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Home My WebLink About09132010BUDGET-HEARINGar or HOME OF PELICAN ISLAND SEBASTIAN SPECIAL CITY COUNCIL MEETING BUDGET HEARING MINUTES MONDAY, SEPTEMBER 13, 2010 5:30 P.M. CITY COUNCIL CHAMBERS 1225 MAIN STREET, SEBASTIAN, FLORIDA 1. Mayor Gillmor called the meeting to order at 5:30 p.m. 2. The Pledge of Allegiance was recited. 3. ROLL CALL City Council Present: Mayor Richard H. Gillmor Vice -Mayor Jim Hill Council Member Andrea Coy Council Member Eugene Wolff Council Member Don Wright Staff Present: City Manager, Al Minner City Attorney, Robert Ginsburg City Clerk, Sally Maio Deputy City Clerk, Jeanette Williams Airport Director, Joseph Griffin Administrative Services Director, Deb Krueger Finance Director, Ken Killgore Police Chief, Michelle Morris MIS Senior Systems Analyst, Barbara Brooke -Reese 10.039 4. 1 PUBLIC HEARING AND ADOPTION OF PROPOSED MILLAGE AND TENTATIVE FY 2010/2011 BUDGET The City Attorney explained this is the first of two statutory required budget hearings, called the tentative budget hearing with the first substantive item discussed to be the percentage increase in millage over the rolled -back rate necessary to fund the budget, if any, and the specific purposes for which the ad valorem tax revenues are being increased. A. City Manager Announcement of Proposed Millage Rate of 3.3456 Mills Which is 14.26% Lower Than Rolled -Back Rate of 3.9019 Mills and Budget Overview The City Manager formally announced the proposed millage rate for fiscal year 2011 of 3.3456 which is 14.26% lower than the rolled -back rate of 3.9019 and staff recommended adoption. City Council Budget Hearing September 13, 2010 Page Two The City Manager began a brief PowerPoint presentation on the $22,463,859 proposed budget. Mr. Wright cited discrepancies in the Special Revenue numbers on revised page 16 and the PowerPoint slide. The Finance Director explained the difference on revised page 16 would be the use or the accumulation of fund balance which is the difference between source and use for the year so the difference would tie; it's trying to get to an ending fund balance. The City Manager continued his presentation outlining the debt service account, and enterprise funds. He said the Building fund is the most problematic with no rebound in sight yet he proposed to continue deficit spending to continue timely permitting services; keep staff operations certified; and he noted if he does reduce staff, those positions will have bumping rights affecting the general fund. He said the Building Department can continue until FY2014 if they do 10 permits per month. Mr. Wright said the projected source of revenue at $355,659 included the business tax revenues, and if that is taken out, the actual deficit for the work is substantially $40,000- $50,000 larger; he didn't anticipate an increase in permit activity; he would like to see business tax revenue taken out of the Department, set aside for economic development and adjust Building Department staff. The City Manager said permit fees are specifically earmarked by statutes and must be dedicated to building expenses, so in the good times the building fees help keep taxes down and on the flip side, if you put the revenues into the general fund, the taxpayers would subsidize the Building fund. Mr. Wright said he would like money retained in that fund so when building picks up we don't have to erase a deficit. Mr. Hill agreed, stating the Building Department is paying for itself by using their reserves; the only way to make it more efficient is a reduction in staff and in the future, they certainly need to look at that if the Department is not receiving the amount of permit requests that would sustain them. Mr. Wolff said it would be 120 permits a year to maintain three staff members and asked what they are doing with their time if not issuing permits. The City Manager said they still have considerable walk -in business, minor permit processing, they split time at the front desk with tax collection, filing, categorizing, updating files, and examining plans. The City Manager capitulated they are not that busy, but if positions are eliminated they can affect the general fund, and when the market turns around we must think about that. He said it is a difficult decision, noted we are set for FY2011, we should put together workshops to analyze if we want to reduce staff further, and advised Council should get with the Building Official to get a more detailed position on what is provided. Mr. Wolff asked how far back the Department was issuing 10 permits a month. The City Manager said since the fall of 2007. Mr. Wolff asked if they could say the Building Department is a component of economic development. City Council Budget Hearing September 13, 2010 Page Three The City Manager responded it is because there is immediate control over the inspections and plans review but the other fair question is, do you need that many people to do that. Mr. Wolff asked if they could bump someone if they did not have seniority. The City Manager explained if we have a building inspector who earns $70,000 including benefits, the PEA contract says we can only reduce their salary 6% so the inspector could bump a $40,000 position costing the general revenue fund $20,000 and if that is done a number of times that will be a mill increase. Mr. Wright said a plan should be in place within the next couple of months because the revenues received for business taxes add up to a ton of money for over the last four or five years. B. Mayor Opens Hearing for Public Comment on Proposed Millage and Tentative Budget Mayor Gillmor opened the hearing for public comment at 6:04 p.m. Damien Gilliams, 1623 US Highway 1, said we all knew the building permits were dropping substantially yet this Council was reluctant to put together a business plan to affect the problem; nobody wants to cut jobs; he asked if we should go with the County Building Department like the City of Vero Beach; if the money is not there, a decision has to be made. He asked Mayor Gillmor to ask the City Manager to do an assessment on what would it take to have the County take over the Building department. Council Input Ms. Coy said she agreed with the City Manager to hold out, and tonight was not the night to go to the chopping block. She said she had a discussion with Commissioner Davis who said their Building Department isn't doing too well either. She also said she didn't see the business tax going towards economic development until we get out of the hole, but would like that in the future as well. She thanked staff and the Budget Committee who worked hard to meet these goals and noted it is a savings to each taxpayer. Mr. Hill congratulated staff and the Budget Review Committee who worked extra hard this year, he said they directed the City Manager to look at the Building Department issue going forward, figure out what can be done; he was pleased to maintain the line at the 3.3456 rate, he understood staff has taken a pretty big hit and he has always been supportive of competitive wages with benefits but there are a lot of people out of work right now and any job is a competitive wage right now. Mr. Wolff said he supported what Mr. Wright said about the Building Department, he would like to hear more about the County handling it; there may be other options that they might hear of. He said the City Manager did a very good job of balancing the budget in the toughest year, and thanked staff with their patience. Mr. Wright reiterated the Budget Committee and Finance Director did an outstanding job, congratulated the public union employees for passing a contract with savings. He said his discussion about the Building Department is the result of watching a trend that he City Council Budget Hearing September 13, 2010 Page Four didn't want to see slide another year. He said it's possible the millage rate might go down even more noting the budget is a one -year contract. Mayor Gillmor thanked the Finance Director, the Administrative Services Director, and the Budget Committee for all of their hard work. He said we are operating on less and less money, we are lean and mean, and we have six full time employees for every 1,000 residents which is very, very good. The City Attorney explained that Council is dealing with the budget presented by the City Manager and Council is not amending that document at this time; noting the budget year begins October 1 2010. 3 C. Adopt Resolution No. R -10 -28 Proposed Millage Rate for Calendar Year 2010 Final Public Hearing and Final Adoption Scheduled for 9/22/10 (Finance Transmittal, R- 10 -28) A RESOLUTION OF THE CITY OF SEBASTIAN, INDIAN RIVER COUNTY, FLORIDA, ADOPTING A PROPOSED MILLAGE RATE OF 3.3456 MILLS FOR THE CALENDAR YEAR 2010; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. The City Attorney read the title of Resolution R- 10 -28. MOTION by Ms. Coy and SECOND by Mr. Hill to approve Resolution No. R- 10 -28. Result of the roll call vote: AYES: ALL NAYS: NONE Motion carried, 5 -0. 7 -15 D. Adopt Resolution No. R -10 -29 Fiscal Year 2010/2011 Tentative Budget (Finance Transmittal, R- 10 -29) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEBASTIAN, INDIAN RIVER COUNTY, FLORIDA ADOPTING THE TENTATIVE BUDGET FOR THE FISCAL YEAR BEGINNING OCTOBER 1, 2010 AND ENDING SEPTEMBER 30, 2011; MAKING APPROPRIATIONS FOR THE PAYMENT OF OPERATING EXPENSES, CAPTIAL EXPENSES, AND FOR THE PRINCIPAL AND INTEREST PAYMENTS ON THE BOND AND OTHER INDEBTEDNESS OF THE CITY IN THE CITY'S GENERAL FUND, SPECIAL REVENUE FUNDS, DEBT SERVICE FUND, CAPITAL IMPROVEMENT FUNDS, GOLF COURSE FUND, AIRPORT FUND, AND BUILDING DEPARTMENT FUND AS PROVIDED FOR IN SCHEDULE "A ATTACHED HERETO, ESTABLISHING AUTHORITY OF THE CITY MANAGER TO IMPLEMENT THE BUDGET; PROVIDING FOR SEVERABILITY; PROVIDING FOR CONFLICTS; AND PROVIDING FOR AN EFFECTIVE DATE. The City Attorney read the title of Resolution No. R- 10 -29. MOTION Wright and SECOND by Ms. Coy to approve Resolution No. R- 10 -29. Result of the roll call: AYES: ALL NAYS: NONE Motion carried, 5 -0. From the back of the room, Mr. Gilliams called for public input on this item, and the Mayor called for a point of order. Mr. Gilliams walked out and said good night. City Council Budget Hearing September 13, 2010 Page Five Approved at the September 22 2010 Regular City Council meeting. Ric a H. Gillmor, Mayor ATTEST: Sally A. Maio, MM City Clerk 5. Being no further business, Mayor Gillmor adjourned the budget hearing at 6:25 p.m. E. Announce Final Public Hearing on Millage and Budget will be held on Wednesday, September 22, 2010 at 6:30 pm Mayor Gillmor formally announced the final public hearing will be held on September 22, 2010, at 6:30 p.m. FY 2010 -11 BUDGET PRESENTATION OVERVIEW •Special Revenues (CIPs) •Enterprise Funds •General Fund •Strengths and Weaknesses •Questions and Answers SPECIAL REVENUE, DEBT SERVICE AND CIP FUNDS aloof HOME OF PELICAN ISLAND CITY COUNCIL FY 2010 -11 1St BUDGET HEARING MONDAY, SEPTEMBER 13, 2010 Special Revenue Fund $5,074,010 22% General Fund $10,454,340 46% CITY OF HOME OF PELICAN ISLAND PREPARED BY AL MINNER CITY MANAGER FY 2010 -11 PROPOSED BUDGET $22,463,859 Airport Fund $395,070 2% Building Department $465,740 2% Golf Course Fund $1,332,789 6% Debt Service $1,460,410 7% Capital Improvement Projects $3,281,500 15% SPECIAL REVENUES Discretionary Sales Tax $2,349,593 Local Option Fuel Tax $689,463 Recreation Impact Fee $475,000 Stormwater Utility Fee $1,138,977 Community Redevelopment Agency $298,942 $2,462,000 Road Project AMOUNT PROJECT RETIRE DATE PAYMENT BALANCE $11,625,000 City Hall 2018 $1,030,681 $6,215,000 $2,294,000 DATE ISSUED 2003 DEBT SERVICE ENTERPRISE FUNDS ,800000 81600,000 81,400,000 81 ,200,000 $1,000,000 $800,000 5600,000 8400,000 $200,000 $0 CITY OF HOME OF PELICAN ISLAND ENTERPRISE FUNDS Golf Course FY 2001 0Y2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 ENTERPRISE FUNDS Golf Course >Worst Revenue Year In 8 Years (FY 2002 $1,385,635) >No Fee Increase in 5 Years ➢Goals for FY 2011 Cont nue Golf Programthing Whit keeping Rates Low ✓60,000 Rounds Per Year Future Goal (70,000) ✓Debt Now Retired ✓Budgeted Low Revenue in Anticipation of Revenue Rebound ✓Projected Surplus of $34,905 ENTERPRISE FUNDS >Cash Poor Asset Rich ➢Moderate Success in Creating Boutique Image ✓LoPresti %/V-Raptor ✓Sebastian Aero New Ownership) evenu ✓Nati ➢Continued rvral 1 peratio nue pment Opportune 120 100 80 80 40 20 ENTERPRISE FUNDS Building Department >Building Recession Continues >Total Elimination of 6 Positions 50% Reduction in Workforce ➢Estimate Losses Through FY 2011 •FY 2007 $427,275 •FY 2008 $212,176 •FY 2009 $159,430 •FY 2010 $131,584 •FY 2011 $111,290 ENTERPRISE FUNDS Building Department 25 20 15 10 5 a BUILDING DEPARTMENT Reasons for Deficit Spending >Continue Timely Inspection/Permitting Services >Keep Basic Certified Inspection Staff Operating (71% Total Personnel Costs) ✓Building Official ✓Building Inspector ✓Plans Examiner ➢If RIF Prevent Displacement of Other GF Personnel Per CBA ➢Due to CBA RIF Could Increase GF Costs ➢Building Department Fund Can Sustain Deficit Spending Until FY 2014 >General Data >Average 10 $2,800 Permits Per Month To Fund Current Expenses >Last 8 Month Average 8 >Last 20 Month Average 3.3 ENTERPRISE FUNDS Building Department $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 ($200,000) ENTERPRISE FUNDS Building Department GENERAL FUND HOME OF PELICAN ISLAND FUND BALANCE SUGGESTED BALANCE -FUTURE TREND -FUTURE REQUIREMENT FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY 014 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 ($200,000) ENTERPRISE FUNDS Building Department GENERAL FUND HOME OF PELICAN ISLAND Goals: Low Tax Burden Budget Goals Maintain High Quality Services Continue to Invest in Quality Capital Improvements Provide for Employees with a Competitive Wage/Benefits (Economy's Effect) SETTING THE MILLAGE RATE HOME OF PELICAN ISLAND Long Term Forecast at $3.3456 Mills 5,096,901 5,039,206 5,039,206 4,890,029 4,739,134 4,631,490 4,573,473 4,566,898 4,613,755 1162421127 974,525,138 925,798,881 925,798381 953,572348 982.180.033 1011645,434 1041994.797 1.073,254341 13456 3.3456 33456 32456 33456 32456 32456 33456 3.3456 3,760.487 2,484200 1,838,715 1378,974 1,385,300 10,847,676 s 8.282,240 24611 77.576 10,821.350 3.122,353 2307,270 1,836,540 1,454065 1438,092 6 10.454.340 8,170,190 2,26 6 350 17,800 10,454,340 2,952,485 2372,452 1.882,454 1486,337 0650,000 $10,643,727 8205315 2, 75,000 55,00040 15000040 811,782,804 2,952,485 2,739,263 1929,515 1523,496 1350,000 611,7044,759 8 .2 0 5.91 2 3 06,969 75,000 57,750.00 300,000.00 16,345,654 3,644760 2,807,745 1977,753 1561383 1650,000 11,037,640 8205,915 23 6 75,000 60537.50 300,000.00 196,64196 11,145,483 3,131692 2,877,938 2,027,197 1600,623 1650.000 11287,440 3,225.333 2349,887 2,077,876 1,640,638 1650,000 11,543,734 8 40 2857 2,306,989 753 83,669.38 300,000.00 190,941% 11,345,457 8599,799 230 6,989 75,000 66,85284 300,000.00 201668.57 11,550,300 3,321793 3,023,634 2,129,823 1681654 1650,000 11,866,904 8,801467 2 .306 9 89 75,000 70,195.49 300,000.00 206295.17 11,786,047 3.421147 4099,225 2,183365 1,723,695 0650,000 12.077.136 9.007,863 8 2,306,989 s 75,000 73,70526 300,000.00 211235.22 11.074,792 Estimated Reserve Assess Value Wage Rale Tames U19ity Service Tam State Shred Revenue Franchise Fees Other Revenue TOT LIEN FUND REVENUE Personnel Operations Capital Health Care Cost Increase End Furlough Oat's COL AIMeritIncrease TOT 6EN FUND EXPS REVENUE• EXPENSES 26,326 140 177 (150595) (107544) (58.016) (6.575) General Fund At A Glance 15% Decrease in Total Taxable Property New Total Assessed Value $974,525,138 Big Three Revenue Sources 86% of General Fund Property Taxes $3,122,353 Utility Taxes $4,057,355 State Shared Revenue $1,836,540 46,857 102344 General Fund Expenses CITY OF HOME OF PELICAN ISLAND MAJOR EXPENDITURE HIGHLIGHTS •Total General Fund $10,454,340 •Personnel Costs $8,170,190 78% •Operating Expenses $2,266,350 22% •Capital Expenses $17,800 <1% •Renewal and Replacement Fund $0 $3,500,000 $3,000,000 $2,500,000 52,000,000 51 500,000 51,000,000 5500,000 5 0 FY 2005 $4,222,022 Includes Storm Expenses FY 2006 160 140 120 100 80 60 40 20 0 Operating Expenses (Down 26% $739,599 Since FY 06) FY2007 FY 2008 FY 2009 Full-Time Employees FY2010 19% Reduction Since FY 2007 II 11111 II M•M•MI /I III I I I II I 01 I I MI I FY FY FY FY FY FY 2006 2007 2008 2009 2010 2011 FY2011 Budget Recommendation ✓Set Millage Rate $3.3456 ✓Approve Special Revenue Plan (CIPs) ✓Approve Enterprise Funds as Proposed