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03/05/2007 BUDGET TASK FORCE MEETING MINUTES CITY OF CLEARWATER March 5, 2007 Present: R. Nathan Hightower Chair Herbert W. McLachlan Vice Chair Martin L. Altner Task Force Member Joseph W. Evich Task Force Member – arrived 6:18 p.m. Isay M. Gulley Task Force Member Robert L. Longenecker Task Force Member Charles J. Rutz Task Force Member Jesse Sherman Task Force Member – arrived 6:09 p.m. James E. Strickland Task Force Member – arrived 6:43 p.m. Douglas J. Williams Task Force Member Absent: Joyce E. Martin Task Force Member Also Present Tina Wilson Budget Director Margie Simmons Finance Director Patricia O. Sullivan Board Reporter The meeting was called to order at 6:07 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 26, 2007 Task Force Member Williams moved to approve the minutes of February 26, 2007, meeting, as corrected: page three, last sentence of paragraph four to read “ . . . elementary motion carried school “Passport to the Arts” program . . .” The was duly seconded and unanimously. 3. Questions/Discussion regarding February 26, meeting – None. 4. Final Task Force Recommendations to the City Council Discussion ensued regarding the City’s Penny for Pinellas 3 project list. Concern was expressed that the list includes a Senior Center. It was stated that the Budget Task Force does not think a Senior Center is needed. It was felt the proposed dog park also should not be built. It was suggested that support for extending the tax may be based on listed projects. Budget Director Tina Wilson said Pinellas County had requested the City’s list of projects last summer. She reviewed the public process the City Council followed to establish the list. Changes to large items on the list require public hearings. Task Force Member Rutz moved that the Budget Task Force recommends that the City not construct any facility that creates a need for additional FTEs (Full-Time Equivalent) such as the proposed standalone Senior Center. The motion was duly seconded. Task Force – Budget 2007-03-05 1 Alternate language was suggested. Task Force Member Rutz withdrew his motion. Task Force Member Altner moved to amend the Task Force recommendations to limit the growth of City facilities by recommended that the City: 1) maintain its existing structures, refurbishing or replacing them as necessary, which could lower maintenance and insurance costs; 2) limit growth of additional facilities and parks; and 3) not construct a Senior Center motion facility and instead use existing facilities for senior activities. The was duly seconded carried and unanimously. Discussion ensued regarding the Task Force’s recommendation regarding employee benefits. It was stated that the buyout program should be limited to the approximately 200 employees who are eligible for retirement. Task Force Member Rutz moved to amend the Task Force recommendations related to employee benefits to recommend 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 PTO policy and consider replacing sick days with a disability rider; 4) evaluate an employee buyout program for employees eligible for retirement; 5) evaluate pension alternatives, such as replacing the defined benefit plan with a defined contribution plan; and 6) emphasize subcontracting by considering liability factors when motion evaluating costs. The was duly seconded. Discussion ensued regarding a buyout plan with comments that it would provide the City an opportunity to reevaluate position responsibilities, consider outsourcing, and stimulate turnover at the top, thereby attracting new blood and new ideas. It was stated that replacement staff would earn lower wages. It was stated that most buyout plans result in a cost savings. carried Upon the vote being taken, the motion unanimously. Discussion ensued regarding the Budget Task Force’s recommendation regarding annual contributions. It was stated the recommendation only relates to Ruth Eckerd Hall as the Harborview Center is an Enterprise Fund and the City operates the Long Center. Ms. Wilson said the City mostly operates BrightHouse Fields. No City recreation centers break even. The City’s annual contribution to Ruth Eckerd Hall is budgeted annually. It was noted that the negotiation of contracts is key, such as providing incentives to Harborview Center management. It was felt that the grant reference in the recommendation makes the language unclear. Task Force Member Williams moved to amend the Task Force recommendation that the motion City review and evaluate annual contribution programs on a year-by-year basis. The carried was duly seconded and unanimously. Task Force Member Rutz reviewed his evaluation of the City’s fleet, focusing on the Police Department, as its costs are highest. He expressed concern that the 38 unmarked Crown Victorias, which cost $35,000 each, should be marked and provide a presence on the road whenever possible. He said the public can easily identify unmarked cars. Task Force – Budget 2007-03-05 2 Task Force Member Rutz said the Police Department’s report that it had 30 take-home cars only referenced vehicles assigned to officers who live in the City; the department has 93 take-home cars. He said an additional 29 vehicles are assigned to specific officers, and expressed concern this policy allows 122 department vehicles to be unused 76% of the time. He said assigning cars reduce their use. He said vehicles are tools that allow employees to do their tasks and should not be used as employee perks. He expressed concern that the Police and Fleet departments do not communicate. He said the high cost of take-home cars is due to depreciation, insurance, and maintenance. He said management is on call 24 hours per day, suggesting suggested that no positions below Lieutenant should be provided take-home cars, except for K9 units. He said desk bound administrative positions, such as Captain of Support Services, do not need use of a City vehicle and should be provided a car allowance instead. He said the Police Department has too many cars and that 156 vehicles for 50 routes is outrageous. Task Force Member Rutz said the Police Department should reduce the size of its fleet. He suggested the department obtain with 5-year leases a maximum of 100 vehicles with warranties, which would provide each route with two vehicles. He suggested 11% more vehicles would be used when pool cars are being repaired or unavailable due to accidents. He said fleets attract costs associated with fuel, repairs, and insurance. He said the City should obtain vehicles that can be driven at least 100,000 and not consider a lifespan of 75,000 miles as adequate. He said reducing the Police Department’s fleet by 45 vehicles would save $1.45- million on vehicles costs, insurance, and repairs. He suggested the funds would be better spent on additional officers than on vehicles. Concern was expressed that perks, such as take-home vehicles, foment jealousies. It was said instead of marketing take-home cars as a benefit, the City should pay higher wages. It was stated the Police Department headquarters resembles a police convention when shifts change due to the large number of vehicles. It was suggested that control factors could be implemented for pool vehicles, such as post and pre trip inspections. Concern was expressed that officers who live outside the City would be permitted to take home vehicles. Concern was expressed that the Police Chief had not considered fleet reductions, instead of staff reductions, when identifying possible department budget reductions. Task Force Member Rutz moved to amend the Task Force recommendation related to take-home vehicles to recommend that the City limit take-home vehicles to Pinellas County for all staff and that City vehicles are tools that allow employees to do their tasks and should not be motion carried used as employee perks. The was duly seconded and unanimously. Discussion ensued regarding Member Rutz’s fleet evaluation with a suggestion that it be submitted as an addendum to the Task Force’s final recommendations. It was stated that the Task Force should not identify alternate uses for targeted savings. Task Force Member Rutz said while the Police Department reported that it had obtained its undercover vehicles through seizures, the cost of insurance and maintenance for those 27 vehicles is not considered. He suggested it would be less expensive for undercover officers to use rental cars. He said as there is no accounting for undercover officers’ fuel purchases, they could be purchasing fuel for personal use. Finance Director Margie Simmons said Fleet does not list undercover vehicles. Task Force Member Rutz also suggested that seven sedans be eliminated due to low mileage use and high insurance costs. Task Force – Budget 2007-03-05 3 Task Force Member Longenecker moved that the Budget Task Force recommends a detailed utilization study be performed on the City’s police fleet to identify and eliminate excess motion vehicles, with a special emphasis placed on take-home vehicles. The was duly seconded. Discussion ensued regarding the need for a detailed study, the amount of potential savings, and the need to reference Task Force Member Rutz’s evaluation. Task Force Member Longenecker moved to amend his motion to state that the Budget Task Force fleet evaluation reflects a potential savings of 25% and the Budget Task Force recommends a detailed utilization study be performed on the City’s police fleet to identify and eliminate excess vehicles, with a special emphasis placed on take-home vehicles. The motion seconder agreed to the amendment to the . Discussion ensued regarding the Fire Department’s fleet, which has significantly fewer vehicles used as take-home cars. The validity of the claim that take-home police cars deter neighborhood crime was questioned. carried Upon the vote being taken, the motion unanimously. It was suggested that annual General Fund budget increases be limited to the CPI (Consumer Price Index) or 4%, whichever is less. It was stated with approximately half of City taxpayers qualifying for a Homestead Exemption and 3% Save Our Homes cap, many residents do not pay their fair share for quality of life services. It was stated that the cost for these services is borne by business owners and non-homesteaded property owners. It was said that caps cannot be instituted until current union contracts expire and become subject to the cap. It was stated that the local CPI is higher than the national CPI due to escalating housing costs. As the legislature may impose caps, the City Council was urged to consider this issue before it is mandated. Ms. Wilson reviewed City Council direction to the Budget Task Force to identify non- essential services and look at projects and programs for reductions. It was stated that the Task Force is empowered to make other recommendations also. It was felt until the current unfair system is reformed, the burden needs to be shared. It was suggested that growth of General Fund increases be reduced by 1% a year, beginning with 5% cap on growth. Discussion ensued regarding spending caps. Task Force Member Longenecker moved that the Budget Task Force recommends that the City Council consider a self-imposed cap on annual general fund increases to the CPI plus motion 1%. The was duly seconded. Discussion ensued. It was suggested that during union negotiations the City indicate it cannot afford to meet all demands. Upon the vote being taken, Members McLachlan, Altner, Longenecker, Rutz, Sherman, and Williams voted “Aye”; Members Evich, Gulley, and Strickland, and Chair Hightower voted carried “Nay.” Motion . Task Force – Budget 2007-03-05 4 It was reported that Task Force Members also want to address the number of Fire Chiefs, consider the use of incentives to encourage use of volunteer fire personnel, consolidate Police and Fire department Public Relations positions under the Communications Department, eliminate the Fire Plans Examiner position, eliminate C-View as it is not an essential service, and consider Parks & Recreation Department reductions. Ms. Wilson requested that Task Force Members forward their suggestions to her for distribution. It was suggested that the City discontinue the practice of transferring FTEs from Proprietary/Enterprise Funds to the General Fund, which appears to be playing games with the budget. It was stated that Enterprise Fund balances total approximately $76-million, which are adequate to cover related costs. It was suggested that the City should transfer back to the Parking fund the 14.5 FTEs previously transferred to the General Fund. Ms. Simmons reviewed restrictions on transferring surpluses from Enterprise Funds with outstanding bonds. Concern was expressed that the Parking Fund has a surplus of $7 million. Ms. Simmons reviewed the history of the Beach Walk project, which will reduce parking and associated income, which previously funded beach guards, beach cleaning, and the Jolley Trolley. There was a difference of opinion if these are General Fund costs or should be funded by the Parking Fund. Ms. Simmons suggested that Parking Fund surplus be used toward construction of a beach parking garage, which studies indicate cannot be self-sustaining. There is no land available on the beach for additional surface parking. Discussion ensued regarding reserves. Staff reported that City standards do not prohibit returning reserves to the taxpayers. Task Force Member McLachlan moved that the Budget Task Force recommends that the City discontinue the practice of transferring FTEs from Proprietary/Enterprise Funds to the motion General Fund. The was duly seconded. Discussion ensued. Concern was expressed that allowing these types of transfers provides a loophole for spending limits. Ms. Simmons said the decision to transfer the subject positions to the General Fund occurred when the Beach Walk project was approved, and was based on the pending loss of parking spaces and reduction to Parking Fund revenues. Parking Fund income is projected to be $500,000 less than required to meet previous FTE obligations. Ms. Wilson said Pier 60 costs were transferred to the General Fund when it was determined that Enterprise Fund could not be self-supporting. It was stated that lifeguards are a necessity for the tourist area. Upon the vote being taken, Members McLachlan, Evich, Rutz, Sherman, and Williams voted “Aye”; Members Altner, Gulley, Longenecker, and Strickland, and Chair Hightower voted continued “Nay.” Motion tied and automatically to March 12, 2007. Consensus was to schedule another Budget Task Force meeting on March 12, 2007, at the Main Library at 6:00 p.m. It was suggested that individual Councilmembers should review the operations and budgets of large departments and report their findings to the City Council. Task Force – Budget 2007-03-05 5 . . . 5. Review "Executive Summary" for final reoort - Continued 6. Adiourn Task Force - Budget 2007-03-05 ~ Chair Budget Task Force 6