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HomeMy WebLinkAbout07-17-2025 CC MinutesCITY OF SEgAST1)kN HOME OF PELICAN ISLAND SEBASTIAN CITY COUNCIL FY 2025-2026 BUDGET WORKSHOP MINUTES WEDNESDAY, JULY 17, 2025 — 9:00 A.M. CITY COUNCIL CHAMBERS 1225 MAIN STREET, SEBASTIAN, FLORIDA 1. Mayor McPartlan called the Budget Workshop to order at 9:00 a.m. 2. A moment of silence was held. 3. 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 Recording Clerk Bridget Eakins 5. BUDGET OVERVIEW BY CITY MANAGER The City Manager greeted everyone and immediately began budget presentations. 6. BUDGET PRESENTATIONS A. Police Department The City Manager initiated the discussion on the Police Department budget, beginning on Page 45 of the FY2025-2026 Annual Budget Draft. The City Manager stated that the proposed FY26 budget for the entire Police Department totals $9,077,500, marking a 12% increase over Fiscal Year 2025. This increase, the City Manager explained, amounts to $968,925. Regarding the budget allocation by category, the City Manager noted that Personnel Services account for the largest percentage, with an increase of $858,830 and operating expenses are projected to increase by a small amount of $4,040. He said capital outlay totals FY 2025-2026 Budget Workshop July 17, 2025 Page 2 were $106,055. The cost allocation by division, as presented by the City Manager on page 45 of the budget draft, breaks down as follows: police operations at 57%, investigations at 18%, police administration at 12%, dispatch at 10%, and code enforcement at 3%. Chief Acosta presented the police administration budget, which encompasses his executive assistant, the records department, and the part-time quartermaster. Chief Acosta explained that $2,700 of the overall $4,000 operating expense increase for the entire department is specifically attributable to accreditation services, including the costs associated with housing assessors and related fees. Chief Acosta informed that repair and maintenance (R&M) of Buildings decreased from $2,500 to $1,500, and R&M of office equipment saw a reduction from $23,000 to $13,115, as some items were appropriately reallocated to other budgets. He said departmental supplies decreased from $7,000 to just over $6,000, and small tools and equipment went down from $1,600 to $1,000. Chief Acosta explained that training and education increased from $6,000 to $8,000, partly to accommodate Public Information Officer (PIO) training for the communications and social media manager. Chief Acosta also confirmed that the captain's position was reclassified to a lieutenant's position in the previous year's budget as part of a reorganization. Chief Acosta provided an update on patrol staffing, noting that there are currently 25 active officers out of 31 budgeted positions in patrol. He explained that three officers are awaiting transfer to detective positions due to one detective retiring and two existing vacant detective spots, which will subsequently result in three officer openings in patrol. Additionally, Chief Acosta stated that five officers are currently in training, and one recruit is in the academy. The City Manager recalled the FY24 budget discussion, where two officers were added, bringing the total to 31. Last year, the Council discussed budgeting for 33 officers to ensure even shift distribution, but only 31 FTEs were funded. The City Manager reiterated that the department is still operating with 31 budgeted positions and would approach the Council for additional funding if opportunities arise to fill the two additional positions (to reach 33) with experienced officers. Regarding the overtime budget, which is proposed at $275,000 for FY26, an increase from $240,000 in FY25, Council Member Dodd questioned its necessity given the unfilled positions. Chief Acosta and the City Manager clarified that overtime is essential to cover current vacancies, special events, and operations that necessitate additional officers, such as arrests extending beyond regular shifts or targeted speeding enforcement. They said overtime for outside details is not included in this budget, as it is covered by vendors. The City Manager explained that the increase in the overtime budget is primarily attributed to anticipated pay increases, which will affect the cost of overtime hours. The City Manager emphasized that overtime is meticulously tracked and not disbursed without justification. Chief Acosta confirmed that Sergeants possess the authority to approve overtime, with accountability extending up to Lieutenants. Council Members Dodd and Nunn expressed a desire to fund 33 officers if that is indeed the number required for full manning, even if positions are not immediately filled, to prioritize public safety. The City Manager stated he FY 2025-2026 Budget Workshop July 17, 2025 Page 3 wanted to maintain the current approach of not budgeting for positions not expected to be filled within the fiscal year to avoid holding unneeded funds, while assuring the Council of readiness to request funding for experienced officers should such opportunities arise. Chief Acosta detailed the proposed capital purchases for the Police Department. He stated that the North Gate is slated for an upgrade to an electric gate to facilitate easier access for larger vehicles, including trailers, boats, and the armored vehicle. A carport is planned, Chief Acosta explained, to protect wrapped vehicles, armored vehicle windows, and the boat from prolonged sun exposure. He said tasers are on an ongoing replacement schedule of five per year and noted patrol rifles are also scheduled for replacement due to the previous vendor going out of business and general wear and tear. Chief Acosta listed Night Vision Binoculars and an SRT Rifle Shield, which were previously cut from the budget, have been pushed forward to this year. He said the department is also requesting Flock Safety 911 software, a new system requested by officers for dispatch and radio, enabling real-time listening to 911 calls; Chief Acosta clarified that while from the same company as Flock cameras, it is a distinct system for dispatch. Chief Acosta further explained that the majority of SRT Gas Masks are being replaced due to being outdated and deteriorated by heat. Chief Acosta added SRT Rifles are being switched out sooner due to their high liability and previous vendor issues, with 10 designated for patrol and 10 for SRT. Chief Acosta explained that the capital outlay, funded by the discretionary sales tax, includes annual vehicle purchases, body cameras, and the CAD and RMS system maintenance fee. He reported that old vehicles are being aggressively sold, and the backlog from previous years has been cleared. Council Member Dodd raised concerns regarding potential increases in vehicle costs due to market conditions, prompting a suggestion for quicker ordering. Chief Acosta outlined several changes in the Police Operations operating expenditures. He noted that the repair and maintenance (R&M) of vehicles budget decreased by $2,000, attributed to the department's newer fleet. Chief Acosta explained that R&M of radios doubled from $2,000 to $4,000 due to a tripling of labor costs from their vendor, Communications International. He noted canine expenditures increased by $1,500 due to rising costs, and departmental supplies saw an increase from $66,000 to $83,000, primarily driven by higher ammunition costs and the necessity to purchase more for training with new firearms. Chief Acosta added small tools and equipment decreased from $25,000 to $7,000, as new firearms and sights were purchased this year. Chief Acosta concluded that training and education costs increased due to the gun range raising fees. Chief Acosta provided an update on the investigations division, which has five investigators/detectives assigned. He stated that one detective is retiring, creating two current vacancies that will be filled by transferring three officers from patrol. Chief Acosta noted that there is no capital outlay planned for investigations this year. Regarding the operating expenditure changes on page 58, Chief Acosta explained that professional FY 2025-2026 Budget Workshop July 17, 2025 Page 4 services decreased by $3,000-$4,000, a fee established by the crime lab based on population and the number of submissions. Internet access decreased significantly from $3,000 to $465, as Chief Acosta stated that detectives will now utilize cell phone hotspots instead of laptop internet. He added that R&M of office equipment increased from $16,000 to $19,000, due to software being transferred from the administration budget and R&M Radios increased from $500 to $2,000, reflecting a labor cost increase from Communications International. Lastly, Chief Acosta indicated that dues and memberships increased from $700 to $1,350, as photo lineup software was moved from operations to investigations. Chief Acosta reported that the dispatch division is fully staffed, as are records (which falls under the administration budget). Chief Acosta noted that there is no capital outlay planned for dispatch this year. Reviewing the operating expenditure changes on Page 62, Chief Acosta explained that R&M office equipment increased from $20,000 to $30,300 due to an increase in Criticall software. Chief Acosta also stated that R&M of radios saw an increase due to labor costs. Departmental supplies, however, decreased due to a chair purchase made this year, Chief Acosta concluded. For the Code Enforcement Division, Chief Acosta highlighted a $16,000 fee for new software as a capital outlay. He explained that this software is a key component of the strategic plan, designed to enhance citizen access to code enforcement activities by allowing them to log in, submit reports, and track the status of their complaints. Chief Acosta added that it will also track cases through the entire enforcement process, including hearings and decisions. Council Member Dodd noted a significant increase in salaries for code enforcement. The City Manager clarified that this represents an increase of approximately $36,000 from the amended budget, primarily due to a code enforcement specialist position being filled and potential pay adjustments for the new hire. Regarding operating expenditure changes on Page 65, Chief Acosta explained that other contractual services increased from $550 to $900 due to higher court reporter fees and travel and per diem increased from $500 to $800 to accommodate staff training. He stated postage saw a substantial increase from $38 to $4,500, reflecting both increased costs and volume. Chief Acosta noted departmental supplies rose from $800 to $1,580, largely due to marketing supplies necessary for the strategic plan. Chief Acosta concluded that training and education costs also doubled due to the code enforcement specialist training. Chief Acosta expressed confidence that current staff can train new hires, particularly with the Lieutenant's oversight and close collaboration with the records department. He believes the current two officers can manage the caseload, and the new software will further enhance efficiency through improved communication. Council Member Dodd raised concerns about the process for repeat offenders, suggesting that current procedures allow offenders to comply just enough to avoid penalties before re -offending. This issue, Council Member Dodd proposed, could be a potential agenda item for a future Council meeting. Council Member Nunn inquired about adding a third position for nighttime enforcement. FY 2025-2026 Budget Workshop July 17, 2025 Page 5 The City Manager indicated that the current workload does not necessitate a full-time nighttime officer but confirmed that plans are being developed for nighttime operations to address specific issues, such as RVs on properties. Council Member Jones expressed appreciation for the department and stated that he believes they are doing a good job. Council Member Nunn remarked that not everyone will be satisfied with every decision, but noted that maintaining a fully staffed department is a strong reflection of leadership. Following the conclusion of the Police Department budget review, the City Manager thanked Chief Acosta and Deputy Chief Wood for their presentation. The City Manager then announced the transition to the Building Department budget, noting that the Finance Department's meeting with the Finance Manager had been moved to after the Management Information Services (MIS) presentation, anticipating a more lengthy discussion for Finance. The City Manager expressed his intention to complete the remaining department reviews before lunch, with Finance closing out the meeting afterward. B. Buildin4 Department The City Manager commenced the Building Department budget presentation, starting on Page 138. The City Manager highlighted that anticipated revenues for the budget are decreasing to a certain extent, indicating that while building activity continues, it has slowed. He emphasized that the department is anticipating the use of reserves to fund the Building Department budget, explaining that the city has been cited in audits for two consecutive years for holding excess funds in reserves within this department. He said that as a result, reducing this surplus has become a priority, with succession planning and certain software and capital purchases playing a role in this reduction. The City Manager stated that the proposed revenues for FY26 are $1,109,650, representing an increase of approximately 6.4% from the projected figures for the current year, a difference of just over $65,000. He further noted that the budget currently shows expenses in the amount of $1,585,407, an increase of 25% in the budget. The City Manager clarified this increase is largely due to succession planning, including the reclassification of a position, and additional operating expenses aimed at aligning the department's reserves with auditor recommendations. The City Manager then turned the presentation over to the Building Director to elaborate on positions, capital outlay, and the operating budget. The Building Director began by discussing the department's accomplishments this year, particularly in succession planning. He reported the successful implementation of a remote video inspection (RBI) program, seamlessly integrated with their My Government Online building department program. The Building Director explained that this program is proving highly successful, especially for roofing, air conditioning, and some plumbing inspections, with an average of 60 to 80 RBI inspections conducted monthly. He highlighted that roofers FY 2025-2026 Budget Workshop July 17, 2025 Page 6 particularly appreciate the efficiency of RBI, as it allows them to complete portions of a roof and receive timely inspections without waiting for an inspector on -site, thus facilitating quicker progression to the next construction step. Council Member Dodd inquired if an electronic device was used for transmission, to which the Building Director affirmed. Council Member Jones asked if the inspector was in the office during these virtual inspections, and the Building Director confirmed this. The Building Director acknowledged that while connectivity issues occasionally arise, the city's compact size allows them to dispatch a field inspector promptly if an RBI fails. He expressed positive feedback on the program and confirmed its continued use as part of their strategic plan objectives, which the City Manager complimented as a great addition and commended the Building Director for thinking outside of the box. The Building Director added that they had explored several vendors, and this particular system's connectivity proved effective, having been fully installed for about three months. The Building Director further elaborated on succession planning, stating that the department hired another Building Inspector III this year. He emphasized the new inspector's extensive experience and licensed certifications, which are crucial as only licensed personnel can conduct structural, electrical, mechanical, and plumbing inspections. The Building Director explained that obtaining these certifications is a lengthy process involving experience, state approval, and exams. He noted the difficulty in finding multi -certified individuals and expressed hope that this individual would fill significant upcoming retirement vacancies and contribute substantially to the department's succession planning. The City Manager highlighted that this hiring was a reclassification of an existing open position, not a new one, and was expedited to secure the candidate given their availability. The City Manager explained that he and the Building Director had previously discussed succession planning and concerns about departmental experience, formulating a plan to act quickly when a suitable candidate was found. The Building Director then discussed contractual services, noting an extra fund of approximately $78,000 allocated for part-time private provider help, available as a contingency for unforeseen circumstances like injuries, given the necessity of licensed personnel for inspections. He also addressed the virtual inspections, explaining that there is a $20 fee per inspection, which the department is currently absorbing as a service to builders and the community. The Building Director indicated that they might consider adding this cost to permit fees in the future. Council Member Dodd sought clarification on where this cost appeared in the budget, and the City Manager confirmed it was under Other Contractual Services. Council Member Nunn questioned the cost-effectiveness, asking if the $20 fee outweighed the savings in manpower and gas. The Building Director clarified that while there are savings in vehicle use and manpower (as one office -based inspector can conduct multiple virtual inspections compared to field inspectors' travel time), the primary benefit is the service provided. The City Manager acknowledged that the virtual inspections result in a slight financial loss for the city but emphasized the value of the service, FY 2025-2026 Budget Workshop July 17, 2025 Page 7 particularly for homeowners who no longer need to take a second day off work for inspections. The Building Director added that the department's permit fees are among the lowest, at $79 for the entire process of issuing a permit and conducting an inspection, and they are not generating profit from these. He reiterated that the decision not to charge for virtual inspections initially was partly due to the existing excess funds, which auditors had questioned. The Building Director then moved to capital outlay, stating the purchase of an HP DesignJet printer/copier for large-scale maps and printing, which will be shared with Community Development. Council Member Dodd inquired if this was included in an increase for R&M office equipment. The Building Director clarified that it was a capital outlay. He also discussed the recently purchased Forerunner software and described it as crucial for floodplain management and mandatory FEMA-required substantial improvement/damage inspections, a process currently lacking a computer -based program. The City Manager confirmed that this software cost $20,000 and was the primary reason for an increase in the R&M office equipment line item, which would not have been fully reflected in the initial budget document, as the purchase was approved recently. The Building Director stressed the software's importance for rebuilding in floodplains and tracking compliance with regulations. Council Member Jones inquired about permitting and turnaround times, specifically the state -mandated seven-day period for certain projects. The Building Director confirmed that the department is not behind and is keeping up, especially with the new hire, as three people are now dedicated to plan review full-time, with field inspections as needed. Council Member Nunn stated that in his five and a half years, every complaint he received about delays was attributed to contractors failing to submit proper documentation or being unlicensed, never the city. The Building Director affirmed that the department receives similar calls and that most of their processes are now online, making them virtually paperless through the My Government Online portal. He also mentioned adding another clerk this year for scanning old documents to achieve full archiving and paperless operations. Council Member Nunn praised the virtual inspections as a benefit for everybody. The City Manager thanked Wayne for his presentation. Following the conclusion of the Building Department budget review, the City Manager announced the transition to the Airport Department budget, introducing the Airport Manager to present on revenues and expenses. The City Manager called for a break at 10:19, and upon return at 10:33, all members were present. C. Airport The City Manager highlighted that total revenues projected for FY26 are $861,315, representing an increase of approximately 6.2% over the previous year. FY 2025-2026 Budget Workshop July 17, 2025 Page 8 The Airport Manager then presented on the airport's accomplishments over the past year. He reported the completion of three new medium -square hangars, which are almost ready for tenants. The Airport Manager stated that the department is still evaluating the five remaining properties to determine if they should be filled before bringing in tenants, to avoid creating a large construction site. Hangar D, the Airport Manager noted, had its north and south office build -outs completed, and a major tenant is now operating there, servicing aircraft and conducting simulator training. He further informed the Council that the automated weather system has been updated with brand new sensors, tracking information that uploads to the National Network, thereby enhancing safety and ease of access to local information for pilots. The Airport Manager also mentioned that the design phase for the new taxiway golf, located on the northwest side of the airport, has been completed, and the project went out to bid, with results expected that afternoon. Additionally, he said the netting between Hangar D and the golf course has been installed. Looking ahead to the coming year, the Airport Manager outlined the Airport's future plans. He stated that they will begin the design phase for changing the apron in front of the terminal building to gain more parking spaces. The Airport Manager informed that preliminary exhibits suggest an increase from six to at least 12 parking spaces, which will provide more transient parking and opportunities to serve both local pilots and visitors using Sebastian for fueling and temporary storage. He also mentioned an incoming grant for runway 1028, designated for crack repair and sealing. The Airport Manager explained that while runway 1028 is in much better condition than runway 523 (which underwent total rehabilitation last year), this repair and seal coat will postpone any major work for at least two to three years, preventing major projects from occurring too close together. The Airport Manager indicated that once these design phases are complete, they will seek construction funding and grants to build the terminal apron and perform the work on runway 1028. He also looked towards future goals, including the design of the Gulf apron adjacent to the new Gulf taxiway on the northwest corner, and the design of the infrastructure for that same area, which will involve bringing in roads and related utilities along the fence line. This, the Airport Manager explained, will allow for the delineation of parcels in that area, enabling ground leases and facilitating building by the city or prospective tenants to increase airport revenues from rent and operations. Regarding capital projects, the Airport Manager detailed the city's share of some of these initiatives for the current year. He said for designing the golf apron, the City's match to the grant is $50,000 and the construction of the terminal apron expansion, an FAA grant was secured, reducing the City's exposure cost to just under $28,000. The Airport Manager stated that the construction of taxiway golf, is just shy of $198,000, funded by two grants (an initial grant and an amendment), with construction now able to commence as the second funding is in hand. He noted a $50,000 design phase for the Northwest access this year, aimed at laying out the infrastructure and road. FY 2025-2026 Budget Workshop July 17, 2025 Page 9 The Airport Manager then discussed the various line items within the operating budget. He noted that "other contractual services" increased by just under $1,000, primarily due to price increases for services like fire alarm monitoring. He mentioned a brief reduction in contractual services for the Automated Weather System due to its one-year maintenance plan being absorbed by this year's renovation and being under warranty, with costs expected to return next year. Other contractual services, the Airport Manager explained, are confined to items such as backflow testing, fire extinguishers, and storage tank permits and inspections. Under equipment leases, the Airport Manager stated that due to the dependability of their equipment, they reduced this line item from $1,000 to $750, hoping it won't be needed but keeping it as a contingency. Regarding buildings, the Airport Manager clarified that the amended budget for R&M on buildings, at $43,200, was a one-time increase for emergency air conditioner repairs at the terminal building, which is now complete. He noted that they need to monitor aging building issues like carpeting and roof work to prevent larger future costs. Council Member Jones inquired if the emergency operations room in the terminal building was included in this work. The Airport Manager responded that they can now access it minimally, and while he is not seeing technical changes, the room has been cleaned, and bids are in for carpeting to make it more presentable. The Airport Manager continued, stating that operating equipment decreased by $3,000 to $29,000 due to a fortunate lack of breakdowns. He reported an increase in R&M for fencing due to concerns about large stretches of security fence where galvanizing has failed and the fence is rusting. The Airport Manager explained that they plan to piece in new netting as needed and perform gate motor upgrades, aiming for one per year to ensure functionality. He confirmed that each gate access point has two cameras (one for the driver, one for the license plate), and while the keypad entry system works well, they are using a separate grant for camera upgrades and replacements at strategic locations to improve clarity and definition, as some older cameras were antiquated. Council Member Jones asked if the new cameras would have infrared for nighttime viewing, and the Airport Manager confirmed their nighttime capability and the shift from motion -sensor activation to constant recording where possible to avoid missing events. The City Manager highlighted that the fencing repairs are proactive measures, identified during annual inspections, to address issues before they escalate. The Airport Manager added that R&M for runways and taxiways saw a $500 drop, as the new runway and refurbished taxiways are in good shape, and the upcoming repairs and sealing of runway 1028 should reduce major work. This line item also covers weed control and lighting repairs. Promotional activities were completely zeroed out, and gas and oil saw a $900 increase to provide a buffer against fluctuating fuel costs due to mowing and operations. The City Manager then highlighted a reclassification recommendation. He explained that when the Airport Manager was initially hired, his role was limited to airport operations, with maintenance falling under the Leisure Services Director's responsibilities. Over the past two FY 2025-2026 Budget Workshop July 17, 2025 Page 10 years, the City Manager has shifted airport maintenance entirely under the Airport Department, making the Airport Manager responsible for overseeing all airport maintenance and facilities. Given the airport's future expansion, the City Manager's recommendation is to reclassify his position from Airport Manager to Airport Director. The City Manager noted that the Airport Manager had additional responsibilities without a pay increase over the past two years and stated that this reclassification is his recommendation for the budget. Council Member Dodd confirmed that this reclassification is the reason for the difference in the largest budget totals, to which the City Manager affirmed. Council Member Dodd then raised a general question regarding the Airport Fund, noting that it ends the budget period with approximately $500,000 in remaining funds (Page 195), while the City is currently funding about $230,000 in matching funds for capital improvements from Discretionary Sales Tax (DST). Council Member Dodd questioned whether the Airport's own funds could be used for these matching funds instead of DST, allowing DST to be redirected elsewhere, especially since the Airport is an enterprise zone. The City Manager responded that they could evaluate this possibility and look at potentially removing some funds from DST, though he would be hesitant to pull the full $325,000. Council Member Dodd then clarified his figure was for capital. The City Manager noted that the Airport has approximately $465,000 unappropriated after this fiscal year and agreed to evaluate the suggestion. Council Member Dodd reiterated that the City pays the Airport rent for land use (e.g., pickleball courts) and then uses DST to cover grant matching funds, suggesting the Airport's money could recoup some of these costs. The Airport Manager clarified that the Airport is federally mandated to seek fair market value for land, even when the city is the tenant, though some rates are heavily discounted. He expressed that he does not want to raise rent to balance the other side. The Airport Manager reported that the Airport is currently operating "in the black" and anticipates increased revenues, which will contribute to greater self-sufficiency. The City Manager acknowledged the positive outlook and referred to the recommendation as a great suggestion, noting that adjustments would be considered in future versions of the budget. Council Member Dodd concluded the discussion by expressing appreciation for the work being done at the Airport, describing it as a great asset to the city. Following the conclusion of the Airport Department budget review, the City Manager initiated the Human Resources Department presentation. The City Manager noted that discussions from the previous day had covered benefits related to health insurance, dental, and vision, all falling under the Human Resources Director's purview. He informed the Council that a presentation from the Gearing Group regarding these benefits would be provided at the upcoming Council meeting on Wednesday. FY 2025-2026 Budget Workshop July 17, 2025 Page 11 D. Human Resources The Human Resources Director started by stating that the overall Human Resources budget had not changed significantly, with a total increase of about $5,500. She pointed out that a notable change in operating expenses was the doubling of the employee background testing line item, mainly due to higher costs for physical exams. She explained that Rivers Edge in Sebastian, the medical facility used for employee physicals, has upgraded its office to better serve the city's employees, now handling all drug testing, including random tests. The Human Resources Director added that if an employee is involved in a vehicle accident, they are directed to this facility for drug testing, and the office is available even on closed days for workers' compensation cases. This budget line item also covers psychological testing for police officers and third -party background checks, which the Human Resources Director said are obtained at the lowest possible cost, with Janice having conducted these checks for the past five years. The Human Resources Director then discussed health benefits, referencing the Blue Value program and the new dental plan with MetLife. She commended the Benefits Committee, now in its second year, for its effective work, noting its involvement from every department and productive discussions. She mentioned that the committee had selected all prizes for the Blue Value program this year, funded by a $10,000 allocation from Florida Blue to the City. This money, the Human Resources Director explained, is used not only for prizes but also for quarterly meetings with employees to provide updates on health metrics, such as adult physical completion rates and engagement with care pathways, while adhering to HIPAA regulations. She highlighted the Peloton stationary bike as a significant prize from last year, alongside Fitbits and earbuds, all health -related items. The Human Resources Director announced the Health Fair for August 14th, from 10 AM to 2 PM, at Public Works, where appointments are scheduled for Florida Blue -affiliated employees for biometric screening and personal health assessments. The Human Resources Director stated this process contributes three points to the City's percentage increase at year-end. Council Member Dodd inquired about participation rates, to which the Human Resources Director responded that it is approximately 95% for scheduled appointments, a figure Florida Blue recognizes as exceptional. She also noted the strong cooperation from department heads, particularly the Police Department, in scheduling officers for these screenings. The Human Resources Director stated the upcoming health fair will host over 30 vendors, offering flu shots, other vaccinations, and various testing, including Bureau Orthopedics, financial planning, and veterans' services. Regarding open enrollment, the Human Resources Director stated that the process is transitioning from Benetek to ADP, which also handles the city's payroll, to streamline data entry. She explained that a significant benefit of using the ADP platform is that MetLife will credit the city 2% of its dental and vision premium quarterly, providing additional savings. The Human Resources Director also commended the Events Committee, noting that due to FY 2025-2026 Budget Workshop July 17, 2025 Page 12 increased attendance at the annual awards banquet, the venue has been moved to Vero Beach. The Human Resources Director then addressed the new policy and procedure manual, necessitated by the general unions disbanding. She stated that she had drafted policies based on existing contracts and updated older policies from the employee handbook. The Human Resources Director explained, this will be the primary reference document, currently under review by the City Manager and City Attorney, and is set to take effect on October 1st, upon the contract's conclusion. Council Member Dodd asked if this would apply to all non -police union employees. The Human Resources Director clarified that anything not covered by their union contract would fall under this new policy. The City Manager added that it is a city-wide document, but union contracts take precedence. Council Member Dodd requested a copy once the ' process is complete, which the City Manager affirmed. The Human Resources Director mentioned that the manual will be available on a website where departments house their policies and also on ADP, emphasizing a paperless approach for employees to access policies. Council Member Nunn inquired if the manual would require internal or council approval. The City Manager stated that policy matters would be internal, with major changes (none anticipated) brought before the council, and confirmed that the document would be shared with the council. Addressing positions, the Human Resources Director stated that while there were 35 vacant positions this year and 40 people were hired. She noted that HR participates in every interview, estimating approximately 160 interviews for those 35 positions, and reviewed over 450 applications. The Human Resources Director explained that some applicants might not have been suitable for the roles, citing an example of an individual who completed paperwork but never returned. The Human Resources Director provided an update on the performance review committee's work from last year, stating that the new performance review is being used without negative feedback. Additionally, a Performance Improvement Plan (PIP) has been implemented and utilized a few times this year to assist employees with performance. The Human Resources Director also detailed a new initiative with the Florida League, where all employee email addresses have been added to their website, enabling HR to assign mandatory online courses (e.g., safety for maintenance workers, ergonomics for office staff, sexual harassment for all) and track completion. Council Member Jones asked if training assignments could be sent via ADP. The Human Resources Director responded that they could use ADP or send emails to directors with reports from the Florida League on employees who haven't completed classes. The Human Resources Director then discussed changes to employee position titles, explaining that titles like maintenance worker would be changed to groundskeeper for Parks and Recreation and equipment operator for Public Works, with different levels, to FY 2025-2026 Budget Workshop July 17, 2025 Page 13 provide a clearer job description. She noted that a groundskeeper might not require a CDL license, as CDL training has become very expensive. Regarding city vehicles, the Human Resources Director stated that she monitors employee accidents from a risk management perspective and, due to a slight increase in accidents this year, a defensive driving course has been implemented. This course is mandatory for employees involved in accidents and for all Public Works and Parks personnel. It is also open to any city employee and is offered twice through the Florida League at no cost to the city. Council Member Jones asked if this would help reduce insurance costs, to which the Human Resources Director expressed hope. The Human Resources Director then addressed succession planning, a topic discussed by other department heads. She reported on a leadership course with 23 participants, noting that in -person training was more effective than work followed by discussion without a trainer, as evidenced by survey responses. The Human Resources Director stated that she has developed a succession planning survey for directors to identify critical roles and potential successors, including their preparedness. She has also established a succession plan outlining key positions and incumbents, and proposes forming a succession committee of directors to create a program where identified successors would rotate through various departments to gain a broader understanding of city operations. The Human Resources Director believes this would be invaluable for higher -level positions. She also mentioned her succession planning within her department, having hired a new assistant with HR management background from a sheriffs department, and is now planning her training given her own approaching retirement. Council Member Dodd clarified that this initiative aims to produce a training plan for identified individuals in the succession plan, extending beyond just director -level succession to career planning for individual employees. Council Member Jones inquired how this new succession planning approach would affect department heads already working on their own succession plans. The City Manager responded that succession planning extends beyond individual departments, especially at higher levels, requiring cross -departmental communication and understanding of processes. He emphasized that in a small municipality like Sebastian, employees cannot operate in silos and must collaborate across departments. Providing opportunities for individuals to observe operations in other departments, he stated, broadens their horizons and better prepares them for higher -level positions by giving them a comprehensive understanding of city operations. The City Manager acknowledged that while not every identified individual will necessarily achieve the target position, the goal is to set them up for success. He also noted that several department heads are expected to retire in the coming years, and discussions are ongoing to ensure robust succession plans are in place to avoid significant gaps. Council Member Dodd added that succession planning also serves as career planning for individual employees, even if they do not remain with the city, and that HR should centralize this process, with departments feeding in data to manage FY 2025-2026 Budget Workshop July 17, 2025 Page 14 training schedules and identifications. The Human Resources Director confirmed she has plans for individual development, matrices, and competencies. Council Member Jones then asked about the application process, noting that many applicants for jobs are often unqualified or apply without serious intent. The Human Resources Director confirmed this, stating that out of over 450 applications for positions like police officers, they and the Police Department must sift through them. She estimated that she sits in on approximately 95% of the 160 interviews conducted for the 35 positions, with typically four or five candidates interviewed per job. The City Manager highlighted the current low vacancy rates across the city, noting only three in stormwater, two in roads, and three in the police department. The Human Resources Director added that the 911 department is also fully staffed, which has not been the case for many years. F. Manaaement Information Services (MIS) The City Manager introduced MIS Manager to present her department's budget. The City Manager stated that the proposed budget for FY26 for MIS is $814,215, which represents a $28,956 increase, or 3.69%. He noted that Personnel Services increased by $44,720 due to wages and insurance costs, and operating expenses increased by $10,120. The City Manager mentioned that capital outlay showed a decrease. He concluded by stating that the MIS Manager had no changes in staffing, no new positions, and no reclassifications to discuss, before turning the presentation over to her to discuss capital and operating expenditures. The MIS Manager began by addressing capital projects. She stated that the department maintains a $15,000 allocation for AV equipment, specifically to replace an aging scheduling software and carousel system used for city-wide slideshows and information. The MIS Manager explained that this system is eight years old, has had its hard drives replaced once, and no longer receives support, necessitating its replacement. For city-wide computers, the MIS Manager stated that this line item represents the annual budget for keeping computers in rotation and up-to-date. She noted an increase in this budget because the MIS department has taken on the responsibility of replacing road patrol laptops for new police vehicles, a cost previously borne elsewhere. The MIS Manager explained that they evaluate and purchase computers in bulk to maintain a seven-year rotation for desktops and laptops whenever possible. Council Member Dodd commented that a seven-year rotation was commendable, noting that typical lifespans are often shorter. The MIS Manager acknowledged that they are pushing the limits of equipment longevity by replacing aging hard drives with solid-state drives and ensuring that specialized machines come with five-year warranties, aiming for standardization to facilitate replacements. For network infrastructure, the MIS Manager stated that this project focuses on the annual replacement of switches to continuously improve the network and replace failing or aging FY 2025-2026 Budget Workshop July 17, 2025 Page 15 devices. She clarified that this does not include more specialized equipment, which is noted in the Capital Improvement Plan (CIP), but it covers all connections for the airport, police department, and all city infrastructure, making it a constantly evolving project. Regarding outdoor security updates, MIS Manager explained that the department collaborates with the police department and parks to provide coverage at parks, enhancing public safety. She highlighted that they prioritize parks with ongoing issues or those requiring closer monitoring, which necessitates installing entire infrastructures, including internet and hardware. Their goal, she stated, is to cover at least three parks per year. Council Member Dodd sought clarification, asking if this meant placing networks and cameras in parks and integrating them into the city's real-time system, and if most major parks currently have this. The MIS Manager confirmed that most major parks are equipped with cameras. Council Member Dodd then asked if the $30,000 annual allocation was for anticipated replacement costs or for installing new equipment. The MIS Manager clarified that it covers new installations, but also includes the replacement of cameras reaching their end -of -life, as replacing them is more cost-effective than buying additional licenses. Council Member Dodd asked if this budget included anything related to the City Hall campus, to which the MIS Manager responded that it does not, but it would include locations like Friendship Park. The City Manager added that boat ramps, the Sports Complex, pickleball courts, and Schumann Park also have cameras, and some locations will see increased coverage. He highlighted that two cameras, one overlooking the twin piers at Riverview Park and another at the pickleball courts, are publicly accessible on the city's website. Council Member Dodd suggested making boat ramp cameras visible for boaters to check traffic and lamented the necessity of spending $3,000 annually for park surveillance, calling it a sign of the times. The MIS Manager emphasized that it helps ensure public safety, as one bad apple can ruin the experience for others. The City Manager provided an example from the Creative Playground, where cameras installed in response to past lawsuits and vandalism have helped track individuals and incidents, such as a fire at the skate park, demonstrating the strategic placement of cameras. The MIS Manager then discussed the campus security program, specifically for City Hall and the Police Department. She stated that their security infrastructure is over 20 years old, with cameras and other components nearing failure, and parts are no longer available for interior and exterior systems. She informed that the first phase of City Hall's security upgrade is in progress, budgeted for the current fiscal year, but it did not include interior infrastructure due to prioritization. For the upcoming year, the MIS Manager explained, they will complete City Hall's interior security and begin upgrading the Police Department's infrastructure, which is of similar age. She stated the final year of this project will involve upgrading the Airport's administration building, which also has aging infrastructure. The MIS Manager noted that core security upgrades are pushed out several years because recent upgrades were completed last year, ensuring future budget coverage. FY 2025-2026 Budget Workshop July 17, 2025 Page 16 Transitioning to operating expenditures, Council Member Jones noted that MIS's budget increase was lower (3.9%) compared to other departments (6.2-6.3%). The City Manager affirmed this, stating that the operating budget's increase of only about $10,000 was their goal, reflecting reductions across the board. Council Member Dodd observed that dues and memberships were the only line item with major increases. The MIS Manager explained that Laserfiche is a major contributor to their cost updates. She also highlighted a significant investment in RGIS implementation, requiring a $12,000 increase to the RGIS program, which accounts for almost the entire increase in dues and memberships. This MIS Manager stated that this is to facilitate the Police Department's initiative for enhanced crime analysis. To offset this, the MIS Manager indicated that MIS has cut several other programs, for which she is seeking alternative solutions. Internet access, she noted, continues to rise. The MIS Manager stated that they plan to acquire Starlink connections for emergency management, hoping they will function during storms when other internet services may fail, and to provide a backup connection for the Public Works compound, which currently lacks one. R&M, she explained, remains stable due to a strategic review of current maintenance projects to minimize costs and absorb increases. The MIS Manager said Laserfiche, which falls under this line item, has announced a 5% increase this year. She then informed that small tools and equipment are also increasing, as MIS plans to replace the carpet in one of their rooms, a small but necessary expenditure. The MIS Manager then clarified that computer supplies decreased from the original budget due to shifting some costs to memberships and dues, where they properly belong. She emphasized that this line item covers all miscellaneous computer supplies for the entire city, including UPS units, keyboards, mice, and tables. The MIS Manager stated that they strive to ensure new computer orders include keyboards, monitors, and mice, which are under warranty and should last the lifetime of the machine. She acknowledged that the city-wide computer budget is very tight this year due to unplanned expenditures, such as specific requests from Community Development for expensive monitors, and they are working to manage this better for the next fiscal year. The MIS Manager affirmed her commitment to ensuring the city's operations run smoothly, even if it means saying "no" more often, as part of fiscal responsibility and staff care. Council Member Dodd expressed appreciation for the MIS team's work, acknowledging their ability to operate effectively despite limited space. The MIS Manager confirmed that while they lack space, they make it work, as breaking up the team into compartmentalized areas was not desired. Council Member Dodd suggested utilizing the large room previously used for physical plans by the Building Department. The MIS Manager stated that they are working on utilizing their space more efficiently, which contributes to the perceived bedlam in MIS as items come and go. She also mentioned plans to revitalize existing infrastructure for other uses to cut costs, particularly for expensive server infrastructure, as another measure of fiscal responsibility. FY 2025-2026 Budget Workshop July 17, 2025 Page 17 Council Member Dodd inquired if the MIS Manager had explored Al packages designed for municipal governments, which integrate Al concepts with overall municipal software. The MIS Manager responded that she is not opposed to Al packages and already has a policy drafted, awaiting final training completion before its release. She explained that the policy will outline guidelines for appropriate Al use, specifically prohibiting its use in police reports. Regarding server requirements, Council Member Dodd expressed concern about potential increases if people migrate to Al. The MIS Manager clarified that they do not host large language models locally, and much of their software is cloud -based or individual, moving away from server -based models. She does not foresee a significant need for increased server space, but anticipates a draw on internet connection bandwidth. The MIS Manager stated that she did not budget for a bandwidth increase this year, having determined they could manage for another year, emphasizing strategic planning. Council Member Dodd then mentioned that services like Laserfiche might introduce Al search facilities. The MIS Manager responded that Laserfiche runs on its own hardware with ample processing power and room for growth. Their current limitation, she explained, is being at maximum licenses, which she did not budget to increase for another year, requiring strategic usage. Council Member Dodd noted that he had been denied Laserfiche access a couple of times, but could get in after 30 minutes when another user signed off. The MIS Manager confirmed that public utilization of their 25 users and web link is increasing, but turnover is quick. Council Member Nunn asked if the introduction of Clearwave to the area would offer new internet access options for the City. The MIS Manager stated they had not inquired. Council Member Nunn noted that Clearwave is installing fiber directly in front of the building and in neighborhoods where AT&T fiber is not present. The City Manager added that they are receiving weekly inquiries from multiple fiber companies currently working in the city. Council Member Jones expressed approval of Starlink for the storm season, asking if it would be ready for the current storm season. The MIS Manager confirmed they have Starlink access through other means for emergencies and are working through an extended process with the state for a state contract and restrictions. The meeting recessed as 12:45 p.m. for lunch and all member returned at 12:30 p.m. E. Finance Department The City Manager welcomed everyone back from lunch, announcing the transition to the Finance Department budget. The City Manager stated that the proposed budget for the Finance Department for this fiscal year is $903,975, which represents an increase of $179,203. The City Manager directed attention to page 31 of the budget document, reiterating a point discussed in numerous other departments regarding the difference in salaries and personnel services. He explained that this significant difference is largely due FY 2025-2026 Budget Workshop July 17, 2025 Page 18 to the Chief Financial Officer's (CFO) salary, as the Finance Director was brought on board closer to the beginning of the calendar year, meaning his full salary was not initially projected. Additionally, the previous Finance Director, who was part-time, had very few hours during the initial period of the fiscal year. The City Manager stated that operating expenses are showing an increase of $54,432, before turning the presentation over to the Finance Director. The Finance Director began by confirming that, in addition to the CFO position, a vacant Finance Assistant position has also been filled, contributing to the personnel changes. The City Manager further clarified that this Finance Assistant position was new two years prior, but remained unfilled until the past fiscal year. He explained that an employee from Human Resources had been working in HR until this position was filled, which accounts for a large portion of the salary difference in the Finance Department's personnel services, as both the CFO and Finance Assistant positions were not initially filled. The Finance Director then discussed other items added to the operating budget. He stated that they contracted with ADP for additional services that overlap with HR, such as employee onboarding for benefits selection and a system for surveying and polling employees, leveraging ADP's existing data and payroll services. The Finance Director also highlighted a new procurement software in the budget, as the procurement officer seeks to upgrade to a more integrated and interactive system, with OpenGov and Una among those being considered. The Finance Director noted that the procurement officer is currently holding off on a decision because he also wants to evaluate budgeting software, as the current budgeting process is manual and spreadsheet -based. He explained that data is manually compiled from spreadsheets, reports are manually generated, and the budget book is a physical compilation of these spreadsheets. The Finance Director provided the Council with a handout detailing some items from his wish list that were not included in the original budget. He specifically highlighted OpenGov, which is being considered for both procurement and budgeting, and which Code Enforcement is also looking to contract with for permitting and licensing. The City Manager confirmed that currently, only the Finance Department and Code Enforcement are actively evaluating OpenGov. The City Manager emphasized that bundling modules, such as procurement and budgeting, with a single company like OpenGov, could lead to better pricing, potentially a 30-35% discount. He noted that the procurement module alone costs $22,000, including a $14,900 implementation fee, with an annual cost of about $8,000. The Finance Director agreed on the advantages of a single platform, stating that they are currently evaluating OpenGov and Una, both of which offer budgeting, online budget books, and procurement options. He mentioned that while procurement is already budgeted for, the budgeting platform, including implementation and annual costs, is estimated to be between $40,000 and $60,000 for the first year, with ongoing costs of $20,000 to $30,000. The Finance FY 2025-2026 Budget Workshop July 17, 2025 Page 19 Director explained that this platform would centralize all budgeting activities, allowing for requests for performance management, operating and capital budgets, and workforce planning. He stated the final product would be an online, dynamic budget book that can tie budget initiatives to strategic plan objectives and comply with GFOA award programs. The Finance Director offered to provide references to other government websites utilizing similar online budget books. Council Member Jones inquired if the software would provide flexibility for specific requests from the Budget Advisory Review or individual Council Members. The Finance Director confirmed that it offers extensive flexibility for drilling down into information, with features like interactive maps for capital projects. The City Manager affirmed this, stating that the software allows users to drill down to specific areas of interest. Council Member Nunn asked about implementation costs if modules were added separately. The Finance Director explained that while a bundle offers a 35% discount, individual components would incur separate implementation costs. Council Member Dodd clarified that implementation primarily involves migrating existing data into the new system. The Finance Director added that the procurement module also includes contract management, providing dynamic tracking of contract renewals, thereby modernizing their technology. The City Manager noted that the software tracks financial accounts against the budget, providing real-time allocation and spending data. Finance Director Stewart confirmed that OpenGov and Una both integrate with Tyler, their current financial system, which is a key reason for their consideration. Council Member Dodd suggested that the software implementation could be funded off budget after the current budget process. The City Manager responded by acknowledging the tedious manual process currently handled by the Assistant Finance Director, involving numerous Excel spreadsheets and manual compilation. He stated that he has challenged the team to accelerate the budget process for next year, aiming for a June meeting, which would necessitate greater efficiency. The City Manager recognized that this is a tough budget year for new initiatives, but noted that Code Enforcement's strategic initiative is moving forward. He suggested a discussion on whether to prioritize the procurement or budgeting module, or if a combined approach with the 35% discount would be more feasible. The City Manager emphasized that any decision would need to be implemented shortly after October 1 st to allow for data compilation for the January -February timeframe. The City Manager stated that, based on discussions, changes would be made to the current budget document. Council Member Dodd expressed his personal view that implementing such software is a given and aligns with the strategic plan's focus on efficiencies. He suggested adding the cost of the software package for budgeting, purchasing, and code enforcement to the current budget, even if it means an additional $60,000 to $90,000, believing the savings in staff time would justify the cost. Council Member Nunn, from an IT perspective, expressed surprise that Excel spreadsheets are still being used for such critical functions, due to FY 2025-2026 Budget Workshop July 17, 2025 Page 20 corruption issues. He strongly advocated for adding the software to the budget, considering it the most impactful item. Council Member Jones agreed, emphasizing the time savings and efficiency. Council Member Nunn stressed the importance of a single, updatable application, rather than relying on manual compilation by staff. Council Member Jones added that relying on one person for such extensive manual work invites inefficiencies and potential issues. Council Member Nunn urged serious consideration for including this in the budget. The City Manager affirmed their commitment to doing what is best for the city and exploring options. The Finance Director agreed, stating that while the new system costs more money upfront, it offers greater efficiencies. Council Member Nunn countered that the current manual process likely costs more in man-hours, making the new system potentially cost -neutral in the long run while offering significant improvements. The Finance Director then introduced additional items from Tyler, their current system, that the Finance Department needs. He highlighted a reporting service, which would cost approximately $7,200 for the first year, including implementation. The Finance Director explained that current data extraction for reports, such as the commission report, is difficult and time-consuming, requiring manual pulling into Excel. He also presented a Content Manager, which he described as the best feature Tyler has. This system centralizes all financial documents (e.g., purchase orders, invoices, checks) into one searchable location, allowing users to find related documents easily. Council Member Dodd clarified if this was a records management function or for the financial system itself. Finance Director Stewart confirmed it was for the financial system, integrating all Tyler documents, but clarified that it does not replace the records management function handled by Laserfiche. He stated that the Content Manager would cost $10,580 for the first year with implementation. The Finance Director discussed the PACE program, a $9,300 three-year contract (cancellable anytime), where Tyler would assess the City's utilization of its software and identify opportunities for greater efficiency and integration, including live training and conference passes. He concluded that these four items would significantly advance the Finance Department. Council Member Nunn added that Tyler also integrates with Laserfiche for document management. The City Manager then opened the floor for questions on the Finance Department budget. The Finance Director noted that the budget includes funds for training and conference attendance, emphasizing the importance of staying updated with technology and earning continuing education units. The City Manager then shifted the discussion to the retirement option, stating that he and the Finance Director had met to gather data. He clarified that a spreadsheet provided to the Council with options, but the dollar amounts were based on the rollback rate, whereas the current document shows the increase/decrease in general fund reserves, which is crucial for covering the proposed budget. FY 2025-2026 Budget Workshop July 17, 2025 Page 21 The Finance Director then presented on retirement options, having researched FRS, independent agencies, and the Florida League of Cities. He found the Florida League of Cities offered better options and lower administrative costs, making it the preferred choice, with FRS's only benefit being transferability. The Finance Director noted that 489 independent plans exist in Florida, indicating the popularity of custom plans. He explained that the study provided to the Council shows actuary -derived costs based on parameters given by the city, which are negotiable. He stated plan they chose mirrored an existing one, with assumptions including a three-year final average pay of base pay only for benefit calculation. The Finance Director explained that the factor, which varies by plan, determines the monthly benefit (e.g., FRS has a 1.6 factor, while the current CWA plan has a 1.0 factor with zero employee contribution, unlike FRS's 3%). The Finance director informed that assumptions for the proposed plan include normal retirement at 55 with 25 years of service, or 60 with five years (five-year vesting), and early retirement at 55 with five years (actuarially reduced). He said normal payment form is a 10-year certain and life annuity, with other options available and a pre -retirement death benefit is included, and there is 100% vesting in five years. The Finance Director explained that the plan does not include disability benefits or automatic cost -of -living adjustments (COLAs), which can be costly (e.g., the police plan has a 1 % automatic COLA). The Finance Director then presented a variable contribution rate based on a sliding scale, designed to appeal to both young and older employees. He explained that employees choosing a 0% contribution would have a factor of 1.0, mirroring their current CWA plan. The City Manager clarified, stating that this 0% contribution option was a recent consideration, allowing employees to maintain their current factor without contributing if they choose. The Finance Director explained that this effectively offers 11 different plans, allowing employees to choose their factor and contribution level. Council Member Dodd asked if this was a one-time choice. The Finance Director stated that this has not yet been defined, but suggested that if an employee chooses a higher rate later, they would need to actuarially "buy up" to that rate for previous years, as it would be unfair to the plan otherwise. Council Member Dodd agreed that employees should not be able to change their factor just before retirement. The Finance Director noted that while actuaries prefer fewer assumptions, employees appreciate the flexibility. The City Manager suggested a one-time selection on October 1, 2025, with new hires making their choice, and possibly allowing a change after five years of vesting, provided they buy back previous years. Council Member Dodd expressed concern about the actuarial management cost of such flexibility but supported giving employees the most flexibility possible within reason. Council Member Jones agreed that employees should have the opportunity to choose based on their financial situation. The Finance Director stated that this would need to be clearly defined in the plan document. Council Member Dodd suggested that buybacks typically occur during anniversary windows, not annually. The Finance Director clarified that actuaries calculate buy -ups as of the request date. FY 2025-2026 Budget Workshop July 17, 2025 Page 22 The Finance Director then presented the ongoing city cost of 13.71 %, based on the plan assumptions and a mix of employee contribution choices. He explained that this is the cost for all employees to switch to this plan, compared to the current 9% budgeted. The additional 4.71 % would cost approximately $278,000 for the general fund. Council Member Dodd clarified that the $278,000 would be the increase to their budget. The Finance Director explained that the 13.71 % is an actuarial number based on employee data and assumed contribution choices, acknowledging that actual choices would affect the rate. He had erred on the high side for employee contributions. The City Manager stated that a survey could be conducted to get realistic employee feedback on contribution choices, but he believed the Finance Director's assumptions were good, with an average employee contribution likely around 5-6%. The City Manager also stated that employees retiring in less than five years would be given a one-time option to remain with their current 9% Mission Square amount, as they would lose out by entering the new plan, especially higher - salaried employees. The City Manager stated that if they proceed with this plan, the City needs to be prepared to budget an additional $280,000 against the general fund, or $378,000 against the total fund balance accounts. The Finance Director clarified that the $378,000 includes other funds like airport, building, golf, and stormwater. Council Member Dodd sought to confirm the total budget increase. The Finance Director confirmed $378,000 for all funds and $280,000 for the general fund only. Council Member Nunn asked if the other funds had the money to cover their portion, to which the City Manager replied that they would need to make adjustments only in stormwater, as it carries a larger deficit. The Finance Director calculated the stormwater's portion based on its payroll. Council Member Nunn clarified that the millage would not need to cover the entire $300,000, as other funds have their portion, but the general fund would need to cover its $280,000. The City Manager affirmed this. Council Member Dodd reiterated that the total budget impact is $378,000, which impacts all accounts. The Finance Director clarified that only the general fund gets the millage. Council Member Dodd acknowledged the total budget impact of $378,000, which would add to the existing $900,000 deficit for the general fund. The City Manager clarified that the $923,000 deficit for the general fund does not include other funds, so the addition would be $280,000, not $380,000. Council Member Dodd sought to confirm the total budget revenue and expenses, but the City Manager stated that enterprise funds are separated and that the number is not in the current book. Council Member Nunn asked about the increase for next year, assuming the numbers are accurate. The City Manager stated it would be $380,000, with the Finance Director adding possibly. The Finance Director then explained that the actuary's valuation for the police plan, done on October 1, 2024, is for contributions applicable to the fiscal year ending September 30, 2026, meaning contributions start a year later. He stated that the first year of the plan does not require contributions, a common setup in Florida. The Finance Director explained that the downside is that an inherent factor (around 6-6.5%) is added to the liability, increasing FY 2025-2026 Budget Workshop July 17, 2025 Page 23 future contributions, effectively like an interest charge. He said if money is contributed upfront as an advanced contribution (like the police plan's $200,000 advanced contribution), it prevents the actuary from charging this interest. Council Member Nunn likened this to a savings account. The City Manager expressed his concern about not funding the plan from day one, fearing a compounding effect of higher percentages, despite being told it would only be a 6% back charge. He presented two options: fully funding the 13.7% this year and putting it into an advanced payment, or only funding the 9% and using reserves for the difference. The City Manager expressed concern that if they don't fully fund it this year, they will face the same $380,000 request next year. He stated he is fine with whatever decision is made, but emphasized his uneasiness with the compounding effect of not increasing the budget this year. Council Member Dodd agreed that funding retirement plans is a fundamental responsibility and that it should be funded from reserves (general fund or enterprise funds), as a millage rate increase to cover the full amount is unattainable. He stated that the entire $378,000 additional dollars should come from reserves, hoping future years can fund it from the revenue stream. The City Manager asked the Finance Director if fully funding this year from reserves would go into an advanced payment. The Finance Director confirmed this, stating it would be listed as advanced contributions in the actuarial report and would reduce future contributions by earning investment income. He clarified that any amount can be advance - funded. The City Manager then asked if employee contributions, starting October 1, 2025, would also earn interest. The Finance Director confirmed that every dollar put into the Florida Trust would earn investment dollars, helping in future years. Council Member Dodd clarified that in future years, the budget would reflect the 13.71% number, assuming employee selections align with the assumptions. The City Manager explained that once the plan is in place, an actuarial report for the following year would be received around October 1st, similar to the police department's budgeting process, where the 18.8% (down from 21.9% previously) is budgeted a year in advance. He clarified that the police plan's actual cost is 28.2%, but state funding reduces the City's portion to 18.8%. The City Manager reiterated that an advance payment would allow them to cover budget deficits in lean years without dipping into general reserves. Council Member Dodd stated that future years would properly fund the plan through the actuarial statement. He expressed his personal preference to fund it now, whether it's an additional $378,000 or $150,000, noting that enterprise fund reserves and general fund reserves have enough money to cover their portions without impacting the millage rate. Council Member Dodd emphasized that this money is being moved into a retirement plan, not spent. The Finance Director clarified that it would not affect the general fund balance, as it's a cash transfer, reducing liability. Council Member Dodd agreed that it's a cash movement, not spending. The City Manager stated that they would proceed with withdrawing documents from the CWA, conducting an actuarial study, and surveying employees to gauge anticipated FY 2025-2026 Budget Workshop July 17, 2025 Page 24 contribution rates. He confirmed that when the budget is presented in September, the general fund budget will not be increased beyond the current 9%, with reserves utilized for any additional amounts, and funding of the account will begin this year. Council Member Dodd and Council Member Jones affirmed this approach. The City Manager asked if there were any issues with the employee contribution options, which he believed offered a wide range of choices, and stated that multiple meetings would be held with employees to explain the process. Council Member Dodd's only concern was ensuring the plan document spells out how employees can move between contribution levels. The Finance Director acknowledged this need for clear direction, noting that forcing buybacks for higher rates might deter employees. Council Member Dodd believed this was an actuarial issue and that the City should offer the most flexibility possible. Council Member Jones agreed that flexibility and choice are important. The Finance Director stated that this would need to be defined in the plan document. Council Member Dodd suggested that buybacks typically occur on anniversary windows, not annually. The Finance Director noted that actuaries can calculate buy -ups at any time. The City Manager stated that these were some options discussed. He clarified that a pension board would need to be established, and that a lot of work would be involved over the next two months with the League of Cities, attorneys, and actuaries. He assured the Council that all documents, parameters, and ordinances would be fully disclosed and discussed at multiple meetings for their approval. Council Member Dodd expressed that he believes this is a good deal for our employees. The City Manager then provided a clearer picture of how the budget would be affected by different millage rates. He stated that if the city were to go to the rollback rate, there would be a $1.35 billion deficit in the current proposed general fund budget. The City Manager informed that the current millage rate of 3.1955, the deficit would be $923,178. He displayed that as the millage rates increase, the deficit decreases. Mayor McPartlan asked if this included the $300,000 for the railroad. The City Manager explained that the $223,000 for Barber Street is scheduled for August 3rd or 9th and will fall into this fiscal year. He stated that they are looking into Local Option Gas Tax or other options, but if not, they will come to the Council for reserves. The City Manager informed that the $90,000 for November will be covered by funds outside the general fund, so, neither of these will need to be covered in this budget, though the $223,000 might require general fund reserves if other allocations are not possible. The City Manager also noted a $200,000 cushion from last year's R&R account. Mayor McPartlan asked if the budget included salary increases. The City Manager confirmed that it does, with a varying range, and that the current across-the-board number is 6%. Council Member Nunn asked for the millage rate for a "zero" deficit. The City Manager estimated it would be close to 3.5455 to 3.5955. He emphasized that the budget workshops provide comprehensive information to the Council, detailing line -item breakdowns. He noted that while further operating cuts are possible, they would be noticeable. The City FY 2025-2026 Budget Workshop July 17, 2025 Page 25 Manager assured the Council that staff is already working on identifying areas for further reductions, even small ones, to contribute to the overall goal. Council Member Dodd stated that the choice on Wednesday would be between funding the deficit through tax increases or reserves. He expressed his opinion that there is "not a whole lot of fat" in the budget, perhaps only $100 here or $1,000 there, and that it would be impossible to reduce the budget by $900,000 or even $78,000. He hoped that the public watching the sessions would gain a better understanding of the budget's constraints. Council Member Nunn agreed that they had already cut "some of the meat off." The City Manager confirmed that he had cut department budgets more than they needed. Mayor McPartlan added that the public has seen the improved level of service from the city in recent years, indicating there is nothing left to cut. Council Member Jones asked about the total general fund reserve balance. The City Manager stated it is approximately $8.6 million, with $200,000 recently spent on retirement. He clarified that the $8.6 million includes restricted funds and assigned funds, totaling about $1.5 million in liabilities, including an estimated $389,000 for employee payouts this fiscal year. Council Member Jones noted that the agreed -upon reserve was $7 million. Council Member Dodd emphasized that the decision on Wednesday would be about how to fund the deficit. He reminded the Council of the demographic of older, retired residents with limited cash flow, and that even small tax increases can impact them. Council Member Nunn added that every change affects residents, and they do not want more taxes. The City Manager concluded by stating that he and Finance Director Stewart would finalize their budget recommendations, which would likely include some one-time expenditures from reserves. He cautioned against using reserves for ongoing expenses, as this could create long-term financial issues. He confirmed that the meeting packets for the City Council and the Budget Advisory Committee would be ready the following day. The Budget Advisory Committee is scheduled to meet on Monday, followed by the Parks and Recreation meeting on Tuesday, and the City Council meeting on Wednesday. 7. Being no further business, the City Manager adjourned the workshop at 1:40 p.m. Approvedd aatttttthe �Auugg%ust27, 2025 Regular City Council meeting Mayor Bob McPortlan ATTEST.• eanette Williams, City Clerk