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HomeMy WebLinkAbout07122010BUD MinutesPledge of Allegiance Roll Call by Vaunette Davis. All present arvcF HOME OF PELICAN ISLAND CITY OF SEBASTIAN BUDGET REVIEW ADVISORY BOARD MINUTES MONDAY, JULY 12, 2010 6:00 P.M CITY COUNCIL CHAMBERS 1225 MAIN STREET, SEBASTIAN, FLORIDA Chairman Ed Herlihy called the meeting to order at 6:00 p.m. Present: Adrina Davis, Ed Herlihy, Jerry Klenck, Harry Marshall, Brad White, Christine Vicars, Edward Kroah Staff Members Present: Debra Krueger- Administrative Services Director; Al Minner- City Manager; Kenneth Killgore- Finance Director; Vaunette Davis -Human Resources Specialist. Motion to approve the Workshop Minutes of May 17, 2010 and the Minutes of June 14, 2010. Approved by Adrina Davis and seconded by Brad White. Chairman Herlihy advised that before Mr. Minner makes his presentation, he would like review and discuss the committee's recommendation for the budget, which will go before Council on Wednesday, 7/28/2010. Once the recommendation is received, he will distribute it to the board members and write a draft to Council. Mr. Minner advised that he did not have a presentation. The budget has not changed much since the last time we had the meeting on June 14, 2010, but he will briefly discuss the DR 420. On 7/1/2010 he received the updated assessments. The General Fund is out of balance approximately $82,000. At this time he is not proposing a balance because we are currently in negotiations with the Unions. He will be asking the employees to make a contribution towards the Healthcare. Last Thursday he had negotiations with both Unions and it went rather well. Both Union officials were very professional, they understood the situation and although they were not happy with some of our proposals, they will take it back to the membership and come back with some counter- offers. The counter -offer should be in our office by July 29, 2010. The Healthcare contributions should bring the budget down to about 20, 000. And if we look into some of our revenues, we just might be able to balance the budget. The Airport Fund is still struggling to balance- there is no easy fix for that. We just have to watch our grants until the economy comes back. The Golf Course, with the Green Fund being paid off, we will have some cash this year. This year we saw our worst revenue of $1.3 mil. Our major expense is the green fee, and the cart rental has come down. This year we see a growth of approximately $30,000 surplus, and as long as we manage that, the Golf Course can be solvent. The Building Fund is in the worst position of the three Enterprise Funds due to the economy. Our deficit is $100,000. We have at least 3 to 5 years of expenses before we see something catastrophic happening. We are trying to keep our existing personnel that we currently have so that when the economy gets better we won't fall behind in service. The special Revenue Funds: DST Funds- We are looking at the Police car purchases, we will get with the Chief on this. CRA- Council met on June 9th and reviewed some CIPs and orchestrated some goals to meet for a master plan. Local Gas Operation Tax- It speaks for itself. Once the debt is paid for and the lights bought etc, those monies are spent without major capital investment. Stormwater We transferred some to the General Fund. That fund is expended. Mr. Minner advised that he would like to get some feedback from the Committee on the DR420 which is the memo we get from the tax office which advises the public on how we set our millage rate. Our current proposal that we will recommend to Council on the staff level will be a 3.3456 millage rate. Our weakness in the budget is maintenance, which is long term. It is the monies transferred from the Local Option Gas Tax Fund into the General Fund, and the Stormwater Fund into the General Fund. We need to set a millage rate that would eliminate these transfers. It will allow the General Fund to use that money to do the existing operations into the budget, and for this to happen, we will need $230,000 more than 3.3456 will allow. In setting the DR420, we recommend to the Budget Committee that they recommend to the Council a millage rate of 3.5940. Mr. Minner advised that a millage rate of 3.9019 which would be a rollback rate, would generate $515,000. The millage rate of 4.5088 will generate $1,077,000. A copy of the millage rate was distributed to the Budget Committee members. Chairman Herlihy inquired if committee members had questions on Mr. Minner's presentation on the General Fund, or any of the Enterprise Funds. Mr. Jerry Klenck inquired about the nine cents Fuel Tax form that was distributed to the committee. Mr. Killgore advised that this tax was reserved to the County, and if they chose to, they could share it with the City. The County has looked at it in the past and decided not to pursue it. Mr. Klenck continued that from his research, of the 67 Counties that have it, 18 do not use it. It is estimated that it would generate $574,000, which would be voter approval. Motion was made by Mr. Klenck and seconded by Mr. Davis to have Council discuss this matter with the County. Mr. Herlihy advised that he would like to communicate both verbally and in writing to Council on this matter. Mr. Minner reminded the committee that for that tax to be imposed by January 1 it must be in no later than July 1 and since we have already missed the deadline for this year, we can be ready for 2010. Motion was made to make a recommendation to City Council on changing the Gas Tax for year 2010. All in favor. Mr. Klenck wanted to make a motion for Council to revisit the mandatory garbage pickup. Mr. Marshall inquired as to how this would be paid, would it be in the property tax or would we be required to pay for this service whether we use it or not. Mr. Minner stated that currently Waste Management does the billing and pay us a franchise. If we were to do mandatory pick up, it would have to be assessed and would be part of your taxes. Motion was made by Mr. Klenck and seconded by Mr. Marshall to continue discussion of mandatory garbage pickup. Board member White inquired on how does it work for vacant land. Mr. Minner advised that there probably would not be a charge for vacant land, but when a permit for the land is pulled through the Building Dept, that would be the trigger mechanism. Mr. Marshall inquired of the franchise agreement with Waste Management, does it include Condominiums or is that a separate deal? Mr. Minner replied the agreement is for residential and commercial, but depending on how the condos were set up it would vary as to whether they are commercial or residential. Because of the Franchise Agreement, every resident in Sebastian has to use Waste Management, they cannot have a private collector. Motion was made to recommend to Council a mandatory residential trash collection. Motion fails 4- 3 Herlihy No, Marshall —No, Davis- No, Kroah No Mr. Klenck inquired if Council did a study on closing the City's Central Garage? This study included savings on the Liability Insurance and revenue on sale of equipment, etc. Motion was made by Mr. Klenck and seconded by Mr. Marshall to discuss the subject. Mr. Klenck said that he could not see how we could close a $130,000 budget and show a savings of only $20,000. There is potential for great savings here. Mr. Kroah said that he did not see a great savings. Mr. Minner stated that we need to have a gatekeeper to track some of the preventive maintenance. This will be a discussion of Council when they do their workshop. Motion was made to recommend to Council to eliminate the City's Central Garage. Motion failed 6 -1 Davis- No, Kroah No, Marshall No, Vicars No, Herlihy No, White No Ms. Vicars inquired as to the Enterprise Fund with the passing of Mr. LoPresti, does it change the relationship the City has with the Company. Mr. Minner advised that it did not. Mr. Herlihy inquired of the availability of a FDOT grant, to build another building that is similar to the LoPresti deal where the City ended up loaning approximately $300,000. He inquired if this is this something that we can pull off. Mr. Minner advised that we have $1.4mil grant to construct another hanger at the Airport which will require a $290,000 contribution from the Airport to move forward. This grant expires in October 2010. We have the option of building a Speculative Industrial Build which means, we go to the DST Fund, we construct the building, it remains empty. We now have building ready to go, waiting for any company who wants to move in. Motion by Chairman Herlihy to recommend to Council to consider, if we do not get prospective tenants in time, we do a Speculative Build borrowing the money from the DST Fund, Seconded by Mr. White. Mr. Herlilhy reiterated that that this is not spending Sebastian's tax money, there is no risk to it. We own the LoPresti Building. Mr. Klenck inquired of the cost of the liability insurance. Mr. Minner advised it would cost approximately $6,000 per year. Mr. Marshall inquired of the monthly cost of maintaining an empty building with the economy in the current state. Mr Minner advised that it would cost about $8,500 per year which would include the $6,000 for insurance. Mr. Davis inquired about job creation. Mr Minner stated that he and the Airport Director have looked into grants and currently have one company who may be a great prospect in moving into the building. Motion made by Mr. Klenck to amend the original motion to include a clause indicating spending the DST Fund only if we have a partner, seconded by Mr. Kroah. Motion passes 5 2 in favor. Davis Yes, Kroah Yes, Marshall Yes, Vicars Yes, Klenck Yes Motion made by Mr. Herlihy to recommend to Council to build a "Speculative Build" only if they can find a partner. Seconded by Mr. Marshall. All board members were in favor. Motion passes. Mr. Marshall inquired as to the definition of what he considered a Catastrophic Event. Mr. Minner advised that if we spent at the rate we are spending and revenues do not pick up in the Building Department, we would have accumulated a deficit of $80,000. Revenues are programmed to increase 3 '/z per year. We just have to do better than Mr. Killgore's estimates. Mr. Minner advised that he wants all Funds to stand on their own. Monies are being transferred from the Local Option Tax into the General Fund for operation costs. $103,000 is being transferred from the Stormwater Fund into the General Fund for operating costs and it should not be. Mr. Herlihy wants to put together the recommendations for Council on July 28, 2010, with several others already made a motion must be made on the millage rates. Mr. Minner advised that this is for the DR420 not the final millage rate. Motion by Mr. Klenck to keep the current millage rate of 3.3456, seconded by Mr. Kroah. Motion fails 4 3 Herlihy -No, Marshall No, Vicars No, White No Motion by Mr. White to propose to Council, a millage rate of 4.5088, seconded by Mr. Marshall. Motion fails 5 -2 Herlihy No, Vicars No, Klenck No, Davis No, Kroah No Motion made by Mr. Herlihy to propose to Council a millage rate of 3.5940 that raises an additional $230,000, seconded by Ms. Vicars. Mr. Klenck stated he opposes. He cannot see raising taxes when he has recommended ways that we can cut cost from the budget. Motion passes 4 3 Kroah Yes, Marshall Yes, Herlihy Yes, Vicars Yes Chairman Herlihy stated that the next meeting will be August 9, 2010. He will need talk to Mr. Minner about changing the date. This is meeting will be the 3rd Quarter Review. He will not be able to make that date as he will be away until 8/18/2010, but will advise the board. With no further business, the meeting was adjourned at 7:30 p.m. Adopted at Meeting of August 18, 2010: Ed Herlihy, Chairman (‘-7 Date