2023 Popular Annual Financial Report

Introduction

The City of Orlando is a Florida municipal corporation that was founded in 1875, and has an estimated population of 326,988 living within an area of approximately 119 square miles. The city is in the approximate center of the State of Florida and the four-county (Orange, Osceola, Seminole, Lake) Orlando-Kissimmee-Sanford Metropolitan Statistical Area (MSA), which has an estimated population of 2.8 million. The city operates under a Charter adopted February 4, 1885, as amended. The city has a seven-member City Council comprised of the Mayor (elected at large) and six District Commissioners.

The city provides the full range of governmental services, including police and fire protection; street construction and maintenance; solid waste management; sewer services; parks, recreation and cultural services; planning and development services; a variety of transportation and public infrastructure programs; and other traditional support activities. Included in the city’s basic financial statements is the legally separate Downtown Development Board (DDB), which is reported separately (i.e., discretely presented). Although legally separate, because of the closeness of their relationship to the city, the Community Redevelopment Agency (CRA) and Downtown South Neighborhood Improvement District are reported as though they are part of the city (i.e., blended presentation).

What is an annual report to citizens?

This Annual Report to Citizens is Orlando’s version of a Popular Annual Financial Report (PAFR). The Government Finance Officers Association (GFOA) recommends governments produce a PAFR to provide a summarized overview of the city’s financial position in a simplified format for the benefit of citizens and other interested parties. The information presented is extracted from the City’s award-winning Annual Comprehensive Financial Report, which is a complete set of audited financial statements presented in accordance with accounting principles generally accepted in the United States of America, (GAAP). The Annual Report to Citizens is unaudited and not presented in GAAP format. This is not intended to replace the Annual Comprehensive Financial Report. For those interested in more detail, the City of Orlando’s Annual Comprehensive Financial Report and other financial documents are available at orlando.gov/financialdocuments. The PAFR is available to be viewed and downloaded at orlando.gov/pafr. 

Achievements

The City of Orlando continues to be recognized for its financial reporting efforts. The GFOA has given an Award for Outstanding Achievement in Popular Annual Financial Reporting to the City of Orlando for its Annual Report to Citizens for the fiscal year ended September 30, 2022. The Award for Outstanding Achievement in Popular Annual Financial Reporting is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government popular reports.

In order to receive an Award for Outstanding Achievement in Popular Annual Financial Reporting, a government unit must publish a Popular Annual Financial Report, whose contents conform to program standards of creativity, presentation, understandability, and reader appeal.

An Award for Outstanding Achievement in Popular Annual Financial Reporting is valid for a period of one year only. The City of Orlando has received a Popular Award for the last four consecutive years (fiscal years ended September 30, 2018, 2019, 2020, 2021 and 2022). We believe our current report continues to conform to the Popular Annual Financial Reporting requirements, and we are submitting it to the GFOA to determine its eligibility for another award.

The City of Orlando was also awarded the Certificate of Achievement for Excellence in Financial Reporting for its Annual Comprehensive Financial Report for the fiscal year ended September 30, 2022. This is the 45th consecutive year it has received the distinguished award.

Letter from the Mayor

On behalf of the Orlando City Council and staff, it is my pleasure to present to you the City of Orlando’s Annual Report to Citizens (Report) for the fiscal year ended September 30, 2023.

Accountability and responsible stewardship are key components of the financial reporting process. This Report will provide you with a snapshot of the city’s financial activities and achievements from the past year and is an illustration of our continued commitment to financial transparency.

We know that a strong partnership with you, our residents, is the best way to work through challenges and realize opportunity. With that in mind, as you review this report, please share any recommendations, concerns or questions you may have with our Office of Business and Financial Services at orlando.gov/obfs.

Sincerely,

Buddy Dyer

Mayor, City of Orlando

Orlando Facts - Did You Know?

3rd ranked college city in Florida and 3rd ranked best college towns and cities in America	3.1% Unemployment rate for Orlando MSA as of September 2023
3rd Best foodie city in the nation	12 Main Street districts
55.9 million  Number of passengers traveling through Orlando International Airport this year	Aa1/AA+/AAA Orlando's comparable rating for general obligation debt by rating agencies Moody's Investors Service, Standard and Poor's, and Fitch Ratings, respectively
2nd Most fun city, best city for outdoor recreation, best city for staycations.	3,286 People in Orlando MSA who moved into permanent housing from being homeless (In the 12-month period ended 01/31/2024)
11 number of mayor's priorities: Community trust and equity initiative, caring for those experiencing homelessness, a city for everyone, making it easier to do business, accelerate Orlando, public safety, sustainability and resiliency, transportation, access to quality housing, providing opportunities for young residents, investing in our neighborhoods	416 miles of bike paths in Orlando.
7 Professional sports teams that call Orlando home: the Magic, the Lions, the Pride, the Solar Bears, the Predators, the Guardians, and the Orlando Valkyries.	Orlando achieved Leed Cities Gold Certification for its citywide sustainability and resiliency efforts.
	548 Number of vendors registered in city's minority or women owned enterprise system.

Property Tax Revenue

Ad valorem property taxes are the city’s largest source of revenue. The table below shows the total amount of tax collected in the last 5 years. Although the city’s millage rate (dollars of tax per $1,000 of taxable value) has remained the same, assessed property values have increased, resulting in more property tax revenue being collected.

City of Orlando Millage Rates Last Five Years

Ad Valorem Property Taxes A tax based on the assessed value of an item, such as real estate or personal property.

Non-ad Valorem Revenues Revenues not including property tax, such as the utilities service tax.

Where do Property Taxes Go?

The example below shows the total amount of property tax a resident would pay on a home with an assessed value of $370,000, and where those tax dollars go.

Capital Improvement Program

What is it and Why Do We Have One?

The city provides needed and desired government services to the public. In order to provide these services, the city must invest in the community by acquiring and constructing capital assets, such as buildings, infrastructure, roads, and parks. The capital improvement program is a road map, approved by City Council, which details and establishes the city’s capital investment priorities and policies over the next five fiscal years. The capital improvement program is of major significance to the city. The benefits derived from the projects intersect with and impact the lives of the city’s residents, businesses, and visitors through the provision of health, safety, transportation, recreation, cultural, and other services.

The following chart illustrates the FY2022/2023 Capital Budget by type of service.

Capital Budget

Funds budgeted to purchase or construct buildings, equipment, infrastructure or improvements.

   

Condensed Financial Statements

The city’s statement of net position is a snapshot of its financial position. It presents all of the city’s assets and deferred outflows and liabilities and deferred inflows. The difference between assets and deferred outflows and liabilities and deferred inflows is known as net position. The change in net position from year to year serves as an indicator of the results of the city’s operations and financial position. For the fiscal year ended September 30, 2023, the city’s net position is $2,537,494,424. This is an increase of $156,521,139 over Fiscal Year 2022. Revenues and expenses are presented in the statement of activities. See glossary for definitions of key terms.

Condensed Statement of Net Position

Condensed Statement of Activities

General Fund Revenues and Expenditures

The city is required to account for its finances using fund accounting. Fund accounting separates revenues and expenses into different funds or “buckets”, based on the source of the revenue and its intended use. The largest “bucket” and chief operating fund of the city is the General Fund. Most of the city’s revenues and expenses are accounted for here. General Fund revenues include property tax, licenses, permitting fees, utility taxes, state taxes, contributions such as revenue sharing, and service charges. General Fund expenses include police, fire, parks and recreation, business and financial services, transportation, economic development, and public works services. The table below provides a summary and comparison of General Fund revenues, expenses, transfers, and net change in fund balance. The charts present expenditures by department and revenues by source for the General Fund for the Fiscal Year ended September 30, 2023. Total revenues increased $34,653,355 compared to the same period last year. Property Tax was the largest source of revenue for the General Fund representing 42% of the total. Total expenditures increased by $103.3 million compared to the same period last year. Public Safety (Police and Fire services) was the largest expense for the General Fund, representing approximately 58% of total expenses.

Total General Fund revenues increased 14.2% in fiscal year 2023 compared to 2022. Property Tax collections increased by $34.8 million due to a 4.7% increase in taxable property values, and Sales Tax revenue increased by $4.7 million as the economy continues to improve. Income on investments increased by $63.8 million, primarily the result of the city’s rate of return increasing from a negative rate of return of 3.35% in FY 2022 to a positive rate of return of 3.94% in FY 2023. General Fund expenditures increased $103.3 million or 22.3% over Fiscal Year 2022. The majority of the increase was in personnel costs. Personnel costs across all departments increased by $75.3 million (25.8%) in fiscal year 2023 compared to 2022. The majority of the increase is due to the recognizing $58 million of American Rescue Plan Act (“ARPA”) grant funding in Fiscal Year 2022, which was used to fund essential city services. This resulted in moving eligible salaries and related payroll taxes from the General Fund to the ARPA Special Revenue Fund. This allowed the City to invest in key priorities through the Accelerate Orlando fund, such as homelessness, affordable housing, community violence intervention, and employment and training.

    

 

  

 

  

 

 

Condensed Statement of Outstanding Debt

The City of Orlando primarily issues bonds to pay for large and long-lived capital assets such as parks, roads, water treatment plants, and buildings. Sometimes existing bonds are refunded with new bonds to achieve savings on interest costs.

There are multiple benefits to paying for large and long-lived capital assets with debt. One benefit is that future users of the assets will bear some of the cost through taxes or other charges that help pay the debt over time.

The city consistently achieves some of the highest bond ratings possible from the major ratings agencies Moody’s, Standard & Poor’s and Fitch. High bond ratings indicate that the city is financially strong, stable and able to repay its debt, which generally results in lower interest costs. 

Governmental Activities

Business Type Activities

Governmental Activities The city's basic services such as Police, Fire, Public Works and Families, Parks and Recreation which are mostly funded by property tax, sales tax and franchise fees.

Bond Rating A measure of financial strength that provides the ability to obtain low interest rates.

Business Type Activities City services that charge users based on the cost of providing the service.

Tourist Development Tax (TDT) A tax on the amount paid by guests for short-term accommodation (less than six months). This 6% tax is collected by Orange County and Florida Statutes require the funds to be used for designated tourism-related expenditures. The county contributes TDT revenue to the City of Orlando to support debt service payments on the outstanding TDT revenue bonds.

Government-wide The city as a whole.

Selected Statistics

Demographics and Economic Statistics
(Last 10 Fiscal Years)

Principal Employers

Source: Orlando Business Journal and Metro Orlando Economic Development Commission.

Note: Includes the four counties in the Orlando-Kissimmee-Sanford Metropolitan Statistical Area (MSA), Orange, Seminole, Osceola and Lake.

Glossary

Current and Other Assets
Assets such as cash, investments, receivables and inventory that can be converted to cash within one year.

Current Liabilities
Debts that can be paid off in one year or less, such as accounts payable and accrued payroll.

Deferred Inflows of Resources
An acquisition of net position by the government that is applicable to a future reporting period.

Deferred Outflows of Resources
A consumption of net position by the government that is applicable to a future reporting period.

Expenses/Expenditures
Money spent or costs incurred through the city’s operations.

Fund
A self-balancing set of accounts which are segregated for specific activities or objectives. Funds are often referred to as "buckets."

Fund Balance
The difference between assets and deferred outflow of resources and liabilities and deferred inflow of resources of a fund.

General Fund
The chief operating fund of the city.

Government Finance Officers Association (GFOA)
Organization which represents public finance officials and promotes excellence in public finance by providing best practice guidance, recognition programs, research and training.

Long-Term Liabilities
Represents mainly debt obligations of the city.

Millage Rate
Dollars of tax per $1,000 of taxable value.

Net Position
The difference between assets and deferred outflow of resources and liabilities and deferred inflow of resources for the city as a whole.

Prior Period Adjustments
The correction of an error or retroactive application of a new accounting rule.

Revenues
Income from taxes and charges to individuals who purchase, use, or benefit from goods or services.

Subscription-Based Information Technology Arrangement (SBITA)
A contract that conveys control of the right to use another party’s information technology software as specified in a contract, for a period of time. A new governmental accounting standard in effect for fiscal year 2023 requires these to be recorded as an asset and a liability rather than as an expenditure of the period as in prior years.