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08-15-2011 - Budget Workshop CITY COUNCIL OF EDGEWATER BUDGET WORKSHOP AUGUST 15, 2011 5:00 P.M. COUNCIL CHAMBERS MINUTES CALL TO ORDER Mayor Thomas called the Budget Workshop to order at 5:00 p.m. in the Council Chambers. ROLL CALL Mayor Michael Thomas Present Councilman Justin Kennedy Present Councilwoman Gigi Bennington Present Councilman Michael Ignasiak Present Councilman Ted Cooper Present City Manager Tracey Barlow Present City Clerk Bonnie Wenzel Present City Attorney Aaron Wolfe Present MEETING PURPOSE Finance Director John McKinney identified the minor tweaks they talked about since July 18 They presented to Council a week ago a balanced budget across all funds of $33,137,861. Mr. McKinney made a staff presentation by going through the attached Powerpoint Presentation. Councilwoman Bennington pointed out she had read in the paper this morning that Volusia County was the third highest taxed County in the State. She questioned why someone would want to build in Volusia County. Mayor Thomas asked the Council to write their questions and comments down and to wait until the end of the presentation in order to expedite things. Mr. McKinney continued his presentation by describing the Taxes Per Capita, Revenue Outlook, Budget Strategies Used For FY2012, Debt Reduction, Budget Challenges, Funded Capital, Street Resurfacing, CIP Projects, Fund Reserves, and Rate Study Status. Councilman Ignasiak confirmed there was no cost increase for health care. Mr. McKinney informed him there was not. 1 Council Budget Workshop August 15, 2011 City Manager Barlow commented on the health clinic concept and the health clinic being open before October 1, which would give longer walk in hours for any employees and /or family or any Florida Health Care participant in Edgewater and Port Orange. He spoke of the co -pay being half the cost by going to the clinic and the City providing gym memberships for plan members. They will also be doing employment physicals as well as workers compensation. Councilman Kennedy felt it was good news that they weren't in any real financial trouble. He then asked if the foul ball nets for the baseball fields were included in the Hawks Park Improvements. City Manager Barlow believed they already had the material. Councilman Kennedy felt this was very critical. Leisure Services Director Jack Corder confirmed it had been purchased and delivered to the site. Scheduled to go up in the Fall was the netting to cover the whole building and inside area again. Councilman Kennedy spoke of the bleachers filling up quick and a lot of people not sitting on the bleachers. Mr. Corder asked if he wanted the netting extended. Councilman Kennedy described where he would like to see the netting and incidents he has seen where someone almost got hurt. Mr. Corder agreed to look at some type of design to see what he could come up with. City Manager Barlow suggested also designating prohibited areas where people shouldn't sit. Councilman Kennedy felt there wasn't enough seating on the bleachers and that they should look at auxiliary seating. Councilman Cooper commented on the bleachers being stackable and being added to. Mr. Corder informed him they couldn't add to those and they would have to purchase new bleachers. Councilwoman Bennington commented on the property values going down 15.4% in FY2012. She questioned if the 3% for FY2013 was in addition to the 15.4 %. Mr. McKinney informed her it was. The $582,000,000 in taxable value would reduce an additional 3% going into fiscal year 2013. He further spoke of the home sales prices starting to creep up. Councilwoman Bennington felt it was great that they could bring the millage down especially with the property values dropping. She asked how long they could operate with the money set aside. City Manager Barlow explained their normal operations as they are today and they have met the 15% required by the Charter and the 60 day requirement recommendation by GFOA. Technically it is 60 days. Nobody had really done the numbers. It is their goal to shoot for 17% which is GFOA which would be more than 60 days on a normal operation. Councilwoman Bennington asked how they compare with their emergency savings with other cities. She spoke of not knowing how long the reserve would last in an emergency situation. Mr. McKinney spoke of increasing the reserve over the last three years and most cities have seen a reduction. They can't compare them to anyone else. 2 Council Budget Workshop August 15, 2011 City Manager Barlow commented on the budget process being a team effort and a partnership by all of the employees. Councilman Cooper commented on the large expense in IT. He questioned that being rare for us. Mr. McKinney stated technology is power. Councilman Cooper stated they have been increasing their technology for the last three years. City Manager Barlow commented on this being a transition year when they were mandated to go with the countywide dispatch center and the costs associated with that as well as the voice recognition system. Councilman Cooper asked how many laptops were included. City Manager Barlow informed him 36 for the City vehicles. Councilman Cooper questioned if the Council would be getting the laptops they need. City Manager Barlow stated they hadn't budgeted directly for that. He also spoke about the IPAD, which was something they could look at. Councilman Cooper expressed concern with using their personal computers for City business which makes it come under the Sunshine Law, which he didn't feel was very fair, as it is his personal property. There was further discussion regarding computers being confiscated if someone is under investigation for a Sunshine Law violation. Mayor Thomas didn't want a laptop. Councilwoman Bennington commented on the IPAD and the money it would save because their agendas could be placed on the IPAD. City Manager Barlow stated he could find the money in the budget as it stands tonight. Councilman Kennedy commented on why he felt the voice recognition system was the best compromise as it related to customer complaints. Councilman Cooper suggested for consideration that last year they had a freeze for directors, assistant directors and supervisors on the automatic raise. He suggested they freeze those positions again this budget but he wanted to include so they don't have what they had recently with the City Clerk's position that her and her assistant fall under that 2% as well so they don't have to come begging to Council. He questioned the assistant falling under a regular City employee. City Manager Barlow confirmed that was correct. Councilman Cooper wanted to see that that get adjusted there. He wanted Council to instruct the City Manager that they don't do any reevaluations and change job descriptions because they need to save a little money this time for things that are going to come up that they aren't going to be ready for. Councilman Cooper asked Mr. McKinney on his projections for the General Fund, they ended up with $581,000 which he made mention he was holding to help pay into 2013's budget. He asked if the revenue 3 Council Budget Workshop August 15, 2011 projections were going to show that kind of overage again next year. Mr. McKinney informed him at the end of FY2012 there would only be $581,000 left. They went from two years ago to having $3 million available to at the end of FY2012 there would only be $581,000 remaining. At the end of FY2013 that $1.3 million is gone. They will have paid off FIND in its entirety. City Manager Barlow commented on this being smoothing money they have talked about in the past and the direction provided to them by Council to pay the debt down which they have done, which has been a long term savings. He further commented on not being reimbursed for overtime costs if a small disaster is not declared. He cautioned the Council not to reducing it any more than the $581,000. Councilman Cooper commented on Edgewater's Council being the lowest paid in the County. He recommended a $1,200 increase across the board to the Councilmembers in this budget. If they can hold that money against the 2% that they don't extend to directors, assistant directors and supervisors that are in the high income level in this City, it should be a wash. Councilwoman Bennington stated they couldn't do it because of the Charter. Councilman Cooper questioned being able to give themselves a raise in the budget. City Manager Barlow informed him they could not. If they were to make an adjustment to the pay, anything greater than 3 %, that wouldn't be effective for the present Council but for the Council that would replace them at the next election. The way the Charter is written every other year they get a raise no more than 3% based on the CPI. Those positions saw raises in 2003, 2005, 2007. They did not in 2009 and would be up for the 3% if the current Council was to approve it and the CPI was 3.6. City Manager Barlow figured out the 3% of the Council's salary to be $223 additional per year. Councilman Cooper felt the Council was underpaid and to ask the citizens to come forward and run for these jobs, they get what they pay for. Councilman Ignasiak felt attempting to raise their salaries at this time sends out the wrong message. He would not take one if it was offered to him. He didn't agree with the assessment that the amount of money that is offered determines the quality of the individual that sits on the Council. He didn't feel that was a driving force behind it. He agreed they are under paid and under compensated but believed the Council should set an example and send a message to tighten up the belt. Mayor Thomas stated he didn't do it for the money. He has never taken any per diem for travel expenses. He felt they needed someone that wanted to do it because they wanted to do it which is why he did it. 4 Council Budget Workshop August 15, 2011 Mayor Thomas expressed how proud he was of the debt reduction since 2005. He was proud of the decisions made by the current Council and the previous Council to get rid of the debt. Councilwoman Bennington commented on when she served on Council years ago and money being pulled from the unreserved fund to balance the budget. City Manager Barlow stated he didn't get a good consensus of raises for the Council. Councilman Kennedy felt the $200 a year wasn't worth asking for. Councilman Cooper stated it is never worth the money, it was just the principle. City Manager Barlow suggested when things get better that they do a salary study on the Council. City Manager Barlow had year two of the step plan and the 2% he was currently negotiating with the City employees to include directors and supervisors. It was the consensus to give a 2% raise to all City employees. City Manager Barlow asked about the 2% for himself and City Clerk Wenzel, the two Charter officers, who don't automatically get those raises unless Council gives direction for those. Councilman Kennedy questioned just giving City Clerk Wenzel a raise in May in the amount of 5 %, which was retroactive to January. They were talking about putting another 2% on top of that. Councilman Cooper stated of all the other cities City Clerk Wenzel was so far below. Councilman Kennedy informed him that wasn't true and that she was on the high side of the middle in the comparison they saw of the salaries of City Clerk's in Volusia County. He didn't feel it was fair to give someone 5% in May and then throw another 2% on for everybody. Councilman Cooper felt the 2% for the City Clerk would be miniscule. Councilman Kennedy commented on hearing from several City employees that felt it was unfair that she got 5% and nobody else did. Councilman Cooper commented on the raise being associated with the certification she obtained. Councilman Kennedy had a problem with the City paying for the education and then giving a raise too. He felt the City Clerk got the raise in May, retroactive to January and now they are going to give everybody, including her 2 %. That didn't seem fair to him. 5 Council Budget Workshop August 15, 2011 Councilman Ignasiak pointed out the City Manager and City Clerk positions were exempt and outside that are not covered by union contracts. Her credentials came up that brought her on par and the compensation they gave her was right. If they are going to do 2% for everybody else, they should do it for her. He didn't think 2% was a significant amount of money and he felt it was right in the situation. Mayor Thomas and Councilwoman Bennington agreed with Councilman Ignasiak. City Manager Barlow informed Council they had a tentative budget workshop scheduled for August 29 but based on what they covered tonight, he questioned if they needed to have that workshop. Mr. McKinney stated Burton & Associates made a recommendation to hold the 6% increase until after they meet with the Council and discuss the rate study. If Council was in agreement with that he would redo the budget, the tentative budget for the first public hearing to account for the 6% not taking effect until January 1St Councilwoman Bennington asked why they wanted them to hold off. Mr. McKinney pointed out they verified the need for the 6% increase it but they also feel there needs to be rate structure change, which always goes better when they do the rate increase at the same time. Councilman Cooper questioned if they lose revenue while they are waiting for them to come back. City Manager Barlow felt they should have this implemented by January. Mr. McKinney commented on the two scenarios that would be presented by Burton & Associates on October 17 Councilman Cooper would say go forward with the 6% and don't lose the revenue. They are going to make recommendations anyway and they can address them and accept them or not. He doesn't want to see them lose 3% of revenue. Councilman Kennedy stated what they are talking about is raising the water bill by 6 %. What Mr. McKinney was saying was there was another way to increase the revenue than just across the board 6 %. They are going to offer them another alternative. Mayor Thomas stated he would like to see what they have to offer. Councilman Kennedy felt they should wait. Mr. McKinney informed the Council they would be completely okay holding off until January 1St ADJOURNMENT 6 Council Budget Workshop August 15, 2011 There being no further business to discuss, Mayor Thomas adjourned the Workshop. The Workshop adjourned at 6:04 p.m. Minutes submitted by: Lisa Bloomer, CMC 7 Council Budget Workshop August 15, 2011 Edgewater General Fund Budget Workshop August 15, 2011 ate"m 9M 75AS -7c bsim SS -oar 5M096 4SA% 404% 3S 25:4% am 150% IDA% s% 4.4% Own" 19WI l9w"" IM-ns 3970-1979 Mo- IM-Im zow2m zaxa�nilv�rc) ■ Res.denua9 ■ [ommefoal ❑ industrial 0 mstitutional ■ Governmental Median Sale Prices Single Family Residence by Taxing Authority (with Sale Count) " i 350,000 (D 250,000 CL 4) 200,000 C t� 150,000 3 372 ■_ M Edgewater $85,000 425 49 383 363 15 202 943 489 ■ , 76 New Smyrna Beach $160,000 lib 379 69 677 18 28 9 320 0 "c 1,�\ '�� �'►`� ovae c� L�� ar arty ��� a aic a'� qp Q Q�et �� e Oaf ��� ��y a� O� Ota¢. yat- �a� * ; Oar 0 `5a �0"� qO 4 `) J I/ Oa 2011 Tax Roll "Net" Value Change Excludes New Construction, Annex, etc. East Volusia Cities Just Taxable Daytona Beach - 8.20% - 8.48 % Daytona Bch Shores -10.11% - 10.23% Edgewater - 16.15% - 16.07% Flagler Beach - 20.92% -20.41% Holly Hill - 11.15% - 11.70% New Smyrna Bch -4.51% - 4.80 % Oak Hill - 9.03% - 10.02% Ormond Beach -7.13% - 6.55% Ponce Inlet - 8.27% - 6.43 %fl Port Orange -3.66% -3.41% South Daytona - 9.17 %° - 7.80% West Volus a Cities Just Taxable Debary - 7.80 % - 7.18% Deland -8.56% - 9.74 % Deltona - 19.95% - 23.16% Lake Helen - 15.65% - 13.38 % Orange City - 9.73% - 10.36% Pierson - 16.29% - 9.98% Unincor crated Count Just Taxable County - 8.98% - 8.59 %fl City of Edgewater SFR Median Sale Price per S+gFt 2001 2002 2003 2004 2001 Real Estate Prices 2005 2006 2007 2008 2009 2010 Sale Year $160.00 $140.00 $120.00 as $100.00 v L o. $80.00 d $60.00 $40.00 $20.00 City of Edgewater SFR Median Sale Price per S+gFt 2001 2002 2003 2004 2001 Real Estate Prices 2005 2006 2007 2008 2009 2010 Sale Year 2011 Challenge for the City of Edgewater (and other taxing authorities) Taxable Value are down. Budgeting the same spending levels will require raising the Millage Rate, which will raise taxes on some taxpayers (most of whom will be resident owners with Save Our Homes differentials left). Otherwise, they will have to "cut spending." There is not a lot of middle ground here... only "What portions of government services will you cut ?" or "how much of an increase can your residents stands ?" 2010 Ad Valorem Budget (?) $4,540,138 (Last year's Property Taxes at 6.591) 2011 Taxable Value $ 5827726,592 (Down by 15.4%) I• p. Millage Rate (?) .0078528 (7.8528 mills) 19.0% potential increase in order to fund last year's Ad Valorem Budget ... Managing the 2011 Budget while explaining potential increase in millage while managing delivery of desired services to Taxpayers ..,. Revenue Outlook Historical Property Values & Ad Valorem Tax Yr FYO 5 FY06 FY0 7 FY08 FY09 FY 10 FY11 FY7 2 Value Mills Tax $ 6641137,932 - $ 812,943,450 - $1,089,419,939 - $1,195,974,542 - $ 981,6171652 - $ 822,343,254 - $ 688, 838, 957 - $ 5821726f 592 - 6.45 6.45 5.70 5.20 5.90 6.36 6.597 6.47 $41125,604 $ 5,045,677 $5,983,622 $6,053,935 $5,606,749 $4,968,598 $4,313,737 $3,587,729 GF Budget $13,194,640 $141136,921 $149107,382 $13,9349557 $1413569423 $12,544,666 $72,454,709 $11, 977, 422 U RVTI I XI Il Il 14,000,000 12,000,000 . 111 111 4,000,000 2,000,000 City of Edgewater ■ Tax Levy Tax Analysis ■ General Fund Mi ? - Mil - ?(M) - ?nnA - 2008 - 2007- 2006- 2005 - 2004 - 2003 - 5.20 5.70 6.45 6.45 6.95 6.95 14,000,000 12,000,000 MES M 4,000,000 2,000,000 City of Edgewater ■ Taxable Amount 2012 Taxable Value ?()I? - 201 1 - ?()I() - ?nnQ - 2008- 2007 - 2006- 2005 - 2004 - 2003 - 5.20 5.70 6.45 6.45 6.95 6.95 7,000,000 5,000,000 4,000,000 3,000,000 2,000,000 MUM City of Edgewater Tax Levy )08 - 5.20 2007 - 5.70 2006 - 6.45 2005 - 6.45 2004 - 6.95 2003 - 6.95 M Tax Levy 10 14,000,000 12,000,000 E M . 111 111 4,000,000 2,000,000 General Fund 0 General Fund nni^1 -1 n1 1 -) n1n 1) nnn 2008- 2007- 2006- 2005 - 2004 - 2003 - 5.20 5.70 6.45 6.45 6.95 6.95 11 3,950,000 3,900,000 3,850,000 3,800,000 3,750,000 3,700,000 3,650,000 City of Edgewater Tax Levy at Various Millage Rates 6.85 6.591 6.47 Tax Levy 12 Volusia's History of Real Estate Development IK&IM two-is" 1"(►.Im ENO. U?O. "79 IM MOAM 2ow"M 350 300 250 o UKII7 100 50 0 City of Edgewater Taxes Per Capita 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Taxes per Capital 14 Revenue Outlook Revenue Outlook 2011 and Beyond • Property Tax OutlooN - FY2012- (15.4 %) -FY 2013- (3.0 %) -FY 2014 -0% 15 Budget Strategies Used For FY201 2 Maintained a hiring freeze Eliminated vacated positions Reduced Operating Budgets Reassessed and Adjusted CIP Projects ► Adjusted Reserves 16 Budget Strategies FY201 2 • Compensation -Step Plan plus 2% •Health insurance and other benefits • No Projected Increase *State Revenue FY1 2 decrease $1141973 *County EMS FY1 2 decrease 580,000 *Ad Valorem FY1 1 decrease $731,402 at $6.47 17 General Fund • 2005 - $91857,233 • 2006 - $89883,985 • 2007 - $7,618,910 • 2008 - $6,0707152 • 2009 - $4,6497000 • 2010 - $391415380 • 2011 - $29563,625 Debt Reduction Enterprise Funds • $37,001,425 • $345625,837 • $3157209482 • $28,841,268 • $255958,775 • $239796,360 • $21,837,783 on $22,457,250 Reduction • $3,348,836 • $491707430 • $494279972 • $493039645 • $3,6709035 • $2,5369332 18 Budget Challenges Current Year Budget at 75% of Year General Fund Animal Services Water / Sewer Refuse Revenues 65% 61% 72% 57% Expenses 69% 63% 79% 68% Stormwater 67% 60% Still maintaining all budgeted capital outlay 19 Budget Challenges Current Year Cash Balance General Fund Animal Services Water / Sewer Refuse Stormwater $2,891,390 $ (169 540 ) $2,138,265 $ 938,326 $ 317,898 20 Funded Capital -Police Pursuit Vehicle - $ 37,000 -IT Upgrades - 122,664 -Bush hog 21858 •W /S Infrastructure 629500 •Kenworth Loader 147,808 •Kenworth Semi 138,697 -Boom mower 120,123 -.Road resurfacing 150,000 $781,650 21 Street Resurfacing •Cherrywood Lane $ 293325 -Edgewater Dr 263520 -Lone Pine Dr 133260 •Pinesedge Ct 115220 Mildwood Dr 48,535 •Parkwood Lane 169235 -Contingency 49905 Total FY2012 $1509000 22 CIP Projects -Hawks Park Improvements .YMCA HVAC Phase II -US 1 Sidewalk Survey & Design •Total FY2012 Funding City Match $ 80,305 CDBG 0 40,000 CDBG 0 19500,000 DOT 0 $1,620,305 23 Fund Reserves As Stated by 9/30/10 CAM •$599749500 General Fund Reserves -Charter 16.71% $2,000,000 (Goal is 17 %) General Fund Unreserved / Designated •FY12 Budget $1,331,804 (used $750,000) • Available $581,804 (unaudited) -Designated F.I.N.D. •$1,322,798 (used $515,639 -100% covered) -Designated City Hall •$200,000 (FY2012 budget brings total to $300,000) 24 Rate Study Status -Burton and Associate to present rate study October 17 -They have validated current year rate increase of 6% -Recommend delaying increase until January 1, 2012 -Will be recommending five year rate increase and rate structure changes 25 QUESTIONS ?? 26