General Fund Fiscal Year 2009-10 Mid-Year Budget Review City of Key West General Fund Fiscal Year 2009-10 Mid-Year Budget Review October 1, 2009 - March 31, 2010

Cash Reserves FYE 2009 FYE 2008 Adjusted $12.1M FY 2008-09 Operating Revenue (Loss) ($ .52M)* FY 2008-09 Operating Expenditure Gain $ 3.0M* Duck Settlement ($ 8.0M) Duck Costs ($ .58M) FYE 2009 Adjusted $ 6.0M Approx. 60 Days of General Fund Reserve * Budget to Actual - Gain / (Loss) 2

General Fund Revenues Focus on Seven (7) Major Revenue Sources: Ad Valorem Telecommunications Amusement Franchise Fees Building Permits Half Cent Sales Tax Cruiseship Activity City Parking

Ad Valorem Change from the July 2009 ESTIMATED taxable value (DR 420) to the FINAL taxable value after the Value Adjustment Board (VAB): Adjustments resulted in a total decrease of $95.3M in assessed value - a decrease of $239K compared to budgeted revenue. Adjustments for Prior Year resulted in a similar situation - total decrease of $114.0M in assessed value - a decrease of $249K compared to budgeted revenue.

Telecommunications Represents seven different state & local communication services consolidated under one tax : Voice, data, audio, video, cable and any other signals transmitted by any medium Collected and distributed by State of Florida FY 2009 Mid-Year actual excludes a one time payment of $118K by State of Florida based on audit of telecommunication industry. Payments for all represented fiscal years are now on comparable basis. $90K shortfall for FY 2010 is projected.

Amusement Franchise Fees Covers Buggy Bus and Conch Tour Train Franchise Fees. Quarterly amounts reflected are for the actual collection months, not date posted. The Franchisee has not calculated March 2010. We have added March 2009 proceeds to the mid year 2010 point. When doing so, we are at $266K for FY 2010, slightly ahead FY 2009. Projected to be ahead of budget for FY 2010.

Building Permits Building Permits Fees for the first half of FY 2010 show improvement over activity for a similar period for Fiscal Year 2009. For the first half of FY 2010 4,324 building inspections were performed. Similar period for FY 2009 saw 3,971 inspections performed. Collections for Business Tax receipts for FY 2010 remain on track to meet budget. HARC Permit Fees & applications are tracking closely to FY 2009 numbers. $200K Favorable Building Permit Fee Variance is anticipated.

Half-Cent Sales Tax So what does this slide tell us: We have established an FY 2010 budget which is properly stated and, provided we sustain FY 2009 actual collections for the balance of FY 2010, the City should exceed budget. The State has not calculated March 2010. We have added March 2009 proceeds to the mid year 2010 point. When doing so, we are at $1.337M for FY 2010, same as FY 2009. Projected to be ahead of budget for FY 2010.

Cruiseship Activity Port calls and passenger counts for both Outer Mole and Pier B exceeded scheduled projections. Mallory Square construction delays resulted in a loss of 19 ship arrivals. Approx. $169K Mid-Year Loss. Favorable schedule for 2nd half of FY 2010 projects a $112K loss.

All City Parking (Less: KWB & PnR Facility) Includes Parking Meters, Mallory Square, Smathers Beach, Residential Parking and Downtown Employee Assistance Parking Excludes Key West Bight Parking Excludes Park & Ride Facility Possible favorable variance for FY 2010 of between $200K - $300K.

Expenditures Overall, all General Fund expenditure accounts are in line with FY 2010 Operating Budget Unleaded Above Ground Fuel Tank – Needs Immediate Replacement Not Budgeted Estimated at $60K. Use either fuel savings or City Manager Contingency City Manager Contingency Budgeted at $250,000 for FY 2010 Only $23,600 used thru March 31, 2010 Fuel Three Scenarios Prices hold at current price per gallon – Favorable Annual Budget Variance Sustained 10-15 % increase in price per gallon – Favorable Annual Budget Variance Sustained 50 % increase in price per gallon – Slight Favorable Annual Budget Variance School Crossing Guard Program successfully transitioned to City responsibility Jan 31, 2010 Departmental Overtime budgets are within established budget limits

General Fund FY 2010 Mid-Year Summary General Fund total revenue budget: Several revenue sources projecting a shortfall. Several revenue sources projecting a surplus. Provided no significant storm related events or a significant economic downturn, total revenue estimated for the General Fund is still projected. Unlike revenues, Management has significant influence over expenditures and will continue to ensure all measures are taken to control General Fund spending. Goals for FYE 2010: Improve Fund Balance from 60 days to 75-80 days by September 30, 2010. Market City’s expiring leasable properties at favorable market rates. Understand the impact of CY 2010 property value assessments Projected to drop another 15 percent.