CITY OF MELBOURNE, FLORIDA MINUTES SPECIAL MEETING BEFORE CITY COUNCIL SEPTEMBER 20, 2017

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1 A special meeting of the City Council was held in the City Council Chamber, 900 East Strawbridge Avenue, and was called to order at 6:30 p.m. by Mayor Kathy Meehan. 1. Pledge of Allegiance. 2. Roll Call. Present: Kathy Meehan Mayor Tim Thomas Council Member, District 1 Betty Moore Council Member, District 2 Yvonne Minus Council Member, District 3 Debbie Thomas Vice Mayor, District 4 Paul Alfrey Council Member, District 5 Teresa Lopez Council Member, District 6 Michael A. McNees City Manager Alison Dawley City Attorney Shannon Lewis Deputy City Manager Cathleen A. Wysor City Clerk Jeff Towne Director of Finance Marla Keehn Management and Budget Officer 3. COUNCIL ACTION RE: Review of the FY proposed budget (public comments on the proposed budget and millage rate will follow introduction by staff and review by City Council). City Manager Mike McNees said that this is the first of two public hearings that, in accordance with state law, must be held prior to adoption of the fiscal year budget. The City Council has had extensive discussion on this item. This meeting will provide an opportunity for the public to comment on the budget before it goes into effect. He asked the Finance Director to provide an overview. Director of Finance Jeff Towne reported that this public hearing was originally scheduled for September 14; however, due to Hurricane Irma, the city followed all of the requirements set forth by law and rescheduled the meeting to this date. Mr. Towne reviewed the following highlights: This hearing provides an opportunity for public input and for Council s tentative adoption of the fiscal year millage rate and budget. The Council will meet again on September 28 at the final public hearing to adopt the tax rate and budget for the new fiscal year. The budget presented for Council s consideration includes a proposed property tax millage rate of per thousand dollars of assessed valuation. This is the rolled back millage rate, meaning that no tax increase is proposed. The proposed budget does include the continuation of the dedicated millage programs to address road Page 1 of 7

2 improvements and public safety fleet/capital equipment replacement as adopted by City Council in the past several years. General Fund Changes to the proposed budget since the July 31 special meeting are reflected on Page 20 of the agenda package. The changes include the addition of the Airport budget in the amount of $23,794,043; reduction of the tax increment revenue totaling $45,184 in all of the Community Redevelopment Agency funds due to the county s proposed millage rate; and a transfer of $200,000 from the General Fund reserves (unassigned fund balance) to the Golf Course Fund to support the operations of the Golf Course Fund for fiscal year as directed by City Council at the July 31 workshop meeting. Additionally, the grants-in-aid funding for parades totaling $13,500 was removed and placed into the operating contingency account based on Council s action at the August 22, 2017 meeting. The General Fund amended budget totals $80,026,158. That budget will maintain current service levels. Special Revenue Funds The Downtown and Babcock Street Community Redevelopment Agencies experienced modest growth in the past year. The Eau Gallie CRA experienced about 15% growth; however, its total taxable valuation is still not at the level needed to support the size of projects funded by those in the Downtown and Babcock CRAs. The tax increment revenue for each CRA was reduced (as a result of the county s proposed millage rate) as follows: $21,310 for Downtown, $16,646 for Babcock, and $7,228 for Eau Gallie. Some of the capital improvement projects being funded by the CRAs include the contributions to Riverview Park, painting of the Downtown archway, contributions to the Babcock Street improvements project, and a lighting project in Eau Gallie. Water and Sewer Fund Staff recommends that the utility rates previously outlined in the five-year plan adopted by Council in May 2012 not be increased. Water and sewer sales remain strong and operational savings have allowed for planned rate increases to be deferred. This is the third year consecutive year that administration has recommended deferral of a rate increase. The proposed Water and Sewer budget will increase approximately $1 million due to funding more capital improvements. It is important to note that the capital improvements plan still shows $116 million in needed improvements over the next five years. Staff from Public Works and Utilities and Finance will be working on a comprehensive long range financing plan, which is expected to be ready at the end of 2017 or the beginning of Stormwater Utility Fund The stormwater rates remain unchanged. Projects totaling $1.4 million are recommended for funding, including stormwater retrofit devices and stormwater quality projects throughout the city. A stormwater utility rate study is being planned for the upcoming year. The last rate study was performed in 1999 when the stormwater utility was first established. Golf Course Fund The budget has been amended by adding a $200,000 subsidy from the General Fund reserve account. The subsidy will allow golf operations to continue at the current operational levels and maintain employees rather than contracted labor, Page 2 of 7

3 while the golf courses management team continues to implement improvements to organizational and financial efficiencies. Insurance Fund The property and workers compensation insurance budgets are consistent with current year budgets. Workers compensation claims have increased significantly over the past four years. This is expected to level as claims close and are resolved. Seventy five percent of the workers compensation budget is charged to the General Fund primarily for public safety, which makes up 58% of all of the General Fund charges. Human Resources and Finance are working on a comprehensive plan to address workers compensation and the expenses charged to it. Airport The Airport budget in the amount of $23,794,043 was approved by the Airport Authority at its August 23 meeting. As noted earlier, that total has now been included in the budget. The entire city budget, inclusive of the Airport budget, is presented for discussion and tentative approval. The property tax rate and budget approved by City Council at this meeting will be advertised in the newspaper in preparation for the final public hearing, which will be held on September 28, 2017 at 6:30 p.m. Mayor Meehan opened the public hearing. Karen Harshaw, Lynn Avenue, representing the Melbourne Light Parade, referenced the action taken by City Council at its August 22 meeting to discontinue funding for parades. She stated that the Light Parade is a non-profit organization that collects food, toys, and pet food for local distribution. The budget for the parade is $17,000 with $13,500 of that being city charges for services. The grant money previously awarded by the city helped offset the costs. To date, she said that she has raised only $2,000 towards this year s December parade. She described her efforts to raise funds and obtain sponsors, and asked if Council would reconsider funding the parades this year. Council Member Betty Moore spoke highly of the Melbourne Light Parade and stated that she hopes it can take place. She commented that to do otherwise would shortchange the citizens of Melbourne. Ms. Moore made a motion that the Melbourne City Council support the Light Parade with the existing amount given in the past, $7,000. Mayor Meehan stated that it was unfair for the city to pull funding this close to the event; it presents a hardship for the Light Parade. At this point, Council Member Teresa Lopez seconded the motion. Moved by Moore/Lopez that the Melbourne City Council support the Light Parade with the existing amount given in the past, $7,000. (See substitute motion below.) Page 3 of 7

4 Council Member Paul Alfrey reported that he has been working the community and believes that he has about 80% of the required funding lined up from businesses. He agreed that it s a great parade, but noted that the Melbourne Light Parade has to step up. Mr. Alfrey pointed out that after city funding in the amount of $7,000, Ms. Harshaw is responsible for $10,000. He stated that he ll continue working with the business community to get funding. With regard to the City Council discontinuing funding of the parades, he commented that the city has a lot of needs. City Attorney Alison Dawley called Council s attention to its August 22 action and clarified that the appropriate motion at this meeting would be a motion to rescind the prior motion. In order for that to pass, a two-thirds vote (five) would be required. Vice Mayor Debbie Thomas agreed that the city needs to be careful with its funding, especially with the potential change in homestead exemption. However, she said that Council s decision was made very late in the game for the Light Parade. In consideration of the amount of money that has to be raised, she stated that she could support providing $7,000 funding for this year s parade with instructions to the applicant to work with the community to provide funding. This action would allow the applicant time to secure funding in future years. Council Member Teresa Lopez expressed support and said that she believes the Melbourne Light Parade unites the entire city and improves the holidays. Council Member Yvonne Minus expressed support for the motion and noted that residents from throughout the county attend this parade. Council Member Tim Thomas expressed concern that this would establish an expectation that funding would be provided for all the parades. Mr. Thomas reported that he also knows folks who would be willing to donate. He cautioned against funding parades with taxpayer money based on the city s current economic situation. Vice Mayor Thomas agreed with that statement, but pointed out that we are at the end of September. She said that she could support funding for one more year and cut the funding in future years. Attorney Dawley further clarified for City Council that the August 22 motion related to discontinuing funding for the Memorial Day, Fourth of July, Veterans Day, and Melbourne Light parades. If City Council makes a motion to just fund the Melbourne Light Parade, Council would only be rescinding in part the action previously taken. The following substitute motion was offered: Moved by Moore/Lopez to rescind in part the action taken on August 22 as it relates to the Melbourne Light Parade for this year only and that the remaining three parades will not be funded. The maker of the motion confirmed that the intent is to fund the Melbourne Light Parade this year only. Based on that, members expressed support for the motion. Page 4 of 7

5 The question was called. The roll call vote was: Aye: T. Thomas, Moore, Minus, Alfrey, Lopez, D. Thomas, and Meehan Motion carried unanimously. The Mayor continued with the public hearing. Connie McLellan, Sand Trap Lane, spoke in support of Mallard s Landing Golf Course. She discussed the condominiums that line the course and reported that most owners purchased their unit because of the golf course. She referenced Council s previous discussion on outsourcing certain positions and recommended that Council consider attrition. Ms. McLellan discussed the number of courses in the area and the activities offered at Mallard s Landing, expressed concern about loss in property values if the golf course closes, and recommended that City Council study the issue for a year. Ms. Moore commented that Parks and Recreation Director Kevin Briski is implementing innovative ideas at the golf courses. She noted that she has asked for a monthly report on the golf course finances beginning in February when the snowbirds are here. Ms. Moore stated that she does not want to see the golf course privatized or eliminated. Mr. Thomas referenced the economic condition of the city and stated that the General Fund can t continue to augment the golf courses by $200,000 every year. Unless the courses make money, the City Council will have to make some tough decisions. Money must be freed up to take care of our roads and support the existing infrastructure. There are many great courses in the county with a lot of competition; the market is flooded. Mr. McNees said that although Council did not approve outsourcing maintenance positions at the golf course, the process of attrition is underway. As positions turn over, they are being filled with contract employees. Savings will be achieved, albeit over a longer period of time. With regard to the finances, the numbers don t look much better than they did four years ago. However, Mr. Briski and his staff will continue to creatively market the courses. Mr. McNees closed by saying that people playing golf at Mallard s Landing will guarantee the future of that course. Mr. Alfrey discussed ways in which the city can be creative in privatizing certain portions of the operations. He noted that the City Council is looking for the courses to break even, and he believes that the right people are in place to get the job done. Ms. Moore said that she does not recall Council approving, through attrition, employees being replaced with contract employees at the golf course. At this point, several members of City Council indicated that they thought that was the intent. Mr. McNees confirmed that he ll review the record to ensure that staff is following City Council s direction. Page 5 of 7

6 Terry Stone, Bogey Lane, representing the 19 th Hole Condo Association, spoke in support of Mallard s Landing. She discussed the residents willingness to help, stated that they do not want to see homes built in place of the golf course, and expressed appreciation for the city keeping the course going. 4. COUNCIL ACTION RE: Adoption of a proposed FY millage rate Mr. Towne said that pursuant to Florida Statutes, , the city has prepared a tentative budget and computed the proposed millage rate of per $1,000 of assessed property value. The proposed rate was tentatively approved by the City Council at the July 31, 2017 special meeting. This is what is considered the rolled back rate and is 6.51% less than the current millage rate of The rolled back rate is the tax rate that, in accordance with state law, is neither a tax increase nor a tax decrease. Moved by Lopez/T. Thomas for adoption of the proposed millage rate of per $1,000 of assessed property value for the fiscal year, (which is the rolled back rate, and is 6.51% less than the fiscal year millage rate of ). Motion carried. Council Member Moore voted nay. 5. COUNCIL ACTION RE: Adoption of the FY proposed budget Mr. Towne provided a recap of the changes noted earlier during his review. Moved by D. Thomas/Minus for adoption of the proposed budget, with revisions, of $185,100,420. Motion carried unanimously. Council convened as the Melbourne Downtown Community Redevelopment Agency for the following item: With regard to Items 6, 7 and 8, Mr. Towne stated that in accordance with Florida Statutes, , Community Redevelopment Agencies must adopt their proposed budgets for inclusion in the city s final adopted budget. 6. COUNCIL ACTION RE: Adoption of the proposed FY Melbourne Downtown Redevelopment Fund budget. Mr. Towne stated that the revised budget reflects the county s proposed millage rate, which reduces the incremental tax revenue by $21,310 from the original proposed budget. The total budget is $1,166,525. Moved by Minus/Moore for adoption of proposed budget with revisions for the Downtown Redevelopment Fund in the amount of $1,166,525. Motion carried unanimously. Council convened as the Babcock Street Community Redevelopment Agency for the following item: Page 6 of 7

7 7. COUNCIL ACTION RE: Adoption of the proposed FY Babcock Street Redevelopment Fund budget. Mr. Towne stated that the revised budget reflects the county s proposed millage rate, which reduces the incremental tax revenue by $16,646 from the original proposed budget. The total budget is $913,749. Moved by Minus/Moore for adoption of proposed budget with revisions for the Babcock Street Redevelopment Fund in the amount of $913,749. Motion carried unanimously. Council convened as the Olde Eau Gallie Riverfront Community Redevelopment Agency for the following item: 8. COUNCIL ACTION RE: Adoption of the proposed FY Olde Eau Gallie Riverfront Community Redevelopment Fund budget. Mr. Towne stated that the revised budget reflects the county s proposed millage rate, which reduces the incremental tax revenue by $7,228 from the original proposed budget. The total budget is $397,545. Moved by Moore/Minus for adoption of proposed budget with revisions for the Olde Eau Gallie Riverfront Redevelopment Fund in the amount of $397,545. Motion carried unanimously. Council reconvened for the remaining item. 9. ADJOURNMENT Mayor Meehan declared the meeting adjourned at 7:16 p.m. City Clerk 9/26/2017 Approved by Council: October 10, 2017 Page 7 of 7

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