- February 6, 2025
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During the Tuesday, Jan. 23, City Council workshop, city staff presented a 5-year forecast to get a better idea of how current decisions being made could have a long-term financial impact in Port Orange. While the model shows a fund balance that is currently positive, staff have forecasted an imbalance in the general fund meaning the city will need to bring in more revenue to prevent a negative fund balance in the future.
Taxable value
According to Assistant City Manager Alan Rosen, during the last 15 years, the city's taxable value, which factors into revenue from real estate taxes, has gone up 5%. For fiscal year 2020, the model shows the value of property going down if the homestead tax reduction is factored in. This would be a loss of about $1 million in revenue in fiscal year 2020.
However, the model also predicts an increase of 2%, 4% and 5% in the ensuing years as the result of a correction in the market that Rosen said is assumed to happen.
"A lot of economic forecasters are saying we're going to hit a bit of a trough, then hopefully we'll come back out of it," Rosen said.
New construction
The model shows revenue from new construction rising in the upcoming years creating about $114 million in value equaling roughly $492,615 in revenue. Rosen said this number could go up or down depending on whether more or less projects are built.
Health care
The current forecast model shows heath care staying at a consistent 5.8% starting in 2020.
"If we have a bad year this might go up 15, 20% in one year," Rosen said. "We've seen cities in the area that that happened to the last year or the year before."
Consumer price index
While Rosen noted that there is not much control over goods and services, the consumer price index is starting to increase, with prices rising with the economy. Rosen said that the model indicates that something bought one year will be about 2.3% more expensive the next year.
Hurricanes
The model could also change depending on natural disasters. Already, Hurricane Matthew has cost $8.4 million and Hurricane Irma has cost $3.5 million.
Savings
According to Rosen, the city usually doesn't spend the entire budget with an average of about 2% being left over. Rosen was able to calculate about how much he thought the city would spend each year and subtracted about 2% from that amount. The extra funds would roll over as savings.
The forecast model indicates that with the current assumptions of trends in Port Orange, revenues will, for the most part, stay below expenditures creating a negative fund balance in fiscal year 2023. The goal is to find ways for revenues to be more than expenditures. It's a goal that may not be a quick fix.
"All decisions you make have impacts," Rosen said.
