frequently asked questions
Q: What is the purpose of the Budget?
A: The Budget is an annual document in which the City communicates policies, operations and a financial plan. Specifically, the level of municipal services and required resources are detailed.
Q: Why does the City use a Fiscal Year for budgeting purposes?
A: Florida Statutes 166.241(1) requires all municipalities to operate on an October 1 through September 30 fiscal year.
Q: Who establishes the rules by which the City of Palm Bay adopts the annual budget and property tax rate?
A: Both processes are governed by the Florida State Statutes, City Charter and City Code of Ordinances.
Q: What is a Base Budget?
A: The Base Budget portion of the annual budget is anticipated personnel costs plus recurring operating costs. All other costs are listed as Service Level Adjustments.
Q: What is a Service Level Adjustment?
A: Any new budgeted expenditure above the Base Budget geared toward a defined level of services provided by the City. A SLA can be an increase, maintenance or decrease.
Q: What is a budget appropriation?
A: A specific amount of money that has been approved by the City Council for use in a particular manner.
Q: How is the Budget Adopted?
A: The City Manager submits a proposed budget by August 10th of each year. The City Council reviews the document and then holds two public meetings in which they vote to approve the annual budget. The first public meeting is advertised via the Truth in Millage (TRIM) notice mailed to all property owners by the Brevard Property Appraiser’s Office. The second and final public hearing is advertised in the local paper (Florida Today).
Q: How are my property taxes set?
A: The value of each parcel is established annually by the Brevard Property Appraiser’s Office. This value is established as “Fair Market” and any exemptions are applied resulting in the “taxable value.” Each taxing authority then sets a uniform property tax rate which is applied to the taxable value of each parcel.
Q: What is a Mill?
A: One mill is equal to $1.00 of property taxes per $1,000 of taxable value. Property taxes on a $125,000 home to which the $25,000 homestead exemption is applied would pay, with a millage rate of 4.7429, a property tax of $474.29.
Q: What is the difference between property taxes and ad valorem taxes?
A: There is no difference. They are different names for the same tax.
Q: How is the Budget changed once it is adopted?
A: The City Manager can transfer budgeted appropriations within a department, while the City Council can transfer appropriations between departments, increase and decrease total appropriations via a Budget Amendment ordinance that requires two separate votes of the City Council.
Q: What is a Community Investment Project?
A: Any construction project or acquisition of an asset with a useful economic life of at least seven years and a cost of at least $25,000. Community Investment Projects are commonly called capital improvement projects in other cities and counties.
Q: What is a fund?
A: A fiscal entity with revenues and expenses which are segregated for the purpose of carrying out a specific purpose/activity. Examples are the General, Transportation, and Building Funds.
Q: What is an FTE?
A: The total scheduled work hours of City employees divided by the total work hours available annually provides the number of FTE (full-time equivalent) employees. A full-time employee working 40 hours/week equals one FTE, where a part-time employee working 20 hours/week equals 0.5 FTE.
Q: What is a general fund?
A: The City’s largest fund that includes governmental services such as legislative oversight, general and financial administration, law enforcement, community development, streets and drainage system operation and maintenance, parks and recreation operation and maintenance, and library services. General Fund activities are primarily funded with property taxes, franchise fees and certain State-shared revenues. General Fund activities comprise approximately 38.8% of the City’s annual budget and are accounted for on a Modified Accrual Basis.
Q: What is an enterprise fund?
A: A fund that tracks business-type activities within the City. The focus of information is on near-term inflows and outflows of spendable resources, as well as the balance of spendable resources available at the end of each fiscal year presented. The City uses enterprise funds to account for the water and wastewater utilities operating activities (Utilities Operating Fund) and the building permitting and inspection functions (Building Fund).
Q: What is an internal service fund?
A: A fund that tracks the accumulation and allocation of costs internally among the City’s departments and funds. The City uses internal service funds to account for the administration of self-insured employee benefits (Employee Benefits Fund), insurance (Risk Management Fund), and vehicular costs (Fleet Services Fund).
Q: What is a special revenue fund?
A: A fund that accounts for revenues that are restricted by statute or ordinance for a particular purpose, or where the City wishes to maintain a separate accounting of the costs of a special project. The City maintains 17 such funds. The accounting for these funds is on a Modified Accrual Basis.
Q: What is a community investment fund?
A: A fund that tracks specific types of capital infrastructure construction projects and/or acquisitions. Although some community investment funds can be classified as enterprise funds (such as the Utilities Community Investment Funds), for the purposes of this document they are listed and presented as community investment project funds. The City maintains 16 such funds. The accounting for these funds is on a Modified Accrual Basis.
Q: What are utility taxes and franchise fees, and why does the City of Palm Bay levy them?
A: A utility tax is a tax levied on utility bills. To be paid by the utility purchaser. The tax is similar to a sales tax, except the tax is only applied to utility bills and not to any other purchases.
The franchise fee is a charge levied by the City on a utility to operate within the City and to use the City right-of-ways and other properties for locating pipes, wires, etc. The state allows utilities to pass on the franchise fee directly to customers on their bills.
The City of Palm Bay, like most cities in Florida, relies very heavily on utility taxes and franchise fees for revenues rather than just on property taxes, which are usually much lower than property taxes levied in other states.