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.