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HomeMy WebLinkAbout06-19-2017 BAC MinutesCITY OF SEBASTIAN CITIZENS BUDGET REVIEW ADVISORY BOARD MINUTES OF REGULAR MEETING JUNE 19, 2017 1. Chairman Napier called the Citizens Budget Review Advisory Board Meeting to order at 6:00 p.m. 2. Pledge of Allegiance was recited by all. 3. Roll Call Present: Mr. Ed Herlihy Mr. Tim Slaven Mr. Larry Napier Mr. Michael Frank Mr. Bruce Hoffman Mr. Harry Hall Ms. Andrea Ring Members Not Present: Mr. Sergio Mota— Excused Ms. Victoria Flaherty Also Present: Mr. Kenneth Killgore, Administrative Services Director Ms. Susan Mann, Recording Consultant 4. Approval of Minutes A. Meeting of June 5, 2017 Mr. Napier called for any corrections to the minutes; hearing none he called for a motion. A motion to approve the June 5, 2017 meeting minutes as presented was made by Mr. Hoffman, seconded by Mr. Hall and carried unanimously by voice vote. 5. Presentation by Ken Killgore Administrative Services Director and Committee discussion of the draft Budget and Capital Improvement Plan Recommendations. Mr. Killgore stated that the 2017-2018 Recommended Budget and Capital Improvement Program Booklet was distributed to the Board. He explained that it is a draft, staff is still working on finalizing the expenses and the certified Ad Valorem Tax information has not been received. Citizens Budget Review Advisory Board Page 2 Meeting Minutes of June 19, 2017 Mr. Killgore continued by reviewing the Power Point Presentation he had provided to the Board (copy attached). He explained what is covered in the presentation and stated that he would be happy to answer any questions either during the presentation or at the end. He stated the expenses are slightly less than in the 2017 budget; revenues are slightly more than in the 2017 budget; as directed by City Council the same Ad Valorem Tax Revenues as last year were used in this budget; and the Reserves are fully replaced for the costs of the Voluntary Early Retirement Program. He reviewed the General Fund Summary of Changes in detail and noted that there was a net budget decrease. He reviewed the Personnel Cost and noted they have increased. He provided details on Pay and Benefits and Position Changes for 2018. He stated that the additional personnel included in the budget are the result of the savings from the Voluntary Retirement Program. He reviewed the Operation Costs providing details on each category regarding increases/decreases and noted the net budget amount is up. He continued to the Capital Purchases and noted that it is down. He explained that instead of budgeting for equipment replacement in each department any funds necessary can be allocated from the Equipment & Facility R&R Reserve Funds. He stated the Transfers out of the General Fund to other funds is reduced and provided details on the Funds and amounts and the reason for the reduction in the proposed budget over the current year budget. He reviewed the Revenues and Balancing Tactics explaining the revenue sources providing details on the changes and the reasons for the changes. He provided a detailed explanation of the items that were not included in the budget. He reviewed the Enterprise Funds, Golf Course, Airport, Building, and provided details on the estimated revenue and expenses of each. He reviewed the Special Revenue and other Revenue Funds, Local Option Gas Tax Fund, Parking in Lieu of Fund, Discretionary Sales Tax, Riverfront CRA Fund, Recreation Impact Fee Fund, Stormwater Utility Fund; Special Revenue/Trust Funds Law Enforcement Forfeiture Fund, Cemetery Trust Fund; Debt Service Funds, Discretionary Sales Tax Debt Service, Stormwater Utility Debt Service providing details on the increases or decreases projected in the draft budget. He reviewed the Property Values and Millage: Estimated Values/Roll-Back Rate and provided information regarding the property value increase and how using the same millage rate or the roll -back rate would impact revenues. He also discussed what the impact would be considering reassessments vs. new properties. He stressed that this is an estimate only because the final information has not been provided. He reviewed the Tax Roll Additions for years 2012-2016 and stated that his estimated revenue is Citizens Budget Review Advisory Board Page 3 Meeting Minutes of June 19, 2017 conservative and based on the prior years. He provided details on how the 3.5 Assumed Roll -Back Rate and the 3.8 Millage Rate would impact residential and commercial properties. He reviewed Other Considerations; Unsettled Personnel Issues; Set Proposed Millage Rate higher to allow for flexibility because if the millage rate has to be increased the City must send each resident by USPS the information on the increase which results in a very high cost. He stated that a Referendum has been passed scheduled to increase Homestead Exemptions; he provided a detailed explanation of how the increase will reduce the City's Property Tax Revenue. He noted that the Referendum will be on the November, 2018 ballot and if passed will be implemented January 1, 2019 impacting the City's Fiscal Year 2019-2020. He cautioned the Board that this situation must be kept in mind when budgeting for the next two years. He concluded his presentation and offered to answer any questions. Ms. Ring asked what the monies designated for the Indian River Lagoon are to be used for. Mr. Killgore explained that the funds were spent for membership in the Indian River Lagoon Coalition and other small projects such as the Oyster Mats; the membership will not be renewed and the City will be able to continue to fund the smaller projects. He stated that the funds saved would be better used by applying them to the Septic to Sewer project. Ms. Ring asked if the savings could be used to install a baffle box which would filter the drainage and better protect the lagoon. Mr. Killgore responded that it would be more cost effective for the City to explore the possibility of a matching grant for the baffle box. He provided details on how much money will be available for Septic to Sewer Grants at the end of the year and commented that there have not been a large number of residents applying for the grants. Mr. Hall asked for information regarding the amount of money involved in the Early Retirement Program. Mr. Killgore provided a detailed explanation of how the Early Retirement Program was established. He noted that it was funded from the Reserves and one half of the expense was repaid and the remaining balance will be repaid in the apseming 2017/2018 budget cycle. He explained that with the cap City Council placed Capital Improvements there was a savings and that was applied to reduce the balance due from the Early Retirement Program. Mr. Hall referred to the golf cart purchase and noted that the building in which they are stored is leaking and asked if it would be repaired. Mr. Killgore responded that he did not have an answer regarding repairs to the building. Mr. Hoffman asked if the cost of proposed Maintenance Facility would be funded through the DST or if it would be financed. Mr. Killgore responded that the current Capital Projects Plan assumes the end of the DST revenue, but with its extension for an additional 15 years the funds would be available to fund it internally. Mr. Hoffman suggested seeking outside financing and when the existing site is sold to use those funds to pay off the financing. Mr. Killgore responded that is an option, but if the City Citizens Budget Review Advisory Board Page 4 Meeting Minutes of June 19, 2017 has the money, it would be more cost effective to fund the construction without borrowing the money. Mr. Hall asked, if needed, could a police dog be purchased from the Law Enforcement Forfeiture Fund. Mr. Killgore responded that State Statute clearly does not allow budgeting items for this fund. Mr. Hall responded that the purchase of police dogs from this fund is exempt from the State Statue and if a dog is needed, this would be a source of revenue. Mr. Killgore stated that the proposed Police Department Budget did not include a police dog. Mr. Hall suggested using the Forfeiture Fund to establish a Body Cam pilot program. Mr. Killgore responded that he did not like to see a pilot program started and proven successful without consideration of the impact on the overall budget. 6. Public Input Mr. Napier called for Public Input; hearing none he continued with the agenda. 7. Staff Matters — Ken Killgore Administrative Services Director Mr. Killgore stated that until the City has confirmation of the final property tax revenue the budget cannot be finalized. He expressed his appreciation for the Board's patience. He asked the Board to provide their comments on the Draft Budget this evening so he will have as much time as possible to make any changes that are identified. 9. Committee Member Matters A. Comments/Discussion by Individual Members Mr. Napier advised the Board that this is the time to ask their questions or make their suggestions on the Draft Budget. Ms. Ring reiterated her concern that a baffle box be included in the Budget. She asked if the Indian River Lagoon monies in the budget could be used. Mr. Killgore responded that is possible, but he supported seeking grant funding prior to placing the full cost in the Budget. Mr. Hall asked what is proposed to be done with the monies budgeted for Swale Improvements. Mr. Killgore stated the swales on private property sometimes become blocked and the owner is not able to clear them which obstructs the proper flow of the stormwater. He explained that some funds are being budgeted so the City could provide assistance, to those needing it, to keep the swales clear. He stated that the preliminary thought is to award grants to help residents pay for clearing swales or possibly hiring a contractor to perform the work. Mr. Hall asked if any of the funds budgeted in Local Option Gas Tax for traffic calming would be used for any sort of traffic control device on Barber Street and Joy Haven. Mr. Killgore responded that it had not been identified in the information he received from Citizens Budget Review Advisory Board Page 5 Meeting Minutes of June 19, 2017 staff for inclusion in the Budget. Mr. Hall stated that the issue had been discussed some time ago, but no additional information had been provided on possible funding sources. He expressed concern about how dangerous the intersection is. Mr. Hall referred to the budget item for road repairs and asked if any of the smaller, residential streets will be addressed. Mr. Killgore responded that the City Engineer evaluates the condition of the streets and determines which ones will be included in the budget based on their condition. He stated that another consideration is to work on roads in the same area and not have crews moving from one side of town to the other. Mr. Hall stated that he is concerned that the amount budgeted for road work is sufficient to keep the City's roads in good shape and not just maintain status quo. Mr. Herlihy stated that he has seen a computer generated chart showing the roads. He explained that the roads are rated as to condition and repairs are budgeted accordingly. He continued that the Board needs to be prepared to advise the City Council on the millage rate to be set. He reiterated that the rate set is the maximum because if it is set too low and has to be increased the City is required by law to send a first class mailing to all residents, which is very expensive. He suggested recommending the 3.8 millage rate as discussed which should cover the draft budget requirements. He explained that if the Council approves using the 3.8 millage rather than going to the roll -back millage rate an additional $329,000 would be generated. He stated these additional funds could be used toward septic to sewer grants to help residents with their expense. He stated that another thought would be to establish a cushion against the lost revenue caused by the increase in the Homestead Exemption. He expressed that doing so for the next two years the City would have time to adjust to the reduced revenue. Ms. Ring stated that she supports establishing a cushion to help make up for the lost revenue caused by the increased homestead exemption. Mr. Frank stated that Mr. Herlihy made a valid point. He thanked Mr. Killgore for his informative presentation and work on the budget. Mr. Napier stated, regarding the budget for road repairs, that there is approximately half in the draft budget than was spent in the current budget year. He requested that staff assign dollar amounts to the road repairs on the chart of streets and provide it to the Board for review. Mr. Killgore responded that there was quite a bit of road work already performed in the last two years so it was the his opinion that the backlog had been caught up thus requiring less in the upcoming budget. Mr. Napier stated that he would like to see more budgeted in the out years and provided his suggestion of where the funds could be found. He stated that there was nothing in the budget for canal repairs. Mr. Killgore responded that at the direction of the City Council, if a bulkhead failed, it would not be replaced; the area where it was located would be smoothed into a slope going to the water. Ms. Ring urged the Board to increase the amount in the road budget in order to be able to do better repairs that would last longer. Citizens Budget Review Advisory Board Page 6 Meeting Minutes of June 19, 2017 Mr. Napier stated that he does not support using the 3.8 millage rate and designating the additional revenue to septic to sewer or as a cushion against the lost revenue from the homestead exemption increase. He supported recommending the roll -back millage rate to the City Council which would result in no increase in property taxes, but would still meet the requirements as indicated in the draft budget. He stated that in his opinion if there are any excess funds they should be allocated to either the septic to sewer or the road work. Mr. Hall asked if the roll -back millage would cover the draft budget. Mr. Killgore responded that he will not know what the roll -back millage rate is until he receives the DR420. Mr. Hoffman supported Mr. Herlihy's suggestion to recommend the 3.8 millage rate, which is the same as this year, to Council for the purpose of the notification to residents. He reiterated that the rate can always be lowered, the point is that it cannot be increased without a great deal of expense. A motion that at the July 12th City Council Meeting, where they are going to set the maximum millage for the DR420, that we recommend a millage rate of 3.8, was made by Mr. Herlihy and seconded by Mr. Hoffman. ROLL CALL: Mr. Herlihy —Yes Mr. Slaven — Yes Mr. Napier — No Mr. Frank — No Mr. Hoffman —Yes Mr. Hall —Yes Ms. Ring — Yes Motion Passed: 5 — 2 Mr. Herlihy stated that the Board should make a recommendation to City Council regarding funds raised by the 3.8 millage rate be earmarked for one of three uses, road repairs, septic to sewer or to provide a cushion against the lost revenue caused by the increased homestead exemption. Mr. Napier responded that he does not support establishing a cushion because increased property values would offset the increased exemption. As the result of a detailed discussion regarding the additional funds raised should the 3.8 millage rate be adopted, it was agreed that a recommendation to City Council should be made to use the additional funds for road repairs and septic to sewer. A motion to recommend to City Council a millage rate of 3.8, any increase, which is projected to be approximately $329,000, be used by the City Council for one of two additional purposes which would be road improvements or sewage linkage was made by Mr. Hall and seconded by Mr. Frank. During discussion Mr. Hoffman expressed concern about trying to predict the Council's action regarding the millage rate. Ms. Ring stated that she felt the motion is premature. Citizens Budget Review Advisory Board Page 7 Meeting Minutes of June 19, 2017 Mr. Herlihy explained that he may have been premature in suggesting this recommendation be made now because the actual millage rate will not be set until September. After extensive discussion regarding the schedule for the City Council to set the millage rate and hold the public hearings Mr. Napier called for a vote on the motion. ROLL CALL: Mr. Herlihy —No Mr. Slaven — No Mr. Napier —Yes Mr. Frank — No Mr. Hoffman — No Mr. Hall — Yes Ms. Ring — No Motion Failed: 5 — 2 B. Proposed Topics for Next Meeting Following a discussion regarding the presentation Mr. Herlihy is preparing, concerns about the roads needing repairs, etc. Mr. Napier directed Mr. Killgore to follow the same format for the next meeting as he did for this meeting's agenda. 10. Committee Member Next Meeting Date (Monday, July 10, 2017) 11. Adjourn — There being no further business Chairman Napier adjourned the meeting at 8:36 p.m. By: Date: 2hlAo/i Chair an Larry Napier /sm Minutes approved as corrected on pages 3 and 5.