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HomeMy WebLinkAbout05172010BUD MinutesHOME OF PELICAN ISLAND CITY OF SEBASTIAN BUDGET REVIEW ADVISORY BOARD WORKSHOP MONDAY, May 17, 2010 6:05 P.M CITY MANAGER'S CONFERENCE ROOM 1225 MAIN STREET, SEBASTIAN, FLORIDA Chairman Ed Herlihy called the Citizens Budget Review Advisory Committee meeting to order at 6:05 p.m. Present: Ed Herlihy, Jerry Klenck, Edward Kroah, Harry Marshall, Adrina Davis Absent were Christine Vicars and Brad White. Staff Members Present: Debra Krueger- Administrative Services Director; Kenneth Killgore- Finance Director. Chairman Herlihy advised that what he was hoping to do tonight was discuss the upcoming budget, set the scene and allow the board to talk about it. Some information has come up since he wrote the memo dated April 21, 2010. With Sebastian Property Tax, he looked at cities the same size as Sebastian. Cities such as New Smyrna Beach, Casselberry, Rockledge, they have about $7- 8 mil range in Ad Valorem, and we are in the $4 mil range. This is the reason that Ken Small told us back in March that our Police Department cost us more than our Ad Valorem tax. Our Police Depaiintent cost us 4.6+ and our Ad Valorem is 3.9, this is 110 Mr Small advised that typically in the State of Florida, it is 65 -75 Mr. Herlihy stated that the question is, Is our Police Dept. too expensive or are we not raising enough taxes? The City of Sebastian is not taxing anywhere near the level that cities of our size are doing. The City Council has been reluctant in raising taxes in the 5 years that he has been here. Property Taxes and Assessed Valuation last year it went down 12 The City Manager last year projected that it would be down 12 The Advisory Committee last year projected it would be on the low side of 15 Palm Bay was 18% last year, this year they are 17% which is a guesstimate. They are going in the right direction, but we will know our numbers by June 1. If we fall another 15 we can be short 300,000 to 400,000 this year. Another problem to look at is we have a terrible low employee head count. It is the number of employees per 1000 population. Vero Beach is somewhere around 18 -19 and we are at 5 -6. Mr. Kroah advised that that number is distorted. They have other things in their head count, so this is not apples to apples. Mr. Herlihy advised that one of the reasons for the distortion is Vero's Police Department and Public Works Dept. is in excellent condition and they have a lot of employees working in those departments but nevertheless, this city has a very low head count in terms of employees. Another topic for discussion is our General Fund Reserve. For those on the board who did not hear the story about the City of Lakeland. This winter they had a reasonable reserve, but they had a catastrophe. The City pulled so much water out to water their strawberries and vegetables, they created sinkholes. If we were hit with a major hurricane, it could wipe out our General Fund which is about $5 mil. We have a healthy fund. Chairman Herlihy distributed a Police Department Budget Summary for fiscal year 2010 of several cities that he had pulled off the interne. Cities such as the City of Sebastian, City of New Smyrna Beach, City of Rockledge, and the City of Casselberry. He advised that different cities do them in different ways. He thinks that we (City of Sebastian) have about 20 Police Officers. Ms. Krueger advised him that we have about 38 Sworn Officers, but in Road Patrol we have about 30 Officers. We have 39.5 Law Enforcement Sworn positions. Mr. Herlihy stated that the City of New Smyrna Beach has a total of 21 Officers, a city which is much more of a resort city than we are. He was not able to pull information on City of Rockledge, but he noted that the City of Casselberry had 38 Police Officers. We are a little under, but not too bad. Mr. Killgore reiterated that some of the positions such as Detectives are also sworn officers. Ms. Krueger stated that the total sworn officers also included the Chief, Deputy Chief and Captains. Mr. Kroah advised the Chairman that the 39.5 was only sworn officers, but did not include the civilian employees such as Code Enforcement Officers. Ms. Krueger also advised that the total number of employees in the Police Depaitment was about 59 which included Dispatch employees and Administrative employees, but that total she believes will be reduced for the coming year. Ms. Krueger also advised that she believes per capita, there should be 2 Police Officer per 1000 residents. We should be about 44 45 sworn officers if we went by the per capita. Chairman Herlihy stated that when he did it last year, per the FDLE numbers, we were just short of 6 officers. He advised that it is tough to make a gross generalization, but this gives us some idea. The Police Department is a large portion of our budget, we just spent $4.6 mil out of $10 mil for them. Chairman Herlihy brought up the subject of Fee structures. He stated that he had a discussion today the City Manager Al Minner about retirement. Mr. Minner informed him about the applicable Florida law that relates to the Police Retirement that we can do absolutely nothing about. This amounts to over 20 It is an unfunded mandate. Ms. Krueger advised that she read this morning in the Florida Today that the Palm Bay Firefighters are in negotiations, and the pension was one of the topics discussed. They are trying to make changes for the new officers coming in. What some organizations are trying to do now is making it a Defined Contribution Plan versus a Defined Benefit Plan. Defined Contributions are the 401 and the 457 Plans instead of a full -blown Pension Plan. Mr. Klenck inquired as to whether the Union will allow them to do that. Ms. Krueger stated that that part is not in the contract. She also stated that the other Union Contract (PEA) does stipulate how much we can contribute. The Actuarial assumption is that we will be getting 8% on our money, but because of the economy, you might not see that return for 20 -30 years and we might have to end up picking that up. Mr Klenck inquired as to how many Volunteers the Police Department had. Ms. Krueger replied that they had approximately 20. Some of which are School Crossing Guards. They do not come in for 8 hours a day, they alternate days. Mr. Klenck also inquired of how many vehicles are utilized by them. Ms. Krueger replied that they use about 7 or 8. She also advised the Board that the City is now focusing on the situation with City Garage, and evaluating the whole process. Breaking it down to how many vehicles, how many we sent to auction, as well as the preventive maintenance. We are also focusing on the Street lights. Chairman Herlihy reminded the Board members that our Police Retirement is costing the City over $410,000 while others are costing $311,000. This is within our control and not controlled by the State. Both the PBA and the PEA contracts expire September 30 this year, so this is the time to fix what we can. The retirement in the PEA contract is up for discussion. Ms. Krueger advised that we cannot touch the contribution rate at this time per Chapter 185 for the PBA or the PEA. We just received a memo that the pension the PEA is in is at a critical state right now. To keep that investment whole, we cannot alter our contribution rates for the 2010 year. We contribute 9% to their pension, and we were looking to reduce that rate to 8 but we received the information that it was in a critical state per pension act. Actually, they took away benefits from the pensioners; there is no more early retirement- you must be 62 to retire. Mr. Klenck inquired of the status of the 10 new cars. Mr. Killgore advised that there were 7 new cars, and Ms. Krueger advised that we are watching what cars are going to auction, and the new vehicles are replacement vehicles. Mr. Klenck informed them that he spoke with the Palm Bay Police Department, and they informed him that the average mileage on a vehicle is 100,000. Mr. Herlihy thought that 100,000 miles on a car was very low, some car are averaging 175,000 to 200,000. Mr. Klenck advised that some cars do have a tire problem, and he found out that there is a State mandate that you cannot plug tires on a Police car, they go into inventory. Mr. Killgore said it is probably based on case law and judgment. Mr. Klenck also wanted to know if the tires are not used on Police cars, are they plugged and used on other vehicles and not thrown away. Mr. Killgore advised that they are used on the vehicles utilized by the Volunteers. Ms. Krueger assured the Board that the tires are not being thrown out. Chairman Herlihy advised that the City is going out for bids on the Health cost. Ms. Krueger informed the Board that today she received information that the total premium of approximately $68,000 which will be brought down to the .employee level. Currently we pay 100% of the employees' health, dental and vision, and 50% of the dependant care and that is for both contracts. Chairman Herlihy inquired about the Building Dept and the Growth Management Dept, because of the recession, where are we with the headcount for both departments? These are areas that might require a microscope or magnifying glass. Mr. Klenck asked about a discussion in the past to have the County take some of it. Mr. Herlihy responded that if we want to be a city, we have to control our destiny as much as we can within financial reason. It is good business because of the high capital cost to pay the County for Fire and EMS. It is not a good deal to have them do the Police Dept. You don't have a feeling of City if you have others doing the policing. Mr. Klenck inquired as to whether they would have to follow the laws of the City or County. Ms. Krueger replied that the Building Dept follow State law while the Growth Management Dept follows our Comprehensive plan. Mr. Klenck advised that the City of Merritt Island is totally run by the County. They have no Police, and no Fire Dept. Mr. Herlihy questioned whether we have too many people and not enough work. We hope it is going to grow. He stated that he does not want the General Fund attacked to reduce taxes. He thinks it is short term. Mr. Klenck inquired of the mandatory solid waste disposal. According to Ken Small, that would be $100,000 per year revenue that we can take in. He said Mr. Small also advised that this could be added to our tax bill. Mr. Klenck said he was just tired of seeing garbage on the side of the road. He said it was brought up for a vote, and this is an election year, someone has to say something about it. Mr. Herlihy asked if Mr. Klenck thought that we can increase our revenue by $100,000? Mr. Klenck replied that is what Mr. Smalls said. Mr. Killgore advised that he was always told that you can't make money from residential garbage pickup. It takes a commercial size pickup to generate enough revenue to subsidize for the residential pickup. The rate has to be high enough to cover the cost. Mr. Marshall stated that everyone has to do it. It cost the residents $36.00 per quarter for pick. Mr. Davis inquired if we really want to have compulsory garbage pick up. Mr. Killgore stated we currently have a franchise company who handles the billing and pays us a percentage of their revenues. We would have to set it up where we would pay them a contract price for picking up everyone's garbage. We could have the contractor do the billing like they do now and pay them out of the fees collected. Mr. Davis stated that if Council voted to have a mandatory pick there would be a revolution in the town. Mr. Klenck added that 52% voted against it. We could lay -off more employees, but that is what we are trying to avoid. We are just looking for ways to raise revenue. Mr. Herlihy advised that if this committee feels strongly about it by the end of July when we submit our fmal report to the City Council, and the majority of the board feels it is an issue, we can make our recommendation. Mr. Kroah stated that currently we are receiving $65,000 a year franchise fee from Solid Waste, and now we would be asking them to pick up garbage from everyone. This is a cost that we would be passing on to the taxpayer. If we pick up everyone, the cost would be doubled. Mr. Killgore stated that 40% of the residents are not being picked now. Mr. Klenck read from a report that stated... "Mandatory Solid Waste collection will bring in 6% which equals to $100,000 on non -users right now Mr. Herlihy asked the board if anyone had ever lived somewhere where there wasn't solid waste disposal. Mr. Marshall advised that about 25 years ago in Wisconsin they would go to the dump on Saturdays. Back then you would either burn it out back or take it to the dump. He advised that he likes the freedom. He does have Solid Waste pickup, but he enjoys having the choice. The purpose of having a proposal is strictly for revenue. We need to find out how do we enhance revenue? Mr. Herlihy advised that he is taking notes, and at the next meeting we will be looking at the budget, and we will bring this up again. At the last meeting before Council the board can do a yea or nay and he will talk to Mr Minner about getting some real numbers from Ken Small Mr. Kroah thought that Waste Management should have the information. They know how much it cost to do the pickup now. Mr. Davis stated that additional revenue would be good business for them. Mr. Klenck confessed that he was not a big pusher of Waste Management. Some board members agreed that their trucks are never on time, and sometimes nothing gets picked up. Mr. Herlihy was proud to admit that his family members are great recyclers. He advised that up North recycling brought in a lot of money. Down here it is a County run operation. Mr. Klenck wanted to discuss what Ken Small brought up about the Local Option Gas Tax we had with the County. He said that Mr. Small said that there were 5 cents left that we could add on. Mr. Killgore advised that he thinks what Mr Small was referring to was that the State Statute allows the County to collect those additional charges, and by inter -local agreement, some counties will share some of those funds, but it is not necessarily a given. Mr. Herlihy stated that the price of gas is lower in Indian River County than it is to the North and South of Indian River County. The lowest price is gas right now is the Hess Station at US 1 and CR 512. Mr. Marshall inquired if the City could regulate the tax on the gas. Mr. Killgore advised that it can be done only if permitted by the State. The State can outline a certain amount of tax that can be levied on the gallon. Mr. Killgore stated that he will get with Ken Small and get some clarification on the statement he made. Mr. Herlihy also wanted Mr. Killgore to speak with Mr. Small about the mandatory garbage pickup. Ms. Krueger advised the board that she will make a list of the items that were unanswered at this meeting and will get answers for them. Mr. Klenck wanted to discuss with Mr. Minner about annexation of parcels on CR 512. These are tax revenues out there that we are not getting any part of. He also inquired about a merger with Roseland. He would like to see a merger with Roseland. Mr. Herlihy commented that a lot of people in Roseland have a negative view of Sebastian because of the Airport. Ms. Krueger inquired of Mr. Klenck if he was the board member who had questioned all the "nos' on Chief Morris' report. She advised him that dates listed on the report were close to the end of the quarter, there were no arrests made hence the reason for the "nos She advised that she received an email from the Chief. Mr. Kroah inquired at what was the board looking at this year in terms of budget cuts, could it be 10 or 11 Mr. Killgore advised that we might be looking at about 5 or 6% to keep our reserves, and that would be based on Ad Valorem going down 12 We should have those figures around June 1, although certified is not until July 1. Mr. Kroah inquired about forecasting of revenues this year. Mr. Killgore advised that this year's, revenue should be close since we were within 5% last year. Mr. Kroah inquired about the Parks personnel. He stated that in 2005 the City went from 17.5 personnel to 23.5. Ms. Krueger advised that we took the Community Center from the County which added more staff members. Mr. Kroah inquired about the Police Department having 63 cars with only 30 officers. Ms. Krueger advised that we are still analyzing this and will have the information ready for the next meeting. Mr. Marshall inquired if there has ever been a cost comparison or study done in contracting out the garage, Parks Recreation, or Police Department. Mr. Killgore stated that other cities who have done studies have noted that some Sheriff's offices are willing and able to consolidate their duties, while others are just not interested or may quote a higher price just to say they offered. It has to do with politics. Mr. Marshall stated that he just wanted an analysis. Ms. Krueger advised that we are currently focusing on the garage, trying to make it more efficient.. We are doing our calculations and have reduced staff. There has been some talks about contacting out the Parks Dept. We have been keeping our eyes on the three Enterprise Funds; Building Dept, the Airport, and the Golf Course. Mr. Herlihy stated that last year one of the things discussed was contracting out the Parks mowing, we just did not get to it, but it is something that needs to be looked at. Mr. Herlihy agreed with Ms. Krueger. The deal we received on the quarter round with Sunshine Landscaping was a good one, they are very hard workers. Ms. Krueger commented that the City employees used to do it before it was contracted out. Mr. Klenck inquired if the City had every advertised outside for contracting out the garage. Ms. Krueger stated that we are currently looking into it. Mr. Klenck advised that he was responsible for contracting out the body shops of the City of Palm Bay, Brevard County, City of Melbourne, and the Airforce Base. He had to prove to them that it was in their best interest. Mr. Herlihy was worried about taking the Police cars and farming out the work to outsiders. There is that possibility that you lose control. Ms. Krueger stated that the City of Ft. Lauderdale, a City of that size, actually contracts out their garage and have not encountered any problems. Mr. Herlihy concluded the meeting. He stated that the next meeting should be on June 14, 2010. Mr. Minner will be on vacation June 26, 2010, and we may have a meeting without him The last week in July we will make our presentation to the City Council. Mr. Herlihy stated the he will be out of town beginning the first week of August to about the 15` We have a meeting scheduled for July 19, 2010. Ms. Krueger wanted to recap: 1. Mileage we are trading in our Police vehicles 2. State mandate about plugging the tires 3. How many Police vehicles we have for the Police Dept. and how many Volunteers work each week. 4. How many Police vehicles in ratio to Police Officers 5. Speak with Ken Small about Solid Waste Disposal- how do we go about getting it just for informational purposes. 6. We will also look into the Recycle revenue side of it. 7. Local Option Gas Tax. 8. Look into the 5 cents Local Option Gas Tax- we will confirm that. 9. Get the Street Light numbers for Jerry Converse- we had the idea of rotating the lights. Ms. Krueger inquired of Mr. Minner if the Roseland merger was possible. Mr. Minner stated that we should find out what our expenses would be. We need to know what additional load will be on our Police Dept. Once we have done all that we will realize that fmancially we will be better off not merging. Roseland does not want to be annexed. With 50 houses in Roseland, they would want to have their roads paved. Mr. Minner thought there would be a benefit to having Roseland annexed, they would have a voice. Mr. Minner apologized for his lateness. There being no further business, the meeting was adjourned at 7:30 p.m. Adopted at Meeting of July 12, 2010: Ed erlihy, Chairman l -7-711 D to