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HomeMy WebLinkAbout06-28-2016 BAC MinutesCITIZENS BUDGET REVIEW ADVISORY COMMITTEE MINUTES 6:00 P.M. MONDAY—JUNE 28, 2016 CITY HALL 1225 MAIN STREET, SEBASTIAN, FL 32958 Ed Herlihy called the Citizens Budget Advisory Committee to order at 6:00 pm. The Pledge of Allegiance was recited. Roll Call Present: Ed Herlihy —Chair Dionna Farmer Michael Frank Harry Hall Terry Taylor Also Present: Ken Killgore, Administrative Services Director Jennifer Smith, Accounting Manager Cynthia Watson, Assistant Administrative Services Director/HR Manager Excused Absence: Sergio Mota Tim Slaven Michael Frank made the motion to approve the June 8, 2016 Minutes, Ms. Farmer seconded, all approved. Mr. Killgore focused on the General Fund Budget and how it was balanced. He focused on how he calculated revenue projections and what was not included and then discussed property values and other considerations. He discussed the Draft Budget and Capital Improvement Plan Recommendation for 2017 and the Certified Taxable Values received from the Property Appraiser. He presented the 2017 Budget via a PowerPoint Presentation. The General Fund Budget shows a net decrease of $75,623 over the amended budget for this past year as of the end of March. We reduced personnel costs, operating expenses, capital equipment charges, and transfers to other funds. We added in street lighting (city wide street lights monthly electric bills). We have in the past been charging the lighting to the local option gas tax fund. Those monies are intended to be used for street work. We want to correct that and have those funds spent as they were designed to be spent, although lighting is a qualified expense. Funds were shifted for Economic Development from the General fund. We fixed some uses of funds to get them more properly aligned with their intent. We came through with a $75,000 budget decrease. Mr. Killgore discussed the strategy for a balanced budget. He discussed the Voluntary Retirement Plan. That total price tag was $371,000 which was taken out of the General Fund Reserves. We realized that even though we thought we didn't need certain positions, we decided that was not effective. We need those positions and therefore those positions have been reinstated. We generated a difference of revenues projected for next year and expenditures of $371,000. We made it come out to the dollar to what we needed to replenish the general fund so it is a surplus and we are doing this with the same millage. Mr. Killgore discussed that we began meeting with the Union to develop a new contract. We have budgeted a 3% employee increase and 15% for insurance. We are meeting with Gehring Group (Broker) to discuss the insurance renewal rates. The budget included additional personnel mostly due to employees taking the voluntary retirement. We put aside $5,000 for Nancy Veidt, Temporary Accountant to return in the event we need someone to help out in the Administrative Services Department. We included a Police Officer, two Maintenance Workers and a part-time Maintenance Worker for the Cemetery. We did all this with $371,000 still going back to general fund. Mr. Killgore went through the 2017 Budget and Capital Program. He feels there will be a 4% growth of Utility and State Revenues. We account for Stormwater operation and maintenance costs in the general fund and that budget amounts to about $900,000. We have a stormwater fee of $5.00 a month which is collected for stormwater improvements and operations. We record the fee in the Stormwater Fund and then make a transfer to the General Fund to defray those costs. We are recommending the Stormwater transfer be increased from $550,000 to $575,000. We are in the 2"d year of repayment of an Airport Loan for legal expenses. By the end of this year there will be $100,000 remaining. It is suggested to reduce the payment in 2017 from $50,000 to $10,000. At the $10,000 repayment plan, it would take 10 more years to repay the remaining $100,000. When there are equipment or facility replacements that we aren't sure will have to be replaced within a year, we put them in the Capital program a year out, so we know it's in our plans but aren't replacing it if we don't have to. We also look at the R&R Fund. One or two pieces of equipment might be replaced in the current year but we try to load up the budget with replacements that may not be required. We want to also make sure that City Council knew we were repaying the Voluntary Retirement Program. Mr. Killgore discussed what was left out: No contingency for negotiations if pay raises are more than 3%; No contingency for Health Insurance Increases if more than 15%. An RFP went out for General Liability and Workers Compensation Insurance. We feel that there may be other companies that can serve us better. Even should we not change, it still may benefit us by having the current provider know their rate quote has to be competitive. Mr. Killgore discussed the Enterprise Funds ---Golf Course, Airport, and Building. We are assuming an increase in revenue for the Golf Course over 2016 because of the improvements such as greens work. The Airport rent will remain the same at $100,000. We are assuming higher fuels sales and rentals. A new Airport Manager was hired and we are adding a Maintenance Worker. We are repaying a $10,000 of the General Fund Loan and Scheduled Amortization of Loans from Discretionary Sales Taxes. The Building Fund's operating revenue estimates are about 3% higher than 2015 budget but almost the same as the 2015 estimates. The Building Fund will receive $5,527 of interest on a loan to the Golf Course. The Building Department is adding a part-time Building Inspector. Mr. Killgore discussed Special Revenue and Other Funds ---Local Option Gas Tax, Parking, Discretionary Sales (DST) Tax, Riverfront CRA Fund, Recreation Impact Fee Fund, Stormwater Utility Fund (SUF), Law Enforcement Forfeiture Fund, and Cemetery Trust Fund. We have been adding to the All Aboard Florida fund through the Local Option Gas Tax now totaling $99,400. It was decided to take the $50,000 a year that has been set aside for All Aboard Florida and put those monies toward road paving. The street lighting expense will now be charged to the General Fund. We are going to use $750,000 in 2017 and $300,000 in 2018 on "Catch-up" road paving. In the DST Fund we are expecting a large amount of funds coming from grants and we have to put in matching funds to get those dollars. Big money items for equipment and facilities are also coming from the DST Fund. We have been setting aside money for grant programs to assist people and encourage signage improvements and sewer connections. Majority of the CRA monies are currently spent on 0 janitorial and landscaping contracts. It is expected in the future these charges should also be switched to the general fund. Any new Recreation Impact Fees are expected to go to any new projects. The new monies shouldn't go toward repairs or improvements. There will be $100,000 transferred from the General Fund to the Stormwater Utility Fund for lagoon improvements such as oyster mats and Indian River Lagoon Council. Monies from the SUF will go towards filters in baffle boxes, equipment replacements, and piping. There are two bank notes funded by Discretionary Sales Taxes --- Discretionary Sales Tax Bank Note and Stormwater Utility Bank Note. The final maturity for DST Bank Note is April 1, 2017. The Stormwater Utility Bank Note will mature on May 1, 2022. Right now the amount outstanding is $2,275,000. Mr. Killgore discussed the Property Values and Millage. The Property values increased to a total taxable value of $1,039,754,558 and that is the amount that we will be working with. This is $72,942,358 more than last year ---an increase of 7.54%. 4.8% of that is due to reassessments. The amount of new taxable values added this year is $25,763,700. The rolled back rate would be 3.6700. The current millage is 3.8556 There was a request to show what was presented as to what was approved and that information can be seen department by department in the summary. Mr. Taylor asked about an additional officer. Mr. Killgore stated that there was an increase in the crime rate and that was the driving argument. Two additional officers were requested but when all the numbers were looked at, the Chief was told that that wasn't possible. When the golf course was mentioned, how did we end up with the sprinkler system? Mr. Killgore stated that last year we had a budget of $1.3 Million. $600,000 would come from DST and the other $700,000 would come from a loan from the Building Fund. When bids came in they were less than projected. We proposed that we improve the greens again this year and still be less than the $1.3 Million. The interest rate was based on a 10 year treasure and it came out at 1.3%. There are some other projects around the golf course, including roof replacements that are needed. Mr. Taylor asked about what was included in the working water front. Mr. Killgore stated the property was purchased through a grant program and the Working Water Front included the property at Crabby Bills and the lot next to it where there is the dock facility. Part of the plan included adding a fish house and historic museum to show the fishing history. In addition to a matching grant, $200,000 was to improve the shore line. It was felt that the improvement should be something (plants, etc.) other than a constructing a wall. Mr. Frank asked if we had a rough time line on the negotiations for the wage increase and insurance. Mr. Killgore stated the first meeting was a meet and greet. We handed them a rewritten agreements and lists that went paragraph by paragraph describing the changes. We told them to take the agreements, review them and then come back with their position on the recommended changes. We are set up for all day meetings July 22"d and 281h. We plan in those sessions to go through the entire agreements and make sure that everybody understands the changes. We hope we get agreements that everyone can adhere to. There would probably be another meeting to entertain discussions on the wage increase terms. The goal is to finish by the August 10th City Council meeting and hopefully we will know about where we are by that time. The contracts have to be voted on by the union members. If all goes well, we hope to be able to have the City Council vote at the first meeting in September to approve the agreements. o-1 Ms. Farmer asked what caused the projected jump in the MIS cell service (page 31). Mr. Killgore stated we are introducing cell phones for issue as the city provide phone and have had a pilot program with the police department. A lot of the increase comes from adding the purchase of those cell phones and the necessary service agreements for that technology. We have a lot of considerations with cell phones regarding compliance with public records requests and how we are going to make the phones secure from outside interference. The phones themselves are not that expensive but the monthly charge on the old phones is $2.00 a month and the new is $54/month. Ms. Farmer asked about the cost of a Maintenance Worker and understands the Police Chief requested two additional police officers but she is only getting one. What is warranted for getting two Maintenance Workers? Mr. Killgore stated the Chief requested two police officers and including benefits its $60,000 for one. The two Maintenance Workers in the Road Division cost about $35,000 each, which includes benefits. The Police Chief is not going to add a vehicle and it wasn't necessary to add the costs of purchasing any additional equipment for the police officer. Mr. Hall asked about the interest income of $30,000 (Page 3) which seems to be a little higher than the trend in previous years. Mr. Killgore stated in the past all City bank money has been divided into the State Board Administration (SBA) and local bank. He stated he received approval from the City Council to open a third account that is similar to the SBA but is sponsored by the County Clerks Association. They offer a program identical to the SBA as a daily investment program and a second program that he was interested in, where they invest in treasuries maturing no longer than 5 years. They currently have an average duration of 2.5 years. Their returns in the previous year were well over 1%. The actual transfer of funds has not yet been made. The program is called The Florida Investment Trust. We will put in $100,000-$200,000 initially to test it and get used to it. Ultimately, we would like to keep $3.5M in SBA, $3-3.SM in this new fund and $4-5M in the local bank. Mr. Hall asked about contributions -Greer Trust (Page 4). Mr. Killgore answered, the Greer Family has a trust for the Police Department; K-9 Officers were bought from these monies. We don't budget those funds until we know how much will be used. Mr. Hall had a question (Page 5) about the new Engineering Department. Money and people moved from one department to another. Mr. Killgore explained how the Engineer was the Public Works Director but it was decided that the Engineer should get away from managing people. Tim Walker was shifted from Stormwater to Roads as the Public Works Director. Then we had people leave public works due to the Voluntary Retirement and that's how we had two positions vacated. Two other employees moved into the Engineering Department for doing traffic signs and inspections. Mr. Hall asked about the increase of advertising and staff training (Page 6 and 37) and asked for more information. Mr. Killgore stated on Page 39, this is where we put the economic development advertising ($20,000) operating cost and the staff training was increased due to having new people in that Department. Mr. Hall asked about the 5 year capital improvement plan and how it calls for 5 vehicles per year except for next year where we're replacing 7 (Page 50). Wouldn't it be 6 instead of 7 because we're only adding one officer? Mr. Killgore stated these replacements were due to mileage according to our Garage Superintendent and those replacements did not presume any additional police officers. Mr. Herlihy stated that he had a meeting with Mr. Killgore and the City Manager. $1.3 M has been set aside for roads and what they are proposing are $750,000 for paving and $150,000 for reconstitution or a total of $900,000. Mr. Herlihy asked how much we might have to borrow. Mr. Killgore stated that he obtained money from transferring the cost of the street lights. He stated he thought of going to the General Fund but he shuffled the numbers and worked out the street light bills. Some of the reconstruction came from DST fund. Mr. Herlihy wanted everyone to know that we are doing things 1* (road improvements), for example the north end of Barber Street which will be a reconstitution. Mr. Hall stated that the $1.3M will be short the $400,000. According to Mr. Herlihy the $400,000 will be spent next year (2018). Mr. Hall stated that we have the $371,000. Mr. Herlihy reiterated that we want to pay that money back. Mr. Herlihy stated that Council approved a patch truck. Mr. Herlihy stated that three years ago we put $50,000 in a fund for All Aboard Florida and now we have over $99,400 for quiet zones so the City Manager would like to stop putting money in this fund. Mr. Herlihy discussed the airport that we want to build a third hangar C but the bid came in for more money than expected. They are working on the extra money. They are working on upgrading the taxi ways in the next couple of years and upgrading the radio system. Mr. Herlihy discussed the golf course and considerable amount of money has been spent ---sprinkler system, restrooms; in a month or so a new maintenance building will be ready so it is hoped that the enhancements will improve our revenue. Mr. Herlihy asked if we should keep the 3.8556 millage. This raises a new $260,000. Does the committee want to recommend this? It was discussed that this would amount to a $5.00 increase. Mr. Frank said the savings in a rollback is not as significant as what is ahead of us. He is recommending to hold the rate as of this date. Ms. Farmer stated we should keep it where it is at. Mr. Hall stated that even though it looks like an increase, it's such a minimal increase, I agree to keep it. Mr. Herlihy agrees to keep it. We could discuss drainage especially the alley south of Riverview Park but that will all be taken care of. As far as the Working Waterfront ---right now drainage is in the planning stages and the building of an ice house for the fishermen. Mr: Herlihy stated he will recommend to Council the 3.8556 millage and budget as presented. He will also talk about the roads. Mr. Taylor questioned what supports the recommendation for maintaining our existing millage. Mr. Killgore stated we want to go to Council with both the staff s recommendation and what the Committee as independent reviewer's recommend. These are presented as two separate opinions, even if they are the same. Mr. Hall stated that he believes this is a really good budget. Mr. Herlihy stated that the City doesn't have much debt and City Hall will be paid for next year. Things are happening here ---waterfront, tree trimming, $5 M in reserve. Mr. Herlihy asked if the public wanted to speak. There was no one to speak. Next scheduled meeting is July 11, 2016 at 6:00 p.m. Mr. Frank stated he cannot make the meeting because he will be out of town. Mr. Herlihy will send out his presentation by next Friday. He will email it to Mr. Killgore and Mr. Killgore will send it out. If anyone has comments please get those comments back to Ken and he will get them back to him. Mr. Killgore reminded the Committee that there can't be any back and forth; just receiving information would be okay. There can't be any discussion. r a O The meeting was adjourned at 7:43 p.m. VIAOIAN l� Edward Herlihy, Ch firman Date 2017 Budget and Capital Program Presentation on Draft Budget and Proposed Millage Budget Review Advisory Committee Meeting Tuesday June 28, 2016 Prepared By: Ken Killgore Administrative Services Director 1 2017 Budget and Capital Program What’s Included in General Fund? Revenues and Balancing Tactics. What’s Left Out? Enterprise and Other Funds. Property Values & Millage. Other Considerations. 2 What’s Included – General Fund Summary $ (73,679) Personnel Costs (3,046) Operating Expenses (181,098) Capital Equipment (22,800) Transfers to Other Funds 185,000 Street Lighting from LOGT 20,000 Economic Development $ (75,623) Net Budget Decrease 3 What’s Included? – Personnel Cost Down $73,679 Pay and Benefits 3% Allocated for Pay Increases (Negotiable!). 15% Higher Medical Insurance Premiums (RFP). New Positions for 2017 o Administrative Services Temporary Accountant. o Additional Police Officer. o 2 Maintenance Workers in Public Works. o Part-time Maintenance Worker at Cemetery. Savings from Voluntary Retirement 4 What’s Included – Operation Cost Down Up $201,954 Moved Street Lighting Cost from Local Option Gas Tax (LOGT). Moved Economic Development Cost from Airport Fund. Decreased Other Operation Cost. 5 What’s Included? – Capital/Transfers Down $203,898 Request for Capital Equipment Reduced by Shifting to Discretionary Sales Tax and Stormwater Fund. Transfers-Out Reduced by FY 2016 Transfers to Fund Unexpected Cost During the Year. Continuing $200,000 Road Work and $100,000 Lagoon Restoration Transfers. 6 Revenues and Balancing Tactics 3.8556 Millage - 96% Collection Rate. 4% Growth of Utility & State Revenues. $25,000 Adjustment to Stormwater Transfer. 2nd Year of Repayment of Airport Loan for Legal Expenses Reduced From 50K to $10K. Cut or Deferred Equipment/Facility Replacements Requested “Just-in-Case”. Qualified Items to Special Revenue Funds. Sought to Cover Expenditures and Repay Reserves for Voluntary Retirement Program. 7 What’s Left Out? No Contingency for Negotiations Different Than 3% Pay Raises. No Contingency for More Than 15% Health Insurance Increases. General Liability/Workers Compensation Premium Changes From Current Year. 8 Enterprise Funds: Golf Course Assuming Increased Revenue Over 2016 Estimates. No Change in $100,000 Airport Rent. Can Pay Just Interest Only on Building Fund Inter-fund Loan. Rolled Capital Account Into Operating Accounts – Intent Completed. 9 Enterprise Funds: Airport Fuel Sales and Rentals Projected Higher. Eliminated Charge for General Fund Management and Adding Part-time Maintenance Worker I. Allocation for Economic Development Moved to General Fund. Repaying $10,000 of General Fund Loan and Scheduled Amortization of Loans from Discretionary Sales Taxes. 10 Enterprise Funds: Building Operating Revenue Estimates About 3% Higher than 2015 Budget But Almost Same at 2015 Estimates. Will Receive $5,527 of Interest on Loan to Golf Course. Adding Part-time Building Inspector. 11 Special Revenue and Other Funds: Special Revenue Funds Local Option Gas Tax: Using $50,000 Transfer for All Aboard Florida Toward Road Paving. Covering Street Lighting In General Fund. Funding $750K in 2017 and $300K in 2018 on “Catch-up” Road Paving. Parking In Lieu Of Fund: Doing Indian River Drive Parking in 2016. Expect $11,840 Year End Balance. Getting $19,730 Per Year on Agreements. 12 Special Revenue and Other Funds: Special Revenue Funds Discretionary Sales Tax: Ongoing – City Hall and Stormwater Bank Note, Computer Upgrades and Police Vehicles. Funds $150K in 2017 and $50K in 2018 of Street Reconstruction (Vocelle and Damask). Funds $200K for Shoreline Work at Working Waterfront in 2017. Funds $330K for U.S.#1 Medians. Funds Matching Requirements on Projected Airport Grants from FAA and FDOT. 13 Special Revenue and Other Funds: Special Revenue Funds Riverfront CRA Fund: Public Lighting, Special Events, Continuation of the Sign and Sewer Connection Programs. Update of CRA Master Plan Versus Another $100K to Sewer Connection Program. Janitorial and Landscaping Contracts. Recreation Impact Fee Fund: Riverview Park Fence Friendship Park Improvements Incorporating Pickle Ball Courts. 14 Special Revenue and Other Funds: Special Revenue Funds Stormwater Utility Fund: $100,000 Transfer From General Fund for Lagoon Improvements (Oyster Mats, Indian River Lagoon Council.) Stormwater Park Electric, Pump/Baffle Box Filters, Equipment Replacements, Road Crossing & Side Yard Piping. Adjusts Annual Transfer to General Fund for Operation and Maintenance Expenditures. 15 Special Revenue and Other Funds: Special Revenue/Trust Funds Law Enforcement Forfeiture Fund: Used Only for Unbudgeted Items. Cemetery Trust Fund: ½ of Sales is Non-Expendable but Interest can be Used for Maintenance. ½ of Sales is Expendable on Expansions or Adding Capacity. Adjusted Plans to Do Concrete Work in 2016, Then Seek Bids in 2017 for Columbariums. 16 Special Revenue and Other Funds: Debt Service Funds Discretionary Sales Tax Debt Service: Includes Required Bank Note Payments. $706,000 Outstanding as of 9/30/16. Final Maturity on 4/01/17. Stormwater Utility Debt Service: Includes Required Bank Note Payments. $2,275,000 Outstanding as of 9/30/16. Final Maturity on 5/01/22. 17 Property Values and Millage: Property Values Property Values Increased to a Total Taxable Value of $1,039,754,558. This is $72,942,358 More Than Last Year, an Increase of 7.54%. New Taxable = $25,763,700 This Year Versus $25,492,245 Last Year. Average Reassessment Increased 4.88%. 18 Property Values and Millage: Millage o 3.6700 Rolled-Back Rate $100,000 Homestead Property Would Pay $6.60 a Year Less Due to CPI Limitation. $100,000 Commercial Property Would Pay $0.65 Less Due to 4.88% Value Increase. Same 3.8556 Millage $100,000 Homestead Would Pay $2.81 More. $100,000 Commercial Would Pay $18.82 More. 19 Other Considerations Unsettled Issues: Premiums for Employee Health Insurance Have Not Been Set – 15% Allocated. Wage Opener Negotiations Not Complete. Liability/Workers Compensation Not Done. Normally Set Proposed Millage Higher to Allow Flexibility in Dealing With Other Matters That Result from Budget Discussions and Hearings. 20