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08-26-1998 - Workshop CITY COUNCIL OF EDGEWATER WORKSHOP AUGUST 26, 1998 6:00 P.M. COMMUNITY CENTER MINUTES CALL TO ORDER Mayor Allman called the Workshop to order at 6: 04 p.m. in the Community Center. ROLL CALL Mayor Randy Allman Present Councilman James Gornto Present Councilman Myron Hammond Present Councilman Gary Roberts Present Councilwoman Judith Lichter Present City Attorney Nikki Clayton Present Interim City Manager Kenneth Hooper Present City Clerk Susan Wadsworth Present Police Chief Lawrence Schumaker Present MEETING PURPOSE The purpose of the workshop was to discuss the City Attorney' s report in regard to pending matters, outside legal fees, self-insurance program, purchasing regulations, personnel policies and procedures and City debt summary. City Attorney Clayton proposed the kind of information being presented to Council tonight is going to be something that should be presented to the Council while it is current. She would make every effort to give them current information and updates . She felt this would give the Council information for decision making, direction, guidance and policy discussion. Pending Matters City Attorney Clayton identified that as of September 30, 1997 there were 9 Open Lawsuits . As of July 13, 1998 there were 5 Open Lawsuits and 8 Closed Lawsuits . She identified the 5 Open Lawsuits as Belz v. City; McMahon v. City; News Journal v. City; UTE, Edward Keenan, et al v. City and Associates of Meadow Lake, Inc v. City. She further provided the status of these pending matters by referring to City Attorney Memos 98-098, 98-095, 98-097, 98-096 and Temporary Physical Takings with regard to the Associates of Meadow Lake lawsuit. 1 Council Workshop August 26, 1998 With regard to the McMahon v. City case, Councilwoman Lichter asked when they filed the Motion of Summary Judgment. City Attorney Clayton informed her sometime at the beginning of August. She agreed to get her the exact date as she did not have that handy. With regard to the News Journal v. City case, the City had filed a Motion for Summary Judgment, which had been scheduled for hearing on September 24th at 2 : 00 p.m. in front of Judge Monaco. The News Journal noticed Mr. Perry Barrett and Kevin Grace for deposition on September 18th. With regard to the UTE v. City case, Councilwoman Lichter asked what would happen first to expedite the matter. City Attorney Clayton informed her the Council had to accept the recommendation, which they wouldn' t be doing tonight. She recommended they unilaterally dismiss, jointly stipulate the matter was over and go in and say there was no Motion for Attorney' s Fees on either side. She further identified why a complex matter like this deserved an effort above and beyond what the Council went to at that time. Councilwoman Lichter asked if this matter would be brought up for a vote at their next Regular Meeting and if the recommendation would include that both sides would put an end to it. City Attorney Clayton informed her if they heard that Council would like to provide answers to the questions they outlined in their pleadings in the court case, they might be willing to bury the hatchet. Interim City Manager Hooper informed Councilwoman Lichter it would be on their next agenda. With regard to the Associates of Meadow Lake Inc. v. City, City Attorney Clayton spoke of there being an awful lot of discussion about her relationship with Mr. Perry Barrett. She only had a friendship with Perry Barrett and represented him as an Attorney at one point in time. Interim City Manager Hooper spoke of there being some correspondence with regard to Council directing Mr. Grace to work with Mr. Barrett to work out some type of settlement. Mr. Barrett had written an offer for settlement, which he forwarded to the Attorney, Donna McIntosh, who was representing the City on this matter. That would also be on the next agenda. He then spoke of this getting more complicated because the offer to settle included a number of civil rights alleged violations. Donna McIntosh reviewed that and stated that was not her area of law and asked that the City get an opinion from its insurer, which they had done. City Attorney Clayton then commented on the Survey of Services by the City Attorney. She referred to the memo dated November 19, 1997 regarding Outsourcing of City Attorney Function. 2 Council Workshop August 26, 1998 Councilwoman Lichter expressed her appreciation to City Attorney Clayton for putting this together because she asked for this yesterday or the day before. Councilwoman Lichter identified when they did the budget workshop it appeared they had gone over in legal fees from what last time' s Council proposed. She still wasn' t sure where they picked up the $83, 000 it seemed like they were short in legal . Interim City Manager Hooper identified in the current budget year those fees were over because of severance and benefits that had been paid in there for a period of time. Councilwoman Lichter asked if the severance with the City Attorney accounted for the $83, 000 they had to put back in there for last year. Interim City Manager Hooper identified it also included benefits she had accrued such as vacation time, sick time and insurance as well as the severance package. Councilwoman Lichter stated it wouldn' t have to do with any attorney fees in terms of suits because insurance was covering that. Interim City Manager Hooper informed her for the most part they were. City Attorney Clayton informed Council there were no items budgeted for outside professional fees in last year' s budget. City Attorney Clayton then referred to City Attorney Memo 98-084 and commented on the 3 Year Comparison - Outside Legal Fees . Councilman Hammond expressed concern with the News Journal lawsuit and the lawyers all being tied into the same thing and this being dragged on which could financially hurt the City if the City was to protest it. City Attorney Clayton explained if you have a lawsuit and you have the facts, you pound the facts. If you have the law, you pound the law and if you don' t have either you pound the table. She felt they knew pretty well who had been pounding the table around here. Councilman Roberts mentioned recouping attorney fees on the News Journal case as well as the McMahon case which were part of the $51, 000 in legal fees for FY 97/98 . City Attorney Clayton explained the McMahon case was something in which the insurance that was carried with a commercial carrier was paying the defense so they would recoup the money, not the City directly. She also identified their experience rating should benefit them in the future premiums being charged. Past experience is what is used in large part to calculate future premiums or reserves. Councilman Roberts clarified that the prior Council when they did the budget did not allocate any money in their budget for outsourcing of legal fees . City Attorney Clayton informed him that was correct. 3 Council Workshop August 26, 1998 Councilman Roberts felt this was odd since the fiscal year before that they spent nearly $86, 000 and $198, 000 the year before that. City Attorney Clayton then commented on the Self-Insurance Program and referred to City Attorney Memo 98-092 . She also referred to the chart that was attached to the memo. City Attorney Clayton suggested they do away with the ordinance and handle this in a professional way so the City knew what protection it needed and how to get it from the insurance industry or do it itself. She suggested they get the reports in front of the City Council so they knew what the status was of their exposure and what they needed to be protected from as they had not had that for the last ten years . Councilman Roberts stated over a ten year period they took $1 million that was in a fund strictly for insurance that had been shuffled around and somehow disappeared, which violated the ordinance where it said the money was only supposed to be used for the Self Insurance Fund. He asked through whose authorization it was shuffled around. City Attorney Clayton wasn' t able to find any records that identified that. The city was paying big City prices for no price at all because it did not appear that the people who prepared the memo to the City Council on the Self Insurance Program had any concept of the basic vocabulary of insurance or the requirements of insurance. They suggested that since the thing had disappeared that they needed to fund it back up to $750, 000 although no actuary had been consulted. Councilwoman Lichter questioned when the ordinance went into effect. City Attorney Clayton informed her 1986. Councilwoman Lichter identified there were several City Councils involved since 1986 in something they don' t understand. Councilman Roberts pointed out the money had been going down since 1992 . He expressed concern with where $1 million disappeared to without the public knowing. City Attorney Clayton felt a consultant would tell them that what was likely to have happened was there was no reserving done and so they just had some money they used to deduct from every time they had an insurance premium or claim to pay. But they had never done the work necessary to investigate, evaluate and reserve those claims so they knew from one year to the next based on prior experience what to put in the fund again. Interim City Manager Hooper identified the money was not lost money. There was some cash in the Self Insurance Fund now but he had recommended and received concurrence from Council that they phase it out. He further commented on the General Fund Unrestricted Reserves . Councilwoman Lichter spoke of the auditors coming in every year and questioned how they overlooked a matter like this. Interim City Manager Hooper identified their job was not to go back and see if they have an ordinance that says there is a Self Insurance Fund. Their job 4 Council Workshop August 26, 1998 was to look and see that they have accounted for it, if they tracked it and if they had the proper balance. George Ewing wanted to know who the agent was that was involved in this . City Attorney Clayton informed him there was no agent. It was a curious situation. It was something that could be and should be fixed. They needed to get the City in a position where it was protected appropriately, had its needs assessed and the proper reserves set aside. Councilman Roberts expressed concern with City ordinances stipulating where money could go and where it could be spent and it sounded like they were violating those ordinances and just shuffling the money around without notifying the citizens or having public hearings about it. City Attorney Clayton informed him this was established as a trust fund by the ordinance but was never handled like that. City Attorney Clayton further identified the purchase of insurance was something that should have been done pursuant to the purchasing regulations . It was never advertised, competitively bid or proposals received and no needs assessment was ever done. City Attorney Clayton then answered questions presented by Councilman Gornto with regard to the way the trust fund was set up and if it appeared on the annual approved budget as a line item each year for claims . Interim City Manager Hooper identified he had looked at the last two years and they didn' t have a line item. Councilman Gornto confirmed column 4 had no effect on the budget and further explained by paying premiums out of a trust fund it was a non-budgeted item and was like taking it out of the unreserved funds and therefore they could keep the millage down. City Attorney Clayton and Interim City Manager Hooper confirmed that was correct. Councilwoman Lichter asked how they straighten it out. Interim City Manager Hooper informed her they were straightening it out by deleting the program of Self Insurance. The ordinance would need to be repealed. He further explained they had another year or year and a half of premiums that were contained in that balance in the trust fund. Interim City Manager Hooper informed Council there was $250, 000 in the trust fund right now. Councilman Gornto confirmed with Interim City Manager Hooper that the budget would jump $250, 000 the following year when there was no more money left in the trust fund. City Attorney Clayton then commented on the recapitulation that they maintained in the office of the Self Insurance Claims that were incurred and reported from FY 96/97 & FY 97/98 . 5 Council Workshop August 26, 1998 City Attorney Clayton then referred to City Attorney Memo 98-100 and commented on the Purchasing Regulations with regard to Resolution 96- R-08 that was adopted on April 15, 1996. Councilman Hammond asked about the $88, 000 in computer hardware was to help bring them up to the year 2000. City Attorney Clayton identified it was a portion and that it shouldn' t cost $88, 000 to fix the year 2000 problem. She didn' t think that was the exclusive reason. Councilman Roberts asked if the $88, 000 was a competitive bid. City Attorney Clayton informed him no. Councilman Roberts further commented on why he felt that was a problem. Councilman Roberts then expressed concern with banking and auditing services that had not been put out for bid for many years . The old Administration was using the same firms and not trying to get a better deal for the City. City Attorney Clayton thought Council had established they believed competition was a good thing. She thought the competition could be enhanced if they improve the requirements that govern it. Councilman Gornto asked if the auditors when they come in do not test purchasing of large items against the procedures that should be followed by law to determine if that purchase was done correctly. Interim City Manager Hooper identified the items an auditor would test and further explained there was very limited checking with that. Councilman Gornto felt they needed to have a talk with the auditors . Interim City Manager Hooper informed him part of it was not having a purchasing system. The only area he could say the City had done properly was the Department Heads were purchasing cars off of State contract. The others had a cutoff that the City Manager was authorized to make purchases up to a certain amount. Department Heads up to a certain value could get quotes but it stopped at that point. Those quotes should be gathered and looked at and held in records in case someone wanted to do an appeal . Zero of that was being followed. He also commented on there being some things that were being done that had resulted in other problems with purchasing. City Attorney Clayton informed Council that she and Interim City Manager Hooper wanted to present together the Personnel Policies and Procedures in so far as the status of Department Heads was concerned. City Attorney Clayton then elaborated on City Attorney Memo 98-094 . Interim City Manager Hooper further commented on establishing Department Heads as "At Will" Employees with no access to disciplinary action and grievance procedures . He suggested they leave things as is for the current Department Heads. As they hire new Department Heads, they would bring them into a system where they would have a contract. 6 Council Workshop August 26, 1998 Interim City Manager Hooper informed Council they had seen the first part of the reorganization in Public Works . He intended to carry that further and he was going to have some redesignation of what now is called a Manager. He wasn' t sure how that was different than a Department Head but they do the same duties and have the same responsibilities and under a reasonable form of government they should be accountable to the same level. They would see him propose to change some of those in the fairly near future. Interim City Manager Hooper had a lively but fair debate on what he described as the outcome that all of the Department Heads could agree to, that as status quo they were there. They understand there is kind of a limbo as to whether they are an "at will" employee or have some rights . He didn' t think he knew that answer but just assumed leave it as is and continue with the relationship they have right now and as each new hire is brought on then they would enter into a contract. Councilwoman Lichter questioned how they balance the civil rights she felt employees had with being able to get fired. City Attorney Clayton explained the employees have their property rights and the due process would guarantee them freedom from violation of their property rights without due process . Everybody has civil rights to be free from discrimination based on the improper categories of age, sex and so forth. The difficulty was in trying to get the right mix of carrot and stick in managing an organization. The right combination of carrot and stick was to be sure they had an environment of fairness and of lawfulness and that they also have a certain stick in the hand of the Manager who if he loses confidence ought to be able to relieve people without having to have cause. The whole idea of this was to give some protection to Department Heads who it was not clear now in the policy whether they have protection as rank and file and if they had to be fired only for cause or could they be relieved without cause. If they were relieved without cause what protection do they get in terms of severance or anything else that protects them from the whim. Currently they were fully entitled to all of the civil rights that any person would be entitled to. There was an argument to be made that if they grant their boss the right to terminate them without cause in exchange for money, they concede the right to argue that the termination was done for those reasons of age, sex, color or religion. Interim City Manager Hooper further spoke of the Council having control over the City Manager and the City Manager having control over the Department Heads. Councilwoman Lichter asked what the Florida League of Cities position was and what kind of stance they take. Interim City Manager Hooper identified what they described was typical in all modern cities and counties. 7 Council Workshop August 26, 1998 There was a brief discussion regarding transitioning gradually instead of doing it all at once with regard to the current and future Department Heads . Councilman Roberts identified Council had to answer to the public. The City Manager had to answer to the Council . He felt the Department Heads should have to answer to the City Manager and the public. He felt the "at will" suggestion for the future of the City was important and that they should go that way. City Attorney Clayton stated in exchange for some kind of fairness and protection. Councilman Roberts felt Department Heads had a serious effect on the citizens depending on which department they ran and should be held accountable for their actions and the way they run their department. Councilman Hammond felt not only the citizens but the employees under them also. Councilwoman Lichter questioned how "at will" was any different than what they had now. As long as she has lived here, the City Manager has had the prerogative of firing the Department Heads or reorganizing. Interim City Manager Hooper informed her it probably wasn' t much different. The problem was it needed to be made clearer for everybody and needed to be defined in the Personnel Procedures and Rules as it was not black and it was not white. Councilwoman Lichter identified they had a Personnel Director now. She wanted to see how that position factored into the decision with regard to the role the Personnel Director played. She felt it should somehow fit in to what they were doing. Interim City Manager Hooper explained they currently did that. Personnel Director Debby Sigler was the keeper of the rules and made sure what they did was consistent and uniform. That was one of the positions he was going to recommend Council make a Department Head level. Mayor Allman called a ten-minute recess at this time. City Attorney Clayton then commented on the chart that summarized the City debt and the chart that summarized the value of new construction. City Attorney Clayton compared the number of Single Family permits in 1997 to 1988 and spoke of having a trend which was extremely disturbing with regard to the City being stagnant. They had never regained the momentum that existed in 1988 and 1989. In 1998 there were some encouraging signs . In commercial permits, they hit an all time high of 28 permits issued in the first seven months of the year. She thought it was time for the City to recognize that the value of its infrastructure was in its use and couldn' t lie idle. If they had invested the money for that capacity and had nobody to use it, it falls back on the existing users and that was the debt load of $72 million that they had outstanding. 8 Council Workshop August 26, 1998 City Attorney Clayton spoke of not having real good regulations which were clear that encouraged the right kind of development and discouraged the wrong kind of development, which they were struggling with. Council had authorized Ms. Plaskett to go out and get help to fix the development regulations and bring the Comprehensive Plan into compliance with the DCA. She further explained the City could not afford not to have growth. Councilwoman Lichter asked when Florida Shores got built. City Attorney Clayton identified Florida Shores was 9, 600 units of which 3, 400 or 3, 500 units remained to be built. It did not happen all at once and it happened before 1988 . Councilwoman Lichter felt commercial was more important to emphasize than residential in terms of trying to spread out evenly the tax base. She felt there were other things that needed to be factored in such as interest rates . Councilman Hammond stated when you have money and you are a builder and you are going to go into a city where it takes a long time to get something done why would you even go there. There are a lot of people that don' t want to come here because of that. Councilman Roberts further commented on there always being a lot of factors with development. He felt the people that were running the Building & Zoning Department were chasing people off and deterring commercial development that could strengthen the tax base. The new people now overseeing those departments were doing a wonderful job and were getting things done in a timely manner. They also had good friendly relations with the developers and builders because they treat them with respect which he felt brought investment into the community. Councilman Roberts then spoke of wanting to see more investment on U.S. #1 . He felt they had to encourage growth since they had the infrastructure and that they should pursue the same avenue they were going to bring good clean development and money into the community. Interim City Manager Hooper identified they wanted as much commercial as they could get to come in but they had an awful lot of water lines and sewer lines to Florida Shores. That was the area they wanted to establish since it was paid for and the roads, the drainage, water and sewer were already in place. Councilwoman Lichter spoke of the infrastructure was not put in unhappily as the project developed and came about after the fact which was a great drain financially on the City. Interim City Manager Hooper spoke of encouraging the infill of those areas and expanding the commercial base wherever they could. 9 Council Workshop August 26, 1998 Interim City Manager Hooper pointed out Edgewater was the only city in Central Florida that he knew of that had a decrease in their assessed values last year. There was further discussion regarding the need for orderly growth and development to broaden the tax base. Interim City Manager Hooper spoke of wanting the land development codes updated so when growth occurred it occurred in an orderly fashion. Councilman Roberts felt if they had good commercial investments in the community the tax rate may have been kept down. Prior administration tended to stifle growth in commercial. They have so much commercial property that could be developed that would help lower the tax rate and make it easier on the citizens in Edgewater. He hoped to lower the millage rate this year. Interim City Manager Hooper felt this Council or any Council in the past had this kind of information or access to that put in front of them and had a good discussion. He felt it was astounding that they wouldn' t budget capital. Last year' s budget didn' t have a fire station in it but they had a fire station site. In the past they haven' t budgeted capital replacements . They had some different approaches to it. He felt having the information in front of them and educating the Council made them able to make informed decisions and better choices . Interim City Manager Hooper suggested Mayor Allman see if the citizens had any questions . Mayor Allman informed the audience if anybody wanted to speak the podium was open. The following citizens spoke: Henry Dardinski, 2704 Sabal Palm Drive, suggested with long range planning that they work on getting a causeway built over to the beachside on Indian River Boulevard and extending Indian River Boulevard out to SR 415. He wanted to see Edgewater on the map. The maps put out by the State of Florida don' t have SR 442 on them. Interim City Manager Hooper spoke of having a meeting with an attorney that represented the Miami Corporation to dedicate right-of-way for a major road that went from SR 442 to SR 415. Mayor Allman identified yesterday at the MPO meeting it was brought up and they were looking at possibly extending SR 442 out to SR 415. 10 Council Workshop August 26, 1998 Councilwoman Lichter mentioned a bridge over to the ocean on SR 442 being looked into before. She felt to have ocean access would help Edgewater. Interim City Manager Hooper identified that as being a long term process . The way they would accomplish that would be to grow. Edgewater had to grow and make it so there was a reason to have a causeway to the ocean. Environmentally they could do it but it was a matter of creating a need. Dick Martinez, 317 Schooner Avenue, wanted to applaud what he saw in the report tonight that looked very professional. He was glad to see them. Mr. Martinez further commented on the City dropping the UTE suit. He was very surprised when the City brought that suit against the UTE. He couldn' t say it was unprecedented but it certainly wasn' t the type of thing a city does with a dissident group of its residents . He felt it was time to start bringing people together in this city. Mr. Martinez then commented on the purchasing policy. After what he heard tonight it really needed improvement. He couldn' t believe they didn' t have a capital spending program. With regard to the chart that summarized the value of new construction, Mr. Martinez pointed out of his personal observation of some of the numbers of previous years didn' t jive with what he had seen in Edgewater Landing. Mr. Martinez thanked the Council for getting the public involved early in some of the issues . Doris Hill, Lincoln Road, reminded Council they were talking about the lack of growth in the last several years . She felt they lost sight of the fact that when they were putting in all the infrastructure there wasn' t any building going on. When the current Council took office the infrastructure was all in but they still had to pay for it. She felt the previous Council had a lot of courage to take that on. Those roads had to be built and the water and sewer had to be put in. The whole real estate industry was at a low not only here but in other areas . Now it was booming. She just came back from the northeast and building was booming up there. She hoped the current Council wasn' t going to take all of the credit because it was the people of the City that had the courage to put in the infrastructure. Interim City Manager Hooper informed Council they had to change the second meeting for the budget. The September 22nd date wasn' t doable. He asked if September 23rd was doable. Mayor Allman informed him he couldn' t do it as it was his 21st wedding anniversary. Interim City Manager Hooper then asked about September 24th. They had to make sure the second meeting didn' t conflict with the County' s or the School Board' s budget meetings. 11 Council Workshop August 26, 1998 It was the consensus of Council to hold the second meeting for the budget on September 24t'' at 7 p.m. The first public hearing on the budget would be held on September 10th Councilman Roberts asked how they were doing on signs for the parks . Interim City Manager Hooper informed him they would be put up. ADJOURNMENT There being no further business to discuss, Councilman Roberts moved to adjourn. The meeting adjourned at 8 : 00 p.m. Minutes submitted by: Lisa Bloomer, CMC 12 Council Workshop August 26, 1998