07-15-2015 - Budget Workshop City of Edgewater 104 N. terL Drive
Edgewater,
,FFL 32132
-,DGEWATER Meeting Minutes
City Council
Michael Ignasiak,Mayor
Christine Power,District 1
Gigi Bennington,District 2
Dan Blazi,District 3
Gary T. Conroy,District 4
Wednesday,July 15,2015 2:00 PM Council Chambers
Budget Workshop
1. CALL TO ORDER
Mayor Ignasiak called the meeting to order at 2:03 pm.
2. ROLLCALL
Present: 4- Councilman Gary Conroy,Councilman Dan Blazi,Councilwoman Christine Power,and
Mayor Mike Ignasiak
Excused: 1- Councilwoman Gigi Bennington
Also Present: 7 -City Manager Tracey Barlow, City Clerk Bonnie Brown,Finance Director John
McKinney,Human Resources Director Donna Looney,Environmental Services Director Brenda
Dewees, Engineer Randy Coslow, Leisure Services Director Jack Corder, Development Services
Director Darren Lear,Police Chief Dave Arcieri,Police Captain Joe Mahoney,Fire Rescue Chief
Steve Cousins, and Fire Rescue Captain Jeff Lariscy.
3. PRESENTATIONS
City Manager Barlow made a staff presentation, stating the purpose of the budget workshop was to
put together the budget for fiscal year (FY) 2015- 2016 He reported that the workshop would
consist of three (3) parts: Part 1 a presentation from Rob Gardner on cost allocations; Part 2 a
presentation on the rate study; Part 3 would be a budget presentation by Finance Director
McKinney, with a question and answer review with staff and that at the end of the workshop he
would look to the Council to determine if they want to conduct, or cancel, the budget workshop
scheduled for August 17, 2015.
Finance Director McKinney provided an overview of the City's development of the "Cost Allocation"
methodology, and introduced Rob Garner,from Public Resources Management Group, Inc. (PRMG).
Mr. Garner, Council and staff discussed.- revenue streams; aligning overhead costs to the function
that internally uses those resources; allocating operational costs to the correct area; the cost
allocation methodology being used by almost all governmental entities, and a comparison to the
previous method used to develop rates for the City's utility systems; evaluating internal services
costs; and the enterprise fund, and evaluating rate revenue sufficiency.
City of Edgewater Page I Printed on 411412016
City Council Meeting Minutes July 15,2015
Mr. Henry Thomas from PRMG discussed areas considered in preparation of the the cost allocation
study, such as: customer growth and maintaining flexibility; operating expenses; capital
improvements and funding; and the affect on rates to maintain compliance with regulatory
requirements.
Mr. Thomas, Council and staff discussed the drivers effecting the sufficiency of rate revenues, by
individual utility system, for: Water, Wastewater, Reclaimed Water, Stormwater, and Refuse Systems;
the long-term sustainability of utility systems and rates; maintaining rates at a level to allow for
future capital improvements; and maintaining compliance with regulatory requirements. During his
presentation they reviewed and discussed projected utility revenue requirements; the results of each
of the City's utilities five (S) year financial forecast; and a comparison of Edgewater's utility systems
rates with other cities.
During the Refuse system presentation, City Manager Barlow asked for Council consensus for staff
to go out, after the budget process, going into the following year, and submit a "request for
qualifications (RFQ) for a consultant to do a refuse rate efficiency study. The Council and staff
discussed Edgewater's excellent level of refuse service; resident's needs and desires; current refuse
rates; the difference between a cost analysis, and a customer oriented rate study; and a study
needing to focus on maintaining a high level of service for Edgewater residents.
After discussion, the Council concurred for staff to submit a RFQ for a consultant to conduct a refuse
efficiency study.
At the conclusion of the presentation, Council and staff discussed: the existing rates for all systems
being insufficient to cover projected revenue requirements, and recommending a five (S) year rate
increase plan for all utility systems; proposed rate adjustments to be applied uniformly to all user
rates, by system; the financial risk of not adjusting rates; and user rates possibly having to be even
higher in the future if rate increases are not considered now.
Mayor Ignasiak called a meeting recess at 3:10 p.in.
3. PRESENTATIONS (Cont')
Mayor Ignasiak called the meeting to order at 3:18 p.m.
City Manager Barlow stated: Finance Director McKinney would provide a comprehensive and more
detailed, but broad budget overview, walking through some of the major budget highlights, however,
not going line item by line item as was done in the past; that staff directors were here to answer any
specific questions about the budget, or a particular department's budget request that Council may
have; that this year's budget theme is "Be Patient, and Stay the Course"; discussed prior and current
budgets, and staying the course; keeping the millage rate at 6.7 mils, not the roll-back rate, which
would technically be a tax rate increase; the positive effects of the increases in annexations, and new
construction; keeping a balance; a projected drop in residential construction; and stated that
although there are some economic improvement indicators, he recommends not getting ahead of
ourselves as it relates to developing the budget.
City of Edgewater Page 2 Printed on 411412016
City Council Meeting Minutes July 15,2015
Mr. McKinney made a presentation, providing an overall review of the FY 2015- 2016 budget,
stating the proposed budget presented to Council is a little over$44 million dollars.
During his presentation, Council and staff discussed. the overall City wide total budget of
$44,424,971; Capital Outlay budget of $1,063,891; Capital Improvement plan of $6,947,756,
salaries & benefits, which includes a proposed 3% raise for all employees, funding the 2nd year of
the City's 3 year step plan for directors and deputy directors, a 6.5% increase in the City's fully
insured health Insurance benefits, an analysis of the 3% raise and health insurance costs; and the
effects of the affordable care act on health care plans and rates.
Also discussed: City wide debt of $23,017,790, and a comparison of the 2004 City wide debt of
$47,930,487; the general fund proposed budget is based on a millage rate of $6.70 per $1,0000J
taxable value; water and sewer rates and the annual review process; monthly rates for refuse of
$24.61, and storm water of $9.00, neither of which have had a rate change since 2009, and both just
had their first rate study conducted since 2002; a comparison of the 2004 budget to the current
budget, and the effect of increased costs of benefit changes on the budget; and employee count and
budget.
Mr. McKinney stated that the overall driving goal of the budget workshop is to discuss what the
City's maximum millage will be set at to be in compliance with the TRIM notice (Truth in Millage), in
accordance with Florida Statute 200.065; staff being able to declare the budget to be "balanced" at
6.70 mils; and that staffs recommendation for Monday, July 20, 2015 Council meeting is for Council
to set the millage rate at 6.70 mils.
The Council and staff discussed the various budget items under the general fund budget categories
of. Mayor & Council; General Administration; Community Public Safety; Public Works; Leisure and
Recreation; the general fund revenues, an analysis of the general fund; not having to heavily rely on
the fund balance; roll-back versus final millage; tax roll net change; Edgewater's taxable value;
2015 taxable value by property class, and property tax exemptions; median sale prices of around
$125,000; 6.70 mil rate and the effect on Edgewater's taxes; 2015 Property Tax; an average 2016
total tax bill, including other taxes, and the school board taxes of $2,025.35, which is an average
increase of $88.19 over last year, of which only $23.85 of the increase goes to Edgewater (less than
$2.00 per month); a review of historical property taxes, and of the use of fund balance; and general
fund key revenue drivers.
Also discussed: the general fund expenditures, and expense drivers, such as: number of personnel in
the police department, meeting residents needs, filling one (1) vacancy in the police department, and
possible mid-year additions to the police department being at the top of the list; special revenue
funds; capital outlay projects; total debt service; the general fund reserve being in compliance with
the City Charter; and the designated general fund reserve.
The Council and staff discussed. sources of special revenue funds; using a portion of the Fire Impact
Fee revenue to purchase a confined space communication system; the projected total available first
year allocation from Edgewater's Community Redevelopment Agency (CRA) of a little under
$12,500; the Series 2005Animal Shelter (205), General Obligation Debt, with a debt service
required millage rate of $0.0486 to cover the total debt service of $32,112; for discussion going
City of Edgewater Page 3 Printed on 411412016
City Council Meeting Minutes July 15,2015
forward, staff is recommending a voter approved, general obligation Series 2016 Parks (205) debt
for parks improvements; staff not having the opportunity to determine the total amount required for
parks enhancements and improvements yet; the amount required needing to be determined within the
next couple of months to be able to have the issue go before the voters by March 15, 2016, which
means the language for the ballot needs to be to the Volusia County Supervisor of Elections by
mid-December; and staff having the parks enhancements topic ready to be presented to Council by
August.
Also discussed.- the general construction fund revenue sources, and expenditures; enterprise fund
revenue sources; drivers that effect the enterprise fund,- impact fees; fund 444 renewal and
replacement fund,- water and sewer rate stabilization, and prior year carry forward,- revenues for
fund 447, which shows a reduction from prior years; operating expenditures; storm water having
roughly a $166,000 increase in charges for service, and reduction in prior year revenues; a total
storm water debt service of $756,000; storm water capital is supported by rates, with a transfer from
storm water operating; Park Avenue improvements, and possible grant funds to help offset some of
the costs; the public works complex is on the horizon for year 2020, and planning ahead; internal
services, and segregating costs out into each area for ease of discussion, and visibility; factors
outside your control, fully Insured health Insurance accounting for almost half of the internal
services budget, and costs containment; being compliant with the City's purchasing policy, and the
501 IT budget, and upgrading the City's camera system; fund 502 annual fuel upgrade; and various
insurance costs increases and decreases.
In conclusion, Mr. McKinney stated that: the proposed budget is based on a general fund of $6.70
millage, operating on a taxable value of $699,244,442; although the 6.7 mils is the same millage rate
as last year, it is a slight increase due to increased property value; the proposed budget will allow
the City to fund upcoming, and much needed projects, some of which have been put off for years; the
City will be required to have a $0.0486 Millage on voter debt service, which is a voter approved
General Obligation debt; the total City wide budget is $44,424,971; and that the proposed budget is
a balanced, City wide budget, with a total debt service of$23,017,790.
Mr. McKinney also stated that the overall goal of the budget workshop is to consider the following
staff recommendations of setting a maximum millage rate (TRIM) of $6.70; and the implementation
of PRMG's recommended five (5) year rate increase. He discussed upcoming scheduled budget
workshops and public hearing dates of. the Budget Workshop on August 17th 4 p.m.; the first Public
Hearing on September 14th at 6 p.m.; and the second Public Hearing on September 28th at 6 p.m..
Council and staff discussed: the proposed millage rate, and the overall tax rate increase of $93.95 a
year, or $ 7.83 a month, to the average tax payer; including additional fees and services; not
reviewing some rates and fees for the last 14 years, and establishing a set length of time to review all
of the City's rates and fees across the board,- past rate study reviews of the City's various service
rates; costs to conduct "out of house" rate studies and the benefit to the City; efficiency studies, and
the City doing a "smoothing effect" rate increase implementation; how a rate of $6.65 mils would
effect the budget; the carry over of $250,000 being a revenue to adjust the budget; the reserve fund,-
the City's taxable value according to the Volusia County Property Appraiser; and staff having a plan
to be ready to discuss where services would need to be cut if a lower than $6.70 millage rate was
implemented.
City of Edgewater Page 4 Printed on 411412016
City Council Meeting Minutes July 15,2015
4. ADJOURN
There being no further business to discuss, Mayor Ignasiak adjourned the meeting at 4:56 p.m.
After discussion, the Council concurred to cancel the August 17, 2015 budget workshop.
Minutes submitted by:
Mitch Honaker
Deputy City Clerk
City of Edgewater Page 5 Printed on 411412016