City of Jacksonville: June 6, 2019 Council Orientation Department of Finance and Administration

Department of Finance and Administration Overview 350 employees across 7 divisions: Treasury (Randall Barnes) – Handles day to day cash operations, investment of operating and pension funds, banking, and debt operations. Accounting (Kevin Stork) – Responsible for transaction recording and financial records of the city. Budget (Angela Moyer) – Produces annual city budget and processes executive and legislatively driven changes throughout the year. Fleet (Cris Tongol) – Manages and maintains city vehicles such as fire trucks, ambulances, police cars, and all other motorized vehicles. Procurement (Greg Pease) – Oversees purchasing city-wide to ensure the city is getting the best value possible within operational and legal requirements Information Technologies (Ken Lathrop) – Manages IT infrastructure city-wide Office of the director also houses the city’s Grant Office

Consolidated Government of Jacksonville Consolidated City and County Florida’s most populous city and nation’s 12th most populous with approx. 900,000 residents and 1.5 million in the Jacksonville MSA Financially strong, carrying an implied G.O. rating of AA/Aa by Standard & Poor’s and Fitch Ratings Analysts note strong financial management, increasing reserves, strong local economy, and low unemployment as positive factors Large Navy, Financial, and Healthcare industry presence Not predominantly driven by tourism as are other large Florida cities Beneficiary of growing Florida population and relocating businesses from more expensive and higher taxed areas of the country

Financial Overview $1.2 billion annual General Fund Budget (>$2 billion total budget) Roughly 50% for Public Safety (Police/Fire) Another 10% for debt service $1 billion in General Fund debt outstanding $1.1 billion in Better Jacksonville Plan debt remaining outstanding Generally $60 – $100 million in annual Capital spending needs $4 billion+ in two closed DB plans $300 million and growing in DC plans Have reduced debt by $376 million since July 2015

General Fund Revenues About 50% of City revenues are from property taxes, the other 50% are from a diversified basket of sales and usage-based revenues. This diversity is viewed as a positive from a financial planning and ratings perspective.

Millage Rate Comparison Jacksonville is roughly median relative to living in other large Florida cities

Projected Debt Outstanding Total debt burden is set to decline over time as BJP is in pay-down mode

Debt Ratios - Snapshot These ratios have been improving in recent years thanks to conservative budgeting, a commitment to pay down more than we borrow, refinancing at attractive rates, and a strong economy

Historical Pension Contributions In addition to past pain, actuarial analysis showed a potential $70 million increase in required pension contributions in FY18 if pension reform effort failed *FY 2018 contributions were based on draft 10/1/16 valuation reports.

FY18 Impact of Reform – Closed DB to new hires In 2017, we closed the DB plan to new hires and enacted a mandatory DC plan $360 Million Enacting pension reform resulted in approximately $139 Million of reduced pension costs in FY18 $360 -221 $139 $221 Million April 12, 2017 22R

General Fund Reserves Reserve funds available during times of stress have more than doubled over the last 10 years. Jacksonville is focused on maintaining and growing reserve fund balances through strong fiscal management. Pension reform helped.

Ratings Agency Comments Strengths Improved reserves Strong local economy Low unemployment Recent economic development Financial Flexibility Demonstrated fiscal responsibility Weaknesses High fixed costs (debt and pension expenses)