Town of

Fort Myers Beach

Fiscal Year Budget

2002-2003

Council Members:

Dan Hughes, Mayor

Terry Cain, Vice Mayor

Howard Rynearson, Council Member (Seat 3)

Bill Thomas, Council Member (Seat 4)

Bill Van Duzer, Council Member (Seat 5)

Town Administration

Marsha Segal-George, Town Manager

John Gucciardo, Deputy Town Manager

Janeen Paulauskis, Finance Director

Damon Grant, Service Delivery Coordinator

Dan Folke, Community Development Coordinator

Julia Campbell, Administrative Services Director

Michelle Mayher, Executive Assistant

Jill Bitterman, Administrative Assistant

Trudi Edelman, Administrative Assistant

Budget Message

From the

Town Manager

Dear Council and Citizens of Fort Myers Beach:

We are pleased to submit the seventh draft budget for the Town of Fort Myers Beach. A budget is the tool used to chart the growth and future of our Town by setting forth the level of service and initiatives to be accomplished during the budget year to meet the needs of the citizens we serve.

We continue to cultivate our unique opportunity to produce the most efficient and affordable government possible by comparing and evaluating private and public (County and in-house) service providers. This includes "contracting out" or "privatizing" services typically provided in house by other governmental entities. The private sector is increasingly being used as a model for the public sector to follow in the pursuit of privatizing governmental services. Privatizing these services is important because of (1) the complexity and magnitude of the tasks to be performed; (2) economies of scale; and (3) the ability to focus more on specific areas. Our focus, however, is to provide the highest possible level of service at the lowest possible cost.

The goal of incorporation of our Town by its citizens was to have elected representatives who were more responsive to the needs of the citizens. Last year the Town Council approved a roll-back millage rate of 1.0400. In the face of appreciating property values, our Town was the only government to roll-back millage last year. As a result of that roll-back, our millage rate is now less than the millage rate inherited from Lee County upon incorporation. It is also important to point out that a resident of San Carlos Island would have paid a millage rate of 1.3449 ( 1.2114 unincorporated MSTU, 0.0602 lighting district and 0.0733 All Hazards) to cover the same services. When you subtract out the taxes that we have in common (school board, Lee County, fire district, etc.) our residents are paying about 30% less in taxes for not only the same services but I would submit that our residents are receiving an enhanced variety of services at a greater level of delivery as compared to the residents of San Carlos Island and unincorporated Lee County.

In addition to the savings in millage, our residents do not pay a 3% surcharge on their electric bills. If the Town followed the rest of the cities and unincorporated Lee County, we would be adding a 3% surcharge to our residents utility bills. The revenue from such a surcharge would add over $500,000 to the Towns revenue. The Council has chosen not to raise taxes, charge any additional surcharges or fees and continue to live within the millage inherited from Lee County 7 years ago.

We again realized a significant increase in property values that will generate over $250,000 in additional tax revenues for the Town. However, I am recommending to the Town Council that the Town accept this additional revenue and place it in a fund for land acquisition on the island.

Once again, this year you will only see one line for the Town and it continues to be an aggregate of the Towns millage and the old County streetlighting district. The other County streetlighting districts realized increases in assessments to cover increased administrative costs, but there will be no recommended increase in our street lighting service or any other services provided within the Towns millage. Again, the Town is continuing to deliver responsive government at a tax rate below what our residents would have to pay if the Town did not exist.

For the fifth year, there will be a 5- year Capital Improvement Plan Budget as required by our new Comprehensive Plan. This capital budget will allow us to continue to transition from the creation of the Town to the design and implementation of projects that will affect the quality of life for our residents. This years recommendation includes such projects as: 1) Implementation of the Harbor Plan 2) Completion of the Old San Carlos Project 3) The Hidden paths Project 4) Work on Drainage Projects and the beginning of a canal maintenance program. 5) The long-awaited island-wide beach renourishment project. In the last budget year, we realized the completion of a number of drainage projects, sidewalks on Lenell, the walkway to the pool, a new gym floor at Bay Oaks and beginning of new tennis court construction at Bay Oaks, the beginning of the Old San Carlos Project and the Estero Boulevard Shoulder Safety Project. The capital budget includes a number of other projects and will depict both timing and funding sources.

From the Towns inception, our budget has been developed and implemented as a family budget. By this term, I mean that a family tries to save money every year in the family budget in order to pay for a vacation or a new car or home improvements, college, etc. We have lived below our means for the last 6 years. This frugality has allowed savings from the operating budget to fund our capital improvement budget in the neighborhood of $4,000,000.00. We now have the opportunity to begin to construct infrastructure improvements funded by the money we have saved in our operating budget. Drainage improvements, sidewalk construction, canal maintenance and improvements to Estero Boulevard such as lighting, crosswalks and improved shoulder pavement began last year and will continue this year. We will also be working on traffic congestion and the continuing search for possible solutions to our seasonal traffic and parking problems and reasonable funding options. The Beach Renourishment Project and the necessary improvements for Estero Boulevard are the two most important projects that the Town may ever do. Both of them will transform our island and offer both our residents and visitors the community ambiance that has been envisioned. However, in both projects, island residents should not be asked to pay for these improvements without substantial contributions from other sources. We will continue to develop better-cost estimates and locate additional funding sources to help make these projects a reality.

In the coming year, we will continue to operate our own Water Utility, Beach Water and hope to bring excellent service and stabilized rates to our residents. We also plan to purchase the Newton Property and are looking to purchase other possible open space opportunities on the island. Over time, we will all enjoy small open space vistas available for passive enjoyment and reflection. Island residents are hoping to create a land trust for additional land purchases on the island and other committed friends are planning on creating a foundation to augment and assist efforts at the Mound House. We have always valued and utilized people power to make our community work more efficiently. Our active volunteer committees have allowed our government to stay streamline and lite as they have provided additional work and guidance to help our Town realize its full potential. I am sure that a Land Trust and the Friends of the Mound House Foundation will build upon that awesome tradition.

There is also a Community Redevelopment Agency (CRA) Budget that will provide for projects within the Overlay District. The first project that is under construction is the Old San Carlos Road Project. The next project will be the sidewalks on Estero Boulevard in front of Seafarers and the pedestrian refuges to be created so that people can cross one lane of traffic, stop and be safe, and then as traffic permits, cross the next lane of traffic which will assist in the removal of the traffic signals at the base of the bridge. These projects are funded from the Settlement with Lee County that resulted in $2,000,000 being transferred to the Towns CRA Account to be used for the projects designated in the Old San Carlos Master Plan and for the completion of the original Times Square Project. It is important to note that all enhancements such as decorative street lighting, fountains, landscaping, etc., budgeted within the Overlay District will be paid for by funds supplied by the properties within the District. In other words all dollars will come from the TIF or tax increment funding realized from the increasing assessments on those properties, and/or additional assessments placed on those properties through MSTU" (Municipal Services Taxing Unit) or "MSBU" (Municipal Services Benefit Unit) assessments.

The following are the major policy issues relating to the preparation of this budget document:

Road Maintenance, Signals, Signs, Drainage and Right-of-Ways and Mass Transit. This area continues to be a difficult area for developing accurate data because of a lack of historical information. We now have six years worth of data. We utilize a system that begins with a request for action, a staff member reviews the requests and makes on-site visits, and the subsequent use of a mix of public (County)/private contractors to complete necessary work on a time and material basis. We have handled/received over 339 requests for action (last year we handled 150 requests for action) and as of the date of this message, most of these requests have been handled. We have delivered a more efficient service by shortening the time for vegetation trimming from 6-7 months to 3-4 weeks and for catch basin cleaning from four months to four weeks. We have begun to handle drainage retrofits in the Capital Budget. For over 25 years, little has been done on this island to deal with drainage problems. However, the retrofitting of drainage flow-ways is a lengthy and complicated task. We must survey the street, determine if appropriate easements are available, or secure appropriate easements, design the retrofit and then construct it. There is tremendous demand and appropriate impatience in getting these drainage problems fixed. We will continue to work toward fixing these long standing drainage problems. We have installed a software program called Better Place that allows residents to notify us of a problem online or by phone. We believe that this program will assist in the recording, tracking of progress and follow up with regard to all requests for action. It is our hope that this technology will help us to continue to provide an excellent response time with an appropriate conclusion.

The County continues to maintain jurisdiction on Estero Boulevard. We are still working with Lee County to address some safety concerns and operational issues such as drainage. We are still working on the following projects: (1) continuing to contest the Countys position on our gas tax allocation; (2) continuing to pursue assistance from the County and the Tourist Development Council with regard to trolleys and trams; (3) Discussions with Lee County DOT and FDOT concerning traffic congestion and possible variable pricing solutions that may or may not result in the Town taking jurisdiction of Estero Boulevard and/or the access bridges; (4) Improved crosswalks and lighting on Estero Boulevard and a Boulevard Safety Project that involves better paved shoulders on Estero Boulevard.

Sidewalks, Landscaping, Bike Paths and Parking. This continues to be an area of priority. The Estero Boulevard Streetscape Project and the side street beautification program are just the most visible attempts to enhance sidewalks, increase treescaping, create better, safer bike paths and continue to manage and improve parking. This year, we hope to re-direct attention to the Hidden Paths Project and to implement construction of a portion of that plan.

Land Use. We are proposing, for budgetary purposes, the continued use of the County for land use services with the exception of the development of the Towns Land Use Regulations. Land use services include code enforcement, building inspections, building permits, plan reviews, contractor licensing, development services, environmental enforcement, zoning, and comprehensive planning.

Long Property/Mound House. We have entered into a partnership with Florida Gulf Coast University and the University will serve as the Director and bring a lecture series and a revitalized docent program to the Mound House. We look forward to new programming and some very exciting educational opportunities in the next year. Last year, an archaeological assessment was completed and this year we hope to do more archaeological work and work on a preservation plan. We have completed significant safety improvements such as an alarm system, fixing the roof and gutters. We have pruned specimen trees and painted the house. We are currently working on the electrical system and repair of the existing dock.

Contingency and Reserves. Contingency and Reserves are funds that are set aside to meet unexpected expenditures or a down turn in revenues. Since property taxes are collected in December and the fiscal year starts in October, we believe a reserve equal to approximately two months of operating expenditures is appropriate. In the past, we have proposed that a reserve level of fifteen percent (15%) be maintained as the desired level of reserves. We have also included a contingency fund for unanticipated items.

We are currently in our sixth year of establishing appropriate reserves and we have a history of significant carry-over funds each year. Our contingency and ending fund balance will still provide substantial dollars available if necessary ($2,879,353) and balance our CIP. The result of a tenacious attitude toward securing optimum revenues for the Town and frugal operations allowed the Town to have sufficient contingency/reserves and also fund an aggressive Capital Improvement Budget.

Recreational Activities. The County has agreed to a continued 50% split on the net expenses for Bay Oaks Recreational Center and Bay Oaks Community Park. The Community Pool has been operational for the last two years. With regard to the pool, our expense projections have been very accurate and revenue is running ahead of projection. The County has replaced a very expensive gym floor and will construct new tennis courts at Bay Oaks. The Town has worked with the County on these projects and will share in the expense for these improvements. The Town will partner with Lee County to make application to Florida Communities Trust in an attempt to secure a 50% match in order to purchase Newton Beach. The Tourist Development Council has placed $500,000 in reserve to help the Town and Lee County master plan and develop a passive beach park at Newton Beach.

Expansion of office space and equipment. The keystone of our operations has been the continuing attempts to use technology to improve efficiency. We do not contemplate any additional space or equipment at this time.

Other Possible Budget Initiatives. Council may wish to consider the following: (1) negotiating with the County for control of all Beach Accesses and Beach Parks. Right now we have responsibility for the roads that lead up to and end at the beach because these roads are Town roads. We do not, according to the County, have jurisdiction for where the road meets the sand. If the Town took possession of the beach accesses, they could be metered and possible net revenue used to defray recreational and/or other costs for the Towns residents. In this way, revenues generated from temporary visits to the island would go into improvements, projects and services that residents could enjoy all year round, such as Bay Oaks or a beach patrol as a component of community policing. (2) Development of a Land Trust that would allow the Town to pursue purchase of environmentally sensitive or recreationally important lands.

The budget document is prepared to provide financial and operational/policy information about the Town from a variety of perspectives and degrees of detail. The budget document begins with a transmittal letter from the Town Manager. This letter summarizes the most significant issues facing the Town and provides an explanation of the rationale used in the preparation of this document.

In separate sections, the following information is provided:

Budget preparation process, budgetary control, and schedules

Demographic information

Revenue highlights

Expense highlights

Glossary

The financial structure is reflected in the reporting of expenditures and revenues by fund. A fund is a self-balancing set of accounts designed to track specific revenues and the uses of those revenues. Each fund is independent of all other funds and money cannot be transferred from one fund to another without the approval of the Town Council. The budgets, segregated by fund, are used to account for the costs associated with specific activities or to account for the use of monies received from specific revenue sources. Gas taxes, for example, can only be used to fund road-related improvements and maintenance hence must be accounted for separately.

Detailed explanations of major capital expenditures are included in the Capital Improvement Plan (CIP) budget, a budget for the Community Redevelopment Agency (CRA),and a budget for Beach Water.

We are making great strides in the effort to provide a better quality of life for our citizens and the most efficient government possible.

Sincerely,

Marsha Segal-George

Town Manager

June 24, 2002

BUDGET PREPARATION PROCESS AND BUDGETARY CONTROL

The Town Charter requires the Town Manager to present to the Town Council a proposed budget for the ensuing fiscal year. This includes making assumptions regarding the anticipation of income and beginning available fund balances. This years budget does include a carry over figure based on the history established in the last fiscal year.

The budget is prepared and presented on both a line item and program basis. The budgets of general government type funds are prepared on a modified accrual basis. This means that revenues are recognized when they become measurable and available, and expenses are accounted for when they are incurred.

Enterprise Funds, on the other hand, are budgeted on a full accrual basis. Not only are expenditures recognized when incurred, but revenues are also recognized when they are billed. Currently the Town of Fort Myers Beach has no enterprise funds. It is likely, however, that these types of funds may exist in the future.

The Comprehensive Annual Financial Report (CAFR shows the status of the Town's finances on the basis of "Generally Accepted Accounting Principals" (GAAP). The audited financial statements for the Town for the fiscal years ending September 30, 2001 and prior years have been completed and are available for review. The purpose of the CAFR is to ensure all governmental entities report financial information in a consistent, uniform and appropriate manner.

This conforms, in most cases, to the way the Town prepares its budgets. Two exceptions are the treatment of depreciation expense (these are not shown in the budget, although the full purchase price of equipment and capital improvements is, while purchases of capital improvements are depreciated in the CAFR for enterprise funds) and the allowance for doubtful accounts. The Comprehensive Annual Financial Report shows fund expenditures and revenues on both a GAAP basis and budget basis for comparison purposes.

Annual budgets are legally adopted for the general fund, proprietary fund types, and certain special revenue funds. In addition, project budgets, if and when they are proposed, are approved for the capital project funds. Debt service budgets are adopted by appropriating the transfers used to fund outstanding obligations. Budgetary reports are prepared to effect control through fund management.

All appropriations end with the fiscal year to the extent that they have not been expended or lawfully encumbered. These appropriations then become part of next year's fund balance.

BUDGET CALENDAR

Submission of Budget & Budget Message June 24, 2002

Budget Briefing to Council Outlining Schedule June 24, 2002

and Process

Council Holds hearing and adopts tentative millage June 24, 2002

Property Appraiser Certifies Tentative Tax Roll to Town July 1, 2002

Town advises Property Appraiser of proposed millage, July 8, 2002

date, time, and place of Tentative Budget Hearing

Property Appraiser prepares notice of proposed (prior to)

property taxes (DR‑474, TRIM Notice) August 23, 2002

Property Appraiser mails notice of proposed (prior to)

property taxes (DR‑474, TRIM Notice) August 23, 2002

First Budget & Millage Hearing September 9, 2002

Final Budget & Millage Hearing September 23, 2002

Adopt Final Budget & Millage September 23, 2002

Certify Millage to Property Appraiser September 24, 2002

Property Appraiser notifies Town of final adjusted tax October 1, 2002

roll (DR‑422)

Town completes and certifies DR‑422 to Property October 3, 2002

Appraiser

Town certifies compliance with Section 200.065 and October 22, 2002

200.068 of Florida Statutes to the Department of

Revenue.

TRUTH IN MILLAGE (TRIM)

The budget and property tax rate adoption process is governed by the State Statute known as TRIM (Truth in Millage). In Florida, properties are assessed by the County Property Appraiser and are collected by the County Tax Collector. Property owners are eligible to receive a homestead exemption of $25,000 on their principal place of residence. Certain seniors are now also eligible for an additional exemption under certain circumstances. All property is assessed at one hundred percent of real value, which approximates eight-five percent of market value.

The Town is required to hold two public hearings for adoption of a property tax rate and budget. The first public hearing is advertised by the Property Appraiser's mailing of a TRIM notice to each property owner. In addition to notification of this first public hearing, the TRIM notice contains the following information:

The new assessed value and the assessed value for the prior year.

The tax bill if the current property tax rate is levied for the new year.

The tax bill if the rolled-back rate is levied for the new year (the rolled-back rate is that property tax rate which would derive the same amount of revenue based on the new assessed values as was raised in the prior year at the old assessed values).

The property tax bill if the proposed budget is adopted.

The second public hearing is advertised by means of a newspaper advertisement. Accompanying this advertisement is a summary of the revenues and expenditures contained within the budget tentatively approved at the first public hearing.

The following provides the effect of the proposed millage on a residential property with an appraised value of $100,000 and a $25,000 homestead exception. It does not take into account other taxing authorities such as the County, School Board, Mosquito Control, etc. or neighborhood MSTU's or MSBU's where taxes apply to those selected areas.

Based on Previous Town of Fort Myers Beach Millage $78.00

Based on Proposed Town of Fort Myers Beach Millage $78.00

Difference $ 0.00

If the Council decides to adopt the rollback rate, the equation will change and a savings (the difference) will be evident.

POPULATION

The population of Lee County has grown from 235,465 in 1983 to 440,888 in 2000. Lee County's population has been increasing approximately twice as fast as that of Florida and eight times faster than the nation.

The population of the Town of Fort Myers Beach, according to the Bureau of Economics and Business Research, College of Business Administration, University of Florida, was estimated at 5,891 on April 1, 1994, 6,018 on April 1, 1995 and 6,561 according to the year 2000 Census figures. This represents about a 9% increase. While the growth in the year-round population is expected to be modest, increases in the seasonal population are expected to be more robust, which will further impact our roads and beaches.

As population is discussed, it is always important to remember that the year- round population puts the Town in a small city/town category, but the seasonal peak population can approach 40,000 which places the Town in the mid-size category. The issues, problems and challenges facing the Town are more diverse and complex because of these population shifts.

REVENUE HIGHLIGHTS

Trends and forecasts emanating from the Financial Trends Monitoring Report, Multi‑Year Fiscal Forecast and quarterly budget monitoring reports prompt conservative revenue estimates in the budget process. The factors driving fiscal constraints are:

Financial management policies which call for an annual operating surplus, establishment of appropriate reserves/fund balances and avoidance of use of temporary revenues to fund mainstream services.

Lower projected rates of growth in assessed values as the Town approaches build out.

Enactment of the Save Our Homes property tax initiative. This legislation limits growth in assessed values for continuously occupied homesteaded property to 3% per year.

REVENUES

REVENUES

2002/2003

Carry Over

$ 3,127,655.00

Ad Valorem Taxes

$ 1,868,731.00

Municipal Revenue Sharing

$ 113,070.00

Half-Cent Sales Tax

$ 510,707.00

Local Option Gas Tax

$ 646,873.00

Simplified Communications Tax

$ 300,000.00

Solid Waste Franchise Fee

$ 37,400.00

Interest Earnings

$ 75,000.00

Interest Earnings Gas Fund

$ 75,000.00

Parking Facilities Revenue

$ 60,000.00

WCIND Grant (Enforcement)

$ 20,000.00

Harbor Plan Grant

$ 300,000.00

Boater Impr. Grant (Docks)

$ 30,000.00

County Occupational License

$ 2,000.00

Other licenses/fees/permits

$ 2,500.00

Times Square Permit Fees

$ 15,000.00

Fines and Cash bond forfeits/Traffic

$ 20,000.00

Interest Park Impact Fees

$ 3,000.00

Interest Road Impact Fees

$ 3,000.00

FDOT Bridge Maintenance

$ 4,000.00

Misc. Transport Revenue

$ 5,000.00

Misc. Revenue

$ 2,000.00

Mobile Home License

$ 10,000.00

Alcohol Beverage License

$ 12,000.00

Impacts Fees (Roads)

$ 50,000.00

Impact Fees (Parks)

$ 10,000.00

MSBU Times Square Maintenance

$ 34,000.00

MSBU times Square Garbage

$ 26,000.00

Special Events Permits

$ 500.00

Special Event Donation

$ 5,000.00

Mound House Foundation

$ 1,000.00

Old San Carlos Construction

$ 131,400.00

Old San Carlos Assessments (maintenance)

$ 25,000.00

Pool Foundation

$ 5,000.00

Federal Traffic Study Grant

$ 530,000.00

MSBU Palmetto Street

MSBU Lennell Road

$ 7,000.00

$ 25,850.00

Tropical Storm Gabrielle Mitigation Grant

$ 38,000.00

TDC Grant for Film Festival

$ 29,000.00

Water Utility Reimbursement

$ 250,000.00

CDBG/Grant

$ 48,000.00

Newton Property Grant

$ 2,300,000.00

TOTAL REVENUE

$ 10,758,686.00

AD VALOREM

Property taxes are levied on the assessed value of real property. These taxes are also known as Ad Valorem taxes.

Approximately 12.25% of the Towns available funds this year are derived from property taxes collected this year. This is based on a General Fund carryover of about $3,000,000, a CIP carryover of about $3,800,000 and income of about $7,310,000 for a total of about $14,310,000 and property taxes of about $1,868,731. Chapter 166.211 of Florida Statutes authorizes the Town of Fort Myers Beach, in a manner not inconsistent with general law, to levy Ad Valorem taxes on real estate and tangible personal property in an amount not to exceed 10 mills.

The taxable value is the assessed value less any exemptions allowed by law. The most common exemption is the $25,000 homestead exemption, allowed if the owner uses the property as the principle residence. There are also exemptions for widows and widowers, disability, government-owned, and non-profit-owned property, including churches, together with the seniors exemption already described on page 10.

In order to gain pictorial perspective of the relationship between a residents total tax bill and that portion payable to the Town, we have included a list of all millages that are included on a tax bill.

2001/2002 AD VALOREM TAXES

MILL RATE TAXING AUTHORITY

4.3277 LEE COUNTY GENERAL REVENUE

1.0124 LEE COUNTY CAPITAL IMPROVMT

5.8700 PUBLIC SCHOOL STATE

2.6080 PUBLIC SCHOOL LOCAL

.0400 WEST COAST INLAND WATERWAY

.5970 S. FL WATER MGMT DISTRICT

.1000 S. FL WATER MGMT-EVERGLADES

.0358 LEE CO. HYACINTH CONTROL

.1275 FMB MOSQUITO CONTROL

2.8000 FM BEACH FIRE DISTRICT

.3935 FMB LIBRARY

1.0400 TOWN OF FORT MYERS BEACH

State law provides that revenue projections are to be made at 95% of anticipated amounts. This 5% provides a cushion for budgetary purposes. The following table provides the estimated property tax collections for budgetary purposes.

Value of Taxable Assessed Property

$ 1,891,428,360

Times: Tax Proposed Rate

.0010400

Gross Tax Estimate

$ 1,967,085,494

Less: Discount (5%)

98,354

FY 2002 Estimated Tax Revenues

$ 1,868,731

REVENUE SHARING

The Town is eligible for State Revenue sharing. Based on estimates from the State Department of Revenue, we have budgeted at 95% of the anticipated amount or $113,070. These monies are distributed monthly by the State Department of Revenue to participating units of local government, per Florida Statutes, Chapter 218.61(3).

CIGARETTE TAX

Now combined in State Revenue Sharing.

OCCUPATIONAL LICENSE TAX

The Governing body of a county may levy, by appropriate resolution or ordinance, an occupational license tax for the privilege of engaging in or managing any business, profession, or occupation within its jurisdiction per Florida Statute, Chapter 305.032. Florida Statute, Chapter 205.033(C4) states The revenues derived from the occupational license tax exclusive of the costs of collection and any credit given for municipal license taxes, shall be apportioned between the unincorporated area of the county and the incorporated municipalities located therein by a ratio derived by dividing their respective populations by the population of the county as follows: (we have not yet been able to ascertain the percentage share for Bonita Springs)

Town of Fort Myers Beach 2.31%

City of Fort Myers 12.52%

City of Sanibel 1.54%

City of Cape Coral 22.84%

Lee County 60.79%

Total 100.00%

We have budgeted $2,000 for occupational license fee collections for fiscal year 2002/2003.

GAS TAX

Florida Statute, Chapter 206.605 states that in addition to all other taxes required by law, a tax of 1 cent per gallon is imposed upon the first sales or first removal from storage, after importation into this state, of motor fuel. Additionally, the Florida Legislature has, in Section 336.025, Florida Statues, authorized counties to enact a local option gas tax. The County has enacted the local option gas tax and originally elected to provide the Town of Fort Myers Beach 2.31% of local options gas tax revenues which was later modified to 2.8%. The distribution of local option gas tax proceeds within the County is as follows:

Town of Fort Myers Beach 2.8%

City of Fort Myers 14.0%

City of Sanibel 5.0%

City of Bonita Springs 3.6%

City of Cape Coral 23.3%

Unincorporated Lee County 51.3%

Total 100.0%

Total gas tax collections (state and local option) have been budgeted at 95% of the anticipated amount, or $646,873. Lee County is now offering a new interpretation for determining gas tax distribution and it has a punitive effect on any City that it is used on. This interpretation escalates the disparity in gas tax distribution amongst the different cities. If the County attempts to use this formula on the Town, it would have a devastating effect on the revenue we derive from gas tax and the corresponding capital projects that utilize gas tax for funding.

FRANCHISE FEES

Franchise fees are fees charged for the right to provide service within the incorporated limits of our Town. Currently, franchise fees are assessed only for garbage collections. The budgeted revenues at 95% of estimates is $37,400. Since the implementation of the Simplified Communication Tax, we no longer collect a franchise fee on cable operations. This revenue now comes to us in the form of this statewide tax and is estimated at about $300,000 per year.

INTEREST EARNINGS

Unless otherwise authorized by law or by ordinance, the governing body of each municipality shall, by resolution to be adopted from time to time, invest and reinvest any surplus public funds in its control or possession in any of the several options for investment per Chapter 166.261 Florida Statutes.

Interest Earnings in the general operating fund are budgeted at $75,000 during the next fiscal year based on an average balance of $3,500,000 and an interest rate of 2%. Actual interest earnings are based on market rates and invested balances. The same estimates hold true for interest income generated from gas tax dollar reserves.

SALES TAX

Projected Sales Tax collections are based on estimates made by the State Department of Revenue. Based on State of Florida Department of Revenue figures, we have budgeted at 95% of the anticipated amount or $510,707.

PARKING FACILITIES REVENUE

While estimated to be lower slightly in the summer and fall of 2002, we expect these revenues to rebound to pre-September 11^th and pre-construction levels by the end of the upcoming fiscal year. We also expect new meters in the Old San Carlos area to be online during the upcoming year.

CRA TAXING DISTRICT T.I.F.

This new revenue stream is a result of our ongoing negotiations with the County relative to the pre-existing Community Redevelopment Agency which has now been re-defined to consist only of the Overlay District. The Town has funded $168,000 over the past years and has budgeted $47,141 for the current year. Our attempts to resolve our differences with the County have been successful and the end result was a one-time payment of $2,000,000 which appears in last years budget.

STREET AND DRAINAGE IMPROVEMENT MSBU:

For the third year, we are showing anticipated income from some of the road and drainage capital projects that have been authorized in previous years.

EXPENDITURES

The following provides a listing of anticipated expenditures for the Town of Fort Myers Beach for the fiscal year 2002/2003. A narrative discussion follows the table.

EXPENDITURES

2002/2003

ADMINISTRATIVE COSTS

Town Manager Salary

$ 100,000.00

Employee Salaries

$ 350,500.00

Merit

$ 36,000.00

Town & Deputy Town Manager Car Allowance

$ 7,200.00

Town Manager FICA

$ 5,000.00

Town Manager Retirement

$ 15,000.00

Town Manager Life and Health

$ 18,000.00

Town Manager Unemployment (FUTA)

$ 57.00

Employee FICA

$ 38,200.00

Employee Retirement

$ 35,000.00

Employee Life & Health

$ 63,000.00

Employee Unemployment (FUTA)

$ 500.00

Leases (building)

$ 46,500.00

Telephone and Internet

$ 20,000.00

Emergency Communications

$ 1,500.00

Legal ads/Promotional

$ 15,000.00

Town newsletter

$ 23,000.00

Town Council minutes

$ 7,500.00

Postage, delivery

$ 5,000.00

Insurance (Fire, liability, etc.) including Workers Comp

$ 52,000.00

Office supplies

$ 10,000.00

Operating supplies

$ 8,000.00

Miscellaneous Expenses

$ 5,000.00

Bank Charges/Investment Expenses

$ 3,600.00

Printing and Binding

$ 25,000.00

Repair and Maintenance

$ 15,000.00

Leases (copier, etc.)

$ 12,000.00

Town Council Travel/Meals/auto

$ 7,000.00

Council Member Training & Education

$ 5,000.00

Town Manager Travel, meals, hotel

$ 3,000.00

Town Manager membership/education

$ 3,000.00

Regular employee travel

$ 5,000.00

Tuition reimbursement program

$ 12,000.00

Books, subscriptions, membership, education

$ 4,000.00

Town Hall Utility Service

$ 250.00

Town Memberships

$ 15,000.00

Treasures of the Sea

$ 10,000.00

Town Council Compensation

$ 74,400.00

TOTAL ADMINISTRATIVE EXPENSE

$ 1,056,207.00

EXPENDITURES

2002/2003

SERVICE COST CENTERS

Community Development

$ 135,000.00

RFA processing

$ 1,000.00

CDBG Program

$ 48,000.00

Road Maintenance Work

$ 100,000.00

Bridge Maintenance Work

$ 8,800.00

Transportation/Trolleys

$ 72,000.00

Animal control

$ 27,000.00

Emergency/ Flood Mgmt. Plan

$ 20,000.00

Community Service

$ 25,000.00

Seasonal Events

$ 55,000.00

Special events

$ 45,000.00

Cultural Events, Concerts, and Film Festival

$ 104,000.00

Traffic Signal Utilities

$ 1,200.00

Street Lighting Utilities

$ 50,000.00

Street Lighting Repair

$ 2,000.00

Street Lighting Improvements

$ 10,000.00

Water Enforcement (Deputies)

$ 40,000.00

Water Enforcement (Fuel)

$ 10,000.00

Traffic Control/Sheriff Office services enhancements

$ 40,000.00

TOTAL SERVICE COSTS

$ 794,000.00

EXPENDITURES

2002/2003

PARKS AND RECREATION

Mound House Director

$ 35,000.00

Mound House Operating & Maintenance

$ 81,000.00

Times Square Maintenance

$ 86,000.00

Times Square Garbage

$ 52,000.00

Times Square Utilities

$ 2,000.00

Times Square Equipment

$ 5,500.00

Times Square Misc. Expenses

$ 10,000.00

Old San Carlos Maintenance

$ 62,500.00

Bay Oaks Recreation Center

$ 172,000.00

Bay Oaks Community Park

$ 66,000.00

Pool Operating and Maintenance

$ 170,000.00

Pool Utilities

$ 33,000.00

TOTAL PARKS AND REC

$ 775,000.00

EXPENDITURES

2002/2003

CAPITAL IMPROVEMENTS

Road/Drainage Projects

$ 600,000.00

Canals

$ 100,000.00

North Estero Paving

$ 100,000.00

Variable Pricing

$ 660,000.00

Hidden Paths

$ 50,000.00

$ 1,510,000.00

Office/Etc

Remodel

$ 35,000.00

Generators

$ 50,000.00

Truck

$ 16,000.00

Newton Property Acquisition

$ 2,700,000.00

Other Land Acquisition

$ 250,000.00

Mound House

House

$ 50,000.00

Dock

$ 30,000.00

Beach Restoration

$ 910,000.00

Harbor Plan

$ 300,000.00

Pool

$ 20,000.00

Neighborhood landscape

$ 10,000.00

$ 4,371,000.00

TOTAL CAPITAL IMPROVEMENTS

$ 5,881,000.00

Total funding dedicated to CIP from this year revenue

$ 4,614,923.00

DRA/CRA

2002/2003

Carryover

1,838,857

Town Contribution

47,171

Property Owner Assessments

131,400

Total Funds Available

2,017,428

Total funds dedicated to CRA from this year revenue

178,571*

TRANSPORTATION CAPITAL IMPROVEMENT PLAN

2002/03

2003/04

2004/2005

2005/2006

2006/2007

(Budgeted)

(Projected)

carryover

2,895,508

2,657,431

1,257,431

157,431

607,431

Yearly Projected Revenue

1,271,923

600,000

(GT +/or RIF)

Road and Drainage

a) Projects

600,000 (GT) & (GF)

1,500,000 (GT)

300,000 (GT)

50,000 (GT)

150,000 (GT)

b) Canals

100,000 (GT)

Traffic Calming side streets

50,000 (GT)

Estero Blvd Safety Project

N. Estero Paving

100,000 (GT)

Variable Pricing Study

660,000 (GT) (G)

0 (G)

Hidden Pathways

50,000 RIF

100,000 RIF

0 (G)

Estero Streetscape 0

300,000 (GT) (G)

1,250,000 (GT) (G)

0 (G)

Yearly Expenditure

1,510,000

2,000,000

1,700,000

150,000

350,000

Balance

2,657,431

1,257,431

157,431

607,431

857,431

DRA =

Downtown Redevelopment Agency T.I.F.

G =

Grant

GF =

General Fund

GT =

Gas Tax

PIF =

Park Impact Fees

RIF =

Road Impact Fees

2002/2003

2003/2004

2004/2005

2005/2006

2006/2007

(Budgeted)

(Projected)

Carryover

1,040,049

12,049

27,049

42,049

47,049

Yearly Projected Revenue

3,343,000

250,000

Office

a) remodel office

35,000

5,000

b) truck

16,000

c) generator project

50,000

Newton Acquisition

2,700,000

Land Acquisition-other

250,000

200,000

Mound House

a) House

50,000

b) Dock

30,000

Beach Restoration Project

910,000

10,000

Harbor Plan

300,000

10,000

Pool 20,000

10,000

S.O. Substation

Bay Oaks

10,000

Neighborhood Landscape

10,000

Yearly Expenditure

4,371,000

235,000

245,000

235,000

Balance

12,049

27,049

42,049

47,049

62,049

2002/2003

LOCAL PLANNING AGENCY COSTS

LPA Land Development Code

$ 32,500.00

LPA Office Supplies

$ 2,000.00

LPA Miscellaneous expenses

$ 1,000.00

LPA books, professional data, education

$ 1,000.00

LPA Attorney

$ 18,000.00

Merit/COLA

$ 1,000.00

LPA Attorney FICA

$ 700.00

LPA Attorney Retirement

$ 2,700.00

LPA Minutes

$ 2,000.00

LPA Legal Ads

$ 500.00

LPA Printing and Binding

$ 5,000.00

TOTAL LPA COSTS

$ 66,400.00

EXPENDITURES

2002/2003

CONTRACTUAL SERVICES

Audit Services

$ 12,000.00

Chart of Account services

$ 7,000.00

Legal (Town Attorney)

$ 57,600.00

Legal (Special master, etc.)

$ 86,706.00

Contract (Cleaning service)

$ 7,000.00

Contract (secretary, etc)

$ 5,000.00

Professional Service (engineering, appraisal)

$ 205,000.00

NPDES compliance

$ 7,000.00

TOTAL CONTRACTUAL SERVICES

$ 387,306.00

EXPENDITURES

2002/2003

COMMITTEES

Committee Minutes

$ 15,000.00

Legislative Printing and Binding

$ 3,000.00

Misc. Committee Expenses

$ 5,000.00

TOTAL COMMITTEES

$ 23,000.00

EXPENDITURES

2002/2003

RESERVES

State Unemployment 00-599-025

$ 40,000.00

Contingency 00-299-099

$ 823,279.00

Reserves 00-590-099

$ 1,000,000.00

End Fund Balance

$ 1,000,000.00

TOTAL CONTINGENCY & RESERVES

$ 2,863,279.00

TOTAL EXPENDITURES

$ 10,758,686.00

RFA PROCESSING

We have contracted with the Florida League of Cities for the Better Place complaint/request tracking system. The better Place system is an Internet accessed application service provider designed to provide Town administrators the ability to track complaints and/or requests from citizens generated by a telephone call or received through the Internet. The Better Place program can be accessed 24 hours a day, seven day a week utilizing the Towns Internet web page, allowing the Town to field request directly from citizens, document the request, act upon the request, and update the citizen of actions taken by the Town through a follow-up letter or through the internet. The cost for this service is and follow up is $1000.00 annually.

COMMUNITY DEVELOPMENT

We have contracted with Lee County for Community Development Services. These services include Code Enforcement, Building Inspections, Building Permits, Plan Reviews, Contractor Licensing, Development Services, Environmental Enforcement (Sea Turtle) and Zoning, including Environmental Review. The cost of these services was $125,000 last year. The cost of these services for the next fiscal year is $135,000 which includes historical review services, a vehicle, and enhanced sign ordinance enforcement.

MAINTENANCE, SIGNS, SIGNALS, RIGHT-OF-WAY AND DRAINAGE

These are the funds we budgeted for road resurfacing, re-paving and repairing potholes. We have worked out the details of an interlocal agreement with the County DOT for this work. We have also established other contacts should we need to look outside of County DOT. We have now completed a number of road improvement and drainage projects and expect to do more in the coming year. As a result, our budget set aside to maintain these areas has increased dramatically. We estimate this cost to be $100,000 in the upcoming year.

ANIMAL CONTROL

We have budgeted $27,000 for animal control services for the Town. This continues to be a substantial decrease over the budgeted amount of four years ago, which was $47,000. We were able to negotiate a more realistic percentage of service cost by working with Lee County Animal Services. This years contract amount is $22,030 and we have included some additional funds for enhanced patrols if needed.

SIDEWALKS, LANDSCAPING AND BIKE PATHS

This continues to be an area of priority. The Estero Boulevard Streetscape Project and the side street beautification program are just the most visible attempts to enhance sidewalks, increase treescaping, create better, safer bike paths and continue to manage and improve parking. This year, we hope to re-direct attention to the Hidden Paths Project and to implement construction of a portion of that plan. We also hope to improve lighting and crosswalks on Estero Boulevard. The Neighborhood Landscaping Program is still very active, which provides a 50% match for the purchase and planting of street trees along neighborhood streets.

EMPLOYEE SALARIES AND BENEFITS

Employee salaries are budgeted at $450,500 for the Town Manager and eight employees. Benefits are budgeted at about 30% of salaries or approximately $132,000. This includes statutorily and contractually required benefits. The Town Managers compensation reflects the recently approved increase of $10,000 which has been equally divided between her salary as Town Manager and as attorney to the LPA. The employee compensation figures also reflect the addition of a new position in May 2002. This year, for the first time, we have added an employee tuition reimbursement program for a cost of $12,000.

LEASE FOR TOWN HALL

This is the cost for the space we rent for Town Hall. Our current lease is $46,500 per year, which includes utilities.

COMMUNICATIONS EXPENSE

Communications expense includes local and long distance telephone calls. This expense is estimated at $21,000 for the year.

LEGAL ADVERTISEMENTS

This is the cost to advertise Town meetings and any public hearings and ordinances as required by law. This expense will vary based upon actual size and number of advertisements, but is budgeted at $15,000.

TOWN NEWSLETTER

This category expense is for the new quarterly Beach Access newsletter. Expenses are estimated at $23,000 for the year. This increase is due to an anticipated move to glossy paper with four-color type, as well as the addition of the previously approved magnet project.

POSTAGE AND EXPRESS SERVICES

This category of expense includes postage and express services. Postage and express services are estimated at $5,000 during the period.

INSURANCE

Insurance expense covers workers compensation, automobile liability, comprehensive general liability and public official's liability coverage. Currently coverage has been purchased through the Florida League of Cities. The estimated cost of this coverage for the next fiscal year is $52,000.

OFFICE & OPERATING SUPPLIES

Office supplies cover the costs of paper, copier and printer toner, pens, pencils and other supplies necessary to support Town Hall. These expenses are estimated at $18,000 for the current fiscal year.

EQUIPMENT LEASES AND MAINTENANCE

This category of expense includes leases and maintenance for copy machines, computers and fax machines, as well as the lease of an off site storage area. The budget for this line item is $12,000.

JANITORIAL SERVICES

We budgeted $7,000 for janitorial services related to cleaning Town Hall for the upcoming year. This now shows up as a contractual expense.

ACCOUNTING SERVICES

This service is related to the maintenance of accounting records for the Town (payroll, accounts payable, general ledger and production of financial statements). The Town has purchased an accounting software package and now provides most of these services with current staff. The estimated cost of these support services is $7,000.

TRAVEL, TRAINING & TOWN MEMBERSHIPS

This expense is for the travel and training for staff and Council. It is advantageous that Council and staff periodically meet with other jurisdictions to exchange ideas. The Town Manager is also required to participate in continuing education to maintain good standing with the Florida Bar. The amount budgeted is $41,000.

NEWTON PROPERTY ACQUISITION

We are in the process of deciding whether or not to acquire the property. We have budgeted $2,700,000 for the acquisition of the Newton Property and it is anticipated that all funds will come from a grant in the amount of $1,300,000, county contributions of approximately $1,000,000 and Town funds of approximately $350,000.

MOUND HOUSE OPERATION AND MAINTENANCE

The Town Council has formed an advisory committee to make recommendations to the Council as to how the Mound House should be operated in the future. An archaeological assessment and a historic structures assessment will be performed using grant funds. Those reports will be used by the Advisory committee (CELCAB) to make final recommendations to the Council as to the operational plan for the property. Funds have been budgeted for operation and maintenance in the amount of $116,000, which will include up to $6,000 for interns to be used at the Mound House.

TIMES SQUARE MAINTENANCE

This line item reflects the costs associated with normal cleaning and maintenance, as well as the lease cost for a paver cleaner which we have found to be necessary in order to maintain the quality of the Times Square area pedestrian mall and sidewalk. We have also included a component for maintenance on Old San Carlos this year.

LOCAL PLANNING AGENCY COSTS

We have completed the Comprehensive Plan and it has been accepted by the State. We are completing the re-draft of the Land Development Code to complement the Comprehensive Plan. The current Land Development Code that we inherited from the County weighs about 10 pounds. The entire Code must be re-done and customized to fit the Town. Consultant assistance is necessary for both of these tasks.

We believe the cost of these services for this year to be $32,000 as we complete the project. We also anticipate the cost of supplies and reproducibles will be $4,000 during the next fiscal year. Legal advertising is estimated at $1,500 and legal services, still being provided in house by the Town Manager, budgeted at $18,000. The cost for taking the minutes of the LPA meetings will vary depending on the number of meetings, but is estimated at $2,000.

AUDIT SERVICES

State Law requires that each governmental entity have an audit performed annually by a Certified Public Accountant. This audit must be performed in accordance with Generally Accepted Accounting Principles and Generally Accepted Auditing Practices. We estimated the cost of the annual audit at $12,000.

FINANCIAL SERVICES

Previously budgeted at $18,000 we continue to do this as an in-house item at no additional expense, even though we have added a Capital Improvement Plan Budget, a Community Redevelopment Budget and a new Water Utility Budget.

COMMUNITY SERVICES

We have included in the budget the sum of $25,000 to allow the Town to participate in a variety of existing or future programs designed to assist and benefit the residents of the Town. It is anticipated that this line item will serve the needs of the private 503C Community Assistance organization proposed by Helen Caldwell and others, as well as the new Leadership Beach program run by Julia and Dan last year. Funding for these projects will be at the Councils discretion and evaluated on a case-by-case basis. The Council will sponsor approved requests up to 100% of the total cost.

SPECIAL EVENTS AND SEASONAL EVENTS

This line item includes the 4^th of July celebration, New Years Eve and holiday celebrations as well as the town Birthday Party celebration. We have also included our ground breaking ceremonies in this category. These line items combined have been budgeted at $100,000. Funding for projects in this category will be evaluated on a case-by-case basis at the Councils discretion. The Council will partner with the public for up to 100% of the total cost of approved events.

CULTURAL EVENTS & CONCERTS

This line item is now estimated at $104,000 for concerts throughout the Town and the Film Festival. This year, we will be expanding the Fort Myers Beach Film Festival that is planned for next April. Funding for projects in this category will be evaluated on a case-by-case basis at the Councils discretion. The Council will partner with the public for up to 50% of all monetary cost for approved events, except for the Film Festival, which we can expect to be funded in part by a combination of a TDC grant, private contributions and Town funds.

LEGAL

We have included $144,306 in the budget for legal services for the Town. This is based on a retainer figure of $57,600 and $86,706 for services beyond the scope of the retainer agreement. Obviously the level of service depends on actual time expended by outside counsel. In the past years, over $166,885 was spent on the Bay Beach/Stardial case. We also incurred expense in the Towns legal fights with the County on both the water utility and the CRA.

RESERVES AND CONTINGENCY

Please see page five for more information. This year we are also proposing a contingency of $823,279, reserves of $1,000,000 and an end fund balance of $1,000,000 for unanticipated or unexpected items.

Operational Budget 2002/2003

Carryover:

$ 3,127,655.00

Revenue

$ 7,631,031.00

$ 10,758,686.00

Expenses:

Administrative

$ 1,056,207.00

Services

$ 794,000.00

Parks and Recreation

$ 775,000.00

LPA

$ 66,400.00

Contracts

$ 387,306.00

Committees

$ 23,000.00

$ 3,101,913.00

$ 7,656,773.00

Funds Committed to CIP

Tropical Storm Gabrielle Grant

$ 38,000.00

Federal Transportation Grant

$ 530,000.00

Palmetto MSBU

$ 7,000.00

Lenell MSBU

$ 25,850.00

Local Option Gas Tax

$ 500,073.00

Interest on Gas Tax

$ 125,000.00

Interest on Impact Fees

$ 3,000.00

Road Impact Fees

$ 50,000.00

$ 1,271,923.00

Non-Transportation:

General Fund

$ 700,000.00

Harbor Plan Grant

$ 300,000.00

Public Docks Grant

$ 30,000.00

Newton Grant

$ 2,300,000.00

Park Impact Fees

$ 10,000.00

Interest on Impact Fees

$ 3,000.00

$ 3,343,000.00

$ 4,614,923.00

$ 3,041,850.00

Funds committed to DRA/CRA

Town Portion

$ 47,171.00

Owner assessments

$ 131,400.00

$ 178,571.00

$ 2,863,279.00

Unemployment Fund

$ 40,000.00

Contingency

$ 823,279.00

Reserves

$ 1,000,000.00

$ 1,863,279.00

End Fund Balance

$ 1,000,000.00

$ 2,863,279.00

CIP BUDGET

TRANSPORTATION ITEMS

2002/2003

Carryover:

$ 2,895,508.00

Revenue from Operating Budget:

2002/2003

Tropical Storm Gabrielle

$ 38,000.00

Federal Traffic Study

$ 530,000.00

Palmetto MSBU

$ 7,000.00

Lenell MSBU

$ 25,850.00

Local Option Gas Tax

$ 500,073.00

Interest on Gas Tax

$ 125,000.00

Interest on Impact Fees

$ 3,000.00

Road Impact Fees

$ 50,000.00

$ 1,271,923.00

Total

$ 4,167,431.00

Budgeted Expenses per item:

Transportation Capital Improvements

$ 700,000.00

Variable pricing, congestion study

$ 660,000.00

North Estero Paving

$ 100,000.00

Hidden Path

$ 50,000.00

$ 1,510,000.00

Transportation Reserves

$ 2,657,431.00

CIP BUDGET

Non-Transportation Items

2002/2003

Carryover

$ 1,040,049.00

Revenue from Operating Budget

2002/2003

General Fund

$ 700,000.00

Newton Property Grant

$ 2,300,000.00

Public Docks Grant

$ 30,000.00

Harbor Plan Grant

$ 300,000.00

Interest on Impact Fees

$ 3,000.00

Park Impact Fees

$ 10,000.00

$ 3,343,000.00

Total

$ 4,383,049.00

Budgeted Expenses

Newton Property

$ 2,700,000.00

Town Hall

$ 101,000.00

Mound House

$ 50,000.00

Land Acquisition

$ 250,000.00

Public Docks

$ 30,000.00

Harbor Plan

$ 300,000.00

Beach Project

$ 910,000.00

Neighborhood Trees

$ 10,000.00

Pool

$ 20,000.00

$ 4,371,000.00

Non-Transportation Reserves

$ 12,049.00

WHERE THE MONEY COMES FROM

WHERE THE MONEY GOES

GLOSSARY

AD VALOREM - A tax levied in proportion to the value of the property against which it is levied.

AGGREGATE MILLAGE RATE - A rate obtained by dividing the sum of all ad valorem taxes levied by the governing body (Board of County Commissioners for County Government) by the taxable value of the county or municipality. Expresses an average tax rate.

APPROPRIATION - A legal authorization granted by a legislative body to make expenditures and to incur obligations for specific purposes. An appropriation is usually limited in amount, and as to the time when it may be expended.

ASSESSED VALUATION - a valuation set upon real estate or other property by a government as a basis for levying taxes. Taxable valuation is calculated from an assessed valuation. Assessed value is required to approach 100% of market value in Florida.

BUDGET - A plan of financial operation embodying an estimate of proposed expenditures for a given period, and the proposed means of financing. Used without any modifier, the term usually indicates a financial plan for a single year. The term budget is used in two senses in practice. Sometimes it designates the financial plan presented to the appropriating body for adoption, and sometimes the plan finally approved by the body. It is usually necessary to specify whether the budget under consideration is proposed and tentative, or whether it has bee approved by the appropriating body. The budget, once adopted, is the legal authorization to expend county funds during the fiscal year. The budget may be amended during the fiscal year by the governing body and/or management, in accordance with procedures specified by law and/or administrative rules and regulations.

BUDGET MESSAGE - A general discussion of proposed budget as presented in writing to the legislative body.

CAPITAL OUTLAYS - Expenditures which result in acquisition of or addition to fixed assets.

CAPITAL IMPROVEMENT PROGRAM - A plan for capital expenditures to be incurred each year over a fixed period of years to meet capital needs arising from the long-term work program. It sets forth each project or other contemplated expenditure in which the government is to have a part, and specifies the full resources estimated to be available to finance the projected expenditures.

DEPENDENT SPECIAL DISTRICT - A special district whose governing body or whose budget is established by the governing body of the County or municipality to which it is dependent.

DEPRECIATION - (1) Expiration in the service life of fixed assets, other than wasting assets attributable to wear and tear, deterioration, action of the physical elements inadequacy, and obsolescence; (2) the portion of the cost of a fixed asset other than a wasting asset which is charged as an expense during a particular period. In accounting for depreciation, the cost of a fixed asset, less any salvage value, is pro-rated over the estimated service life of such an asset, and each period is charged with a portion of such cost. Through this process, the entire cost of the asset is ultimately charged off as an expense.

ENHANCEMENT - An improvement to a programmatic service level.

ENTERPRISE FUND - A self-supporting fund designated for activities totally supported by user charges or fees. Water and sewer services, for example, in most communities.

EXPENDITURES - Decreases in net financial resources. Expenditures include current operating expenses which require the current or future use of net current assets, debt service, and capital outlays.

EXPENSES - Decreases in net total assets. Expenses represent the total cost of operations during a period regardless of the timing of related expenditures.

FISCAL YEAR - A 12-month period to which the annual operating budget applies, and at the end of which a government determines its financial position and the results of its operations. Lee Countys fiscal year begins October 1, and ends September 30th of each year.

FIXED ASSETS - Assets of long-term character which are intended to continue to be held or used, such as land, buildings, improvements other than buildings, machinery, and equipment.

FUNCTIONS - Expenditure classification according to the principal purposes for which expenditures are made. Examples are public safety, public health, public welfare, etc.

FUND - A fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations.

FUND BALANCE - A term used to express the equity (assets minus liabilities) of governmental fund types and trust funds.

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) - uniform minimum standards and guidelines for financial accounting reporting. They govern the form and content of the basic financial statements of an entity. GAAP encompass the conventions, rules, and procedures necessary to define accounting practices. They include not only broad guidelines of general application, but also detailed practices and procedures. GAAP provides a standard by which to measure financial presentations. The primary authoritative statement on the application of GAAP to state and local governments are GASB pronouncements. Every government should prepare and publish financial statements in conformity with GAAP.

INTERGOVERNMENTAL REVENUE - Revenue collected by one government and distributed (usually through some predetermined formula) to another level of government(s).

LEGALLY ADOPTED BUDGET - The total of the budgets of each County fund including budgeted transactions between funds.

MEASUREMENT FOCUS - The accounting convention which determines (1) which assets and which liabilities are included on an entitys balance sheet, and (2) whether its operating statement presents financial flow information (revenues and expenditures) or capital maintenance information (revenues and expenses).

MILLAGE RATE - A rate expressed in thousands. As used with ad valorem (property) taxes the rate expresses the dollars of tax per one thousand dollars of taxable values.

MODIFIED ACCRUAL BASIS - The accrual basis of accounting adapted to the governmental fund type Spending Measurement Focus. Under it, revenues are recognized when they become both measurable and available to finance expenditures of the current period. Expenditures are recognized when the related fund liability is incurred except for, but not limited to: (1) inventories of materials and supplies which may be considered expenditures either when purchased or when used; (2) prepaid insurance and similar items which need not be reported; (3) accumulated unpaid vacation, sick pay, and other employee benefit amounts which need not be recognized in the current period, but for which larger-than-normal accumulations must be disclosed in the notes to the financial statements; (4) principal and interest on long-term debt which are generally recognized when due. All governmental funds and Expendable Trust Funds are accounted for using the modified accrual basis of accounting.

(MSBU) MUNICIPAL SERVICES BENEFIT UNIT - An MSBU is a special district created to provide for projects and/or services to a specifically defined area of the County and financed by a special assessment to only those citizens receiving the benefits of those projects or services.

MSTU (MUNICIPAL SERVICES TAXING UNIT) - A special district authorized by the State Constitution Article VII and the Florida Statutes 125.01. The MSTU is a legal and financial mechanism for providing specific services and/or improvements to a defined geographical area. An MSTU may levy ad valorem taxes without referendum. An MSTU may also use assessments service charges or other revenue, to provide resources. The MSTU is one type of dependent special district.

OBJECTIVE - A simply stated, readily measurable statement of aim or expected accomplishment within the fiscal year. A good statement of objectives should simplify a specific standard of performance for a given program:

(a) An operational objective focuses

(b) A managerial objective focuses on those aspects of management that help staff achieve operational objectives; i.e., staff training, work plan development, etc.

OPERATING TRANSFERS - Legally authorized transfers between object codes as needed to balance specific line items.

PERFORMANCE BUDGET - A budget which relates expenditures to measures of activity and performance.

PROGRAM BUDGET - A budget organized by programs. A program used in this application is a grouping of related activities, projects, and services which are similar in purpose. The expenditure focus of a budget program is related to the mature of work and services performed.

PROGRAM PERFORMANCE BUDGET - Combines performance measures with a program budget structure.

RESERVE FOR CONTINGENCIES - an amount set aside, consistent with statutory authority, that can subsequently be appropriated to meet unexpected needs.

RETAINED EARNINGS - An equity account reflecting the accumulated earnings of an Enterprise or Internal Service Fund.

REVENUES - (1) Increased in governmental fund type, net current assets from other than expenditure refunds, and residual equity transfers. Under NOGA Statement 1, general long-term debt proceeds and operating transfers-in are classified as other financing sources rather than revenues. (2) Increases in proprietary fund type, net total assets from other than expense refunds, capital contributions, and residual equity transfers. Under NOGA Statement 1, operating transfers-in are classified separately from revenues.

ROLLED-BACK RATE - The millage rate that would generate the same ad valorem tax revenue as was generated the previous year, excluding changes in taxable valuation resulting from new construction, annexation or de-annexation. If the proposed aggregate millage rate exceeds the aggregate rolled-back rate, then by law, the advertisement for the public hearings to adopt the millage must state the percentage by which the rolled-back rate exceeds the percentage of the proposed tax increase. The rolled-back rate is used in the same manner for individual millage levies.

SERVICE LEVELS - Service(s) or product(s) which comprise actual (or expected, depending on whether one is describing a current or future service level) output of a given program. Focus is on results, not measures of workload (e.g., for a Sheriffs Department - number of assaults investigated is a workload measure, while number of assault cases cleared is a service level).

STATUTE - A written law enacted by a duly organized and constituted legislative body.

TAX INCREMENT FINANCING (T.I.F.) - Tax increment revenues are all new property tax revenues generated by new developments or assessments which increase the existing tax base within the designated redevelopment area.

TAX RATE - The amount of tax stated in terms of a unit of the tax base; for example, 5 mils equals 5 dollars per thousand of taxable value.

TAXES - Compulsory charges levied by a government for the purpose of financing services performed for the common benefit. This term does not include specific charges made against particular persons or property for current or permanent benefits, such as special assessments. Neither does the term include charges for services rendered only to those paying such charges as, for example, sewer service charges.

TAXABLE VALUATION - The value used for computing the ad valorem taxes levied against property. The taxable value is the assessed value less any exemptions allowed by law. The most common exemption is the $25,000 homestead exemption allowed, if the owner uses the property as the principle residence. There are also exemptions for disability, government owned, and non-profit owned property.

TRANSFERS IN/OUT - Amounts transferred from one fund to another to assist in financing the services of the recipient fund. Transfers do not constitute revenues or expenditures of the governmental unit, but only of the individual funds. Thus, they are budgeted and accounted for separately from other revenues and expenditures.

TRIM NOTICE - True Rate In Millage, a tentative tax notice sent to all property owners in August, to provide information reflecting tentatively adopted millage rates.

UNINCORPORATED AREA - That portion of the County that is not within the boundaries of any municipality.