Fiscal Year 2021 - Revenues

Trends and Analysis


This section describes important revenue sources for the City of Tallahassee. There are over 350 different revenue and fund combinations at the City. While staff analyze all of these, some revenues have a minimal impact on the overall budget. The 27 sources on this page account for over 80% of the City's revenues. Explanations of trends and forecasts are included for each.


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General Fund - Ad Valorem

The authority for the City of Tallahassee to collect and utilize Ad Valorem (also commonly referred to as “property taxes”) is derived from Florida Statutes, Chapter 192. The City’s FY21 adopted millage that is used as the basis of these collections is 4.1 mills. Florida Statutes allows municipalities in Florida the ability to adopt up to 10.0 mills. A residential homeowner can use this millage rate to calculate their annual property tax payment buy utilizing the Leon County Property Appraiser’s “taxable valuation” amount for their property divided by 1,000, then multiplied by 4.1 mills. Example: $150,000 Taxable Value/$1,000 = 150 x 4.1 mills = $650 annual property tax amount.


Each fiscal year the Leon County Property Appraiser’s Office forwards both a preliminary (June) and then a final estimate (July) of total private property valuation for the entire City that forms the basis for the estimated annual revenue amount to be derived from property taxes. The City utilizes these calculations to provide estimates of property tax revenue collections to the Commission and the public at two budget workshops that are in addition to the final budget public hearings in September of each year.


This information along with an estimate of each specific property owner’s tax amount is mailed to all property owner’s in August as part of the Truth-In-Millage (TRIM) process. As part of the TRIM process the City of Tallahassee notifies all property owners of a potential “tax increase” even if the millage is not increased, but the same millage rate will result in increased property tax revenues over the previous year.


The chart to the right shows this relationship as the City has held its millage rate at a constant 4.1 mills even prior to FY17, the annual budgeted amount has increased as shown.



Over 50% of the real property inside the city limits is owned by federal, state, and local government entities and is exempt from ad valorem or property taxes. As a strategy to have these properties “pay their fair share” of city services, the electric, gas, water, and sewer utilities provide a contribution or transfer to the General Fund. The amount of each utility’s contribution is set by the city’s finance policy. Prior to fiscal year 1998, contributions were not recorded as General Fund revenues. Pursuant to interpretation of Chapter 200, F.S. by the Department of Revenue, the city revised its procedures in fiscal year 1998 to account for the contributions as General Fund revenues and utility expenses.


A public service tax imposed upon the sale of electricity within the corporate limits. The current tax rate equals 10% of gross sales (excluding the fuel adjustment charge), the maximum allowed under state law.


Frequency: Due to the city by the 20th of the month following the month of the sale.


Revenue Estimating Methodology: Revenues are impacted by increases/decreases in electric rates, population changes, and weather. Anticipated receipts are based upon electric sales forecasts.


The purpose of this state revenue sharing program is to provide relief from ad valorem and utility taxes in addition to providing counties and municipalities with revenues for local programs. The city is eligible for “ordinary” distribution of a portion of the sales taxes collected within the county, based upon a participation formula and other requirements established by statute.


Frequency: The Florida Department of Revenue remits tax revenues on a monthly basis.


Revenue Estimating Methodology: Estimate for the budget year is obtained from the Legislative Committee on Intergovernmental Relations following the close of the annual legislative session. Out year projections are adjusted by changes in the population growth rate and the consumer price index.


The Communications Services Tax replaces the cable television franchise fee, public service tax on telecommunications, the local option sales taxes applied to cable television and telecommunications, the municipal franchise fee on telecommunications, and certain permit fees imposed on communication service providers. The Communications Tax was implemented on October 1, 2001 and set at the rate of 5.6% for the first year, the maximum rate permitted in the Communications Services Tax Simplification Law. Thereafter, the rate is set at 5.3% instead of the basic rate of 5.1%.


Frequency: Remitted monthly by the Florida Department of Revenue.


Revenue Estimating Methodology: Projections used to be based on the annual change in the population growth rate. With the growth of mobile phone usage, student populations frequently use phones from their home area codes rather than acquiring an 850 phone number which explains most of the decline in this revenue stream.


General Fund - State of Florida Revenue Sharing

Municipal revenue sharing program includes taxes from cigarettes, municipal fuel taxes, and state alternative fuel users decal. Municipalities must meet the requirements of s. 218.23, F.S., to be eligible to participate in revenue sharing beyond a “minimum entitlement.” The portion of revenue derived from the municipal fuel tax can only be spent for certain transportation activities pursuant to s. 206.605, F.S.


Frequency: The Florida Department of Revenue remits tax revenues on a monthly basis.


Revenue Estimating Methodology: Estimate for the budget year is obtained from the Legislative Committee on Intergovernmental Relations following the close of the annual legislative session. Out year projections are held constant at the budget year amount.



Building Code Enforcement Fund - Building Permits

For any new construction, additions, alterations, or repairs with an estimated cost of labor and material greater than $1000, and for both commercial and residential owners, building permits are required. As required by Florida law, building permitting revenues flow into its own fund to keep them separate from General Fund activities. Building permits ensure that the work completed is up to code, which grants some degree of assurance to the real estate market that construction is sound in the area.


Building permits had seen very high commercial activity in recent years, but the COVID-19 pandemic response had put a damper on construction activities. The Growth Management department innovated a virtual inspeciton process which helped activities to continue despite a public health crisis.




Fire Services – Residential, Commercial, Resident – County, and Governmental

Description: The City of Tallahassee charges all improved property within the city limits and unincorporated Leon County, a fire non-ad valorem assessment to pay for providing fire services each year. The use of a non-ad valorem assessment to charge for fire services is derived from Florida Statutes Chapter 191. Because the city is the state capital, is the site for multiple federal buildings, is the site for 2 major universities, 1 community college and 1 vocational college, almost 50% of the improved property is governmental and therefore pays no property taxes. The city’s use of non-ad valorem assessments allows for the cost recovery from these properties that require the same fire protection as the non-governmental properties within the Tallahassee Fire Department’s (TFD) service area.


The rates are charged to all improved property. Residential properties pay on a per dwelling unit basis and all non-residential categories pay on a square footage tier basis. City and most unincorporated rate payers pay for these services on their utility bill on a monthly basis, although there are a small group of County rate payers who pay for the service via a quarterly invoice and there are also approximately 10,000 County rate payers who pay for the service annually.


Basis for revenue estimates: Revenue estimates for future years are based on the annual growth rate of utility accounts and also through the tracking of the number of “improved” parcels in the unincorporated portion of the County. Periodically either through an internal evaluation or through an outside study, the rates will be updated and these changes will be factored into future revenue estimates as well. Leon County also sends out assessments for solid waste services and uses that data as a cross check of the number of fire accounts.







Residential establishments of up to six units receive single-family service. This service consists of once a week curbside pickup of a 96-gallon garbage container and a 64-gallon recycle container. Trash and bulk waste is collected curbside once every two weeks.


The City provides garbage dumpster, roll off, and barrel collection services to commercial customers inside the city limits. Solid Waste works individually with each commercial customer to determine the appropriate level of service. Commercial garbage dumpster customers’ lease 2, 4, 6, or 8 cubic yard containers and are charged based upon the size of the container and the frequency of pick up based on their needs. For customers with periodic large volumes of waste, roll off service is offered on a demand basis.

Water Fund - Residentialy & Commercial Revenues

Description: Water system revenues include water sales, development fees, various water service fees and other miscellaneous fees. Revenues from residential customers, commercial customers, and surcharge are the most significant in terms of revenue generation in the Water Fund. Collectively, these sources produce revenues of approximately 80% of the projected annual revenues. Water revenues are developed through periodic rate studies with the primary purpose (i) to determine the annual revenue requirements (ii) to determine potable water rates and charges for recovering the total cost of providing water services (iii) to recognize the implementation of a water conservation rate structure, and the current economic conditions.


Revenue Estimating Methodology: Estimates are based on water consumption and customer growth trends outlined within the rate study. This includes rate changes based on the City approved ordinance change that provides for the water rates to be adjusted annually on October 1 by the positive change in the Consumer Price Index.


Trend Analysis: Water sales have a positive upward trend. This includes a conservative growth projection for customer service point and consumption of less than 1%, combined with adequate CPI rate changes to recovery water operations cost.




Sewer Fund - Residential & Commercial Revenues

Description: The largest revenue generating sources in the Sewer Fund are residential, commercial, and the transfer from sewer system charge. Collectively, these sources produce revenues of approximately 80% of the projected annual revenues. Sewer revenues are developed through periodic rate studies with the primary purpose (i) to determine the annual revenue requirements (ii) to determine wastewater service rates and charges for recovering the total cost of providing wastewater services (iii) to design rates to recover a portion of the cost of reclaimed water service (iiii) to review the design of the rates and charges for wastewater service as required to reflect generally-accepted rate design techniques, EPA guidelines, the policies established by the Legislature, the District and the DEP, and City policy.


Revenue Estimating Methodology: Estimates are based on water consumption, which determines wastewater billing, and customer growth trends outlined within the rate study. This includes rate changes based on the City approved ordinance change that provides for the water rates to be adjusted annually on October 1 by the positive change in the Consumer Price Index.


Trend Analysis: Wastewater revenues have a positive upward trend. This includes a conservative growth projection for customer service point and consumption of less than 1%, combined with adequate CPI rate changes to recovery wastewater operations cost.




Stormwater Fund - Residential & Commercial Revenue

Description: Stormwater service is provided on a full cost recovery basis with associated revenues and expenditures accounted for within the Stormwater Fund. Rates are based on an equivalent residential unit (ERU). Commercial rates are established in multiples of the ERU, with the actual amount dependent on the impervious area at the customer’s physical location. The major sources of revenues within the stormwater fund are residential and commercial fees. Collectively, these sources produce revenues of approximately 95% of the projected annual revenues.


Revenue Estimating Methodology: Estimates are based historical trends to provide projections for customer growth along with fee changes based on the City approved ordinance that provides for the stormwater fees to be adjusted annually on October 1 by the positive change in the Consumer Price Index.


Trend: Stormwater revenues have a positive upward trend. This includes a conservative growth projection for customer accounts of less than 1% and combined with adequate CPI fee changes to recovery stormwater operations cost.




Electrical Fund Revenues

Description: Electric rate revenues are composed of two categories: Energy Cost Recovery Charge (ECRC) and base rate revenues. The ECRC is a pass-through charge that recovers the cost of fuel used in the City’s power generating facilities and the cost of wholesale power purchased from other utilities. The City reviews the actual over or under-recovery of these costs on a monthly basis and modifies the ECRC charge, if required, on at least a semi-annual basis. All other rates (referred to as base rates) are reviewed and adjusted periodically to ensure rate level sufficiency and equitable rate structure. Included in the rate revenues are specific accounts such as Residential and General Service Demand/Large Demand/Non-Demand, which constitute over 90% of overall Electric revenues.


Revenue Estimating Methodology: Estimates are based on electric sales and customer growth trends outlined within the rate study. This includes rate changes based on the City approved ordinance change that provides for the electric rates to be adjusted annually on October 1 by the positive change in the Consumer Price Index.


Trend Analysis: Electric revenues are budgeted based on a positive upward trend. This includes a conservative growth projection for customers and sales combined with adequate CPI rate changes to recover the cost of operations.






Gas Fund Revenues

Description: Gas rate revenues are composed of two categories: Purchased Gas Recovery Charge (PGRC) and base rate revenues. The PGRC is a pass-through charge that recovers the cost of gas purchased for the gas utility. The City reviews the actual over or under-recovery of these costs on a monthly basis and modifies the PGRC charge, if required, on at least a semi-annual basis. All other rates (referred to as base rates) are reviewed and adjusted periodically to ensure rate level sufficiency and equitable rate structure. Included in the rate revenues are specific accounts such as Residential and Non-Residential, which constitute over 71% of overall Gas revenues.


Revenue Estimating Methodology: Estimates are based on gas sales and customer growth trends outlined within the rate study. This includes rate changes based on the City approved ordinance change that provides for the water rates to be adjusted annually on October 1 by the positive change in the Consumer Price Index.


Trend Analysis: Gas revenues are budgeted based on a positive upward trend. This includes a conservative growth projection for customers and sales combined with adequate CPI rate changes to recover the cost of operations.