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HomeMy WebLinkAbout03222011BUDCommittee Members Present: Adrina Davis William Flaherty Ed Herlihy Jerry Klenck Harry Marshall Christine Vicars Brad White (absent unexcused) Al Alvarez, Alt (absent) CITY of HOME OF PELICAN ISLAND SEBASTIAN BUDGET REVIEW ADVISORY BOARD MINUTES TUESDAY, MARCH 22, 2011 6:00 P.M. SEBASTIAN CITY HALL 1225 MAIN STREET 1. Chairman Ed Herlihy called the meeting to order at 6:05 p.m. 2. The Pledge of Allegiance was recited. 3. Roll Call: Staff Present: City Manager, Al Minner (Ex- Officio Member) Administrative Services Director, Debra Krueger Finance Director, Ken Killgore City Clerk, Sally Maio 4. Introduction of Members Each Board and Staff member introduced him /herself and gave a brief background. Chairman Herlihy said the Committee needs to select a Chairman and Vice Chairman. MOTION by Mr. Davis and SECOND by Mr. Klenck to appoint Ed Herlihy as Chairman passed on a unanimous voice vote. MOTION by Mr. Herlihy and SECOND by Mr. Klenck to appoint Chris Vicars as Vice Chairman passed on a unanimous voice vote. 5. Approval of Minutes: A. Meeting of July 12, 2010 B. Meeting of August 18, 2010 MOTION by Mr. Marshall and SECOND by Mr. Davis to approve the minutes passed unanimously on a voice vote. Citizen Budget Review Advisory Board March 22, 2011 Page Two C. Comments by City Manager The City Manager said if anyone on staff can do anything to help members they are always welcome, said this is a kickoff meeting for FY 2012 and for the 1 quarter 2011 budget amendment, and gave brief highlights on the good audit report just received and some of the minor adjustments made as recommended by GASB, which makes the books more open. He said staff has started on some FY 2012 issues, and two things discussed this morning among staff were that they are developing a plan, and while assessed values may continue to decrease, other revenues may be up, which are not quite balancing but helping, and the budget could be offset by those slight increases. He said this year's big worries are where ad valorem is going and personnel health insurance costs, and those issues will not be known until summer when the valuation comes in, insurances are bid and we deal with union negotiations. Mr. Klenck said last year the Board made a motion to have Council take a look at the additional one cent gas tax available to the County and asked whether Council had considered it and what was the outcome. The City Manager said he didn't think the Council picked that up and would ask the Clerk to research it, but the answer was probably no, noting we may not be able to tap into it. Mr. Klenck said we are one of only 18 counties that don't use it and he did not understand why. The City Manager said our elected officials have shied from any tax increases and it is a political issue. The Administrative Services Director said she would look into it. Mr. Klenck asked if there had been any further action on police officers taking cars home. The City Manager responded that during negotiations on the PD CBA last summer, management did not press hard on that issue due to other concessions being requested, i.e., furloughs, merit, COLA and health insurance issues. He said the PBA argued the furlough days, so in FY 10 they filed a grievance on that issue, and in FY 11 we bogged down on continuance of furlough, no merit and no COLA and also tried to decrease the City's contribution for health insurance. He said for FY 11 the City asked for a $25 contribution from employees for health insurance, which helped the City pick up $25,000 from both unions, so they did not get to the take home policy which will be discussed for FY 12. Mr. Klenck said the Press Journal noted that the cost of the take home policy was $53,707. The Administrative Services Director said staff calculates the cost at $25,000, and that the newspaper editorial was probably based on the IRS mileage estimate. The City Manager said there is a benefit of having vehicles in the neighborhoods, noting most agencies utilize this and it is a show of force, that the City had not enforced their 20 mile radius, and reiterated they have shown the actual cost to be closer to $25,000. Mr. Klenck asked if this is a taxable income issue. The City Manager said the Police Department is exempt from that. Mr. Klenck said the article says 19 cars are going out. Mr. Klenck then asked about the huge jump in cash reserves, and Mr. Killgore said this was simply reflective of projects that have not yet been completed. 2 Citizen Budget Review Advisory Board March 22, 2011 Page Three Mr. Davis asked if the City Manager intended to continue with the 25% contribution from employees for health care. The City Manager said it was actually a $25 employee contribution, and explained that one of the problems with early budgeting is that in these conversations we go in eighty directions and then we use three of them. He said staff has really taken it on the chin, has kept a positive attitude, is accomplishing things, but as we continue to get tighter, there are few things we can look at to balance the budget and it may not appropriate to talk about that nine months out. He said he thinks there is a plan, staffs know where the financial blocks are, and he wanted to avoid the trepidation that employees feel as they hear and read about these issues. Mr. Herlihy agreed with him, saying until you know what the revenue figures are, you can only speculate. He read from an article which notes nearly 20% of all Florida homes are vacant and questioned what that will do to assessed valuation, and questioned will this year be even tighter than last year and have we seen the bottom. Mr. Klenck asked what the second of two police vehicles listed in the documents was. The Finance Director responded that this shows projects carried forward from the last fiscal year, noting one vehicle was not delivered and paid for from the previous year, and when it is, it can be closed out. The Administrative Services Director said actually the Police vehicle replacement budget decreased from $385,000 to $276,500 for current FY 2011. The City Manager briefly addressed the airport issues, noting the airport fund is currently $750,000 in the hole, owes the general fund $200K loaned to pay off a settlement, and owes about $500K to DST for grant match for Hangar A and Hangar B projects, noting the other monies for those projects were FDOT grant funded. He said conceptually where they are going is really positive, citing the airports' use as an economic development tool, such as LoPresti and V- Raptor which have and will bring in 28 and 20 -25 new jobs respectively. He said staff has been successful with marketing office space in the Airport Administration building at a cost of $8 per square foot, improvements and infrastructure have been completed on the Airport Industrial Road on the east side and attempts are being made to do the same on the west side. Mr. Flaherty asked if management looks at what other cities are doing with employee issues. The City Manager responded the City obtains data from like cities, with similar populations and services. He listed some of the cities and said we like to try to stay in the middle of all of them when it comes to salary and health care. He also added the City's health care provider also provides a good market basket of benefits and we also throw in the school district. D. Review First Quarterly Report FY 2011 The Finance Director gave a brief overview of the first quarter budget amendment, noting that every quarter a budget amendment resolution is brought before City Council reflecting necessary changes to the adopted budget, citing in Exhibit "A" the changes reflected in this amendment are minor general fund adjustments which have already been approved by the City Manager under his authority, and the carry forward balances in various other funds previously noted. 3 Citizen Budget Review Advisory Board March 22, 2011 Page Four He reviewed the General Fund Summary, citing the decrease in carry forward cash reserves to $4.9M, stating that if you look at the FY 2010 CAFR, staff took the lead in changing its governmental accounting practice which required us to present the fund balances differently than had been done in the past. He said under the new practices, the overall fund balance of $4.9M as one number won't be found in the financial statements, but is now broken into categories which will add up to the total available funds which aren't tied up in things such as inventory, prepaid insurance, or loans or advances, and what is shown in committed is money to be spent but was not spent by year end. Mr. Killgore noted on the spending side the departments overall are at about 22 which is better than in prior years for the first quarter. Mr. Flaherty said coming from the private side and as a novice to municipal budgeting, he is curious to know what percentage of revenues are expected in the first quarter and are we getting what we are supposed to be getting. Mr. Killgore said there are more detailed excel sheets in the Finance that show a clearer picture of revenues received. He noted local option gas tax and discretionary sales tax revenues only reflect two months of receipts due to their accrual process. He continued with a brief detail of the other miscellaneous revenue funds on page two, and enterprise funds on page three, noting the Golf Course fund is showing a negative, but that they had paid off their bond and no longer have debt service which hopefully will erase the negative numbers. He said Building revenues came in slightly higher than expected. Mr. Killgore said, on the spending side, department expenses came in overall at approximately 22 and there were no significant issues. He then went on to the Capital Project Status Report and Mr. Flaherty, using police vehicles as the example, noting the difference in the original budget of $385,000 and total expenditure of $210,981 and its difference with the balance to complete number of $174,018, asked if we are on target. Mr. Killgore said there will be an additional $20K to $25K coming in for final payment and that they will be able to see a clearer picture in the 2 quarter budget amendment. In response to Mr. Davis, Mr. Killgore reiterated that the carry forward amount reflects funds approved in this fiscal year but not received or paid for. Mr. Killgore went on to briefly explain the City's investments in the total amount of $10,563,232 as set out in the Quarterly Investment Report in the agenda packet, noting that the City recently employed a new investment advisor, cited the breakdown of the City's investments in SBA, CDs, and US Treasury and Agency Bonds, further detailed in the report. He closed by briefly describing the individual department accomplishments' report. Mr. Flaherty noted in the original budget we list goals and objectives for each department and said he was trying to correlate those with the listed accomplishments in this report to ascertain if those goals were either accomplished or still on the radar. 4 Citizen Budget Review Advisory Board March 22, 2011 Page Five The City Manager said staff tries to have a program performance based line item budget, but we don't keep up with those goals every year, there may be some collaboration and sometimes we do, but we have not been aggressive in updating the goals that get repeated. He said we try to keep goals broad, Council does a good job of letting staff know what they want to do, and staff does a good job of getting those things done. He said some of the reports are micro and perhaps someone could correlate the goals to them, and maybe we need to do a better job of setting goals. Mr. Flaherty said it is all good stuff, there is tremendous of amount happening and its good to know. The City Manager said the Clerk, Council and Finance Department goals are concise, but as you get into some of the other departments they are so busy trying to get things done, the last thing you look at is their goals and objectives, and he looks at this as constructive criticism and perhaps needs to be tightened up. In response to Mr. Klenck, the City Manager said the City Garage is consolidated under Public Works. The Administrative Services Director said her office can provide an up to date budget report and then explained recent changes including the hiring of a new Garage Superintendent, Greg Schmidt, the new oil and gas company offer, new inventory, elimination of excess some which is going to auction, and cited Mr. Schmidt's organization and efficiency skills. Mr. Herlihy asked if there is any upward trend for the Golf Course. The City Manager said he thinks the first quarter report shows signs of coming back, the two recent months have been very strong, and he did not see a problem with them hitting their estimate, the negative being the low threshold. Mr. Herlihy asked about the Building Fund and the City Manager said staff budgeted extremely low at $355,650 but the department is already at 40% of budgeted revenues. He did note that building development will slow down in the summer, while Golf Course activity will increase. Mr. Klenck asked if we are still working on annexation. The City Manager said he did not see Council making an aggressive push on annexation, said we had kept in touch with Ansen in regard to the property at CR 510 and CR 512 which they ultimately decided not to annex at least for the near future. Mr. Herlihy said this budget amendment will be presented to Council tomorrow night, said sometimes someone from this Board comments to Council, and asked if the members would like him to make brief comments on what occurred at this meeting. He noted that in the recent 2010 audit report no problems were found, and this is something the public needs to know. There were no objections to his making a report. E. Discussion Regarding Committee Functions and Meetings for 2011 F. Set Meeting Schedule He said the next meeting is scheduled for May 9, departments submit their budgets the middle of May, estimated property value is available June 1, and the Committee will get the budget on June 17. He said if the Board needs an additional meeting between June 17 and June 28 it can schedule that at a later time, he cited the Board's report to Council 5 Citizen Budget Review Advisory Board March 22, 2011 Page Six Chairman Ed Herlihy scheduled for July 19. The City Manager asked if they could keep the schedule as it is for now, noting they will have contact with him and staff. Mr. Flaherty said it is a formidable document, and when the Board meets on June 28 there will be a lot, and might we need more time. The City Manager said we could break it down into funds, and talk about the schedule a little more at the May meeting. Mr. Herlihy said there is more and more participation and it may need to be broken down and agreed we can see where we are at the May meeting. He encouraged members to meet individually with the City Manager. The City Manager said there are other committees that need to see the budget, citing Parks and Recreation and Planning and Zoning input on the CIP. Mr. Herlihy said this Board has not spent much time discussing the Capital budgets in the past, and that needs to be discussed. In response to Mr. Flaherty, the City Manager said his time is available to anyone even if there is duplication in questions, and he is never too busy to speak with them. Mr. Herlihy expressed concern about the Sunshine Law and its effect on their ability to speak to one another. The City Manager said he and the Administrative Services Director and Finance Director are interchangeable on the budget, and if the members talk to one, they have talked to all. 10. Being no further business, Chairman Herlihy adjourned the meeting at 7:19 p.m. Approved at the May 24, 2011 meeting. Sally A. Mai., MMC City Clerk 6