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HomeMy WebLinkAbout08242009WorkshopCity Council Present: Mayor Richard H. Gillmor Vice -Mayor Jim Hill Council Member Dale Simchick Council Member Eugene Wolff City Council Absent: Council Member Andrea Coy (excused) crry OF HOME OF PELICAN ISLAND SEBASTIAN CITY COUNCIL FY2009/2010 BUDGET WORKSHOP MONDAY, AUGUST 24, 2009 6:00 PM MINUTES CITY COUNCIL CHAMBERS 1225 MAIN STREET, SEBASTIAN, FLORIDA 1. The Mayor called the budget workshop to order at 6:00 p.m. 2. The Pledge of Allegiance was recited. 3. ROLL CALL Staff Present: City Manager, Al Minner City Clerk, Sally Maio (excused 6:45 pm) Deputy City Clerk, Jeanette Williams Administrative Services Director, Deb Krueger Airport Director, Joseph Griffin Building Director, Wayne Eseltine Finance Director, Ken Killgore Golf Course Director, Greg Gardner Growth Management Director, Rebecca Grohall Police Chief, Michelle Morris Police Captain, Greg Witt Public Works Director, Jerry Converse PW Administrative Supervisor, Linda Kinchen MIS Director, Frank Losardo MIS Senior Systems Analyst, Barbara Brooke -Reese 4. FY2009/2010 PROPOSED BUDGET A. Citizen Budget Review Advisory Board Report Ed Herlihy, Chairman of the Budget Review Advisory Board, reported to Council, reminding them of issues to keep in mind for next year, the housing and foreclosure situation, reduction in benefit expenses, changing union contract, outsourcing some areas of DPW, Police and police car costs, reduction in street and park lighting, and review of department manning tables. City Council Budget Workshop August 24, 2009 Page Two B. Budget Presentation /Overview City Manager The City Manager presented a Power Point presentation on the proposed $23,882,000 fiscal year 2010 budget (see presentation attached). Beyond information presented in the power point presentation, he advised he did not recommended eliminating the Building Department and going to the County despite recent revenue losses. He cited the four major spending categories: Administration, Public Safety, Public Works and Non Departmental; briefly described the plans for personnel cost deductions which are a hiring freeze, Management and PEA COLA and merit freezes, cancellation of longevity increases, and 12 furlough days for all departments, though Police and Golf Course days will be rotated. He further noted a 14% reduction in staff over the last few years, and that overtime is only 2 The City Manager said Sebastian is a financially sound community which has been successful in reducing its millage rate and has a capital reserve well above the recommended amount. He described future projections and taxing methods that will be required if revenues continue to slide, noting hard decisions will have to be made in future years. In closing, he commended staff for efforts to reduce expenditures and their commitment to the City exhibited by willingly accepting pay freezes, furloughs and department reductions. He said the budget represents an 8.4% overall decrease, there is a deficit of $84,021 which he recommended should come from reserves, recommended Council set the millage at the current 3.3456 mills which equates to a 17% tax cut for most, and said services should continue with the exception of the furlough days. He further described (presentation slide 42) Taxing Ramifications for future years, noting the current millage won't get it in future years, there may be need for modest increases which potentially may need a supermajority vote. He said future cuts which will be harder, and we can look at including revisiting the CRA, looking at dependent coverage again, and projected pay freezes through FY 2011. Mayor Gillmor thanked the City Manager for his great presentation and making the budget easy to understand. Ms. Simchick requested a history of the millage rate and an explanation for the benefit of the public as to how staying with the current millage of 3.3456 represents a 17% tax cut. The City Manager showed slide 41 Future Projections chart. He went on to explain that there are three line items that make up the general fund, and the biggest of the three revenue funds is ad valorem taxes, which is based on assessed values. He said assessed values have decreased in the last three years, and when assessed values go down, the millage rate has to go up to get the same amount of revenues. He said in FY 2009 -2010 we saw a drop in value from $1.3 billion to $1.162 billion which represents a 12% reduction in taxable value, so last year 3.3456 mills brought in $4.2 million and this year that same millage will bring in $3.7 million. 2 City Council Budget Workshop August 24, 2009 Page Three Mr. Wolff asked if he always uses 2008 as a benchmark when he says there is a value taxing loss going forward, and the City Manager responded it depends, that on residential value it is hard to take a pen and say typical because some people have homestead, some do not, some have been residents for thirty years, some are new, assessed values are different. He said he thought amendment one tried to fix this but it doubled the unfairness. He said on the housing question we use 2008. Mr. Wolff stated it could represent an extreme and you may never see that again. The City Manager cited slide 40 Tax Levy History which exhibits the jump. Mr. Hill thanked the Budget Review Committee and staff. He said we started this process with a $400,000 shortfall and worked it down to $84,000 with a 17% tax cut. He asked what the millage would have to be to balance the budget, and what would the tax cut be to get to a balanced budget. Ms. Simchick people might call that fuzzy math, that there is commercial property and that not everyone's assessed value went down. She said the millage rate is going up and now you are asking for a higher rate. Mr. Hill said commercial property value has decreased by approximately 10 some more and some less, so if we keep the millage rate the same, there is clearly a tax cut. He said in the past when property values were high, if Council did not go to rolled back rate they were accused of raising taxes. He said though he is not suggesting we go to rolled back rate, he wanted to know what the tax cut would be to balance. Mr. Wolff said last year his property value in a bad year went up, and in his TRIM this year the decrease was slight and did not appear to be as much as people are bandying about. Mr. Hill noted he will be paying less because of the drop in his home value. Ms. Simchick said she would rather see quarterly rather than monthly furlough days. Mr. Hill said that is precisely why he mentioned it, to be sure we are being responsible. The City Manager said to get that additional $84,000 you would have to increase the millage to 3.4217. He said it would equate to a 15% decrease in taxes rather than a 17% decrease. In response to Ms. Simchick, the City Manager said it costs approximately $900,000 to operate the City on a monthly basis, therefore, the recommended contingency would be $2.7M and the City currently has $5.4M. Mayor Gillmor went down the department list and called for questions. C. Department Questions (See Proposed Annual Budget Document) 1) City Council (Page 49) None 2) City Manager (Page 53) None 3) City Clerk (Page 57) None 3 City Council Budget Workshop August 24, 2009 Page Four 4) City Attorney (Page 61) Mayor Gillmor noted the City Attorney is on retainer and asked what was saved. The City Manager said his hope was 75 but we budgeted 60, noting that Mr. Ginsburg's contract is now an operating expense rather than personnel expense. 5) Administrative Services (Page 65) Mayor Gillmor asked if this is a new department and the City Manager said it was and includes Finance and Human Resources. 6) Management Information Systems (Page 73) Mayor Gillmor noted we have capital money set aside for MIS, and asked if there was any thought of funding for automating channel 25. The City Manager said there is money funded in 2011. 7) Growth Management (Page 77) None 8) Police Department (Page 81) None a) Administration b) Operations c) Detective Division d) Dispatch Unit e) Code Enforcement Division 9) Public Works (Page 107) a) Roads and Maintenance Mr. Wolff said he thought the City Manager said that street paying was $50,000 and then he showed the splash pad expenditure of $50,000, which made him think we are not spending much money on street paving, and wondered if we are doing enough for street paving. The City Manager said the splash pad is being funded through recreational impact fees and streets are funded by gas tax and general revenues. He said that gas taxes are spent on street lighting and the old bond for street improvement, and there is not much left for street paving so one shortfall has been shying away from resurfacing streets. He said he hoped we can tackle this with bigger projects like Easy Street, and Barber Street which used stimulus money. He said he is hearing complaints on various City streets and though we will struggle, hopefully we can address them when the bond rolls or when revenues increase again. b) Stormwater Utility c) Garage d) Facilities Maintenance e) Parks and Recreation f) Cemetery 4 City Council Budget Workshop August 24, 2009 Page Five 10) Non Departmental (Page 131) The City Manager explained the purpose the non departmental line for items such as insurance, electric, CRA payment, 4th of July, employee benefits, Pelican Brief, and a catch all for other items. 11) CRA (Page 142) The City Manager said that the budget will be tightened up, and have a separate budget approved by Council which will modify this page of the budget. 12) Capital Projects (Page 149) Mayor Gillmor said Council went though the CPI a couple of weeks ago. 13) Golf Course (Page 157) Mayor Gillmor asked if some of this savings amount is due to changing of the maintenance contract from One Source, and the City Manager said yes. 14) Airport (Page 169) None 15) Building (Page 175) Mr. Wolff said the Building Department represents a unique challenge and thought the City Manager outlined its status very well and expressed the opinion that by maintaining our own department we keep cost in check for residents. He asked what the dollar amount of that savings would be. The City Manager said he did not have an answer, but it is a safety service that we can control, that complaints from contractors and home owners are low, and to tangibly quantify the benefit of in -house service is difficult but it is a governmental operation that by statute has to be run like an enterprise. He said you have to look at are complaints low, do we give quality service, and are things getting done and the answer is yes. He said when things get out line or you want to change fee levels you have control over that with Council, the Construction Board, and the City Manager. You have to have a Building Department and conduct inspections so why not have control of it. Mr. Wolff asked with 40% of the workload being staff inspection, what occurs with one's time in down time. The City Manager said staff has been cut so the inspectors also work the counter, and automate permit information. He listed the remaining staff, noting one staff member pays her salary through business license. He said when we separated the Building Department out of the General Fund and we paid $1.5M, we did a chart on that and delineated that money was building money and not general fund, money which came from the boom and not taxes; so that money should be set aside, and when it is gone, it is Building money gone not tax money. 5 City Council Budget Workshop August 24, 2009 Page Six In response to Mayor Gillmor, the City Manager said in 2006 we created the Building Department fund out of building inspections as mandated by Tallahassee which created legislation so building and construction fees only pay for operation of inspection services. He noted not every municipality has a Building Department fund, but we followed the law. 5. PUBLIC COMMENTS Mayor Gillmor asked if we operate the Building Department like an enterprise zone could we do a profit and loss on it and see if it is self supporting, noting you expect a business to lose money in the beginning. The City Manager said in the last three years you saw losses, and we are on downside of that curve. He said his philosophy is that we have four employees who are essential and we are banking on a rebound before additional cuts have to be made. Don Wright, 720 N. Fischer Circle, Sebastian, thinks the Budget Committee and City Manager have done a tremendous job, he knows there is fuzzy math for those who bought during the boom years. He noted his taxes increased slightly, and some long term residents won't see a reduction in taxes, but newer residents who paid probably more than their house was worth during the boom will see a reduction and they deserve a break. He said overall this was a tremendous job by the City Manager, no changes sends a positive statement and his recommendation should be followed. The City Manager said most people should have received a TRIM notice which may show an increase but reminded Council they set the millage in the TRIM at the rolled back rate which is a slight increase, so hopefully once the final millage is set most people will see a deduction in the final tax notice. In response to Mayor Gillmor, the City Manager said the TRIM notice is a not to exceed number. 6. COUNCIL COMMENTS /DIRECTION Mr. Wolff congratulated everyone in the City for more than pulling their weight during a difficult time, said Mr. Minner did a great job, and appreciated the Budget Committee's efforts. He noted that the City Manager hears comments that the City is generous on its health care package, and stated at the end of the day it is just insurance policy, you've got the potential of those benefits and it is not until you use them that they become tangible. He said when you get sick you may just as easily get denied so one has to keep that in perspective, having the coverage is not to say you will be able to reap the benefits of it because when you can't work you lose that coverage, and hopefully we will see stabilization of costs. Mr. Wolff said Chairman Herlihy also mentioned savings on electricity, noting the telephone expense is astronomical and suggested maybe MIS can look at alternative ways of communicating. 6 City Council Budget Workshop August 24, 2009 Page Seven .1 'Ai Richard H. mor, Mayor ATTEST: Sally A. Maio, M. C City Clerk The City Manager responded one thing we have done is look at that number, crediting MIS, and have gone through cell accounts to save $10,000 this year, that he did not choose to represent the savings in the budget but we will see it as we progress. Ms. Simchick echoed comments on the hard work on everyone's part, that she personally felt we should not want to increase the millage rate to balance the budget. She said we currently have $5.4M in contingency, would be comfortable keeping millage at 3.3456, not raising the millage, and even consider taking $300,000 from contingency and not shutting down City Hall for furloughs. Mayor Gillmor said the City Manager has done an excellent job of shaving expenses, believed he feels in his heart he can keep services as they are expected, would be careful of going into reserves any further which would have us reaching a supermajority quicker if we did, and agreed with 3.3456 mills. He again noted taxes will be less than what TRIM notices are showing, so from his point of view we are going in the right direction. Mr. Hill said what concerns him is that what takes place in all levels of government is that we find it easy to put off expenses to our children or the next generation, that in 2014 we will be pretty much out of money and we will need a supermajority just to keep the City running. He said it is easy to say keep the millage the same, and even though he is a strong proponent of stripping fat, we have been able to strip the budget down to $84,000 through a lot of pain that staff will have to endure. He said he wants to be very, very careful with our finances, we are saying that by passing this budget, we are telling future Councils to 2016 that they have to raise the millage to the maximum allowable amount. He said he was not sure we should cut taxes by 17% for an $84,000 deficit, whether we should ask employees to endure 12 furlough days, and suggested finding potential savings in areas such as phone or electric bills. He said we really need to be careful, that maintaining a millage rate is an expedient thing to do but next year Council will have to increase to run a deficit, and the same thing year after year. He said his was not in favor of increasing taxes, but needed to be sure we are not spending future Council's money. 7. Being no further business, Mayor Gillmor adjourned the budget workshop at 7:38 p.m. A•.roved at the September 2009 Regular City Council meeting. 7