Silt is recurring, problematic issue at City of Fernandina Beach Marina requiring dredging.
EDITOR’S NOTE: Contributing columnist, Steve Nicklas, expresses his views and insights on various topics in Marketplace column.
___ STEVE’S MARKETPLACE ____
For several years, Fernandina Beach city officials have operated a “fluid” budget (according to the former mayor), instead of a finite one.
This apparently means that taxpayer money can flow from one category to another, with nary a ripple. This is opposite of a finite and specific budget, with balanced figures on each side of the ledger.
However, some observers are questioning if the fluid has leaked out and left behind an empty reservoir. A popular response of former city officials has been to reach out into the community for higher taxes and fees as a remedy.
To the electorate, this has been received with a resounding thud. The once-fluid budget has caused two commissioners and the city manager to be washed away as with an outgoing tide.
The summation of newly elected officials is that maybe the city’s budget is not as resilient as previously portrayed. Exacerbating the situation are three years of deficit spending as well as still-declining revenues from property taxes. As well as these lurking expenses:
– A settlement in the lawsuit with the operator of the city airport, which includes a hangar-full of attorneys’ fee. This could have been resolved within the past year, but at the advice of City Attorney Tammi Bach, the city answered the bell to go another round (after decisively losing all previous bouts). Pending liability: In excess of $1 million.
– A recently filed lawsuit regarding the city’s arbitrary assessment and use of impact fees. This lawsuit is brought on behalf of local businesses that have been assessed impact fees despite have caused little impact to the city’s infrastructure. There are also questions about how the city has used and accounted for these fees. Pending liability: In excess of $1 million, eventually (if the city loses the case).
– The city’s pension obligations could increase, simply because investment performance has not met the standards normally used in calculations. This is a common affliction among towns throughout the U.S., not just here.
– Servicing outstanding debt, including $1.8 million the city recently borrowed to finance the first stages of the “Forward Fernandina” capital projects. The city has borrowed money for marina improvements and for other projects. As more money is borrowed, the debt service increases (yes, this is really the case with loaned money).
Steve Nicklas
In addition, municipalities are required to set aside reserves that provide a cushion from year-to-year fluctuations and financial uncertainty. When you have deficit spending, it means you are spending more than you are receiving — and likely impacting reserves. That has been the case in recent years here.
While the city’s financial condition may not exactly be dire, it definitely (note that the root word is “finite”) deserves immediate attention.
