06-03-2013 - Budget Workshop CITY COUNCIL OF EDGEWATER
BUDGET WORKSHOP
JUNE 3, 2013
5:00 P.M.
COUNCIL CHAMBERS
MINUTES
1. CALL TO ORDER, ROLL CALL
Mayor Thomas called the Budget Workshop to order at 4 : 58 p.m. in the
Council Chambers .
Present Mayor Michael Thomas
Councilwoman Christine Power
Councilwoman Gigi Bennington
Councilman Mike Ignasiak
Councilman Gene Emter
City Manager Tracey Barlow
City Clerk Bonnie Wenzel
City Attorney Aaron Wolfe
Absent None
2. DISCUSSION
a. FY 2013/2014 Preliminary Budget
City Manager Barlow identified he had Finance Director John McKinney
put together an extremely preliminary assessment of where they are
with the budget to try to continue to massage the budget to continue
to reduce their operational expenditures and where they are on some of
their preliminary revenue projections they have received so far. He
reminded Council over the last several years they have tried to do a
variety of initiatives to steer them through this recession until they
see a recovery. Last year they were one of three communities that saw
a property value appreciation, which was 1 . 3% . He felt they were
heading in the right direction but it would take a long time to catch
up. He commented on the cost of living increases for goods the City
needs in order to operate. He spoke of refinancing in order to reduce
interest rates . They had made a significant dent in the outstanding
debt and taken on very little new debt. He then spoke of stabilizing
the City' s capital structures to get them into the future, which
resulted in additional efficiencies . He also spoke of various grants
they have taken advantage of. He also spoke of reducing the work
force and evaluating every time a position comes open. They have
tried to do everything they could to maintain the current level of
services . The importance of those services was to keep the residents
here and attract new residents and businesses . He mentioned putting
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Budget Workshop
June 3, 2013
together incentive packages to attract businesses . He also spoke of
enhancements made to Code Enforcement. He spoke of adding an EMS
transport which now they are receiving reimbursement for.
City Manager Barlow informed Council they were going to hear about the
budget stabilization reserves, which ended last year. The operating
costs exceeded their revenue as a result of that. They are hoping
through attrition and increase in property values that those would
balance out.
City Manager Barlow spoke of discussing areas they needed to consider.
He felt some would be tough decisions they had put off for a few
years . Council would inform staff where they needed to focus to
extrapolate more reductions in the General Fund operating budget in an
effort to balance that out with existing resources they have going
into 2014 .
At this time, Finance Director McKinney started the attached
Powerpoint Presentation by going over the "Tax Roll "Net Increase in
Real Property Just Value" "Excluding New Construction" and answered
questions presented by Mayor Thomas .
Mr. McKinney then commented on the "Median Sales Prices - Single
Family Residences - 1998-2011 . " In Volusia, Edgewater and Deltona
were leading the County in home sales on resales and were finally
starting to see a reduction in foreclosure short sales . They are now
starting to see the non-foreclosure homes and regular resales . The
home prices are starting to come up.
Mr. McKinney then commented on the "2004" and projected "2014 Property
Tax on a Residential Home in Edgewater. " He also had a pie chart that
showed the breakdown of the 2004 General Fund budget compared to where
they project to be for fiscal year 2014 based on the "2012 Preliminary
Tax Roll Taxable Value by Property Class . "
Mr. McKinney then commented on the "Rolled Back Rate vs . Adopted
Rate", "Property Taxes Per Capita", "Tax Analysis", "General Fund
Expenditures Breakdown FY2014" and "FY2004", "Budgeted Revenue
Outlook", and "Budget Expenditure Outlook" .
City Manager Barlow further identified the Compensated Absences was
the cash value of all the sick and vacation time the employees had in
an accrual bank. Current policy and labor agreements allow for them
to cash out a certain percentage every year. If you are here over a
certain amount of time when you terminate employment the City pays for
the compensated sick and vacation time .
There was further discussion regarding the compensated time being one
for one for anyone that has been here greater than five years and two
for one for anybody that has been here less than five years .
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Budget Workshop
June 3, 2013
Mr. McKinney then identified the "Requested Capital", and "General
Fund Debt" and informed Council there was no new debt projected
currently for 2014, other than possibly floating debt for the
potential expansion of the YMCA. The City would potentially front the
debt but the YMCA would be making the annual debt service.
Mr. McKinney then commented on "Street Resurfacing" .
Councilwoman Bennington said last year they had a list too and they
went down some of them but she didn't see some of them that they
didn' t do last year on the new list. Mr. McKinney identified Ms .
Dewees re-evaluates every street every year.
Mr. McKinney then commented on the "General Construction Projects . "
There was further discussion regarding the amounts being matching
amounts .
Mr. McKinney continued his presentation by commenting on "Funding
Strategies" with regard to the Tax Levy at Various Millage Rates,
"Budget Reduction Considerations" .
With regard to the PILOT/PILOFF item, City Manager Barlow identified
we were one of the few communities that had yet to consider the
Payment In Lieu of Taxes/Payment In Lieu of Franchise Fees . He
described that numerous years ago a previous City Manager asked for
consideration, which turned out to be unfavorable, to sell off the
City' s utilities to a private individual . If a private individual
owns it they are able to tax those properties .
City Manager Barlow spoke of receiving franchise fees from a lot of
the communication companies as well as the power company for
permission and exclusive right to operate within the City of
Edgewater. Those Enterprise Funds, if they want to maintain those
services here, they could be considered to pay their own fair share of
franchise fees, which is very popular everywhere.
Councilwoman Bennington described the Enterprise Fund, they weren't
going to privatize it, they would just make them pay their fair share
of the taxes, which would raise the rates . City Manager Barlow spoke
of being sensitive to the rates because they have to be competitive
with the competition which is a private enterprise. There is a lot of
private enterprise that would love to have our Solid Waste business
for example. In an effort to keep it so they can maintain that level
of customer service, he further identified that as being a challenge .
City Manager Barlow spoke of a previous Council electing not to
explore there so he has asked Mr. McKinney to relook at that.
Councilwoman Bennington was interested in looking at it as long as
they didn't go to privatization. City Manager Barlow felt this was
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Budget Workshop
June 3, 2013
the best of both worlds as they would be paying their fair share, the
City would still have control over the service side of it and the rate
side of it as well . Mr. McKinney explained in doing the PILOFF
franchise fees that would give them the opportunity to use some of
those fees derived from the Refuse Department towards their Road
Resurfacing Program, which would be a good funding source to help pay
for the Road Resurfacing Program.
Mr. McKinney continued his presentation of the Budget Reduction
Considerations by commenting on renegotiating the FIND debt. He sent
an e-mail to FIND and they responded back this afternoon that they
would allow him to defer 50% of the 2014 payment for two months, which
was a $200, 000 reduction in the 2014 budget that they could put off to
the 2015 budget. He felt it was a win-win for them to do that.
Mr. McKinney then commented on the "Staff Levels" by comparing
2003/2004 to 2013/2014 .
Mr. McKinney then commented on the "Fund Reserves" and described the
savings of reducing the General Fund Reserves from the current 18 .2%
to 17% and 15% . Councilwoman Power questioned the $342, 000 going
against the $1 . 5 million they were short. Mr. McKinney informed her
that was correct but urged Council not to bring it too low because
they have lean times in a fiscal year.
Councilman Emter questioned how Mr. McKinney came up with the amount
of $124, 491 when 1% of $2 million is $20, 000, which Mr. McKinney
explained for him. It was all based on the projected budget.
Mr. McKinney then commented on the General Fund Unassigned/Designated
with regard to "Fund Reserves . "
There was a brief discussion regarding there being $500, 000 in the
City Hall fund and not funding the $100, 000 this year. City Manager
Barlow recommended Council give them direction not to add the $100, 000
next year, which would still leave it at $500, 000 and see where they
can balance the budget.
There was then further discussion regarding the $337, 018 designated
for FIND and deferring 50% of the 2014 payment to 2015, which would
also be the final payment. This debt was for the purchase of the
ParkTowne property. FIND agreed to do the split payment and not
charge the City any additional interest on the principal .
Mr. McKinney finished his presentation by describing the "City of
Edgewater Use of Fund Balance . "
Mr. McKinney further explained if they look to build a budget to bring
back to Council of 6. 7 mills, changing their accrual cash in policy,
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Budget Workshop
June 3, 2013
looking at reducing insurance benefits and looking at modifying their
FIND payment, they were still looking at a shortfall of $785, 000 .
Councilwoman Power asked if that included reducing the Charter reserve
to 17% . Mr. McKinney informed her it did not but if that was the
direction Council gave, he would start to build a budget for the City
Manager at that direction.
Mayor Thomas and Councilwoman Power felt they should look at going to
15% . City Manager Barlow suggested before they jump off to increase
the millage that they look at reducing the 15, which would only get
them a fraction there. He felt they had cut, organized and tried to
extrapolate every bit of an efficiency they could. They had not
addressed those very unpopular areas that other communities around
them had already done going through this recession such as compensated
absences and the benefits associated with it. He reported on meeting
with two of the three labor organizations . He needed direction from
Council if that was a direction they wanted him to continue to work
on.
Councilwoman Bennington stated she would hate to ask the employees
because they have been hit hard but she felt they did need to look at
that. She knew there were some that took advantage of it and she felt
they needed to tighten up a little bit on that. Along with not
putting $100, 000 into City Hall. They have put off things for five
years that were catching up with them. She didn' t want to hit the
taxpayers with a big increase or cut services .
City Manager Barlow agreed. The only way they could continue to
maintain those services and steer the community out of the recession
was they needed the employees to do it. He wasn't sure they could
continue the benefit and the associated cost with those benefits to
keep the same number of employees . He was afraid if they didn' t do
that he would be back before Council having to recommend layoffs,
which would affect the level of service.
Councilwoman Bennington didn't think the taxpayers could afford to pay
it. City Manager Barlow didn' t think so either and he was just as
compassionate with those needs out there.
Councilman Emter felt the budget was a shared venture no matter how
you shake it. He commented on personnel costs, including salaries and
benefits, amounting to 87% of the total General Fund budget, which he
felt was an astronomical figure. He felt to maintain a sustainable
budget they had to look at the personnel situation. He didn't want to
do it but he didn't think there was any other way they could put
together a workable budget without looking at and evaluating some of
the elements they have talked about.
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Budget Workshop
June 3, 2013
There was a brief discussion regarding the City' s funds being
transferred from Wells Fargo to Sun Trust. From August 1st forward
they were looking to save $27, 000 annually.
City Manager Barlow encouraged the Council to spend some individual
time with him to further discuss the budget.
Councilman Ignasiak asked when the County Tax Assessor' s final figures
were due in. Mr. McKinney informed him he typically receives it
around July 2nd.
City Manager Barlow stated their next budget workshop was scheduled
for July 15th but they may schedule another workshop that wasn't prior
to a Council meeting so they could spend a couple of hours and dig
into it.
3. ADJOURNMENT
There being no further business to discuss, the Budget Workshop was
adjourned at 5: 58 p.m.
Minutes submitted by:
Lisa Bloomer, CMC
Deputy City Clerk
6
Budget Workshop
June 3, 2013
EDGEWATER GENERAL FUND
PRELIMINARY BUDGET WORKSHOP
JUNE 3, 2013
30.00
(10.00)
(20.00)
(30.00)
City of Edgewater
Tax Roll "Net Increase in Real Property Just Value"
"Excluding New Construction"
34.01
2005 2006 2007
9.78
- ...... _,--
2008
(16.23) (14.94)
(17.92) (16.69)
n % of Net Change in Taxable Property Value
3.93
1.70
0
W
2013
2014
"THE NEW REALITY FOR CITY
BUDGETS"
BUDGETING 2014 EXPENSES
WITH
2004 REVENUES
Volusia County, FL.
Median Sales Prices - Single Family Residences (SFR)
1998-2011
2501000__ —W — — — — — — — — — - - -- — - - - - - - - - - - - - - - - - - - - - - - - - - - -
2001 - 200614411 Increase 117,404 2006 - 201146% Decline
17% 199,944
2001000 - _ -- -- - -- 185,000 - - - -- -- -� - --
I 29% _F 172,400 l
l I
.L l 19% I
CL
1500000 __� _- 19`;0 143,440 140 142,400 -- _ —�_ --
m
Y 13% 120,404 -170 122,640 116,400
U)
4 4% 8% 101,000 f --
-
100,000 88,900 -
C� 75,544 78,500 82,000 I -14"A
-5%
I
50,000 _ -
I N
I
0
1998 1999 2000 2001 2002 2003 2fi(e 4Rp 2006 2007 2008 2009 2010 2011
SOUrce: Volusia CountI. Florida. Propertj Appraiser's Office
2004 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 $70,874 less a $25,000 Homestead Exemption taxable value
of $45,874
School Board City of Edgewater (1)
Volusia
$399.06
County
(34.25 %) $318.82 (27.36 %)
$284.60
(24.42 %)
s.
Other
SE Volusia Hospital District
$106.43
9.13%
TOTAL TAX BILL Taxes
St. Johns River Water Management District
21.19
1.82%
$1,165.26 $162.78
Florida Inland Navigation District
1.77
.015%
13.97%
East Volusia Mosquito Control
10.92
.94%
Port Authority
4.13
.035%
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 $70,874 less a $25,000 Homestead Exemption taxable value
of $45,874
2014 PROPERTY TAX ON A RESIDENTIAL
HOME IN EDGEWATER
School Board
2014 TAX BILL Other
$811.30 Taxes
2004 - $1,165.26 $92.55
Difference 11.42%
($353.96)
City of Edgewater (1)
$ 166.38 (20.51%)
SE Volusia Hospital District
St. Johns River Water Management District
Florida Inland Navigation District
East Volusia Mosquito Control
Port Authority
Volusia
County
$176.13
171 710M
$ 83.12
10.24%
0.85
.10%
0.88
.11%
5.32
.66%
2.38
.31%
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 $66,754 less a $50,000 Homestead Exemption. Taxable Value
of $26,944
(1) Operating Millage of $6.50 and $0.0612 for Voted Debt Service Millage
CITY OF EDGEWATER
2004 (FINAL) TOTAL TAXROLL BREAKDOWN - TAXABLE VALUE
INSTITL
INDUSTI
4%
OTHE
0%
TANGIBLE PERSONAL PROPERTY
6%
CE NTR ALLY AS SE S:
0%
AGRICULTURAL
l �%.
",.L
Tangible Personal Propei
6.34%
2012 PRELIMINARY TAX ROLL
TAXABLE VALUE BY PROPERTY CLASS
EDGEWATER
Agricultural
n i F:. Centrally Assessed
al
;titutional
0.4
miscellaneous
0.0446
ROLLED BACK RATE - VS.-
ADOPTED
9.00
8.00 7.85
7.70
7.13
7.00 6.47
6.44 6.36 6'59 6.36 6.5
6.00 5'70 5.90
5.375.20
5.00 4'92
4.00
3.00
2.00
1.00
0.00
2007 2008 2009 2010 2011 2012 2013
Rolled Back Rate
Final Millage
350.00
i
300.00
250.00
200.00
150.00
100.00
50.00
City of Edgewater
Property Taxes Per Capita
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
D Taxes per Capital
16,000,000
14,000,000
12,000,000
10,000,000
2,000,000
City of Edgewater
Tax Analysis
13,934,557 14,136,921
14,356,423 14,107,382
12,207,802 12,197,558
1 1) Fn n aaF
11,956,023
11,032,407
13,194, 640
2014- 2013- 2012- 2011- 2010- 2009- 2008- 2007- 2006- 2005- 2004-
6.50 6.50 6.47 6.59 6.36 5.90 5.20 5.70 6.45 6.45 6.95
ON
Non - Departmental
15%
Beutification
2%
Leisure Services
10%
Streets
3%
Animal Control
1%
General Fund Expenditures
Breakdown FY2014
Fire/ Code
26%
City Council City Clerk
1 %, r2%
,Community Development
Finance 4%
5% Personnel
2%
City Manager
2%
Police
25%
Economic Development
1%
City Attorney
1%
General Fund Expenditures
Breakdown FY2004
Non - Departmental City Council
15% 1/0 �Cit2 lerk
Community Development
Finance 4%
Personnel
5% /- 2%
Beutification
2%
Leisure Services
10%
Streets
3%
Animal Control
1%
Fire / Code
26%
/—City Manager
2%
Police
25%
Economic Development
1%
City Attorney
1%
BUDGETED REVENUE OUTLOOK
• State Share is flat
• Transport increased $280,000
• Ad Valorem increased $155,100 at $6.50
• Franchise Fees /Utility Tax is flat
• Our use of unassigned reserves decreased $1A72J29
• Cost Allocation increased - $145,324
BUDGET EXPENDITURE OUTLOOK
•Compensation -Step Plan $36,950
• Health insurance and other benefits 5% Increase
• City Pension Contributions has not been approved
by all three pension Boards
BUDGET EXPENDITURE OUTLOOK
Compensated Absences at 9/30/12
General Fund
Enterprise
FY 13
FY 14
$ 1,454,403
$650,813
General
$334,988
$425,732
Others
$416,660
$264,239
REQUESTED CAPITAL
Funded Unfunded
Kubota Utility $113245
Kubota Utility $119245
Police Interceptor $34,714
Police Interceptor $343714
Explorer - Fire $34,100
F250 - Leisure Services $21,649
$915918 $555749
GENERAL FUND DEBT
Animal Shelter
F.I.N.D.
Station 55
Fire Rescue 2010
Vehicle Lease 2013
$
355,000
$
337,019
$
690,000
$
127,334
$ 160,583
$1,669,936
Lime Tree Dr. - Mango Tree to 30th St.
(Lake)
S.R. #442 - North Side -Air Park Rd to
Cow Creek
S.R. #442 - South Side - Air Park Rd to
Cow Creek
Hibiscus - S.R. #442 to 30th St.
16th St. - Hibiscus to Mango Tree
Hibiscus Dr. - S.R. #442 to 16th St
Mango Tree Dr. - 16th St. to Park Ave
Mango Tree Dr. - S.R. #442 to 27th St
$ 50,150
$ 129,063
$
129,063
$
129,800
$
30,975
$
17,331
$
95,875
$
94,400
$ 676,671
CING
GENERAL CONSTRUCTION
PROJECTS
*Park Ave 8v Old Mission $ 60,000
•Flagler Ave Sidewalks
*US 1 Sidewalk Design
*US 1 Sidewalk Construction
*Rotary Park Trailhead
*Kennedy Park Seawall
,*Total
-The above amounts are the matching amounts
$ 37,000
$ 39,254
$130,000
$ 75,000
35,000
$376,254
FUNDING STRATEGIES
City of Edgewater
Tax Levy at Various Millage Rates
4,200,000
4,100, 000
4,000,000
Y
t
3,900,000
3,800,000
3,700,000
3,600,000
7.1 6.9 6.7 6.5
BUDGET REDUCTION
CONSIDERATIONS
Modify employee Accrual Cash in
Modify employee health benefits
Furloughs
PILOT / PILOFF
Renegotiate F.I.N.D. debt
Hiring freeze /layoffs
Cuts in service levels
STAFF LEVELS
DEPARTMENTS
BUDGET 03/04
PROPOSED 13/14
Citv Mana er
3
2
City Clerk
2
2
Finance
5.0
9.5
Community Development
3
2
Building
4
3
Personnel
2
2
Police Administration
6
7.5
Police Operations
32
27.5
Fire /Rescue Administration
4.5
4
Fire /Rescue Operations
19
25.5
Community Services
3
2
Animal Control
-
2
Public Works
5
3
Leisure Services Administration
5
5
Leisure Services Operations
10
10
General Fund Total
103.5
107
FUND RESERVES
General Fund Reserves
-Charter 18.2% $2,000,000 (Goal is 17 %)
General Fund Unassigned f Designated
•FY13 Budget $ 1,472,129
-Designated F.I.N.D - $337,018
-Designated City Hall
•$500,000
7,000,000
6,000,000 1 —
• •1• M
3,632,246
4,000,000 3,
3,632,246
3,000,000
2,000,000''`
1,000,000
City of Edgewater
Use of Fund Balance
6,219,068
5,230,103
4,515,489
6,209,694
5,243,485
Reserves
Ad Valorem Proceeds
4,283,690
4,014,168
M MR LIN VI- -_ 1
2014-6.50 2013-6.50 201-1-6.47 2011-6.59 2010-6.36 2009-5.90 2008-5.20 2007-5.70 2006-6.45 2005-6.45 2004-6.95