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02/26/2007 . . . BUDGET TASK FORCE MEETING MINUTES CITY OF CLEARWATER February 26, 2007 Present: R. Nathan Hightower Herbert W. McLachlan Martin L. Altner Joseph W. Evich Isay M. Gulley Robert L. Longenecker Joyce E. Martin Chair Vice Chair Task Force Member Task Force Member - arrived 5:47 p.m. Task Force Member - arrived 5:50 p.m. Task Force Member Task Force Member - arrived 5:49 p.m. departed 8:00 p.m. Task Force Member Task Force Member - departed 8:07 p.m. Task Force Member - arrived 6:03 p.m. Task Force Member Charles J. Rutz Jesse Sherman James E. Strickland Douglas J. Williams Also Present Tina Wilson Margie Simmons Patricia O. Sullivan Budget Director Finance Director Board Reporter The meeting was called to order at 5:35 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 - February 20, 2007 Task Force Member McLachlan moved to approve the minutes of February 20,2007, meeting, as recorded and submitted in written summation to each Task Force Member. The motion was duly seconded and carried unanimously. 3. Questions/Discussion reaardina February 20. meetina - None. 4. Task Force Recommendations to the City Council It was felt while the City has sufficient facilities to meet the needs of seniors, transportation for seniors is problematic. It was suggested that transportation, such as the Jolley Trolley, could be scheduled for seniors to access facilities such as the Long Center. It was suggested that the City could reduce its public communication staff and reduce communication costs by advertising City programs on C-view and in utility bills. It was suggested that rather than constructing new facilities that require additional FTEs (Full-Time Equivalent), money be spent on infrastructure such as sidewalk repair. Concern was expressed that prohibiting the use of Penny for Pinellas funds to construct buildings that require additional FTEs could preclude construction of a needed facility. It was suggested that long- term operating expenses be analyzed before considering a new structure. It was suggested Task Force - Budget 2007-02-26 1 . that the Task Force not consider replacement facilities as new. It was stated that new construction could reduce maintenance and insurance costs. The ranking of each recommendati.on will be determined at a later date. Task Force Member Altner moved that the Budget Task Force recommends that the City maintain its existing structures, refurbishing or replacing them as necessary, which could lower maintenance and insurance costs and that the City limit growth of additional facilities so that no additional FTEs are needed, i.e. use Long Center or existing facilities, such as libraries, to meet Senior Center needs. The motion was duly seconded and carried unanimously. Discussion ensued regarding a proposed moratorium on additional parks. Finance Director Margie Simmons reviewed the required use of impact fees for open space, recreation facilities, and open land. Concern was expressed that even empty parks require maintenance, unless they remain in a natural condition. It was stated that park additions should be limited, not stopped completely. Task Force Member McLachlan moved to amend the previous motion to read that the Budget Task Force recommends that the City maintain its existing structures, refurbishing or replacing them as necessary, which could lower maintenance and insurance costs and that the City limit growth of additional facilities and parks so that no additional FTEs are needed, i.e. use Long Center or existing facilities, such as libraries, to .meet Senior Center needs. The motion was duly seconded and carried unanimously. . The advantages of subcontracting were reviewed. It was stated that subcontracting eliminates holiday, vacation, pension, and health benefit costs, and mitigates costly risk to the City should injury occur. It was suggested that management consider outsourcing on a regular basis and justify why it cannot be accomplished. It was stated that some retraining of management staff would provide the skills necessary to oversee outsourced operations. It was suggested that outsourcing solid waste disposal would be beneficial. Discussion ensued regarding the need to control the growth of employee benefit costs. It was suggested that increases to health insurance costs be capped at 3% annually, the same amount as the Save our Homes cap. In response to a suggestion that employees pay one-third of their health insurance costs, concern was expressed that low wage workers would be impacted most. It was noted that negotiations with the unions are necessary before benefit changes can be implemented. It was stated that the City cannot pay what it cannot afford. It was suggested that retirement contributions be capped and that the defined benefit plan be replaced with a defined contribution plan, which would result in no liability to the City. Ms. Simmons reviewed City contribution requirements for the Pension Plan. It was felt that employees should handle their own investments. Ms. Simmons said IRA contributions would be in addition to a 6.2% Social Security contribution that the City currently does not pay. . In response to concerns that the City would lose staff if it reduces benefits, it was stated that employees would have no where to go if Clearwater acts as a catalyst for nearby cities to face budget reduction demands by also reducing employee benefits. It was stated the City needs to determine causes behind significant turnover in the Fire Department, as resulting training costs are high. Task Force - Budget 2007-02-26 2 . Consideration of an employee buyout program was suggested. It was felt that the City's PTO (Paid Time Off) plan should be reviewed and that floater days and the carryover of vacation and sick days be eliminated. It was suggested that sick days be replaced by five disability days annually, with extensions available if documented as necessary. Task Force Member McLachlan moved that the Budget Task Force recommends that the City control the cost of employee benefits: 1) limit increases to the 3% level of revenue increases (based on the Save Our Homes cap); 2) freeze or cap the City's contribution to health insurance and consider a co-pay program; 3) reevaluate union contract provisions; 4) evaluate the vacation/sick day policy and consider a PTO concept with a disability rider; 5) consider an employee buyout program; 6) evaluate pension alternatives, such as replacing the defined benefit plan with a defined contribution plan; and 7) emphasize subcontracting by considering liability factors when evaluating costs. The motion was duly seconded and carried unanimously. Discussion ensued regarding subsidy costs related to Ruth Eckerd Hall, BrightHouse Fields, and the Harborview Center. Opposition was expressed to long-term funding agreements. It was suggested that facilities be required to justify their requests for funds through annual applications that are subject to City evaluation. While it was felt that the uncertainty of receiving City funds every year would make facilities work harder to raise funds, it was stated that the receipt of City funds helps facilities raise money. . It was stated that without culture, Clearwater would be a dead city and there are no local corporations to subsidize the arts, which draw a segment to the population, raise property values, and draw tourists. It was noted that Tampa, St. Petersburg, and Clearwater all have performing arts centers. It was felt that Clearwater, along with nearby communities, should lend support to the arts, such as the Florida Orchestra. It was indicated that Ruth Eckerd Hall ticket prices are too expensive for many residents. It was stated that Ruth Eckerd Hall plans to expand its elementary school "Passport to the Arts" program, which has helped raise test scores. Budget Director Tina Wilson said every recreation center is subsidized. The City operates BrightHouse Fields and the Long Center. Ms Simmons said the cultural operations at Ruth Eckerd Hall and convention operations at the Harborview Center are outsourced. The successful outsourcing of operations at the Sailing Center was reviewed. Concern was expressed that proposed downtown boat slips may require subsidies. Discussion ensued regarding the use of facilities. It was felt that costs should be spread across the population as residents' needs for specific services vary throughout the year, i.e. the arts, Fire & Rescue, Library, Parks, etc. Task Force Member Gulley moved that the Budget Task Force recommends that the City review and evaluate annual contribution programs on a year-by-year basis through a grant- type system. The motion was duly seconded and carried unanimously. . Discussion ensued regarding the beach library with suggestions that it not be a standalone structure, that it be consolidated with the recreation center, open fewer days, or closed. It was suggested that money saved could be used to add an information position at the Task Force - Budget 2007-02-26 3 . Main Library. Concern was expressed that beach residents would have difficulty reaching the Main Library during tourist season. It was suggested that hours at the North Greenwood Branch be maintained. Task Force Member McLachlan moved that the Budget Task Force recommends that the City eliminate a free-standing beach library, by consolidating it with the recreation center or closing it, with patrons instead using the Main Library. The motion was duly seconded. Task Force Members Altner, Longenecker, McLachlan, Martin, Rutz, Sherman, Strickland, and Williams, and Chair Hightower voted "Aye"; Task Force Members Evich and Gulley voted "Nay." Motion carried. Discussion ensued regarding City policies related to reserves. It was suggested that use of reserves for FTEs be prohibited. It was noted that reserves had been used for that purpose fora finite time. Ms. Wilson reported current levels of reserves equal 18% of the budget, higher than mandated. It was suggested that excess reserves should be returned to the taxpayers at some point. It was stated that decisions regarding reserves should be delayed until proposed changes to Florida property tax law are adopted. Ms Simmons recommended that use of reserves be limited to projects such as constructing a new City Hall, rather than borrowing money or using Penny for Pinellas funds. It was stated that the obligation to fund similar projects belongs to future residents who will use the infrastructure. . Task Force Member Evich moved that the Budget Task Force recommends that the City prohibit using reserves for FTE (Full-Time Equivalent) costs. The motion was duly seconded. Task Force Members Altner, Evich, Gulley, Longenecker, McLachlan, Rutz, Sherman, and Williams, and Chair Hightower voted "Aye"; Task Force Member Strickland voted "Nay." Motion carried. Ms. Simmons reviewed current and past property insurance coverage. Staff will provide the City Council with coverage options, based on what is obtainable. It was suggested, as the City has not suffered hurricane damage in many years it should drop coverage or self-insure. It was felt the City would never have sufficient reserves nor insurance to repair destruction wrought by a major hurricane and would need to depend on the Federal government. It was suggested that the City pool its insurance needs with other municipalities and obtain coverage off shore. Ms. Simmons said Clearwater is too large to participate in FLC (Florida League of Cities) pools for smaller cities. Due to its large size, the City has difficultly obtaining sufficient coverage. Task Force Member Strickland moved that the Budget Task Force recommends regarding property insurance that the City consider eliminating or reducing its wind coverage, using reserves in the central insurance fund to increase self-insurance limits, and pursuing pooling concepts with other municipalities. The motion was duly seconded. In response to a question, Ms. Simmons said the budget for property insurance renewal includes use of reserves in the central insurance fund. Upon the vote being taken, the motion carried unanimously. . It was recommended that take-home vehicles be limited to Pinellas County. Discussion ensued regarding distances between cities inside and outside the County. It was suggested Task Force - Budget 2007-02-26 4 . . . expressed that the take-home program is very expensive as those vehicles are available for City business only one-third of the time. It was stated that sufficient time is not available to discuss a review of the City's fleet, with concerns expressed regarding discrepancies in fleet information provided to the Task Force. Task Force Member Strickland moved that the Budget Task Force recommends that take-home vehicles be limited to Pinellas County for all staff. The motion was duly seconded and carried unanimously. To finalize recommendations, consensus was to schedule another Budget Task Force meeting on March 5, 2007, at the Main Library at 6:00 p.m. If too many changes are recommended, another meeting may be necessary on March 12,2007, unless the Task Force can approve changes via e-mail. 5. Adiourn The meeting adjourned at 8:26 p.m. Chair Budget Task Force Task Force - Budget 2007-02-26 5