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09-27-2000 - Special 'W' ...." CITY COUNCIL OF EDGEWATER SPECIAL MEETING September 27, 2000 6:00 p.m. COMMUNITY CENTER MINUTES Chairman Alcorn stated the reason the Economic Development Board wanted to meet with City Council was to tell them where the EDB stood and to find out if the Board was going in the appropriate direction. CALL TO ORDER Mayor Schmidt called the Special Meeting to order at 6:00 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 Present Arrived at 6:30 p.m. Present Present Present Present Present Economic Development Board Members: Chairman Tom Alcorn Chris Balmer Donald Gillispe Rick Morin Nora Aly Mike Wilson Ed Keenan Adelaide Carter Roland Bazin Present Present Excused Absent Present Present Absent Present Present DEVELOPMENT BUSINESS PLAN FOR ECONOMIC DEVELOPMENT PROGRAM A. Update of current economic efforts surrounding Cities/Chambers - Chairman Alcorn said, last year the Board sent surveys to US 1 property owners to the south of the City limits asking if they were interested in City services and/or annexation. He said there were significant responses indicating interest in coming into the City of Edgewater. Chairman Alcorn said through the Board's efforts this year, they found the businesses within the City had no issues. Ms. Carter headed a program (Outreach Program) where the Board met business owners at their location, questioned them on their satisfaction of City services and asked if they needed any assistance from the EDB. Ms. Carter distributed and summarized the surveys. She felt the Board had a good response, with many businesses thanking them for stopping by and for their interest in willing to assist them. Mayor Schmidt asked if the small business owners had relayed any ideas or what they would like? Ms. Carter didn't believe so. Councilwoman Lichter asked what happened to the small businessmen's organization. Chairman Alcorn said it was formed with the idea to look after what was going on in government. At that time, one of the issues was that auto repair owners wanted to repair cars at their establishments but couldn't open the hoods outside because it was against City Code. The Chairman said the City was responsive and worked with the owners to resolve the issue. He said the small businessmen's group dissolved. Councilwoman Lichter thought the organization was going to help in other ways and felt such an organization may be needed; maybe SCORE could help. Councilwoman Lichter felt small businesses had trouble staying in business and she would like to see the small businessmen's group connect with SCORE. .... ...., Chairman Alcorn said there were other programs available. He spoke of DBCC doing a program for Rick Sterba, Chairman of the Southeast V olusia Economic Development Board. Chairman Alcorn said the EDB needed to let people know the resources that are available to them. At the EDB meetings people give reports about what's going on in the community, such as Planning Director Lynne Plaskett reporting on the City and Dr. Frank Wedda, Provost of DBCC, which enables the EDB to be better informed while out in the community. He said the EDB was available to new industries in connecting them with the proper organizations who would "take them by the hand." Ms. Aly mentioned Chairman Alcorn's statement that there was nothing to cater to small businesses and most of the businesses in Edgewater were ten (10) people or less. She felt the small businesses should be catering to each other and maybe they were not aware of each other. Chairman Alcorn stated that was a function of the Chamber of Commerce, but they don't have the participation in the Chamber from Edgewater that they do in New Smyrna Beach. The membership to the Chamber would pay for itself probably in the first 30-60 days just in the discounts they would receive in insurance and other things. Councilwoman Lichter asked if perhaps Steve Dennis, Executive Director of the Chamber, should be told Edgewater needed some type of small business group to emphasize this problem. Chairman Alcorn said he was Vice President of the Chamber for Economic Development and would bring the subject up at the next meeting. Ms. Carter read from one business survey of problems the manufacturing company owner was having looking for a sturdy, existing building for expansion. Chairman Alcorn mentioned New Smyrna Beach had a 10,000 square foot spec building that had a site plan and everything approved, but could not find anyone to pay the rent, based on the cost of the building. He said for industrial space in the New Smyrna and Edgewater area it would cost approximately $4.50-$5.50 per square foot annually. Mayor Schmidt asked how the costs compared to Daytona and Deltona. The Chairman said probably $5.50-$6.50. Councilwoman Lichter spoke about the Industrial Park and Chairman Alcorn said a place was needed to provide value added jobs. He felt most of the business in the area would come from the small businesses of 10 to 15 employees. Jerry Fox spoke of the costs for the Porta Products buildings ($3.75 per foot). Mr. Fox interjected the current Council of Edgewater was the best he had seen anywhere in the County in terms of economic development, working with companies and making them happy. Mr. Fox said Scott (Porta) was building to make opportunities available, and knows it would take a good while to get his investment back. Chairman Alcorn said Mr. Porta was one of the major players in this part of the County, along with John Massey. City Manager Hooper said Council would see more of this, referring to Mr. Porta installing the water and sewer and making it attractive. He would then recover his costs from being able to lease or rent the buildings. Councilwoman Lichter said the City needed to communicate with small businesses and educate the ones already here. Ms. Aly felt a need to begin a campaign to patronize your fellow neighbor, concentrating on the small businesses. Mayor Schmidt suggested producing a small business directory catagorized by business type, and include an information page where they could get help through SCORE, the Chamber or whomever. Ms. Aly said the concentration should be on the businesses already here, and a promotional advertisement should be placed in the newspaper and maybe a week on the radio station in leu of directory pamphlets. Chairman Alcorn asked about obtaining information from the occupational license program. City Clerk Wadsworth explained problems with going to a new system. Discussion continued on developing and distributing an Edgewater business directory, and getting businesses together. Chairman Alcorn said Ms. Aly had worked on getting people together during Industrial Appreciation Week last year. He said the EDB spoke of doing the same thing this year, but fell behind in their schedule. The Chairman said perhaps they could still do something to that effect, and felt the Chamber would be happy to assist. 2 Council Special Meeting September 27, 2000 ....., ......, Chairman Alcorn said the City of New Smyrna Beach, Southeast V olusia Chamber of Commerce and Enterprise Volusia would be putting together a credit card size CD. He said it would contain basic information on economic development for Southeast Volusia, e.g., Edgewater's economic development brochure, statistics, community profiles, etc. He said DBCC was putting together a course where students would receive college credits for helping to create the CD. He said the CD would be tied to the Internet site for current and additional information. Councilwoman Lichter asked what Cities would be involved. Chairman Alcorn said it would be produced by the Chamber with participation from New Smyrna Beach, Edgewater and Oak Hill. He said Ms. Plaskett would be updating Edgewater's community profile for the CD. B. Council comments related to economic development - expressed throughout the meeting. C. Develop economic development priorities - Chairman Alcorn mentioned Mr. Fox saying how cooperative the City had been and all they had done to make things happen. He said City Council are the figure heads but City Manager Hooper was the one the people dealt with on a day-to- day basis. The Chairman said everyone he had talked to applauded City Manager Hooper's efforts, knowledge and foresight. City Manager Hooper said the City had focused on Park A venue, the FIND project, putting in infrastructure along Dale Street, working with the County to re-align Air Park Road and annexation of Massey Airport. He said some of these projects would create larger manufacturing opportunities which were starting to happen. D. Joint ventures/partnerships - commercial building/park - City Manager Hooper did not favor the City building a spec building. He was in favor of building a spec park that the City could co-own or co-manage which would provide a great tax base. He said that would be similar to what the City was doing with the FIND project. He said there were a few parcels that the City would like to talk about buying after some of the current major projects had been completed. He said widening of SR 442 was needed, making the area more attractive for development. Councilwoman Lichter didn't want to neglect the businesses on Guava and Hibiscus and felt some could improve their appearance with the help of the City. Chairman Alcorn spoke about developing a community redevelopment agency and explained tax increment financing. E. CRA - are we serious about setting up a District? - City Manager Hooper said when the City advertised for planning consultants, CRA was one of the criteria used for hiring. He said they were waiting to get the Comp Plan finished and other capital projects. He explained there were two different kinds of CRA's that would benefit the City. City Manager Hooper said one would be undeveloped areas and the other would be blighted areas. He said developing a CRA was on the City's agenda, if not this year perhaps next year. Councilwoman Lichter said they needed to educate the citizens to think about the future. Chairman Alcorn felt the citizens were seeing the City in a more positive light through the efforts of the current City Council. He said Edgewater was a great, affordable place to live. Ms. Aly asked if funds generated from a CRA would be used to help improve the "curb appeal" of businesses along US 1. Councilwoman Rhodes mentioned speaking to City Manager Hooper previously about having a fund to help business owners improve their buildings. She commented on the bright colors some businesses chose to paint their buildings and didn't want to see Edgewater as a neon City. Chairman Alcorn noted how restrictive Port Orange was on the appearance of their buildings. The Chairman mentioned Edgewater not having a downtown. Councilwoman Lichter spoke about a new City Hall site as being the center to build up around. Chairman Alcorn highlighted what Council wanted to see the Board do as, to develop a resource booklet listing businesses and update the City's profile, brochure, and fact sheet. Councilwoman Lichter encouraged the Board to continue their visits to area businesses as a way to keep communications open. 3 Council Special Meeting September 27, 2000 ~ ...., Chairman Alcorn mentioned the Strike Fishing Tournament was moving from Daytona Beach to New Smyrna Beach and asked Council to think about how Edgewater could participate in this event so to receive some of the retail business. He said the event (to be held Memorial Day weekend) should bring in about one million dollars. The Board discussed possible business sponsorships of the event. Chairman Alcorn said Boston Whaler was one of the larger sponsors. Chairman Alcorn remarked he would like to see Edgewater put in a designated bike path and canoelkayak trail. Mr. Fox asked about the crossover bridge on the City's north end of Riverside Drive. City Manager Hooper said they were just waiting for New Smyrna Beach's engineer design (since this was ajoint project.) Chairman Alcorn thanked Council for meeting with the Board, Planning Director Lynne Plaskett for keeping the Board updated and the City Manager for helping organize the meeting. Councilwoman Rhodes remarked that the Board should feel free to request workshops with Council at any time. City Council recessed at 7:07 p.m. Mayor Schmidt called to order the second half of the meeting at approximately 7: 17 p.m. Mayor Donald Schmidt Councilman James Brown Councilman Dennis Vincenzi Councilwoman Harriet Rhodes Councilwoman Judith Lichter City Manager Kenneth Hooper City Clerk Susan Wadsworth Present Present Present Present Present Present Present PRESENTATION FOR EXTERNAL AUDIT SERVICES City Manager Hooper informed the Mayor, members of the selection committee were in the audience if Council had any questions of them. He said both firms were notified of the meeting and both were present. He said Ernest and Young indicated they wanted to sit in the conference room while the first presentation was made. City Manager Hooper stated it was up to Council if they wanted both firms to leave or stay while Council debated and voted. He said Finance Director Michele Goins had put together a list of nine (9) questions which they may use if desired. He said the presentations would be about 15 minutes and about a 10 minute period for questions and answers. Since Councilwoman Lichter missed the last Council meeting, she asked if this was the normal procedure. City Manager stated there were three proposals submitted which were ranked and scored. Of those submitted, he said two firms were interviewed. City Manager Hooper said the interview process consisted of meeting with City staff for questions, answers and discussion with the principals who would be working with the City of Edgewater. He said a final component was to call the references of both firms. City Manager Hooper stated the selection committee ranked and voted unanimously for one firm and that was what was on last week's consent agenda. City Manager Hooper asked if staff could answer any questions before they got started. Councilwoman Lighter asked what was the vote on this item at the last meeting. City Manager Hooper said Council agreed to take it off the consent agenda and asked to hear presentations from both firms. He added only the selection committee had heard the presentations. 4 Council Special Meeting September 27, 2000 'w' ..""" A. Brent Millikan & Company - Handouts were distributed highlighting what would be presented to Council. Bradley Douglas was grateful for the opportunity to make a presentation that he had asked for at the previous meeting. Mr. Douglas stated he lived in the City of Edgewater, was a CPA and owner in the firm of Brent Millikan & Company in New Smyrna Beach and had been a member of this community (Edgewater) for 15 years. Managing principal and founder Brent Millikan was present, but since he would be acting as the engagement audit manager, he would be doing the presentation. Mr. Douglas proceeded with his presentation and at the conclusion, asked if there were any questions. Council woman Rhodes suggested they start at the beginning of the list of potential questions which was: What is your firm's "plan of attack" for assisting municipalities with the Governmental Accounting Standards Board's Statement 34? Mr. Douglas conveyed they would have to wait until after April 200 1 before they met with their local governmental entities to make a check list of all the things they would need to do. He said GASBY 34 would require an education process, that it was a complete rewrite of how a government is going to report its financial activity. He indicated that if he did the City's audit, it would give him the opportunity to get acquainted with what was going on. He continued to explain the new reporting system. Councilwoman Lichter asked, what type of experience does your firm have with assisting in software issues, especially experience with the City's current software, HTE/CitySoft? Mr. Douglas responded that he had not personally worked with HTE software but had helped the Utilities Commission go through a new system. He said he would be able to look at our system to see who had access to the computer, to see what internal controls were there and what weaknesses there were. Mr. Douglas said his firm would go through every aspect of our system with City staff, andfrom that information they would make certain assessments. Councilwoman Rhodes asked, what precautions do you use to avoid becoming involved in the politics of the City Council? Mr. Douglas said he had lived here (Edgewater) 15 years and had never involved himselfat all. He said he is very independent and lived a very low-key life. He stated the only thing he got involved in was making sure that he had some opportunity to present this presentation to Council. Councilwoman Rhodes asked, what type of experience do you have with assisting cities in obtaining the "Certificate of Achievement for Excellence in Financial Reporting" from the GFOA? Mr. Douglas answered, he did all of it for the City of New Smyrna Beach and the Utilities Commission, that they prepare their entire CAFR. He said there was a specific list the GFOA uses and knowing whether the report contains the specific information to achieve this. Mr. Douglas applauded Edgewater for their great record of making sure they had it, and he would be prepared for a smooth transition. Councilwoman Rhodes asked, when his firm were the auditors for the City of Edgewater, did the City receive the Certificate of Achievement for Excellence? Mr. Douglas answered yes they did. Councilman Vincenzi said there were a few comments on the reference checks about using contract employees. Mr. Douglas stated his firm along with two other firms preformed the audit for the County of V olusia as a joint venture. He said one firm decided to get out of the government audit business and he did not have the staff to pick up the extra work so he had to contract it out. He maintained it would not happen to the City of Edgewater. 5 Council Special Meeting September 27, 2000 ~ """'" Councilman Vincenzi commented the other firm could come in and gi ve a similar presentation about how qualified they were and the resource they have, etc. He asked, other than being local, what would differentiate him from them? Mr. Douglasfelt who they were going to put in the field. His impression was if they had to reduce their fee, you would get a senior level accountant in the field that might not have 19 years experience and or be a manager like himself, or not be on site as long as he would be. Mr. Douglas said the difference would be who was really doing the audit. Councilwoman Rhodes asked if he would be the only one Finance Director Michele Goins would be working with. Mr. Douglas indicated he would bring with him other experienced people. He said since the audit would be new for them and a transition for the City, it would require extra effort in having to bother staff for information. He stated he would be the senior person giving the direction to staff. Councilman Brown referred to a conflict of personalities between a member of his firm and City Manager Hooper and said he would not wish to have him interacting. Mr. Douglas said that person was not currently present and understood what Councilman Brown was referring to. City Manager Hooper asked Council if they had any questions for him or the selection committee. He eXplained the RFP process and said things were subject to change until the contract was negotiated. B. Ernest & Young LLP - John V odenicker introduced himself as being the partner in charge of the City's audit for a number of years, working through some significant issues with computer conversions, bonds issues, etc., and appreciated the opportunity to be before the Council. He distributed a handout to track their presentation. Mr. V odenicker felt there was clearly a difference in the two firms being considered for auditing services which he would cover during his presentation. At the conclusion of his presentation, Walt Houston, part of the information systems/risk management group, spoke on computer and computer related technologies. Mr. V odenicker had a few closing statements and asked for questions. Councilwoman asked where he was located. Mr. Vodenicker answered that he worked in Orlando, but grew up in Volusia County. Councilwoman Lichter asked if additional funds would be needed to implement the new accounting system (GASBY 34), or if it was included in their proposed fee. Mr. Vodenicker referred Council to page seven of the handout which summarized some of the services they would provide over and above the audit. He said hisfirm saw three levels of assistant to the City; 1) the City would make all the changes of 34 and they would come in and audit it with no impact to the audit fee, 2) they come in and review everything the City would be impacted on 34 and compose a detailed letter copying Council to see how much was involved, and 3) the City would decide if they needed to out-source some of it or to do it in-house. Councilwoman Lichter asked who worked with the City last year, and because their price got lower, would the City be getting that same person(s) or someone lower on the ladder? Mr. Vodenicker stated Mike Pattillo would be working with the City, same as last year. He said the senior would be different but is more experienced than the senior last year. Mr. Houston said he would like to answer the question about thefee. He said the City did not have a CPA in the controller position prior to Ms. Goins being hired. Since Ms. Goins had the ability to prepare adequately for the engagement, it enabled them to lower the fee. 6 Council Special Meeting September 27, 2000 '-' ...." Councilwoman Rhodes said he must have known about Michele's ability before his firm gave the City the renewal fee. Mr. Houston said the fee was lowered after discussions. Councilwoman Rhodes asked if Ms. Goins works more, then the fee goes down? Mr. Houston answered right. Councilwoman Rhodes said if Council went with his firm, she would appreciate it in the future that anything that could be done to lower the fee should be done before the City asked for the bid. City Manager Hooper informed Council that last year was Ms. Goins first year and Ernst and Young was not auditing her work, this would be her first year. He stated the point of the discussion of whether they lower or modify the fee if Ms. Goins did things, would appear next year as her first effort. City Manager Hooper said she helped the City greatly to finish where the City was. He explained staff was asking Council to authorize him to negotiate a contract and bring back the numbers. He said the City had two fee proposal amounts but nothing would be firm until there was a scope of service and an associated price. City Manager Hooper stated he would negotiate with the firm Council chose and bring the contract before Council at the next meeting. While Ms. Goins accompanied Ernst & Young out, City Manager Hooper indicated he wanted to talk to Council from staffs/his point. One reason why staff recommended Ernst & Young he said, was GASBY 34. City Manager Hooper stated they initiated Tampa's implementation and were computer automated. He said the other firm did not have a plan. City Manager Hooper said the computer part was very important and stated the previous Finance Director left during the transition of the City buying into HTE and CitySoft. Mike Pattillo was called and told the Finance Director was leaving and staff did not know how to do the computer conversion; they sent people to help. He said the City has had excellent response from the firm when they call. City Manager Hooper felt there was a big difference in the presentations by both firms. He believed that was what swayed the selection committee. Councilwoman Rhodes asked when Ernst & Young helped the City through the audit, if they charged extra to do so. City Manager Hooper said yes in some areas. Councilwoman Rhodes asked if during the transaction period, if Millikan would have been as helpful as Ernest & Young. City Manager Hooper said no. They could have helped with the budget part, but as they said previously, they had never worked with HTE, CitySoft, or an IBM system for conversion. Finance Director Michele Goins remarked the original presentation before the selection committee was given by Alex Kish and Brad Douglas, with Jim Stansell saying a few words and Bonny Wrobel saying nothing; Mr. Kish ran the show. Councilwoman Rhodes referred to the committee's score sheet which indicated it was an aggressive presentation, and she did not see that during their presentation this evening. Councilwoman Lichter indicated she would base her vote on what she saw this evening, and felt Ernest & Young were pros. Councilman Brown asked if the City does a new contract every year with the auditors. Ms. Goins said normally the contract is for a specific period of time, and in the past it was based on a three year contact with one year renewals, with additional one year extensions. Councilwoman Lichter asked if the proposed fee would last for three years. Ms. Goins said there is generally a multiplier in which the price would go up each year. Councilwoman Rhodes asked Ms. Goins if she believed there would be more work for staff if Millikan was selected. Ms. Goins said yes, based on what they said. She would not mind the extra work if it was going to save the City money. By going with a new firm, it would take additional time and money on their part because they would be starting from scratch. Ms. Goins had talked to New Smyrna Beach Finance Director Bill Polling for a reference check. She said one comment was that every year they whined about the price and how they were not making any money. One of her main concerns, which was talked about by the selection committee, was the amount of resources and the availability of scheduling staff. She said last year Ernst & Young pushed back their time for the City's audit three times to enable her and staff to prepare the needed information. She explained possible consequences of not being able to meet the deadline for the Certificate. Ernst & Young worked overtime/triple-time to check the finance statements she put together, reviewed them and met the deadline. Ms. Goins felt it was important for a firm to be flexible with the City's needs. 7 Council Special Meeting September 27, 2000 '-" ...." City Manager Hooper remarked that Ms. Goins was being humble, that she had implemented major changes which caused the price to drop. She had taken on a CPA approach that wasn't there before, and had eliminated the amount of manual paper work. He said the request of Council tonight was to authorize Ms. Goins and himself to negotiate an audit contract and bring it bank to Council. Ranking would be Ernst & Young, and if a successful negotiation could not be reached, then they would negotiate with Brent Millikan. Councilwoman Rhodes asked what would be considered a successful negotiation. City Manager Hooper said if he brought back a contract Council didn't like, it would be over, that Council was in charge. Another part of being unsuccessful would be ifhe was unhappy during his negotiations with the firm. City Manager Hooper said he would then inform Council his negotiations were unsuccessful and request authorization to move onto the number two firm. Mayor Schmidt asked for someone to it all in the form of a motion. Councilwoman Lichter so moved, second by Councilman Brown. Motion CARRIED 5-0. City Manager Hooper believed he would be able to negotiate a contract (with Ernst & Young) and bring it back before Council at their October 23, 2000 meeting for a vote. City Manger Hooper said Councilman Brown had the idea of putting up aerials of SR 442 which was done. It showed the condition of SR 442 today and a computer generated version of after the road would be widened. He updated Council on the request to reduce speed limits from SR 442 south to Roberts Road and informed them of an up-coming meeting with FDOT concerning the widening of SR 442. Councilman Brown stated he liked the letter written by City Clerk Wadsworth welcoming new businesses to Edgewater. ADJOURNMENT There being no further business to discuss, Councilman Vincenzi moved to adjourn. The meeting adjourned at 8:47 p.m. Minutes respectfully submitted by: Elizabeth J. McBride Assistant to City Manager 8 Council Special Meeting September 27, 2000