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09-26-2005 - Special Budget '-' ...., CITY COUNCIL OF EDGEWATER SPECIAL MEETING SEPTEMBER 26, 2005 7:00 P.M. COMMUNITY CENTER MINUTES CALL TO ORDER Mayor Schmidt called the Special Meeting to order at 7:00 p.m. in the Community Center. ROLL CALL Mayor Donald Schmidt Councilman James Brown Councilman Dennis Vincenzi Councilwoman Harriet Rhodes Councilwoman Judith Lichter City Manager Kenneth Hooper City Clerk Susan Wadsworth Paralegal Robin Matusick Present Present Present Present Present Present Present Present INVOCATION, PLEDGE OF ALLEGIANCE There was a silent invocation and pledge of allegiance to the Flag. MEETING PURPOSE The purpose of the meeting was to hold public hearings (2nd Readings) on Ord. 2005-0-47, adopting final millage rate of 6.45 mills per $1,000 of assessed taxable value and Ord. 2005-0-48, adopting final budget for fiscal year 2005/2006. Paralegal Matusick read Ord. 2005-0-47 and Ord. 2005-0-48 into the record. City Manager Hooper made a staff presentation. He went over the budget at 6.45 mills and 6.20 mills. The reduction of this quarter mill is a total of $190,414.65. He commented on hearing from the auditors in the past that we had a low amount in our reserves. He explained it looks like $1.1 million will be in the reserves. We are supposed to have 15% as a minimum and that number is about $1.5 million. ~ ......, City Manager Hooper further stated we are slightly under but he feels this is a major recovery from last year and going through the storms. That was done by a stopping of expenditures and we went into a very slow hiring mode. Only emergency or necessary procedures did we go through. That enabled them to build the reserves from $200,000 to $1.1 million. The issue is down to FEMA. Our expenditures is about $5 million. To date we have been reimbursed $2.1 million from FEMA. There is about $1.4 million that he would call committed. They know that dollar amount has been allocated. He spoke of Crowder Gulf picking up most of our debris. They wound up with a tab of about $4 million. We have paid them a portion but we still owe them $1.4 million. They are estimating we will have about $1.5 million in reserves with this budget that they proposed. City Manager Hooper further commented on the 1/4 mill reduction. He feels it shouldn't happen but if they choose to make it occur it has to come out of one of these three areas. As a fiduciary responsibility he can tell them they can take it out and still have a balanced budget. Reduce the fund balance, which is the reserves, by $190,000. They will be almost $200,000 lower at $1.3 million. Resurfacing, they have reduced a little already. They could take $190,000 out of resurfacing which would leave them with about $109,600. The other option is to freeze some hiring and not fill any vacant positions until they match the $190,000. This is a bare bones budget and has been whittled back 5% in each department. He further commented on this being a recovery budget. He suggested one more year at the current millage rate of 6.45 with every effort to look at, reduce, even increase the savings to enable them to have some money as they go into the budget next year. City Manager Hooper further commented on knowing the Council wants to reduce the budget but he is also aware they have projects they want done as well as projects the public wants done. They can't continue to expand services and still do even a portion of roll back. He commented on how well Economic Development is working and having over a 20% increase in revenues from a variety of sources. He spoke of things coming in and taking time to get on the tax roll. He spoke of development other than residential that is starting to occur. He feels we are in a situation where it is not a smart move at this point to do a reduction. City Manager Hooper explained there are no changes to the budget and the figures are the same as have been described in the past. Page -2- Council Special Meeting September 26, 2005 ~ ....." Councilman Vincenzi commented on saving $190,000 from freezing hiring and asked where City Manager Hooper anticipates these positions would come from. City Manager Hooper informed him the first would be from the Police Department. There is a sergeant that is retiring October 6th. There is Environmental Services and some other retirements that are around the corner. He spoke of this being general fund employees only. Councilwoman Lichter asked if there is a chance that FEMA's money may not come in. City Manager Hooper feels there is a fairly strong chance they may not get it all. He feels the more money FEMA owes out, the more difficult they will make it for everybody to get to the level they promised. Councilman Brown asked about resurfacing. He doesn't feel reducing resurfacing is the right thing to do. He can't see reducing the fund. We went through three hurricanes and it is possible we might go through more. If you take that money out it is taking it away from the potential of protecting the people and he can't see doing this. Councilwoman Rhodes stated our Charter won't let us. This is not an option. It says we are supposed to have a certain amount and that is what we are supposed to have. City Manager Hooper agreed. He spoke of this being an issue again with the audit in January or February. Councilwoman Lichter asked if other cities have the requirement of a definite amount defined in the Charter. City Manager Hooper explained it was included in the Charter in 1999 because the reserves had gotten very large. They went through and budgeted a fire station and the YMCA out of excess revenues. He has never seen it in another municipal Charter but he has seen it in County Charters. Mayor Schmidt opened the public hearing. The following citizens spoke: Andv Anderson, Pine Tree Drive, commented on an article he saw in today's paper regarding the notice of proposed tax increase. He sees the actual property tax level is $4,283,690. The proposed tax for this year will be $5,171,261. That is almost a 25% increase in one year. Finance Director Jon Williams elaborated on Mr. Anderson's concerns. City Manager Hooper stated the actual number is 14.69 over roll back. Page -3- Council Special Meeting September 26, 2005 --- ..." City Manager Hooper explained they advertise the full amount that is by way of millage but you are only allowed by Statute to appropriate 95% of that. Mr. Anderson stated you have a lot of retirees in this town and he feels they need to do something about that. This is almost 25%. That is a sizeable increase for one year. City Manager Hooper stated if you live in your household and haven't bought and sold, 3% max is all that occurs with homestead exemption. He also commented on the additional exemption for seniors. Mr. Anderson asked about federal grants and if we are getting some money from the feds. Councilwoman Rhodes and Councilwoman Lichter commented on grants we have. Mr. Anderson feels whatever they do they need to be careful. He thinks the Animal Shelter was a no-brainer. It is half a million bucks and someone will be hired for $50,000 a year. He feels the Animal Shelter on Glencoe Road was cheaper than the way we are going. Councilman Brown stated we aren't increasing the tax rate. We have more people paying the same amount of money and that is an increase in tax revenue, not an increase in the taxes. We are still at 6.45 mills which does not increase the taxes. Art Morgan, Yule Tree Drive, stated if your homeowners insurance went up this year 55%, your auto insurance went up 25% and your medical went up 17% and you are on a fixed income, what do you do, eat dog food? Anthony Rivera, 3026 Queen Palm Drive, stated he finds it amazing that the City finds the three most controversial issues to come up with $190,000. He feels they should find the $190,000 some place else. Debra Roqers, 510 S. Riverside Drive, asked if today is the day the City of Edgewater is supposed to establish the rate by law. Councilwoman Rhodes stated it is before the 30th of this month. Ms. Rogers stated it is almost too late to go back and forth over this budget. Ms. Rogers asked how many meetings the Council has prior to the 7:00 p.m. Council Meeting to discuss the budget. Councilwoman Lichter stated three workshops. Ms. Rogers feels three workshops at an hour and a half a piece is not enough time to go over this City's budget. Councilwoman Rhodes informed her they get the budget before they go to the workshops. Page -4- Council Special Meeting September 26, 2005 ~ ~ Councilwoman Lichter stated they meet with City Manager Hooper or any department head individually on certain items. Councilwoman Rhodes stated if they feel they need more time they can have more workshops. Ms. Rogers stated she looked at the budget and feels they don't have the detail but lump numbers. She feels they have aggregate numbers. Councilwoman Rhodes informed her she is wrong and they got a detailed budget. Ms. Rogers informed her they don't have a detailed breakdown. Ms. Rogers asked Councilwoman Rhodes if they have the general ledger which breaks down what goes into the funds. Ms. Rogers feels perhaps this needs to be looked at more detailed. Ms. Rogers stated since the auditors have been hired again for another three years, perhaps they can have a different format and give the Council more detail. Mayor Schmidt stated this budget has been a year in the making. The workshops are the culmination of the year. After October 1, they are working on next year's budget. DOm2nic Capri a , 606 Topside Circle, stated he didn't agree with Councilman Brown when he said there wasn't a tax increase. The 6.45 mills is an increase in taxes. Mr. Capria agreed with Mr. Rivera reduce resurfacing and freezing hiring would bring the budget down to 5.9 or 5.95. Councilman Vincenzi stated that would bring it down to 6.2. City Manager Hooper stated he is talking about reducing both. Mr. Capria stated garbage by addition of another route and another new truck, where is that route going to be? Councilwoman Rhodes stated you can reduce the garbage but that has no effect on the general fund budget. That is an enterprise fund that is funded through user fees. City Manager Hooper explained that has nothing to do with the tax structure. It would have to do with the rates citizens pay for garbage pickup. Mr. Capria then commented on the shuffleboard courts. He commented on the FEMA number going down. Originally, the shuffleboard courts were a $500,000 figure as far as money from FEMA. He commented on it being down to 80% reimbursement. How much are we getting specifically for the shuffleboard courts? City Manager Hooper stated we are getting somewhere around $300,000. There is also some insurance money in it. It is about $500,000 to replace. There is about $150,000 the City will put up. Page -5- Council Special Meeting September 26, 2005 -- ~ Mr. Capria then commented on the costs being combined being $337,000. City Manager Hooper commented on the site work and the cost to have it designed, with a figure of $500,000 when you do the whole project. City Manager Hooper agreed to further speak to Mr. Capria. Mr. Capri a stated with the figures before we were making money. Tonight's figures we are using a little bit and according to City Manager Hooper's statements we are better than breaking even so why is that in the budget for that amount of money. City Manager Hooper stated any appropriation, FEMA gives us money or the insurance gives us money, comes in as revenue and to appropriate it he needs to appropriate the expenditures so those two numbers balance. He further spoke of the money from the City's general fund appropriated to make up the difference. Councilwoman Lichter stated it is too bad they couldn't go in with New Smyrna on something but FEMA said no. They weren't going to give us anything if we went in with another city.\ Mr. Capria commented on the union contract and the employee raises at 5.5%. He asked if last year was negotiated for this year. City Manager Hooper informed him yes. Mr. Capri a then asked how many employees are in the union contract. Councilwoman Rhodes stated there are different unions for different employees. City Manager Hooper informed Mr. Capria the City has about 200 employees. Covered under the union contract would be 140 of those employees. Those not in are upper management, the Fire Department and the Supervisory Group. Mr. Capria asked how many are non-union. City Manager Hooper informed him 60. Mr. Capria then asked about the sixty employees not in the union getting more money. City Manager Hooper informed him they are all getting the same percentage of pay raise. Mr. Capria suggested the higher salary employees taking a little less to help the City out. Chris Balmer, 148 William Street, stated if this Council has to start digging through actual general ledger accounts we are in trouble and that means we have a problem with our management team. He doesn't think that is the case. He is glad they don't spend hours justifying prices. He doesn't feel that would be a good use of anyone's time. He would like to see this reduction and would like to see if they could hold off on the shuffleboard courts for one year and take those dollars from there. He asked if timing wise that could be held off for a year. Page -6- Council Special Meeting September 26, 2005 '-" ...." Councilman Vincenzi asked how long it will be until we get the money. City Manager Hooper stated a majority of that money for this we have in hand. The insurance has paid us. We have initiated the design. We have met with the shuffleboard court on multiple occasions. Their schedule is to complete the design in 90 days and start construction in about a six month period and they are looking twelve months from now to have the courts ready to play. Part of our issue with FEMA and the insurance is the money has to be expended in the following fiscal year which means we got it last year and have to spend it this year. If you don't you would forfeit some of it. Georqe Austin, Orange Tree Drive, stated he is a federal retired employee living on a fixed income. He is proud to live here in Edgewater. He thinks everything is very reasonable. You all are elected officials and he is proud of what they are doing. Bickering and arguing should have happened before this meeting. A very drastic thing happened on September 18th at 9:15 a.m. Two stray dogs came into this yard and mauled his cat. He has had her for twelve years and she was very much a part of his family. He immediately began to call the veterinary clinics in the area and no one was available. They all had a recording to take her by the jail on 92. He feels they need to address that their needs to be a vet on call. If it was on a rotation it would happen every three months or so. The only thing he was seeking was that his cat could be put to sleep so she would not suffer. That was at 9:15 a.m and at 3 p.m. she expired. He was very upset with the City. He again stated we need to have a vet on call in the area whether it is New Smyrna, Edgewater or Oak Hill. Fred Pelletier, 1801 Kumquat Drive, representing the Shuffleboard Club, stated they have met successfully with City Manager Hooper and he feels this group has done a good job. They lost the courts that were across the street. It was a good part of their shuffleboard association. He is the tournament director for the northern district and they all come to Edgewater several times a year to play in tournaments. They also have an inter-city competition they play every week all winter long. He spoke of this being a sport you can still afford to play on a fixed income. He thanked the Council for their diligence and going forward. Mayor Schmidt closed the public hearing. Councilman Brown stated he was wrong. They did have a tax increase but only because the property appraiser increased the value of property. The most it could be is 3%. Page -7- Council Special Meeting September 26, 2005 '-' "'" Councilman Brown stated he had a document that explains exactly what is going on with roll back and it explains it where you can understand it well. Mr. Capri a stated he has read it time and time again. Councilman Vincenzi stated he doesn't like increasing taxes or keeping the tax rate the same. He believes that there is such a thing as financially responsible decision making and he thinks this year with the problems that Edgewater has had and the things that need to be done, such as building the reserve money, he thinks he is going to vote to keep it the way it is and not argue too much. Next year he will be harping on City Manager Hooper for other ways to cut cost. For right now it is too late to start a process like that. Councilwoman Rhodes stated in 1998 our millage rate was 6.44. Right now we are looking at 6.45 which is one-one hundredth of a millage point higher. She can't run her house now for what she ran it eight years ago and we can't run this City if they cut taxes. We would have to cut services and we have the best services of any City, bar none. She feels they don't have an option on the reserve fund, that is in their Charter, that was voted on by the citizens of this City. We are sworn to abide by that Charter. She feels they have done a good job of taking care of this City without raising a millage rate. She would have to vote to keep it the same, as much as she doesn't want to. Councilwoman Lichter stated she is the senior member of this group and is on a fixed income. It's not just seniors that are on fixed income. Everyone in the community is thinking where they can save money to pay for something else that is increasing. She feels the City Manager and Department Heads have done an excellent job. The taxes have not gone up because of Edgewater. The property value has gone up. Councilwoman Lichter commented on the things in the City that did not exist when she came here fifteen years ago such as the beautified medians and the YMCA. Edgewater was living so close to their chest in terms of money that they have reaped the negativism of all that to make this a City that goes into the 21st Century. From the new growth and new development money is going to come in and is coming in now. You can't attract attractive industry without looking good. She stated it is not just the seniors that are hurting. She is voting for this budget because there is no choice. She spoke of this budget being as tight as it can be. Page -8- Council Special Meeting September 26, 2005 '-' ...., Councilwoman Lichter further spoke of hurricane season not being over and the Council being compelled to put money into a fund for troubled waters. She is in good faith and good conscience voting for this. She spoke of when Florida Shores wasn't paved and didn't have sewers. Sometimes going the cheapest way isn't always the best way. Mayor Schmidt stated on September 23, 2005 when the books close if we have anywhere near $1.1 million in the reserves, his hats would go off to every department head and City Manager Hooper for a job that probably was almost impossible to do after what we went through. At the last meeting he made the statement what would it be if they went to 6.2 mills. Listening to his four fellow councilpeople, if he was a betting man he would say 6.45 is going to happen. He feels all of the citizens that spoke had legitimate points. This City is a business that we need to run like a business. We have obligations we need to do. Being in business also for twenty-some years, he knows there are things you have to do and things you can do. He is not going to support a rate of 6.45 but he understands it and he has the utmost confidence that this budget is where it needs to be and where it can be. He made a promise three years ago and he still believes he wants to see part of it chipped away. Counci~woman Lichter moved to approve Ord. 2005-0-47, adopting fina~ mi~~age rate of 6.45 mi~~s per $1,000 of assessed taxab~e va~ue, second by Counci~n Vincenzi. The MOTION CARRIED 4-1. Mavor Schmidt voted NO. Counci~n Brown moved to approve Ord. 2005-0-48, adoptinq fina~ budqet for fisca~ year 2005/2006, second by Counci~woman Lichter. The MOTION CARRIED 5-0. ADJOURNMENT There being no further business to discuss, Mayor Schmidt recessed the meeting with the Regular Meeting to follow. The meeting was recessed at 7:50 p.m. Minutes submitted by: Lisa Bloomer Page -9- Council Special Meeting September 26, 2005