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08/23/2005 CITY COUNCIL BUDGET WORKSESSION MINUTES CITY OF CLEARWATER August 23, 2005 Present: Frank Hibbard Mayor William C. Jonson Vice-Mayor Hoyt P. Hamilton Councilmember Carlen Petersen 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 Brenda Moses Board Reporter The Mayor called the meeting to order at 8:30 a.m. at City Hall. To provide continuity for research, items are in agenda order although not necessarily discussed in that order. General Introduction – Bill Horne, City Manager Fiscal Year 2005/06 Capital Improvement Program – Tina Wilson, Budget Director Budget Director Tina Wilson reviewed the proposed FY (Fiscal Year) 2005/06 Capital Improvement Program. In comparison with the previous year, the one-year CIP (Capital Improvement Project) would decrease by $3-million to $55-million and the six-year CIP would increase by $22-million to $340-million. Proposed FY 2005/06 CIP expenses include: 1) Fire: a) Airpacks - $385,000; b) Exhaust Systems - $155,400; and c) Security Systems - $90,380; 2) Recreation Infrastructure: a) Crest Lake Park - $200,000; b) Countryside Complex - $500,000; c) Fitness Equipment - $150,000; d) McMullen Tennis - $400,000; e) Dog Park North - $400,000; f) Joe DiMaggio Complex - $8-million; and g) Senior Citizen Center - $4.5-million; 3) Marine Facilities - Beach Guard Facility - $50,000; 4) General Miscellaneous: a) Structural Evaluation - $135,000; b) Land Management System - $75,000; c) Traffic Asset Management - $100,000; and d) MSB (Municipal Services Building) Parking Lot - $400,000; 5) Stormwater Infrastructure: a) Facilities Maintenance - $300,000 and b) Lake Bellevue Improvements - $666,670. Ms. Wilson said each project requires City Council approval prior to implementation. National Guard Armory renovations are not included. Many maintenance projects are in the CIP to maintain a steady pace of funding. Stormwater funds finance stormwater facility maintenance. City Engineer Mike Quillen said due to a high number of stormwater projects, they are listed in the CIP instead of operations. The final phase of the North Martin Luther King, Jr. Avenue traffic-calming project includes Fairmont and side streets, and landscaping. Finance Director Margie Simmons said Roadway & Traffic asset management will address another phase in the program and collect data regarding signs, signals, etc. Council Budget Work Session 2005-08-23 1 Consensus was to rename a line item, Senior Services, as no location, size, etc. for a center has been determined. Parks & Recreation Director Kevin Dunbar said staff is working with groups committed to fundraising for the Joe DiMaggio project. The Chargers plan to hire a fundraising firm. The City’s $2-million match for that contribution is budgeted to show City commitment to the project. Discussions are underway with the City of Safety Harbor regarding the Countryside Sports Complex. Plans are to allow the Chi-Chi lease to end and then renovate the facilities. The City will consider refurbishing the nearby driving range in 2010. Public Works Administrator Mahshid Arasteh said construction of a Public Works headquarters may not occur if the City does not receive necessary grants. Assistant City Manager Garry Brumback said via mutual agreement, the County pays an annual percentage of City fire costs but does not fund specific fire stations. Fire Chief Jamie Geer said the structural analysis for the new main fire station was completed. Ms. Wilson said Crest Lake Park improvements include construction of a parking lot and grant-related improvements. Mr. Dunbar said staff will consider diagonal parking on Glenwood as part of this project. Penny for Pinellas project changes – Tina Wilson, Budget Director Ms. Wilson reviewed the Penny for Pinellas list. New Penny for Pinellas projects: 1) Ladder Truck - $850,000; 2) Long Center Pool - $800,000; 3) Long Center - $1,705,000; 4) Bayfront Promenade - $900,000; and 5) Armory - $150,000. Penny for Pinellas eliminated projects: 1) Harborbluff Waterfront Park - $2-million. Penny for Pinellas/Amended Scope: 1) Parks & Recreation Complex - ($2,375,000). It was suggested that Downtown marina revenue could support the waterfront park. Ms. Wilson said Penny for Pinellas-3 could fund the park and marina. Mr. Brumback said the park project, modified following defeat of the referendum, required several sources of funds. The allocated funds were moved to other projects to better use the funds. It is anticipated that the downtown marina could be constructed with revenue bonds, but referendum approval is necessary before a marina or park project could move forward. Funding can be added later. It was suggested that the budget footnote this project. Ms. Wilson reported Penny for Pinellas has $5-million in new projects, including the waterfront promenade on the original bridge’s footprint. Mr. Dunbar said the Parks & Recreation Department does not need a new complex after improvements to the Vine Street property and Armory, which will consolidate locations and improve security for equipment. The budget reflects a reduction in lease costs. Ms. Simmons reported insurance rates are higher than anticipated. Staff is considering 18-month coverage to avoid renewals during hurricane season. Future budget meetings are scheduled: 1) September 1, 2005 – first Public Hearing and Penny for Pinellas and September 15, 2005 – second Public Hearing. Council Budget Work Session 2005-08-23 2 Budget Highlights: 1) Enterprise Funds: a) Adhere to approved Rate Study Analysis and b) PILOT (Payment in Lieu of Taxes) reflects increase from 4.5% to 5.5% and 2) Internal Service Funds affected by: a) Escalating fuel costs; b) Facility maintenance; and c) Property Insurance. Clearwater Gas System – Chuck Warrington, Director CGS (Clearwater Gas System) Managing Director Chuck Warrington provided a PowerPoint presentation. From 1993 to 2004, the overall gas system increased by 7.1 Equivalent Therms to 22 and by 6,837 customers to 18,454. Anticipated growth by 2010 would increase equivalent Therms to 29.6 and customers to 29,675. Increases in Pasco County grew since 1995 to include Connerton and Bexley and additional territory. Innovations adopted to increase productivity included gas supply mechanisms, gas strip contracts, public gas partners, financial instruments, pre-pays, and computer automation. Employee productivity has increased from 127:1 to 209:1 customers to employee. Between 1993 and 2004: 1) General fund payments to the City increased from $1.1 -million to $2.1-million, with $3.6-million anticipated in 2010; 2) Plus net income increased from $1.5-million to $2.9-million, with $4.8- million anticipated in 2010; and 3) Net benefits to the City increased from $2.6-million to $5- million, with $8.4-million anticipated in 2010. CGS has a 330 square-mile service territory, 750 miles of gas mains, serves 18 municipalities and two counties, and provided a $1.4-million dividend and a $5.6-million transfer in FY 2005. A planned strategic business plan update will relate to the budget. Mr. Brumback said staff will be added as necessary to maintain standards of service. Staff was complimented for increased productivity. Mr. Warrington said contractors will handle most expansion construction. Before building a pipeline, a staff analysis must ensure a seven- year payback. CGS monitors customer satisfaction and is an innovator in providing reliable service. As CGS expands to east Pasco County, staff is considering office sites in the center of the County. It is difficult for CGS to expand into existing subdivisions, as a seven-year payback must be guaranteed. LP customers will be converted to natural gas at CGS cost when expansion occurs. The next major opportunity to expand natural gas service in the City is during the reclaimed water project in Countryside. Gas supply costs are passed through to customers. Natural gas is 35% less expensive than electricity. When costs increase, some customers reduce appliance use. Marine & Aviation Operations – Bill Morris, Director Marine & Aviation Director Bill Morris provided a PowerPoint presentation. Marine & Aviation operations for FY 2005/06: 1) Marina - 18.1 FTEs funded by Marine & Aviation Enterprise Fund; 2) Airpark - 1.9 FTEs funded by the M&A Enterprise Fund; 3) Beach Guards - 17.3 FTEs funded by Parking Enterprise Fund; 4) Pier 60 - 6.4 FTEs funded by General Fund; and 5) Sailing Center – 0 FTEs. The FY 2005/06 Marina budget is decreasing by 8.1% to $3.2- million with the reduction of one FTE. The Airpark budget is decreasing by 32% to $150,290. The Beach Guard budget is increasing by 5.7% to $744,480. The Pier 60 budget is increasing by 6.4% to $450,580 and adds 0.5 FTE. The Sailing Center budget is decreasing by 9% to $52,250. Recurring Department CIPs remain stationary for FY 2006 and FY 2007-09 for Utilities Ser Rep at $10,000, Docks R & R at $25,000, Fuel System Repairs at $20,000, Pier Council Budget Work Session 2005-08-23 3 60/SC Maintenance at $15,000, Airpark Improvements at $10,000, and Dredging Maintenance at $85,000. Nonrecurring Department CIPs include $75,000 for Tank Repair and $900,000 for the Bayfront Promenade. The FY2005/06 department budget: 1) 72% - Marina; 2) 3% - Airpark; 3) 15% - Beach Guards; 4) 9% - Pier 60; and 1% - Sailing Center. Since last year, Marine & Aviation Enterprise Fund budgeted expenses will increase $0.2-million to $3.6-million, budgeted revenues will increase $0.3-million to $3.9-million, and profits will increase from $172,000 to $249,000. Mr. Morris said the Airpark’s budget decreased after it paid off its debt. Red tide impacted department revenues. The 501(c)3 operating the Sailing Center is funded by fees, memberships, etc. and has many volunteers, a paid manager, and contract instructors. Mr. Morris meets with them monthly to monitor operations. Staff is investigating funding options for Beach Guards. Staff’s proposal for beachfront hotels to pay some Beach Guard costs was poorly received. The project to construct a waterfront promenade on the old Memorial Causeway Bridge piers can move forward. Uses are part of the City’s vision for a downtown marina, including a ferry facility, etc. In response to comments, Mr. Morris recommended restricting fishing on the promenade and permitting it instead on the Drew Street dock. Staff involvement in customer issues was complimented. Council Discussion of the Proposed 2005/06 Budget Discussion ensued regarding the Harborbluff Waterfront Park with support expressed for removing funding, as there was no clear project and money was set aside for years, without result. It was felt that budgeted funds would be better used for other projects and this action would not diminish Council’s commitment to develop Coachman Park. Ms. Arasteh reviewed the division of staff costs to operate facilities shared by Parks & Recreation and stormwater utility. Parks & Recreation costs are funded from the General Fund while the stormwater portion, including 25% of mowing expenses, is funded by stormwater bonds. Concern was expressed that the budget, with 32 new FTEs, does not eliminate functions no longer needed to support customers. Specific examples were requested. It was recommended that staff identify underutilized productivity and that performance management be institutionalized. It was noted that some new FTEs will result in added revenues. The City Manager said the City is in the service delivery business. New FTEs do not necessarily cause a reduction elsewhere. Mr. Brumback said during the budget process each department analyzes the impact of staff reductions. The budget is based on the City Manager’s vision of what he wants accomplished. A committee reviews each new FTE position before it is submitted for City Council approval. Each new position is a direct result of customer or Council requests. Recommendations were made that during upcoming visioning sessions a report is made to residents regarding: 1) The cost to provide City services; 2) Per capita spending for Parks & Recreation activities; 3) Investment through taxes; 4) Costs of current high levels of service, including the Fire Department; and 5) A budget message summary. In responses to questions, Ms. Wilson said comparing department costs with those of other municipalities is misleading, as services provided by same-name departments vary greatly. Staff is cognizant of opportunities for change and takes advantage of them when Council Budget Work Session 2005-08-23 4 deemed appropriate. Mr. Dunbar reported the Parks & Recreation Department has attracted new partners and opened new facilities, absorbing 15 FTEs without a budget increase. Fire Chief Jamie Geer said while four new FTE positions are needed to cover workweek reductions, the other two will be used for EMS (Emergency Medical Services). No department in the County has four-person crews daily. He said 20% of department calls are for structure fires, while the remainder are EMS-related. He reviewed improvement efforts, including a large turnover in management staff, maximizing what existed, and changes based on department history, local practices, and national standards. While training has improved department effectiveness, each call requires a certain number of people to respond. Calls for structure fires and EMS have increased. Firefighting strategies do not change if a building has internal sprinklers, as crews must be prepared to address unfolding events. Mr. Brumback said the City is adopting the Fire Task Force recommendation for a 30- FTE increase in increments. Fire Chief Geer said although the department meets minimum standards for commercial and high-rise response, additional training and personnel are needed. While some response times have diminished, others have increased due to traffic and other factors. The City Manager reported spending considerable time discussing these issues with the Fire Chief, making certain the City is covered, real needs are not ignored, and the department retains flexible staffing. Concerns were expressed that right-sizing is difficult to discuss and the increase in Fire Department FTEs is significantly greater than the increase in City population. The City Manager said he is confident that FTEs are needed when he brings them to the City Council for approval. He said the ongoing question related to fire services is when is enough, enough. The new Fire Chief has a different view on how to deploy assets. The City must have the capacity to respond to an increase in high-rises, even though new construction has fire suppression capability. Fire Chief Geer said the number of false alarms has been reduced. Multiple-story buildings require additional personnel for other floors. Buildings with sprinklers require fewer responders. New firefighter positions will serve as initial responders. The department has been reorganized to allow fire plan review and field inspections. The department’s sweep of the City is 50% complete. Prevention positions primarily respond to fires in investigative functions. He said local Fire Chief opinions differ regarding the County’s preliminary fire review study recommendations. He said important elements were missing. Fire Chiefs have not agreed on ways to address duplication of services. Discussion ensued with support expressed for the new positions, as they are necessary to satisfy City customers, provide needed services, and some new positions also provide a cost benefit. It was felt that most residents are satisfied with current service levels. It was stated the Council previously had discussed and approved each of the positions, which were supported by the City Manager after he challenged all departments to identify unnecessary positions. It was felt that voters need to be assured that the Council has made a thorough evaluation. Staff will provide a list of Penny for Pinellas projects. Adjourn The meeting adjourned at 11:46 a.m. Council Budget Work Session 2005-08-23 5