Two-Year Forecast

Fiscal Year 2022 Operating and Capital Budget

This section will provide a two-year forecast for the following major operating funds:


  • General Fund/Utilities Services Tax Fund
  • Local Option Gas Tax Operating Fund
  • Stormwater Service Fund
  • Parking Operating Fund
  • Water Operating Fund
  • Wastewater Operating Fund
  • Solid Waste Operating Fund

The two-year forecast uses a series of projections of major revenue and expenditure drivers for each fund. Revenue drivers consist mainly of property taxes and various usage taxes and rates. Expenditure drivers include salary increases, primarily determined by Collective Bargaining Agreements (CBA), increases in health and pension costs, contributions to the Community Redevelopment Agencies, and general operating expenses.


The City has requested that the two pension plans provide annual actuarial reports that identify the required contribution for the upcoming fiscal year. The pension contribution requirement identified in each actuarial report is a percentage of budgeted salary.


The City does not budget for Other Post Employment Benefits as this is an implied benefit. Former employees who retire from the City, and their eligible dependents, may continue to participate in the City's health and hospitalization plan for medical and prescription drug coverages. These retirees are solely responsible for payment of their insurance premiums and the City does not contribute toward this payment. However, the City subsidizes the premium rates paid by retirees by allowing them to participate in the plans at blended group (implicitly subsidized) premium rates for both active and retired employees. These rates provide an implicit subsidy for retirees because, on an actuarial basis, their current and future claims are expected to result in higher costs to the plan on average than those of active employees.

General and Utilities Services Fund

The City combines the General Fund and the Utilities Services Tax Fund when calculating the General Fund's unassigned fund balance for budgeting and financial reporting. External auditors require the combination of the two funds into the General Fund when preparing the Annual Financial Report.


The General Fund is the primary operating fund of the City of Tampa used to account for all financial resources except grant, capital, debt, enterprise, and special revenue funds. Major revenues consist of property taxes, sales taxes, occupational licenses taxes, franchise fees, licenses and permits, charges for services, state revenue sharing, transfers, and other financing sources. These funds are used to support public safety, parks and recreation, economic development programs, general government operations such as human resources and purchasing, and other non-enterprise related operations.


The Utilities Services Tax Fund provides for the collection of communications service taxes and taxable sales for utilities such as electric, gas, and water. These funds are used for general government operations, the purchase of machinery, capital equipment and vehicles for non-enterprise fund activities, capital improvement projects, related debt service, and other needs as determined.


The City has established a policy of maintaining a minimum fund balance amount equal to at least 20% of the budget for the combined General Fund and Utilities Services Tax Fund. A healthy fund balance greatly impacts whether the City receives favorable bond ratings which reduce interest costs on debt issued by the City. For the 15th consecutive year, the City has maintained a fund balance greater than the minimum 20% policy requirement. During the forecast period, the General Fund and Utilities Services Tax Fund's projected fund balance remains strong, exceeding that minimum requirement, as identified below:


  • FY2021 - 25.66%
  • FY2022 - 24.22%
  • FY2023 - 23.33%
  • FY2024 - 23.06%

While the City is projecting increases to fund balance over the forecast period, expenditures are increasing at a greater rate than the projected fund balance increases.


Revenue Drivers (FY2023 & FY2024):

Property Taxes - 8% annual increase

Sales Taxes - 3% annual increase

Other Revenue - 1% annual increase


Expense Drivers (FY2023 & FY2024):

Salary Increases - 3% annual increase

General Employee Pension - 8% annual increase

Fire & Police Pension - 8% annual increase

Healthcare - 8% annual increase

Community Redevelopment Area Trust Fund Contributions - 10% annual increase

Other General Expenses - 1% annual increase

Local Option Gas Tax Fund

The Local Option Gas Tax Fund accounts for the City’s share of taxes levied on motor fuel and special fuel sold within Hillsborough County. This revenue supports operations and maintenance of the transportation system and transfers to the capital project fund for transportation capital projects. This fund also receives a subsidy from the City's General Fund/Utilities Services Tax Fund in the form an interfund transfer and increased State Revenue Sharing revenues.


Over the next several years, expenditures are projected to exceed revenues which will result in a negative fund balance in FY2024. The City will have to re-evaluate and possibly increase the General Fund/Utilities Services Tax Fund's subsidy to this fund when preparing the FY2024 budget.


Revenue Drivers (FY2023 & FY2024):

Gas Taxes - 2% annual increase


Expense Drivers (FY2023 & FY2024):

Salary Increases - 5% annual increase

General Employee Pension - 8% annual increase

Healthcare - 8% annual increase

Utilities - 7% annual increase

Other General Expenses - 2% annual increase

Stormwater Service Assessment Fund

The Stormwater Service Assessment Fund includes revenue from non-ad valorem stormwater service assessments that support operations and maintenance of the stormwater conveyance system. Services provided include street sweeping, pond maintenance, pipeline system cleaning, outfall cleaning, ditch maintenance and miscellaneous micro-projects ancillary to maintenance activities. Stormwater service assessments are collected on the annual property tax bills. The current stormwater service assessment is $82.00 per equivalent stormwater unit.


Over the next several years, expenditures are projected to exceed revenues which will result in a negative fund balance in FY2024. The City will have to re-evaluate and possibly increase the General Fund/Utilities Services Tax Fund's subsidy to this fund when preparing the FY2024 budget.


Revenue Drivers (FY2023 & FY2024):

Stormwater Service Assessments - No projected growth


Expense Drivers (FY2023 & FY2024):

Salary Increases - 5% annual increase

General Employee Pension - 8% annual increase

Healthcare - 8% annual increase

Utilities - 7% annual increase

Other General Expenses - 2% annual increase

Parking Operations Fund

The Parking Operations Fund is used to support the operations of the parking system, fund capital improvements, and pay debt service.


Tampa City Council recently approved a multi-year rate increase that went into effect on December 1, 2020. The current forecast projects that revenues will exceed expenditures throughout the forecast period and should provide sufficient cash fluidity within the Parking System for future capital projects.


Revenue Drivers (FY2023 & FY2024):

Parking Fees - 1% annual growth increase and a rate increase in FY2023


Expense Drivers (FY2023 & FY2024):

Salary Increases - 5% annual increase

General Employee Pension - 8% annual increase

Healthcare - 8% annual increase

Utilities - 7% annual increase

Other General Expenses - 2% annual increase

Water Operations Fund

The Water Operations Fund is used to support the operations of the water system, fund capital improvements, and pay debt service.


Tampa City Council adopted a 20-year rate plan that increased potable water rates and introduced base charges in September 2019. Annual rate increases become effective with utility bills after October 1 of each year. The rate plan was approved to address aging infrastructure and provides sufficient revenues for a $2.8 billion (combined value of the Water and Wastewater systems) capital improvement program. The rate plan was developed by City staff in consultation with both, our rate consultant and financial advisor.


The City issued the Series 2020 Water and Sewer Revenue Bonds to take advantage of historically low interest rates by adjusting the Capital Improvement Program to increase the amount of projects funded from debt proceeds thus preserving cash for capital projects in later fiscal years. The use of cash to fund capital projects during forecast period is the causative factor for expenditures exceeding revenues during the period. However, the Water Operations Fund's forecasted fund balance remains strong with cash in excess of 300 days of operating expenses.


Revenue Drivers (FY2023 & FY2024):

Potable Water Sales - 0.5% annual growth increase and rate increases in FY2023 and FY2024


Expense Drivers (FY2023 & FY2024):

Salary Increases - 5% annual increase

General Employee Pension - 8% annual increase

Healthcare - 8% annual increase

Utilities - 6.5% annual increase

Other General Expenses - 2.4% annual increase

Wastewater Operations Fund

The Wastewater Operations Fund is used to support the operations of the wastewater system, fund capital improvements, and pay debt service.


Tampa City Council adopted a 20-year rate plan that increased wastewater disposal rates and introduced base charges in September 2019. Annual rate increases become effective with utility bills after October 1 of each year. The rate plan was approved to address aging infrastructure and provides sufficient revenues for a $2.8 billion (combined value of the Water and Wastewater systems) capital improvement program. The rate plan was developed by City staff in consultation with both our rate consultant and financial advisor.


The City issued the Series 2020 Water and Sewer Revenue Bonds to take advantage of historically low interest rates by adjusting the Capital Improvement Program to increase the amount of projects funded from debt proceeds thus preserving cash for capital projects in later fiscal years. The use of cash to fund capital projects during forecast period is the causative factor for expenditures exceeding revenues during the period. However, the Wastewater Operations Fund's forecasted fund balance remains strong with cash in excess of 200 days of operating expenses.


Revenue Drivers (FY2023 & FY2024):

Wastewater Disposal Charges - 0.5% annual growth increase and rate increases in FY2023 and FY2024


Expense Drivers (FY2023 & FY2024):

Salary Increases - 5% annual increase

General Employee Pension - 8% annual increase

Healthcare - 8% annual increase

Utilities - 6.5% annual increase

Other General Expenses - 2.4% annual increase

Solid Waste Operations Fund

The Solid Waste Operations Fund is used to support the operations of the solid waste system, fund capital improvements, and pay debt service.


Expenses will exceed revenues during the forecast period primarily due to funding capital projects related to consolidating solid waste operations at the 34th Avenue site and continuing major investments at the McKay Bay Waste-to-Energy Plant. To assist in funding these large capital investments, the City is planning to issue debt during the forecast period. Fund balance remains positive during the forecast period.


Revenue Drivers (FY2023 & FY2024):

Solid Waste Collection Fees - 0.5% annual growth increase


Expense Drivers (FY2023 & FY2024):

Salary Increases - 5% annual increase

General Employee Pension - 8% annual increase

Healthcare - 8% annual increase

Utilities - 6.5% annual increase

Other General Expenses - 2.4% annual increase