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HomeMy Public PortalAbout050_011_State of the City State of City 2014 I want to start by saying that I am honored and humbled to serve as your mayor. Tonight I will be sharing with you the state of our city. Before going any further, please join me in recognizing our elected officials who are here with us tonight. also want to recognize (past mayors etc.). As you all know, we spend a lot of time at our council meetings dealing with specific issues--public hearings, discussing suggested changes to our ordinances, and many other issues all of which are very important. But what we don't have a chance to do in the context of our council meetings is to look at the big picture. That's what I want to do tonight. I'll cover four items: First -provide an overview of our finances and our tax rates second --what we r doing to bring tax dollars back to the island third --discuss how we r investing in the future of Tybee. And fourth lay out what we are doing and what we need to do to address our challenges and opportunities I want to be clear that any successes I discuss tonight are the result of a collaborative effort. We have moved forward as an island thanks to our council members past and present, our city manager, our city clerk, our city attorney, our city staff and you, the citizens and stakeholders who volunteer your time and talents to make Tybee better. Let's start with the state of our city finances: -by any measurement, the city continues to be in a strong financial position. -one of my goal as Mayor is to turn over to the next administration a more efficient city government with a healthy fund balance, limited debt, a solid position with respect to employee pensions and a funding plan in place for future beach re-nourishments. . On our fund balance, we have worked to build up a healthy reserve which is especially important for a community that could be so drastically affected by a hurricane. This has been difficult in light of the massive drop in the Island's overall tax digest. We have seen a more than 30% reduction in property tax revenue since 2008 when the nationwide financial crisis took hold. So it has been a challenge. Our Council's shared goal is to have 4 months' worth of reserve funds on hand at all times. We presently have $2,283,980 in our reserves. This represents 4 months of operating expenses in the off season and 2.7 months in the summer. It does not include $750,000 of funds on reserve for beach re-nourishment or the $100,000 in reserve for green space both of which could be tapped into in an emergency situation. We have been able to add to our fund balance in recent years by managing our funds carefully. Much of our success in building this healthy fund balance can be attributed to the way that we formulate our budget every year. We do not base a departmental budget on what it spent the previous year. This is done by many other governments and leads department heads in those places to make sure to spend ALL of their budgeted funds by the end of each fiscal year for fear that their budget will be cut the next year if they don't spend all of their allotted funds. Our department heads recognize that each dollar we bring in is a precious commodity and should be spent prudently. The way that WE choose to budget on Tybee has enabled us to add to our fund balance at the end of each of the past few budget cycles. To get a full picture of our financial position, we also need to analyze our debt obligations. First off, the total debt owed from our gen fund is only $48,540.61. Second-Our water and sewer enterprise fund, which currently has a fund balance of $2.4 million, has $4,576,000 in debt obligations. This comes out to about $350,000 a year and is completely covered not by tax proceeds but by water and sewer charges. Most of the water/sewer debt is in the form of low interest loans from the state's environmental finance authority. We get an additional 1% off of these loans thanks to our work to become a designated Water First community, an effort that was led by Councilman WOLFF. -we also carry debt in our campground enterprise fund. -over the years, the council's unanimous 2006 decision to buy the rivers end campground and RV park has been called into question. I believed at the time and believe today that it was an excellent long term decision. We currently owe $5.6 million to the county's recreation authority for this facility. The campground now brings in almost enough money to pay to operate, maintain and invest in improvements while also paying the annual debt service payments. The facility stands to be a significant revenue generator for the City for the long term. While we are a sacrificing a little bit now, the payoff for Tybee's future will be well worth it... -as for our pensions: many large and small cities have run into major financial problems due to shortfalls in their employee pension plans. Our pension plan is in excellent shape. The state of Georgia mandates that governments fund 70% of their potential pension liability. Our plan is funded at 92.89%. It doesn't make sense to fully fund it because many people currently on staff will not work with the city long enough to be fully vested. To get to this point, over the past 6 years, we have reduced our actual pension liability by nearly $1,000,000. So....To our hard working city employees, we are doing what we need to do to follow through on our commitment to you. To our taxpayers, we will not be hitting you up down the road to bail out a mismanaged pension plan. All in all, we are in solid financial shape as a city. We have limited debt, a large fund balance, and a secure pension plan. Furthermore, we have not achieved this solid financial position by raising taxes on our property owners, by cutting services or by not making investments in our community. We currently have a millage rate of 4.158. While other governmental entities have increased their millage rate in the last few years to offset the decline in property values, Tybee has maintained its low millage rate and has maintained our homestead exemption. While this millage rate doesn't have any impact, as I will explain in a moment, on many of our residents, keeping it low is extremely important for our businesses that are ineligible for Stephens-Day and other homestead exemptions. To give you a sense of where your property tax dollars actually go, on the screen SLIDE ONE is a list of millage rates for surrounding governmental entities. READ SLIDE Those in blue are paid by Tybee residents. Those in red are not. And in black is Tybee's millage. In addition to this low mill rate, we have a $200,000 homestead exemption. A recent analysis showed that over half of those who reside in owner occupied homes on Tybee pay nothing to the city in property taxes because of this homestead exemption. And those who do pay property taxes to Tybee do not pay much relative to what is paid out to other governments and boards. Here is a breakdown as an example SLIDE TWO This example is for an Owner occupied home purchased in 2002. READ SLIDE So...for police, fire, recreation, the beach, administration, public works, roads, etc., the total bill is in this situation is only 67 dollars per year. Everything else paid in property taxes goes off the island. -going forward on our finances, we need to find ways to provide services, upgrade our infrastructure and make wise and forward thinking capital investments without increasing the tax burden on our residents and businesses. But how can we invest in our community, add to our fund balance, deal with escalating energy and health care costs and continue to upgrade our services without increasing taxes? Some believe we already do this by charging what some say are exorbitant rates for parking which some equate to a form of taxation. actually, when you add up all that we as a city pay to provide a clean and safe experience for our visitors to the beach--the lifeguards, the dune crossovers, the maintenance of the beach, Tybee's portion of the re-nourishment of the beach, the extra police at the beach, etc., we bring in $750,000 less annually in parking than what it costs for us to manage our beach. To provide some perspective, a family of four can come to Tybee for 4 hours for less than the cost of 2 happy meals at McDonalds. It's a bargain. Try parking in Atlanta for $1.50 an hour. And the last time I checked there is no beach in downtown Atlanta. So how do we fund community investments in light of our low tax rate and inexpensive parking? This brings me to the second item I want to discuss tonight. In large part, we do this by fighting to get more of the money that we send to the county, school system, state and federal government in the form of property taxes, income taxes and sales taxes back to Tybee! We have done this in several different ways. SLIDE 3 We all pay a 7% sales tax on goods and services we purchase in Chatham County. 4% goes to the State, 1% is the Local Option Sales Tax, 1% is the Special Purpose Local Option Sales Tax and 1% is the E-SPLOST. Contrary to what many believe, not one penny of sales tax revenue comes directly to the city. What we get is what we fight for. Both the LOST and the SPLOST are collected by the County and distributed to the municipalities in the County based on agreements made at the outset of the collection of the tax. The SPLOST is a voter approved sales tax that expires and has to be re-approved by voters about once every 5 years. In negotiations with the county in 2006 in advance of the up or down referendum on a new SPLOST, we were initially offered by the county a share of the tax revenue that was commiserate with the percentage of the population that Tybee represents. In other words, since Tybee has 2990 people and the county has 276,000 people, we were told we would get 1.08% of the proceeds from the county-wide tax collections and were therefore offered about $3.2 million. We aggressively made the case that Tybee ought to get much more. we argued that we are the beach playground for the entire county, that we attract tourists who contribute to sales tax collections which justifies the tax in the first place and that therefore we ought to get more than what we would otherwise get based on our population. Consequently, we ended up getting offered $8million. The difference between what we were offered and what we received--which ended up being less than projected due to the economic meltdown in 2008-- is incidentally almost exactly the cost of the new police station which is being funded with SPLOST tax proceeds. The Local Option Sales Tax or LOST is a 10 year tax. It needs only be approved by the City of Savannah City Council and the County Commission--not the voters-- and as a result we have much less leverage in the negotiations. The 2003-2013 LOST expired last year so we had to make our case for more than what we were offered which--like the 2006 SPLOST negotiations-- was based solely on our population. Despite our population going down between the 2000 and 2010 census, by standing firm and making our case, we were able to get $114,000 more each year than we were getting under the LOST that expired in 2013. That is a total of over $1.1 million more for Tybee. As the SPLOST deal we negotiated in 2006 was coming to a close last year, we started making our case in the 2014-2018 SPLOST negotiations for; once again, more money than we would receive based on our population. Based on our population, we would have received only $4.2 million. What we ended up with was $4.2 million plus $6 million that is committed to beach improvements on Tybee. We hope to use this $6 million for new restrooms, dune crossovers and among other things, a down payment on the 2023 beach re-nourishment project. We will use the other $4.2 million for infrastructure, new fire fighting vehicles and equipment, new police cars, and upgraded recreation facilities. We also continue to work to get county, state, and federal funds to pay the lion's share of re-nourishing the beach every few years. Many other beach communities are forced to raise property taxes to pay for projects like this. Our argument to the county, the state and the feds is twofold: first, a 2007 study done on the impact of the shipping channel on Tybee's beach confirms what Tybee has been arguing for decades...that the majority of the erosion on our beach is due to the man-made savannah harbor shipping channel. Second, we argue that without a re-nourished beach on Tybee, sales and income tax revenue for the county state and feds would go down. For instance, the State would collect $3.5 million less every year if Tybee's beach was unusable due to severe erosion. In the 2008 re-nourishment, we used $6.3 from the federal government, $2.93 from the state and $1 million from the SPLOST to fund the project. Imagine if Tybee taxpayers would have had to foot the bill for the 2008 re-nourishment project. It cost over $10 million. We have another re-nourishment scheduled for 2015. SLIDE FOUR Thus far, we have saved $2 million from the SPLOST and our general fund and after 4 years of meetings with the Governor, and thanks to persistent lobbying from our local legislative delegation, we were allotted $5.8 in the State's budget this year for the project. And last year, as I mentioned earlier, we got the County to agree to set aside $6 million from the SPLOST for beach improvements which includes beach re-nourishment. So we have nearly $14 million for the project. Now we are waiting for the federal government to honor its commitment. I believe that despite the total dysfunction in DC, this project will be funded, which will free up the aforementioned SPLOST funds for other beach-related upgrades. We have been working for 5 years with the army corps and our elected representatives in DC to build support for this critically important project. We have their full support and they are working very hard on our behalf to make this happen. -so by arguing to get back our fair share of tax dollars that are sent off the island, we have been able to make major upgrades to Tybee while at the same time maintaining a low tax rate. we have used these funds that we fought for to pave roads, rebuild our network of water and sewer lines, upgrade our drainage systems, improve our parks, purchase fire and lifeguard equipment, make improvements to our business districts and more all in the midst of the worst economic conditions since the Great Depression without raising taxes and all the while adding to our fund balance. Again this success has been a team effort of council, our staff, community members, our beach task force and our elected officials at the county, state and federal levels. our job now is to access federal funds for the re-nourishment and convince the county to allow us to use that extra $6 million to build new restrooms at the beach, finish building our dune crossovers, provide more handicap accessibility at the beach and other important projects so that we can use the other $4.2 million on the things off the beach that we need and want. The third item I want to cover is what we are doing to invest in Tybee and its future. From time to time, I and my fellow council members have people ask why we invest so much in our business community and not focus more on our residents. Then we get asked by businesses why we invest so much in things for our residents and neglect our businesses. I've come to realize that you can never please everybody all of the time. But--What I believe is that what is good for our residents is good for our businesses and vice versa. Tourists more and more these days are looking for an authentic beach town experience. They want to come to a beach town with people that actually live there year-round. Tourism on Tybee is up in recent years and continues to grow. I believe that while a big part of that increase is the hard work of the business community and tourism council who have done a great job developing events that attract visitors in the off season, it also is because Tybee gives tourists an authentic experience that doesn't exist in many places anymore. After the oil spill on the gulf coast, for example, many came to Tybee for the first time and discovered us. And now they come back every year. Conversely, the hotel motel tax revenue generated by tourists helps to ensure that we can keep a low millage rate and giant homestead exemption for our residents. This tax contributes over $1 million a year to our budget. And the existence of our businesses gives us places to shop and eat and have a good time and get our hair cut and go to the dentist without having to leave the island. Furthermore, the events that attract tourists to Tybee are enjoyed by residents too. The wine fest, the pirate fest, the beach bum parade, the Irish heritage celebration on and on--these things makes Tybee a fun and vibrant place to live. So the constant back and forth between residents and businesses actually should in my humble opinion be viewed as a mutually beneficial relationship. Getting back to how we are investing in our community. One way that we have done so is not a function of the city government: you may have noticed earlier the school property taxes we pay. We pay these taxes for the purpose of funding public education county wide. In the past, It helped pay for Tybee kids to go to public schools...but until this year, that money and our kids went to schools off the island. A school is a major part of any thriving community. Having a school here is so critically important for our kids and our families. Thanks to the tireless efforts of many hard-working and dedicated volunteers on our island, we now have a public charter school. The opening of the Tybee maritime academy is in my mind one of the most important things that has ever happened on Tybee. It will keep Tybee a true residential community. It will attract families to our island, ensure that our community remains vibrant, and pay dividends for Tybee and its children for decades to come. -as a city, we are investing heavily in our infrastructure. Cities all across the country are dealing with outdated and crumbling water and sewer lines, inadequate drainage systems and inefficient wastewater treatment. A few years back, we set up a committee of city council members to roll up their sleeves and address the infrastructure issues we have head on. We had a lot of work to do. Much of the Island's infrastructure was literally crumbling--old cast iron water lines; outdated sewer lines, streets and neighborhoods that flooded after heavy rains just to name a few. Thus far we replaced the outdated water lines on Butler Avenue and the auxiliary lines on the beach side of butler and improved firefighting capabilities by looping many lines on the beach side of butler. We replaced the water lines on the north part of the island that dated back to the days of Fort Screven. Many of these lines ran under houses built since the Fort was in operation which made maintenance somewhat of a challenge. We are currently replacing the water line that runs parallel to Jones. We have replaced almost all of our old sewer lines. We have addressed the major drainage issues in the 14th street area, on 16th Street, on the beach side of Butler, on Veterans Drive, on Jones Avenue and elsewhere throughout the Island. Barry spent a lot of time and energy on these drainage projects and deserves credit for this. Several years ago, we developed a long range plan for paving our roads. Jones for example will be paved once the water line work is installed. We also continue to invest in our parks. We have replaced all of the lights at our fields and courts, graded our fields, added two playgrounds, replaced grills and tables, and finally added a functioning scoreboard at Jaycee Park. We negotiated a deal with the YMCA to stop the duplication of services we had with recreational staff. The YMCA and its board to its credit have worked to add to the services they provide to our residents that take advantage of our coastal environment--surf and kayak camps for example. We are a bike friendly community--one of only 2 in Georgia. We will soon have not only a north-south bike route, but one that runs east-west almost all the way to the lazaretto creek bridge. We are as of last week a Certified Local Government thanks to our ongoing commitment to historic preservation. Our volunteer historic preservation commission has worked on this designation for several years. Kudos to bill and all involved for their work on this issue. We have worked to become more pedestrian friendly by repairing and making all sidewalks ADA compliant and by adding crosswalks to Butler and Hwy 80. Soon we will be putting in LED warning lights along both sides of all crosswalks to make them even safer. We have extended the sidewalks all the way to the end of Butler and widened sidewalks in our beach business district. We have invested in our businesses through the facelift of our beach business district that we completed a few years back. Last year we completed a street- scaping project on butler between 14th and 16th. And we are now a Main Street community that is working hard to become a more business friendly place that attracts investment. We are in the process of building a new Police Station to replace a building that city leaders have planned to replace for decades. The problem was that we didn't have the money to do it and didn't want to borrow money to build something that wouldn't generate any revenue to pay the debt service on the loan we'd have to take out to build it. The solution was the SPLOST. We are building this facility without dipping in to our reserve, without using general fund revenue and without borrowing a nickel except for the financing of the new 911 system we are putting into place. All told, it will end up costing about $3.5 million and will allow us to demolish once and for all our old outdated, inefficient Police Station. Wanda and the public safety committee have worked hard to get this project to where it is today. So to summarize thus far, we stand in good shape financially as a city, we are fighting to bring tax dollars back to Tybee so we can invest in our City while at the same time practicing fiscal restraint. But we have more to do. If our community is going to get better, we have to strive for continuous improvement and never be satisfied with the status quo. We need to continue Monty's work in recognizing and showing our volunteers that they are valued. And work with Rob as he works to engage our community's youth in our city government. And this brings me to the fourth and final item I want to discuss. Like all communities, we have some major challenges. But due to our coastal setting, I believe ours are in many ways more difficult to resolve. We have flood insurance issues and a constantly eroding beach. We have one way on and one way off the island via a mostly two lane road with bridges nearly half a century old. We have a community of 3000 full time residents that swells to nearly 10 times that in the summer leading to all manner of logistical problems in terms of managing a City. We have a community that is vulnerable to a direct hit from a hurricane and associated storm surge. These are big challenges. But every challenge presents an opportunity. One challenge we have is constantly increasing energy prices. And new federal guidelines on energy production designed to curb greenhouse gas emissions will, whether you agree with them or not, lead to even higher Energy costs. We spend nearly $500,000 on our annual GA Power bill. Thanks to our city's green team and volunteer Community Resource Committee, we have started to work on trimming our energy costs by reducing energy usage in some of our government buildings. We have a geo thermal unit powering city hall and the adjacent county library thanks to a federal grant we worked on with the county. we are reducing fuel usage at our police department with more fuel efficient vehicles that cost a little more upfront but will save hundreds of thousands down the road if we move forward with purchasing such vehicles as we rotate out older less efficient police cars. As solar technology continues to evolve and become more cost effective, I believe we should work to install panels in some our government buildings to minimize long term energy costs for example the Youmans-Solomon gym. As energy costs and things like employee health care costs increase, we also need to look for other long term savings so we can cut down on m and o costs. For example, by spending a little more on the type of wood we use for dune crossovers, we will avoid having to constantly replace them. By building things using in house labor in the off season we are using our staff to minimize the cost of bringing in contractors to complete many of our capital projects. By putting in automated meter reading equipment, we are not only reducing water leaks, but the amount of staff time dedicated to such work. By putting in hearty landscaping in our median and other areas, we don't have to have staff maintaining areas of the island, using expensive equipment and using more fuel. but we can and should do more...we need to continue to find ways to reduce our energy usage, find more efficient ways of doing things like collecting water bills, and figure out ways to use technology so can do more with less. Another challenge anyone who has a mortgage on Tybee is dealing with is increasing Flood insurance premiums. I could talk a lot about this but in the interest of time want to focus on what we are doing to help: --one--we are working to increase the discount that all flood policies on Tybee receive thru the Community Rating System--all policies on Tybee currently get 15% chopped off the top. We believe that we will be getting 20% off going forward and hope to go even higher. --two--we are working w those who are re-doing our flood maps to take the dunes we have built up into consideration so as to shift the Velocity zone lines towards the water and to change the base flood elevation. We also are looking at ways to enhance our dune field to protect Tybee from a major storm and further decrease flood insurance premiums in V zones and in homes just at or below base flood elevation. In my mind, however, our biggest challenge is access to and from the Island. The Bull River and Lazaretto Creek Bridges are narrow two lane bridges with no emergency lanes; the causeway itself floods at spring tides and in bad storms; traffic gets backed up on busy weekends; wrecks especially on the bridges can leave us isolated and make it a challenge for ambulances to get to and from the island; and finally the road creates problems for hurricane evacuation. So what are we doing about it? For over 7 years, we have attended every meeting of the body that makes funding decisions on transportation projects locally--called the CORE MPO--and made the case that something needs to be done. As a result, the State DOT is spending $4,200,000 right now on designing new Bull and Lazaretto Creek bridges that will enable emergency vehicles to get to and from Tybee and include segregated bike lanes. The good news is that rarely does the state fund design work and then not BUILD what they design. The minute the design work is done we will be pushing as aggressively as humanly possible to get the construction money appropriated. The less expensive causeway improvements are next. We tasked our CM with representing Tybee at the CORE MPO meetings and she recently stood up to the staff there to finally get the bridges project on what is called the TIP which means that it is now--for the first time-- a prioritized project and in line to actually be funded. In the interim, we continue to work w the County and City of Savannah to address the problems on the roadway. Just a few days ago our police chief met w Metro police to develop better protocols for using technology to inform Tybee residents and stakeholders about delays on the road to Tybee and the length of time delays can be expected to last. We are doing all we can on this issue. I have included a list of CORE MPO voting members on the back table. I encourage you to write to them and explain why we need new bridges to Tybee now not 10 years down the road. Another major issue I want to touch on is water. There is plenty of it in the Floridan aquifer where we get our drinking water. But because of the possibility of salt water seeping further into the aquifer, the state has placed severe restrictions on how much water we can take out for Tybee's use. We are very close to maxing out on our water usage. We're doing all we can to limit our water use thru a variety of strategies. We even, to the consternation of many beach-goers, took down the showers at the beach. Accessing surface water is unrealistic because it would involve running a water pipe all the way from here to the mainland which is cost prohibitive. And most critically, if we do have salt water intrusion in our wells, we are in big trouble. The bottom line is that our water use is not the cause of the strain on the Floridan aquifer. The aquifer is being stressed by heavy aquifer use by industry in our area and a huge growth in residential development in the coastal empire. For several years we have made the case to the state that Tybee is in an untenable situation with respect to water. Why should Tybee have to pay for a problem that we didn't create! Well...WE finally had a breakthrough a few weeks ago. The Governor announced that Tybee would be the beneficiary of a $5 million grant to build a well that will get us access to water in a deeper aquifer. This aquifers water has some salt in it and will need to be cooled down. But it has proven to be a solution for others in the same boat we are in-- including Hilton Head whose wells started to become contaminated w salt water a few years ago. Once we identify the land, design work will begin and we are told work could start next spring. This is the long term solution we have been seeking. The $5 million will cover the well and a small treatment device. If it all works as planned, we will be tasked with building a larger treatment facility that will allow us remove the salt from the water and cool it down so we can use the water and not be dependent solely on the Floridan aquifer. But it is a very big deal for Tybee and I believe will be the solution to one of our most significant long term challenges. Going forward, we have two projects that while not part of the city operations or responsibilities, are, like the new school, projects that will benefit us all. The Tybee Post Theatre has been saved from the wrecking ball, has a new roof and thanks to dedicated volunteers continues to get closer to the ultimate goal of becoming a unique historical performing arts venue--movies, concerts and other events will be brought to Tybee. We need to find ways to get this done sooner rather than later. The Tybee marine science center has sat in a building ill-suited to its mission for years. Like the post theatre, the city has committed funds towards the construction of a new center that will be built at the north beach parking lot. The volunteers and staff have worked hard, with community input, to design a facility that will make Tybee proud. Let's get this done too. Both projects will enhance the quality of life for residents and will add value to our community. Before concluding I want to commend my fellow council members for their work. We have been working as a team to identify short and long term goals and plans for making them a reality. On the back table is a list of the goals we have established together. In closing, let's continue to recognize that while we may disagree from time to time with one another on certain issues, we work a whole lot better as a community when we can set aside our differences of opinion on the few things we disagree on and work together on the all of the many things we want to accomplish. On behalf of the entire city council, it is an honor to serve our wonderful community. Thank you very much.