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08-15-1995 - Budget Workshop CITY COUNCIL OF EDGEWATER BUDGET WORKSHOP AUGUST 15, 1995 7:00 P.M. COMMUNITY CENTER MINUTES CALL TO ORDER Mayor Hayman called the Budget Workshop to order at 7 : 00 p.m. in the Community Center. ROLL CALL Mayor Jack Hayman Present Councilman Danny Hatfield Present Councilwoman Louise Martin Present Councilman Michael Hays Present Councilman David Mitchum Present City Attorney Krista Storey Present City Manager George McMahon Present City Clerk Susan Wadsworth Present Police Chief Lawrence Schumaker Present MEETING PURPOSE The purpose of the meeting was to continue discussion regarding the FY1995/1996 budget. Economic Development Update Mayor Hayman identified the first order of business would be the discussion about the Chamber of Commerce, VCBDC and the Economic Development Board. Finance Director Fred Munoz presented Council with the detail of what the Economic Development Board had spent since the beginning of the year. Jerry Fox, Volusia County Business Development Corporation, made a presentation on behalf of the VCBDC by describing they are the ones that sell the improvements that are made to the community to attract business to the community. Mr. Fox then commented on the VCBDC being successful in getting Boston Whaler to locate here. He spoke of watching the company grow from 120 employees to 455 employees, which he felt was a major contribution to the City even though they weren' t in the City limits . He further commented on Kayat Engineering being brought here by the VCBDC. They predicted employment of 35 and they were now at 50 and still growing. 1 Council Workshop August 15, 1995 He then commented on WACO Manufacturing who started at 40 employees and were now at 72 . He spoke of having projects underway at Edgewater Machine and Dougherty Marine. Edgewater Machine was presently up to 50 employees . He identified Dougherty Marine was growing rapidly, not only in product line but also in employees . He then commented on the Coronado Paint project that was just completed. He further identified their role was job creation and identified they caused 396 new jobs since last year. He then commented on the Opportunity Fund Assistance and the Edgewater area receiving 1/3 of that fund for growth for companies here. He also commented on State Road Fund Assistance with regard to road improvements . He also expressed their support of Maglev. He spoke of working with Phillip Fong and the Chamber. One of their five staff is down here two or three times a week with a prospect. He had a prospect down here but they couldn' t come together on the lease rate for the Consolidated PreStressed property. He had also been with working with Scott Porta and his new project off of Park Avenue. He further commented on no matter where the jobs are in the County, he felt somebody from Edgewater would be working at one of them. They run a nationwide advertising program in many different national magazines . They attend seven trade shows a year. They do prospecting trips on targeted industry groups in specific parts of the Country. They publish all the data on the demographics for the County. Mr. Fox identified what they were seeking was one dollar per person per year for economic development. The County provided $ . 50 per person countywide and another $ . 50 per person for the unincorporated areas of the County. They then come to the cities to ask for their $ . 50 per person to fill in the rest of the dollar. All of the cities do not participate. Most of the major cities have a contract with them where $ . 50 per capita is automatically included in the budget every year. Councilman Hays asked if they wanted to handle these as three separate line items . Mayor Hayman stated previously they budgeted $7, 000 for VCBDC and $8, 500 for the Chamber. He didn' t see any reason why, if it was the consensus of Council, to consolidate it all into one economic development line number. Councilman Hays felt some of the moneys were going to be utilized in both areas for economic development. City Manager McMahon recommended the Council come to its conclusions regarding how they want to fund economic development and combine it under one budget. He felt the appropriations should be specific. Mr. Munoz identified there was $8, 548 budgeted for the Chamber and $7, 000 budgeted for VCBDC with regard to economic development which totaled $15, 548 . City Manager McMahon identified the Economic Development Board' s request for their entire budget, which included the Chamber and VCBDC, was around $39, 000 . 2 Council Workshop August 15, 1995 Councilman Hays wanted to handle each item separately. Councilman Hays thanked Mr. Fox for coming back tonight and providing the specific information he provided to the Council . Councilman Hays moved to approve the $7, 000 for the VCBDC, second by Councilwoman Martin. Councilman Mitchum stated Mayor Hayman' s first view of that was the $ . 50 per capita was not out of line and asked him what his feelings were on that. Mayor Hayman felt $7, 000 was a good start but believed their request for $ . 50 per capita was justifiable . He asked that they recognize VDBDC' s efforts with a $ . 50 per capita. Councilman Hays stated he would withdraw his motion if Councilwoman Martin would withdraw her second. It was determined the amount at $ . 50 per capita would be $8, 548 . It was the consensus of Council to approve the $ . 50 per capita for the VCBDC at an amount of $8, 548 . Steve Dennis, Executive Director, Southeast Volusia Chamber of Commerce, made a presentation on behalf of the Southeast Volusia Chamber of Commerce by commenting on working hand in glove with the VCBDC. Mr. Dennis then spoke of having no economic development program three years ago. Last year they held a job fair in the Community Center and were planning another one in September. Mr. Dennis identified the Chamber received a minimum of 700 calls per month on their 800 line. He then spoke of inquiries they receive from all over the world and being instrumental in working with the Southeast Volusia Advertising Authority. Mr. Dennis then commented on difficulties in New Smyrna and Edgewater enjoying a tremendous boom. He further spoke of working every day on Edgewater' s behalf. Mr. Dennis then commented on the Chamber being the tourism awning and who the people see first. Mr. Dennis also identified they were always representing the business community. They have made a concerted effort to change their home philosophy from the New Smyrna, Edgewater, and Oak Hill philosophy to the Southeast Volusia philosophy and are representing a more regional approach. Mr. Dennis spoke about developing a better consensus with the elected officials and about a focus luncheon that was held today where they 3 Council Workshop August 15, 1995 talked about some issues the Chamber will be involved in and the lead on. Mr. Dennis spoke of working with Mr. Fong on the Economic Development Board on their budget. He was approached by VCBDC to have a representative, he was currently speaking to John Browning, go to the Marine Show in Chicago in the first part of September. He also spoke of going to the Miami Boat Show and having three prospects that have contacted them. He further commented on wanting to combine more trade show appearances and Fan Tours . Councilman Hays spoke of being more skeptical a few years ago of the Chamber' s willingness to work for the City of Edgewater versus some of its other interests and he expressed some of that. He felt they had risen to the challenge and have done a lot of work in the City that they are seeing results from. Mr. Dennis pointed out they had taken more than 16, 000 inquiries into their Chamber alone . He also mentioned they were selling tickets for the Christmas House for the City. Mayor Hayman thanked the Chamber for coming. He spoke of going to the Miami Boat Show to call on the CEO of a company that withdrew or struck a red line through Edgewater as a potential site to relocate a very nice high-end yacht manufacturing company. They wanted to have a face to face with the CEO to try and persuade them to reconsider the elimination of Southeast Volusia as a potential site to locate their company. They were very pleased that the Chamber, an elected official and the economic development community of Edgewater were down there trying to find out what the problem was and work out a way to overcome any problems they had. They learned later they had been put back on the list and were under very serious consideration. He gave kudos to Mr. Dennis, Mr. Fox and Mr. Fong who also attended the Miami Boat Show on behalf of Edgewater. Councilman Mitchum complimented the Chamber of Commerce and felt the last few years they had really done a good job. Councilman Mitchum and Councilman Hatfield both identified they felt the Chamber deserved the $ . 50 per capita. Mr. Munoz assured them he would be able to find the difference. It was the consensus of Council to approve the $ . 50 per capita for the Chamber of Commerce at an amount of $8, 548 . Mayor Hayman commented on the fireworks the City does for the 4th of July. He wanted help from the Chamber advertising Edgewater to help raise donations towards the fireworks . Councilman Mitchum pointed out New Smyrna was watching our fireworks and didn' t want to pay. 4 Council Workshop August 15, 1995 Councilman Mitchum asked if they could let Police Chief Schumaker go home. Police Chief Schumaker was excused at this time . Councilman Mitchum couldn' t support the type of budget the Economic Development Board was asking for but he did support them. He further spoke of the caliber they had on the Board and felt to not fund their effort in some form would be a slap in the face to them. He agreed with lumping the Chamber, VCBDC and the Economic Development Board under Economic Development. He identified some things that were repetitive to what the Chamber was doing and he suggested Mr. Fong work very closely with the Chamber and the VCBDC to make next year a beneficial year for all the entities . He asked what a bare bones budget was that the Economic Development Board in conjunction with the Chamber and VCBDC could work with. Mr. Fong identified it was a hard question to answer and further commented on the newsletter, which he didn' t feel was a duplication. He spoke of the postage and printing also representing a cost. He wanted to prioritize and let the final decision lie with the Council . He then explained why he felt the studies were important. Councilman Mitchum didn' t share Mr. Fong' s views with regard to tax increment financing. He pointed out the Economic Development Board budget last year was $7, 000 and of that $5, 500 was for the Business Climate Analysis . He didn' t think this year there was any money for more studies . He would support a budget of $3, 000 which would bring the total economic development budget to about $20, 000 . If something were to come up in the year, they have an opportunity at that point to address it. If they could convince Council that they needed to do something, the Council could always fund it. Councilman Hays would support the $3, 000 but would support including an additional $5, 000 in the budget in case something comes up. Councilman Mitchum, Councilman Hays and Mayor Hayman agreed. Mayor Hayman felt the discretionary $5, 000 should be used to entice the big boat builder out of Miami . He didn' t think the $3, 000 should be spent unless they could see a positive return in terms of economic development dollars coming back into the City. He felt they needed to become more proactive and maybe even a little reactive . City Manager McMahon confirmed in putting the $5, 000 in the budget as an open line item that it would be subject solely to Council' s discretion and approval of any expenditure from that would come to Council first. It was the consensus of Council to budget a total of $8, 000 for the Economic Development Board. The total budgeted for economic development was $25, 096. 5 Council Workshop August 15, 1995 Mr. Munoz identified the Chamber of Commerce, VCBDC and the Economic Development Board would all be budgeted in one place. There was a five-minute recess at this time. Overview of City Enterprise Funds Budget - Utilities Director and Public Works Director City Manager McMahon identified they needed to settle where the $25, 000 was coming from within the budget. Councilman Mitchum suggested in the Fire Department budget, he felt the land acquisition and land prep fee that was $25, 000 and the $4, 000 could wait another year. The final payment for the two fire trucks was being made this year which would free up funds for next year. There was further discussion regarding proceeding with the grant. If a grant did come it would be into the following fiscal year before they would have to match. Council was in agreement with Councilman Mitchum' s suggestion. There was a discussion regarding where they were at with the changes Council had made to the budget. Public Works Director Hugh Williams answered questions presented by Councilwoman Martin with regard to the 100% increase under improvements other than buildings with regard to the Refuse Department budget. Mr. Williams then answered questions with regard to Other Contractual Services and if this amount was for tipping fees . Mr. Munoz informed him it was a combination of tipping fees and recycling. City Manager McMahon further commented on tipping fees potentially being raised at the landfill . Councilman Hays questioned if they should consider the increase in the budget. Mr. Williams spoke about raising the $1 per month per house for recycling to $1 . 50 . The City' s cost was $1 . 48 . He felt the difference would cover the potential increase for the tipping fees . His basic understanding was the increase was not being recommended by Solid Waste staff but would produce $2 million that would help County funds . Councilman Mitchum questioned if some of Mr. Williams' personnel retired or transferred with regard to salaries and wages going down $202, 000 . Mr. Williams informed him some people had left that hadn' t been replaced and they had some transfers within the organization. 6 Council Workshop August 15, 1995 i Councilman Hays questioned whether changes made to the routes and the employees leaving when their routes were done was paying off in the long run, which Mr. Williams explained the new rear loaders and the task system had worked very well and the payoff to the City had been taking one truck off the fleet which in turn reduced three people. Mr. Williams informed Council this fiscal year they were not proposing any new equipment for Refuse . City Manager McMahon commented on people in the community feeling the City should make certain improvements to the Stormwater Management Maintenance Fund. There were no capital project costs . He identified there was no money in the budget for significant problems such as the Hart Avenue project. He spoke of also receiving calls from people looking for assistance who have purchased properties in low elevated areas . He also mentioned the City not being designed for urban growth and was designed for agriculture. Mayor Hayman referred to the undeveloped parcels in the Florida Shores Road Improvement area that were adjacent to paved roads appreciating because of the improvements that have been made to the roads and the drainage system. He felt they should be able to go to the owners of the unimproved parcels and ask for an additional $24 a year to help defray the cost for maintenance of the drainage system. Mr. Williams felt as a matter of justice, fairness and equity they had to. There was further discussion regarding incurring an increased expense for stormwater operation and maintenance, management and repair. There was also discussion regarding this not being done before because of it costing the City almost as much as they were trying to collect. Councilman Hays felt if the collection of the money was the only problem, they could look at an assessment charged against the property on a yearly basis or put it on the tax rolls . There was additional discussion on different ways the money could be collected to help pay for drainage. Mr. Williams anticipated they would have some dry retention areas that would need to be mowed and identified they would be coming back to Council for guidance on the level of mowing they wanted. Councilman Hatfield mentioned the improvements made increasing the level of service and the value of the properties so more revenue should be generated from that that might help offset some of the cost. Mayor Hayman spoke of having a mechanism to lien the property. City Manager McMahon spoke of the properties being assessed and taxed for the improvements . Mayor Hayman identified he was talking about 7 Council Workshop August 15, 1995 the maintenance which was a different thing. City Manager McMahon felt they would need to look at the maintenance further. Councilman Hays felt once the retention ponds were in place, there would be maintenance costs that would be justified. Mr. Williams identified he didn' t think it was a dependable revenue stream and that it was an equity issue. Mayor Hayman asked about the appropriated retained earnings dropping 46.2%, which Mr. Williams and Mr. Munoz explained for him. There was a brief discussion regarding the improvements made to the 18th Street canal that were being done in-house. Mr. Williams commented on aeration devices that they were using in some of the ponds to help with algae control that had the potential to save the City a lot of money. Utilities Director Terry Wadsworth commented on the funding problem with the 800 megahertz system and further described his entire budget called for $39, 000 worth of equipment, which had been placed in the budget, of which the total equipment came to about $29, 000 so without altering his budget he could accommodate about another $10, 000 worth of equipment. There was a discussion regarding the Emergency Operations Center being located at the Alan R. Thomas Water Treatment Plant at I-95 and SR 442 and the Fire House being used as another EOC location. Mr. Wadsworth then presented an overview of the Utilities Department budget by describing the highlights . Mr. Wadsworth described what a jumping jack was for Councilman Mitchum. Councilman Hays and Councilman Mitchum complimented Mr. Wadsworth for the information provided to them with regard to his budget which they felt was very helpful . City Manager McMahon spoke of wishing they were able to afford to pay the State Revolving Loans for $7 million to finish the reuse. Mr. Wadsworth described he was confident they wouldn' t need to expand the reuse system. Mayor Hayman questioned there being no revenue stream for water revenue for the southern area utility region customers they might have during that fiscal year. Mr. Wadsworth explained they may be able to hook up some people in our area but he didn' t want to speculate how much revenue that would produce . 8 Council Workshop August 15, 1995 Councilman Hays spoke of pumping reuse into and out of Mango Tree Lake. He asked if they were budgeting to move in that direction next year. Mr. Wadsworth identified the money he had budgeted was for burming, pumps and modifications to the reuse system. He also spoke of the need to get a cover for the existing reuse tank. Mayor Hayman commented on the budget increase for Field Operations with regard to increasing personnel and field operation requirements because of the expansion facilities . Mr. Wadsworth explained there was no actual increase in personnel and personnel transfers that were done within his department. There was then a discussion regarding the age and condition of some of the other areas for water and sewer in the northern part of the City with regard to money that had been budgeted and CDBG funding that may be available in the amount of $75, 000 . Mr. Wadsworth also described piggybacking the Port Orange bid for slip lining. In the past they paid $48 to $52 per foot, which they were getting for $37 per foot under this bid. They were going to be starting the slip lining on October 1St Mayor Hayman complimented Mr. Wadsworth for the organization and presentation of his budget. Councilman Mitchum referred to City Manager McMahon' s memo dated August 15, 1995 regarding the City' s Self Insurance Fund and expressed his concerns about the fund not being able to maintain itself as it was originally set up to do. City Manager McMahon further commented on his suggestion to remedy the situation. Councilman Mitchum commented on the main cost of this fund being the maintenance of it and the fact that they weren' t paying out a lot for claims . What had happened over the last three or years was they paid for the expense of the fund out of the fund balance which he identified had to stop. City Manager McMahon informed Council if they concurred with this and by consensus approved this as their operating policy for that fund, the Finance Department would automatically take direction from this policy and annually make that appropriation. He further commented on operating a tight budget. There was further discussion regarding trying to recover essentially $150, 000 to $160, 000 over the next two or three years and the $24, 000 that was budgeted for claims and judgments . It was the consensus of Council to adopt a policy wherein annually an amount of money would be restored to this fund as a restricted asset exclusively to this fund through a portion of the amount of money 9 Council Workshop August 15, 1995 added to the fund balance each year from the unappropriated fund balance. Mayor Hayman confirmed Councilman Mitchum had received the Travel & Per Diem report he requested at which time Councilman Mitchum pointed out five departments were over their limit in travel and per diem but that overall they were at 80 . 4% . City Manager McMahon identified what happened within the Utilities Department as it related to Travel & Per Diem. Councilman Hays then identified he wanted Council' s support to sit down and look at the feasibility of the City getting into the cable television business as an Enterprise Fund, which he felt would work and could be a revenue source. He felt they needed to look at other revenue sources . Councilman Hatfield expressed his support but questioned having money in the budget for a study. Councilman Hays spoke about staff finding out the very basic information. Mayor Hayman felt they all agreed. He further commented on Daytona Beach Shores already having everything wired for cable television and requiring the builders to wire the condos for it. They were very close to turning it on. City Manager McMahon commented on getting preliminary information and it being impossible to try and buy out someone like Time Warner, who was now CVI but he did think they had a right to go into the business as some cities had done that and were successful . It was the consensus of Council to support this by taking an initial look to see whether it is a direction they wanted to go. ADJOURNMENT There being no further business to discuss, Councilman Mitchum moved to adjourn. The meeting adjourned around 9: 45 p.m. Minutes submitted by: Lisa Bloomer, CMC 10 Council Workshop August 15, 1995