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HomeMy WebLinkAbout06-29-2020 BAC MinutesCITIZENS BUDGET REVIEW ADVISORY COMMITTEE MINUTES OF REGULAR MEETING JUNE 29, 2020 Chairman Napier called the Citizens Budget Review Advisory Committee meeting to order at 6:00 p.m. II. Pledge of Alleaiance was recited by all. III. Roll Call Present Mr. Lewin Mr. Hall Mr. Napier Ms. Cerda Mr. Hoffman Mr. Herlihy (via Zoom) Absent Mr. Keerthi Weragoda (a) -- Excused Also Present Paul Carlisle, City Manager Ken Killgore, Administrative Services Director/CFO Cindy Watson, Human Resources Manager (via Zoom) Janet Graham, Technical Writer (via Zoom) IV. Acoroval of Minutes A. Meeting of March 16, 2020 Mr. Napier asked if all Committee members had reviewed the Minutes of March 16, 2020. All indicated they had. He called for a motion. A motion to accept the Minutes as presented was made by Ms. Cerda, seconded by Mr. Lewin, and approved unanimously via voice vote, including Mr. Herlihy via Zoom. V. Presentation of Draft Budaet by Ken Killgore. Administrative Services Director/CFO and Committee Discussion of the Draft Budget and Caoital Improvements Plan Mr. Killgore made a PowerPoint presentation (SEE ATTACHED). He reviewed that it has been a difficult year so far. He gave a brief overview of what has been submitted by staff to date. There is still a lot to be settled. The budget has been balanced, but there are CITIZENS BUDGET REVIEW ADVISORY COMMITTEE PAGE 2 MEETING MINUTES OF JUNE 29, 2020 some areas that he is not happy with. Staff will continue to work on it up through the August meeting with City Council and then finally in the September public hearings. Mr. Killgore focused primarily on the General Fund Revenues. He touched briefly on the Enterprise and other funds. There were no additions to personnel. The General Fund budget had a $302,408.00 decrease, which is approximately a 2.3% decline. He pointed out how the negative increase in personnel costs was arrived at. Mr. Hoffman asked if the health insurance issue has been settled already. Mr. Killgore stated staff met with the broker, who met with the carrier, and finally got the premium down 3%. Mr. Hall asked for clarification as to the "added responsibilities" in the personnel section. Mr. Carlisle stated that some employees are being reclassified and will be handling more responsibilities. Since those employees will have added responsibilities and duties, the City is going to give them a step-up in their pay per the union contract. Some are nonunion, but mostly are union employees. Mr. Killgore stated the Revenue Assumptions section is the area that troubles him the most. The figures included were used to balance the budget. The franchise fees appear at this point in time to be about the same as were collected last year. Usually this item is budgeted for growth. He made the assumptions that by early next fiscal year things will be better, and there will be a 4.5% increase over this year. State revenues are down 35% when April of this year is compared to April of last year. He hopes there will be some growth in those revenues by October or November if the country continues to stay open. As to State Revenue Sharing, he stated that around August they usually furnish the City the amounts for the next 12 months. This year, they have already notified the City that the June and July payments are reduced from what they promised last August that the City would get on a monthly basis. So the City took a big hit there. He explained that there would be $50,000.00 recovered due to the COVID-19 pandemic through the CARES Act. The County has received a large amount that they are going to allocate back to the cities to help with expenses related to the pandemic. Mr. Carlisle added that the City believes that number is going to be significant. He stated that some of the projects for next year were pushed further out. If the economy recovers, those can be put back in the budget. Mr. Hall asked regarding the property tax, if anyone has any idea what the collections are going to be for next year. Mr. Killgore stated he did include a slight increase in delinquents for next year. Again, that is still an unknown. Mr. Killgore reviewed that the City budgets 96% of the tax roll that is received each year. Over the last several years, that figure is just above 96%. CITIZENS BUDGET REVIEW ADVISORY COMMITTEE PAGE 3 MEETING MINUTES OF JUNE 29, 2020 Mr. Lewin asked if that 4.5% increase that was projected is going to be left as it is or will there be a time in the coming months when that will have to be adjusted. Mr. Killgore answered that he hopes sometime between now and September he can get a better handle on things. Mr. Carlisle stated there are some projects that were cut and/or pushed out to some future date. Mr. Killgore reviewed the Enterprise Funds singly. He is projecting a long-term reduction in the golf course debt. Mr. Hoffman inquired if the rent to the airport was lowered in the past to somewhere around $90,000.00. Mr. Carlisle stated that was talked about, but it was decided not to do it. Regarding the Airport funds, there are no pay raises budgeted. Regarding the Building Fund, there are no problems there, as there are ample reserves there. As to the Special Revenue and other funds, the gas tax fund is down 31% comparing March of this year and March of last year. The Discretionary Sales Tax is down 37% in April compared to April of last year. There are some major projects, such as the $500,000.00 budgeted for road reconstruction work. The Riverfront CRA fund showed an increase of 4% in taxable values over last year. That is a positive sign for the growth in the CRA. Mr. Killgore stated that the City has been paying 100% of the landscaping in the CRA district out of CRA funds. This year that was reconsidered. It was decided that, because a lot of that cost is for work done in the Swale areas or the drainage system, half of that cost will be moved to the Stormwater Fund. Half of the contract will still be paid out of the CRA funds. Regarding the Recreation Impact Fee Fund, it used to be a concern year to year that the City was not spending the money fast enough. It is supposed to be spent within seven years. There is no question that the Leisure Services Director and the Parks and Recreation Committee have really come forward with a lot of projects over the last couple of years, and it is balanced out for those things that have been requested. It has been reviewed by the Parks and Recreation Committee, and they seem happy with the projected expenditures that are budgeted. All of the fees covering the personnel and operating costs of the Stormwater Fund as well as some equipment replacements have been budgeted for, as well as half the landscaping costs in the CRA area. Significant this year is $200,000.00 that has been allocated to update the stonnwater master plan. It was Mr. Killgore's proposal that half of the sales, according to the ordinance, that are available to help fund the operating cost of the cemetery be transferred to the General CITIZENS BUDGET REVIEW ADVISORY COMMITTEE PAGE 4 MEETING MINUTES OF JUNE 29, 2020 Fund in the amount of $80,000.00 to offset the cemetery's division of operating and maintenance costs. It has been recommended that $85,000.00 be transferred next year and $90,000.00 the following year. The Debt Service fund is just a transfer between funds, where the DST funds are actually paying the Stormwater Utility debt on a bank note that is still outstanding. It will reach final maturity in May of 2022. The Capital Improvement Program is up over what had been budgeted last year. There was $23 million in total over the six -year period. This coming year $27.6 is projected to be paid out or appropriated. Mr. Hoffman asked if, as of November, it is found that things are not as positive as was anticipated, is there a formal process for deciding which of these projects get pushed back. He asked if that has to go to City Council. Mr. Killgore answered that, with the quarterly reporting, staff would come to City Council after amending the budget. Mr. Carlisle stated the ultimate recommendation comes through him, with consultation with Mr. Killgore and staff. After that, recommendations would be made, possibly asking this Committee to support the recommendations. Then the budget amendments would be made with City Council because they are the ones who make the final budget amendments. Regarding property values and millage, the City has already received the certified values from the Property Appraiser. Based on those figures, the City's rollback rate will be 2.8090. Thus, the budget has been constructed to be at 2.9399 millage, which is the same millage as this year. That will have to be advertised because of the rollback legislation as a 4.66 tax increase because the millage would be increased. Mr. Carlisle stated he will be meeting with the Property Appraiser, as he thinks the rate is a little high. Mr. Killgore stated this year the 2.9399 was levied; the year before that 3.1514 was levied. If it was decided that the 3.1514 millage was desired, that would be a much higher percentage increase advertised, but it would generate additional funds that could present more of a cushion or the ability to do more for the City's employees. He reviewed a chart that he had provided to give the Committee an idea about the differences between the 3.1514 millage and the 2.9399 millage. He also provided a history of how the millage rates were arrived at. Mr. Killgore stated it has been a good year for additions to the tax rolls. The only year that was higher than 2020 values of $33 million was 2017, when it was almost $36 million. Mr. Killgore stated the big unknowns presently have to do with the labor negotiations. There have not been discussions started regarding those negotiations at this point. The hurricane season is another consideration, as well as any legal settlements that may be out there that would impact the fund balance. The virus situation is an unknown. So the revenue estimates may need to be adjusted. Hopefully, by October 2020 there will be CITIZENS BUDGET REVIEW ADVISORY COMMITTEE PAGE 5 MEETING MINUTES OF JUNE 29, 2020 some better estimates seen. If not, there may be adjustments in the budget needed. He asked for questions or comments from the Committee. Mr. Herlihy stated he is pessimistic because of the COVID-19 situation. He would like this Committee to consider raising the 3.1514 to a higher number and give City Council the flexibility of having to go to that. Mr. Killgore responded to Mr. Herlihy that the current year rate is at 2.9399. The 3.1514 was the rate last fiscal year. Mr. Herlihy suggested that, if a higher millage number is suggested, it gives City Council the flexibility of setting the higher rate. Mr. Napier stated this is budgeted at the 2.9399 rate, which is the same as this year, which is an increase over rollback for this year. Mr. Hoffman opined that the 2.9399 figure is good. He would rather let the managers manage the budget at least for the initial part of next year, reducing capital expenditures or controlling cost expenditures, before increasing the millage rate. Mr. Lewin stated he is also pessimistic about the future. He stated he is in favor of letting the millage stay the same as last year. Mr. Killgore stated City Council is scheduled to consider the proposed millage on July 22nd. This Committee is scheduled for another meeting on July 13th. He also reminded the Committee that there is a high reserve amount at $5 million, which is a safety valve. Mr. Hall asked if in this budget there is anything being pushed out that needs to be caught up on in coming years. If that is not the case, he asked how much pressure would be put on the City if the millage went back to rollback rate. Mr. Hall stated he is leaning towards the 2.9399 millage rate. Mr. Killgore stated that the capital items that were budgeted were about $213,000.00, which is somewhat less than what had been budgeted last year. When the City went through the recession times there were a lot of deferrals. He stated over the last few years there has been some improvement as far as the overall condition of the fleet and the maintenance of buildings and equipment. The R and R fund is allocated to handle unexpected replacements or repairs. So that is available as well. His feeling is that it is not being cut so deeply that there will be a severe price to be paid as far as this year's budget goes. Mr. Carlisle stated that if things need cutting in the future, it will be cutting into the ability to provide services if the City keeps lowering the millage rate. Ms. Cerda stated she is also pessimistic about the future, and she thinks it is always safe to err on the side of caution. She agrees that this is not where the changes need to be made. VI. Aaree on Next Meetina Date (Monday. July 13. 2020) Mr. Carlisle stated the Governor extended the current meeting procedures through August 1 st, and if the virus continues, he may extend it again. The Committee agreed on CITIZENS BUDGET REVIEW ADVISORY COMMITTEE PAGE 6 MEETING MINUTES OF JUNE 29, 2020 July 13, 2020 to be the date for the next meeting. VII. General Discussion by Members Mr. Lewin thanked Mr. Killgore for all his work. Mr. Hoffman asked Mr. Killgore if the excess FEMA money has been sent back. Mr. Killgore stated he has not sent it back yet. It is set aside in an account awaiting developments. Vill. Comments by Staff_ Mr. Killgore encouraged the Committee members, if anyone has any questions, to feel free to contact him via emails or phone. Mr. Hall asked, if there are any changes made before the next meeting, could he have a list of the changes. Mr. Killgore stated he will be sending a list of changes with the agenda packet for the next meeting. IX. Public Comments — None. X. Adjournment There being no further business, Chairman Napier concluded the meeting at 7:12 p.m. Bv: a u9.�c �. Date: Y/y/L�26 irman Larry�apier 19