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8-21-12 Budget Workshop Minutes MINUTES OF THE BUDGET WORKSHOP OF ATLANTIC BEACH CITY COMMISSION HELD IN ADELE GRAGE CULTURAL CENTER ON AUGUST 21, 2012 AT 5:00 PM. City Commission Members present: Mike Borno, Mayor Maria Mark, Mayor Pro Tem Mark Beckenbach, Commissioner Jonathan Daugherty, Commissioner Carolyn Woods, Commissioner Staff present: Jim Hanson, City Manager Nelson Van Liere, Finance Director Donna Kaluzniak, Public Utilities Director Rick Carper, Public Works Director Keith Randich, IT Manager Tim Gilboy, Deputy Public Works Director Donna L. Bartle, City Clerk The meeting was called to order at 5:08 p.m. by Mayor Borno. Mayor Borno explained the purpose of the budget workshops and the process and timelines for adopting the budget. Commissioner Beckenbach asked if citizens could speak for three (3) minutes at the end of the meeting. Mayor Borno agreed to consider it depending on the time it takes to finish the agenda items. Budget Overview (Handout: Budget Overview) City Manager Jim Hanson explained the workshop schedule and the items to be discussed at each meeting. He gave an overview of the budget, explaining the need to understand the long- term economic downturn cities have been facing for a number of years; taxes and other general fund revenues are down; utility sales volumes are declining; pension costs are rising; and health care costs are rising. He explained the total revenues and expenses are down from the current year reporting revenues at $27.4 million: down from $34.3 million and expenses at $25.3 million: down from $31.0 million. He stated the greatest piece of the difference in both revenues and expenses is from the TMDL Project. He reported the personnel count will be down by four employees from the current year's budget. He explained the philosophy and benefits of conservative, long -term budgeting. He referred to the chart titled Atlantic Beach Fund Balance as he explained the three (3) types of funds, their balances, the various items that the funds are used for, and their restrictions. He believes the City has very strong balances and is in good shape. He referred to the charts titled City of Atlantic Beach Pension Contribution and City of Atlantic Beach Pension Payroll as he explained the history of the pension over the last eleven (11) years. He reported the reductions in the expenditure budget from the last five (5) years include: personnel, overtime in various departments, training in all departments, employee raises /merit program, Employee Bonus Program; document imaging program stopped (only done in -house Minutes — City Commission Workshop August 21, 2012 Page 2 now); fireworks share to Jacksonville Beach; logo shirts for non - uniformed employees; police motorcycle lease; vehicle replacements; sidewalk repair budget; expenses for Police Explorer Program; ped path expansions; new sidewalks, etc. He reported the items that are not in the proposed budget and distributed a list of discretionary projects for consideration. He explained the two rate increases that are being proposed include a property tax partial roll -up of 1.8% or $72,000 and a sanitation rate up 3.2% or $55,000; the rates remaining level are water and sewer, stormwater, franchise fees /taxes, building permit /inspection/plan review fees and communication service taxes; and the State revenues (sales tax, gas tax, revenue sharing) rates are not set locally. Public Works (Handout: Public Works Budget FY2012 -2013) Public Works Director Carper stated that Public Works Administration, Streets, Fleet Maintenance, Parks Maintenance and Beautification, Sanitation and Stormwater make up his budget. He referred to the Public Works manpower chart as he explained the department's organizational chart. He explained the roles of the various divisions and of the contracted services. He reported on the following Parks projects: Veteran's Memorial Park, Tideview Canoe/ Kayak Launch and ICW Parks Master Plan Study and answered questions from the Commission. He pointed out that the Convention Development Fund (Bed Tax) is a source that can be used for some of the projects. He referred to the charts titled Marsh Master Plan Long Range Capital Plan as he explained the costs and funding for the various projects. He indicated that many of the projects in the plan will qualify for FIND grants, but other funding sources will be pursued. Mr. Carper, Mr. Hanson and Mr. Gilboy answered questions from the Commission. Mr. Carper showed a drawing of the conceptual plan for the Rose Park Expansion as he and Commissioner Daugherty explained and answered questions on the proposed project and the costs involved. He explained Stormwater Utility by reporting the history of Capital Improvement Projects, the completion of the Stormwater Master Plan Update, the Capital Improvement Plan, the Stormwater Long -Range Plan, maintenance issues, and the proposed budget. Mr. Carper and Mr. Hanson answered questions from the Commission. Mr. Hanson referred to page 113 which is a chart titled Stormwater Utility and page 112 titled Long Term Financial Plan Financial Projection Summary as he explained details of the Stormwater Utility Fund including amounts for Personnel Services, Operating Expenses, Capital Outlay, Debt Services, Transfers and Revenues and answered questions from the Commission. Commissioner Daugherty reported he is proposing to increase the stormwater rates by $1.50 per month and explained the reasons for the proposed increase. Discussion ensued. Commissioner Daugherty indicated he would like to continue explaining the proposed increase later in the meeting. Minutes — City Commission Workshop August 21, 2012 Page 3 (Break at 7:25 pm to 7:33 pm) Mr. Hanson explained the Sanitation Fund and reported and answered questions on the Landfill Tipping Fee Estimates. He referred to and explained the chart on page 111 titled Sanitation Fund which shows amounts for Personnel Services, Operating Expenses, Capital Outlay, Debt Services, Transfers and Revenues. Commissioner Daugherty stated that in two years the City's contract with Advanced Disposal comes up and, since there are options to consider, believes the discussions should start now and direction should be given to the City Manager as to what we think should happen. Discussion ensued. Mr. Carper explained the Resurfacing Program is a major use of our Gas Tax Fund and this year's budget proposal has $300,000 for resurfacing. He reported the inspections have been completed and the Overall Condition Index (OCI) for the entire city is 73.6 (Very Good), but is down by a point from last year. He indicated that 1 segment was poor and 121 were excellent and there is a total of 294 (public only). He explained that each year he drives every street in the city and gives them a grade. He referred to the map showing the City Street Resurfacing History Since 2005 as he explained the history. He indicated that if the funding stays relatively the same each year, it will take at least 35 years to resurface every street in the City. He answered questions from the Commission. Mr. Hanson referred to the Gas Tax Fund chart on page 109 and explained the Operating Expenses, Capital Outlay, Transfers and Revenues. Mr. Carper gave a brief overview of the history of the Community Development Block Grant (CDBG) and the Tree Fund and he and Mr. Hanson answered questions from the Commission. Commissioner Daugherty distributed and explained his proposal (which is made part of this record as Attachment A). Enterprise /IT Application (Handout: Enterprise Application) Mr. Hanson indicated there is a project that was budgeted in the current year to upgrade our software, but with further research, we don't feel like we should do what we budgeted for. It was determined that about $20,000 remains in the current budget. He asked IT Manager Randich to explain the new proposal. Mr. Randich referred to the handout as he explained the current SunGard HTE application, new system requirements, new system advantages, and issues with moving to a new application at this time. He suggested the project be done in three phases and explained the cost for each phase. The project proposal includes the following: 1) Delay the start of the conversion one year to allow for funding situation to improve and to allow time for "One Solution" product to be completed and successfully installed by other cities, 2) Move the current application to SunGard's data center to avoid the expense of buying a new computer at $50,000 and to utilize SunGard's staff to perform support tasks including data backups and system upgrades and 3) Add the Code Enforcement module to our existing system which would cost $10,000 plus training estimated at $5,000 to $10,000. Discussion ensued. There was a consensus from the Commission to move forward with the proposed plan and add $20,000 to the proposed budget for the Code Enforcement module. Minutes — City Commission Workshop August 21, 2012 Page 4 There being no further discussion by the City Commission, the Mayor declared the meeting adjourned at 9:06 p.m. VAA 1-4 " Mike Borno Mayor 4. 07Apdee. Donna L. Bartle, CMC City Clerk ATTACHMENT A Proposed Budget Amendments; Commissioner Daugherty August 21, 2012 Fund Unrestricted Fund Change Amount Balance 9/30/13 Half Cent Sales Tax Proposed Budget $341,133 Expenses Reduce transfer to Stormwater $68,000 Rose Park; part not covered by CBDG (see below) - $75,000 Add sidewalk on W. 9th St. - $35,000 Balance after changes $299,133 Stormwater Fund $748,736 Proposed Budget Revenues Increase monthly fee $1.50 $150,000 Reduce transfer from Gas Tax - $82,000 Reduce transfer from Sales Tax - $68,000 Balance after changes $748,736 Gas Tax Fund Proposed Budget $5,261 Revenues Expenses Reduce transfer to Stormwater $82,000 Add Dutton Isle sidewalk project - $79,000 Mayport Rd. crossings - $100,000 Reduce resurfacing budget $100,000 — Balance after changes $8,261 CDBG Eliminate Dutton Rd. sidewalk and septic conversion projects and put * Expenditures $ to Rose Park $0