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The Budget Process at the City of Gainesville

Every spring, municipal governments across the state enter into the budget process to be ready for the start of their fiscal year on Oct. 1.

Florida law sets the city fiscal year from October 1 through September 30, the same as the federal fiscal year. This is staggered from the Florida state fiscal year of July 1 to June 30.

The budget process has three phases. In the first phase, the city develops the annual budget calendar and sets goals. In phase two, the city develops department goals, service levels and target budgets.

In phase three, the city manager presents the proposed budget to the Gainesville City Commission, residents and staff in a series of workshops. The City Commission adopts a proposed property tax millage rate, a tentative fire assessment rate and sets times and dates for the mandated public hearings.

In August, the Alachua County Property Appraiser notifies each property owner inside city limits of the proposed millage rate and the public hearings as required by Florida’s Truth in Millage (TRIM) legislation. All workshops are available to the public, and Gainesville neighbors can make suggestions online or during public comment.

Once the commission reaches agreement, the city adopts the Financial and Operating Plan for the upcoming fiscal year and reports the budget to the state. The Financial and Operating Plan is available online and by public records request.

Per Florida statute 166.241, city officials and staff must stay true to the financial and operating plan. The statute stipulates that spending not be more than funding, and that there be no spending on items outside the adopted budget. A budget amendment process with public hearings is required to make any changes to the budget.

Funding

The city has a variety of funds, including debt service funds committed to addressing debt, capital project funds for the acquisition or construction of major facilities or facility improvements and fiduciary funds to pay employee retirement. Special-use funds can only be used for specific purposes, such as grant-funded programs.

The budget process is concerned primarily with the city’s general fund. The general fund pays for traditional government services, such as public safety, mosquito control, sanitation, housing services and park maintenance. Spending from the general fund is not tied to revenue sources, as it is in many other city funds. More than half of general fund spending pays employee wages and benefits.

1. Gainesville Fire Rescue at City Government Week 2. Depot Park 3. City of Gainesville Mosquito Control specimens 4. Habitat for Humanity house built on land donated by the City of Gainesville 5. Gainesville Police Department 6. Albert "Ray" Massey Park
The general fund pays for traditional government services, such as public safety, mosquito control, sanitation, housing services and park maintenance.

The primary general fund revenue sources consist of:

  • Property tax
  • Government Services Contribution utility transfer
  • Utility tax
  • Half cent sales tax
  • State revenue sharing
  • Fire assessment
  • Communication services tax
  • Indirect cost revenue

The Government Services Contribution (GSC) is a transfer from Gainesville Regional Utility (GRU), previously known as the General Fund Transfer. In fiscal year 2023, the GCS was the second largest single general fund revenue source, accounting for almost a quarter of general fund revenue.

This contribution represents what GRU would pay the city if it was an investor-owned utility, which includes property taxes, franchise fees, and a return on investment to shareholders. As a utility owned by the people, Gainesville residents are shareholders, and this transfer funds programs and services for our residents.

Gainesville Regional Utilities

What’s different this year?

The City Commission has approved a new formula for the Government Services Contribution (GSC). Commissioners accepted the staff recommendation to reduce the GSC for fiscal year 2024 to $15.3 million, lowering it more than 55 percent from fiscal year 2023.

City officials initiated budget cuts after the Joint Legislative Auditing Committee (JLAC) directed they work to pay down GRU’s debt and reduce the Government Services Contribution (GSC). For fiscal year 2024, the commission is setting a one-year budget. Gainesville’s city manager has asked department heads to address the effectiveness and importance of each budget item, and there will be significant, strategic cuts to the budget.

Budget Definitions

Ad valorem means based on value, so an ad valorem property tax is a tax based on the value of the property. Non Ad Valorem Assessment is a charge or a fee, not a tax, to cover the costs of providing services or benefits to a property. The TRIM for City of Gainesville includes both the ad valorem property tax and the non-ad valorem fire assessment.

Mill rate or millage rate is the rate at which property is taxed according to its value divided by 1,000. Any exemptions, like the homestead exemption, reduce the taxable property value.

Millage rate x (taxable property value ÷ 1,000) = Property Tax Owed

For example, with a millage rate of 5 mills, and taxable value of 100,000, the owner would owe $500 in property tax.

Mill comes from the Latin millesimum, meaning thousandth.

Taxable Value is the value of the property determined by the Property Appraiser, minus any exemptions. Exemptions include homestead, senior homestead, widows/widowers, disability and veteran disability exemptions.

TRIM notice is the notice of proposed property taxes.

Florida Legislature passed the Truth in Millage (TRIM) Act in 1980 to inform taxpayers which entity levies the taxes and the amount of tax they can expect to pay the following year. The property appraiser sends this information to the property owner in August.

TRIM notices include:

  • Property’s taxable value, classification, exemptions and assessment limitation
  • Proposed property tax rate
  • Non-ad valorem assessments such as the fire assessment insert
  • Budget hearing locations and times
  • Deadlines for filing petitions with the Value Adjustment Board
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