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07-12-2010 - Budget Workshop CITY COUNCIL OF EDGEWATER BUDGET WORKSHOP JULY 12, 2010 5:00 P.M. COUNCIL CHAMBERS MINUTES CALL TO ORDER Mayor Thomas called the Workshop to order at 5:06 p.m. in the Council Chambers. ROLL CALL Mayor Michael Thomas Present Councilwoman Debra Rogers Present Councilwoman Gigi Bennington Present Councilwoman Harriet Rhodes Present Councilman Ted Cooper Present City Manager Tracey Barlow Present City Clerk Bonnie Wenzel Present City Attorney Carolyn Ansay Present MEETING PURPOSE The purpose the Budget Workshop was to discuss the General Fund and Funded Budget. City Manager Barlow informed Council he was going to have Finance Director John McKinney walk through the Action Plan they talked about at the last Council meeting regarding the comments in the CAFR after which time they would have the opportunity to ask questions of James Haleran from James Moore and Company. Finance Director McKinney passed out copies of the Action Plan to Council and went through the attached Powerpoint with regard to six questions identified from the previous Council meeting. Mr. McKinney commented on the first of six questions that were asked at a previous Council meeting regarding refinancing of the debt that would have retired this year. (Attached) Councilwoman Rogers stated when that question was asked it was understood that it wasn't the fiscal year ending that the CAFR was based upon. It was the fiscal year ending that they are going into now. She was looking for since it was to retire in 2010 that in 2009 there should have been something accrued for that final payment. Mr. McKinney informed her there was nothing scheduled for satisfaction in 2010 either. Councilwoman Rogers was looking at a newsletter a citizen gave her dated February 1995 and it shows that the road paving drainage project was to retire 1 Council Workshop July 12, 2010 in 2010. That is what she was looking for. Mr. McKinney informed her the special assessment and notes payable, Series 1995A and 1995B were scheduled for final maturity October 1, 2010. He wanted to defer the debt portion. When this came up later in the discussion, he would have copies made of the debt schedule so the Council could see for the next 15 years what debt issuance is to retire based on principle and interest. Councilwoman Rogers stated what she was looking at was something that shows the 16 payment would have been made in 2009. She didn't know they were going to have the auditor at this meeting until this Friday and she didn't know they were going to address the questions she asked. She was not prepared on that end. If she knew she would have prepared more questions. Mr. McKinney spoke of meeting with Mr. Haleran two weeks ago going through questions he had on the CAFR as well as six pages of the audit plan. Councilwoman Rogers mentioned the CAFR being prepared by Mr. McKinney internally and not by the auditor. The auditor was just making comments in a very general limited sense on the CAFR that was prepared internally. Mr. McKinney informed her no. It was a jointly produced book that they provide all the financial statements. They utilize the City's format and they go in and once it's presented to staff they go through and make sure it ties to their trial balances and then they produce the other associated documents that make up the CAFR, audited and unaudited. Mayor Thomas wanted the record to show that Councilwoman Rogers did make a comment about the years that the road and sewer debt would be out of date but as he remembered it she also wanted to have a special meeting regarding the CAFR. She was out of State and was unavailable. Councilwoman Rogers stated she indicated she would be out of State at that time too. Mr. McKinney had put together a worksheet to try to answer these questions. Mr. McKinney stated he tried to schedule a meeting with the majority of Council and City Manager Barlow had eluded at the last meeting that that meeting had to take place prior to this evening so they could move forward on the budget. If there were more questions, they would be happy to bring back any questions and answers. Mr. McKinney commented on the second of six questions that were asked at a previous Council meeting regarding the sale of ParkTowne, List as Special Items. Councilwoman Rogers mentioned the sale of ParkTowne being something that was directed by Council but at the same time it is something they couldn't say is infrequent because the sale of capital assets can occur but it is something unusual. This was the first time she has heard that they used what they did last year as their reasoning for why they put it in the financial statements this year under Other. Mr. Haleran explained in any accounting transaction there can be multiple ways to present a transaction and this is one of those cases. It's management's decision on how to present that. In his opinion if they reported it this year as a special item one of the 2 Council Workshop July 12, 2010 areas that would start to get distorted would be the statistical section. For him based on what was done in previous years, last year the proceeds coming in weren't worth reporting as a special item since it had been considered a proper GAP treatment. Councilwoman Rogers stated she had authoritative literature regarding GAP and GASB that would point out it should have been a special item the previous year and if it would have been reported that way it would have been a special item this year. To the users of the financial statements, having it reported under Other, she felt was misleading. There was a brief discussion regarding some of the Council not knowing this was going to be addressed tonight. Mr. McKinney identified he had been given the questions to answer this morning. Councilwoman Rogers wanted it on the record that the special item verses the other financing sources is a matter of management's opinion. Mr. Haleran explained both were considered GAP and whichever way it would be presented would be acceptable. Mr. McKinney asked if they have something like this in the future if this was something that before they put it in the face of the CAFR if Council would like for him to bring this in advance of the book being prepared on how to treat items such as this. City Manager Barlow suggested they move through the rest of the report and they could come back and research that. He pointed out at the last meeting it was very clear by a majority of the Council that they wanted the CAFR workshop and wanted it before they got into the budget. He spoke of it becoming evident that it wasn't going to happen prior to tonight based on the availability of the Council and conflicting schedules. In an effort to hit the target he thought that was why it was scheduled at the beginning of this that they could go through there because the objective was to have this prior to getting in the budget. They are at a point now if they weren't comfortable with this they could cancel this part and send James on his way and try to reschedule that and move on to the workshop. Mayor Thomas felt they were trying to put the questions together that Councilwoman Rogers asked so they could get the answers. City Manager Barlow stated he listened to the audio tape from the last meeting and listed every question that every Councilmember had and presented them to Mr. McKinney. He assumed the offer was still on the table if the Council wanted to meet one -on -one with Mr. Haleran or Mr. McKinney. Mr. McKinney then commented on question three regarding budgets being be done on a department basis verses a fund basis. He believes the question he heard that it should be done on a department basis verses a fund basis, it is done on a fund at a department /division basis. He then commented on not doing the revenue on a department basis because the General Fund is a pot. All the revenue collected within the 3 Council Workshop July 12, 2010 General Fund goes to help support the entire General Fund. Prior to his arrival in the 2007 budget it was presented that revenue was posted within the expenditure budget of the department which they couldn't make heads or tails out of. Councilwoman Rogers commented on the CAFR indicating that it was done on a fund basis. Mr. Haleran informed her their legal level control was the fund basis. Mr. McKinney further explained they weren't in an expenditures over revenues situation. The legal level of expenditures is at the fund level not the department /division. They were doing a lot of transfers in the past, which they didn't need to do. Mr. Haleran commented on the problems associated with doing transfers throughout the year. He described at the fund level the City Manager has more flexibility to move funds between departments within the General Fund and restrictions that are placed on other funds such as impact fees and special revenue funds being restricted by purpose. Mr. McKinney then commented on question four with regard to Over Expenditures of $300,000. Mr. McKinney couldn't comment on the statement regarding issues with the Water /Sewer Fund unless there was an expansion later of what the question was there. Councilwoman Rogers went back to the question regarding the over expenditures of $300,000. She commented on how many items were brought to Council the last fiscal year that required a budget amendment. Last year when they went through the budget they were trimming it as much as they could. Going into the next fiscal year they are doing budget amendments and are told they have the funding. At one point in the beginning of the year, she did a request whereby the budget amendment items were listed as well as the dollar amount and coincidentally it was approximately $300,000. She asked how they could do this again if their budget was as trim as it should have been last fiscal year. If the City Manager overspent what can they do to reduce that possibility in the future and control was one of the items that needed to be done. If they are on a fund budgetary basis, if they get to a department budgetary basis it doesn't give the City Manager the flexibility to move money around and right now he is allowed to spend up to $50,000 and also has the flexibility if they have a job frozen, then that is like invisible money he can use and allocate to spend in another way. She spoke of using money for jobs frozen to pay for things. She felt that was so artificial that it created the $300,000 problem. Mr. McKinney then identified what the money was used for. He further explained question number four had nothing to do with the spreadsheet he provided earlier this year of $300,000. He commented on where the $300,000 came from with regard to Fire Station #55. 4 Council Workshop July 12, 2010 Mayor Thomas asked if the City could operate without flexibility. Mr. McKinney informed him no. Councilwoman Rhodes asked Mr. Haleran if they recommended flexibility. Mr. Haleran commented on a city that decided to adopt their budget on a line item basis. If the line item exceeded, it had to go to Council. It bogged them down so much because they constantly had to go back to Council for budget amendments at every meeting. He further commented on having to have some flexibility and there being a trust factor in that between the elected officials and City staff. Councilwoman Rogers commented on not being against flexibility. She commented on lack of internal controls, lack of accounting procedures, grants out of compliance, as well as accounting issues. She further spoke of also being accountable and removing the ora of overspending. Would it have helped if they recorded encumbrances? Mr. Haleran explained the encumbrances would only tell them what was coming in the future and wouldn't help with the current year. Councilwoman Rogers felt if that would have been done the year before it could have helped minimize the impact of the $300,000 expenditure. What can they do proactive so that doesn't happen again? City Manager Barlow didn't know that the $300,000 over expenditure was a fair statement. The $300,000 was money in other funds that when allocated at the beginning of the year authorization was brought back before Council. He commented on some of the $300,000 being for the dilapidated house next to the Police Department. Mr. Haleran commented on it being three specific funds when they looked at the final budget that was adopted that were under budget by those amounts. He felt the mistake might have occurred during the budget amendment in November when various funds were adjusted for projects that didn't occur. It's not unusual to have cities that have funds that maybe are over budget. He presented some examples of reasons why funds may be over budget. There was a brief discussion regarding transferring money and being limited in certain funds and there being a different scenario with the General Fund and budgeting construction projects out of a special revenue fund or a construction project /capital project fund. City Manager Barlow briefly commented on the purchase of the home next to the Police Department not being anticipated when they established the budget and this being an opportunity that came up that was brought before Council. Councilman Cooper commented on going through the CAFR detail by detail but as he went through he remembered what they did with the funds. He mentioned the comment on Page 35 where it stated expenditures in excess of appropriations. Mr. Haleran explained the budget should have been increased in those funds for those transfers. Mr. McKinney 5 Council Workshop July 12, 2010 explained he did the agenda for the November 16 meeting and they hadn't finished all their year -end accrual entries. He then commented on State Statute changing four years ago and only having 60 days to make any budget amendments. Mr. Haleran explained they could see why they did that because then they could just consistently do budget amendments up until the time they issue their financial statements to have no over expenditures. He spoke of people adopting their budgets by ordinances, which required two readings, which made it difficult to meet the 60 day window so they went to resolutions, which require one reading. Councilwoman Rogers asked if they do encumbrance type accounting. Mr. McKinney informed her they did. Councilwoman Rogers commented on the three things they can do so they don't have this problem in the future being having better accounting controls, better internal controls and recording encumbrances. Mr. McKinney wanted to defer this discussion regarding the Water & Sewer revenue pledge to retirement bonds, previously used as transfers due to having a slide on the budget transfers from the Enterprise Fund. Mr. McKinney then commented on the debt service schedule which showed the City's debt through 2026. (Attached) Mr. McKinney then referred to the Remediation Response for Fiscal Year Ended September 30, 2009. (Attached) Councilman Cooper commended Mr. Haleran for the job he did. Councilman Cooper commented on the 21 items with 17 being pointed at the Finance Department. He asked Mr. Haleran if there was anything in the program where he follows up to see that this gets done. Mr. Haleran explained there were the financial statements which they give an opinion on so those are in accordance with GAP and that is what goes up to the GFOA and gets evaluated by them to see if it qualifies for a Certificate in Financial Reporting Excellence. The other part of their engagement is required under government auditing standards, the evaluation of internal control over financial reporting and internal control over compliance. He spoke of their comments being related to internal controls which are a cost benefit decision for the City. Councilman Cooper felt this was a great checks and balance. City Manager Barlow commented on the auditors going through the CAFR with a fine tooth comb and some of the issues or concerns they addressed being corrected prior to the publishing of the CAFR. He further commented on implementing the recommendations. 6 Council Workshop July 12, 2010 Councilman Cooper asked if they had internally the capable staff to fix the majority of the problems they have without having to go to an outside CPA to oversee that these things get implemented. Mr. Haleran informed him it was whether or not they needed more skilled employees internally. He would probably say the City needed more skilled employees. Mr. McKinney commented on everyone bringing up the check number differences in 2009/2010. He had a lady that for six months manually typed every check that went out in the City. It took them that long with HTE to get a check software in place. It was just as aggravating for him to get this rectified to then six months later have a new auditor write him up on it. Mr. Haleran mentioned saying in their comments that they noted management was aware of the issue prior to the audit and took corrective action to realign numbering scheme of the check system. However several checks printed during the time of the error the check numbers per the information system still did not agree back. Councilwoman Rogers stated something she did mention that they didn't have on the questions was the grant compliance and accounting for the grants. She spoke of having to pay Quentin Hampton to do grant accounting for them because they can't do it internally. She felt that was something that could benefit the City if they could start doing that internally. She expressed concern with grants being expenditure driven. If the grant accounting is out of compliance, that puts them in serious jeopardy. Mr. McKinney commented on having the necessary training for grant accounting but he didn't have the staff. They have the capability to do all of the grant accounting, it is the time, which he didn't have at the present time. It took him and Ms. Dewees six months to get all of the debt refinanced and for five months all he did was the CAFR. He further commented on taking Mr. Haleran's comments very personally. Councilman Cooper referred to Page 36 and asked why he had a $300,000 deposit to pay. They had that last year and $400,000 forgot to get carried along. Mr. McKinney informed him the current auditor disagreed with the prior auditor and the current auditor had better backup to substantiate his claim. Mr. Haleran commented on it being the responsibility of the City, as the client, to communicate any prior period adjustment back to the prior auditor. He further commented on where the confusion occurred. Councilwoman Rogers stated she had asked Mr. McKinney what the item under Other Financing Sources, the sale of Capital Asset, was because there was nothing in the CAFR to tell her what it was. She assumed it was the sale of ParkTowne. When she asked him he told her it was the sale of ParkTowne. Then she asked him why he put it there instead of 7 Council Workshop July 12, 2010 giving her an answer like it was on the City CAFR last year, he directed her to a Blue Book, which he explained to her was a seven hundred page document. She was thinking it was the way he presented it to her almost as if it was a report that would back this up. He didn't tell her it was a guide book and he didn't offer any of that information to her. She went to another government auditor and he told her if she would have pointed it out in 2008 they probably could have had it fixed back then. At the end of the day, she felt it was good they were talking about it and making themselves more knowledgeable. Councilwoman Rogers felt they could probably feel pretty guaranteed that Mr. McKinney would make sure they didn't have this many comments at the end of next year. She guessed they wouldn't have over expenditures because it would be dealt with. If they do encumbrance accounting that should alleviate them having an over expenditure. Mayor Thomas called a ten - minute recess at this time. The meeting recessed at 6:01 p.m. and reconvened at 6:10 p.m. City Manager Barlow informed Council this was a gross budget to help establish a maximum millage rate. The detailed budget sessions would be in August. He informed Council after the General Fund Budget presentation, they would hear a presentation regarding the Fire Station, which they had received estimated costs for. Mayor Thomas informed Councilwoman Rogers he appreciated her work to put Mr. McKinney and the Accounting Department on their toes with her expertise in numbers and finance. City Manager Barlow presented Council with a rough draft letter (attached) and brought them up to speed on continuing the contingency transport agreement like they had with EVAC. He further spoke of discussion at the last County Council meeting on Thursday. Chairman Bruno had received letters or conversations from City Managers or Fire Chiefs but he didn't really have a good feel on what the political bodies of each of those agencies want. He would bring this draft letter before Council again at the meeting on Monday under his reports where Council could take formal action to give the Mayor consensus to send the letter which would communicate their position of Edgewater still being very interested in doing contingency transport for those emergency patients for the times they are on scene and the patient is critical and they have those transport capable vehicles on scene. Councilman Cooper asked if the intention was to put back the verbal agreement they had in the past that was dropped a couple of years ago. City Manager Barlow informed him it was a formal agreement. Councilman Cooper confirmed they were trying to re- implement this so they had an understanding on both sides. He further commented on what happened the last time. He spoke of it being subletted out to EVAC by 8 Council Workshop July 12, 2010 the County and they fell under their license so it gave them authority to rip it away and the County didn't even know they were removing that agreement. They would suggest the County give them the COPCN and not sublet it. Councilman Cooper asked if they were shooting themselves in the foot for having the capabilities. City Manager Barlow informed him in his professional opinion he was advising Council it was the right thing to have the contingency opportunities there for the patients that need it. Councilman Cooper asked if it would behoove them as a Council to budgetize an amount of money where when the question comes up he has their okay to spend the money if they have to. If they don't get reimbursed he doesn't care. Life is first and foremost. He asked if it would behoove them to put something like that in. City Manager Barlow informed him they wouldn't need to budget for this. He commented on the previous agreement allowing EVAC to do the billing and they kept 10% for their billing fees and gave the City the rest. That would be additional revenue back into the General Fund. Councilman Cooper asked how much trouble they would get in if they transported someone and didn't have permission. City Manager Barlow informed him the last time it happened in the City of Deltona they reviewed that call after the fact and threatened them not only with a penalty that could have imprisoned the Fire Chief as well as fined the Fire Chief. Councilman Cooper felt it seemed redundant that anybody would do that when their whole predication is to save a life. Mr. McKinney then went through a Powerpoint presentation regarding Property Tax. (Attached) He commented on a house that started four years ago at $150,000 that used to pay $2,532 on their tax bill. In 2008 that same house now only paid $2,149. In 2009, that house now is assessed at $124,000 because the property value decreased by 16.91% so they only paid $1,794. With the way they built the budget presented this evening, that same house is paying a total tax bill of $1,230.15. He estimated that same property would probably see a 17% or greater reduction for next year. Councilwoman Rogers commented on her tax bill going up every year. Mr. McKinney commented on a small nitch with Save Our Homes that the property is still increasing. That nitch saw an increase this year of 2.6 %. He also pointed out he was prefaced by the property appraiser to say he was using a generalization. The generalization of Edgewater is they have seen a 16.3% reduction this year across the board. He further commented on speaking with many residents and when he has contacted the Property Appraiser's office they have been told that Save Our Homes in their case didn't work because of the inflation factor dictated by State Statute. 9 Council Workshop July 12, 2010 Mr. McKinney started a new Powerpoint presentation (Attached) by describing the Revenue Outlook with regard to the General Fund Budget. He commented on the drastic reduction in ad valorem revenue from two years ago. Mr. McKinney then described the Budget Strategies Used for FY 2011. He commented on there being some line items they just can't reduce because it is beyond their control. There was a brief discussion regarding charging our utility customers a fee if they pay with a credit card. Mr. McKinney described they are authorized to charge a convenience fee to people that call in and have no information. They cannot charge a convenience fee because they are using a credit card unless they outsource it to a third party vendor who takes the payments on our behalf. Mr. McKinney further described having 10 merchant accounts in the City and every time they swipe, the City pays a percentage, which varies depending on the card. There was then a brief discussion regarding there also being a charge associated with processing checks. Mr. McKinney commented on the new utility bills having bar codes, which will take the time it takes to process from four hours six days a week down to about 30 minutes. By doing that the fees they are realizing from the bank will be cut in half. Not only are they cutting staff time but they are reducing the fees the City is paying at the same time. Mr. McKinney then explained if the City was to eliminate taking American Express and Visa utility bills might not be paid. Councilwoman Rhodes stated eventually it would be paid or they wouldn't have any water. Mr. McKinney commented on the City having a very good track record that when they cut people off somehow they pay that day. Councilwoman Rhodes suggested putting something in the newsletter asking people to save some tax money and pay by check. She didn't know that and always pays with a credit card but said she could send a check. City Manager Barlow asked to hold this conversation for when they talked about the Enterprise Fund and some of those rates. Mr. McKinney continued his presentation by further identifying the Budget Strategies Used for FY2011. Mr. McKinney then commented on the Budget Challenges with regard to Debt Reduction. Councilwoman Rogers felt what they had done was traded one form of debt for another and referred to not having to deal with the SRF. Mr. McKinney explained SRF was Water /Sewer debt and what he was describing was only General Fund debt. 10 Council Workshop July 12, 2010 Mr. McKinney then described the Budget Challenges - Cost Allocation from Enterprise Funds with regard transfers from the Enterprise Funds. Mr. McKinney then identified the Budget Strategies 2011, Budget Challenges - Current Year Budget at 67% of Year with regard to Revenues and Expenses, Budget Challenges - Current Year Cash Balance, Budget Challenges - Capital. There was a brief discussion regarding the cost to redo the Council Chamber Restrooms. Mr. McKinney then described the Budget Challenges - Five Year Capital Outlay. Councilwoman Bennington felt they needed to add sidewalks in Florida Shores as a Capital need. There was some question on how they would do this with the drainage system. City Manager Barlow described the there was a lot before they even got to a number. Phase one would be hiring a consultant engineer to start to put that together. They continue to look for grants. He identified the sidewalk that is going in on Mango Tree Drive. They were talking about a very large bonded project down the road. Councilwoman Bennington felt it should be a five -year challenge for them that they should be addressing. Councilman Cooper commented on getting Development Services Director Lear more involved and keep pushing the MPO for some of the funding and they start to get the streets they can do. Even if they get them in pieces, they would save a tremendous amount when they have a 10% or 15% match. He further spoke of Edgewater not having any projects presented and recently being appointed as 2 nd Vice Chair of the MPO. City Manager Barlow commented on the MPO wanting them shovel ready and before they could be shovel ready they had to have the engineering plans. Councilwoman Rogers asked Councilman Cooper about the bridge over to the coast. Councilman Cooper stated they basically got voted out. Mr. McKinney informed Council they were not able to put the $100,000 in next year's budget for City Hall at the current millage rate. It was in FY2010 but he couldn't maintain the $100,000 in FY2011. Mr. McKinney finished his presentation by describing the Budget Challenges - Good News - Fund Reserves. Councilman Cooper questioned the General Fund Unreserved Unaudited money being surplus. He asked Mr. McKinney if he expected the $200,000 to be there at the end of the year. Mr. McKinney informed him on 9/30/11 it would be there. Councilman Cooper questioned taking some of the carry over surplus and putting it in the City Hall fund so 11 Council Workshop July 12, 2010 they end up with at least $300,000 in the City Hall Fund. Mr. McKinney informed him the City Hall money was within the budget stabilization amount. He was taking the estimate that he was going to collect all budgeted revenues this fiscal year and their expenditures are going to be what is budgeted. If expenditures are low then the $212,000 goes up. It is hard to say on July 12 what their final revenue and expenditure numbers were going to be. Councilwoman Bennington asked about the $139,000 they were going to get from the State. She referred to the 8% motor fuel tax. The proposed amount was up $18,000 more. She asked why it was so much more. Mr. McKinney explained how he came up with the $139,000. Councilwoman Bennington commented on the half cent sales tax being so much more than it was last year. Mr. McKinney commented on the numbers being revised on a weekly basis. They should be getting the final numbers by mid -July because the State budget took effect July 1St Councilwoman Bennington stated she knows their ad valorem taxes are only a small portion of their revenue that goes into the General Fund. Mr. McKinney informed her it wasn't quite half. Councilwoman Bennington doesn't want to set their ad valorem at the bare minimum they want because if something were to change, they can't raise it. Mr. McKinney informed her without advertising citywide. Councilwoman Bennington suggested they do it a little higher with the intent of bringing it down to what they want to. Mr. McKinney stated he had gone through and found a couple of corrections that had been made, some to the good and some to the bad. Councilwoman Bennington asked what the roll back rate was. Mr. McKinney informed her 7.7048. Councilman Cooper asked Mr. McKinney about the projected amount brought forward and the 0.475 additional for debt service. He asked if it was in the 6.36 or if it had to be added to that. Mr. McKinney informed him that was the voted debt service for the Animal Shelter and explained they were totally separate and would have to be voted on separately. ADJOURNMENT There being no further business to discuss, Mayor Thomas recessed the meeting at 7:00 p.m. and went right into the Regular Council meeting. Minutes submitted by: Lisa Bloomer 12 Council Workshop July 12, 2010 Edgewater Budget Questions 1. Refinancing of the debt that would have retired this year. 2. Sale of Parktown — List as "Special Items" 3. Budgets — Should be done on a dept bases vs. Fund Basis. 4. Over Expenditures of $300,000 5. Issues with Water Sewer Fund 6. W &S revenue pledge to retire bonds, previously used as transfers + 'M s City of Inc. MEMO TO: The Honorable Mayor and City Commission THRU: Tracey T. Barlow, City Manager FROM: Jonathan C. McKinney, Finance Director DATE: July 12, 2010 SUBJECT: Remediation Response for Fiscal Year Ended September 30, 2009 Below are the individual audit comments with management's remediation plan for each item with expected completion times. 2009 -01 Reconciliation of Balance Sheet Accounts — CAFR page 105 Management's Response: Finance The City received the same comment for FY2008. The City engaged our prior auditor to work out a plan. This plan was not finalized until November 2009. This finalization did not afford us the time to implement and make all necessary changes to FY2009 in time for the FY2009 audit. We fully intend to have all accounts reconciled prior to field work for the FY2010 audit. Time to complete: January 2011 2009 -02 Prior and Current Period Adjustments to Revenue — CAFR page 106 Management's Response: Finance Traditionally, the City has utilized a twelve month posting per Fiscal year of all major revenues and expenditures for many years. With the switch in Auditors, they are encouraging that staff adhere to all City policies and procedures and generally accepted accounting principles when posting revenues and expenditures at year end. This was an area that had not yet been addressed in my tenure as Finance Director. Time to complete: September 2010 2009 -03 Journal Entry Process — CAFR page 106 Management's Response: Finance The City is currently reviewing and rewriting all policy and procedures as it relates to Finance. In particular we will standardize the approval process prior to entries being updated. We have already implemented a tracking mechanism for the approval process prior to posting. Furthermore, staff has addressed the documentation required with all entries. Department of Finance P.O. Box 100 • Edgewater, FL 32132 -0100 (386) 424 -2400 Ext. 1300 • Fax (386) 424 -2409 www.cityofedgewater.org Time to complete: January 2011 2009 - 04 Tracking of Restricted Resources — CAFR page 106 Management's Response: Finance All projects in question were approved by Council as part of the budgetary process. The Finance Department utilizes separate funds to track all revenues for grants and impact fees. The proper tracking mechanisms are in place. Funds were transferred prior to the completion of projects authorized by Council. Finance staff has been instructed to the purpose of the restricted funds and transfers should only be made once a project is completed or any funds expended. In addition the Auditor has recommended that staff update the ordinances written in 1975 that specifically address that impact fees are authorized to be used for debt payments. Time to complete: May 2010 2009 - 05 Cash Disbursement Controls — CAFR page 107 Management's Response: Finance The City is currently reviewing and rewriting all policy and procedures as it relates to cash disbursements. The practice has been that the Finance Department coded invoices to the ledgers. The practice has been stopped. Departments are responsible for the coding of all invoices that they have signed off on. The lost documentation was an isolated event and not a representation of the organization of the Finance Department. However, controls have been put in place limiting access to the information by the finance clerk II only. All other individuals seeking copies, review etc, must go thru the finance clerk II. Time to complete: September 2010 2009 - 06 Recording of Unusual /Infrequent Transactions — CAFR page 107 Management's Response: Finance The City utilizes many different sources when unusual / infrequent transactions take place. All infrequent or unusual transactions must be brought to the attention of the Finance Director. I will consult with auditor if required. Time to complete: Ongoing 2009 - 07 Centralization of Grants — CAFR page 107 Management's Response: Finance The City agrees and has contracted with Quentin Hampton to monitor compliance with all major and Federally funded grants received for FY2010. The individual departments along with Finance are also continually reviewed monthly and quarterly as required to ensure compliance is maintained. Time to complete: Ongoing 2009 - 08 Excess Expenditures over Appropriations — CAFR page 109 Management's Response: Finance Department of Finance P.O. Box 100 • Edgewater, FL 32132 -0100 (386) 424 -2400 Ext. 1300 • Fax (386) 424 -2409 www.cityofedgewater.org • This comment goes along with comment 2009 -04. Subsequent to the 60 day window allowed by Florida Statutes transfers, which were approved by the City Council and / or within purchasing policy guidelines, were reversed that created the excess expenditure over appropriations. The Final Year End amendments were completed November 16, 2010 as allowed by Florida Statutes. The Finance Department will allow for such yearend adjustments in the future to account for any year end entries that might be made or proposed. Time to complete: November 2010 2009 - 09 Deficit Fund Equity — CAFR page 109 Management's Response: Finance Staff acknowledges weakness & a procedure should be written to address how fund balances should be addressed. Final entries to remedy the deficit fund equity should have been completed. This would have involved an additional transfer from the General fund for MIS and Animal Services which was already budgeted. For LLEBG this would have been an adjustment of expenditures with the Police Department's budget in General fund as well. More oversight by the Finance Director will ensure this will not occur again. Time to complete: September 2010 2009 - 10 Check Number Differences — CAFR page 110 Management's Response: Finance This was an isolated incident due to a software conversion. With the switch to H.T.E. ASP in August 2008, the City lost the ability to print checks. For over six months staff typed checks issued to Vendors and employees. The City secured the Mind Gate software Print Chef in late 2008. MindGate encountered numerous issues in implementing a solution due to the many irregularities between payroll and accounts payable within H.T.E. Both MindGate and H.T.E. were a part of this implementation. The only problem encountered was with our Accounts Payable checks. The issue involved remittance length and checks over $100,000. We had six check runs affected with a check count of 466 from March 31 — June 11, 2009. From day one a cross reference was created to log the H.T.E. check reference to MindGate reference. We installed numerous batches to correct. Our former external auditors were onsite and they were involved to make sure we were keeping the proper files for bank reconciliation to H.T.E. outstanding check reconciliation. As Finance Director I authorized this switch as I felt more errors were possible from manually typing checks versus check number out of sequence. We had more control with the later. MindGate was very responsive in revising the software to accommodate the check dollar value. H.T.E. assisted us to switching to a summary description versus detail account description for our vendors. At no time did the City not know that there was a problem with the check numbers. All steps were taken to remedy the situation. Time to complete: June 2009 2009 - 11 Accounting Policies and Procedures — CAFR page 110 Management's Response: Finance The City is currently reviewing and rewriting all policy and procedures as it relates to Finance. Policies are being written and shared with the Auditor to cover the following: • Financial Reporting • Accounting Operations • Grants Management • Treasury Department of Finance P.O. Box 100 • Edgewater, FL 32132 -0100 (386) 424 -2400 Ext. 1300 • Fax (386) 424 -2409 www.cityofedgewater.org • Risk Management • Management and Budget • Purchasing and Materials management • Information Technology The above topics are meant to cover the Finance Departments major areas of responsibility as it relates to the City Charter, Ordinances, Resolutions and other policies and procedures approved by Council. Time to complete: January 2011 2009 - 12 Cash Receipts — CAFR page 111 Management's Response: Finance Staff acknowledges weakness & a procedure has been implemented to address. H.T.E. cannot limit access to individual's batches for editing. However, we can monitor zero dollar transactions. Therefore, if an individual makes a change to a transaction they must complete a form and have a finance clerk II or accounting technician review the transaction. Also, at the end of the day the person responsible for the daily closeout is reviewing all zero dollar transactions to make sure they were handled correctly. Time to complete: January 2011 2009 - 13 Permitting Process — CAFR page 111 Management's Response: Community Development Staff acknowledges weakness & a procedure has been implemented to correct. When a customer is referred to City Hall to pay for his permit, he will be given an invoice to take with him which will be stamped paid by the cashier who is processing the payment. He will return this to the Building Department as proof of payment. This invoice will then be attached to the actual permit and filed with the permit application and supporting documents. Time to complete: January 2011 2009 - 14 Information Technology — CAFR page 111 Management's Response: MIS Documentation of the City of Edgewater's Information technology procedures is an ongoing event. We currently have Network diagrams and IP topography on our web server utilizing Google Maps. We are researching ways to meet today's demands dynamically without undue use of paper. The City's enterprise program H.T.E. Naviline which includes all financial programs, is currently an internet cloud based, on demand program that meets or exceeds all PCI compliance standards for password and securities protection. Our data is backed up nightly in Atlanta, Ga. and then copied to Lake Mary FI. thus achieving double redundancy. The IT department at the start of fiscal year 2010 purchased a host virtual machine and has been moving server applications to it. Industry standards dictate that many server applications such as Exchange server and domain controllers not be virtualized and we adhere to that standard. Time to complete: January 2011 2009 -15 Interest Earnings Allocation — CAFR page 111 Department of Finance P.O. Box 100 • Edgewater, FL 32132 -0100 (386) 424 -2400 Ext. 1300 • Fax (386) 424 -2409 www.cityofedgewater.org Management's Response: Finance The City is in the process of implementing Interest Earning Allocation within H.T.E. H.T.E. will allocate monthly interest based on total monthly fund cash balances. Currently the City of Ormond Beach is utilizing H.T.E. and has already addressed this issue. We have requested their assistance in helping to resolve. When implemented, H.T.E. will create all necessary postings for staff. Time to complete: September 2010. 2009 - 16 Errors in Documentation Supporting Special Assessments — CAFR page 111 Management's Response: Finance The City going forward will work with the County to ensure the accuracy of all documentation regarding the special assessments. The County and the City are currently in balance and all changes within the database are being logged and reconciled quarterly. Time to complete: January 2011 2009 - 17 Calculation of Charges for Services — CAFR page 111 Management's Response: Finance Currently all fee changes made to utilities maintenance are performed by a finance clerk II. These changes were not verified by anyone else within the finance department. Effective immediately, all fee changes made to utilities maintenance will be the primary responsibility of the finance clerk II and be reviewed by the finance director to ensure accurate input of information into the system. In the event the finance director makes a change, the finance clerk II will review. Time to complete: January 2011 2009 - 18 Review of Personnel Changes — CAFR page 112 Management's Response: Personnel Currently all personnel changes made through employee maintenance are performed by either the personnel director or the personnel administrator. These changes are verified by the finance department during the payroll processing steps. Effective immediately, all personnel changes made through employee maintenance will be the primary responsibility of the personnel administrator and reviewed by the personnel director to ensure accurate input of information into the system. In the event the personnel director makes a change, the personnel administrator will review. Time to complete: June 2010 2009 - 19 Employee Reimbursements — CAFR page 112 Management's Response: Finance The City is currently reviewing and rewriting all policy and procedures as it relates to Finance. A policy is being written to address employee reimbursements and will be incorporated as part of the roll out of the Works Program with the Bank of America Purchasing Card as these are both interrelated. Department of Finance P.O. Box 100 • Edgewater, FL 32132 -0100 (386) 424 -2400 Ext. 1300 • Fax (386) 424 -2409 www.cityofedgewater.org Time to complete: August 2010. 2009 - 20 Access to Information System — CAFR page 112 Management's Response: MIS The IT department will establish a policy of continually reviewing Naviline (H.T.E.) access. The policy will require the City Manager to approve various access levels based on employees responsibilities. Time to complete: September 2010 2009 - 21 New Accounting Pronouncements (GASB No. 54) — CAFR page 112 Management's Response: Finance The City will be revising the fund balance classification to be more consistent and to clarify the existing fund balance presentation within the CAFR. This is not required until the presentation of the FY2011 CAFR. Time to complete: September 2011 Department of Finance P.O. Box 100 • Edgewater, FL 32132 -0100 (386) 424 -2400 Ext. 1300 • Fax (386) 424 -2409 www.cityofedgewater.org CURRENT CITY OF EDGEWATER DEBT PRINCIPAL 001 CURRENT BOA OBLIGATION #273 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY20FY20 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 TOTAL BOA OBLIGATION #281 Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected 167,065.38 001 25,276.39 4,840.78 39,686.94 20,221.11 3,702.69 8,101.18 15,165.84 2,51283 - 10,110.56 1,284.26 - 5,055.28 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 75.829.18 12,345.56 47,788.12 BOA OBLIGATION #273 254,000.00 254 000.00 254,000.00 - - - - - - - - - - - - - - 762,000.00 BOA OBLIGATION #261 15,000.00 15,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 25,000.00 25,000.00 25,000.00 25,000.00 30,000.00 30,000.00 30,000.00 35,000.00 35,000.00 35,000.00 425,000.00 F. 1. N. D. 337,018.59 337,018.59 337,018.59 337,018.59 337 018.59 - - - - - - - - - - - - 1 685,092.95 STATION 55 - - 61,774.80 61,774.80 61,774.80 61,774.80 61,774.80 61,774.80 61,774.80 61,774.80 61,774.80 61,774.80 61,774.60 61,774.80 61,774.80 61,774.80 61,774.80 926.622.00 SUNTRUST 27,690.72 28,828.81 30,013.67 31,247.24 - - - - - - - - - - - - - 117,780.44 OBLIGATION #26 (A) Series 2002 (Waterway) 597,296.08 310,390.32 - - - - - - - - - - - - 907,686.40 OBLIGATION #34 (B) Series 2002A (Non -Ad Valorem) 256,169.82 133,469.94 - - - - - - - - - - - - - - 389,639.76 WACHOVIA VEHICLE LEASE 20,444.99 21,281.61 22,152.46 17,20713 166,370.16 146,915.45 125,270.73 101,265.78 74,844.00 46,559.54 18,833.78 1,322.03 - - - - - 81,086.29 SUNTRUST RESCUE LEASE 21,088.00 26 431.00 27 540.00 28 695.00 29,8 9.00 37 153.00 32 460.00 33 822.00 - - - - - - - - 210 000.00 001 Principal Total 1,507,620.20 1,126,420.27 752,499.52 495,942.86 448692.39 112,927.80 114,234.80 120,596.80 86,774.80 85,774.80 86,774.80 91,774.80 91,774.80 91,774.80 96,774.80 96,774.80 96,774.80 5,504,907.84 440 230,361.00 299,203.00 2,606.57 252,960.00 299,203.00 1,993.76 233,580.00 299,203.00 1,355.75 213,690.00 299,203.00 691.52 192,950.00 283,118.57 171,36&00 226,920.95 - 149,090.00 168,654.55 - 127,791.00 108,243.09 106,493.00 45,607.53 - 85,194.00 - - 63,895.00 - - 42,597.00 - - 21,298.00 - - - - - - - - - - 1,891,260.00 2,029356.69 6,647.60 2001 BOA OBLIGATION #265 514,000.00 514,000.00 514,000.00 514,000.00 - - - - - - - - - - - - - 2.056.000.00 JCI WATER METER 275,635.97 313,415.09 354,124.34 397,964.38 445,139.84 495,929.55 550,574.27 609,784.22 660,156.00 693,440.46 548,394.96 126,087.55 - - - - - 5,470,646.63 1991 REVENUE BONDS - - - - - - - - - - - - 1993 REVENUE BONDS 500,000.00 - - - - - - - - - - - - - - - - 500,000.00 Wachovia Series 2009 #42 505,000.00 570,000.00 585,000.00 610,000.00 635,000.00 655,000.00 626,429.00 626.429.00 626,429.00 626,429.00 626,429.00 626 429.00 626,426.00 - - - - 7,945,000.00 SRF - - - - 1,528,319.46 1,584,517.08 1,642,783.48 1,703,194.94 1,249,372.03 - - - - - - - - 7,708,186.99 SUNTRUST 14,910.39 15,523.20 16,161.21 16,825.44 - - - - - - - - - - - - - 63,420.24 TERRA MAR - - - - - - - - - - - - --- 440Principal Total 1,809,546.36 1,412,938.29 1,469,285.55 1,538,789.82 2,608459.30 2,735,446.63 2,819,786.75 2,939,408.16 2,535,957.03 1,319,869.46 1,174,823.96 752,516.55 626,426.00 - - - - 23,743,253.86 447 448 OBLIGATION #26 (A) Series 2002 (Waterway) 246,956.57 128,333.22 - - - - - - - - - - - - - - - 375,289.79 OBLIGATION #34 B Series 2002A Non -Ad Valorem 105 915.34 55,184-15 - - - - - - - - - - 167 099.49 448 Principal Total 352,871.91 183,517.37 - - - - - - - - - 536,389.28 TOTAL PRINCIPAL 3,670,038.47 2,722,875.93 2,221,785.07 2,034,732.68 3,057,151.69 2,848 374.43 2,934,021.55 3,060,004.96 2,622,731.83 1,406,644.26 1,261,598.76 844,291.35 718,200.80 91 774.80 96,774.80 96,774.80 96,774.80 29,784,550.98 INTEREST 001 BOA OBLIGATION #273 32,728.00 21,819.00 10,909.00 - - - - - - - - - - - - - - 55,456.00 BOA OBLIGATION #281 16,341.26 15,764.50 15,187.76 14,418.76 13,649.76 12,880.76 12,11176 11,34236 10,381.50 9,420.26 8,459.00 7,497.76 6,344.26 5,19076 4,037.26 2,691.50 1,345.76 167,065.38 F. 1. N. D. SUNTRUST OBLIGATION #26 (A) Series 2002 (Waterway) 25,276.39 4,840.78 39,686.94 20,221.11 3,702.69 8,101.18 15,165.84 2,51283 - 10,110.56 1,284.26 - 5,055.28 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 75.829.18 12,345.56 47,788.12 OBLIGATION #34 (B) Series 2002A (Non -Ad Valorem) 18,217.50 3,723.81 - - - - - - - - - - - - - 21,941.31 WACHOVIA VEHICLE LEASE 2,883.73 2,047.11 1,176.26 289.31 6,396.41 SUNTRUST RESCUE LEASE 8,810.00 7,701.00 6,545.00 5,342.00 4,087.00 2,781.00 1,419.00 - - - - - - - 36 685.00 001 Interest Total 139,974.60 84,189.40 52,657.69 32,647.89 24047.04 16,967.76 14,892.76 12761.76 10,381.50 9,420.26 8,459.00 7,497.76 6,344.26 5,190.76 4,037.26 2,69150 1,345.76 390,425.55 440 2001 BOA OBLIGATION# 265 66,229.00 44,153.00 22,076.00 - - - - - - - - - - - - - - 132,458.00 JCI WATER METER 225,239.03 213,094.91 199,320.66 183,790.62 166,370.16 146,915.45 125,270.73 101,265.78 74,844.00 46,559.54 18,833.78 1,322.03 - - - - - 1,502,826.69 1991 REVENUE BONDS 21,088.00 - - - - - - - - - - - - - - - - 21,088.00 1993 REVENUE BONDS 251,075.00 - - - - - - - - - - - - - - - 251.075.00 Wacho0a Series 2009 #42 SRF SUNTRUST 230,361.00 299,203.00 2,606.57 252,960.00 299,203.00 1,993.76 233,580.00 299,203.00 1,355.75 213,690.00 299,203.00 691.52 192,950.00 283,118.57 171,36&00 226,920.95 - 149,090.00 168,654.55 - 127,791.00 108,243.09 106,493.00 45,607.53 - 85,194.00 - - 63,895.00 - - 42,597.00 - - 21,298.00 - - - - - - - - - - 1,891,260.00 2,029356.69 6,647.60 440 Interest Total 1,095,801.60 811,404.67 755,535.41 697,375.14 642,438.73 545,196.40 443,015.28 337,299.87 226,944.53 131,753.54 82,729.78 43,919.03 21,298.00 - - 5,834,711.98 447 448 OBLIGATION #26 (A) Series 2002 (Waterway) OBLIGATION #34 B Series 2002A Non -Ad Valorem 16,408.85 7,532.16 3,349.50 1,539.64 - - - - - - - - - - - - - - - - - - - 19,758.35 9,071.80 448 Principal Total 23,941.01 4,889.14 - - - - - - 29,830.15 TOTALINTEREST 1,259,717.21 900,483.21 808,193.10 730,023.03 666,485.77 562,164.16 457,908.04 350,061.63 237,326.03 141,173.80 91,188.78 51,416.79 27,642.26 5,190.76 4,037.26 2,691.50 1,345.76 6,253,967.68 TOTAL DEBT SERVICE 4,929,755.68 3,623,359.14 3,029,978.17 2,764,755.71 3,723,637.46 3,410,538.59 3,391,929.59 3,410,066.59 2,860,057.86 1,547,818.06 1,352,787.54 895,708.14 745,843.06 96,965.56 100,812.06 99,466.30 98,120.56 36,038 518 66 2007 Property Tax on a Residential This graphic displays what a homeowner pays in ad valorem taxes on a homesteaded property in the City of Edgewater with an assessed value of $150,000 less a $25,000 Homestead Exemption (1) Operating Millage of $5.2 and $0.2710 for Voted Debt Service Millage Other SE Volusia Hospital District $271.10 10.70% TOTAL TAX BILL Taxes St. Johns River Water Management District 51.98 2% $2,532.82 $358.15 Florida Inland Navigation District 4.31 .17% 14.13% East Volusia Mosquito Control 22.32 .88% Port Authority 8.44 .33% This graphic displays what a homeowner pays in ad valorem taxes on a homesteaded property in the City of Edgewater with an assessed value of $150,000 less a $25,000 Homestead Exemption (1) Operating Millage of $5.2 and $0.2710 for Voted Debt Service Millage 2008 Property Tax on a Residential Home in Edgewater This graphic displays what a homeowner pays in ad valorem taxes on a homesteaded property in the City of Edgewater with an assessed value of $150,000 less a $25,000 Homestead Exemption and the additional $25,000 Amendment 1 exemption. 2009 Property Tax on a Residential Home in Edgewater Total Tax Bill $11794.93 This graphic displays what a homeowner pays in ad valorem taxes on a homesteaded property in the City of Edgewater with a decrease of 16.91 % in assessed value of $124,635 less a $25,000 Homestead Exemption and the additional $25,000 Amendment I exemption 11 ;111ii I � I 2010 Property Tax on a Residential Home in Edgewater Total Tax Bill $1,230.15 This graphic displays what a homeowner pays in ad valorem taxes on a homesteaded property in the City of Edgewater with a decrease • 16.30% in assessed value of $104,319 less a $25,000 Homestead Exemption and the additional $25,000 Amendment 1 exemption (1) Operating Millage of $6.36 (17.45% below rolled back) and $0.04750 Voted Debt Service Millage Property Tax Comparison on Homestead Home in Edgewater 2007 2008 2009 2010 Assessed Taxes Edgewater $653.39 $593.30 $487.23 $330.65 Total Assessed Value $2,532.82 $2,149.44 $1,794.93 $1,230.15 $125,000 $100,000 $ 74,635 $ 54,319 Property Tax Comparison on non Homestead Home in Edgewater Assessed Taxes Edgewater 2007 $839.57 2008 $766.68 2009 $685.34 2010 $487.14 Total $3,254.56 $2,777.55 $2,335.55 $1,812.38 Assessed Value $160,619 $1 29,222 $ 95,613 $ 80,028 Property Tax Comparison on Commercial in Edgewater Assessed Taxes Edgewater 2007 $603.97 2008 $721.38 2009 $729.58 2010 $518.58 Total $2,341.26 $2,613.42 $2,486.29 $ 1,929.35 Assessed Value $115,546 $121,586 $ 101,784 $ 85,193 City of Edgewater, Florida Tax Collections FY 2011 for 2010 Property Tax Year Due before January 1, 2011 Current 2010 Adjusted Tax Value $ 679,098,616 Taxable Value x Agency New Taxable Value 6,000,587 Millage Rate x 95% equals amount Current Year Gross Tax Value $ 685,099,203 to be collected by January 1 (Per F.S.S. Chapter 163.337) AGENCY MILLAGE TAX AMOUNT 95% DUE MILLAGE Percent RATE 12/31/2008 RATE of per $1,000 Total Edgewater 0.00636000 $ 4,357,230.93 $ 4,139,369.38 6.360000 26.41% Edgewater IBS 0.00004750 32,542.21 30,915.10 0.047500 0.20% Volusia Co - GF 0.00536000 3,672,131.73 3,488,525.14 5.300500 22.01% Volusia Co School 0.00780500 5,347,199.28 5,079,839.32 8.110000 33.68% St. Johns 0.00041580 284,864.25 270,621.04 0.415800 1.73% FIND 0.00003450 23,635.92 22,454.13 0.034500 0.14% SE Vol Hospital Dist 0.00351090 2,405,314.79 2,285,049.05 3.510900 14.58% E Vol Mosq Cont 0.00021127 144,740.91 137,503.86 0.208000 0.86% Port Authority 0.00009379 64,255.45 61,042.68 0.092900 0.39% Totals 0.02383876 $ 16,331,915.48 $ 15,515,319.70 24.080100 100.00% 95% 95% FY11 Tax FY 10 Tax Fiscal Year Proceeds Proceeds Variance Edgewater 0.00713 $ 4,884,551.79 4,640,324 4,968,598 $ (328,273.80) 0.00710 $ 4,864,204.34 4,620,994 4,968,598 $ (347,603.88) 0.00700 $ 4,795,694.42 4,555,910 4,968,598 $ (412,688.30) 0.00690 $ 4,727,184.50 4,490,825 4,968,598 $ (477,772.72) 0.00680 $ 4,658,674.58 4,425,741 4,968,598 $ (542,857.15) 0.00675 $ 4,625,789.82 4,394,500 4,968,598 $ (574,097.67) 0.00670 $ 4,590,164.66 4,360,656 4,968,598 $ (607,941.57) 0.00669 $ 4,584,683.87 4,355,450 4,968,598 $ (613,148.33) 0.00660 $ 4,521,654.74 4,295,572 4,968,598 $ (673,026.00) 0.00659 $ 4,516,173.95 4,290,365 4,968,598 $ (678,232.75) 0.00650 $ 4,453,144.82 4,230,488 4,968,598 $ (738,110.42) 0.00649 $ 4,446,293.83 4,223,979 4,968,598 $ (744,618.86) 0.00646 $ 4,425,740.85 4,204,454 4,968,598 $ (764,144.19) 0.00645 $ 4,418,889.86 4,197,945 4,968,598 $ (770,652.63) 0.00644 $ 4,414,779.26 4,194,040 4,968,598 $ (774,557.70) 0.00640 $ 4,384,634.90 4,165,403 4,968,598 $ (803,194.85) 0.00636 $ 4,357,230.93 4,139,369 4,968,598 $ (829,228.62) 0.00630 $ 4,316,124.98 4,100,319 4,968,598 $ (868,279.27) 0.00625 $ 4,281,870.02 4,067,777 4,968,598 $ (900,821.48) 0.00622 $ 4,262,687.24 4,049,553 4,968,598 $ (919,045.12) 0.00620 $ 4,247,615.06 4,035,234 4,968,598 $ (933,363.69) 0.00610 $ 4,179,105.14 3,970,150 4,968,598 $ (998,448.12) 0.00607 $ 4,156,270.78 3,948,457 4,968,598 $ (1,020,140.76) 0.00596 $ 4,083,191.25 3,879,032 4,968,598 $ (1,089,566.31) 0.00590 $ 4,042,085.30 3,839,981 4,968,598 $ (1,128,616.97) 0.00580 $ 3,973,575.38 3,774,897 4,968,598 $ (1,193,701.39) 0.00570 $ 3,905,065.46 3,709,812 4,968,598 $ (1,258,785.82) 0.00560 $ 3,836,555.54 3,644,728 4,968,598 $ (1,323,870.24) 0.00550 $ 3,768,045.62 3,579,643 4,968,598 $ (1,388,954.66) 0.00540 $ 3,699,535.70 3,514,559 4,968,598 $ (1,454,039.09) 0.00530 $ 3,631,025.78 3,449,474 4,968,598 $ (1,519,123.51) 0.00520 $ 3,562,515.86 3,384,390 4,968,598 $ (1,584,207.94) J '' Revenue Outlook I iDGr_VVAT Historical Property Values & Ad Valorem Tax Yr Value Mills Tax GF Budget Edgewater General Fund FY05 $ 664,137,932- 6.45 $4,125,604 $13,194,640 Bud et Worksho FY06 $ 812,943,450- 6.45 $5,045,677 $14,136,921 g p FY07 $1,089,419,939 - 5.70 $5,983,622 $14,107,382 July 12, 2010 FY08 $1,195,974,542 - 5.20 $6,053,935 $13,934,557 FY09 $ 981,617,652 - 5.90 $5,606,749 $14,356,423 FY10 $ 822,343,254 - 6.36 $4,968,598 $12,544,666 FY11 $ 685,099,203 - 6.36 $4,139,369 $12,444,758 Revenue Outlook Budget Strategies Used For FY2011 Revenue Outlook 2011 and Beyond • Eliminated positions • Property Tax Outlook • Maintained a hiring freeze — FY 2011 — (16.3 %) • Proposed Step Plan for employees — FY 2012 — (17.0 %) rb • Reduced Operating Budgets — FY 2013 — 0% , , • Used Prior Year Cash Savings • Reassessed and Adjusted CIP Projects — ARRA • Adjusted Reserves Budget Challenges Budget Challenges Debt Reduction Debt Reduction General Fund Enterprise Funds Reduction General Fund Enterprise Funds Reduction •2005- $9,857,233 •$37,001,425 •2011 $1,126,420 •51,596,456 .$2,722,876 • 2006 - $8,883,985 • $34,625,837 • 53,348,836 .2012 $ 752,500 •$1,469,285 .$2,221,785 • 2007 - $7,618,910 • $31,720,482 • $4,170,430 .2013 $ 495,943 •51,538,790 •52,034,733 • 2008 - $6,070,152 • $28,841,268 • $4,427,972 • 2009 - $4,649,000 • $25,958,775 • $4,303,645 • 2010 - $3,141,380 . 523,796,360 • $3,670,035 Total Reduction $19,920,918 1 Budget Challenges Budget Strategies FY2011 Cost Allocation from Enterprise Funds • Compensation — no increases since Oct 2008 w•..5..., • Health insurance and other benefits 000 459,726.00 27998100 (231,20000/ 4;.x 5.00 001 600,0000 "0000000"1f000000' " • Pro ected % or $274,990 002 918.00100 732.�.00l (264.s�00( ( 52 . 6 0 j $ 500.000.00) 1200400.00( (55.000.00 003 755.000.00 004 1.412.650.00 0.000.001 (205.000.00( (s6.65000 • State Revenue FY11 increase $139,617 a009.o00.00i u94.00o. cos 624.34000 n09s00.0o ,62..3w.00 • Ad Valorem FY11 decrease$829,229at $6.36 008 7071600 p cos 65,los.co s2.ass.00, 135 0 634.00, (55.62600 020 67,16700 (460,63 00( a54,667.00j (56.763.001 Budget Challenges Budget Challenges Bad News: Current Year Budget at 67% of Year • Unemployment & foreclosures Revenues Expenses • Economic uncertainty General Fund 68% 56% • Declining revenues Animal Services 58% 44% • State budget deficit /unfunded mandates • Increasing service needs Water /Sewer 60% 62% Good News: Refuse 57% 64% • Cost cutting measures to conserve cash Stormwater 68% 60% • Realigning to meet new future • Reviewing strategies to balance the budget with a focus on Still maintaining all budgeted capital outlay sustainability • Strengthening our financial policies s Budget Challenges Budget Challenges Capital Current Year Cash Balance •Two Police Pursuit Vehicles - $74,457 •Code Enforcement Replacement - 17,275 General Fund $3,531,835 •Council Chamber Restrooms - 62,250 Animal Services $ 39,283 Total Capital FY2011 $153,982 Water /Sewer $1,966,063 Refuse $ 624,035 Stormwater $ 168,106 2 Budget Challenges Budget Challenges Five Year Capital Outlay Good News— Fund Reserves •Station 55 $ 715,182 •Police Station 4,000,000 As Stated by 9 /30 /09CAFR .$5,726,394 •Streets Repaving 2,500,000 •City Hall 4,000,000 General Fund Reserves •Two Fire Engines 900,000 .Charter 15% $1,897,188 Total Capital FY2011 $12,115,182 .Budget Stabilization $1,065,558 General Fund Unreserved •FY11 Budget $1,341,943 • Available $212,369(unaudited) 13 14 3