08-05-1991
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CITY COMMISSION SPECIAL MEETING
August 5, 1991
The City Commission of the City of Clearwater met at City Hall with the following
members present:
Mayor/Commissioner
Vice~Mayor/Comrnissioner
Commissioner
Commissioner
Commissioner
Rita Garvey
Sue Berfie1d
Lee Regulski
William Nunamaker
Richard Fitzgerald
Also present were:
Michael J. Wright
Kathy Rice
Elizabeth Deptula
Cynthia E. Goudeau
Financial Forecasting
The City Manager opened the meeting at 1:00 p.m.
City Manager
Deputy City Manager
Assistant City Manager
City Clerk
He stated he is here to present a three year forecast based on reasonable
assumptions of revenues and expenses. This three year outlook will be updated
periodically to show where the City is heading.
He reviewed the revenue aS$umptions stating that over the past five years
there has been a gradual decline in the increase in property values and the City
is projecting a 2.5% increase per year for the next three years. Franchise fees
will increase by 1.5% per year.
In response to a question, it was indicated historical trends were used in
establishing these assumptions. No growth is anticipated for licensing and
permits or fines and penalties. Intergovernmental grants are not anticipated to
increase. The reserves from the state1s sales tax are anticipated to increase
by .5% next year, 1% the following year and .5% the third year out. Revenue
sharing is showing a downward trend and it is anticipated this will continue.
Other miscellaneous fees from the State will level out.
Revenues from the fire tax is anticipated to increase 2.5% a year, this is
the reimbursement from the County for fire services provided to unincorporated
areas. These funds go into the General Fund and Fire Department expenses are
taken from the General Fund. No growth is anticipated in the Emergency Medical
Services taxes.
Revenues from such things as occupational license, eRA reimbursements and
grants are anticipated to show no growth. A 4% increase in Parks and Recreation
charges is assumed and zero growth in library fees.
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Fees from such things as land use plan applications, lot mowing, etc. are
also anticipated to show no growth. Interest earnings or return on investments
are anticipated to be at 5% next year, with zero growth after that time.
Miscellaneous revenues are anticipated to increase at 2% a year. It was
indicated revenues from administrative overhead are anticipated at 2%, a 5%
increase is shown this year due to changes in the charge for services.
Stormwater utility has been moved into its own enterprise account but it is not
believed there will be any growth in these revenues.
Interfund transfers from the utility system are anticipated at 5% growth
per year for the next three years and the Gas System dividend to the General Fund
is anticipated to be zero for next year and 10% for the next two years. This
will result in revenues for the 92-93 fiscal year of $59,190,366, for the 93M94
fiscal year $60,436,554 and for the 94M95 fiscal year $61,700,000.
Expenses were then reviewed with it being stated that 3/4 of the cost to
the City is for payroll. It was stated that in fiscal year 87-88 there were
almost 1600 employees. In 1990-91 there are 1615 employees. There are increases
in the Police Department with decreases in other departments. Fourteen
individuals have been included for the new environmental stormwater section. A
3% increase in the salary line has been anticipated for the next three years.
Over time and special pay is anticipated to increase at 2.1% per year.
It is anticipated that the Pension contribution will increase but there
have been previous overfundings and therefore, no increase is shown at this time.
Contribution to the Fire Pension is fixed. Social Security is anticipated
to increase 4.2%. Hea 1 th insurance costs are projected to increase 14% next year
and 10% the following two years. There will be a major increase in Workers'
Compensation costs due to a court order thereforE, an increase of 20% is shown
for next year with 4.2% increases for the next two. It is anticipated there will
be zero growth in the other fringe benefits.
Other operating costs, including utilities, with an increase of 3.5% per
year and insurance with 5% increase were reviewed.
For internal services, it is expected that garage services will increase
3.5% per year as will computer services and building and maintenance services.
No growth is anticipated in the Capital Expenditures in the General Fund and debt
service is stable.
The City Manager reported he anticipates a 10.8% cash reserve at the end
of this fiscal year. The policy of the Commission has been to keep the reserve
at 10% He is proposing to use the excess in the surplus to pay for salaries of
those individuals who leave the City for retirement but due to accumulated sick
leave and vacation, stay on the payroll, sometimes for almost two years. He
stated over the next three years, in order to balance the budget, the millage
rate would have to be increased to 6.0 mills.
In response to a question, it was indicated that if the Maas Brothers
property is removed from the tax rolls, it will be removed at the rate that
existed at the inception of the Community Redevelopment Agency.
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A question was raised regarding the dramatic increase in gasoline prices
in the last year and that they are now down and whether or not the City adjusted
for that. It was stated there is some surcharge back to the departments however,
it is not enough to remove the spike that occurred.
In response to a question, it was indicated the possibility of a state
income tax was not assumed in these projections. It was stated the goal is for
the City to reduce numbers of employees without layoffs and to address overtime
costs.
The City Manager stated he felt there would be a continued shrinking of the
number of employees. He stated he is looking at everything to see if there is
a way to reduce costs. He indicated he is not recommending any cuts for the 91-
92 fiscal year but rather is looking ahead to what reductions need to be made for
future years.
One citizen spoke stating he appreciated the forward planning. He
suggested looking at the recreation areas to include user fees, including a user
fee for the library. It was stated there were some legal restrictions regarding
user fees for library.
The City Manager thanked staff members who assisted in developing this
forecast.
A question was raised regarding on what basis the 14% increase in health
insurance was based. Betty Deptula, Assistant City Manager indicated since mid-
1988, there have been major increases, including a 20% increase.
Discussion ensued regarding whether or not the pension contribution should
be reduced in the upcoming fiscal year. A question was also asked regarding
making cuts at this time.
The City Manager indicated that if the Commission established the roll back
rate for the millage, the gap anticipated for the next year will be even greater.
It was stated the City is in good financial shape compared to others but a major
issue is pension with the greatest exposure for longevity and disability
pensions.
A quest ion was asked regarding the projected increases, including increases
in the number of employees and it was indicated there is no increase in employees
in the projection.
The meeting adjourned at 2:21 p.m.
ATTEST, 0 ~'-d-LL-.lL ,) d '_
Cit Cl€'rk _ . .
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