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HomeMy WebLinkAbout07-16-2025 CC MinutesCITY OF SESASTj,&]N HOME OF PELICAN ISLAND SEBASTIAN CITY COUNCIL FY 2025-2026 BUDGET WORKSHOP MINUTES WEDNESDAY, JULY 16, 2025 — 9:00 A.M. CITY COUNCIL CHAMBERS 1225 MAIN STREET, SEBASTIAN, FLORIDA Mayor McPartlan called the Budget Workshop to order at 9:00 a.m. 2. A moment of silence was held. The Pledge of Allegiance was recited. 4. ROLL CALL Mayor McPartlan Vice Mayor Jones Council Member Dodd Council Member Nunn Also Present: City Manager Brian Benton City Clerk Jeanette Williams BUDGET OVERVIEW BY CITY MANAGER The City Manager welcomed everyone and thanked the Finance Department for all of their hard work on this budget, especially the Assistant Finance Director Jen Smith for getting the proposed budget document finalized. The City Manager said the proposed budget does show a deficit in the general fund of $943,178 based on the current millage rate of 3.1955. The discussions will allow staff to receive feedback from City Council to finalize the millage rate to present to the Citizens Budget Advisory Review Board on Monday, July 21 and then back to Council on July 23. The millage rate will need to be set at the July 23 meeting to send to the property appraiser. He said the budget has a few unknowns such as the police and supervisor union negotiations and property and liability insurance amounts. He said the health insurance would only increase 7% based on the contract the City entered into last year. He said the dental has a decrease and the vision will have a nominal increase. The possible change in the employee retirement account is also an unknown. The withdrawal amount is currently included as well as the 9%contributions for employees. FY 2025-2026 Budget Workshop July 16, 2025 Page 2 He said there were three options: continue to contribute to the CWA; contribute to hourly employees as the City does for salaried employees with Mission Square; or develop a defined pension plan similarly to the police pension plan. He said the last item to consider is a Notice of Intent to Proceed from the Florida East Coast (FEC) Railway for doing rail work on the Barber Street and Schumann Drive crossings for deteriorating conditions. The proposed budget does not include funding for this and based on agreements dated from 1984 and 1959, the cost of the crossing maintenance is the responsibility of the City. The proposed cost for Barber Street is $232,818.12 and the proposed cost for Schuman Drive is $90,548.30 with a total proposed cost of $323,366.42 to address the concrete panels that are in between the tracks. He said staff was in discussions with them and we are looking at Local Option Gas Tax or Discretionary Sales Tax. He said FEC could close the railroad down if the City doesn't pay. He said the budget shortfall now goes up $1.2M. The estimated certified property values provided by the Indian River County Property Appraiser for the City in fiscal year 2026 is $2,494,261,853 which equates to an 8.4% increase in collections of ad valorem taxes. Any increase to the millage rate would be in addition to the 8.4%. If the City goes above the 3.1955, that would be an addition to the 8.4%. Some millage rate options include keeping it the same at 3.1955; or going to the rolled back rate of 3.0148; or going with 3.3305 which brings in an additional collection of $761,000. The departments have really reduced their operating costs and while going to a higher millage rate can be considered, it will only mean that the City can continue to operate the way it has for the past two years. The proposed Fiscal Year 26 General Fund Budget is proposed to increase by $734,691 compared to the amended Fiscal Year 2025 and does include one full time position reduction in the City Clerk's office due to reorganization. Staff continues to move the City forward with the vision set forth by City Council. The City Manager went over the grants that have recently been applied for and pointed out that if the City doesn't apply for the grant, another City will get that money. 6. DEPARTMENT PRESENTATIONS A. City Manager / Non -Departmental He said the City Manager's overall budget has a decrease of 3% with no capital requests but there is $2,450 included for the newly proposed Citizens Academy. He explained that while the Special Projects Director/City Engineer's salary comes out of his budget, there are two stormwater conferences that will continue to be paid from the Stormwater Line Item. FY 2025-2026 Budget Workshop July 16, 2025 Page 3 He shared a list of R & R funding that covers unexpected expenses. He noted these funds are typically spent later in the year. He said in reserves, there is the additional fireworks tariff and a percentage for employee payouts. He said there were some positives from projects that came in under budget that will go back into the Reserve Account. The proposed FY 26 General Fund Budget is proposed to increase by $734,691. compared to the amended FY 25 budget, a 3.9% increase. He noted that quite a few operating increases are related to objectives in the Strategic Plan that will be discussed during those department presentations. Staff continues to apply for grant funding so projects continue to progress with minimal impact to the General Fund. He distributed a list of the grants noting the City has been awarded about $5M and it has cost the City $107K to apply. The City Manager said there are about 76 employees covered by the retirement plan that is in trouble right now. He said the City continues to fund 9% for the hourly and salaried employees. City Manager's Office He said his budget has a decrease that doesn't include any kind of an increase for him at this time. He doesn't have any capital requests. There is an increase in the operating budget on page 17 to help kick off a Citizens Academy. On page 19, the increase was explained for his new assistant. He said travel and per diem was cut by eliminating some conferences and training. The promotional line was increased to accommodate the Citizens Academy and the increased number of sympathy messages needed. He said a new management software will help keep track of all of the projects in one location and his training budget was reduced by moving two stormwater conferences to the Stormwater Division. Non -Departmental He said this was increased due to the CWA pension withdrawal payment which will need to continue for the next 20 years and depending what Council decides to do in the future, there is an earmark of 9% for the continuation of Mission Square or a different plan. Extensive discussion followed on changing the retirement plan by October 1 with the Finance Director, Brian Stewart. The City Manager said the police retirement insurance was reduced due to an officer leaving the system. There is also a reduction in the health savings account, unemployment, additional compensation, and other contractual services line items. Water and sewer indicate a 5% increase. He said he did buy some permanent float decorations to save money on the parade expenses. He placed more money in the FY 2025-2026 Budget Workshop July 16, 2025 Page 4 annual awards banquet line item to have a bigger venue. And finally, the Florida League of Cities increased their annual dues which is paid out of non -departmental. Mayor McPartlan called for a break at 10:31 and upon return at 10:37, all members were present. B. Stormwater Department The City Manager stated the deficit in the 2026 budget is $160,773 but at the amended 2025 budget, there was a deficit of $102,000 that is projected to put some funds back into the stormwater reserve leaving us with an overage of $160,773 that will cover the deficit. Lee Plourde, Stormwater Director, said they will see some maintenance costs for the stormwater pumps. He plans to continue with the roadway paying and drainage improvements to zones 4, 5 and 6. He also plans to continue developing field maps, slip -lining, ditch and canal trimming. The City Manager said the total revenues are a little over $2.8M and as of today there is $160,773 being used from reserves for a total budget of $3M. The Stormwater Director said they do have three operators that can retire at any moment so there is some succession training happening. He described the equipment he plans to purchase in the upcoming year. The City Manager said the master stormwater plan called for two vac trucks. They still have a vac truck that is used 1-2 weeks a month and then it goes into the shop for repair. A new truck is planned to be delivered this summer. Previously staff thought to refurbish the old truck but it was decided they could use one full size truck and a vac trailer to get the job done. The Stormwater Director said they plan to move to the upper Stonecrop drainage with culvert pipes as opposed to the armoring. The City Manager said he gave the division $50,000 to do a fifth ditch cut but there isn't enough to do the whole City so this will be a test area. To help with the funding, staff will be mowing the right of ways and vacant lots to reduce the contractor cost. The Stormwater Director said there will be some training costs. He said all of the concrete is being recycled for rip rap. He has an employee that is a heavy equipment operator by trade that he would like to reclassify. He stated he would like to purchase a shoring box to protect staff. Council Member Dodd and Vice Mayor Jones said they would be in favor of funding the deficit out of reserves because of the division's great progress. Mayor McPartlan agreed, saying they can see the moving water when it rains. FY 2025-2026 Budget Workshop July 16, 2025 Page 5 C. Roads and Maintenance For Fiscal Year 2026, the Public Works Director said staff plans to continue with roadway and pot hole maintenance, inspection of sidewalks, repainting stop signs and stop bars, widen roadway approaches and aprons; and mowing the vacant lots. They will pave roads as needed, continue bridge inspections, and do the PCI this year. The division plans to purchase a breaker hammer for the concrete, a midblock crosswalk for Powerline Road, and continue sidewalk replacement. The City Manager said staff is watching out for driveway culverts that might need to be repaired as they proceed with the road repaving. He said staff is planning to apply for a Safe Streets for All Grant and seeking reimbursement, going back 3 years for road preservation grants. The City Manager stated this budget is about $17K less than last year's budget. The meeting recessed as 12:02 p.m. for lunch and all member returned at 12:52 p.m. D. Fleet Management The Public Works Director said they plan to continue to update and enhance the work order and asset management system. He hopes to have the reclassification of the heavy equipment operator happen to service all of the vehicles. The City Manager said the wage and insurance cost is the largest increase in this division. The Public Works Director said in the past year, inspections were not in the line -item budget but they have been completed and will now bean annual recurring cost. Anew a/c unit is needed along with a hose assembly. He said the heavy equipment technician saved $3,150. The City Manager said a lot of the heavy equipment is in stormwater so this line might be changed from stormwater to general fund to help fund the technician's salary. E. Golf Course The City Manager said they do have revenues exceeding expenses however, he would like to continue to have the discussion to build a fund at the golf course for capital projects. If they continue to get by on the $15,000 annual profit they will be in trouble when it comes to capital items such as a new golf cart building and the front nine greens. He said last year the daily and membership rates were increased and now is an opportunity to find a medium of increasing the numbers of rounds vs. increasing revenue. FY 2025-2026 Budget Workshop July 16, 2025 Page 6 He said general revenues are projected at a 3.8% increase and as they get to the expenses, there is an increase of $27,172 which is a 2.77% increase in the budget. Greg Gardner, Golf Pro, said the annual memberships and club storage should stay the same but on page 3, the comparison does show some room for increases. Council Member Dodd said they could go up close to the Sandridge rates and he asked if that would reduce the play. The Golf Pro said the City did receive a lot of play and broke a record in March 2025. Council Member Dodd said if they approached Sandridge rates and it reduced the play in March it would be beneficial to the course. Council Member Dodd said he didn't see how they could concentrate on paying back the debt to the City and create a capital improvement fund at the same time. He asked if they should pay back the debt knowing they will have to take a loan again to do a capital improvement. One of the capital items is the replacement of the cart barn to which the City Manager said staff is showing the replacement scheduled for 2027. The City Manager said staff would bring the daily rates increase to them later this summer. The Golf Pro reported that the sales in the pro shop did go down somewhat. He said the contractual services such as internet, electric, postage and departmental supplies are pretty set numbers. He said a considerable expense is the airport rent and insurance. He is trying to hold the line on repairs and maintenance in the buildings. The City Manager said the general fund loan is $500,000 and the Building Fund loan was $559,684. During last year's budget workshop, it was decided that they should decide on an annual basis if they should forego the $500,000 loan. Council Member Dodd said he would be willing to forego the loan if they would begin a capital improvement fund. The City Manager said staff was planning to make a payment from the 2024-2025 budget and do it again at the end of the fiscal year. Council Member Nunn said he didn't think they should put the golf course before what is needed in the general fund right now. The City Manager said they would be using golf course funds in the amount of $240,000 which includes the $15,000 annual profit. Vice Mayor Jones was excused from the meeting at 1:37 p.m. FY 2025-2026 Budget Workshop July 16, 2025 Page 7 Council Member Dodd noted they could do the cart barn with existing funds. The City Manager said staff does push things off to see if they can get by. Council Member Dodd said he would like to pay $100,000 a year until the loan is paid off. The Golf Pro said the golf course maintenance is set with the renewal of the contract. The City Manager explained that $26,650 was used to air inject the greens. The Golf Pro said they are keeping $50,000 in the capital line item in case something comes up such as a fertigation system that they might want to try. He said golfers like to see things continually improve. The Golf Pro said the carts are set for the next year. The City Manager said he would look at moving up the cart barn; bring back a daily rate increase in a couple of months and continue to make loan repayment to the general fund. Solid Waste Collection The City Manager said he received the latest report on the collection which shows an overage of $86,000 which includes the franchise fee and commercial collection so he will have funds for first payment for the next fiscal year. F. Community Development / CRA Alix Bernard, Community Development Director, said the biggest expense will be for consultants and other contractual services to rewrite the land development code that hasn't been updated since 2000. The estimate is $170,000 that will be split over 2 1/2 year period. The City Manager said the budget for Earth Day was increased to $2,500; an additional $2,500 was funded for anything that might come from the action plan. Council Member Dodd called for a break at 2:05 pm and upon return at 2:09 pm, Council Members Dodd, Nunn and Mayor McPartlan were present. The City Manager said four pedestrian crossing signs will be installed along Indian River Drive; there will be a grant match to design the Working Waterfront docks. There are also funds dedicated to move forward for the plan at Fisherman's Landing. He also said there is money for the North Central Avenue Catalyst Site that will transfer over the Fisherman's Landing site. FY 2025-2026 Budget Workshop July 16, 2025 Page 8 The Community Development Director said the budget is standard as last year with funds earmarked for Fa4ade, Sign and Landscape Grants, sewer connections and other contractual grant writing. The City Manager said there have been some discussions with FDEP regarding sewer connections. He noted that the County has made an agreement to waive connection fees but still charge the impact fees but the state will pay for impact fees but not connection fees so there is an amount included for impact fees. G. City Clerk Jeanette Williams, City Clerk, said the City Council budget is the same as the current year. She said the City Clerk's budget will also stay the same with the exception of travel and training for her new assistant and the stand-alone election. H. City Attornev Jennifer Cockcroft, City Attorney, said her budget reflects an increase in the contractual services given the recent lawsuit activity along with the special magistrate expense. Cemetery Richard Blankenship, Parks and Recreation Director, said an additional irrigation pump will be added next year, they're designing a new administration building and they're in the process of developing an on-line mapping system so that individuals may look up their loved ones in the cemetery. The capital purchases will include a dump trailer, the irrigation pump, and a zero -turn mower. Council Member Nunn was excused from the meeting at 2:40 p.m. Vice Mayor Jones had rejoined the meeting at this point. I. Parks and Recreation Richard Blankenship, Parks and Recreation Director, said they plan to dredge the Main Street Boat Ramp, complete phase 1 of Riverview Park, and they expect to host more sports programs. His capital projects include the replacement of the park's restroom doors and the allotments to make playground improvements as identified by the parks committee. FY 2025-2026 Budget Workshop July 16, 2025 Page 9 He said improvements are planned for Hardee Park, Schumann Park, and the Friendship Park Tennis Courts. He said once the shoreline is stabilized in Riverview Park the design can begin on the swing and bench park that will include ADA access to the park. The Parks and Recreation Director said to combat the budget cuts, his staff has implemented the See My Legacy Program to help sponsor some of the programs that might have needed to be cut. Facilities Maintenance Richard Blankenship, Parks and Recreation Director, said he planned to replace the roof of the Police Department in addition to the Art Center. He said his budget also included the purchase of another vehicle; funding to replace air conditioning units as needed; and the hardening of the roof over the dispatch center. He said one item they might notice is the considerable expense for the maintenance of the AED's located throughout the City. The City Manager advised Council that was all of the departments scheduled for July 16 and invited everyone to return the following day for the remaining departments. Being no further business, Mayor McPartlan adjourned the workshop at 3:22 p.m. Approved daaattttthe August 27, 25 Regular City Council meeting Mayor Bob McPartlan l�nette Williams, City Clerk -