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HomeMy WebLinkAbout07-10-2017 BAC MinutesCITY OF SEBASTIAN CITIZENS BUDGET REVIEW ADVISORY BOARD MINUTES OF REGULAR MEETING JULY 109 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. Larry Napier Mr. Michael Frank Mr. Sergio Mota Mr. Bruce Hoffman Ms. Andrea Ring (A) Members Not Present: Mr. Harry Hall — Excused Mr. Tim Slaven Ms. Victoria Flaherty (A) Also Present: Mr. Kenneth Killgore, Administrative Services Director Ms. Susan Mann, Recording Consultant Mr. Napier noted that Ms. Flaherty has been absent for 3 meetings and asked what the procedure is. Mr. Killgore responded that it is handled by the City Clerk's office. 4. Approval of Minutes A. Meeting of June 19, 2017 Mr. Napier called for additions, deletions or corrections to the June 19, 2017 minutes. Ms. Ring stated that in her opinion the minutes are not complete because they do not show her calling the Chairman out of order because a motion was not stated clearly before a vote was called for. She agreed that the minutes do reflect the video, but the video is not complete. She asked if any of the other Committee Members remember the meeting as she does. Mr. Napier explained that only the Chair can call a member out of order and in the future if there is a problem to call for a point of order. Mr. Herlihy responded that the video recordings are complete from the beginning of the meeting until the end and are not edited for any reason. Mr. Napier called for any further discussion; hearing none he called for a motion. Citizens Budget Review Advisory Board Page 2 Meeting Minutes of July 10, 2017 A motion to approve the minutes as presented was made by Mr. Herlihy and seconded by Mr. Frank. Mr. Hoffman requested changes on page 3 paragraph 2, change the word passed to scheduled; paragraph 4, change upcoming budget to 2017/2018 budget; page 5 paragraph 5, change the opinion, to his opinion. Mr. Napier called for any further discussion; hearing none he called for a vote. With a voice vote, the motion passed, five in favor and one opposed. Ms. Ring opposed the motion. 5. Presentation by Ken Killgore, Administrative Services Director and Committee discussion of the Draft Budget and Capital Improvement Plan Updated Recommendations. Mr. Killgore stated that his presentation will focus on the General Fund and the proposed millage rate. He showed a slide with the February 8th City Council motion regarding the budget, noting that it directs the Budget Review Committee to prepare a budget with not one penny more than we need to — to maintain our quality of life. He explained that the revenue is based on the 3.4 Ad Valorem Millage Rate and what the other changes were. He noted that the result is a net reduction of $2,935. He reviewed the expenditures and explained the changes, noting that these changes resulted in an increase of $42,391. He provided an explanation on the Early Retirement Payback, the Overview of the General Fund, details on the change in Personnel Costs, Summary of Changes, Operating Costs, Capital Purchases, Transfers, and Balancing Tactics. He stated that there was a significant increase in the taxable property values over what had been estimated. He provided an explanation of what the difference in revenue would be using the 3.4 Millage Rate vs. the 3.8 Millage Rate. He reviewed the tax roll additions and noted that there is a significant increase. He reviewed how the Millage Rate would impact property owner's taxes. Mr. Hoffman asked, regarding the proposed 3.4 Millage Rate, if he is recommending going below Rolled -Back Rate. Mr. Killgore responded that after reviewing the proposed budget with the changes that were identified he is comfortable with the 3.4 Millage Rate. He explained that the 3.4 would be sufficient to cover the City's expenses, but the 3.8 Millage Rate is going to be recommended to City Council to cover any items that may be identified before September. He stated that the City can always lower the Millage Rate, but after the tax notices are sent out it would involve a very large expense to notify residents, via first class mail, of an increase. He presented a slide showing the historical Millage Rates and explained the years that the proposed rate and the final rate were different. He provided a review of how the proposed increase in Homestead Exemption will impact the homesteaded properties, non -homesteaded and commercial properties. He explained the revenue that would be generated from the different Millage Rates and how that would affect homesteaded properties. Mr. Hoffman stated that he is astounded that the budget can be balanced at a Millage Rate of 3.4. Mr. Killgore responded that it is a result of the Early Retirement Program Citizens Budget Review Advisory Board Page 3 Meeting Minutes of July 10, 2017 savings. He stressed his concern about maintaining the Reserves to protect the City in case of a storm or other unseen major expense. He stated that although the City will receive reimbursement from FEMA for the dock repairs caused by the last hurricane, in 5 years they could require payback of those funds. Mr. Hoffman stressed his concern about how the Increased Homestead Exemption, if passed, will negatively impact the City's budget. He stated that if the City has to raise its Millage Rate to compensate for the revenue reduction the residents will be very upset. Mr. Napier interjected that the rise in property values will offset the increase. Mr. Killgore responded that is correct, but if the cost to provide services increases that is what will create the problem. Mr. Herlihy reiterated his concern regarding the shortfall that will be created by the increased exemption and the need to consider maintaining a Millage Rate that will allow the City to build a cushion to reduce the impact of the reduction of revenue. Mr. Napier stated that he would like to see an additional one-half million budgeted for road repairs. 6. Public Input Mr. Napier called for public input; hearing none he continued with the agenda. 7. Staff Matters -- Ken Killgore, Administrative Services Director — None 9. Board Matters A. Comments/Discussion by Individual Committee Members Mr. Napier called on Mr. Herlihy to show his PowerPoint Presentation to the Board. Mr. Herlihy stated that he will review the presentation, answer questions and make whatever changes that are needed before presentation to the City Council on Wednesday. Mr. Herlihy reviewed the points in the budget discussions and provided details on each. There was discussion regarding road repairs and the Septic to Sewer budget. He reviewed the Key Elements in the 2017/2018 General Fund Proposed Budget and provided details on each. He reviewed the Other Items in the 2017/2018 explaining the Roads Budget, DPW Garage, Sewer Connectivity, All Aboard Florida, Working Waterfront P3, Airport and Golf Course Loan Paybacks. He continued with the Lagoon Funding and current Septic to Sewer and noted the two have been combined. He reviewed the Public Safety and City Staff Changes Reduced Costs. He reviewed the increase in the property values and stated that if the 3.8 Millage Rate, the same as this year, is used it will raise additional revenue of $342,362. He explained that the 3.8 rate is used for the tax notice only and Council can take the action they deem appropriate Citizens Budget Review Advisory Board Page 4 Meeting Minutes of July 10, 2017 when the final millage rate is set; by including this information in the presentation the Council will be aware of the amount that will be raised over what is needed to fund the proposed budget. He asked if the Board would want to suggest options for use of the additional funds for either roads, Septic to Sewer or as was discussed to build a cushion against the impact of the increased homestead exemption. Mr. Napier asked if the dock repair expense had been deducted from the General Fund Reserve Balance. Mr. Killgore responded no, that the invoice has not been paid. Mr. Herlihy explained the General Fund Reserve elements. He stressed that it has been the recommendation of the Board to "borrow" from the fund and not make permanent withdrawals. Mr. Herlihy concluded by stating the action necessary to approve the recommendation of the 3.8 Millage Rate for the purposes of the DR420 which is the same as last year's actual rate. Mr. Hoffman stated regarding Budcom Options, he would defer to the City Engineer on the roads and feels there are sufficient funds in the Septic to Sewer. He would prefer to create the cushion against the shortfall that could be created if the increase of the Homestead Exemption is passed. He stated that he supports keeping the general fund at the level it is at this time to be prepared for unforeseen expenses. He stated that he understands Council's desire to keep taxes low, but feels that consideration should be given to what the City will face in the next few years. Mr. Herlihy stated that he believes the Septic to Sewer has sufficient funds and the roads budget was set by staff to cover what they. anticipated would need to be done. He expressed his concern about preparing for the shortfall that would be caused by the increased Homestead Exemption. Mr. Frank stated that he is in favor of the rolled -back rate and feels that the increase in property value will help offset the shortfall caused by the Homestead Exemption increase. Ms. Ring stated that she supported recommending the 3.8 Millage Rate to the Council to allow for any unforeseen expenses that could be identified before the final rate is set in September. She also supported taking action that would help prevent the need for a large increase when the increased Homestead Exemption is passed. Mr. Mota stated that he supports the 3.8 Millage Rate and agrees with establishing a cushion in anticipation of the reduced revenues caused by the increased Homestead Exemption. Mr. Napier stated that he supports the 3.4 Millage Rate which is less than Rolled -Back. He noted that the consensus is that there are sufficient funds in both the roads and Septic to Sewer. He asked if the Board needs to take further action since the 3.8 Millage Rate was passed at the last meeting. Citizens Budget Review Advisory Board Page 5 Meeting Minutes of July 10, 2017 Mr. Herlihy suggested that the Board recommend the 3.8 Millage Rate for the DR420 and before the final Millage Rate is set by City Council to propose to them considering establishing a fund to help offset the shortfall that will be created by the increased Homestead Exemption. Mr. Napier stated that would require a motion. Mr. Hoffman made a motion "That Ed's presentation, minus the last slide, be presented on Wednesday to City Council with the idea that we recommend the 3.8 for the 420 disclosure and that we, in line with Mr. Frank's comments, support the City's Administration Budget with the 3.4 rate, but that we want them to give serious thought and consideration to the future Homestead Exemption Referendum which will require a tax increase at some time in the future." The motion was seconded by Mr. Herlihy. Following a brief discussion about the motion's intent, it was agreed that it stated the Board's recommendation to the Council. Mr. Napier called for a vote. ROLL CALL: Mr. Herlihy —Yes Mr. Mota — Yes Mr. Napier — No Mr. Hoffman —Yes Mr. Frank — Yes Ms. Ring — Yes Motion Passed: 5 —1 Mr. Herlihy stated that he will send the presentation to Mr. Killgore who will forward it to the Board for review. He requested that if there are any changes they be communicated to Mr. Killgore as soon as possible. Mr. Napier suggested providing the Council a memorandum rather than the PowerPoint Presentation. Mr. Herlihy explained that experience has proven that the PowerPoint is helpful in showing the Council what the Budget Review Committee is recommending. Mr. Mota supported the presentation, stating that is easier to understand the rationale if it is explained. B. Discussion of Topics for Next Meeting on July 31, 2017 Mr. Napier instructed Mr. Killgore to follow the same format for the next Agenda. 9. Adiourn — There being no further business Chairman Napier adjourned the meeting at 7:15 p.m. By: Date: Chaimidn Larry Napier Ism