CITY COUNCIL WORKSHOP: FY BUDGET July 30, 2018 and July 31, 2018

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1 CALL TO ORDER The City Council of the City of Fort Myers, Florida, met in workshop session at Oscar M. Corbin, Jr. City Hall, 2200 Second Street, its regular meeting place in the City of Fort Myers, Florida, on Monday, July 30, 2018, at 9:04 o clock a.m. Present were Mayor Randall P. Henderson, Jr., presiding, City Council Members, Teresa Watkins Brown, Johnny W. Streets, Jr., Terolyn P. Watson, Liston D. Bochette, III, Fred Burson and Gaile H. Anthony. Also present were Saeed Kazemi, P.E., City Manager; Gwen Carlisle, MMC, City Clerk, and Grant W. Alley, City Attorney. Absent: None. Mayor Henderson requested prayers for the family of fallen Fort Myers Police Officer Adam Jobbers-Miller who passed away on Saturday afternoon, July 28, 2018; and for the family of former Dunbar High School Student, TeNiya Jones, 19, a sophomore at the University of Kentucky, who drowned on Saturday evening, July 28, 2018 in the Mediterranean Sea. Ms. Jones was involved in a seven-week study abroad program in Jordan, Israel. OPENING PRAYER The meeting was opened with prayer by Reverend Dr. Rickey L. Anderson, Sr., Chaplain, Police Department. PLEDGE OF ALLEGIANCE TO THE FLAG Mayor Henderson led the Pledge of Allegiance to the Flag of the United States of America. MOMENT OF SILENCE Saeed Kazemi, P.E., City Manager, led a Moment of Silence in honor of fallen Fort Myers Police Officer Adam Jobbers-Miller. City Manager Kazemi, extended his heartfelt condolences and his sympathy to the family of Officer Adam Jobbers-Miller, a brave and committed police officer who was taken from us too soon. He further stated that it is people like him that inspire us to dedicate ourselves to public service. He noted that the City is thankful to law enforcement and we will continue to make public safety a priority in the Fiscal Year 2019 budget. NO. 1 REVIEW THE CITY MANAGER S RECOMMENDED FISCAL YEAR BUDGET City Manager Kazemi noted that he is pleased to present his recommended budget for 2019 Fiscal Year, based on recommendations on every department, it is a balanced, progressive budget, that also maintains our City reserve fund. City Manager Kazemi stated that all the department directors will provide a brief presentation and introduced Christine Tenney, Deputy Director, Finance, to make her presentation. Ms. Tenney stated that the agenda of the meeting include: Fiscal Year 2019 General Fund Budget; Presentation of General Fund Long-Term Model; Other Major Operating Funds Fiscal Year 2019 Budget Highlights; Presentation of the Water & Sewer Revenue Sufficiency Rate Model; Discussion & Consensus on the Not to Exceed Millage Rate; 5-Year Capital Improvement Program and Next Steps. Councilperson Anthony 1

2 asked whether Ms. Tenney has run several calculations to look at different millage rates. Ms. Tenney stated that the impact of different millage rates can be viewed when the General Fund long term model is presented. Councilperson Burson stated that he would prefer if budget presentations were based on the roll back rate and noted that the millage rate is too high in the City. Ms. Tenney described the Ad Valorem Revenue or Property Tax revenue and noted that the Homestead Exemption Amendment No. 2 will be voted on in November Ms. Tenney presented an analysis of taxable value trends. She referred back to 2012 when the City had tremendous gains in their tax base and noted that half of those gains were a result of new construction. Mayor Henderson commended the City Council for inspiring investor confidence. Mayor Henderson stated that the Metropolitan statistical area is growing, and Fort Myer s rate of growth is leading the way. Councilperson Burson stated that if you want the valuation of the entire City to take off, then you need to lower your tax rate, and any loss in the millage rate will be offset by an increase in valuation. A discussion ensued regarding the millage rate. City Manager Kazemi encouraged the City Council to go to Tallahassee this year to discuss unfunded mandates. Ms. Tenney stated that a 0.1 change in our millage is approximately $629,000. Anything above the roll back rate is considered a tax increase. It will be advertised in that matter when we adopt the budget. Ms. Tenney further described the dollar and percent change in the General Fund operating revenues for Fiscal Year 2019 compared to Fiscal Year She noted that the City surpassed the budget in revenue collections for Ms. Tenney stated that the Impact Fees for Fire, road, water and sewer was 45 percent, and it will incrementally increase each year. City Manager Kazemi noted that the General Fund services are increasing because departments are getting larger. Ms. Tenney stated that the gas tax is not a revenue to the General Fund. Ms. Tenney stated that this will change June 1, 2019, as the gas tax is dedicated to road improvements. City Manager Kazemi stated that that there are two gas taxes, one to use for operations, one for improvements. A discussion ensued regarding the history of the gas tax. Councilperson Anthony stated that several citizens contacted her asking why the City doesn t receive money from tolls. City Manager Kazemi stated that he would need to address that issue with the County. Mayor Henderson stated that the City lost a lawsuit about the Midpoint Bridge in the 1980s. Councilperson Burson stated that the overarching concern with the gas tax is we are reducing debts, but we have capital improvements looming over us, which may create new debt. Ms. Tenney stated that the percentage of the gas tax will change; the 6-cent tax will change on June 1, 2019 and the 5-cent tax will change in Ms. Tenney stated that there is no impact to the General Fund on that tax change for 2019, but it will hurt the street maintenance operations fund. Ms. Tenney noted that the City is providing the 2019 fund without any General Fund subsidy, as they had reserves over the years. Ms. Tenney noted that the 2

3 2020 budget will be when the full impact will be felt of that reduced revenue. She noted that the General Fund subsidy would probably be $1 million or $1 million and a half starting in 2020, and that will be reflected in the General Fund model. The only other increase is a change to the General Fund revenue; money that the City is receiving from the Lee County School district for their portion of the SRO positions. Ms. Tenney stated that the other major fee in the 2019 budget is the Fire Assessment Fee; as it is planning to generate $3,800,000 in 2019, with an estimated recovery of 16.5 percent of the eligible Fire suppression and rescue services. She explained that the Fire assessment fee is a fee that gets collected on the annual property tax bill that comes out in November. Ms. Tenney noted that the stormwater fee and the residential solid waste assessment go on the tax bill. The proposed Fire assessment fee will be on the August 6, 2018 City Council agenda as a Permission to Advertise item. Ms. Tenney noted that once a certain rate is advertised, a Public Hearing follows; if the City Council wanted to increase the rate at the hearing, the City would have to re-advertise. Councilperson Burson inquired how the assessments were calculated. Ms. Tenney stated that the assessment calculations start with a Calls for Service study; provided by Stantec. For example, the Calls for Service study analyzes Fire department and first responder calls; services that are not assessible are not eligible. Mayor Henderson stated that what is not dialed in this year, is the fact that there is a substantial component to Fire protection related to medical requirements and the City is not afforded any opportunity to have that offset. Ms. Tenney stated that the only way to raise the rates is to take a percentage and raise it across the board. Councilperson Burson asked to advocate for an increase in those rates, especially when the City is only recovering 16.5 percent of the actual cost associated with those calls. Councilperson Brown asked what the difference was with increasing the millage rate versus increasing the Fire assessment fees. Councilperson Burson stated that the difference is that for people that occurred the expense, pay the expense; and asked why we aren t trying to recover 20 percent. Councilperson Burson recommended a police assessment fee also. City Manager Kazemi stated that the City reviewed that option. Ms. Tenney stated that the Fire fee exempts churches and non-profits. Property owners with low taxable values due to exemptions; do not pay any property taxes but would pay this Fire fee. Ms. Tenney stated that an option is to lower the millage and increase the Fire fee. Councilperson Bochette noted he agreed with Councilperson Burson to spread the fees over all users and thought there must be a precedent why it wasn t done in the past. Mayor Henderson stated that the faith-based community and property owners would come forth regarding no taxation. Councilperson Burson recommended adding 2 cents for the four categories; residential, commercial, industrial/warehouse, government/institutional. City Manager Kazemi stated that a year and a half go there were significant changes in some of these properties and it was decided to proceed with this formula. By law, the City needs to 3

4 review assessments every 3 years, however, the City can review it any time, and provide a recommendation. He noted the faith groups did not want to pay the Fire assessment fee because it was a burden to them, but it can be a burden to the City also. Councilperson Brown stated that it could be burden to the residents and the businesses that are carrying the loans and the costs. City Manager Kazemi stated that currently the businesses are carrying most of the costs. Mayor Henderson stated that he thinks there is an opportunity to have a debate on this. City Manager Kazemi stated that we have a program in the model that will show the impact on the budget if you increase or decrease the budget. Councilperson Bochette asked to earmark this issue to come back to it. Councilperson Brown stated that the City has a Fire assessment fee, a stormwater assessment fee and a lot of things that are piled up on our residents and our businesses to take care of, so if we are going to be increasing all these things, we might as well go another inch on the millage. City Manager Kazemi stated that the City wants to reduce the millage. Ms. Tenney further described transfers in from other funds; noting that the utility fund, solid waste and stormwater are three utilities that the City will charge payment in lieu of taxes and franchise fees; based on a calculation of what they would be paying in property taxes if they were private if the City were to charge them a franchise fee. Councilperson Bochette stated that CRA s contribution represents above market value recovery, noting that improvements in the area increases values, then that money is used to pay the debt service towards the cost of those improvements. Mayor Henderson stated that the Army Corps. of Engineers helped the City come up with a best practice plan for the basin. Once the City did that, it was prepared to have a new hotel and have North American properties acquire the Smith lawn. He noted that three to five years after the Hotel is installed, the County and the City would receive a combination of new net revenue; ad valorem, rent, lease, ground lease, of approximately $900,000 to $1 million dollars in perpetuity. Mayor Henderson stated that whereas before, the City was subsidizing Harborside in the amounts of $700,000 to $800,000 per year. Ms. Tenney stated that they are looking at how much the City incurred doing Streetscape and Detention Basin improvements and that is why the City is looking at the CRA to repay a portion of the debt service. A conversation ensued regarding sales tax revenue. Ms. Tenney stated that the total transfers in from other funds for the 2019 budget are $4.3 million; $747,400 more than the 2018 budget. Ms. Tenney stated that per the General Fund Revenue Summary, Operating revenues in the 2019 budget are approximately 9.5 million more than the 2018 budget; 9.4 percent increase. Councilperson Burson inquired why there was not a Fire impact fee for Ms. Tenney stated that Fire impact fees can only be spent on expansion; in 2018, $50,000 was the Fire impact fees to initiate sourcing a new Fire Station. Ms. Tenney stated that in 2019 there is more on the capital side available to spend in Fire impact fees, but not on the Operation side. Councilperson Bochette 4

5 stated that the Central station downtown is state of the art. City Manager Kazemi stated that Fire Station 7 will cover the area that Ward 6 does not have coverage. Ms. Tenney stated that Operating Revenues are projected to be strong in 2019; totaling $110.6 million representing a 9.4 percent increase in the amount of an additional $9.5 million from Ms. Tenney stated that it is encouraging to see the General Fund at this level driven by the economy and population, generated by City operations, taxes, assessments and sales tax. Mayor Henderson stated there is an attractiveness to this area due to the quality of life. Regarding the red tide issue, he hopes help is provided by Washington, D.C. and Tallahassee. He harkened back to January of 2016, where he traveled to Washington, D.C. with other Mayors and met with the number 2 in command; Let Mon Lee, Army Corp. of Engineers, he was somewhat encouraged that they were going to give this matter serious attention, however it has just languished, too little, too late. City Manager Kazemi stated that City was not adding to the problem that exists. Ms. Tenney provided the General Fund Budget Expenditure Highlights and noted that litigation relating to the sludge issue, in the amount of $300,000 is placed in the Utility fund. Hotel litigation is being charged to the overall project for the garage. A discussion ensued on the amount budgeted for litigation and staff for the legal department. Ms. Tenney discussed the proposed budget for the police department; it includes 15 new officers and 2 sergeants added in July 2018; to back fill the positions for the School Resource Officer assignment. Ms. Tenney stated that funds were included to provide for wage increases. She noted the police contract is currently under negotiation as the current contract expires on September 30, 2018 and $450,000 was added to the police department budget for operations. In addition, there will be a $100,000 housing assistance program for police officers; if they apply to purchase a home in the City, there would be funding available to help toward a down payment on that home if they so choose. The details of the housing assistance agreement are being defined. Ms. Tenney stated that they will be providing funds for more police vehicles, in the amount of $316,000 and an annual lease payment amount for about 25 more vehicles. In the General Fund the amount was increased for fire services for the South Trail Fire Protection and Rescue Service District, per interlocal agreement total; estimated at $998,000, an increase of $98,000. She noted that South Trail is an independent taxing district established by the state legislature to provide fire protection and rescue services to approximately 62,000 residents of a 55-square mile area in south Fort Myers. Councilperson Anthony stated that South Trail serves two developments. Ms. Tenney stated that is the reason that the City is looking into establishing Fire Station 7. Councilperson Burson stated that it seems excessive to fill Fire Station 7. City Manager Kazemi stated that it takes more time to get to locations, and if the Fire department doesn t meet the time requirements, insurance goes up. Councilperson Burson stated that he agrees it is important to build Fire Station 7 and 5

6 asked if the City can build it for less than $998,000. Councilperson Anthony suggested that the City can partner with South Trail. Ms. Tenney stated that $200,000 will be added to the Fire Departments Operating budget for contractual Fire inspector services, training equipment, radios, gear and self-contained breathing apparatus equipment. In addition, the budget combines Development Services and the Planning Divisions. The General Fund will increase Code Enforcement s budget by $150,000 for contractual services. Councilperson Brown and Councilperson Watson recommended hiring an additional lawn mower person. Ms. Tenney further described the proposed budgets for parks, recreation and S.T.A.R.S., human resources and provided a summary of Personnel Costs for Councilperson Burson asked whether it was prudent to freeze code enforcement positions. City Manager Kazemi stated we are trying to see if we do contractual work without paying pensions. Councilperson Streets agreed with Councilperson Burson that we need Code enforcement now and in the future. City Manager Kazemi stated that the intention is to contract Code enforcement workers. Councilperson Bochette stated code enforcement is a vital area for the City to address. Councilperson Anthony stated that the competition is strong for Code employees and the City pay structure is not quite where we need it to be. Councilperson Anthony recommended that we look at a different recruitment process. A discussion ensued regarding staffing the Park department. Councilperson Burson stated that there will be automated meter readers and asked what was going to be done with current meter reader employees. City Manager Kazemi stated that there will be positions available for the meter readers that are replaced by technology. Councilperson Bochette asked whether the City had a good pattern of migrating employees within departments. City Manager Kazemi stated that we always offer the same job in a different department. Councilperson Streets stated that the tech sector places a lot of people out of jobs. Councilperson Anthony stated that the City pays for tuition reimbursement to get further training. Councilperson Burson stated that we should come up with an affordable work pay program for all employees, not just for police officers. City Manager Kazemi stated that the goal is to attract people to work, live and play in the City. A discussion ensued regarding affordable workforce housing. Councilperson Bochette asked how the City bond ratings compare to years past. Mayor Henderson stated that the City is rock solid. Ms. Tenney stated that the City is rated Double A. A discussion ensued regarding the City bond rating. Councilperson Anthony asked if we are looking at the City pension structure as we provide new contracts with the Fort Myers Police Department. Ms. Tenney stated that Florida statutes provides for minimum benefits for Fire fighters and police. City Manager Kazemi congratulated employees for embarking on wellness and prevention. Ms. Tenney further described the pensionable payroll. Mayor Henderson stated that if the City were 80 to 85 percent funded, 6

7 we would be considered financially healthy, currently we are 15 to 20 points off that point. A discussion ensued regarding pension funding and the liability of debt. Ms. Tenney stated that the personnel services expenditure summary, summarized the General Fund and personnel costs between the 2018 budget in comparison to the 2019 budget; with a total increase of $7.6 million, an increase of 10.8 percent. Included are contract pay increases, the police pension expense of $11.4 million, an increase of $2 million for There are 22 additional full-time employees funded for 2019, not including the 17 School Resource Officers. Councilperson Bochette asked if there is an option for employees to make their own investments. City Manager stated that they had considered it. Councilperson Brown stated that overtime had gone down. A discussion ensued regarding overtime for the payment of officers at special events. Ms. Tenney stated that the amount for workers compensation is driven by an actuarial study; for 2019, they have a 90 percent confidence level. Ms. Tenney stated that there are looking to reduce the Southwest Florida Enterprise Center subsidy next year in the amount of $20,000 and the Skatium transfer is increasing by $118,000. Ms. Tenney noted that they are looking into fees for all of recreation; as the City typically charges a lot less than the cost of the recreation programs. City Manager Kazemi and Ms. Tenney further discussed the Skatium facility noting that half is dedicated to ice skating and is profitable; while the recreation half is dedicated to service to the community. Councilperson Bochette suggested that if the Skatium had ice on both sides, it might be self-sufficient. Councilperson Brown and Councilperson Anthony recommended to maintain the budget for the Southwest Enterprise Center and to give Mike Love, Director, the opportunity to provide a plan for charging fees. Ms. Tenney discussed proposed transfers in Fiscal Year 2019 to maintain Fort Myers and Eastwood Golf Courses, due to the increase of costs for expenditures, fuel, and salaries. Ms. Tenney stated that golf course fees were increased this year for the golf course. Councilperson Anthony asked why the City was not looking at private enterprise to help run the Skatium and the golf courses. A discussion ensued regarding the future of golf based on national studies. City Manager Kazemi noted the list of subsidies have decreased and the City used to subsidize the Imaginarium and Harborside. Councilperson Anthony stated that businesses have become successful without the City intervening. Councilperson Bochette stated that there is nothing that stops us in the future to make budget amendments. Councilperson Brown stated that it is better to clear up these issues before the budget is adopted, she recommended that $20,000 not taken out of the funding for the Southwest Florida Enterprise Center in The meeting was recessed at 12:12 p.m. The meeting was reconvened at 1:00 p.m. 7

8 Ms. Tenney reviewed the transfers to debt service funds noting that the new 2018 Bond is dedicated to the Downtown hotel/parking garage and other various capital improvements. Councilperson Burson asked what the 2007 bond issue was for. Ms. Tenney stated that in 2007 the City had refunded 1997 bonds; and the 1997 bonds had refunded 1992 bonds and a portion of 1986 bonds due to projects coming under budget. Mayor Henderson state that the bonds offered almost zero cost of funds. Ms. Tenney stated that bond issues were done to take advantage of interest savings. Councilperson Burson asked what the 2014 Bond was issued for; Ms. Tenney stated that the 2014 Bond was a 20-year bond issuance for renovations to the golf course and Harborside. City Manager Kazemi stated that a portion of debt will be paid from the new garage, rent from the hotel and rent from the restaurant. Councilperson Bochette asked to clarify what in our debt portfolio is a producing asset and a non-producing asset, so he can get an understanding of what part of the debt portfolio is being paid out first. Councilperson Burson stated that if a portion of that gets defaulted on, then the City would be responsible to pay that debt and at some point, it will come out of the taxpayer s budget and will be a liability on paper. Councilperson Bochette asked whether the City was protected if an outside group defaulted on an obligation. Ms. Tenney stated that when the City asks for Request for Proposals, insurance on bonds protects the City from default. Councilperson Bochette asked if the City s reserve is compromised if it is short term, midterm, long term; is it liquid. Ms. Tenney stated that when she talks about reserves for budget purposes, it means it is unassigned, which means there is no designation for it. Ms. Tenney noted that the City anticipates receiving 85 percent back if the City is reimbursed from FEMA for Hurricane Irma expenses of $15 million, that would add another $8.5 million to our General Fund reserves. A discussion ensued regarding reimbursements received from Hurricane Charley. City Manager emphasized that investments improved the City for the future. Councilperson Bochette stated that the City is borrowing to grow. An additional discussion ensued about debt issuance and future revenues. Councilperson Burson noted that revenue is going to offset debt issuance. Mayor Henderson stated the charge for the City is to put in the infrastructure that invites the investment community to build their business model. Councilperson Bochette asked for additional information on the Baseball stadium. City Attorney Alley stated that the County was able to negotiate an extension for the Boston Red Sox and the City was able to avoid the property taxes. Councilperson Bochette stated that the Citizens may not know that the City was not paying the maintenance and taxation. A discussion ensued about the reverta clause of the Red Sox stadium. Ms. Tenney stated that the total service in debt service funds increased to $9,745,600 in She further shared a summary of special program funding which included a reduction of 10 percent in the FY 2019 Budget of City Service grants, Community Agency Support Program, the Police Athletic League, the Arts & Culture Program, and 8

9 Fort Myers Redevelopment Agency (FMRA) Funding. Councilperson Bochette noted that arts and culture program and the Police Athletic League are incredibly valuable to the quality of life and asked what we can do to support these organizations. City Manager Kazemi stated that the City can partner with outside grants. Councilperson Bochette stated that an outside grant writer would help and recommended to put committees to work and give them the help they need. Councilperson Streets stated that he would echo what Councilperson Bochette stated regarding cutting funds from some of the most vital areas. Councilperson Bochette stated that no increase is a step backwards due to the way the economies evolve. Ms. Tenney stated that there is a Special Events Advisory Board that created a matrix to determine how available funds should be allocated, with a $25,000 cap placed on each grant award. Ms. Tenney stated that the goal is for events to be selfreliant. City Manager Kazemi clarified that the goal of the City is to move the City forward with everybody participating as a partner. Ms. Tenney described the goal of the Community Agency Support Program was to fund non-profits that provide youth services and basic subsistence programs such as food, housing, shelter and independent living. She noted that the City does not solicit for these programs. Councilperson Burson asked to research the support to the Guardian Ad Litem as it is also supported by the Court system. Ms. Tenney stated that the City had an advisory board to review applications for special programs and determine allocations, however, there is no board at this time. The Southwest Florida Community Foundation (SWFL) receives applications and determine allocations for artists; nonprofit arts organization and operating grants; followed by a review for approval at a City Council meeting. A $25,000 matching fund grant is provided to SWFL, for the larger regional art grant program. They were recommending a 10 percent reduction to the smaller City art grant programs. Ms. Tenney stated that the total General Fund expenditures for 2019 would be $120,325,600; representing a 11.5 percent increase of $12,363,300. Expenditures are public safety, general government, parks and recreation; subsidies, payout to Tax Increment Financing (TIF) Districts, governmental debt and other uses. Ms. Tenney stated that the projected General Fund reserves; include a favorable 2018 forecast of $527,986. The use of reserves in the 2019 budget is $5,457,200; with an estimated 2019 reserve balance of $15,260,076. Ms. Tenney stated that the Hurricane Irma expenditures are tracked in a separate fund outside the General Fund. The General Fund reserves were moved there to cover those expenses. A discussion ensued regarding allocation of one-time expenditures. Ms. Tenney noted that budgets are not executed at 100 percent, as there are expenditure savings that adds to our reserves. Ms. Tenney shared a comparison of General Fund reserves with Sarasota, Cape Coral, Punta Gorda, Lakeland, and Naples. The City of Fort Myers was second on the list as far as reserve percentage. City Manager Kazemi stated that the staff is making sure the City is financially responsible and that every dollar is spent conservatively. 9

10 Ms. Tenney introduced consultants from Stantec; Erick van Malssen, Managing Consultant and Peter Napoli, Consultant. Mr. van Malssen stated that Stantec provides a 5 to 10-year cash flow projection model to analyze the projected sustainability of the City s General Fund. Mr. van Malssen defined sustainability as having adequate revenues to fund ongoing costs while maintaining minimum reserve targets in the General Fund. The interactive model is calibrated for live, what if scenarios. Mr. van Malssen noted that there are two simple graphs on the model, a cash-in and cash-out graph, that portrays how that surplus or deficit affects the General Funds reserve. Some of the key data assumptions that feed this model include the 2017 audited financials, which were used as the fund balance starting point for the beginning of Fiscal Year 2018, targeting a 10 percent minimum of annual expenses within the General Fund. He noted that all revenues and expenses are based upon the amended 2018 year-end estimates provided by staff, as well as the 2019 preliminary budget which was presented by Ms. Tenney. All future revenues and expenses are projected on a line item basis. They recognize that salaries, health care, fuel supplies and office supplies have their own individual escalation factors. The debt service amortization schedule includes known escalations. Included in the 2019 budget, are ad valorem receipts, that include the Lee County Property appraisers current estimate. One key issue is the proposed amendment to the state constitution, to increase the homestead exemption by exempting assessed valuation between $100,000 and $125,000. The current homestead exemption applies to the first $50,000 of property value, therefore, any property valued above $100,000 would receive an extra increment up to $125,000. The impact of this exemption would make it so that in 2020, the City would lose an estimated $1.7 million of annual ad valorem revenues. Mr. van Malssen stated that he will show the impact of the projection with the homestead exemption. One of the toggles on the model is the potential FEMA reimbursement for Hurricane Irma. It was not included in the budget, but estimates are included in the model. Through discussion with City Staff and Management, Mr. van Malssen stated that one of the toggles on the model is a potential future bond issue in the range of Fiscal Year 2020, estimated between 30 to 80 million, depending on the projects to be included in that bond, as they have identified the cost for a new City Hall, Police headquarters and a Ward 6 police substation. In addition, the budget accommodates most of the city department requests. He noted that from 2017 to 2018 there was an 11.7 percent increase in total taxable value within the City. Property Appraisers anticipate an 8.3 percent increase to taxable value for Fiscal Year New construction is expected at a higher-level next year, therefore that number was increased to 9 percent and was slowly tapered to provide a conservative estimate for the next five years. The City continues to find savings on the cost side and continues to find revenues that are not in the budget for or budgeted very conservatively for. Stantec executed a potential cash flow model rather than assume the budget is dollar per dollar perceived. Mr. van Malssen stated that 10

11 operating costs are the largest function of the General Funds budget, particularly personnel services. What is not included in this projection is anything beyond 2019 in terms of addition to staff of the General Fund. There is no potential need for any action on the tax rate or Fire assessment this current Fiscal Year and expect this budget to be carried forward with reserve balances. Mr. van Malssen demonstrated how adding new hirings and new bond issues will create deficits that will have to be dealt with in the future. Mr. van Malssen described the impact of the potential exclusion of the exemption of churches and non-profits, as they are currently exempted from our Fire service assessment. He stated that the City s General Fund with the proposed budget, assumes a five and a half million dollar decline of its reserves. Year after year, the City executes under costs and receives more revenues than it budgets. Mr. van Malssen noted that the challenges the City faced were the additional salaries in the General Fund in terms of Full Time Equivalents (FTEs), particularly in police and any of the general employees, that are not funded in the budget. In addition, at the end of the five-year forecast there is a potential new bond issue, to cover new facilities. He is not suggesting any millage rate adjustments, or Fire assessment adjustments this year, this was only intended to provide a word of caution while going forward. The current budget could be covered by existing revenues, but there will be challenges to increase the budget any further over the next 5 years. A discussion ensued about planning for a recurrence of a recession. If a mild recession should occur; reserve balances would be depleted due to a slowdown in taxable value growth; corrections in the budget would need to take place. Options would include increasing revenues to match that offset or cuts in costs, or cuts in the rate of escalation of costs. Councilperson Brown asked if a Fire assessment can be charged to the non-profit and tax-exempt sector at a lower rate. Mr. van Malssen stated that if a Fire assessment were charged to non-profit and tax-exempt sector at today s rates; it would generate approximately $500,000 more than we are currently receiving. Councilperson Bochette asked if those adjustments were made can those be earmarked. A discussion ensued on fees to the nonprofit sector. Councilperson Burson stated that the City has a long way to go before calculating a surplus. Mr. van Malssen stated that many of their clients, isolate the cost for Fire services in a revenue fund outside of the General Fund for transparency purposes. Councilperson Bochette stated that a similar scenario took place when the State moved the lottery to support education. A discussion ensued regarding exemptions and the disparity of fees for residents versus industries. Councilperson Burson stated that he would like to reduce the millage charge and increase some of the other user fees to help the residents in the City. Councilperson Burson recommended a flat fee of ad valorum rates so the Fire department has a steady budget. City Manager Kazemi stated that they will bring the forecasting analysis presentation back next year. Mayor Henderson asked where the new construction is built into the model. Mr. van Malssen stated that new construction is in the taxable value scenario, at 11

12 9 percent, 8 percent, 7.5 percent and 6.5 percent. Ms. Tenney asked if the City Council would like to see other scenarios of the ad valorum rate. Councilperson Burson requested to roll back the millage rate. Mr. van Malssen recommended to maintain the millage rate and not roll it back particularly given the sensitivities going forward of any variance of the taxable value growth but also more particularly the need for future fulltime employees in the police department and the general departments. Mr. van Malssen stated by rolling back the millage rate, there would be a pattern of constant deficit spending that would need to be corrected at one point. John Caufield, Fire Chief, presented an overview of the Fire Department. He noted that call types from 2016 thru June 30, 2018 include Fires, medical rescue at 58 percent of the total call volume and 50 percent of other call types are for calls that are cancelled as an ambulance gets there ahead of time. He noted that actual fires only comprise 2 percent of the calls. Fire Chief Caufield stated that over the past year, there were 102 different type of calls with steady growth in call volume; up 22 percent in the past 4 years. He noted that as the City becomes more populated and denser, there will be more call volume. The medical call volume increases quicker than the Fire and other types of calls. 50 percent of Firefighters are paramedics. Fire Chief Caufield stated that the City was awarded a $383, Federal grant to replace outdated breathing apparatus and the City will provide a 10 percent match. He stated it would take a number of years to replace aged out equipment and that breathing apparatus is the most essential of all equipment needs; as it is specific for Firefighter health and safety, and their ability to do their jobs. His goal is to replace all breathing apparatus, after the 1 st of the year, as there is a 90-day lag time. Councilperson Bochette asked what became of the old equipment. Fire Chief Caufield stated in some cases you can trade them in, but because they are so old, they are worth pennies on the dollar at best. The lifecycle for a breathing apparatus is approximately 10 years; with a possible extension of 2 to 3 years. Fire Chief Caufield discussed incident response time. Typically, when there is an actual fire, the City responds with 4 out of 6 stations. They are anticipating increasing growth due housing is being planned. Fire Chief Caufield shared that fire code planning review and inspections are accomplished with a skeletal staff of 3 inspectors, 2 plan reviewers and a Fire Marshall. He noted that all hands are on deck depending on the call. Fire Chief Caufield noted that inspections are up 25 percent from 2016 and they have since added one inspector. A discussion ensued regarding the collapse in the stairway of Sunrise Towers. The Fire Department is trying to identify and proactively address these challenged properties. Fire Chief Caufield requested 2 new staff members. Councilperson Anthony asked if the Fire code inspections can be done on a contract basis and Councilperson Burson asked if the Fire department had adequate help. A discussion ensued regarding code citing for Sunrise, Jones Walker apartments and the displacing of residents. Councilperson Watson inquired who was responsible for 12

13 inspecting buildings as there was urination inside the Sunrise Towers stairways for years and caused the stairwell collapse. Councilperson Streets stated Section 8 housing provides a record in written reports. He would recommend requesting structural inspections at least twice a year. Fire Chief Caufield stated that we need to be proactive and take a multifaceted approach to address these problem properties. He is proud of the efforts of the Fire department to interact with the community. This year s activity included the Safety Saturdays Campaign where 800 homes were visited, and 425 smoke alarms were provided with an additional 122 installed since November Eighteen Community Cardiopulmonary resuscitation (CPR) classes were delivered to 170 Citizens. The Fire department is actively going out to the community, educating residents and providing free smoke detectors. Their public service purpose includes: Respect our Community; Commitment to a Fire Safe City, Comparison, Everyone, Every Time. Integrity at the Highest level, Caring for our Community. Fire Chief Caufield stated he has a great team and is honored and humbled to be the Fire Chief. The City Council thanked him for providing the Fire stations for community meetings and for his extraordinary help and service to the community at large. Richard Moulton, Director of Public Works, stated that he has 389 employees with 14 divisions. Their motto is Hard work, Team work, Public works. The City of Fort Myers Public Works Department strives to enhance the quality of life of all residents by providing safe, reliable, effective service consistent with the mission and goals of the community. The goals of the Public Works Department are to improve and beautify the landscape throughout the City, to expand recreational opportunities in a safe and economical way and to oversee the facilities preventive maintenance program. Mr. Moulton noted that they oversee approximately 100 facilities and the fleet department maintains 724 vehicles. The goals of the Public Works Department include improving the golf course image, generating sufficient, sustainable revenues and provide the best playing conditions possible. They try to improve and preserve the quality of life for the citizens, by providing courteous and professional public service of the highest quality. Mr. Moulton stated that the City has a water treatment plant that operates at peak efficiency while meeting all regulatory requirements; by providing the highest level of waste water treatments, exceptional customer service, and the highest level of solid waste service at competitive rates. Mr. Moulton reviewed the 14 divisions of public works including administration, engineering, recreation, S.T.A.R.S. Complex, Skatium, Parks, Golf Courses, Facilities Management, Utilities, Stormwater, Solid Waste, Fleet Maintenance and Street Maintenance. Amber Smith, Interim Center Manager, S.T.A.R.S. Complex, 2980 Edison Avenue, stated that the S.T.A.R.S. program has been a focal point of the Community for the past 27 years. Ms. Smith stated that S.T.A.R.S. stands for Success Through Academic and Recreational Support. The S.T.A.R.S. complex operates a building, a junior Olympic size pool, a 13

14 baseball field, and a multi-purpose field that accommodates more than 30,000 people each year. They provide affordable afterschool and out of school camps for over 200 children daily. S.T.A.R.S. partners with over 20 non-profit organizations annually to provide other Athletic programs, special events, mentoring programs and life skills training, that reach over 2500 citizens each month. In addition, S.T.A.R.S. provides space to host community meetings, birthday parties, baby showers, weddings, anniversaries and other events. They are currently working on a Memo of Understanding to the Police Athletic League to offer additional athletic programs. She further described the additional S.T.A.R.S. programs including Afterschool/Summer Camp Programs, Sunrise Club- before school, Science, Technology, Engineering, and Mathematics (STEM) Program, Performing Arts Programs, Junior National Basketball Association (NBA) Basketball/ Cheerleading, National Football League (NFL) Flag Football, Rugby, Swim Lessons, Public Pool, Little League Baseball/ softball, Police Athletic League (PAL) Football and Tennis. Ms. Smith created the Watch Us Grow theme, noting that children are little sprouts. She noticed the garden was full of weeds when she arrived, she let the children take ownership of the garden and they beautified it, hence she made Watch Us Grow their tag line to grow into the next century. Ms. Smith stated that S.T.A.R.S. received a million-dollar legislative grant to accommodate additional space for educational and recreational programs, and a disaster shelter for the City. S.T.A.R.S. will expand the STEM program through partnerships with their mentor, provide employment readiness training, and basic computer literacy for the elderly with their computer labs. Ms. Smith reviewed the S.T.A.R.S. major accomplishments of FY 2018 that included partnering with KaBOOM!, an American non-profit organization that helps communities build playgrounds for children. Together, S.T.A.R.S. and KaBOOM! built a new playground that is fully functioning. They partnered with Red Cross to provide 132 Free Swim lessons to the community. In addition, they provided field trips to summer camp participants exposing them to new experiences, for example, they learned how to ride and groom horses, they visited the golf course and took golf lessons, they partnered with the Edison Sailing Center and 18 participants took sailing lessons. She noted that the summer camp was a grand experience for the children of the City. Their main concern was the 12 to 14 age group, and they were kept entertained the whole summer. An additional accomplishment was a partnership with Florida Power and Light; solar canopies were installed in the parking lot keeping the cars cool. They also developed and funded a program through the Southwest Florida Community Foundation to provide guidance and mentorship to at-risk students, aged 12 to 18. In addition, they dedicated the S.T.A.R.S pool to community leader Loreen P. Hughes. The Rising S.T.A.R.S. Teen program (ages 12 to 18), provide mentorship, academic assistance and progress of tracking the teens over a three to five-year period to get them ready for the sustainability of adulthood. What they are planning on doing is recruiting older teens that typically do not attend the S.T.A.R.S. 14

15 complex. In addition, they are providing additional life skills to the current adolescents at S.T.A.R.S. including conflict resolutions, how to solve problems without fighting or arguing, improving their communication skills. She noted that they teach the adolescents that life is not all about texting or social media, they help the adolescents learn how to communicate effectively so they can get ready for school. They improve the adolescent s self-esteem by providing leadership abilities; hence grades improve from exposure to different skill sets, and adventures that they might not have been able to afford on their own. Milestones are reported so that employees are held accountable for what they do. Ms. Smith stated that children are our future, and S.T.A.R.S. wants them to be ready and prepared for that next chapter in life. City Manager Kazemi shared that this is a partnership. Councilperson Watson asked what S.T.A.R.S. was doing to market the program to teenagers. Ms. Smith stated that one of the ways attract teenager s attention is provide food for them. City Manager Kazemi stated that the funding would come through the Southwest Florida Community Foundation. Mayor Henderson stated that this program complements the efforts of Police Chief Digg s program, the Cease Fire initiative. Mayor Henderson stated that we owe a debt of gratitude to Councilperson Forrest Banks, who has raised about $175, in private donations toward this program. City Manager Kazemi stated that there will be an additional staff member to help this program. Councilperson Watson stated that we have to transform kids at risk and S.T.A.R.S. will help those kids who have trouble going to school. She recommended hiring someone in the community who knows the kids. Ms. Smith stated that the program will host 20 teenagers. Councilperson Burson asked if there are programs in other parts in town. Ms. Smith stated that the City is working on expanding the program at Billy Bowlegs park, to incorporate a small after-school tutoring session. A discussion ensued regarding an after-school program. Councilperson Streets recommended looking at the Shady Oaks Community Center, 3280 Marion Street. Councilperson Bochette stated that the City has a lot of children to service. Mr. Moulton stated that the Skatium and its ice related programs include ice skating, ice hockey, figure skating, public skating, learn to skate, various tournaments, lessons, sled youth and adult hockey, ice rental, hockey camp and a figure skating camp. The Skatium Recreation Programs include: roller derby, indoor basketball, soccer, roller hockey, volleyball, drone club, lacrosse and soccer camp. Mr. Moulton stated that maintenance of the 37 City parks include maintenance of the right of way with mowing and landscaping; horticultural maintenance, sports turf maintenance for 19 athletic fields, irrigation, installation and repair, beautification board technical support, and a tree and plant propagation nursery on Dr. Martin Luther King, Jr. Boulevard. He further noted that special events support debris pickup and cleanup after events. The department maintains best management practices for maintenance, equipment repair, the irrigation system with the goal of maintaining revenue sustainability of the two municipal golf courses. Facilities 15

16 management provides janitorial services for all of the inhabitable structures that the city has including facility maintenance and inspection; air conditioning and heating, ventilating, and air conditioning (HVAC) analysis and repair; furniture and fixture relocation; preventative maintenance and special projects. In addition, the Public Works department maintains utilities, the areas that are in the right of way, that are horizontal, lift station maintenance, sewer maintenance, waste water and reclaimed water distribution, and maintenance, water production from our water plant and customer service and meter repairs from our utility billing service and the administration function of utility billing, sending out bills, getting payments from the service center. The Stormwater division handles drainage conveyance, maintenance and operations, canal and outfall maintenance, right of way mowing, stormwater testing, monitoring and reporting for permit compliance, and storm water project management. The Solid Waste division provides residential and commercial collection, recycling program, the roll-off program, a dead animal collection program, maintenance and delivery of containers and compactors and code enforcement for solid waste related violations. The Fleet maintenance maintain 724 vehicles and equipment and are responsible for parts procurement and warehousing of associated parts; and fuel management. Street maintenance takes care of the maintenance of street lights, as approximately 50 percent of all the street lights are maintained by the City. Mr. Moulton noted that signalized intersection and crossing signal maintenance are outsourced to Lee County. Councilperson Streets invited Richard Lamb, Golf Course Manager, to address the City Council to discuss the City golf courses and provide the reasons for the subsidies. Mr. Lamb provided an update on the golf courses. He emphasized that the Eastwood Golf Course needs to have the back 9 holes completed. He noted that four years ago, the Fort Myers Country Club had a lot of issues and now it is at a whole new level and very close to sustaining itself. A discussion ensued regarding the debt service to maintain and repair Eastwood Golf Course. Councilperson Bochette requested a business plan for the golf course. Ms. Tenney further shared the debt payment schedule for the Fort Myers and Eastwood Golf Courses. City Manager Kazemi stated that an option is to privatize the golf courses, to proceed to advertise, and find out if the businesses are willing to operate the golf course without any subsidy from the City. Councilperson Streets shared that Mr. Lamb is a dedicated employee and has given an extraordinary amount back to the City including his salary. Councilperson Streets stated there was a time when both golf courses had to pay the City s bills when they were making money. He emphasized that people will come back to play at Eastwood Golf Course once the back 9 is repaired. Councilperson Bochette stated that youth participation in all sports is dropping and asked for a business projection for 5, 10, 15, 20 years for the City golf courses. Councilperson Streets stated that he supports restoring the back 9 of the Eastwood Golf Course and Mayor Henderson concurred, noting that we 16