Ad Valorem Taxes
Ad Valorem taxes are assessed on July 1, based on property values as of January 1. The Highlands County Tax Collector remits collected taxes to the City monthly.
The uses of ad Valorem taxes are limited to the General Fund.
Sales tax revenues are restricted to the Infrastructure Surtax Fund. This fund is used for Capital Improvement Plan projects.
Gas tax revenues are limited to the construction and maintenance of the City's roads, sidewalks and curbs. This is accounted for in the street department.
Grants, which are to be received during the year, are considered a revenue source for budget purposes. The budget is amended during the year to include additional grants received.
The City maintains reserves in order to insure a healthy financial position. The needs for reserves differ based on the type of fund.
Operating reserves are appropriated in the budget as reserve for contingency. The general fund maintains a fund balance reserve of at least 10% of the general fund revenues. It has been the practice of the City to maintain $1mill. in fund balance.
City Council approval is required to move funds from reserve accounts into expenditure line items.
Capital Expenditure Policies
A five-year capital improvement plan is in place for the airport fund. This plan is updated annually and is incorporated into the financial projections.
The City shall develop a program for identifying, scheduling and budgeting the renewal and replacement of capital facilities. The City maintains its physical assets at a level to insure the capital investments and to minimize future maintenance and replacement costs.
The City attempts to fund capital projects with grants. If they are not available most are funded out of the infrastructure fund. In the case of enterprise fund assets, they are funded out of their respective fund and the infrastructure fund. Bonded debt and other financing can be used if it provides low risk factors such as fixed-rate obligations and revenue bonds.
The City coordinates capital improvements with the operating budget. Future costs associated with new projects are included in operating budget forecasts.
Debt Service Policies
The City uses a "pay as you go" policy unless internal funding is not sufficient to meet needs for capital projects. Projects are not financed for greater than the useful life of the improvement or asset.
Long-term debt will not be issued to finance current operations.
The City maintains sufficient reserves in the appropriate funds, which equal or exceed the reserve required by bond ordinances.