Financial Strategy

A Financial Strategy is a multi-year financial planning framework designed to position the County for long-term financial sustainability and resiliency. It is a forecast of the projected financial position of the County and outlines strategies to meet future needs. The Financial Strategy assumes the continuation of current service levels and the impact of maintaining those service levels will have on future budgets. The strategy takes a realistic view of the current operating environment, establishes goals, and then maps a plan for achieving those financial goals.

We have been able to minimize the impact on the taxpayer, by a slight net increase in the millage rates of 0.2723 mills, all while addressing our strategic goals by:

• Decreasing the operating millage rate from 7.6076 mills to 7.5700 mills
• Increasing the Fire MSTU millage rate from 1.8036 mills to 2.1225 mills
• Decreasing the total voter approved debt service millage rates from 0.2807 mills to 0.2717 mills
• Maintaining the Stormwater Assessment at $95 per Equivalent Residential Unit (ERU)
• Increasing the water (1.5%) and wastewater (3.5%) rates through Fiscal Year 2025, in accordance with the 2021 Water and Wastewater Rate Study
• Continuing with year five of seven of the Board of County Commissioner approved "7 for 7" plan increasing the Solid Waste Assessment by $7 (from $93 per ERU to $100 per ERU) to accumulate the funds necessary to increase the capacity of the Waste-To-Energy (WTE) plant

Pasco County takes a long-term approach to strategic planning and financial management. Emphasis is given to anticipating emerging issues, using forecasting tools to quantify their impacts, and then implementing sound practices to mitigate or take advantage of these opportunities. The County's environmental scan revealed three potential threats for which we should be aware and prepared, as discussed in the County Administrator's Transmittal Letter earlier in this budget document. These threats include the following:

• Current Economic Environment - Record low unemployment rates will cause wage rates to rise. Inflation will continue to cause price increases, particularly in supplies, construction, and vehicles. Travel and tourism are exceeding pre-pandemic levels and building permit activity remains strong.
• Natural Disasters – Pasco County is prone to hurricanes, floods, and drought - all of which can be quite costly. Preparing, both physically and financially, for these potential eventualities is paramount.
• Unprecedented Growth - Continued increases in population places pressure on the County to provide necessary core services to all residents. This includes providing the necessary staffing to operate four additional Fire Rescue stations over the next five years as well as the staffing and operational expenses associated with the expansion of the detention center.

As discussed earlier, the County borrowed approximately $229 million of the $240 million General Obligation Bonds authorized by the voters to help address a majority of the current capital needs. The Office of Management and Budget has created long-term projections of revenues and expenses for major funds to ensure that financial decisions are made with the long-term impact in mind.

COVID-19

On March 13, 2020, President Trump declared a nationwide emergency pursuant of Sec. 501(b) of the Stafford Act. All 50 states, the District of Columbia, and 5 territories were approved for major disaster declaration to assist with additional needs identified under the nationwide emergency declaration for COVID-19. This declaration dates back to January 20, 2020, and ended on May 11, 2023.

The COVID-19 pandemic has brought with it unforeseen costs associated with combating the virus to protect our citizens and employees, while continuing to provide services to the highest level possible under unusual circumstances. At this time, Pasco County has an obligated amount of $2,965,259.09 covering costs that include testing, cleaning, vaccine distribution, and protective measures that are all eligible for FEMA Reimbursement. Pasco County has received a total of $1,532,862.86 in FEMA funding and is currently processing projects to finalize final costs.

The impact of the COVID-19 pandemic continues to affect local governments on several levels including delays to building materials, production of replacement vehicles and rising prices for materials and services the County utilizes.

CARES

The Coronavirus Aid, Relief, and Economic Security (CARES) was passed on March 27, 2020 and ended on December 31st of 2021 allocating a sum of $96,659,479.80 to Pasco County for recovery efforts and offset costs to protect life and safety of employees and the citizens we serve. All funding from this allocation has been utilized to assist with continuity of operations, serve the citizens and protect the public during the pandemic.

ARPA

On March 27, 2021, Pasco County received and utilized through the American Rescue Plan Act (ARPA) funding to the sum of $107,579,711.00 to be used to recover lost revenues, enhance services and continue economic recovery.

HURRICANES

Two significant hurricanes impacted Pasco County including Hurricane Ian and Hurricane Nicole. Hurricane Ian was declared with an incident period of September 23,2022 to November 4, 2022 and Hurricane Nicole was declared from November 7, 2022 to Nov 30,2022 resulting in an estimated $1,944,064.41 in costs including emergency protective measures taken including shelter operation, preparation and after action activities to ensure life, safety and mitigation of damage to property.

One of the five areas the Government Finance Officers Association (GFOA) recommends local governments focus on to ensure financial resiliency and sustainability is investing in the renewal and replacement of vital infrastructure. In the November 2018 election, Pasco County voters approved four General Obligation (GO) Bond issues. These are projects in addition to the investments made through the Capital Improvement Program (CIP). The four GO Bonds will allow for sorely needed investment in the Detention Center, Fire Stations, Parks and Recreation amenities, and Libraries.

Prior to the 2007 recession, the County had planned to build a number of new fire stations to meet the needs of the growing population and commercial development within the County. During that recessionary period, those plans were put on hold as the revenue available to build and staff these stations dried up. Based on the rapid population growth and the location of that growth, the 2014 Facilities Master Plan recommended building ten new fire stations, renovating one existing station rated as very poor, renovating two existing stations in poor condition, and renovating six existing stations in fair condition. In fact, the Master Plan recommended building two new stations per year for five years. In a 2018 internal Fire Rescue Department Station Infrastructure Plan, Fire Rescue identified the need to build 17 stations (which included new construction plus reconstruction of existing stations) over the next 10 years to meet the needs of a growing population. To accomplish this goal in a manageable manner, Fire Rescue developed a four-year Station Infrastructure Plan that would build four new stations in underserved areas, rebuild five of the stations in the worst condition, and relocate the Fire Training Center to the central part of the County.

The cost to implement the four-year Station Infrastructure Plan, including the cost of rolling stock for the new stations, was estimated at $67.9 million. Adding the estimated Bond closing costs brings the total GO Bond request to $70,200,000. Since the voter-elected GO bonds in 2018, two tranches for the Fire Rescue projects have been issued totaling $60,107,530, with the final tranche expected to be issued in 2024. The two tranches that have been issued are:

- Series 2019B - $19,107,530

- Series 2020A - $41,000,000