City Council Special Meeting August 7, 2012

Transcription

1 City Council Special Meeting August 7, 2012 The City Council of the City of Titusville, Florida met in special session on Tuesday, August 7, 2012 in the Council Chamber of City Hall, 555 South Washington Avenue, Titusville, Florida. Mayor Jim Tulley called the meeting to order at 2:00 p.m. Those present were Mayor Jim Tulley, Vice-Mayor Walt Johnson and Members Kathleen Burson, Martha Long, and Rita Pritchett. Also present were City Manager Mark Ryan, City Attorney Richard Broome, City Attorney Emeritus Dwight Severs and department heads and/or their representatives. Assistant City Clerk Jolynn Donhoff completed the minutes. Mayor Tulley asked for a moment of silence. He then led those in attendance in the Pledge of Allegiance to the Flag. The purpose of the meeting was to conduct a budget presentation on the Fiscal Year (FY) budget and discuss the appropriation of General Fund Revenues based on the tentative adopted millage rate of $ Presentation Citizens Budget Advisory Committee Recommendations - Citizens Budget Advisory Committee (CBAC) Chairman Michael Werner summarized the purpose of the CBAC was to make cost saving recommendations for the proposed fiscal year (FY) budget. He identified each of the members and thanked them for their hard work and efforts. CBAC Chairman Werner gave a presentation that highlighted the following: CBAC action plan Reference documents Findings and recommendations for Millage rates and service fees Economic Development City Departments Non-departmental recommendations including health care, Other Post- Employment Benefits (OPEB), and General Fund reserves Historical review of General Fund budgeted expenses from

2 Historical active and final account delinquent amounts for Utility Billing from FY Management recommendations Vice-Mayor Johnson felt there were cost saving opportunities in the City s post-65 (age) health care program. He requested pursuing these ideas, which Member Pritchett supported. Member Pritchett commented on (1) the recommendation of increasing the rate of return for Water Resources from 2% to 5% that was estimated to procure an additional $400,000 in revenue and affect a shift in reserves; and (2) the CBAC s recommendation of centralizing administrative support staff within the Police Department/Law Enforcement was due to the CBAC felt there were cost saving opportunities by readjusting staff. Member Long requested applying dollar values to the CBAC s recommendations and providing the numbers to the Council by the next Council meeting. City Manager would provide the information requested by Member Long and the pros and cons related to the CBAC s recommendations. Mayor Tulley confirmed that each of the Council supported Member Long s request. He also commented on (1) Changing the rate of return on the water utility, but not beyond the 2013 rate. He was interested in confirming that lower increases or decreased rates would occur in the future; (2) The CBAC supported the acquisition of the seventy-five foot aerial ladder truck for the Fire Department due to the current vehicles were aging and their leases were ending and because the purchase was intended to offset costs; and (3) The recommended surcharge of $25 monthly to employees that used tobacco products was legal and an industry standard used by employers. Fire and Emergency Services Chief Michael Woodward summarized that of the two aging vehicles that were in question, being used by his department, one of the vehicles would be maintained as a reserve vehicle and the other had an approximate appraised value of $130,000. Vice-Mayor Johnson commented on knowing how the Water Resources reserve funds were used including when there might be an emergency. Water Resources Director Sean Stauffer and Public Resources Management Group (PRMG) Representative Henry Thomas commented on the uses of a ninety-day reserve fund for other costs, the City recently received a higher rating from an outside credit agency, maintaining a strong reserve fund in case of an emergency, keeping up with inflation and operating costs was a goal, how the reserves were managed and why, etc. Discussion ensued by CBAC Chairman Werner with PRMG Representative Thomas who commented that approximately $3 million was currently in the water resources reserves and that each percent equaled approximately $185,000.

3 Mayor Tulley requested receiving more details. He desired the CBAC and PRMG Representative Thomas iron out the calculations to assist determining where the City would stand. City Manager Ryan advised the information requested would be reported back to Council. Member Long commented on knowing if the funding from Water Resources was transferred, whether there would be any impact to the system; (2) Whether the proposed balanced budget would increase due to there were ladder trucks/vehicles at the Fire Department whose leases were expiring; and (3) Whether the CBAC included reviewing the City s medical costs for retirees as one of their recommendations. Finance Director Bridgette Clements summarized that the debt service for the new aerial ladder truck proposed for purchasing for the Fire Department would not begin until 2014 although the FY 2013 budget would reflect the expenditure. The debt service on the two aforementioned vehicles currently being used by the Fire Department were due to expire and this would reflect revenue. City Manager Ryan advised that he would include on Council s agenda for the regular Council meeting on August 16, 2012 an item requesting Council s authorization to reconvene the Citizen Budget Advisory Committee for the purpose of reviewing health benefits with staff and the consultant on the Post-65 (age) retiree health insurance. Member Pritchett confirmed according to PRMG Representative Thomas that a one-time transfer of $200,000 (revenue) to Economic Development from Water Resources/Utilities would not be a large challenge to recoup over time, although it would deduct funding from projects such as the 2-inch water line replacement program. For these reasons, Member Pritchett requested an impact analysis on the water resources program if funding was to be transferred to Economic Development. Next, Member Pritchett confirmed according to CBAC Chairman Werner that the CBAC s recommendations for Economic Development were not ranked in the order of importance, but they were ideas that the CBAC recommended. CBAC Chairman Werner advised that the Committee s recommended ideas for Economic Development could be applied to matrixes that could be used to measure how beneficial the ideas were to economic development. He advised that Economic Development Director Laura Canady could assemble the matrix. Member Pritchett requested having Economic Development Director Canady assemble the matrixes as discussed. In addition, Member Pritchett confirmed according to Support Services Director Tom Abbate that the data reported for the $1,405,293 of accounts receivables for Utility Billing accounted for the accounts that were and 120 days old.

4 Support Services Director Tom Abbate advised that utility accounts that were beyond 120 days past due were considered aged delinquency accounts, which accounted for approximately $250,000 of the $1,405,293. He added that the success of collecting on aged delinquency accounts was low and that selling the aged accounts for approximately $.10 per each $1 owed was possible. Accounts that were within day age status were not sent to collections. Currently, receiving payment on these accounts was an issue due to individuals were falling behind on their payments. City Manager Ryan advised that there was an increase in the sales of homes in the community, which was one of the signs of economic recovery. This was supported by the current volume of lien release transactions that the Water Resources Department was processing and recording. Member Pritchett requested receiving the information on the percentage of active Utility Billing accounts that progressed to aged delinquency status (120 plus days). Member Pritchett confirmed the City s current reserve in its General Fund was sixty-two (62) days. She recalled during the FY 2012 budget process, the City desired incrementally growing its General Fund reserves to a ninety (90) day status over time. Member Pritchett confirmed according to Finance Director Clements that an incremental increase in these reserves was not written into the proposed FY 2013 budget due to it was not possible. Maintaining a sixty day General Fund reserve met the requirement and adequate industry standard per Finance Director Clements. Mayor Tulley recognized and thanked each of the individual CBAC Members for their hard work. CBAC Chairman Werner advised there was an interest for the Committee to continue and stay focused based on the Council s direction. Staff Presentation Fiscal Year (FY) Proposed Budget City Manager Ryan thanked the Executive Leadership Team and support staff for their efforts. He gave a presentation that highlighted the following: Budget workshop goals and format Economic climate The City s vision and Mission Statement FY 2011/2012 Strategic Plan Initiatives and priorities Budget build guidelines FY 2011/2012 budget highlights City wide cost saving measures FY 2011/2012 proposed budget and All Funds Expenditures City organization and staffing levels, including full time employee (FTE) reductions, General Fund personnel costs, etc. Budget highlights by fund General Fund projected budget gap based on assumptions, changes in the estimated budget gap projections

5 General Fund proposed budget revenues, property valuations, operating millage rates, and ad valorem revenues General Fund - revenue variance analysis and expenditures variance analysis General Fund - Department initiatives and service impacts for the City s Administrative Offices, Economic Development, Support Services Departments, Development Services, Planning and Growth Management, Law Enforcement, Fire, and Public Works Departments Other Funds Special revenues and Capital project revenues Enterprise Funds Solid Waste, Fleet, Marina, and Water Resources Per City Manager Ryan s request, Henry Thomas of PRMG with Water Resources Director Sean Stauffer gave a presentation that highlighted the water and wastewater fiscal year (FY) 2013 financial forecast update as followed: Water Resources business plan update Five year financial forecast from FY 2012 through FY 2017 Revenue requirements Significant changes since the last update History of Water Resources staffing from 2000 to the proposed in 2013 Five year capital improvement plan Rate adjustments Reasons and factors affecting rate adjustments Typical residential monthly bill for ¾ meter at existing and proposed rates Current rate comparison to other municipalities in the Central Florida area for a typical 5/8 meter monthly bill at 5,000 gallons Other issues inactive account fees and return on investment transfer Recommendations and conclusions Vice-Mayor Johnson and Mayor Tulley expressed concern on the concept of discontinuing certain laboratory services due to it was a method of producing revenue. Each Member questioned whether the idea made sense for fiscal health purposes and whether the result was a net reduction in cost savings. They did not feel employees who earned an income for the City should receive furloughs. Water Resources Director Stauffer advised that if lab services were reduced, they would begin by discontinuing external analysis services. Losses in revenue would be a subsequent result of the pending employee furloughs or reduced work schedule. City Manager Ryan advised that the overall idea was to fund employee pension costs. He would review Vice-Mayor Johnson s and Mayor Tulley s concerns on this issue and report back to Council. Member Long asked whether the revenue that was generated by the lab services covered the cost of the employees. She understood the issues were not simple and it was Management s recommendation on how to accomplish the cost savings to the FY 2013 budget.

6 Mayor Tulley commented similarly to Member Long and confirmed whether the use of daily labor was sometimes used to perform certain duties. City Manager Ryan advised that the reference to daily labor employees was within the service impacts to the Solid Waste Division. Next, Mayor Tulley commented on water line replacement costs. Water Resources Director Stauffer desired placing a metric value on the $200,000 that was proposed being designated for Economic Development. PRMG Represented Henry Thomas summarized that the transfer might lower the water line repair and replacement (R&R) reserve fund. Vice-Mayor Johnson commented on manhole covers that Council discussed at the regular City Council meeting on July 24, 2012 at 6:30 p.m. He clarified according to Water Resources Director Stauffer that manholes had an effect as well as other mechanisms on inflow and infiltration of the water system. Member Pritchett commented on knowing the subsequent costs of a one-time transfer of $400,000 to Economic Development for which PRMG Representative Thomas responded and commented on example projects and expenses that were required over time. Next, Member Pritchett asked the Council to consider how they might relieve the pain or ease the burden on employees. Member Burson reviewed the capital outlay requests proposed for FY She felt the City should consider purchasing used equipment for the items identified within the budget. She also confirmed that the cost of the equipment was estimated at new prices. Member Burson felt that given the current economy, purchasing newer used equipment might be less costly. City Manager Ryan and Support Services Director Abbate cautioned that used equipment sometimes had problems that the City may not want to inherit and receiving an active warranty with the equipment would be important. The challenges associated with budgeting the purchase of used equipment were also discussed; however, City Manager Ryan advised that he would direct Support Services Director Abbate and Purchasing and Contracting Director Jesus Vieiro to review soliciting used equipment. The Purchasing and Contracting Office could specify within bid solicitation notices that a warranty and other bid specifications were required, etc. Second, Member Burson commented on the reference to day laborers. Mayor Tulley advised that City Manager Ryan was reviewing this item to determine if there was a cost savings by using this form of labor. Vice-Mayor Johnson commented on prior communications with regard to preparing the FY 2013 budget and laying off fourteen sworn police officers. He asked knowing where the idea originated.

7 City Manager Ryan advised this idea came from a template that was previously provided to staff on how each department might achieve a 3%, 5%, 10% reduction in their budgets. Member Long confirmed that the approximate savings of $430,000 used to assist closing the estimated budget gap was a result of the cost savings provided by the employee health care clinic. She also confirmed according to Finance Director Clements that the State required the City to maintain a Catastrophic Reserve Fund due to the City was self-insured. Human Resources Director Joe Denaro commented on the City stop-loss and reinsurance program(s). Reinsurance would pay for a catastrophic claim(s), which was over $125,000. He also referenced a prior catastrophic claim in vague terms that was eligible/covered by Medicare. Member Long expressed concern on the City being vulnerable for payments associated with catastrophic claims, health care costs, and operating expenses. Finance Director Clements commented on a significant trend in health care cost savings was occurring due the success of the employee health care clinic. She and Member Long discussed these savings as a right-sizing plan that reduced health care premiums during FY 2012 and into the future. City Manager Ryan summarized that Council previously discussed and approved having stoploss insurance. Member Long confirmed that (1) $300,000 identified as restricted reserves was intended for the Police Department due to the State required funding for certain activities, but also due to the reserves were intended to off-set the costs of the previously approved New World dispatch software; (2) $800,000 in Capital within the General Fund Expenditures was budgeted for the purchase of the aerial fire truck, which required being appropriated within the budget; (3) How/why the Solid Waste Revenue Variance of $832,000 was programmed with in the budget; and (4) An intergovernmental Water Resources revenue of $1,207,000 was the result of a loan application made to the State Revolving Fund (SRF) for the filter rehabilitation project at the Mourning Dove Water Treatment facility. The loan would require a repayment schedule to begin within months of the project s completion. Next, Member Long requested the City Manager s evaluation be completed within September Mayor Tulley added this would be an item that would be submitted and discussed by the Council at the second regular City Council meeting in September Vice-Mayor Johnson briefly highlighted how the City stop-loss and reinsurance program worked and the City s history of using the program/insurance. He advised the program was not unique and he felt the program was safe. Mayor Tulley commented on the City s prior efforts to stay ahead of the road resurfacing schedule. At 2.5 miles of road resurfacing estimated for completion during FY 2013, the City would fall behind schedule at approximately 1.6 miles of road. For this reason, he requested

8 knowing the amount of funding that would be necessary to maintain or stay ahead of the current schedule. City Manager Ryan summarized that there was more information within his presentation that would address the road resurfacing issue. The Council recessed the meeting at 4:18 p.m. and reconvened at 4:28 p.m. City Manager Ryan continued the staff presentation on the Fiscal Year (FY) proposed budget as followed: Internal service funds Additional funding needs for FY 2013 including restoring employee work hours and service levels, and additional unfunded needs The public hearings on the FY 2013 proposed budget were scheduled on September 4, 2012 and September 18, 2012 City Manager Ryan advised that one of the unfunded needs was filling the position of the Building Plans Examiner. He advised that there were different opinions on whether the cost of homeowner s fire insurance would increase if this position remained unfilled. For this reason, he advised the City should assume the costs would increase if the City decided not to fill this personnel position. Member Long requested prioritizing the entire list (unfunded needs) and the significance of not completing items or projects. City Manager Ryan advised that he would report back to the Council. He added that the lion share of unfunded items on the list took into account the personnel costs. Member Long understood the ten percent reduction in personnel costs was a uncomfortable, but she felt the City could continue its operations after making the reduction. She was further interested in ranking and knowing what items on the list (unfunded needs) the City had the means of completing. Once ranked according to their priority, identifying the funding source for an item(s) or project(s) would be necessary. City Manager Ryan advised that if the City achieved pension reform through the process of collective bargaining, the issue of personnel costs would go away. Member Burson requested a priority comparison of the list of unfunded needs to those items that were written into the proposed budget. She used unfunded items for the Fleet Division items as an example. She asked how did some items make it on the budgeted list and others did not.

9 City Manager Ryan would have the Fleet Division provide the criteria necessary to answer Member Burson s question. Member Burson confirmed that funding was not identified for several computers needed by the Police Department. She added this was why she recommended purchasing good used vehicles in order to have funding to purchase other necessary items. She requested receiving a prioritized list for both the budgeted and unfunded needs. Member Pritchett supported Member Burson s request. For instance, the Fire Department requested a defibrillator that was used to save lives. Fire Chief Woodward advised that the Fire Department s current defibrillators/lifepaks would be phased out of use by His department desired purchasing two per year at a cost of $31,000 each to offset a lump sum replacement cost during Altogether, seven Lifepaks were identified for replacement by Member Pritchett requested the CBAC s recommendations on the unfunded needs list. She wanted to identify common items between the City Manager s presentation and the CBAC s recommendations. Vice-Mayor Johnson clarified according to City Manager Ryan and Fire Chief Woodward that Parrish Medical Center may assist the City with purchasing the New World dispatch software if the hospital had remaining funds at the end of the year. Vice-Mayor Johnson commented on his prior knowledge and experience with the North Brevard Medical Support organization and the organization s efforts to assist the community. He recommended that Fire Chief Woodward contact this organization to review whether funding or other assistance was available. Mayor Tulley confirmed according to Finance Director Clements that Other Post-Employment Benefits (OPEB) trust fund contributions did not require being reported to the Governmental Accounting Standards Board (GASB); however, the City was required to record its liabilities within its accounting procedures. Mayor Tulley also commented on Community Relations events that employees from this Division worked, which sometimes required being paid overtime. He questioned whether there was a risk of not hosting some events, if the cost to cover employees time was not funded. City Manager Ryan summarized that Community Relations employees were paid hourly. Implementing employee furlough days in the FY 2013 budget could have an impact on these events unless there were major adjustments to employees work schedules. The employee furloughs could affect events in other ways, such as providing coverage from the Police and Fire Departments. He added that individuals hosting events may complain about having to pay additional costs for hosting their events. Next, Mayor Tulley discussed and confirmed additional information with staff, as followed:

10 A nominal increase in Solid Waste revenues occurred due to a surplus of recyclables and from commercial accounts. The loss fund increased by ten percent and payroll decreased by ten percent due to the loss fund contained the premiums and costs for the City s insurance, which was set by the insurance carrier(s). The numerical figures had nothing to do with personnel costs. Improvements for City Hall included resealing the exterior and sidewalk repairs. Improvements to other City buildings including the Emergency Operations Center were also pending. The Fire Department proposed purchasing a capable emergency transport unit to use as a primary response vehicle for medical calls due to dispatching a ladder truck to a medical call was less efficient. The hospital provided these vehicles since 1997 until funding became unavailable. In addition, Mayor Tulley commented on Council reducing their salaries on the principal that reduced personnel costs were proposed. For this reason, he requested City Manager Ryan return to Council and request advisability to reduce Council s salaries. Vice-Mayor Johnson requested the costs of Community Relations supported events or knowing the costs to continue these events. Mayor Tulley confirmed that City Manager Ryan was recording the list of questions that the Council was asking at the meeting. City Manager Ryan and Mayor Tulley commented on employing an individual to manage the goals of the Greater Titusville Renaissance (GTR) a volunteer movement to enhance business and development, beauty, and arts and culture in Titusville. Mayor Tulley advised that per the Brevard County District One Commissioner, the Brevard County Manager would allocate approximately $30,000 from the County Manager s budget to support the proposed administrative position. It was an idea the Council might consider as an item on the agenda for the first FY 2013 budget hearing and special City Council meeting on September 4, Member Pritchett requested Economic Development Director Laura Canady return with a recommendation on whether co-funding the Greater Titusville Renaissance Administrative position would bring a financial return and opportunities over time to the City. Member Long asked knowing whom the GTR Administrative position would report to (supervisor). She also summarized that she could support a contract employee for the position, but not a regular salaried or hourly employee. Vice-Mayor Johnson felt the GTR position needed further discussion. His experience provided that projects were more successful when individuals were paid for their efforts and that a consistent amount of work would be required to keep the momentum of projects moving forward.

11 Petitions from the Public Present Citizens Budget Advisory Committee (CBAC) Member Curt Leady felt that the CBAC should have been provided the unfunded list of items to review that were highlighted during the staff presentation. He felt the CBAC could have made recommendations to the Council. Second, he advised that of approximately $7 million in reserves for Water Resources, the CBAC Committee recommended allocating $400,000 of which $200,000 could be appropriated to Economic Development and the other $200,000 be used as the Council desired. Third, Mr. Leady desired Council discussing not only their priorities, but also revenues and addressing raising the millage rate to fund items. Fourth, Mr. Leady desired resolving the issue of emergency medical staff from Brevard County and the City s Fire and Emergency Services Department arriving at the same medical response calls due to this was a duplication of efforts. Per City Manager Ryan s request, Water Resources Director Stauffer commented on Mr. Leady s reference to the approximate $7 million in reserve funds. Water Resources Director Stauffer summarized that these reserves consisted of two items/funds. The $3.8 million of the reserves was within the unreserved funds; however, each year the City completed a rate study that began with reviewing the City s Comprehensive Annual Financial Report and cash balances. The City considered these unreserved funds in its five-year Capital Improvement Plan (CIP). The reserves in question were referenced within page no. 143 of the proposed FY 2013 budget. On the issue of a duplication of efforts by Brevard County and Titusville Fire and Emergency Services, City Manager Ryan advised that resolving this issue would require a legislative change at the State level unless Brevard County, which had not yet agreed, gave the City full authority to transport medical victims. Fire Chief Woodward advised that his staff would continue to respond to emergency response calls due to the City s response times were quicker than Brevard County. Member Pritchett recommended writing a letter to Brevard County to address the issue. Fire Chief Woodward advised that since April 2012, he and the Brevard County Fire Chief were trying to work out the issues and arrive at a new plan; however, the County removed the transport agreement and the City had not reviewed a new plan. City Manager Ryan added that he, Fire Chief Woodward, and Mayor Tulley would organize a meeting to continue dialogue with the County to address these issues. Council discussion of appropriation of tentative millage rate of $ City Manager Ryan advised that from the discussion at this meeting, he would work with his staff to compile, answer, and respond to Council s questions. Member Long requested knowing whether the first public hearing date on the FY 2013 budget scheduled for September 4, 2012 could be changed.

12 City Manager Ryan advised that Council could not hold their budget hearings the same day as the Brevard County School Board or Brevard County, etc.; however, he would respond to this question at the regular City Council meeting on August 16, Mayor Tulley requested City Manager Ryan forward the electronic copy of the City Manager s Evaluation form to the Council. He also advised that Council welcomed a new employer, The Scotty Group, to Titusville earlier in the day and the airport was becoming an economic engine for the community. Lastly, Mayor Tulley thanked City Manager Ryan and staff for their efforts. He also advised that the Council would try to be fair during their consideration of the FY 2013 budget. With no further business to discuss, the meeting adjourned at 5:12 p.m. ATTEST: James H. Tulley, Jr., Mayor Wanda F. Wells, City Clerk