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08/21/2006 CITY COUNCIL BUDGET WORKSESSION MINUTES CITY OF CLEARWATER August 21, 2006 Present: Frank Hibbard Mayor Carlen Petersen Vice-Mayor Hoyt P. Hamilton Councilmember William C. Jonson Councilmember John Doran Councilmember Also present: William B. Horne II City Manager Garry Brumback Assistant City Manager Rod Irwin Assistant City Manager Pamela K. Akin City Attorney Cynthia E. Goudeau City Clerk Patricia O. Sullivan Board Reporter The Mayor called the meeting to order at 6:30 p.m. at the Main Library. To provide continuity for research, items are in agenda order although not necessarily discussed in that order. The Mayor said personnel costs account for 67% of the budget and reducing costs requires reducing staff and services. He requested residents identify services they are willing to sacrifice. FY 2006/07 Preliminary Annual Operating & Capital Improvement Budgets Budget Director Tina Wilson provided a PowerPoint presentation. Guiding principles for staff: 1) build budget around Council Vision; 2) support Council decisions; 3) strive for positive budget impact with economic redevelopment successes; 4) link FTE (Full-Time Equivalent) growth to service delivery; and 5) routine focus on budget & financial issues: a) strategy meetings; b) resource committee; and c) project meetings. Meetings are held to control costs, consider budget impacts, and review status of current capital projects. As proposed, FY (Fiscal Year) 2006/07 General Fund Expenditures total $123.6-million: 1) 49% - Public Safety; 2) 23.5% - Quality of Life; 3) 14% - Administration/Other; 4) 9% - Public Works; and 5) 4.5% - Planning & Development. Key financial issues affecting the budget: 1) Property/liability insurance; 2) Fuel & energy; 3) Outside agency funding; 4) Pension contribution; and 5) Beach Walk debt. Staff is working to control insurance, fuel, and energy costs. Liability insurance costs have increased by $1-million. Due to lower returns on investment, Pension contributions increased by almost $2-million. Costs associated with Beach Walk debt are slightly less than $1-million. Other changes the General Fund Budget: 1) $257,000 – Jolley Trolley; 2) $675,610 – beach guards; and 3) $300,000 – PACT contribution. Previously, Jolley Trolley and beach guards were funded from the parking fund, which lost revenues as beach parking was reduced. Council Budget Work Session 2006-08-21 1 Approximately $400,000 is proposed to expand Sailing Center programming. Costs for salaries and benefits also have increased. Millage for FY 2006/07 totals 22.4816 mills: 1) 37% - School Board; 2) 26% - Pinellas County; 3) 13% - Other Agencies; and 4) 24% - Clearwater (5.42 mills). The Homestead exemption is $25,000. The exemption for low-income seniors is increasing from $10,000 in 2006 to $25,000 in 2007. As proposed, General Fund costs will increase $12.2-million to $123.6-million in FY 2006/07: 1) Police Department - $2.4-million to $35.6-million; 2) Fire Department - $2-million to $22.7-million; 3) Parks & Recreation Department - $2.5-million to $22.6-million; 4) Public Works - $0.3-million to $10.4-million; 5) All other departments - $5-million to $32.2-million. Police Chief Sid Klein continued the PowerPoint presentation. Police Department personnel costs of $28.7-million account for 81% of its budget. Operating and other expenses are budgeted at $6.9-million, with most of the increase due to higher utility and fuel costs. Staff numbers are unchanged with 421.3 FTE - 260 FTE Sworn/161.2 FTE Non-sworn. Capital projects include $400,000 for the lease/purchase of a computer network. Key issues: 1) Emergency & disaster response. New federal requirements for training and equipment changed institutional tactics. Emergency and disaster response readiness will be expanded to include all hazards, mutual aid, and anti-gang suppression. The department’s building will be hardened and systems to communicate with regional agencies and the State will be improved; 2) Officer recruitment & retention. There is fierce competition to recruit and retain police officers. The recruitment team has developed a video for national distribution; 3) Traffic enforcement and congestion tops the list of citizen concerns. Expanded patrols will focus on DUI, running red lights, school bus safety, and seat belt use. Lasers are replacing radar to track vehicular speeds. A traffic citation printer is being tested. Additional undercover vehicles have been added; and 4) Improved technology will permit data and information sharing with external agencies. The department is partnering with Pinellas County Sheriff on records management software. The radio dispatch system needs replacement. Fire Chief Jamie Geer continued the PowerPoint presentation. Fire Department personnel costs account for 84% of its budget, or $19-million. Operating and other expenses are budgeted at $3.7-million. The department has 221 FTE - 203 FTE Sworn/15 FTE Non- sworn. The budget proposes an additional 3 FTE Sworn due to contractual agreements to reduce work hours. Capital projects include: 1) $181,000 – Fire vehicles including fire boat with fold down hull and shallow draft that can pump water and ATV (all terrain vehicle) that is transport capable; 2) $150,000 – Air packs that meet new standards. First of two-year replacement schedule; 3) $75,000 – Ladder equipment. First of two-year replacement schedule; 4) $50,000 – Radio replacements; and 5) $190,000 – Protective equipment that meets new standard and has five-year life expectancy. Key issues: 1) Third year of training initiatives includes recruit classes and 2) Special operations & storm preparedness. Plans will increase the number of certifications. Enhanced marine capabilities will allow fire suppression on water and improve dive capabilities. Policies and procedures for equipment and training have been adjusted for storm events. Council Budget Work Session 2006-08-21 2 Parks & Recreation Director Kevin Dunbar continued the PowerPoint presentation. Parks & Recreation Department personnel costs account for 50% of its budget, or $11.2- million. Operating and other expenses are budgeted at $11.3-million. The department has 240.8 FTE - 31 FTE administration/89.8 FTE programming/120 FTE parks & beautification. Expenses are trimmed by working with third party providers when possible. More than $15- million of programming is contracted. In addition to Bright House Field, the City has golf courses and owns Ruth Eckerd Hall. The athletic program expands with volunteer efforts. Capital projects include: 1) $500,000 – Morningside design; 2) $200,000 – Jack Russell Stadium demolition; and 3) $598,500 – Infrastructure maintenance to maintain facilities. Key issues: 1) Staff working to reduce utility costs; 2) Bicycle & pedestrian master plan will allow residents to move around City on non-motorized vehicles; and 3) Office of Aging is doing needs assessment on aging well in Clearwater. Budget meetings are scheduled for September 5 and 21, 2006. Nine residents expressed concerns about significant increases in City costs, the Main Library and Beach Walk project are too expensive, and tax increases of 300% to 400% within five years on small motel properties could force owners to sell. Recommendations were made to limit government growth, reduce personnel costs, eliminate the take home vehicle program, and determine which expenses are essential. Ms. Wilson said the property appraiser determines property values. The City supports the FLC’s (Florida League of Cities) recommendation to review the Save our Homes Cap and determine how unintended consequences affected commercial properties and non- homesteaded residential properties. It was stated that franchise fees had not increased during the previous five years. While the City’s budget increased 40% in five years, the State’s budget increased 49%. Significant increases relate to: 1) Liability insurance up 140%; 2) Health insurance up 85%; and 3) Pension costs up 180%. Regarding fuel efficiency, the City has replaced many vehicles with hybrids, including pick-up trucks, and is reviewing route efficiencies, limiting trips, and encouraging staff to increase the number of employees in each vehicle. Solid Waste/General Services Director Tom Downes reported the City pays less for fuel than the City of St. Petersburg. Police Chief Klein reviewed department efforts to reduce fuel consumption. The Police Department does not generate revenue by issuing traffic tickets. Turnovers have increased as other municipalities improved benefits. Mr. Dunbar reported Parks & Recreation Department performance indicators are listed in the budget. Concern was expressed there is no consensus among residents to cut programs, close facilities, or discontinue community character enhancers. City residents are accustomed to high standards. It was stated that residents often request additional programs and parks, longer hours, restrooms, etc. The importance of hearing citizen concerns was stated. The City Manager said the contingency balance is for equipment and to be set aside to rebuild following a severe storm. Finance Director Margie Simmons said staff is conservative when establishing reserve levels for the General and Insurance funds. Fund balances are not used for reoccurring expenses. Increasing reserves would not improve the City’s bonding rate due to the risk of hurricane. Low cost bond insurance boosts the City’s rating to AAA. Council Budget Work Session 2006-08-21 3 The City Manager said the size of the Police and Fire departments is based on the level of risk the City is willing to face. New technology must be proven before embraced by the City. It was commented that Beach Walk is relocating underground infrastructure and has not experienced price overruns. The City has increased infrastructure and maintenance funding during the previous decade. The number of new staff position requests decreased from 33 last year to three this year. New technologies are being used to reduce staff. Current pension costs are a result of poor market returns on investments. Staff will seek voter approval of strategies to increase plan income. The City Manager said cities are run differently and employment numbers cannot be compared. The goal is to not hire more people than needed. Adjourn The meeting adjourned at 8:35 p.m. Council Budget Work Session 2006-08-21 4