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HomeMy WebLinkAbout08-08-2016 BAC MinutesCITIZENS BUDGET REVIEW ADVISORY COMMITTEE MINUTES 6:00 P.M. MONDAY —AUGUST 8, 2016 CITY HALL 1225 MAIN STREET, SEBASTIAN, FL 32958 Ed Herlihy called the Citizens Budget Advisory Committee to order at 6:00 pm. Present: Ed Herlihy -Chair Harry Hall Sergio Mota Tim Slaven Terry Taylor Excused Absence: Dionne Farmer Michael Frank Also Present: Ken Kiligore, Administrative Services Director Jennifer Smith, Accounting Manager Cynthia Watson, Assistant Administrative Services Director/HR Manager Ed Herlihy made a motion to approve the minutes from meetings June 28, 2016, July 11, 2016 and August 1,2018. ( Editor's note: The August 1, 201$5 minutes were not approved until 1/30/17.) Mr. Hall made a motion to approve the minutes. Mr. Mota seconded. All approved. Mr. Kiligore presented the same PowerPoint Presentation as was presented in June 28, 2016. Staff is still recommending the millage rate of 3.8556 and our rationale behind that. There is a budget decrease of $75,623. Pay and Benefits are still allocated at 3%. Those negotiations are still continuing. There changes to the Personnel Costs. What we are proposing and presenting to City Council for our medical and dental Insurance Is a $230,000 savings which is less than we allowed for in the budget 15% rate. There are no changes in Operating Costs, Capital Transfers, Balancing the budget and the Assumptions and presumptions we made. As far as what is left out is the 3% pay raises subject to negotiation. WE have the $230,000 savings from the Employee Health Insurance and we also completed the proposal for Liability and Workers Compensation Insurance. The company we are recommending is on $50,000 savings by going through that process. The RFP did result in a downward slope to our premium. The Golf Course and Airport and Building Fund and Enterprise Fund are not changing. Since Council requested additional Information, we are also presenting to Council 3 options --- one keeping it at 3.8556 one at the rollback rate and one in the middle at 3.7 mills. There is a way to get down to the $176,000 as suggested and that is to apply $50,000 of the health insurance savings, $50,000 liability and workers comp savings and the other piece which is the increase we transfer from the stormwater fee revenues. Right now we transfer 62% to the General Fund. We are recommending transferring 70%which would increase the revenues to the General Fund by $50,000. So the sum of the three items wouldn't effect really what we have recommended for the General Fund. Understand this is not staffs recommendation and we are still sticking with the 3.8556 millage rate. The CRA Fund pays for the electric bill for lights, janitorial services for the park and landscaping contract. The Stormwater Utility Fund allocates funds to sewer grant program. There is no change to some of the other funds Debt Service Fund, Property Tax 3.8556 is still the same. To summarize, we still have the Labor Negotiations to be determined which is hopefully completed before September. The Item still pending is the vote on Discretionary Sales Tax. Mr. Taylor questioned if the City Council understood the need to save money. Mr. Killgore stated he didn't really have a chance to discuss this with them because they wanted to see other options. $5M will not go extremely far if the whole City is affected. The presentation presented will be presented again when the recommendation is made and the need to save the money will be stated again. Mr. Taylor questioned the union negotiations. Mr. Killgore stated staff is in the negotiation process. Mr. Hall asked about the DST and what kind of loss that would be if we didn't have it. Mr. Killgore stated Right now we take in $2.8M a year and most is allocated to the police cars and special projects, grant matching costs at the airport. If we had to live without it the impact would be back on the General Fund and between Utility taxes and Franchise fees. We would have to take some severe corrective measures to handle it. Mr. Hall questioned the health insurance premium increase of 15%. The benefits to the employees are they being changed or are they at the same level or is the premium going up. Mr. Killgore stated to keep with the same policy there was a 16% increase. The alternative which made the most sense was to change the Plan to a copay even after the deductible is met. Right now they receive an HRA card to meet the first deductible ($2,000 or $4,000 spouse and family) but they also have a maximum out of pocket amount ($4,000 or $8,000 spouse and family) of which 20% is paid by the employee. This is the plan we are proposing to Council. Mr. Hall questioned a couple members of Council's "wishlist" or "Pet projects"? Mr. Killgore stated he has not. Mr. Slaven or Mr. Moto did not have any questions. Mr. Herlihy stated how the City got through the recession but through that we ran equipment into the ground. We have fixed those things. He stated our City is growing. Houses are being built. Our Building Department is buried and busy and doing very well. The growth puts more pressure on City services. There are more things that need to be done and we have problems especially with the lagoon. We have talked about it so going forward we will need funds for the Sewer Grant Program which is the City's greatest secret. People don't know about it and we need to publicize it. We need to put more money into it. DST will probably not be passed. It will be interesting to see what the School Board gets since they want a piece of the action. We would really be stuck if the DST would go away. We don't know where we are headed in the next election. There are indicators that the economy will slow down. He is recommending we stay with the 3.8556. Mr. Helihy stated that this committee needs to say that we are going to stick with the 3.8556 even after Council hears staffs recommendation. He is going to present a PowerPoint to Council stating why we need to stick with the 3.8556. He's going to present the following reasons why: lagoon, sewer fund grant, City growth, and possible economic recession. Mr. Helihy made a motion to stick with the 3.8556. Mr. Hall seconded the motion. There was no Public discussion. All approved the motion to stick with 3.8556. Mr. Herlihy stated he will prepare the PowerPoint and he has asked all members to review it by 4:30 Tuesday, August 9th because he has to have it to the City on Wednesday. If any comments, get them to Ken so he can get them back to me so I can make changes. Mr. Killgore made comments regarding the Third Quarter Annual Report. Most changes were due to unexpected repairs. He listed new and additional approvals by City Council. General revenues collected are at 76%. Capital Projects will be presented and debt service and obligations are being paid on schedule are in compliance. The Golf Course figures are distorted because of the major irrigation project. As you recall the Golf Couse had a loan from the Building Fund but it is inflating the expenditures. It's not necessarily a cash flow problem but a deficit. Airport Fund has had a successful year. They have increased their reserve amounts to about $46,000 because they are mostly supported by the DST funds. Building Fund is having a good year because of Building Permits. If you recall, the Building Department wants to add a Part-time Inspector which will help with their work load. Included are the Detail Summaries. On page 83 of 321 shows you the 75% expended and you can look at each department and where they stand individually. On pages 84 of 321 there is the Capital Project Status Report is included and some are carried over from year to year because of the operating budget. About 63% of our projects are in process and we are awaiting some of our grant funding. Page 325 shows the Amount of Cash Investments. We still have $11M available in cash investment. I still haven't set up the third investment with Florida Trust. He stated he still needs to get comfortable with their procedures. The status of the Cash Reserves is $5, 033,000. The Balance of the report is each Department's activities. I would call special attention to the Golf Course, page 92 of 321. They explain why they have less revenue than the year before. They have done some promotion and added members. Mr. Herlihy commented on how we are down $193,000 on the golf course and this could have been due to the heat in July and August. It will be tough for them to make that up. Mr. Helihy requested a motion to approve the Third Quarter Budget and make that recommendation to the City Council. There was a motion and a second. All approved the Third Quarter Budget. There was no public input. Mr. Killgore noted that Dionna Farmer resigned from the Committee. Mr. Herlihy commented on the email from the City Manager regarding attendance. He stated he reassured Mr. Griffin that in November members will be told of their obligations. It is important to be at the meetings because City Council wants our opinions. They want to hear what we think. There are normally seven of us and that gives a fair representation of the whole City. It was noted that there will probably not be another meeting before the two September Public Hearings. This Council Meeting is the last meeting in August because the Council Chambers are going to be used for Early Voting. Assuming that Council is happy with the 3.8556 then that is what will be carried into the Budget Hearings, although they can make changes at that meeting. There won't be any meeting scheduled unless there is a major decision and Council goes in another direction then this Committee might want to regroup. The meeting was adjourned at 6:53 p.m. Minutes prepared by Cynthia Watson. Minutes approved at the January 30, 2017 Citizens Budget Review Advisory Meeting.