies’ salaries. Meeker wants to “balance a salary increase” with perhaps an increase in employee contributions. But commissioners will have to be careful not to negate the wage increase by matching it to a premium cost increase.
County taxpayers may look at county employee health costs and think: that doesn’t affect me. Not true: how the commission decides to pay for its health care will affect everything else in the coming budget. “These are major decisions that will shape how I will approach everything else.” Coffey said. Which means the final tax rate county residents will pay is predicated in part on how commissioners approach their health care costs.
But there are other reasons county residents at large have reason to be concerned about government employees’ pay and benefits, and how that affects the workforce.
“I’ve been crunching some of the numbers at the sheriff’s office in recent weeks,” Jon Dopp, vice president of the Coastal Florida Police Benevolent Association and a detective with the Flagler County Sheriff’s Office, told commissioners. “In the last three years we have a turnover rate of 39 percent. Some of these issues with salary and insurance, it can only work to compound those issues. Right now, about half of your sheriff’s office has less than three years of experience, so these are things that I think should be considered when these decisions are made.”
“Valuable information,” Revels said. (Revels had forgotten to open the floor to public comment at the end of the meeting, as is the habit of the commission. She had adjourned the meeting, was reminded, and reopened the session to take comments.)
Steve Palmer, president of the Flagler County Professional Firefighters union, echoed Dopp’s words and recalled speaking with a non-firefighter county employee to “advocate for the county employees who don’t have a voice. They actually do talk to me about stuff. I talked to one the other day that was one of the road and bridge–I don’t remember what division he works for–but he was telling me that with all the increases and stuff, he actually goes back in pay, from what he started off with five years ago.” The reason: insurance, pension contributions, and cost of living. “We are what makes the county function,” Palmer said, reminding commissioners that training employees just to lose them to better-paid work elsewhere is a loss–not just of experience, but of the county’s investment.
“You’re telling us the cost of doing business is going up,” Commissioner Nate McLaughlin had said to the county administrator earlier in the meeting.
Beyond county employee pay and benefits, commissioners must still plan for ongoing and new costs—theirs and that of the constitutional officers such as the supervisor of elections, the clerk of court, the tax collector and the sheriff. Most of the constitutionals have talked about not raising their budgets this year. “You’ll see from the funds there isn’t a ton of money to go around,” Coffey said.
The county is also facing a so-called white collar exemption that will raise costs: the new mandate requires that all salaried employees who make $50,000 or less must have their time tracked for overtime. “That’s going to actually hit us in July,” Coffey said. “There’s a cost to that.” The business world was not happy about the change, but the federal Labor Department is enacting the change to reduce a tendency to take advantage—or exploit—workers at the mid-salary range when companies and agencies demand uncompensated work out of them.
Property values are rising, but even that must be kept in context. The county experienced a good increase last year, 7 percent, but it remains “a slow crawl-back” to pre-recession days,” Coffey said. “You won’t reach that for many, many years.” In actual numbers: taxable values in the county rose half a billion dollars this year, to $7 billion. But that’s still a long way from the $12.1 billion in taxable value in 2007.
If the property tax rate remains the same in next year’s budget, it would be considered a tax increase under Florida law, because the average property owner will see an increase in his or her tax bill. The current tax rate is $7.9417 per $1,000 in taxable value—that is, the typical $150,000 house with a $50,000 homestead exemption pays $794 in taxes for the year.
The full budget presentation, including all numbers discussed, is below.