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12/11/2006 BUDGET TASK FORCE MEETING MINUTES CITY OF CLEARWATER December 11, 2006 Present: R. Nathan Hightower Chair Herbert W. McLachlan Vice Chair Martin L. Altner Board Member Joseph W. Evich Board Member Isay M. Gulley Board Member Robert L. Longenecker Board Member Joyce E. Martin Board Member Charles J. Rutz Board Member Jesse Sherman Board Member Douglas J. Williams Board Member Absent: James E. Strickland Board Member Also Present Tina Wilson Budget Director Margie Simmons Finance Director Patricia O. Sullivan Board Reporter The Chair called the meeting to order at 6:02 p.m. at the Main Library. To provide continuity for research, items are in agenda order although not necessarily discussed in that order. 2. Approval of Minutes – December 4, 2006 Member Altner moved to approve the minutes of the December 4, 2006, meeting, as corrected: page 3, paragraph one, sentence five to read “. . . draft of the General Fund financial motioncarried statement . . .” The was duly seconded and unanimously. 3. Questions/Discussion regarding December 4, 2006, meeting In response to a member request, Finance Director Margie Simmons said the 2006 unaudited financial statements should be released in January 2007. Discussion ensued regarding e-mails. In response to a request for a graph comparing past taxing district budgets, Budget Director Tina Wilson said that would require significant staff time and City Council approval of resulting costs. Task force members were encouraged to direct questions and e-mails to Ms. Wilson. 4. Staff Presentation – Employee Pay Human Resources Director Joe Roseto provided a PowerPoint presentation. An ordinance established that the Human Resources Department is responsible for the administration of the Civil Service System, which provides a means to recruit, select, develop, and maintain an effective work force. The system includes policies for hiring, promotion, job Task Force – Budget 2006-12-11 1 classification, salary administration, training and development benefits, retirement and layoffs, and discipline and discharge. The Civil Service System applies to all tenured positions except: 1) Elected officials; 2) City Manager, Assistant City Manager, City Attorney, and Assistant City Attorneys; 3) Department directors, assistant department directors, and managers; and 4) Board members. PERA (Public Employees Relations Act), enacted in 1974, grants public employees the right of organization and representation, excluding persons designated by the act as “Managerial” or “Confidential.” The act requires government entities to bargain collectively with employee representatives. It creates a Public Employees Relations Commission, under the Governor, to resolve disputes and establishes its powers and duties. The act generally defines the rights of public employers and employees. It prohibits strikes by public employees. It provides guidelines for the formation of employee organizations, collective bargaining, and impasse resolution. PERA also provides for enforcement of the law through Unfair Labor Practice procedures. Under PERA, the employer has the right to determine the purpose of its agencies, set standards of service to be offered to the public, exercise control and discretion over its organization and operations, and direct employees and take disciplinary action for proper cause. Under PERA, employees have the right to form and participate in, or refrain from forming or participating in a union. Employees are not required to pay union dues. However, all employees will be represented by the union and be covered by the collective bargaining agreement. Employees have the right to be represented by the union of their choosing and to negotiate terms and conditions of employment. Employees have the right to be represented in the determination of grievance and engage in concerted activity not prohibited by law. Under PERA, collective bargaining mandatory subjects include wages, hours, and other terms and conditions of employment. Permissive subjects cover everything else that is not unlawful. The bargaining agreement may not provide for a term of more than three years duration. City employee organizations include the Fraternal Order of Police, representing approximately 267 sworn Police Officers and non-sworn Police Service Technicians and approximately 55 Police Sergeants and Lieutenants, International Association of Firefighters, representing approximately 182 sworn Firefighters, Driver-Operators, Fire Medics, Fire Inspectors and Fire Lieutenants; and CWA (Communications Workers of America), which represents more than 927 “non-professional” employees. SAMP (Supervisory, Administrative, Managerial, and Professional) are non-represented employees and include all division managers, assistant department directors, department directors, all confidential employees who assist or aid managerial employees, and all professional employees whose work requires advanced knowledge generally acquired through a course of study requiring a college degree. There are approximately 383 SAMP employees: 265 Civil Service non-managers and 188 “at will” staff, who serve, without contract, at the pleasure of the City Manager. Reductions in pay and benefits only can be made in the context of contract negotiations. Layoffs must comply with Civil Service rules and/or union contracts. Reducing pay and benefits would impact recruitment and retention. As the majority of positions are unique to the public sector, the City competes against other public entities for staff. Task Force – Budget 2006-12-11 2 5. Questions/Discussion In response to questions, Mr. Roseto estimated that almost 100% of public safety employees belong to unions. CWA membership fluctuates between 50% and 60%. There are six SAMP levels. The lowest three are non-managerial and are covered by the Civil Service System. While SAMP pay levels are adjusted between 2% and 3% annually, based on surveys, salaries are not adjusted automatically. Most surveys of pay and benefits use public sector information, as it is readily available. Staff considers variables such as health insurance co- pays and prescription costs. To be competitive, staff also compares duties with other local agencies, based on population. Reducing staff would require a reduction of services. Rarely are all positions filled. Part-time employees do not receive benefits. Discussion ensued regarding outsourcing. Mr. Roseto said the City gives up responsiveness and flexibility when it outsources work. If requirements expand outside contract parameters, the City must pay more. The City outsources unemployment compensation. In response to a suggestion that chores, such as mowing, could be outsourced, Assistant City Manager Garry Brumback said staff regularly evaluates positions for outsourcing and departments are always challenged to be more efficient. Concern was expressed that outsourcing work requires a different set of management skills. It was felt if costs are similar, outsourcing is worthwhile. Discussion ensued regarding the Pension Plan. Ms. Simmons said a new actuary report will be completed in the Spring. The defined benefit plan is based on years of service plus salary. It was stated that corporations are moving away from defined pension plans. Mr. Roseto said defined plans are the rule rather than the exception in the public sector. Changes would impact retention and recruiting. Discussion ensued regarding the Pay Plan. Concern was expressed that ranges are too close and do not encourage staff to seek promotions. Mr. Roseto said the department director pay band includes three pay ranges, based on factors such as staff size, etc. Unions represent approximately 75% of City employees. Non-union staff are the highest compensated. Mr. Roseto reviewed the FMLA (Family Medical Leave Act), a federal job guarantee program that permits 12 weeks of absences annually due to personal or family member medical problems. Employees are required to use all paid leave before entering a no pay status. Discussion ensued regarding the Police Department. Standby pay, negotiated by contract, is a flat fee and requires officers to be available for duty. Overtime is based on hourly pay. In response to a question, the City Manager reviewed the procedure for reducing the department’s cost should the City Council demand it. The Police Department has a robust volunteer program, which is not involved in law enforcement. Concern was expressed regarding staff management and public perception when several police cars are parked and involved with the questioning of one person It was suggested that the City consider contracting with the Pinellas County Sheriff to provide police services at a lower cost. Ms. Wilson said that process would be difficult. The City Manager said that proposal is not attractive to the Police Department and Police Officers. Concerns were expressed regarding department growth and it was recommended that the Task Force – Budget 2006-12-11 3 Police Department be challenged to enhance productivity, providing the same service for less money. Information was requested on reasons for increases and where the department is headed. It was suggested that work charts would be helpful. It was stated that a growing population has a direct correlation with public safety. It was suggested if there is little room to cut staffing levels, the Task Force should consider other strategies. It was questioned what the government should provide and if the City needs six libraries and the large number of Parks & Recreation facilities. It was stated that public safety is critical. Concern was expressed that the City subsidizes Ruth Eckerd Hall and the Florida Orchestra, as these organizations should be self-sustaining. It was felt that City contributions are important to residents’ quality of life, as otherwise, ticket costs would be too expensive. Discussion ensued regarding the Fire Department. Ms. Wilson said the Fire Department is the fastest growing department. Based on Fire Task Force recommendations, two fire stations were added. To improve productivity, it was suggested that firefighters be scheduled for eight-hour shifts and not paying them to sleep and eat. It was noted that other staff members provide their own exercise equipment and kitchens to prepare meals. It was felt that having firefighters live together may increase problems. It was stated that the Police Department also is on call 24/7. Discussion ensued regarding accident response by Fire Rescue and County ambulances. Mr. Brumback said the City is the first responder. The County ambulance then transports patients. Concern was expressed that two departments provide essentially the same service. It was suggested that the fire response could be eliminated. Mr. Brumback reviewed the competitive bid process. Fire Chiefs are looking to provide both services. The City Manager said 80% of fire calls are for paramedics, not fires. The County compensates the City for reacting to some of the demand. It was felt it is inappropriate to use expensive fire trucks to respond to accidents when the trucks’ features are not needed. Recommendations were made for efficiencies, such as delaying the purchase of new vehicles. It was felt that economies could be found in each department. It was suggested that the City maintain current facilities, but not expand them. Concern was expressed that high property taxes and insurance rates will make the City unaffordable for many. It was noted that the City’s population had increased 1% annually since 1996. Ad valorem taxes are now covering a larger share of the General Fund. Concerns were expressed that many homeowners are unaware of property tax problems as their taxes are subsidized by businesses and investment owners, that a vicious cycle will ensue as increased costs are passed on to customers, raising the cost of living and changing who comes to Florida, that a decrease in property values could affect City services, and that many new projects, expected to increase the tax base, have not broken ground. In response to a request, Ms. Wilson will contact the County Assessor to see if a forecast for 2007 property values is available, based on data through September 30, 2006. She also will provide information regarding each department’s budgets for the previous decade. It was questioned if the City had noted efficiencies due to new and expensive technologies. Mr. Roseto said the City looks at automation to improve and increase capabilities, not reduce staff. Technology has increased expectations. It was suggested that administration levels should have been reduced as a result of managers now being able to plan there own trips Task Force – Budget 2006-12-11 4 . . Ie and handle other duties. It was stated that costs should have decreased elsewhere as a result. Mr. Roseto said capabilities have increased, not staff numbers. Ms. Wilson said departments are encouraged to not spend their entire budgets. The excess is set aside for tough times. It was noted that the City should have enormous reserves due to its hurricane prone location. 6. Information for next meetina The December 18, 2006, meeting will review employee benefits, including health insurance and the Pension Plan. 7. Adiourn The meeting adjourned at 8:00 p.m. Chair Budget Task Force Task Force - Budget 2006-12-11 5