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HomeMy WebLinkAbout07-12-2021 BAC MinutesCITIZENS BUDGET REVIEW ADVISORY COMMITTEE MINUTES OF REGULAR MEETING JULY 12, 2021 Acting Chairman Herlihy called the Citizens Budget Review Advisory Committee meeting to order at 6:00 p.m. II. Pledae of Alleaiance was recited by all. III. Roll Call Present: Mr. Hoffman Mr. Wilson Mr. Hall Mr. McGinn (via Zoom) Mr. Herlihy Absent: Mr. Sullivan (a) -- Unexcused Mr. Napier -- Excused Ms. Cerda -- Excused Mr. Newhart -- Excused Also Present: Ken Killgore, Administrative Services Director/CFO Cindy Watson, HR Manager Joseph Perez, AV Technical Assistant Janet Graham, Technical Writer (via Zoom) IV. Approval of Minutes: Meeting of May 17, 2021 Mr. Herlihy asked if all Committee members had reviewed the Minutes of May 17, 2021. All indicated they had. Mr. Herlihy called for a motion. A motion to accept the Minutes of May 17, 2021 as presented was made by Mr. Hoffman, seconded by Mr. Hall, and approved unanimously via voice vote. V. Presentation of Draft Budget by Ken Killgore, Administrative Services Director/CFO A. Power Point Presentation Mr. Killgore made a Power Point presentation (SEE ATTACHED) and pointed out that the Proposed budget will be presented to City Council on July 28". At that meeting, Council has to set the proposed millage rate for the next fiscal year. He stated that it is hoped that the Committee will be in a position to formulate a recommendation tonight to City Council on what you recommend the proposed millage should be. He also stated that this Committee is scheduled for another meeting on Monday, July 19, and if the CITIZENS BUDGET REVIEW ADVISORY COMMITTEE PAGE 2 MINUTES OF MAY 17, 2021 Committee cannot reach a decision tonight, at that meeting there will still be enough time to get the recommendation to City Council before they make their decision on July 28x'. He reviewed that this millage is what goes on the tax notices. We cannot go above that at the final budget hearings in September without incurring additional cost. It is best that the Committee give a proposed millage that gives us some flexibility. Mr. Killgore went over a summary of the General Fund budget, the Enterprise and other funds, and made some comments on the Capital Improvement program and talked about the property values and millage. He described the proposed addition of three employees to the City staff: one in MIS, one in the Police Department, and one in Leisure Services. There are no changes proposed to other positions. The total increase in the budget as it is proposed at this time is 1.6% or $227,000.00. The City is out of balance at this point, revenues being $108,401.00 less than expenditures. The rollback rate is calculated to be 3.0043 which adds $137,711.00 or 3.1%from tax roll additions. Personnel costs went up $513,000.00 essentially because the City has allowed a contingency for 3% across- the-board wage increases. The contracts have yet to be negotiated. There are meetings scheduled later this week to begin those negotiations. State revenues are $638,615.00 above this year's budget. Last year the City was dealing with a cutback the State arbitrarily made to its monthly payments. So basically the City has recovered the amount of the monthly payments it was getting from the State. They are now back at normal levels. As a result, the City will be substantially above its current year estimate on state revenues, and he shows a $638,000.00 increase comparing this year's budget for state revenue sharing and next year's budget. Mr. Killgore went line -by-line in describing the proposed budget figures. Mr. Hoffman inquired regarding the golf course numbers. Mr. Killgore stated the budget is balanced for the coming year, but invariably the amount of revenues that are budgeted do not come in as high as projected, typically because of the weather and other negative factors. Mr. Hoffman addressed the $20,000.00 that is budgeted to be spent on a capital project out of a reserve fund that is negative, and he suggested that this project may not be necessary and that maybe a harder look should be taken regarding golf course expenses. Mr. Herlihy suggested that, although there have been many discussions regarding the golf course, it is one of the largest amenities that this City has. He opined that the golf course is something that the citizens of Sebastian want. Mr. Hoffman stated he is not suggesting closing the golf course. However, he feels that the golf course should be more fiscally responsible and take a step back and realize how much money has been spent on the golf course in the last few years. Mr. Killgore pointed out that one of the reasons all that money was spent in the past few years is because during the years preceding that they were not doing any sort of improvements or upkeep or replacing equipment. CITIZENS BUDGET REVIEW ADVISORY COMMITTEE PAGE 3 MINUTES OF MAY 17, 2021 Moving on, Mr. Killgore reviewed the financial state of the airport. He stated that the City is now moving in a positive direction as far as the airport and its future financial position. He also described some of the special revenue funds and the projects that are proposed for next fiscal year. He reviewed that the City is holding off on roadway improvements for next fiscal year, the reason being that over the past couple years there have been a lot of road improvements made. The work on the stormwater system is behind as far as addressing those streets that have been repaved. If the stormwater work is not done, there will be deterioration of the roadways. So the City wants to allow the stormwater work to be done as well as have the consultant back to do an updated road assessment. Mr. Hoffman asked regarding the $100,000.00 for the sidewalks —whether those are new sidewalks or replacements. Mr. Killgore said there is money budgeted for day-to-day replacement. However, the $100,000.00 is being directed towards adding sidewalks. Mr. Herlihy addressed the idea of holding off on road improvements for a year. He described the condition of Barber Street at the east end from Schumann Drive to Route 1 is plagued with potholes, as well as the 90-degree turn, which presents a hazard. He is very concerned about the idea of doing nothing to the roadways in the next fiscal year. Mr. Hall asked, if road improvements are held off, is the City still going to continue to address potholes that develop during that year. Mr. Killgore stated that the normal pothole situation will be addressed. Discretionary sales tax funding shows revenues looking favorable there as compared to the current year. Work has been started on the public works compound, and there was a ribbon -cutting ceremony held there last week. After a question from Mr. Hoffman about what slip lining is, Mr. Killgore described it as a pipe that is inserted into an existing pipe that is buried underground and is failing. Mr. Killgore described a $23 million project for canal restoration, and if the City gets that grant funding, $1 million of the $23 million is all that the City would have to match. Mr. Hall inquired what the priority projects are from the discretionary sales tax, and Mr. Killgore discussed how that is decided. The CRA Fund, the recreation impact fee Fund, the stormwater utility fund, the cemetery trust fund, the stormwater utility debt service, the law enforcement forfeiture fund, and the parking -in -lieu -of fund were discussed. The capital improvement program was described by Mr. Killgore as substantially more than last year. $11,876,000.00 is to be funded by grant funds, and a line -by-line list of the largest items for next fiscal year was explained. Mr. Killgore discussed the actual property values and the millage rates. He discussed the differences when using the 3,1514 versus the 3.0043 millage rates. The rollback rate is computed at the 3.0043 figure. CITIZENS BUDGET REVIEW ADVISORY COMMITTEE PAGE 4 MINUTES OF MAY 17, 2021 Other considerations were described by Mr. Killgore as: • Labor agreements not yet negotiated • Compliance with referendum vote for $15.00 an hour minimum wage • Minimizing operating account increases and funding capital items with other funds or deferring them to future years as prices have spiked, and inflation has to be considered • Recommending setting proposed millage for the TRIM notice at 3.1514. Mr. Killgore called for questions or comments from the Committee members. Mr. McGinn: Asked if there is any sense of the impact of the minimum wage increases, such as how many employees there are and how many dollars will be needed. Mr. Killgore stated he does not have that information readily available. Mr. Hall: • Regarding the public facilities compound, is there a time frame for this project? Mr. Killgore stated the original contract set forth a scheduled completion date of approximately May of next year. It may be some months after that, as there was a delay in getting the necessary permits. It is estimated that this facility will be completed before the end of next fiscal year. He also emphasized that the original contact amount is a guaranteed maximum price. • Regarding the change in the fund balance of $108,401.00, he noted that some of the revenues were above prior years. He asked if Mr. Killgore feels confident that these are good numbers. Mr. Killgore replied that one thing that has happened is the actual group insurance increase for employees is only 4.5% as opposed to the 6.7% increase projection. It is his belief that, if everything else holds true that is in the draft for the general fund, we will be able to actually balance the budget at rollback. • If the City is going to do a one-year delay on road improvements, he is going to suggest to the Committee that we go with the rollback rate, since we are fully funding the budget and still coming in with a balance that is above our targeted $5 million, knowing that during the year there could be other savings. • Regarding the $15.00 minimum wage, he inquired if there are a great many employees that it would affect. Mr. Killgore stated yes, there are a number of employees that are at less than $15.00 an hour. Mr. Wilson: CITIZENS BUDGET REVIEW ADVISORY COMMITTEE PAGE 5 MINUTES OF MAY 17, 2021 • Is concerned regarding the rollback since the wage negotiations have not yet begun. He asked if Mr. Killgore has an idea as to where that is headed. Mr. Killgore stated he does not want to make a statement on that. Mr. Hoffman: • Asked how the dollars from the American Rescue Act have impacted the City's budget. Mr. Killgore stated that the draft budget document that is before this Committee presently does not even address the American Rescue Act fund. • Supports using the rollback rate for the budget. He also supports using the current year's rate for the TRIM. Mr. Herlihy: Regarding the item in the budget that proposes adding three employees, he questions whether these people need to be added to the employee pool. He also asked regarding the need for a crime analyst in the Police Department. His other question is whether there is areal need for an events coordinator. He is concerned that every time an additional employee is added, it is not just the salary, but other expenses are also added. He understands the need for an additional person in the MIS Department. Mr. Killgore addressed the events coordinator position and the fact that the environment changes with time. As far as the additional employee in the Police Department, the requests for public records, the volume of people requesting information, and the need to comply with state statutes and what information is required to be compiled necessitates that we keep up with those demands. Mr. Hoffman also questioned the need for an events coordinator. Mr. Herlihy asked Mr. Killgore if he could ask the City Manager for a justification for that position and when he receives that if he would send it out to all the Committee members. Mr. Killgore said he will pass on the concern. Stated that this city has a very low debt of $804,000.00 as of the end of this budget year. It will all be paid off by December of 2022. Barring that we do not borrow anything in the interim, the City will have no debt. He suggests that that is amazing for this city or any city. He commended Mr. Killgore and his staff for keeping it that way. Regarding the canals, he inquired if the City would have to borrow money for the canal work. Mr. Killgore said that if the City gets the grants, the City's share would be $1 million, but he has not heard anything positive recently about that matter. He cannot say there is a firm commitment. Mr. Herlihy asked, if the City would have to come up with the $1 million, could the City borrow that amount. Mr. Killgore said no, that he would allocate it out of the discretionary sales tax fund. Regarding the millage rate, he agrees essentially with what has been said. However, he has some reservations. Mr. Killgore said he may know tentatively by CITIZENS BUDGET REVIEW ADVISORY COMMITTEE MINUTES OF MAY 17, 2021 PAGE 6 the 281' of July how the labor negotiations are going. Part of the reason for setting the higher millage rate than rollback is things that may happen before the hearings in September. The $300,000.00+ that was spent on the yacht club is an example of unexpected things that can occur. Mr. McGinn recommends that we stay at the 3.1514 millage rate. Comments by Committee Members: Mr. Hall stated he believes the budget should come in at 3.0043, the rollback rate, and that they advertise the TRIM notice at the current millage of 3.1514. Mr. Herlihy called for a motion. A motion recommending to City Council that the TRIM notice be set at 3.1514 as set forth in the CFO's presentation, was made by Mr. Hoffman, seconded by Mr. Wilson and approved unanimously via voice vote. Mr. Herlihy commented that this Committee is somewhat unique in that all of the members are appointed directly by City Council. He believes that this Committee should make a presentation at the City Council meeting when Mr. Killgore makes his presentation. We should tell them what our recommendation is, tell them the things that were brought up here for them to hear if we cannot get an answer that makes sense to all of us about the number of employees that are being added. He stated this Committee should tell City Council that that is a concern of ours. Also, if the City is not spending any money on the roads next fiscal year, then the Committee members should say that so that Council understands that we have spent time looking at this budget, and we have spent time asking questions. He described how the process would work and asked the Committee members if they would support that suggestion. It was the consensus of the Committee that they would support this idea. VI. Public Comments -- None VII. Next Meetina Date -- Monday, July 19, 2021 to review V Quarter Budget Report Vill. Adiourn There being no further business, Mr. Herlihy adjourned the meeting at 7:35 p.m. Bv: 1Y1.7Gi • —YA Date: Aw(=i Js