ST. PETERSBURG CITY COUNCIL BUDGET, FINANCE & TAXATION COMMITTEE AGENDA. August 23, :00 am City Hall Room 100

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1 ST. PETERSBURG CITY COUNCIL BUDGET, FINANCE & TAXATION COMMITTEE AGENDA August 23, :00 am City Hall Room 100 Members: Alternate: Charlie Gerdes, Chair, Ed Montanari, Vice Chair, Darden Rice, Amy Foster Gina Driscoll Support Staff: Kewa Wright, Administrative Aide to City Council A. Call to Order B. Approval of Agenda C. Approval of August 9, 2018 Minutes D. New/Deferred Business 1. August 23 a. Customer Assistance Programs for Utilities (Tammy Jerome) b. 3 rd Quarterly Grant Reports (Shrimatee Ojah Maharaj) c. 3 rd Quarterly SBE Contracts Report (Jessica Eilerman) d. Revising Fiscal Policies (Anne Fritz/ Elizabeth Makofske) F. Upcoming Meetings Agenda Tentative Issues 1. September 13 a. Linkage Fee/Nexus Study (Rob Gerdes) b. Reduction in Multi-Modal Impact Fees (Rob Gerdes/Tom Whalen) 3. September 20 a Sanitation Management Evaluation Best & Final Offer (Boriana Pollard) b. Allocating $250k for FY 19 to the SPMOH and a multi-year commitment (Darden Rice) c. Funding for the expansion and renovation of the Dr. Carter G. Woodson African American Museum (Steve Kornell) d. Retroactive remedies for the Jordan Park Audit (Boriana Pollard) G. New Business Item Referrals H. Adjournment

2 ST. PETERSBURG CITY COUNCIL BUDGET, FINANCE & TAXATION COMMITTEE Minutes August 9, :00 City Hall Room 100 Present: Chair Charles Gerdes, Vice Chair Ed Montanari, Darden Rice, and Gina Driscoll (alternate) Absent: Amy Foster Also: Council Member Steve Kornell; City Attorney Jackie Kovilaritch; Assistant City Administrator, Tom Greene; Chief Financial Officer, Anne Fritz; Public Works Administrator, Claude Tankersley; Administrative Aide to City Council, Kewa Wright; Deputy City Clerk, Patricia Beneby A. Call to Order Chair Gerdes called the meeting to order at 8:01 am with the above persons present. B. Approval of Agenda CM Rice made a motion to approve the agenda. All were in favor of the motion. C. Approval of Minutes July 26, 2018 CM Montanari made a motion to approve the minutes. All were in favor of the motion. D. New/Deferred Business 1a. Issuance of Bonds for the Public Utility: Water Resources Ms. Fritz addressed the committee to discuss the FY19 CIP program to refund the 2017 Public Utility Note of $120 million and to fund up to $100 million in upcoming water resources projects that was included in the CIP program. She also introduced the consultants who contributed to the Public Utility Bonds study. CM Rice inquired about what happens to the remainder of the CIP once the funds are allocated for FY19. Ms. Fritz indicated that in the documents provided to the committee, there is a draft financial feasibility study with anticipated CIP Plans and the funding sources. For public records purposes, CM Gerdes noted the forecast borrowings for the next four years (see page 4 and 5 in the Stantec report). Mr. Greene also noted that the future borrowing forecast shows a reduction from what previously would have been borrowed each year due to the committee s decision to invest $9 million annual cash funding from Penny for Pinellas.

3 CM Gerdes inquired about what subordinate debt service is being rolled into the bond service coverage (page 2 of the Stantec report). Ms. Fritz indicated the subordinate debt service is the SRF loans (State Revolving Fund). CM Montanari inquired about why the debt service is structured the way it is. He indicated that it appears to be stable at one point and then increases significantly. Jay Glover, Financial Advisor of Public Financial Management addressed the committee and referred to the preliminary numbers of the Aggregate Debt Service (page 8 of Public Utility Refunding Bonds). He explained the way the debt is structured is called a slight wrap structure. The annual aggregate debt is leveled out through 2040, and when the principal amount is increased, the debt service drops off on the current debt. CM Montanari asked if the three columns (on page 8) can be explained. Mr. Glover explained that the Public Utility Refunding Revenue Bonds, Series 2018 is the actual annual debt service requirement on the proposed $220 million. The Parity Debt is debt with the same source of security of public utility revenue bonds. The Aggregate Debt is a combination of the public utility and parity debt. There was some discussion regarding debt service projections for the next 10 years. Mr. Burnham, Vice President of Stantec provided a detailed analysis on these projections. There was some general discussion on incorporating debt decisions in our fiscal policies. CM Rice inquired about the aggregate debt service schedule for the $220 million and the future borrowing forecast. She noted that based on the future borrowing assumptions, the parity debt service amounts will change and therefore, change the amounts in the current aggregate debt. Mr. Glover explained that the Stantec report adds in the debt service of future subsequent borrowings into the aggregate amount and is incorporated into their financial model. CM Rice made a motion to approve the resolution authorizing the issuance of not to exceed $220 million for Series 2018 Public Utility Refunding Revenue Bonds. All were in favor of the motion. 2b. Continued Discussion on Utility Rates: Water Resources 5-Year CIP Plan CM Montanari inquired about the debt requirements referenced in the Stantec report of August 2 nd being significantly higher than what was provided in the July 12 th FY19 Utility Rate Study memorandum. Ms. Fritz indicated that we have a combined bond system, which includes the stormwater CIP. Mr. Tankersley addressed the committee on this item and stated that the rate analysis for debt service in the chart referenced in the July 12 th memo is specific for water, wastewater and reclaimed water and does not include stormwater, which is why the amounts are different. 3c. 3 rd Quarterly Financial Reports Investments: Ms. Fritz provided a summary of the general investment policy and the alternate investment policy. As of June 30, 2018, the City reported an amortized book value of $686.6 million in investments and a market value of $679.3 million, with a market loss of $7.3 million. Ms. Fritz indicated that the loss was due to short term rates going up, and a decrease in market value securities. The alternate investment portfolio was reported with an amortized book value of $32.5 million and a market value of $37.9 million, with a $5.4 million market value gain.

4 A chart was provided that showed diverse holdings for the short-term portfolio and core portfolio which represents the adherence to the diversification policy. On the debt service portfolio chart provided by Ms. Fritz, she explained that the debt service has two components: (1.) Long term debt service reserve is for our bonds that were subject to the debt service reserve requirement, (2.) Short-term debt is funded monthly (debt interest is paid on April 1, and debt principal and interest are paid on October 1). Ms. Fritz briefly discussed the water cost stabilization portfolio, which is governed by the general investment policy except the portion (approximately $20 million) in index funds which is covered in the alternative investment policy. The market adjusted investment policy portfolio, which showed a book value rate of return of 2.42% and a market value adjustment of minus 1.34%. Ms. Fritz highlighted the market value trend analysis for index funds and the dividends received. In terms of the investment quarter activity, the City purchased 11 investments for a total face value of $63 million, 18 matured at a face value of $66.5 million. Ms. Fritz presented the City investment policy compliance report, which is tested quarterly. All the portfolios shown on the report are in compliance. Debt: In the general governmental debt, the City has $124 million outstanding in principal, $20 million in interest, for a total of $144.3 million in outstanding debt. The largest debt is the Public Service Tax, which is the pier and pier approach debt. The second largest debt is the police headquarters. However, $20 million from the Penny for Pinellas will go towards this debt payment. Ms. Fritz provided a list of funding sources for the general governmental debt and showed a life to date chart for the pier and police headquarters & training facility projects. CM Montanari inquired why the amount on the outstanding principal debt ($124 million) is the same as the last quarter. Ms. Fritz explained that most debt payments are made at the end of a fiscal year and that number should decrease by the end of the next quarter. Pensions: On the pension report for Police, Fire and EMS, Ms. Fritz displayed the figures for the solvency tests and the comparison for actuarial present value benefits and total assets. During the quarter ERS and Fire showed over 100% of percentage funded, with Police at 98.56%. As for the actuarial accrued liability, the percentage funded for ERS is 94%, Fire is 107% and Police is 90.99%. Weeki Wachee: As of June 30, 2018, the Weeki Wachee Fund has an undesignated amount of $1 million. Ms. Fritz indicated that the City is not projected to have the income for this fund like in years past. Budget vs. Actual Report: Ms. Makofske presented the committee with an overview of third quarter budgetary performance report. The following was presented:

5 FY18 Stoplight Report: Beginning fund balance of General Fund is $ million True Operating (excluding BP) Beginning fund balance $ million. BP Settlement An estimated $3.08 million will be expended by the end of FY18 and approximately $1.24 million will be rolled over to FY19. Debris Removal/Monitoring $2.44 million in estimated expenditures associated with Hurricane Irma in the GF for FY18 Reimbursement is not likely to occur during the current fiscal year. Estimated end of fiscal year General Fund balance is $ million 28 of the 35 operating funds (80%) are operating within an acceptable variance FY18 Third Quarter CIP Project Close Out: o A total of 33 CIP projects were completed and closed. The GF revenue has increased slightly compared to the second quarter and the GF expenditures (excluding BP resources) is expected to be under budget by year end. CM Montanari asked for clarification regarding the $6 million gap in the financial quarterly report and the $2 million gap in the budget analysis report. Ms. Fritz explained how the timing of reports is different. The financial reports show fund balances as of June 30, 2018 and the budgetary reports annualize revenues and expenditures to estimate what the fund balances would be at the end of the fiscal year (September 30, 2018). E. Upcoming Meetings Agenda Tentative Issues 1. August 23 a. Customer Assistance Programs for Utilities (Tammy Jerome) b. 3 rd Quarterly Grant Reports (Shrimatee Ojah Maharaj) c. 3 rd Quarterly SBE Contracts Report (Jessica Eilerman) d. Revising Fiscal Policies (Anne Fritz/ Elizabeth Makofske) 2. September 13 a. Linkage Fee/Nexus Study (Rob Gerdes) b. Reduction in Multi-Modal Impact Fees (Rob Gerdes/Tom Whalen) F. New Business Item Referrals G. Adjournment There being no further business, the meeting was adjourned at 9:40 am

6 BUDGET, FINANCE AND TAXATION COMMITTEE PENDING/CONTINUING REFERRALS Topic Customer Assistance Programs for Utilities Return Date Date of Referral Prior Meeting Referred by Staff 8/23/18 10/26/17 Tammy Jerome August 23, 2018 Notes CM Gerdes a motion made to ask Administration to look into increased marketing for the voluntary assistance programs to rate payers, increased marketing for the one day a week garbage pick-up and reimplementing the LIFT-UP program Quarterly Grant Reports Q3: 8/23/18 Q4: 11/29/18 Quarterly Q1: 2/22/18 Q2: 5/31/18 City Council Shrimatee Ojah- Maharaj 5/31: Will come back to the committee after the summer listening tour Quarterly Report - SBE contracts Q3: 8/23/18 Q4: 11/29/18 Quarterly Q1: 1/11/18 Q2: 5/31/18 Ordinance Jessica Eilerman Revising Fiscal Policies 8/23/18 Fritz /Makofske Linkage Fee/Nexus Study 9/13/18 HLUT Rob Gerdes Reduction in Multi-modal Impact Fees (MIF) 9/13/18 HLUT R. Gerdes/Whalen

7 2018 Management Evaluation (Sanitation)- Staff to Present Best & Final Offer 9/20/18 Annual 1/25/18 4/12/18 7/12/18 7/26/18 Ordinance Boriana Pollard Discussion to allocate $250k for FY19 for the SPMOH and a multi-year commitment of $250k per year for 3 years to suppor the expansion of the museum and construction of the Welcome Center as part of the Pier District Discuss funding for the expansion and renovation of the Dr. Carter G. Woodson African American Museum at the same time we discuss funding for the SPMOH Audit of Jordan Park Cont. - Discussion of retroactive remedies for the audit 9/20/18 8/2/18 Darden Rice 9/20/18 8/2/18 Steve Kornell 9/20/18 Kornell Boriana Pollard CM Gerdes suggested this discussion at the 7/26 BF&T Meeting 2019 Management Evaluation 10/11/18 Annual Ordinance Boriana Pollard Request for a $25k allocation to the Alliance for Bayway Communities to conduct a Comprehensive Feasibility Study to look at viability of undergrounding utility lines along the Pinellas Bayway 10/11/18 5/3/18 Kornell

8 Report on the Independent Corridor Program and related costs and funding IOC reommended changes to the investment policy 10/11/18 6/7/18 Gabbard 10/11/18 8/10/18 7/26/18 Anne Fritz Update from the 7/26 meeting Minority Business Enterprise and consideration of a disparity study 10/25/18 8/24/17 1/11/18 2/22/18 Montanari Louis Moore Committee decided to discuss after the 2017 elections and discuss in Feb Staff will present a list of all City department accreditdations. 1/25/18: Staff will come back with a draft scope of work for the Sanitation Department Tiered Stormwater rates 10/25/18 (Tentative) Claude Tankersley Quarterly Financial Reports Q4: 11/15/18 Quarterly Q1: 2/8/18 Q2: 5/17/18 Q3: 8/9/18 City Council Fritz/Makofske Presentation of Attorney General Opinion on the Ability of the City to Conduct an Equity Study to Revise its Business Tax Ordinances 11/29/18 Heather Judd 2019 Health Insurance Renewal and Status update on current year health plan 12/13/18 Annual BF&T Chris Guella and Vicki Grant Linkage Fee/Nexus Study Completion Feb-19 HLUT Rob Gerdes 2019 Property Insurance Renewals Mar-19 Annual Blaise Mazzola/Chris Guella

9 External Audit Mar-19 Annual Anne Fritz Social Action Funding Program Mar-19 Annual Theresa Jones Draft Consolidated Plan and Proposed Budget. Approval of draft for publication and comment June- 19 Annual Joshua Johnson Discussion of exceptions for legal defense fund suggested by Free Speech for People and process for retaining outside legal counsel Discussion of a General Fund transfer TBD 11/2/17 Rice TBD 1/26/17 8/17/17 City Council - COW 1/26/17 Kornell Motion for FY19 initial budget presentation to include alternative to a proposed budget. Meeting to include David Downing of the TDC. Gerdes to follow-up Discussion for use of Tourist Development Tax, including Arts Funding - Follow-up TBD 8/21/14 City Council Joe Zeoli An introductory discussion on the potential of business cooperative developments TBD 7/12/18 Darden Rice

10 A broad discussion regarding strong community benefits in agreements with developers, enacting ordinances and policies and other methods to establish baseline community benefits for future projects A broad discussion supporting small business and outreach TBD 4/5/18 TBD 4/5/18 Lisa Wheeler- Bowman Lisa Wheeler- Bowman

11 BUDGET, FINANCE & TAXATION COMMITTEE WEEKI WACHEE PROJECT LIST TOPIC DATE REFERRED REFERRED BY RETURN DATE STAFF RESPONSIBLE SPECIAL NOTES Maximo Park Project Kornell TBD Jefferis Referred to COW on 7/14/16 Scheduled COW on 7/28/16 $150,000 allocated by council on 8/4/16. Still in process Skating Rink to the Southside CRA Wheeler- Bowman Jefferis Exercise Zone and Playground in Broadwater Park Wheeler- Bowman Jefferis

12 CUSTOMER ASSISTANCE PROGRAMS BUDGET FINANCE & TAXATION COMMITTEE AUGUST 23, 2018

13 Bill Discounts Lifeline Rates Flexible Terms Temporary Assistance Water Efficiency Rebates ENVIRONMENTAL PROTECTION AGENCY NATIONWIDE CAP STUDY 2

14 Nonprofits 21% Utility Budgets 14% Customer Voluntary Contributions 14% Local Government Funds 10% Other Sources 0% CAP FUNDING SOURCES 3

15 Activity Late and Termination Notice Fees $13 Lock Off of Utility Service # of Customers Monthly Yearly Activity Total Percentage to Total Accounts Projected Assistance at Average O/S Bill ($160) 8,000 96, % $1,280,000 1,500 18, % $240,000 Activity # of Customers Monthly Yearly Activity Total Percentage to Total Accounts Total Average Bill Amount Collections Agency - Tenant Liens - Owner % $ , % $260 DELINQUENCY STATISTICS 4

16 Utility Assistance Program - Voluntary Donations Payment Plans Recurring Billing Permanent Due Date Extension Water Efficiency Rebate Programs CURRENT PROGRAMS 5

17 CURRENT UTILITY ASSISTANCE BROCHURE 6

18 Budget Billing One Notice Implementation Bill Round-Up Voluntary Donations Lift-Up Program FUTURE PROGRAM OPTIONS 7

19 QUESTIONS & COMMENTS

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