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09-16-2002 - Special . ~ u u " CITY COUNCIL OF EDGEWATER SPECIAL MEETING SEPTEMBER 16, 2002 7:00 P.M. COMMUNITY CENTER MINUTES CALL TO ORDER Mayor Schmidt called the Special Meeting to order at 7:08 p.m. in the Community Center. ROLL CALL Mayor Donald Schmidt Councilman James Brown Councilman Dennis Vincenzi Councilwoman Harriet Rhodes Councilwoman Judith Lichter City Manager Kenneth Hooper City Clerk Susan Wadsworth Legal Assistant Robin Matusick Present Present Present Present Present Present Present Present MEETING PURPOSE The purpose of the meeting was to hold public hearings (2nd Readings) on Ord. 2002-0-13, amending the City Budget for the Fiscal Year ending September 30, 2002; Ord. No. 2002-0-14, adopting final millage rate of 6.95 mills per $1,000 of assessed taxable value and Ord. No. 2002-0-15, adopting final budget for fiscal year 2002/03. City Manager Hooper made a staff presentation regarding the reasons for a budget increase. (Attached) City Manager Hooper then went over the changes made to the budget since the first public hearing with regard to revenues and expenditures. (Attached) City Manager Hooper strongly recommended the tax rate be 6.95 mills. He further commented on Enterprise Funds. Councilwoman Lichter asked about the corridor and taking out the money for the planning of SR 442. She asked if that was in terms of the media getting a landscape architect to make the entranceway. She feels this could be postponed until closer to the completion of the project. u u / . city Manager Hooper explained it was an analysis of what kind of setbacks and landscaping to preserve and maximize the use and make it into a corridor, such as Dunlawton Avenue in Port Orange. He further commented on the $100,000 the city will be getting from DOT for median improvements and upgrades. DOT has indicated there is more grant money out there available for that. The city will be seeking those. Councilwoman Lichter asked if the Truck Center is involved in any kind of beautification. City Manager Hooper stated not really. Councilwoman Lichter questioned an agreement with him to have him do something with his property. City Manager Hooper stated there is an agreement with him that he complies with all of our Codes no later than the time that all the improvements are out there, which means fencing and setbacks. The City is working with him and he has made some improvements but the balance needs to match the time of the completion of SR 442. Councilman Vincenzi asked where the money comes from for the Capital Improvements fund. City Manager Hooper informed him there are different ones. Enterprise Funds have their own capital improvement funds. The General Fund projects come out of the General Fund and you can have others that are coming out of impact fees. Councilman Vincenzi asked about the realignment of Airpark Road, the computer hardware/software and the FIND improvements. City Manager Hooper commented on the FIND improvements coming from what we have borrowed to put in Phase II of FIND. This comes from a bank loan. OSSI computer is the Consolidated Dispatch that the three cities have entered into, which was also a bank loan. Councilwoman Lichter asked about there being a grant for the realignment of Airpark Road. City Manager Hooper stated there is a grant for $155,000 which the City is getting. The total job is about $600,000. The City has borrowed the difference. The grant added to it gets the money to do the road improvement and then the County is reimbursing the right-of-way and construction costs. As new construction comes into this whole district inside the City we will keep these road impact fees to pay the balance off. If we don't have the County's agreement to do it, then the project doesn't get built. Page -2- Council Special Meeting September 16, 2002 u u Councilman Vincenzi asked about not having an agreement with the County right now. City Manager Hooper explained we have a draft agreement sent to them. Their attorney has reviewed it. It has been through the entire process short of going to the County Council. Councilwoman Lichter stated so we will not proceed with that unless we have it firmly established that we are getting that money. City Manager Hooper informed her that is correct. Councilman Vincenzi asked when we get the money. City Manager Hooper explained the process. Councilman Vincenzi expressed concern with the City laying out some money to do the job and questioned being able to put this project off. There was further discussion regarding having a line of credit and if the City had to borrow money it could. City Manager Hooper stated they talked of that and the bank offered that but the interest rates were so low we were able to get the money and invest it and even earn some of that investment. City Manager Hooper spoke of options if this road can't be built and prepaying back a portion of the money. Councilman Vincenzi feels when times are tight like they are now possibly it should be a project to put off. City Manager Hooper feels they couldn't do that and get the savings the City is wanting to. Mayor Schmidt questioned this jeopardizing the $155,000 grant. City Manager Hooper stated it would wipe it out. Legal Assistant Matusick read Ord. 2002-0-13, 2002-0-14, and 2002-0-15 into the record. Mayor Schmidt opened the public hearing. Anton Heeb, 616 N. Riverside Drive, member, Planning & Zoning Board, commented on the request made by the Planning and Zoning Board. It is his understanding that the $60,000 appropriated for the planning for the SR 442 corridor also includes the Park Avenue corridor. City Manager Hooper informed him it is just SR 442. Mr. Heeb stated they understand we have a serious problem about funding but they also feel the SR 442 corridor will probably open up to a lot of development. He suggested putting a moratorium on building until SR 442 is finished. Page -3- Council Special Meeting September 16, 2002 u u Mr. Heeb requested Council give this some consideration and possibly enact something so they can slow down. All they want to do is see that it is managed properly. City Manager Hooper stated he is hoping to come back in six months and go over this again. One of the top priorities he hated to cut out was this. He feels it would be a wise choice to do a moratorium but he feels it is premature to discuss tonight. He suggested reviewing this during the mid-year budget review. He mentioned phasing into that. City Manager Hooper commented on gathering corridor studies from Port Orange, Ormond and Lake Mary to see what they have done. He spoke of trying to develop something ourselves and work with some volunteers from the Planning and Zoning Board. He feels we are at least a year from SR 442 being completed. Activity is very hot. There are people coming in two or three times a day talking of parcels along SR 442 and what they can do. Councilman Vincenzi feels Mr. Heeb had a valid point and he agreed with him. Robert Pogg, 2925 Yule Tree Drive, feels the corridor is down the road and what they need to think about is today. He feels nobody really cares anymore in Edgewater. He stated a couple of his neighbors don't vote anymore because they are disgusted. He spoke of taxes going up. He commended the Council for not increasing taxes in the past as much as they have increased this year. He feels after 9/11 the Council should have put the breaks on on spending and to start cutting. He then spoke about most of the people in Edgewater being on a fixed income. He spoke about City trucks riding around all day long wasting gas. He spoke about cruisers hiding under trees on 35th street. He feels the department heads should get out and look at what their people are doing because there is a lot of wasted money. He feels we should keep Edgewater a small town. Myron Hammond, 1821 Royal Palm Drive, also commented on a lot of people being on a fixed income. He spoke about the businesses having a rough time also. He commented on worker's compensation and insurance increasing drastically. A lot of people have asked him about the pensions and they want to be explained when the stock market goes down the City has to match what portion to bring it back up. Page -4- Council Special Meeting September 16, 2002 u u city Manager Hooper explained each fund is independent. He spoke about the actuarial the City receives every year which is a study that says it went down 8% and the City has to make that up. This varies year to year depending how the investments went. In years past it has been a small amount. This year it is a much larger amount. He further commented on the City having two General Fund type pension plans. The City's total increase for all funds across the board is about $250,000. He further commented on Edgewater growing by leaps and bounds. He feels we have to have controlled growth. He hates to see taxes go up but he understands. Bill Fischer, 2825 Sabal Palm Drive, asked about the money going into the stock market for the employees. He retired six years ago and has lost a lot of money. Nobody is going to replace his and he wondered why the City has to make it all up in one year. City Manager Hooper explained it is not made up in one year. It is each year you get an invoice that says to keep your pension plan solvent so that at the time anybody retires that there is enough money to pay for their retirement. This year it went down. They are not making up for a shortfall from years before. This is only what has occurred in this last twelve months. He feels the City is taking extra from him that he doesn't have to give to the City employees. Mike Visconti, 316 Pine Breeze Drive, asked if there is a 5% increase in the employees salaries as well as an 8% increase on their pension. City Manager Hooper stated there isn't an increase on the pension. The pension is just to keep it solvent. He commented on there being an investment the City makes into the employees pension plan, which varies. He asked if there is a possible way to negotiate with the unions to freeze the salaries at this point. City Manager Hooper stated no there is not. They entered into a contract with the unions for a period of time. Mr. Visconti commented on there being no money for beautification. City Manager Hooper stated that is for this twelve month period. He has recommended they go without for a twelve month period. He has elected to recommend they go without for twelve months and the budget tightening is across the board. This year is one that everybody is putting something on the table. Page -5- Council Special Meeting September 16, 2002 u u Ray Miller, 2450 S. Ridgewood Avenue, spoke about the 1990 census demographic sheet at City Hall. He referred to the percentage of people that make under $15,000 and under $25,000 and the percentage of people in Edgewater that are over age 65. He asked if the City copies the County as far as what they put into the pension funds. City Manager Hooper explained they are independent funds. The County has its own investments. The City has a local plan which is a different plan. Finance Director Goins stated for the general employees the new plan is about 12%, the general employees old plan is about 23%, the Fire Department is about 16% and the Police Department is about 28%. Mr. Miller stated the average of 20.4% being a pretty good chunk of change that people are getting. He doesn't know why they should have to pick up paying that. Councilwoman Rhodes stated the City does not manage investments for the pension funds. We have different consultants that do that. City Manager Hooper commented on the employees making money in years past. He further commented on employees being entitled to full benefits when they sign the contract to become public employees. Usually the wages are much lower than they would have been able to do in private sector and some of the benefits offset that wage. Councilwoman Lichter feels when they are talking about the stock market they are talking about two separate things. She received some of the same phone calls as Mr. Hammond. She commented on the older employees and having to guarantee a certain amount is going to be in there. She spoke of the employees who have been in the plan longer having a different type of plan than the newer employees. That plan is guaranteed by the City to give them a certain retirement pay and that is the one that we are short on because some of those moneys have been invested in the stock market. Doris Hill, 112 Lincoln Road, stated she is not in favor of cutting anybody but it gets to the point of where she thinks what some of these people are saying is where is it going to end. They are talking about one year. This isn't going to kill anybody. However it could go on and on. Unless this is figured differently, if this were a company what do they do. If they can't meet that, they cut back on their expenses, which means layoffs. Page -6- Council Special Meeting September 16, 2002 u o Councilwoman Rhodes stated we have already done that. City Manager Hooper commented on having some vacant positions and some frozen positions. There were between five and ten people that have been frozen or laid off. The next step if this doesn't get better is shrinkage and then you are talking of what services to cut. You can't cut people without cutting some services. Ms. Hill stated right now they can't have it all because there isn't any money. Councilwoman Rhodes stated they realize that and that is why they are cutting everywhere they can. If the City of Edgewater goes bankrupt, we don't have pensions either. We don't want to see that happen. Ms. Hill feels everybody has to suffer a little bit, even the workers. We don't want to lose any of them. Pat Card, 3019 Willow Oak Drive, spoke about the requirement to fund additionally the pension plan. The additional funding he saw was in the Police Pension Plan. To keep the fund solid you have to do that. He feels the important thing to remember is if it comes back, you are going to have more money in the fund then you need and when that happens, he doesn't want to see the money spent on other things. Taxes have a ratchet effect. Next year if the fund rises 30% he doesn't want to see 30% of the money that comes in that would have funded the pension plan being used for something else. He doesn't want to see the tax rate staying the same. What concerns him is that the actuarial assumptions that are being utilized are really quite simple. The way you know how much a pension plan costs is when the last retired person dies. Until that time, everyone is making assumptions. The bottom line to this is assumptions and until they see what the actuarial assumptions were and unless somebody on this board understands them, nobody understands why the pension fund requires an additional $16,000 this year and the Fire fund requires less this year. Mayor Schmidt closed the public hearing. Councilwoman Rhodes stated we have $404,000 more than we had last week. City Manager Hooper informed her yes. Councilwoman Rhodes questioned the tax not having to go up a whole mill. City Manager Hooper explained this now balances the reserve account which meets the Charter standards and gives the Council a balanced budget for all of next year at 6.95 mills. Ord. No. 2002-0-13 - Amendinq the City Budqet for the Fiscal Year endinq September 30, 2002 Page -7- Council Special Meeting September 16, 2002 (.) u Councilwoman Lichter moved to approve Ord. 2002-0-13, second by Councilman Brown. The motion CARRIED 5-0. Ord. No. 2002-0-14 - Adoptinq the final millaqe rate of 6.95 mills per $1,000 of assessed taxable value Councilman Brown moved to approve Ord. 2002-0-14, second by Councilwoman Lichter. The motion CARRIED 5-0. Ord. No. 2002-0-15 - Adoptinq the final budqet for fiscal year 2002/03 Councilwoman Rhodes moved to approve Ord. 2002-0-15, second by Councilwoman Lichter. The motion CARRIED 5-0. ADJOURNMENT There being no further business to discuss, Mayor Schmidt recessed the meeting for ten-minutes, after which time they will move on to the Regular" Meeting. The meeting recessed at 8:07 p.m. Minutes submitted by: Lisa Bloomer Page -8- Council Special Meeting September 16, 2002 , ~ o Q REASONS FOR BUDGET INCREASE . INTEREST RATE DECLINED FROM OCTOBER 2000 OF 6.64% TO SEPT. 2001 OF 3.46%. CURRENTLY 1.9%. (SBA RATES) . PENSIONS - INVESTMENTS DID NOT GAIN AS EXPECTED. . HEALTH, DENTAL AND LIFE INSURANCE BENEFITS INCREASED. FY 2003 - 8% INCREASE . PROPERTY INSURANCE INCREASE OF 20 - 30%. . 18 MONTHS FOR NEW GROWTH TO BE ADDED TO TAX ROLLS . ADDITIONAL SENIOR HOMESTEAD HOME VALUE INCREASE OF 12.74% . UNION CONTRACT (5% SALARY) (.) .' . o CHANGES MADE TO BUDGET SINCE FIRST HEARING 9/16/02 . DELINQUENT TAXES . ELECTRIC FRANCHISE FEES . OCCUPATIONAL LICENSES . ALCOHOLIC BEV. LICENSES . ADMIN FEE - IMP ACT FEES . SALE OF INDUSTRIAL PARK PROPERTY . RIGHT OF WAY CREDITS EXPENDITURES $ 2,000 $ 15,000 $ 2,000 $ 1,500 $ 334 $100,000 $ 1.,000 $121 ~834 · PUBLIC WORKS ROOF REPAIRS $30,000 · BUILDING POSITION ~ YEAR $20,000 · CITY CLERK-ELECTIONS $ 4,000 . PERSONNEL - ELIMINATE SAFETY AWARDS $11,500 · CITY COUNCIL $ 8,000 . CITY CLERK $ 1,000 . CITY MANAGER $ 2,300 · FINANCE $ 5,000 · PLANNING - CORRIDOR PLAN $60,000 J' . t . o ..., . . · OGS - BUCKET TRUCK AND FILE SERVER · INSURANCE & OTHER MISC. INCREASE . POLICE . FIRE INCREASE . BUILDING . CIVIL DEFENSE . CODE ENFORCEMENT · PUBLIC WORKS - RESURFACING . PARKS REVENUE INCREASE EXPENDITURE DECREASE TOTAL BUDGETED INCREASE u $88,500 ($38,417) $ 4,000 $ 4,000 $ 500 $ 2,400 $20,000 $50,000 $10,000 $121,834 $282,783 $404,617