· 4 Forecast Document Second year as a formal stand-alone document New section: Key Assumptions New fund: Capital Projects Fund Replaces Penny for Pinellas Fund Includes ten key

Budget ForecastFY2012-2021January 25, 2011

2

Outline

Forecast document

Economic overview

Fund forecasts

General Fund forecast

FY2012 Budget strategy

FY2012 Budget process

Next steps

Forecast Document

4

Forecast Document

Second year as a formal stand-alone document

New section: Key Assumptions

New fund: Capital Projects Fund

Replaces Penny for Pinellas Fund

Includes ten key funds:

General Fund Fire Districts Fund

Tourist Development Fund Airport Fund

Transportation Trust Fund Utilities Water Funds

Capital Projects Fund Utilities Sewer Funds

Emerg. Medical Svcs. Fund Utilities Solid Waste Funds

5

Forecast Document

Forecasts are based on the best information we have at this time

Model is designed to facilitate sensitivity analysis to demonstrate impact of changing key assumptions

All assumptions and detail analysis (pro-formas) are provided

Potential risks affecting the forecasts are identified and discussed

Funds are presented as in balance or not in balance based on current revenues and expenditures Net of beginning fund balance and reserves

6

Forecast Document

Introduction: discusses how the Forecast dovetails with the annual budget process, how the Forecast is developed, and how the Forecast can be used

Executive Summary: summarizes the key elements of the Forecast as a whole over the ten-year time horizon

Economic Overview: features an overview of the national, state, and local economies

Key Assumptions: provides detail regarding key revenue and expenditure assumptions

Funds Forecasts: includes key fund information as well as succinct interpretations of each forecast

Pro-Formas: provides ten-year pro-formas for all ten key funds

7

Power of the Forecast

Valuable tool that reflects the impact that decisions

made in the present can have on future fiscal

capabilities

Ex) adding a new program

Ex) approving a new revenue source

Helps to identify future challenges, weigh potential

options, and craft policy well in advance

Provides transparency to the budget planning

process

Economic Overview

9

National Economic Outlook

The recession officially ended in June 2009 and

lasted 18 months

Worst recession since the Great Depression

The national economy is anticipated to grow by 2-3%

annually over the next three years

Length of Recession (Contraction Peak to Trough)

No. of Months

August 1929 March 1933 43 months

November 1973 March 1975 16 months

July 1981 November 1982 16 months

December 2007 June 2009 18 months

10

State Economic Outlook

Florida Economic Estimating Conference met

in December 2010

Expect flat to low growth through mid-2011

A transition to low level normal growth

from mid-2011 through 2012

Marked by weak population growth and a slow

improvement in the unemployment rate

11Source: Florida Legislature Office of Economic and Demographic Research

12

Local Economic Outlook

Generally tracks with timing of recovery of

Floridas economy

Moderate growth expected in 2011

Local recovery will be hindered by high

unemployment, low prices and high inventory of

residential property due to foreclosures, and slow

improvement in the commercial real estate market

Year % Change in Gross

Metro Product (MSA)

2010 2.3%

2011 (Est.) 2.4%

2012 (Est.) 4.0%

2013 (Est.) 5.0%

Fund Forecasts

14

Tourist Development Fund Forecast

Fund is balanced through the forecast period

Tourist development tax collections are expected to grow

from 2.5% to 3.5%

Based on assumption that promotional activities budget is

adjusted to match revenues

Additional capacity beginning in FY2016 as debt service is

paid off

Balancing strategy

Continue to adjust the promotional activities budget to

match revenues

15

Tourist Development Fund Forecast

16

Transportation Trust Fund Forecast

Fund is not in balance beginning in FY2013 resulting

in a gradual erosion of fund balance by FY2018

Results from inflationary pressures on expenditures

exceeding the relatively flat growth in gas tax collections

Balancing strategies

Revenue transfer from General Fund

Imposition of additional local option gas taxes

Reductions in program service levels

17

Transportation Trust Fund Forecast

18

Capital Projects Fund Forecast

Fund is not in balance due to changes in the current Penny

Program from FY2010

Ten-year shortfall of $13.5M due to:

Funding restoration of $8.75M to the Gulf Boulevard Improvements project to original allocation of $35M

Addition of $4.5M for the Friendship Trail Bridge Demolition project

Cash flow issue beginning in FY2012 due to the front-loading of

key projects in the ten-year program (ex. Public Safety Campus &

Consolidated Communications Center project $81M)


Identify $13.5M in project reductions to current Penny Program

Smooth out project expenditures as much as possible to minimize

the amount of interfund loan necessary to maintain adequate cash

flow (authorized up to $85M from Solid Waste R&R Fund)

Penny Program originally anticipated $150M bond issue for cash flow purposes

19

Capital Projects Fund Forecast

20

EMS Fund Forecast

Fund is currently not in balance resulting in a

depletion of fund balance by FY2013

Project shortfalls of $16.0M in FY2012 and $3.1M in FY2013

due to reduced property tax revenue collections


Increase in countywide EMS millage rate

Reduction in funding for first responder contracts

Increase ambulance user fee revenues

Reduction in funding for ambulance contract

21

EMS Fund Forecast

($16.0M)($3.1M)

22

Fire Districts Fund Forecast

Fund is not in balance through the forecast period

beginning in FY2012 due to reductions in property

tax revenue collections

Fund information presented in a consolidated manner to

provide a high level perspective

Budgetarily, each fire district is balanced separately


Additional increases to millage rates for the individual fire

districts will likely be necessary

Potential millage rate increases will need to take into

account the individual millage caps in each district

23

Fire Districts Fund Forecast

24

Airport Fund Forecast

Fund is balanced through the forecast period

Revenues are conservative due to economic conditions

Fluctuations in revenues and expenditures are caused by

the timing of capital projects

Balanced based on the following assumptions:

Capital projects budget will be adjusted to reflect the timing and amounts of any grants revenue

Airports operating budget would be adjusted to match revenues


Continue to adjust operating and capital expenditures to

match revenues

25

Airport Fund Forecast

26

Utilities-Water Funds Forecast

Fund is not balanced through forecast period

resulting in a depletion of fund balance by FY2016

Water system and wholesale water sales revenues have

declined due to the recession

Consumption has decreased 19% from FY2006 to FY2010


Rate increases of 6% in FY2012 and FY2013

27


This chart does not include rate increases

28


This chart includes rate increases of 6% in FY2012 and FY2013

29

Utilities-Sewer Funds Forecast

Fund is not balanced through forecast period resulting in a depletion of fund balance by FY2014 Sewer system and wholesale revenues have declined due to

the recession

Volume of waste processed has declined 7.5% from FY2006 to FY2010

Insufficient funds to maintain required debt service coverage and reserves

Balancing strategies Rate increases of 2% annually through FY2021

30


This chart does not include rate increases

31


This chart includes rate increases of 2% annually through

FY2021

32

Utilities-Solid Waste Funds Forecast

Fund is balanced through forecast period

Solid Waste tipping fees and electricity sales have declined

with the recession, but remain sufficient to fund operations

and reserves through FY2021

Reserves are being accumulated for future capital

replacement needs consistent with the 25 year capital plan


Continue to adjust operating and capital expenditures to

match revenues

33

Utilities-Solid Waste Funds Forecast

General Fund Forecast

35

FY2011 Beginning Fund Balance

On a net basis, $4.4M higher than projected

Primarily savings from FY2010 expenditure target

of 97% versus 99% assumption (landed at 98%)

$4.4M represents about 1% of total General Fund exp.

Could be allocated for non-recurring purposes,

added to the Service Level Stabilization Account

(currently $19.3M), or added to Reserves

An estimated $4.9M is necessary to fully fund the

Justice Consolidated Case Management System

project

36

General Fund Revenues

Source: FY2011 Adopted Budget

Property taxes comprise

2/3 of total revenues in

the General Fund

37

Foreclosure Filings

Foreclosure

filings appear to

be decreasing

38

Taxable Values by Property Type(Estimated 01/01/2011)

Taxable values

were estimated to

decrease from

5 to 8%

Forecast assumes

property tax

revenues to

decrease by 6%

39

Countywide Taxable Values

Annual Rate of Change

-15

-13

-11

-9

-7-5

-3

-1

1

3

5

7

9

11

1315

17

19

21

23

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

%

Average annual increase FY87 FY03: 5%

Estimate additional decrease

of -6% in FY12

Perc

ent

40

General Fund Property Tax Revenue(FY02-FY12) in millions

200

220

240

260

280

300

320

340

360

380

400

420

440

460

480

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

From FY07 to FY12,

$155M or 38%

revenue decrease

FY12 revenue will be

equivalent to revenue

in FY02

Average annual increase

of 5% trend line

BCC reduced millage rate

by 7/10 of a mill in FY07

41


Fund is not balanced beginning in FY2012

Projected $21.5M shortfall for FY2012

Additional $9M shortfall projected for FY2013


Target FY2012 budget at 6% less than the FY2011

budget (based on adjusted base budget)

Rethink the services that the County provides and

how we can best organize to deliver them

42


($21.5M)

($9.0M)

FY2012 Budget Strategy

44

FY2012 Balancing Strategies

General Fund

Target FY2011 budget at 6% less than the FY2011 budget

(based on adjusted base budget)

Rethink the services that the County provides and how we

can best organize to deliver them

Tourist Development Fund

Continue to adjust the promotional activities budget to

match revenues

45


Transportation Trust Fund

Revenue transfer from General Fund

Imposition of additional local option gas taxes

Reductions in program service levels

Capital Projects Fund

Identify $13.5M in project reductions to current Penny

Program

Smooth out project expenditures as much as possible to

minimize the amount of interfund loan necessary to

maintain adequate cash flow (authorized up to $85M from

Solid Waste R&R Fund)

Penny Program originally anticipated $150M bond issue for cash flow purposes

46


Emergency Medical Services Fund

Increase in countywide EMS millage rate

Reduction in funding for first responder contracts

Increase ambulance user fee revenues

Reduction in funding for ambulance contract

Fire Districts Fund

Additional increases to millage rates for the individual fire

districts will likely be necessary

Potential millage rate increases will need to take into

account the individual millage caps in each district

47


Airport Fund Continue to adjust operating and capital expenditures to

match revenues

Utilities-Water Funds Rate increases of 6% in FY2012 and FY2013

Utilities-Sewer Funds Rate increases of 2% annually through FY2021

Utilities-Solid Waste Funds Continue to adjust operating and capital expenditures to

match revenues

FY2012 Budget Process

49


Community outreach prior to budget development

Mid-year budget presentations from each BCC

department

Focus on program-based budgeting and levels of

service

Evaluate new funding sources and cost savings

Focus on ability to sustain programs given revenue

decreases and ongoing property tax caps

Constitutionals and Independents have individual

budget work sessions with the Board

50


BCC focus on policy decisions regarding:

Tax policy

Funding for Constitutionals and Independent

Agencies

New revenue sources

Increases to existing fee schedule

Reduction packages of BCC department

programs and levels of service

Next Steps

52

Next Steps

Set appropriate budget guidelines

Kickoff the FY2012 budget process on

February 17th

Community outreach prior to budget

development

Continue to refine property tax and other

revenue estimates

53

Budget Timetable

February 17: OMB conducts FY12 Budget Kickoff

meeting

March: Community outreach

March 11: Budget submissions for BCC departments

and Independent Agencies due to OMB

March 31: CIP budget submissions due

April 5 & 7: Mid-year budget presentations for BCC

departments

May 1: Budget submissions for Constitutional

Officers due to OMB

54

Budget Timetable

May 17: Budget Information Session Independent

Agencies

June 1: Property Appraiser delivers preliminary

Estimates of Taxable Values

June 7: Budget Information Session Constitutional

Officers and Independent Agencies

June 9: Budget Information Session Capital

Improvement Program (CIP)

July 1: Property Appraiser certifies Estimates of

Taxable Values

55

Budget Timetable

July 12: County Administrator presents the FY2012

Proposed Budget to the Board

July 28: Budget Information Session Finalize

proposed millage rates for inclusion in the TRIM

notice

August 4: Property Appraiser is notified of proposed

millage rates for development of TRIM notices

August: Budget Information Sessions as needed

August 22: TRIM notices mailed to all property

owners

56

Budget Timetable

September 6: 1st Public Hearing BCC adopts

tentative FY2012 millage rates and budgets

September 15: 2nd Public Hearing BCC adopts final

FY2012 millage rates and budgets

57

www.pinellascounty.org

Pinellas County, Florida Office of Management & Budget

FY2012-2021 Budget Forecast

TABLE OF CONTENTS

Pinellas County Budget Forecast: FY2012-2021

I. Introduction A-1 II. Executive Summary B-1 III. Economic Overview C-1 National Economy C-1 State Economy C-8 Local Economy C-14 IV. Key Assumptions D-1 Revenues D-1 Expenditures D-8 V. Fund Forecasts E-1 General Fund E-3 Tourist Development Fund E-17 Transportation Trust Fund E-21 Capital Projects Fund E-25 Emergency Medical Services Fund E-29 Fire Districts Fund E-35 Airport Fund E-41 Utilities Water Funds E-45 Utilities Sewer Funds E-49 Utilities Solid Waste Funds E-53 VI. Pro-Formas F-1 General Fund F-3 Tourist Development Fund F-7 Transportation Trust Fund F-11 Capital Projects Fund F-15 Emergency Medical Services Fund F-19 Fire Districts Fund F-23 Airport Fund F-27 Utilities Water Funds F-31 Utilities Sewer Funds F-39 Utilities Solid Waste Funds F-47 VII. Glossary G-1

Pinellas County Budget Forecast: FY2012-2021

INTRODUCTION

Pinellas County Budget Forecast: FY2012-2021 A-1

The Introduction portion of the Budget Forecast: FY2012-2021 discusses how the Forecast dovetails with the annual budget process, how the Forecast is developed, and how the Forecast can be used as a planning tool to enhance decision making. It includes the following sections:

Forecasting and the Annual Budget Process

Developing the Forecast The Power of the Forecast Using This Document

Forecasting and the Annual Budget Process The first step in the annual budget process is to update the Forecast in order to develop the budget guidelines for the FY2012 budget process.

Several of the Countys key funds are included in the Forecast. Each fund is analyzed individually as part of the forecasting process.

Development of Budget Guidelines The budget guidelines are developed by County Administration based on the results of the Forecast and policy direction from the Board of County Commissioners. If the results of the Forecast for a given fund indicate a shortfall, the budget guidelines would most likely include

some kind of reduction target. If a surplus is expected, the guidelines would most likely include proposals for new or enhanced programs. The budget guidelines are communicated to the County's departments and agencies for use during their budget development. At this time all instructions and resources for preparing budget requests are also distributed. Updating the Forecast After the Forecast is prepared and presented to the Board of County Commissioners in the January timeframe, the Forecast is continually updated throughout the rest of the fiscal year in parallel with the budget development process.

Developing the Forecast The Forecast is developed by the Office of Management & Budget (OMB) during November and December for presentation to the Board of County Commissioners in January. Developing Projections The Forecast is built upon an individual assessment of ten of the Countys major funds: the General Fund, Tourist Development Fund, Transportation Trust Fund, Capital Projects Fund, Emergency Medical Services Fund, Fire Districts Fund, Airport Fund, and Utilities Water, Sewer, and Solid Waste Funds. The process for developing the Forecast includes updating the projections for FY2010 with actual revenue and expenditure information following the closeout of the fiscal year as of September 30, 2010. At the same time, the current FY2011 expenditures are projected on a preliminary basis by analyzing the actual expenditures to date and projecting the remaining months left in the fiscal year. These expenditure projections are further refined later in the process as department provide their expenditure projections. The coming FY2012 budget year is

Forecast (January)

Targets / Budget Guidelines

(February)

Budget Worksessions (April/May/June)

Proposed Budget (July)

1st & 2

nd Public

Hearings (August/September)

Adopted Budget (October)

Deptl Budget Submissions

(March)

BCCs Policy

Direction

INTRODUCTION


forecasted based on the best information available at this point in time. The Forecast has a ten year horizon to help determine the long-term financial position of the Countys funds as well as the impact of todays budget decisions. The out-years through FY2021 are forecasted using various projection methods such as trend analysis, linear regression, and moving averages.

Forecast Assumptions The projections are modeled so that assumptions may vary each year to reflect future impacts of known variables and other anticipated events. The model is also designed to allow the key assumptions to be adjusted so that sensitivity analysis can be performed to demonstrate the impact of changing key assumptions. Additionally, unknown risks that could potentially affect the ten-year forecast have been identified and discussed. Forecast Results Major assumptions driving the revenue and expenditure projections are outlined to ensure a clear understanding for the basis of the results. Shortfalls and surpluses are cumulative in the sense that any individual years surplus or deficit flows into the next years fund balance, thus carrying a current years balance forward. In using the information contained in the projection, it is important to understand that an indicated surplus or deficit reflects the models assumptions and demonstrates a potential need for revenue increases, expenditure reductions, or a mix of both.

The Power of the Forecast Developing a multi-year forecast provides decision-makers with at least two key benefits: (1) assessing the long-term financial sustain-ability of the Countys Funds and (2) under-standing the impact of todays decisions on the future.

Long-Term Fiscal Sustainability One of the key purposes of developing a multi-year fund forecast is to identify potential actions necessary to balance revenues and expenditures over the long-term to ensure fiscal sustainability. Forecasting over a ten-year horizon can serve as a window into the future to warn of potential future challenges. For example, if a major capital project (i.e. jail expansion) will have a significant impact on the operating budget, that impact can be anticipated several years in advance and strategies can be developed and implemented to manage the negative impact to the budget. Conversely, if debt service on a bond is due to expire in the near future, additional funds may become available to increase service levels to certain programs or other uses. Enhanced Decision-Making Another benefit of long-term forecasting is the ability to assess the impact that decisions made in the present can have on future fiscal capabilities. If the Board is considering funding a new or enhancing an existing program, the Forecast can demonstrate the long-term impact to the budget. Similarly, if the Board is considering a new revenue source, the Forecast can show how much revenue could be anticipated over the years. Implementing cost-saving initiatives can also be forecasted and evaluated over time. In summary, the Forecast can be a powerful tool to understand how policy changes have real consequences that last far beyond a one-year budget solution.

Using This Document The Executive Summary section of this document summarizes the key elements of the forecast as a whole over the ten year time horizon. The Economic Overview section features an overview of the national, state, and local economies. This section provides important context for the various forecasts in the document. The Key Assumptions section discusses the sources of key

INTRODUCTION


revenue and expenditure assumptions that were used to develop each of the fund forecasts. This section is followed by the Fund Forecasts section which includes individual forecasts for ten of the Countys major funds. These forecasts are designed to be succinct and help focus the reader on the important elements in the ten-year forecasts for each fund. The assumptions, pro-formas, and a full-size forecast chart for each of the funds can be found in the Pro-Formas section. A Glossary has also been included to facilitate understanding of key terms.

EXECUTIVE SUMMARY

Pinellas County Budget Forecast: FY2012-2021 B-1

Introduction This is the second year that the ten-year Budget Forecast has been formalized into a stand-alone document. Changes to this document include a new section called Key Assumptions. This section provides detail on the important assumptions that drive the forecasts for ten of the Countys key funds. Another change to the document is the addition of the Capital Projects Fund, which replaces the Penny for Pinellas Fund. During the FY2011 budget process, the Penny for Pinellas Fund was eliminated and the proceeds from the Penny for Pinellas were included in the Capital Projects Fund. The first step in the annual budget process is to update the Budget Forecast and seek Board policy direction in order to develop the budget guidelines for the FY2012 budget process. Developing a multi-year forecast provides decision-makers with at least two key benefits: (1) assessing the long-term financial sustainability of the Countys funds and (2) understanding the impact of todays decisions on the future. Economic Overview The national economy has stabilized and is anticipated to grow by 2-3% annually over the next three years. The States economy can expect flat to low growth through mid-2011 and transition to low-level normal growth from mid-2011 through 2012. This low-level normal growth is anticipated to be marked by weak population growth and a slow improvement in the unemployment rate. The Tampa-St. Petersburg-Clearwater Metropolitan Statistical Area (MSA) economy grew by 2.3% in 2010 and is anticipated to grow by 2.4% in 2011 before growing by 4 to 5% in 2012 and 2013. The local recovery is anticipated to be hindered by high unemployment, low prices and high inventory of residential property due to foreclosures, and slow improvement in the commercial real estate market. General Fund Forecast The forecast for the General Fund shows that the fund is not balanced beginning in FY2012 primarily due to the anticipated 6% decrease in taxable property values. There is a structural imbalance in FY2012 between the General Funds recurring revenues and recurring expenditures of $21.5M. The projected shortfall is anticipated to increase by an additional $9M in FY2013 due to the anticipated 0% growth in taxable property values. Balancing strategies for FY2012 include making 6% worth of reductions against the adjusted base budget or increasing revenues to offset some or all of the decrease in property taxes. Tourist Development Council Fund Forecast The forecast for the Tourist Development Council Fund shows that the fund is balanced through the forecast period based on the assumption that the promotional activities budget would be adjusted to reflect any revenue increases or decreases that may occur. Beginning in FY2016, the fund is forecast to have additional capacity once the debt service on the Tropicana Field and the Dunedin Spring Training Facility is paid off in 2015. The additional capacity could be dedicated to new debt service, as with the Board approved Salvador Dali funding, or to supplement the promotional activities budget. In FY2010, the Board revised the Tourist Development Plan to allow funding of capital projects for non-profit museums that are open to the public and the Board also approved a review of the Tourist Development Plan every five years.

EXECUTIVE SUMMARY


Transportation Trust Fund Forecast The forecast for the Transportation Trust Fund indicates that the fund is not in balance beginning in FY2013, resulting in a gradual erosion of fund balance by FY2018. This imbalance primarily results from inflationary pressures on expenditures that exceed the relatively flat growth in gas tax collections that are based upon the volume of gasoline pumped and are not indexed to the price of fuel. By FY2017, action will need to be taken to manage this future gap such as potential revenue transfers from the General Fund, imposition of additional local option gas taxes, or reductions in current service levels. Capital Projects Fund Forecast The forecast for the Capital Projects Fund shows that the fund is slightly out of balance over the forecast period by approximately $13.5M due primarily to the Boards decision to restore funding in the Gulf Boulevard Improvements project of $8.75M and the addition of the Friendship Trail Bridge Demolition project of $4.5M to the overall Penny Program. In addition, there is a cash flow issue beginning in FY2012 due to the front-loading of key projects in the ten-year program. During the FY2012 budget process project allocations in the 2010 to 2020 Penny Program will need to be reduced or eliminated to close the $13.5M shortfall. In addition, project expenditures over the forecast period will be smoothed out as much as possible to minimize the amount of interfund loan necessary to maintain adequate cash flow. Emergency Medical Services Fund Forecast The forecast for the EMS Fund indicates the fund is not balanced through the forecast period. The forecast projects a $16.0M shortfall in FY2012 and an additional $3.1M in FY2013 due to reduced property tax revenue collections. Various revenue and expenditure balancing strategies are available. On the revenue side, options include an increase in the countywide EMS millage rate and an increase in ambulance user fee revenues. On the expenditure side, a reduction in funding for first responder contracts, a reduction in funding for the ambulance contract, or a reduction in other expenditures within the fund would be necessary. The current ambulance service contract is in effect through FY2012, while First Responder contracts are negotiated on an annual basis. Fire Districts Fund Forecast The forecast for the Fire District Fund indicates that the fund is not balanced through the forecast period. Six of the twelve fire districts increased millage rates in FY2011 to support expenditures. Additional increases to millage rates for the individual fire districts will likely be necessary to cover expenditures over the forecast period. Potential millage rate increases will need to take into account the individual millage caps in each fire district. Airport Fund Forecast The forecast for the Airport Revenue and Operating Fund shows that the fund is balanced through the forecast period based on the assumptions that the capital projects budget would be adjusted to reflect the timing and amounts of any grants revenue and that the airports operating budget would be adjusted to match revenues.

EXECUTIVE SUMMARY


Utilities Water Funds Forecast The forecast for the Utilities Water Funds shows that the fund is not balanced through the forecast period resulting in a depletion of fund balance by FY2016. Water System retail and wholesale water sales revenues have declined with the slower economy, which will require rate increases to fund operations and maintain sufficient reserves during the forecast period. The forecast shows the need for rate increases of 6% in both FY2012 and FY2013. Utilities Sewer Funds Forecast The forecast for the Utilities Sewer Funds shows that the fund is not balanced through the forecast period resulting in a depletion of fund balance by FY2014. Sewer System retail and wholesale revenues have declined with the slower economy, and will require rate increases to fund operations, sustain a debt service ratio of 1.5, and maintain sufficient reserves during the forecast period. The forecast shows the need for rate increases of 2% annually from FY2012 through FY2021. Utilities Solid Waste Funds Forecast The forecast for the Utilities Solid Waste Funds shows that the fund is balanced through the forecast period. Solid Waste tipping fees and electricity sales revenues have declined with the slower economy, but will remain sufficient to fund operations and maintain sufficient reserves during the forecast period. Reserves are being accumulated for future capital replacement needs consistent with the 25 year capital plan.

ECONOMICOVERVIEW

PinellasCountyBudgetForecast:FY20122021 C1

The Economic Overview portion of the BudgetForecast: FY20122021 provides importantcontext for the various forecasts in thisdocum lowingsections:entandincludesthefol

TheNationalEconomyBackground

looko o NationalOut

TheStateEconomyBackground

oko o FloridaOutlo

TheLocalEconomyBackground

o LocalOutlooko

TheNationalEconomyBACKGROUNDEndoftheGreatRecessionThe recessionofficially ended in June2009andasted18months.ThiswasthelongestrecessionincetheGreatDepressionasshownbelow.ls

LengthofRecession(ContractionPeaktoTrough)

No.ofMths.

August1929March1933 43monthsMay1937June1938 13monthsFebruary1945October1945 8monthsNovember1948October1949 11monthsJuly1953May1954 10monthsAugust1957April1958 8monthsApril1960February1961 10monthsDecember1969November1970 11monthsNovember1973March1975 16monthsJanuary1980July1980 6monthsJuly1981November1982 16monthsJuly1990March1991 8monthsMarch2001November2001 8monthsDecember2007June2009 18months

This recession was especially deep due to theoverlapofameltdowninthefinancialsectoranda steep downturn in the real estate market.hesetwokeysectorsoftheeconomyreinforcedachotherinadownwardspiral.Te

AvoidingaDoubleDipRecessionSincetheendoftherecessioninJune2009,therehave been fears that the fragile economicrecovery was in danger of falling back into arecession. A doubledip is defined as a periodduring which a recovery is interrupted byeconomic contraction, usually in the form ofnegativeGDPgrowth. Therehasonlybeenonedoubledip recession in the postWorld War IIera, the recession of 19801982. Some of theissuesdrivingthefearsofadoublediprecessionrevolvearound:highunemployment,taxhikesifthe Bushera tax cuts were not extended, lowconsumer spending, the threat of deflation,impacts from the European debt crisis, andexpiration of the stimulus. Some of these fearshave been allayed by actions taken by theederalReserveandCongressover the last twoonths.

FmQuantitativeEasingInNovember2010,theFedannounced itwouldincreasequantitativeeasing,buying$600billionof Treasury securities by the end of the secondquarterof2011. Quantitativeeasing (QE) is anunconventional monetary policy used by somecentral banks to stimulate their economy. Thecentralbankcreatesmoneywhichitusestobuygovernmentbondsandother financialassets, inorder to increase the money supply and theexcess reserves of the banking system.Expansionarymonetarypolicynormallyinvolvesa lowering of the interest rates by the centralbank. However, when the interest rates areeither at, or close to zero, normal monetarypolicy can no longer function effectively, andquantitativeeasingmaybeusedbythemonetaryauthorities in order to further stimulate theeconomy. The Fed launched this program inorder to counter the threat of deflationadangerousdropinprices,wages,andthevaluesof homes and stockswhile the nation struggleswith persistently high unemployment. Thisaction influences financial markets by pushinglongterm rates down, equity prices up, anddecreasing the dollar exchange rate. Since the

http://en.wikipedia.org/wiki/Monetary_policyhttp://en.wikipedia.org/wiki/Central_bankshttp://en.wikipedia.org/wiki/Money_supplyhttp://en.wikipedia.org/wiki/Zero_interest_rate_policyhttp://en.wikipedia.org/wiki/Monetary_policyhttp://en.wikipedia.org/wiki/Monetary_policy

ECONOMICOVERVIEW


Fedannounceditsintenttoincreasequantitativeeasing,theRussell2000ofsmallcapstocksisup0%, even more than the 15% to 20% rise inluechipindexes(asofJanuary2011).3bExtensionoftheBusheraTaxCutsExpectations for the economic recoveryincreased when President Obama signed anextension of the Bushera tax cut rates onDecember 2010. This legislation extended thecurrent income, dividend, and capital gains taxratesforanothertwoyears.Thelegislationalsoincludeda13monthextensionofunemploymentbenefits and a 2% point cut in Social Securitypayroll taxes from 6.2% to 4.2%. The bill alsoprovides a twoyear patch to the AlternativeMinimumTaxandoffersextensionsof theChildTax Credit, the Earned Income Tax Credit, theAmerican Opportunity Tax Credit for collegetuition, the Research and ExperimentationCredit, and a host of other items. Extension ofthe tax cuts is expected to stimulate consumerpending and continue a taxfriendly investingnvironment.seEndoftheStimulusInFebruary2009,CongresspassedtheAmericanRecoveryandReinvestmentAct(ARRA)of2009,sometimesreferred toas theStimulusAct. Thegoals of the Recovery Act were to create newjobs as well as save existing ones; and spureconomic activity and invest in longtermeconomic growth. The chart below shows theistribution of ARRA funds as of December 31,010.d2

Of the $787 billion, $592 billion or 75%, hasbeenpaidout.Asfundswinddown,theeffectofhe stimulus on the economywill decrease into011. t2StimulusProjectsinPinellasCountyInFlorida,a largeportionof thestimulus fundsare devoted to Florida Department ofTransportation (FDOT) projects. In PinellasCounty, stimulus funds will assist with thereconstruction of US 19 from north ofWhitneyRoad to north of State Road 60 (Gulf to Bay),which includes the construction of a limitedaccess mainline roadway, frontage roads, andthree interchanges. The recipient of theseStimulusPackagefundsisFloridaDepartmentofTransportation, District 7. The District will belead for the construction. The total amount ofStimulusPackagefundingfortheprojectis$45Mf which $21M is local stimulus funds. Totaloprojectcostis$132M.The amount of funds that the Pinellas Countygovernment is eligible for is limited to countygovernments, highly urbanized areas, and toprogramsofferedbyPinellasCounty.TheCountyis not eligible for Stimulus funds that aretargeted to functions provided by other localgovernmentsoragencies,suchas,transit(PSTA),transportation (FDOT), weatherization (UrbanLeague), education (school district and/or St.PetersburgCollege),andlaboranddevelopment(Worknet).

Distribution of ARRA Funds

$243.4B$170.9B $177.7B

$288B $275B$224B

0

50

100

150

200

250

300

350

Tax Benefits Contracts, Grants &Loans

Entitlements

F tunds Paid Ou Total Recovery Act Funds

85% 62% 73%

$ B

illio

ns

ECONOMICOVERVIEW


Pinellas County has applied for twelve grantsfunded from this act, seeking a total of65,807,626. As of January, 2011 nine awards$havebeenreceivedtotaling$14,468,623:HealthandHumanServicesReplaceMobile

lUnitwithmorecapablevehicle: $327,150awardedJune25,2009(the

Medica

countymatched$30,000)

HealthandHumanServicesIncreasedservicesbyMobileMedicalUnit:

$155,125awardedMarch27,2009,andanadditional$1,000awardedon

offered

September21,2009

CommunityDevelopmentBlockGrantRecoveryActFun lessEmerge Center:

dingforthecreationoftheHomencyProject'sCommunityService

$809,226awardedJuly22,2009

CommunityDevelopmentShorttermrentalassistanFingert

ceforatriskresidents(SeeHPRPipFactCardfordetails):

$1,237,464awardedJune19,2009

OfficeofManagementandBudgetEnergycyandConservation:

2009Efficien

$3,791,300awardedAugust31,AirportTerminalimprovementsand

ions:009

renovat $5,357,400awardedApril8,2

Justice&ConsumerServices/Florida

mentofLawEnforcement:

DepartEdwardByrneMemorialJusticeAssistanceGrant

$1,962,437awardedAugust4,2009(AcceptanceofProgram)

AirportTerminalbaggageconveyori

mprovements: $808,184awardedNovember3,2009

Parks&ConservationResourcesTreesCreekGreenwayParkimprove

$19,297awardedJune14,2010

PlantingndJoe ments:a

Pinellas County ARRA

% Funds Received of the Total Award

0%0%

95%

40%

14%

90%89%

5%

52%

$0.0 $1,250.0 $2,500.0 $3,750.0 $5,000.0

Forestry

MMU

CDBG-R

HPRP

EECBG

FAA

JCS

USHS

MMU SVR

$ in Thousands

Funds Received Amount Pending MMU Mobile Medical Unit MMU SVR MMU Increase Service CDBG-R Community Development Block Grant Recovery Act Grant HPRP Homeless Prevention and Rapid Rehousing Program EECBG Energy Efficiency and Conservation Block Grant FAA Terminal Improvements Recovery Act Grant

JCS Edward Byrne Recovery Act Grants ($770,448 directly to LE Agencies)

USHS Homeland Security Recovery Grant for Airport Forestry Florida Division of Forestry

ormoreinformation,gotothefollowingebsite:

Fw www.pinellascounty.org/recoveryThePathtoFiscalSustainabilityThe National Commission on FiscalResponsibility and Reform is a PresidentialCommissioncreatedin2010whosemissionistoidentifypoliciestoachievefiscalsustainabilityinthe long run. The Commission includes 18memberssix appointed by the President, sixmembers of the U.S. House of Representatives,and six members of the U.S. Senate (10Democratsand8Republicans).TheCommissionfirst met on April 27, 2010 and released itsreport onDecember 1, 2010. In the report theCommissionproposedasixpartplantoputournation back on a path to fiscal health, promoteeconomic growth, and protect the mostvulnera a awould:

bleamongus.T ke sawhole,theplan

Achieve nearly $4 trillion in deficitreductionthrough2020.

Reduce the deficit to 2.3% of GDP by2015.

ECONOMICOVERVIEW


Sharply reduce tax rates, abolish the b iAMT, and cut ackdoor spend ng in the

taxcode. Cap revenue at 21% of GDP and keep

spending below 22% and eventually21%.

Ensure lasting Social Security solvency,prevent theproject22%cuts tocome in2037, reduce elderly poverty, anddistributetheburdenfairly.

Stabilizedebtby2014andreducedebttoby2035.60%ofGDPby2023and40%

:Theplanhassixmajorcomponents1) Discretionary Spending Cuts: Enact toughdiscretionary spending caps to force budgetdiscipline in Congress. Include enforcementmechanisms to give the limits real teeth. Makesignificantcutsinbothsecurityandnonsecurityspending by cutting lowpriority programs andstreamlining government operations. Offer over$50billioninimmediatecutstoleadbyexample,nd provide $200 billion in illustrative 2015asavings.2) Comprehensive Tax Reform: Sharply reducerates, broaden the base, simplify the tax code,andreducethedeficitbyreducingthemanytaxexpendituresanother name for spendingthroughthetaxcode.Reformcorporatetaxestoake America more competitive, and cap

mrevenuetoavoidexcessivetaxation.3) Health Care Cost Containment: Replace thephantom savings from scheduled Medicarereimbursement cuts that will never materializeand formanew longtermcareprogram that issustainablewithreal,commonsensereformstophysician payments, costsharing, malpracticelaw, prescription drug costs, governmentsubsidizedmedicaleducation,andothersources.nstituteadditionallongtermmeasurestobringownhealthcarespendinggrowth.Id

4)MandatorySavings:Cutagriculture subsidiesand modernize military and civil serviceretirement systems, while reforming studentoan programs and putting the Pension BenefitlGuaranteeCorporationonasustainablepath.5)SocialSecurityReformstoEnsureLongTermSolvency and Reduce Poverty: Ensuresustainablesolvencyforthenext75yearswhilereducing poverty among seniors. Reform Socialecurity for its own sake, and not for deficitSreduction.6)ProcessChanges:Reform thebudgetprocessto ensure the debt remains on a stable path,spending stays under control, inflation iseasured accurately, and taxpayer dollars gom

wheretheybelong.This reportwill likelyshapea fiscaldebate thatis expected to begin in earnestwhen PresidentObamadelivershisStateoftheUnionaddressonJanuary25th.Thesameweekoftheaddress,theCongressionalBudgetOfficewillrelease itsnew10yearbudgetandeconomicreport,whichwillprovide updated economic growth estimates asell as budget deficit projections for the nextecade.wd

ECONOMICOVERVIEW


NATIONALOUTLOOKGross Domestic Product (GDP) is the generallyaccepted measure of the size of the nationaleconomy. GDPmeasures the totalmarket valueof all final goods and services produced in acountryinagivenyear. Themajorcomponentsof national GDP (2009) are shown in the piechartbelow.

Net Exports, -2.8%

Consumer Spending,

70.6%

Investment, 12.6%

Government Spending,

19.6%

ConsumerSpendingAt 70.6%, consumer spending easily representsthe largestportionofGDP. Unfortunately,mosteconomists expect 1 to 2% growth inconsumptionoverthenextcoupleofyears.Thisexpectation is based on relatively high levels ofunemployment, an increase in householdsavings, a restrictive supply of credit, andotentialtaxincreases. Thegraphbelowshowsonsumersentimentfrom1975todate.pc

Source:St.LouisFederalReserve

ntimentisimprovingfrClo

2008to67.7inOctober2010.Althoughtrendingupward, thisamount isstillwellbelowthe longrunaverageof86.5.The twin effects of the bursting of the housingbubble and the financial crisis resulted in amassivedeclineinhouseholdwealthnationwide,which has been further exacerbated by highunemployment. This decline has inducedhouseholds to reduce their consumption andincreasetheirsavingsinordertorebuildwealth.Sincetheendoftherecessionin2009,consumerspending growth has been positive, but thatgrowth has been and will likely continue to begradual. Average annual consumption growthfrom2010through2013isanticipatedtobejust1.9%. To put this in perspective, the averageannualgrowthinconsumptionduringtheperiod20032007was3.0%.

Year %ChangeinConsumptionGrowth

2004 3.5%2005 3.4% 2006 2.9% 2007 2.4% 2008 0.3% 2009 1.2% 2010(Est.) 1.5% 2011(Est.) 2.1% 2012(Est.) 2.2% 2013(Est.) 1.8%

Source:UCFInstituteforEconomicCo nessmpetitiveU.S.Forecast,September,2010

The December, 2010, Labor Department reportshowedunemployment is currentlyat9.4%. InJanuary, 2011, Federal Reserve Chairman BenBernankesaidheisoptimisticthattheeconomywillstrengthenthisyear. Buthewarnedthat itwill take up to five years for unemployment todrop to a historically normal level of around 6percent.AccordingtotheNovember,2010,surveybytheNational Association of Business Economics,monthly payroll gains are forecast to averagelessthan150,000untilthelatterhalfof2011,atwhich time gains will improve at a range ofroughly 150,000170,000. Joblessness will

onsumerse omnearthewest levels ever obtained, 55.3, in November

http://research.stlouisfed.org/fred2/graph/?s%5b1%5d%5bid%5d=UMCSENT

ECONOMICOVERVIEW

PinellasCountyBudgetFore :FY20122021 cast C6

remain high, with the unemployment ratepersistingatover9%throughthefirstquarterof2011beforeeasing. This isanticipatedtomarkthe weakest postrecession job recovery onrecord.The outlook for consumer spending received asignificantboostwiththeextensionoftheBushera tax cut rates in December 2010 for at leastthenexttwoyears.Allindividualsmarginaltaxrates will remain the same, middleclasstaxpayers will be free from an AlternativeMinimum Tax surcharge, and employees willbenefit from a 2% reduction in Social Securitytaxes.According to the National Retail Federationsanalysis of government figures, sales for 2010increased 6.7% compared to last year,which is13.5% higher than the recession low inDecember 2008. The last six months of 2010sawsixstraightmonthsofgains.

overnmentSpendingGThe second largest component of GDP isGovernment Spending at 19.6%. The state andlocalgovernmentsectorrepresents60%oftotalgovernment spending. State governmentbudgets will be challenged as federal stimulussupportendsandincomeandsalestaxrevenuesbegin a slow recovery. Until property taxrevenues recover, local government spendingwill likely lag. Overall, the state and localgovernment sector is anticipated to decreaseslightly or be flat over thenext fewyears. Thefederal government sector represents 40% oftotal government spending and is expected towinddownbytheendof2010anddecreaseby23% from current levels over the next threeyears.

nvestmentIThe third largest component of GDP isInvestment at 12.6%. Business investment inequipmentandstructuresisexpectedtoincreasesubstantially over the next several years.

Businesses are holding large amounts of cashand coupled with low interest rates it isanticipated that business equipment spendingwillincreasebyabout10%ayearthrough2013.Theoutlookforinvestmentinstructuresispooras this sector has seen a significant contractionin 2009 and 2010 as the commercial mortgagecrisiscontinuestoplayout.Itisanticipatedthatthis sector will bottom out during 2011 andgrow slightly in 2012 and 2013. Residentialfixedinvestmentgrowthhasbeennegativesince2006 and should finally see positive growthbeginning in 2011. Finally, inventories haveshown sustained growth as demand hasappearedtostabilize.

etExportsNThe definition of net exports is exports minusimports. Current net exports are at a 2.8%,down from 6% last year. A key factor drivingnetexports isthevalueofthedollar. Thevalueof the dollar has gradually weakened during2010andisanticipatedtocontinuetodepreciateduetorecentactionbytheFederalReserve.TheFedsmovetoincreasequantitativeeasinghelpsdecrease the dollar exchange rate against othercurrencies. A depreciated dollar should helpincrease exports by making the costs of U.S.goods more competitive in the globalmarketplaceandreducethenegativenetexportscalculation.SummaryofNationalOutlookMost economists agree that the nationaleconomyhitbottomin2009andthatweareontrack for a sustainable recovery. Normally,economic recoveries are marked by realeconomicgrowthofaround5%inthe firstyearof recovery due to pent up demand. It isanticipated that this particular recovery willmore than likely be in the 23% range due tolingering high levels of unemployment, thebottoming out of the housing market, thecontinued decline of commercial real estatemarket, anddecreases inboth federal and state&localgovernmentspending.

ECONOMICOVERVIEW


EconomicRecovery GDP

Growth19611962 7.5%19701971 4.5%19751976 6.2%19821983 7.7%19911992 2.6%20012002 1.9%Average 5.1%2007 1.9%2008 0.0%2009 2.6%2010(Est.) 2.6%2011(Est.) 2.0%2012(Est.) 3.0%2013(Est.) 3.1%

Source:UCFInstituteforEconomicCompetitivenessU.S.Forecast,September,2010

Insummary,thenationaleconomyhasappearedto stabilize and is anticipated to grow slightlythrough 2010 and experiencemoderate growthof23%annuallyfrom2011through2013.

ECONOMICOVERVIEW


TheStateEconomy

BACKGROUNDThebackgroundinformationbelowfortheStateseconomy is derived primarily from the FloridaEconomic Estimating Conference which met inecember 2010 to revise the forecast for theDStateseconomy.Until a few years ago, Florida was one of thenations fastest growing states.With the end ofthehousingboomand thebeginningof the realestate market correction, the state slipped tovirtually no growth on a yearoveryear basis.While Florida was not the only state toexperienceasignificantdecelerationineconomicgrowth(California,NevadaandArizonashowedsimilar trends), it was one of the first andhardest hit. Looking across the 50 states, thethree mostwidely used indicators ofovernment financial health illustrate thesehanges.gcStateGrossDomesticProductGrossDomesticProduct(GDP),themarketvalueof all final goods and services produced orexchanged within a state, is one of the keyeconomicmeasuresforthecomparisonofstates.WhileFloridahasoutperformed thenationasawholeinsevenofthepasttenyears,twooftheseyears (2004 and 2005)were greatly influencedby the activity sparked by the 2004 and 2005storms(primarilythroughinsurancepayments).In2006,Floridareturnedtothenationalgrowthlevelbeforedroppingbelowitin2007(4.8%USversus 2.8% FL), 2008 (3.3% U.S. versus 0.3%FL), and 2009 (1.3% U.S. versus 1.7% FL).Floridas nominal GDP in 2009 was just over737billion.$

Gross Domestic Product: Annual Growth Rate

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

United States Florida Source:BureauofEconomicAnalysis

Afteradjustingforinflation,FloridasrealgrowthinGDPrankedit45th inthenationin2009withan outright decline of 3.4% By way ofcomparison,Floridawasranked50thin2008and4th in the nation in 2005. For Arizona, Nevadaand Florida, losses in the construction sectoraccountedforasignificantportionofthedeclinesitsubtractedmorethanonepercentagepointromrealGDPgrowthineachofthesestates.afPersonalIncomeGrowthOther factors are frequently used to gauge thehealth of an individual state. The first of thesemeasures is personal income growth, primarilyrelated to changes in salaries and wages.Quarterlypersonalincomegrowthisparticularlyood for measuring shortterm movements ingtheeconomy.Since the2ndquarterof the2009calendaryear,Floridahasexperiencedslightlypositivegrowthinpersonal income.The increaseof0.9% in themost recent quarter (Q2 of the 2010 calendaryear)rankedFlorida37th in thecountry.This isslightly worse than last years ranking at thistime30th. Personal Income growth hasaveraged about 3.8% from 19912008. It isanticipated that from 20092011, growth inersonalincomewillbebelowaverageoronly1%.p3

ECONOMICOVERVIEW


Personal Income Growth

-4%-2%0%2%4%6%8%

10%12%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

*

United States Florida Pinellas

Not ntye:2009datanotavailableforPinellasCouSource:U.S.BureauofEconomicAnalysis

JobGrowthandUnemploymentThekeymeasuresofemploymentarejobgrowthand the unemployment rate. While Florida ledthe nation on the goodside of these measuresduring the boom, the statewasworse than thenational averages on both measures until JulywhenFloridaexperienced its firstovertheyearincrease in jobssince June2007.HoweverasofOctober2010,Floridaisstill854,900jobsbelowitsmostrecentpeakinMarch2007.Thismeansthatrehiring,whilenecessarywillnotbeenough.At the current pace, a full recovery to therevious peak will not occur until about thepspringof2016.The states unemployment rate in October was11.6%, persistently remaining higher than thenationalrateof9.0%.AsofOctober,Floridahad1.1millionunemployedpeople andwas ranked4th in the country for its unemployment rate.Even more troublesome, 48 of Floridas 67countieshavedoubledigitunemploymentrates.Theproblemshaveclearlybeenwidespread.Forthe second year in row, the only sector to gainjobs among Floridas major industries wasEducation&Health Services.Virtually all of theincreasewasduetohealthservices,primarilyinambulatoryhealthcareservices.

Unemployment RatesNational, State, MSA, Pinellas

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Jan-

01

May

-01

Sep

-01

Jan-

02

May

-02

Sep

-02

Jan-

03

May

-03

Sep

-03

Jan-

04

May

-04

Sep

-04

Jan-

05

May

-05

Sep

-05

Jan-

06

May

-06

Sep

-06

Jan-

07

May

-07

Sep

-07

Jan-

08

May

-08

Sep

-08

Jan-

09

May

-09

Sep

-09

Jan-

10

May

-10

Perc

enta

ge

United States Florida MSA Pinellas Source:FloridaResearchandEconomicDatabase(FRED)

Largely, these changeswere related toFloridasongoing housing market woes and the gloomynational and global outlooks that plaguedmostof the year. The growing inventory of unsoldhouses coupled with the sluggish credit crisisdampened residential construction activitythroughouttheentireyear.LastJuly,theFloridaEconomic Estimating Conference (FEEC) hadexpectedameager31,200privatehousingstartsfor theyear. In fact,newactivityrose to36,000private housing starts. While better thanexpected,thisfigurerepresentsjust13.3%oftheFY200506level.Singlefamilystartsmanagedtopost a positive gain, but multifamily startsworsened the percentage drop they made inFY200809 over FY200708. In yet anothermanifestation of the significant housingmarketadjustment still facing Florida, existing singlefamily home sales ended the FY200910 nearly30%belowthepeakvolumeofthe2005bannerear,whilethemedianhomepricecontinueditsecline.ydFinancialShocksFloridas economy has essentially movedthrough three waves of responses to financialshocks:thecollapseofthestateshousingboom, national recession, and a credit crisis severea

enoughtobringonaglobalcontraction.At first, the end of the housing boom broughtlower activity and employment in theconstruction and financial fields, as well asspillover consumption effects in closely related

ECONOMICOVERVIEW

PinellasCountyBudg tForecast:FY20122021e C10

industries: landscaping and sales of appliances,carpeting,andotherdurablegoodsusedtoequiphouses.Thisbeganinthesummerof2005whenthe volume of existing home sales started todeclineinresponsetoextraordinarilyhighpricesand increasingmortgagerates.Closely linkedtothe housing industry, Floridas nonagriculturalmploymentannualgrowthratebegantoretreatefromitspeakinthefallof2005.By the summer of 2006, existing home pricesbegan to fall, and owners started to experiencenegative wealth effects from the decelerationand losses in property value. Mortgagedelinquencies and foreclosures becamecommonplaceaspropertyprices further tankedin 2007, and the unemployment rate began toclimb as part of a slow slide into a nationalecession that was ultimately declared inrDecember2007.By the fall of 2008, Floridas homegrownproblems with the housingmarket were givingwaytoseveralworldwidephenomena:anationalrecession that was spreading globally and acreditcrisis thatwasthreateningtobringdowntheworlds largest financial institutions. As thesubprime mortgage difficulties spread to thelargerfinancialmarket, itbecameclearthatanypastprojectionsofarelativelyquickadjustmentin the housing market were overly optimistic.Forecastsweredampenedthroughtheendofthefiscal year, and then again as the excessinventory of unsold homeswas further swolleny foreclosures and slowing population growthbarisingfromthenationaleconomiccontraction.While small improvements were seen in late2009 and early 2010 on the state and nationalfronts, they seemed to sputter as the recoverystruggledtotakehold.BridgetoRecoveryIn addressing the States FY2011 $3.2 billiondeficit theFloridaLegislatureused$2billionoffederal stimulus funds, $400 million of trust

funds, and revenue enhancements including anewSeminoleGamingContracttominimizedeepbudget cutsandbuildabridge to recovery.Thestimulusfundingandtrustfundsweepsarenonrecurring in nature. This means that theupcoming budget cycle will again be extremelychallenging.InJanuary,2011,theDirectoroftheLegislatures Office of Economic andDemographic Research announced that theshortfall for the FY2012 budget could bebetween $3.6 billion. It is possible that theLegislature will shift costs (mandates andfunding formulas) to local governments in anffort to deal with fiscal pressures at the stateevel.el

ECONOMICOVERVIEW

o PinellasCountyBudgetF recast:FY20122021 C11

FLORIDAOUTLOOKThe forecast information below for the Stateseconomy is derived primarily from the FloridaEconomic Estimating Conference which met inDecember 2010 to revise the forecast for theStateseconomy.ForFlorida,itappearsthattheextremefinancialand economic stress experienced over the lastfew years reached its bottom sometime duringthe spring of 2010. Months of modest growthare expected before full recovery begins inearnest in the spring of 2011. The remainingquestions focus on the actual pace of recovery,thedegreeofremainingturbulence,andtheriskofadoubledip.LaborMarketFloridas current unemployment numbersrepresent a loss of 854,900 jobs from thepeak,with the states negative overtheyear growthrateactuallybeginninginMarch2007.Whilethestates job losses began with the constructiondownturn, almost all of the major industrieswereultimatelyaffected.Overallemploymentisprojected to gain 1.1% in FY201011 and thenincreaseby2.1%inFY201112,2.9%inFY201213, and 2.4% in FY201314. Job restoration inthe construction, information and financialactivitiessectorswill lagbehindtheotherareasnd is not anticipated to experience positiveaannualgrowthuntilFY201112.The unemployment rate peaked at 12.4% inAugust2010,andasofOctoberhasdecreasedto11.6%. The unemployment rate for FY201112is projected to be 10.8%, followed by 9.2% inFY201213 and 8.2% in FY201314. Over time,the Florida forecast begins to converge to theational forecast, except Floridas job growth is

g t c onstrongerthrou hou thefore asth rizon.The outlook for wages and salaries hasweakened slightly. Floridas longterm growthprospects essentially mimic the nationalforecast; however, Floridas average annual

wageslargelyfallbelowthenationasawhole.In2009, the states average annual wage for allndustries was only 89.9% of the nationalverage.iaHousingandConstructionVigorous home price appreciation thatoutstripped gains in income and the use ofspeculative financing arrangements madeFlorida particularly vulnerable to thedecelerating housing market and interest raterisks. In 2006, almost 47% of all mortgages inthestatewereconsideredinnovative (interestonly and pay option ARM). With the ease ofgaining access to credit, longtermhomeownership rates were inflated to historiclevelsmovingFloridafromalongtermaverageof66.3%toahighofover72%.Essentially,easy,cheap and innovative credit arrangementsnabled people to buy homes that previouslyewouldhavebeendenied.The surging demand for housing led manybuilders to undertake massive constructionprojects that were left emptywhen themarketturned.Thenational inventoryofhomes isnowclose to 9 months. In Florida, the picture isworse.Basedonthemostrecentdata,theexcesssupplyofhomesisapproaching450,000.Atanygiven point of time, an inventory of roughly50,000 isgoodthe450,000figure isontopofthat level. Subtracting the normal inventoryand using the most sales experience, the statewillneedsignificanttimetoworkoffthecurrentexcess at least until the end of the 2011calendar year (halfway through FY201112),likely longer. Because the state is so diverse,someareaswillreachrecoverymuchfasterthanotherareas.Foreclosures have further swelled Floridasunsold inventoryofhomes.Originallyrelated tomortgageresetsandchanges in financing termsthatplacedownersindefault,recentactivityhasbeenboostedbythecontinuallygrowingnumberof unemployed. Although foreclosure filings

ECONOMICOVERVIEW


d2

ropped from last year, the state still finished010withthesecondmostfilingsinthecountry.

Foreclosure Activity October 2010Top Ten Counties

2,4601,9811,958

1,763

3,8014,257

4,4855,786

6,8517,324Broward

Palm BeachMiami-DadeHillsborough

OrangeLee

PinellasVolusiaPascoDuval

Source:RealtyTrac.com

TheFloridaeconomy isunlikely to turnarounduntilnewconstructioncomesbacktolife,andisnot expected to happen until the inventory isreduced. With the meltdown in the mortgagemarket and the subsequent credit crunch,housingstartswentintoasignificantdeclinethatshowed little improvement until this year. Astrong rebound is not forecasted to untilFY201112; however, it lasts through theremainder of the planning horizon. Totalconstruction expenditures follow a similarattern, never returning to the 200506 levelpduringtheforecastperiod.As the availability of financing for commercialreal estate tightens and loan losses mount,growth in private nonresidential constructionexpenditures is projected to fall another 13.6%this year after last seeing positive growth inFY200708. Themarket is expected to stabilizenextyear,andthenreturntostrongergrowthinthe outyears. Similarly, after posting a 20.7%gain in FY200708, public construction activityposted backtoback declines over the past twoears. In FY201011, moderate growth isyexpectedtoreturn.Duringthepastnineteenmonths,existinghomesaleshavegrownbydoubledigit ratesover thesame month in the prior year. In the last six

months, the sales volumehas reached just over69% of the level achieved in the 2005 banneryear.Muchofthesalesincreasehasbeendrivenby the increasing number of distressed sales.Thiscanbeseeninthecontinuingpricedeclines.In 2008, the median price of an existing homedeclined 20% and in 2009, it declined another24%.Todate,2010isaveragingadeclineof4%.Fromaneconomicperspective, significantpricedeclinesareaprecursortorecovery,buttheyarestill painful. The inventory of unsold homessuggests thatpriceswill continue to fall or stayrelatively flat through most of 2011. From thepeak in 2006 to November 2010, the state hasalreadyseena44.6%declineinmedianpriceforxisting homes. This level was slightly downromapeakdeclineof49.2%inJanuary2010.ef

Existing Single Family Home SalesFlorida & Tampa/St Pete/Clearwater MSA

0

50,000

100,000

150,000

200,000

250,000

300,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*

Num

ber

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

Dol

lars

State Sales MSA Sales State Median Price MSA Median Price Source:FloridaAssociationofRealtors*ThroughNovember,2010

PopulationGrowthPopulation growth continues to be the statesprimaryengineofeconomicgrowth,fuelingbothemployment and income growth. The nationaleconomic contraction significantly slowedFloridas population gains, but this was notunexpected. Over 80%of the states populationgrowth comes from positive net migration,rimarily frompeoplemoving intoFlorida fromtherstates.po

ECONOMICOVERVIEW


TopTenStatesMigratingIntoPinellasCountybyReturns,2008

#ofReturns

NewYork 1,058Ohio 630Pennsylvania 599Michigan 557Massachusetts 515NewJersey 493Illinois 433Georgia 405California 400Texas 331

Source:Intern Re enueSer ce

From past studies, it is clear that people arereluctant to move during recessions first,becauseof the inability to sell theirhomes, andsecond, because of the difficulty in finding newjobs. Floridas strong international migration,which until recently had been a bulwark, islso being affected by the global economic

al v vi

aslowing.Population growth hovered between 2.0% and2.6% from themid 1990s to 2006, then beganslowingbeforecrossingintonegativeterritoryin2009andflatteningoutin2010.In2011,growthis expected to reflect just the states naturalincrease (positive births minus deaths) with77,492newresidents.Theextremelylowrateofgrowth seen over the past few years isunprecedentedinFloridasmodernhistory.Overthe forecast horizon, population growth willmoderately rebound persisting above 1.2%after2013.WhilethisisstillsignificantgrowthFlorida was adding a city roughly the size ofMiamieveryyear; in the future, itwillbea citymore like St. Petersburg it ismarkedly lowerhan the average of the annual growth ratesetween1970and1995(3.04%).tbSummaryofFloridaOutlookAsshownintheFloridaRecoveryTimelinefromthe Florida Legislature Office of Economic andDemographicResearch,Floridacanexpectflattolow growth halfway through 2010 and make agradual transition to low level normal growthbeginninghalfwaythrough2011andonthrough2012. This low level normal growth ismarked

y weak population growth and a slowbimprovementintheunemploymentrate. largerversionoftheTimelinecanbefoundatheendofthissection.At

Source:FloridaLegislatureOfficeofEconomicandDemographic

Source:FloridaLegislatureOfficeofEconomicandDemographicResearch

ECONOMICOVERVIEW


TheLocalEconomyBACKGROUNDThe context of this section is from theerspective of background impacting theinellasCountybudget.pPPropertyValueIncreasesFrom FY2002 to FY2007 there were unusuallylarge increases in property values in PinellasCountyandthroughoutthestate.AcrossFlorida,public budget hearings brought out manycitizens who were upset about their proposedproperty taxes as presented on their Truth inMillage (TRIM) notices. Most of those whoexpressed their frustration were persons whoownedproperty thatwasnothomesteaded andthereforenotprotectedbytheSaveOurHomestaxable value increase cap, such as commercialand rental business owners and owners ofsecond homes. In response to the publicsconcerns, the Board of County CommissionersreducedtheFY2007countywidemillagerateby.701 mills (over 10%), the first millage rateeductionsincethe1997budgetyear.0rImpactofSaveOurHomesAmendmentNotall localgovernmentswereasresponsivetothe situation as Pinellas, and this dramaticgrowth in taxable values resulted in a surge inproperty tax revenues that became the focus oflegislative concern. In reality, the primaryproblem has been the systematic inequitiesresulting from the Save Our Homesamendment to the Florida Constitution whichhas capped the growth in taxable values forhomesteadedproperties(permanentresidences)since 1996. The amendment was intended toprotect homeowners from escalating propertytaxbillsresultingfromgrowthinmarketvalue,asituation thatwasperceived tobe forcing someeople, particularly residents on fixed incomes,ptoselltheirhomes.Whilethisobjectivehasnodoubtbeenachieved,there have been dramatic, and in many cases

unforeseen,consequencesasaresultofSaveOurHomes. Becauseof the largeamountofmarketor just value not taxed due to the Save OurHomes exemption, a disproportionate share ofany increase in tax revenuehasbeenplacedonproperties that are not established permanentesidences,suchasbusinesses,rentalproperties,randnewlypurchasedhomes.The increases in values for fiscal years 2002through 2007 notwithstanding, the historicaltrendovertheprevioussixteenyearsinPinellashasbeenanaverageannualincreaseofabout5%in values (including new construction). Mostobservers believed that the market wouldcorrect itself and return to more normalpatterns.Tosomeextent, thevaluegrowthpartftheproblemcouldbeexpectedtocorrectitselfvertime.ooLegislativePropertyTaxRollBacksThe Florida Legislature perceived property taxreform as one of the two most critical issues(along with property insurance reform) thatneededtobeaddressedin2007.InJune,athreedaySpecialSessionoftheLegislatureproducedamandate that was unlike anything ever seenbeforeinitsforcedreductionsinpropertytaxingcapability of local government in Florida. TheLegislature did not make similar reductions toFY2008 school property taxes, which theyontrol,eventhoughthesetaxesmakeupaboutc40%ofmostpropertyownerstaxbills.Unfortunately,thissolutionfailedtoaddressthereal inequities that were the focus of publiciscontentandinsteadhasthepotentialforeven

te indgrea rdisparities thefuture.The Legislature adopted two key itemsimpacting property tax reform. The firstapproach involved statutory changes requiringall counties, cities, and special districts to rollback property tax collections in FY2008 to apointbelowtheFY2007collectionsadjusted fornew construction (also known as the rolled

ECONOMICOVERVIEW


back rate). This target ranged from3% to9%below the rolledback rate depending on theStates calculation of how much the taxingauthorityspropertytaxrevenueincreasedfromFY2002 to FY2007. Independent Districts, andDependent Districts many of which have theprimarypurposeofprovidingFireorEmergencyedicalServices,wereall targetedat3%belowM

therolledbackrate.These calculations, and the resulting reductioncategories, did not adequately acknowledge thelowertaxprofileofPinellas.PinellasCountywasequired to cut 7% below rolledback (theecondrs

mostseverelevel),eventhough:

o TheCountysFY2002FY2007percentageincrease in per capita property tax wasbelow the states average increase forcounties;

o TheCountysFY2007percapitapropertytax was less than Orange, Hillsborough

c t(andother ounties) hatwereinthe3%or5%cutbackcategories;

o aAcitywiththesamepercent ge increasewasrequiredtocutonly5%;

o The States numbers did not reflectoseasonal or tourist p pulation impacts;

ando The States numbers did not take into

account the additional cost pressures foranurbancoastalcounty(suchaspropertyinsurance).

PropertyTaxRevenueCapTheother itemadoptedby theLegislaturewithimportant longterm implications was theimplementation of a property tax revenue cap.Beginning in FY2009, property tax revenueincreases will be limited to new constructionplus the statewide percentage increase in percapita personal income. This percentage hasaveraged about 3.8% from 19912008. It isanticipated that from 20092012, growth inpersonalincomewillbebelowaverageoronly1

%. Even thisminor increase isneutralizedby3thehistoricdecreasesinpropertyvaluation.Thecapsrequirethatthemaximummillageratethat canbeapprovedbya simplemajority voteoftheBoardofCountyCommissionersequalstheprioryearsmaximumrolledback rateadjustedfor the change in per capita Florida personalincome. A twothirds vote of the Board mayapprove up to 110% of this maximum. Anyhighermillageraterequiresaunanimousvoteofthe Board, or a referendum. Based oninformation from the Florida Department ofRevenue, it appears that the County may havesomeflexibilityforincreasesabovethepropertytax revenue cap in the short term because theoardhasnotleviedthemaximummillagesinceBthebaselinewassetinFY2008.Thelongtermimpactofthiscapisthatpropertytax revenue will be constrained even if taxablevalues increase beyond the average increase inpersonal income. To date, the County has notseen an impact from this cap because valueshave actually declined since it was passed.However, due to the bursting of the housingbubble and the negative impact of foreclosures,the baseline of values has been set artificiallylow, which will keep property tax revenuesconstrainedbyahigherthananticipatedmargin.ImpactofAmendmen OneThe FY2009 budget situation was unique inseveral ways. This was largely due to thepassageofAmendmentOne,placedontheballotbytheLegislatureandapprovedbythevotersofFlorida on January 29, 2008, which reducedproperty tax revenues. Also, the economicdownturn which began in FY2008 intensified,hich further reduced property taxes and also

n f t i s

t

wreducedreve ues romo her mportant ources.Amendment One made the following changeswhich reduced taxable property values andrevenuesavailabletolocalgovernment:

ECONOMICOVERVIEW


o Doubled the existing $25,000 homesteadexemption(exceptforschooltaxes)

o Allows for up to $500,000 of the Save OurHomes exemption to be applied to another

property(portability)o apImposeda10%c onassessmentsfornon

homesteadproperty(schooltaxesexempt) Instituted a new tangible personal propertyexemptionof$25,000

o

ImpactoftheRecessionAtthesametimethattheimpactofAmendmentOnewasbeingfelt,therealestatebubbleburst,and market values for property declineddramatically. The resultwasanunprecedenteddecrease in theproperty taxbase. SinceWorldWar II, the average annual increase in taxablevalue is about 5%. In the last three years, theCountywide taxable value has decreased 8.4%,11.4%, and 9.7% with another 6% decreaseanticipated in FY2012. Normally, some of thisrevenuedecreasewouldbeoffsetby the restofthe revenue mix such as sales taxes, staterevenue sharing, and other miscellaneousrevenues. Unfortunately, the general economydeterioratedtothepointthatvirtuallytheentiremix of nonproperty tax revenues also declinedsubstantially. The end result of all of thesechanges was a large negative impact to theCountys revenues which have resulted inignificant reductions across all of the Countysunds.sfImpactstothePinellasCountyBudgetOver the last four years, the County has beenfaced with resizing the organization to fit thenew fiscal reality stemming from legislativeaction, the bursting of the housing bubble, andtherecession.SinceFY2007,totalpositionshavedecreased 1,618 or 25%. Within that number,the BCC departments have decreased 985positions or 35%, which yields the lowestposition count since FY1985. TheConstitutionals and Independents havedecreased633positionsor17%whichyieldsthe

lowest position count since FY1995. The totalpositioncountiscurrentlythelowestsince1989.In the General Fund, the Countys largest fundthatfundsmostofitsoperations,propertytaxes(twothirds of total revenues), are expected toecrease 35% or $152million from FY2007 toY2012.dF

ECONOMICOVERVIEW


LOCALOUTLOOKPinellas County is the 6th largest county inpopulation (931,113) and is the most denselypopulatedintheState.PinellasCountyismostlybuiltoutandexpects limitedpopulationgrowthin the future. The County is the most populartourist destination on the Gulf of Mexico,drawing 13 million tourists annually. TheCounty is part of the TampaSt. PetersburgClearwater Metropolitan Statistical Area (MSA)comprisedofHernando,Hillsborough,Pasco,andPinellas counties. Below is a chart ofEmploymentbyIndustry(2008data)forPinellasCounty.

Natural Resources, Mining, &

Construction, 7.6%

Financial Activities, 8.2%

Trade, Transporation, & Utilities, 19.6%

Other Services, 3.2%

Manufacturing, 6.1%

Information, 2.6%

Education & Health Services,

19.5%

Leisure & Hospitality, 10.7%

Total Government,

4.8%

Professional & Business

Services, 17.7%

Source:FloridaLaborMarketStatistics

Over the last four years, several of these areashave seen substantial decreases: Naturalresources, mining, and construction decreased42%; Manufacturing decreased 27%;Information decreased 18%; Professional &Business Services decreased 12%; Trade,Transportation, & Utilities decreased 12%;FinancialActivitiesdecreased11%;LeisureandHospitality decreased 9%, and Other Servicesdecreased7%.Theonlyareasthathaveshowngrowth since 2007 is Education & Healthervices which increased 10% and Totalovernmentwhichincreased6%.SGUnemploymentInprioryears,theaverageunemploymentrateinthe TampaSt. PetersburgClearwater MSA hasbeen 3.5%4.5%. The current unemploymentrateasofNovember,2010,is12.4%.Inthetable

below, localunemploymentexceedstheaveragebeginning in 2008 and is expected to crest in010andremainaboveaverageatleastthrough014.22

Year UnemploymentRate( MSA)

2005 3.9%2006 3.4%2007 4.2%2008 6.6%2009 11.0%2010 12.3%

2011(Est.) 11.8%2012(Est.) 10.7%2013(Est.) 9.4%2014(Est.) 8.3%

Source:UCFInstituteforEconomicCompetitivenessFlorida&MetroForecast,December,2010

Thismeansthateveniftheeconomyimprovesinheshortterm,thatunemploymentwillcontinueobeafactorforseveralyears.ttTourismTourismisakeyeconomicdriveroftheeconomyin Pinellas County and contributes direct andindirect visitor expenditures of $6.7 billionannually. Tourismisverysensitivetoeconomicconditions because it is discretionary in nature.During FY2008 and FY2009 bed tax collectionsdecreasedmarkedly as the recession deepened.With the recovery taking hold at the nationallevel,bedtaxcollectionsareexpectedtoincreasegraduallyoverthenextseveralyearsfrom2.5%to3.0%beforereturningtoanaverage increaseof approximately 3.5% a year. (See the Fundeview for the Tourist Development Councilundsectionofthisdocument).RFRealEstateThe real estate market in Pinellas County isstruggling to recover from the bursting of thehousingbubble.Pinellas,liketherestofFlorida,experiencedadramaticriseinhousingvaluesforseveral years during the housing boom. Sincethe bubble burst, values countywide havedeclined by 8.4%, 11.4%, and 9.7% in the lastthreeyearsandanother6%decreaseisexpectednextyear.

ECONOMICOVERVIEW


ResidentialRealEstateOverthelastyear,homesalesintheTampaBayareahaverisen. However,almosthalfofall thesales are distressed sales involving foreclosedproperties. Because distressed sales composesuch a high proportion of the overall market,housing prices have decreased dramatically.Thechartbelowshowsthatthemedianprice inPinellasCountyiscurrentlyat$150,000whichis2% lower than the median price of $222,000rom2006.3f

Pinellas CountySingle Family Residential - Countywide

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2003

2004

2005

2006

2007

2008

2009

2010

Quarterly Data

Num

ber

$0

$50,000

$100,000

$150,000

$200,000

$250,000

Sales Median Price

Source:PinellasCountyPropertyAppraisersOfficeAccording to the Pinellas Realtor Organization,there has been a steady increase in pendingcontracts for thepastsixmonths. InNovembertherewere 15%more contractswritten than ayear ago. Bankowned properties represent56%ofthesecontracts,anincreaseofover87%fromNovember2009. Inthecondomarket justover 50% of the contracts are for bankownedproperties, an increase of 92% from last year.Bank owned single family properties representmorethan60%ofthecontractswritten,an82%increasefromayearago.Itisinterestingtonotethatcondosaresellingfor85%oftheirlistprice,singlefamilyhomesaresellingat80%ofthelistrice,and56%ofallsalesinPinellasCountyareashsales.pc

Foreclosurescontinuetohampertherecoveryofthe residential real estatemarket. In 2006, themonthly average of foreclosures was 308. In2007, foreclosures doubled to 628 a month.From2008through2009,foreclosuresaveragedalmost 1,200 a month, which is approximatelyfour times the normal average. ThroughNovember 2010, there has been someimprovement as the average has decreased to955 and trending downward. However, thistrendmaybeskewedbyarecentmoratoriuminhe courts and stricter requirements for lenderocumentation.td

Foreclosure Activity October 2010Top Ten Areas within Pinellas

126136

169243

468 994

4346

7888

0 200 400 600 800 1,000

St. PetersburgClearwater

LargoPalm Harbor

SeminolePinellas Park

Tarpon SpringsDunedin

Clearwater BeachOldsmar

Source:RealtyTrac.com

Recoveryintheresidentialrealestatemarket isdependentonthestrengthofhousinginseveralfeeder markets, notably the Midwest and theNortheast. As those markets recover over thenext two years, potential retirees and jobhunters can sell houses in their home marketsnd help the Pinellas housing market decreasetscurrenthighlevelofinventory.aiCommercialRealEstateAlthoughtheTampaBayofficemarketcontinuesto struggle with abnormally high vacancy andsubdued tenant demand, overall vacancy rateshave improved slightly in 2010 compared to2009. Most of this improvement can beattributedtojobgrowth,whichpostedapositiveincreaseofnearly7,300newjobsfromFebruarythroughAugust 2010. As job growth continuesand as corporate confidence strengthens,

ECONOMICOVERVIEW


demandisexpectedtocontinuetoriseslowlyin011 resulting in lower vacancy rates andtabilityinaskingrentalrates.2sSummaryofLocalOutlookA good indicator of the local economy is thepercentage change in Gross Metro Product forthe metropolitan statistical area (MSA). TheTampaSt. PetersburgClearwaterMSA economyhit bottom during 2009 and grew slightly by2.3%in2010.Anotheryearofsimilarmoderategrowthof2.4%isexpectedin2011.From2012o2014thelocaleconomyisexpectedtorecovero45%growthasshowninthechartbelow.tt

Year %Chan GrossgeinMetroP t(MSA)roduc

2004 5.4%2005 6.9%2006 3.7%2007 0.2%2008 1.5%2009 2.8%2010 2.3%

2011(Est.) 2.4%2012(Est.) 4.0%2013(Est.) 5.0%2014(Est.) 5.7%

Source:UCFInstituteforEconomicCompetitivenessFlorida&MetroForecast,December,2010

In the short term, the local recovery will behindered by doubledigit unemployment, lowpricesandhighinventoryofresidentialpropertyue to foreclosures, and slow improvement inhecommercialrealestatemarket.dt

ECONOMICO

VERVIEW

PinellasCountyBudgetForecast:FY20122021

C20

Documents

· 4 Forecast Document Second year as a formal stand-alone document New section: Key Assumptions New fund: Capital Projects Fund Replaces Penny for Pinellas Fund Includes ten key