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09/05/2001CITY COMMISSION BUDGET WORKSESSION CITY OF CLEARWATER September 5, 2001 Present: Brian J. Aungst Mayor/Commissioner – (arrived 8:49 a.m.) Ed Hart Vice-Mayor/Commissioner Whitney Gray Commissioner Hoyt P. Hamilton Commissioner William C. Jonson Commissioner Also present: William B. Horne II City Manager Garry Brumback Assistant City Manager Pamela K. Akin City Attorney Sue Diana Assistant City Clerk Brenda Moses Board Reporter The meeting was called to order at 8:45 a.m. at City Hall to discuss the Enterprise Fund budgets. Enterprise Operations Harborview Center Operations – Kevin Dunbar, Parks & Recreation Director Assistant City Manager Garry Brumback said the City’s goal is for the Harborview Center is to become self-reliant. He complimented Parks & Recreation Director Kevin Dunbar on his efforts toward that goal. Parks & Recreation Director Kevin Dunbar said the goal is to reduce the Harborview Center’s deficit to under $150,000 this year and by a minimum of $50,000 for each of the next three years to achieve a zero deficit. He said it is important to consider the Harborview in the long term. Many events are booked several years in advance. The Harborview Center has been brought under the Parks and Recreation budget this year. Shifted into the Harborview budget is $179,000 for police aides. The Harborview’s technology and infrastructure needs are being addressed in the budget. In response to a question, Mr. Dunbar said the Harborview Center's computers are not connected with the City. IT is working with them to upgrade its computers to connect to the City to make it more of city operation. The cost will be covered through lease purchase. In response to a question, Budget Director Tina Wilson said she would provide the Commission with a line item detail regarding the Harborview’s Internal Service Fund. In response to a question, City Manager Bill Horne said there would always be maintenance and operational costs. It was remarked that 97% of convention centers require subsidies to operate. It was suggested the City be careful how it classifies the Harborview Center; as a civic or as a convention center. Concern was expressed regarding the cost to replace the air-conditioning and roof when it becomes necessary. The amount of subsidies required to operate the facility has been reduced. Ms. Wilson said on July 3, 2001, a detailed budget document was provided the Commission. She said garage charges, charges for the generator and building and maintenance costs decreased. In response to a question, Mr. Dunbar said when the City operates a program at the Harborview Center; it only pays for direct costs. The City uses the facility on an as-needed basis depending upon its availability. It was remarked the Harborview facility is a gross misuse of the property due to its location. Inherent physical flaws prevent the contracting of certain conventions. It was felt there is a need for a convention facility elsewhere. 2. Marine & Aviation Operations – Bill Morris, Marine & Aviation Director. Marine & Aviation Fund/Airpark, Marina, Parking Fund/Beach Guard Operations Marine & Aviation Director Bill Morris said the Clearwater Airpark has been converted to an Enterprise Fund. He said staff has been working with the FDOT (Florida Department of Transportation) to obtain all available grants to accomplish the parameters stated in the Airpark Master Plan. Three major concerns from meetings with the neighborhoods in the area included: 1) Safety of the Airpark; 2) neighborhood compatibility; and 3) financial stability. Mr. Morris said the projections for the Master Plan are financially stable. No City resources for additional funding have been necessary. Increased funding up to 77% allowed plans for landscaping and berm and runway projects to move forward. In keeping with the 20-year plan, a stormwater study for the entire Master Plan project will be done. In response to a question, Mr. Morris said unrestricted retaining earnings have been combined for the Airpark and the Clearwater Marina. Currently, the Airpark is not contributing, but with additional funding from the State, staff feels the City would not need to borrow any funds. He said the $200,000 that previously was borrowed can be leveraged for other projects in the Master Plan. Combining the Marine and Aviation departments has resulted in the elimination of any duplication of services or positions. The Airpark was being run with a small staff. Personnel were changed to accommodate both the Airpark and the Marina. In response to a question, Ms. Wilson said $200,000 has been allocated for Airpark improvement project and the rest for Marina projects, for a total of $305,000. Transfers are being recognized as prior dollars to balance the budget. Mr. Morris said a large part of the Marine & Aviation Department budget is for fuel costs. He said this year was a slow fuel sales year. Fuel prices were not marked up in sensitivity to economic conditions. In response to a question, Mr. Morris said a monthly survey of Marina fuel prices is done. Historically, the Clearwater Marina fuel prices are between 5 to 8 cents a gallon cheaper that other area marinas. 3. PWA Operations – Mashid Arasteh, Public Works Administrator; Stormwater Fund/Stormwater Management and Stormwater Utility; Parking Fund/Parking Operations; Public Utilities Department Water & Sewer Fund (separate document dated 7/24/01 –Water & Sewer Fund Preliminary 2001-02 Budget) Mr. Morris said $175,000 for beach guards on Sand Key comes from Pinellas County. He said those funds go directly into the Parking Fund, not the Marina. He said Clearwater has the lowest paid lifeguards at the highest certification level in Florida. Staff is proposing an equitable pay scale. Staff plans to meet with the Convention Visitor’s Bureau to ask their representatives to request that local hotel owners pay costs for lifeguards. Mr. Morris said during peak times such as Spring Break, one lifeguard could be watching as many as 5,000 people. He is considering the possibility of City-sponsored lifeguards at specific areas and designating other areas as “swim at your own risk”. All alternatives are being considered. He said lifeguards provide a valuable service at a low cost and perform 53,000 actions a year, which frees up Police and Fire rescue activities. Public Works Administrator Mashid Arasteh said staff is focusing on global solutions regarding utility funds with the use of grants and public funds. She said the County and other cities have participated in many watershed studies. Staff will be bringing forward $70 million in capital improvement projects over the next 5 years, including Kapok, Town Pond, and Stevenson’s Creek projects. Ms. Arasteh said the City has installed new parking meters and adjusted rates, which resulted in a 17% increase in revenues. Those revenues will be used for the new parking garage. She said the majority of the $295,000 of the Parking Fund is for the Jolley Trolley; the rest is for beach lifeguards and beach cleanup. Ms. Wilson said the reason staff does not concentrate so heavily on the Enterprise Funds during the budget process is because these funds are looked at when rate structures are reviewed. The budget is based upon available resources and rates at the time it is being compiled. When the rates change, they are addressed at the quarterly process. Mr. Brumback said staff plans to bring forward a stormwater rate study within the next 30 – 60 days. In response to a question, he said a watershed management plan is in place. The question is whether the City is willing to put the resources against that plan in order to make it a reality. Kapok has been identified as an issue. Assistant Director of Engineering/PD&E Tom Miller said when FEMA (Federal Emergency Management Agency) gives Clearwater a favorable ranking; it results in a reduction in citizen’s insurance premiums. He said the State provides the City with guidelines regarding watershed plans. In response to a question, Ms. Wilson said the stormwater fund historically has not been paying their share of costs, however staff is trying to ensure those costs are being distributed fairly. Ms. Wilson said the budget document reflects $476,000, which is partly for interest earnings, not receipts for operating expenses. She explained how the funds are allocated to the Marina from the Parking Fund. She said that many funds have different operations. She said separate ledgers for expenditures are not a major issue. Discussion ensued regarding using cards for the new electronic parking meters. It was felt the City must begin to make the cards more available to the public by allowing their purchase from local merchants. It was suggested citizen permits on an annual basis for use of public parking meters also be considered. It was felt that rather than hang tags, stickers for cars could be used. It also was suggested that pay stations be considered. In response to a question, Mr. Brumback said installing parking meters around Coachman Park is being considered. Tracy Bruch, Parking Facilities Manager, said State Statute provides that disabled citizens are not required to pay parking meters. She said staff plans to pre-sell parking permits to local area businesses. It was suggested staff consider having the Parking Fund pay for Police aide services. Ms. Wilson said a separate handout regarding the utilities department water and sewer fund was provided to the Commission. She said for the 2002 budget, staff used the 2000 audited financial statement. She said that process has been established for years. In response to a question, Finance Director Margie Simmons said part of the City’s bond covenants require the City to put money in the sewer renewal and replacement fund to protect bondholders by maintaining the system. 4. Strategic Business Services – Chuck Warrington, Managing Director and Executive Officer Gas System Operations Managing Director and Executive Officer, Clearwater Gas System, Chuck Warrington presented an overview of the Clearwater Gas System operation. He said manpower is being reduced by one this year; travel budget by 40%; and the value to the City has grown 67% over the past eight years. 5. Clearwater Customer Service – Jim Geary, Customer Services Director Customer Services Director Jim Geary said the Customer Service Department is working with other departments to provide quality customer service throughout the City. He said the new system allows staff to quickly respond to customer questions and provide data to comptrollers for stormwater, etc. 6. Solid Waste/Recycling Operations – Bob Brumback, Solid Waste/Recycling Director Solid Waste/Recycling Operations Director Bob Brumback presented an overview of operations. He said the City competes commercially on roll-off and recycling services. In response to a question, he said in order to keep rates down and maintain the system, revenues are kept within the department rather than using funds elsewhere. Ms. Wilson said the Solid Waste and Recycling Departments are healthy; the Gas Department dividends are unique. She said when rate analyses are performed on Solid Waste and Recycling, they are based upon no dividends, otherwise rates would be affected greatly. Mr. Brumback said years ago, staff was directed by the Commission to operate Solid Waste and Recycling as a business. He said the departments would not be competitive if they did not work to keep rates down. He said positive cash flow must flow back into the system. Ms. Wilson said one of the pooled positions in the department is being recommended to be transferred to Solid Waste operations. The revenue that person would generate would offset the costs. The position will be used for recycling, roll-off services, and marketing purposes. Jolley Trolley 1. Jolley Trolley – Kevin Dunbar, Parks and Recreation Director City Manager Bill Horne said the Jolley Trolley contract expires the end of September 2001. He said Al Sakey has been instrumental in its operation. Mr. Horne requested the Commission’s direction regarding the City’s ability and desire to continue to provide a subsidy to the Jolley Trolley. Mr. Dunbar said staff is proposing a 1-year agreement with the Jolley Trolley to allow a dialogue with them regarding future funding. He said City funding basically comes from grants. Dialogue with Mr. Sakey will include how the Jolley Trolley fits into tourism plans, ridership, PSTA, etc. Staff is looking for ways the Jolley Trolley can become less reliant on the City for funding. Ms. Wilson referred to specific pages in the budget document, which explain the various sources of funding for the Jolley Trolley. Mr. Dunbar said $295,000 generally goes towards paying for tour groups and the remainder for maintenance of trolleys. It was felt there are opportunities with the PSTA to avoid duplication of service with the Jolley Trolley. It was requested that financial statements regarding the Jolley Trolley be provided. In response to a question, Mr. Dunbar said the Jolley Trolley still needs the subsidy to support the original mission, otherwise it will cease to exist. It functions under a grant program for 65% of its operation. Mr. Dunbar said he felt a 10% reduction in the subsidy was a fair step in the right direction. It was felt the Jolley Trolley should make an effort to publish a specific schedule to better accommodate riders. Many complaints have been received from the Chamber of Commerce. Al Sakey, Jolley Trolley, said 2 of the 8 trolleys are leased annually from PSTA for $1/year. They are the original trolleys. Seven (7) trolleys have been acquired. He said trolleys are constantly being repaired due to the high mileage incurred. He said the oldest trolleys are 6 years old, average more than 100,000 miles a year, and have to be replaced. No trolleys have been disposed of yet. Mr. Sakey said four years ago; he submitted a statement regarding the status of the Jolley Trolley, wherein he suggested that 7 trolleys would be a normal number for continued operation of the system. He said the trolleys are owned outright. The first ones were purchased with loans. Mr. Sakey said when the Jolley Trolley was conceived, PSTA operated a trolley system in Clearwater beach and was receiving $350,000 a year for 2 trolleys. PSTA determined it was not practical or economical and discontinued the trolley operation. The City felt trolleys were necessary to the beach and for tourism. Negotiations with the PSTA resulted in leasing the 2 trolleys from them. Mr. Sakey said the Jolley Trolley operates from10:00 a.m. to 10:00 p.m., 7 days a week; PSTA operates from 5:45 a.m. to 10:00 p.m. PSTA services mass transit; the Jolley Trolley services tourism, the beach, and hotels, and some local residents. He said the Jolley Trolley runs approximately every 35-40 minutes with a targeted schedule; PSTA runs hourly but with a disclaimer due to traffic conditions. He said all efforts are made to ensure the Jolley Trolley runs efficiently. Mr. Sakey said $50,000 now maintains 9 trolleys. The City subsidy voluntarily has been reduced by $30,000 by the Board. He hopes to be able to continue to reduce that subsidy. In response to a question, Mr. Sakey said he first wanted to request the Commission’s support regarding an increase in Jolley Trolley rates before taking it to the PSTA for their approval. He said the question is how much the rates should be raised. PSTA rates are $1.25; seniors only pay $ .25. It was remarked that if the Jolley Trolley operates inside the PSTA framework, it will be constrained to PSTA routes and fees. Exact change boxes would also be expensive. It was remarked that as today’s discussion is budget-related, this topic should be discussed at a future meeting. It was remarked the Jolley Trolley provides a tremendous tourist benefit and is a highly visible impact in the City. It moves tourists around who are not on a set schedule and reduces traffic. Internal Service Funds 1. Finance/Risk Management Program – (page 54 in Preliminary 2001/02 Budget document)- Margie Simmons, Financial Services Director AND 2. General Support Services/General Services Fund and Garage Fund Operations (pages 65 – 71) – Bob Brumback, Interim General Support Services Director AND 3. Human Resources/Employee Benefits Program – Paul O’Rourke, Human Resources Director AND 4. Information Technology Operations – Dan Mayer, Information Technology Director Ms. Wilson said these items have already been discussed. 5. PC & M/Graphics Program – Jackii Molsick, Public Communications & Marketing Director In response to a question, Public Communications & Marketing Director Jackii Molsick said the department lost one employee last year to cancer. That position has not been filled. Salary savings have been moved into the operating budget. Consideration is being given to IT taking over the courier position along with other changes. All operations are being reviewed. In response to a question, Ms. Molsick said the Graphics Department produces large quantities of quick copy jobs such as the Employee Newsletter and utility stuffers, designs City materials, and produces the budget books, forms, stationery, etc. The department has two printing presses. Plans are to establish a joint arrangement with Xerox for some work. Special Revenue Funds Ms. Wilson referred to the Special Development Fund. Those revenues are restricted either by County or City ordinance or some other means such as the Penny for Pinellas, infrastructure tax, impact fees, local option gas tax, etc. She said designated reserves are approximately $5.9 million. In response to a question, Ms. Simmons said there is restricted money in the Enterprise Funds. If there are outstanding bonds, the bond covenants require money for renewal and replacement, and transfer money to pay interest payments and part of the principal. Discussion ensued in regard to the spreadsheet regarding the budget hat Commissioner Hart provided. It was remarked that normally, the Commission requests background from staff 24 hours in advance in order to make an intelligent decision. It was felt it would be difficult to discuss the spreadsheet without background materials. Commissioner Hart said he was not prepared at this time to provide the background related to his spreadsheet. The Commission indicated it needed all information in advance in order to review any potential changes. In response to a question, Commissioner Hart said he is not recommending all information in the spreadsheet. He said he was only offering additional suggestions and is giving the Commission as much advance notice as possible. He felt the public should be involved in the budget earlier in the process. It was remarked that the public has had many opportunities to give the Commission feedback. On July 12, 2001, the TRIM was set and there was no public input. Concern was expressed misstatements are being made and the public is being mislead regarding Commissioner Hart’s references to budget numbers. In response to a question, Commissioner Hart said he would discuss the over $2 million in retained earnings for recurring expenses tomorrow night. He said he has been asking for over three years to have a review by department heads on individual line items. He said citizens have approached him regarding lowering taxes. In response to a question, Ms. Wilson said meetings were held to engage the public regarding the budget in four different locations. Those meetings were advertised and few citizens attended. It was remarked the public has an opportunity for input as soon as the budget document is available. It was felt the public has had months to review the proposed budget and provide input. It was remarked that no public outcry has been received stating the system is broken. Concern was expressed that Commissioner Hart wants to change the budget at the eleventh hour. It was felt that to roll back taxes this year would cause even higher taxes the next year. Adjournment The meeting adjourned at 11:20 a.m.