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06/20/2001CITY COMMISSION BUDGET WORKSESSION CITY OF CLEARWATER June 20, 2001 Present: Brian J. Aungst Mayor/Commissioner Ed Hart Vice-Mayor/Commissioner Whitney Gray Commissioner Hoyt P. Hamilton Commissioner William C. Jonson Commissioner Also present: William B. Horne II Interim City Manager Garry Brumback Assistant City Manager Pamela K. Akin City Attorney Cynthia E. Goudeau City Clerk Patricia O. Sullivan Board Reporter The meeting was called to order at 1:02 p.m. at City Hall to discuss the preliminary budget for Fiscal Year 2001-2002. ITEM #2 - Budget Presentation - Bill Horne, Tina Wilson The Interim City Manager thanked the City Commission for their dedication to the 12-month budget process. While retained earnings are above 8%, staff is working to reduce costs. A key assumption is that the millage rate shall not be raised. The City Commission will set the millage rate on July 12, 2001. Public hearings and final approval of the budget are scheduled for September 6 and September 20, 2001. Budget Director Tina Wilson presented the City Manager’s recommended annual Operating and Capital Improvement Budget for FY (fiscal year) 2001/02. Staff is working out issues related to the incomplete water and sewer budget. The budget focuses on City Commission priorities of public safety, economic development, infrastructure maintenance, human resources, and quality of life. The budget is balanced. The General Fund is increased by 5.7%, or $4.7-million. The current millage rate of 5.5032 mills equals 24% of homeowner tax bills. No increase to Clearwater’s millage rate is suggested. Of $88.3-million in General Fund Expenditures: 1) 49% - Public Safety; 2) 22.5% - Qualify of Life; 3) 14% - Administration; 4) 9.5% - Public Works; and 5) 5% - Planning & Development. Public Safety expenditures have decreased by 0.5%. The budget includes new General Fund positions: 1) 13.2 FTEs (Full-Time Equivalent) – Fire Department (11 new firefighters and an enhanced maintenance CIP); 2) 7 FTEs - Public Works; 3) 1.8 FTEs – Parks & Recreation Department; 4) 1 FTE – Library; 5) 1 FTE – Finance; and 6) 0.3 FTE – Development Services. Personnel costs of $59.9-million equal 68% of the General Fund and have increased by $3.2-million, or 5.6% from FY 2000/01. Personnel costs are the fastest growing expense. Increases relate to: 1) $1.1-million – new/other positions; 2) $952,000 – wage increases; 3) $247,000 – pension/social security; 4) $581,000 – medical insurance; 5) $182,000 – overtime; and 6) $138,000 – workers compensation. A second tier study is underway regarding fair payment and enhanced training needs. Operating costs have increased by $887,000, or 7%. Internal Service costs have increased by $118,000, or 1%. Debt services have decreased by $200,000, or 6%. General Fund revenue sources: 1) 32% - property taxes; 2) 20% - franchise and utility fees; 3) 15% - telecom tax; 4) 13% - interfund; 5) 11% - other government; and 6) 9% - other. Tax values have increased by 8.8% with a 7.2% increase in values plus 1.6% new properties. In FY 2000/01, the homeowner of a $92,300 house, average value, paid $370.37 in Clearwater property tax. Any increase in the property’s value, would cause taxes to increase incrementally. Retained earnings of $8.4-million is 9.8% of the operating budget. The 6-year Capital Plan will be discussed at the June 25, 2001, budget workshop. This budget adopts the first year for spending purposes. Annual review and amendments are planned. Penny for Pinellas projects will be reviewed in a separate public hearing. Few changes are recommended to the Penny for Pinellas list. ITEM #3 - Commission Discussion In response to a question, Ms. Wilson said two Police Department positions are offset by the reduction of two Police Aides and are revenue neutral. The City should net $130,000 from the new Coca-Cola contract. The two engineer positions for Public Works will be funded by Capital Improvement Projects. Ms. Wilson said all new Public Work positions and the partial Development Services position are revenue neutral. It is expected enhanced revenues will support new Parks & Recreation Department positions. Assistant City Manager Garry Brumback said 11.2 positions have a direct impact on the General Fund. Police Chief Sid Klein said the Police Department is obligated to retain five grant- created positions until September 30, 2003, when the department budget incorporates the positions, with attrition offsets. In response to a question, Ms. Wilson recommended the City Commission discuss new projects at a future meeting. She said it is difficult to compare Clearwater’s millage rate with other cities. While Dunedin’s millage rate is lower, that city does not have a Police Department. County residents have access to fewer recreation activities. It was requested staff provide a spreadsheet list of benefits available to City residents. The Interim City Manager stated the beach library will remain open. Concern was expressed the budget did not adequately address infrastructure maintenance. It was recommended the decrease in budgeting for street maintenance be reversed. City Engineer Mike Quillen said the City has kept pace by continuing to repave 30 miles of City streets each year. It was recommended funding be restored to 100%. Ms. Wilson said the subject funds are used for traffic calming and other street improvements. Discussion ensued regarding the restoration of the road millage rate. This line item’s incremental value has increased significantly. In response to a request, Public Works Administrator Mahshid Arasteh said staff will provide estimates for the first scheduled traffic-calming projects in North Greenwood, Skycrest, and Grandview Terrace. It was recommended a curb replacement program assess areas needing repair, such as Clearwater beach and neighborhoods north of Drew Street, and establish a repair schedule. Ms. Arasteh said that information is being included in the GIS (Geographic Information System) inventory and will be part of future projects. An inspector evaluates curb-related complaints. Problems with sidewalk surfaces are addressed separately. In response to a concern, Mr. Brumback said staff had not funded Coronado and South Gulfview road projects on Clearwater beach as a design has not been determined nor have sources of funding been contemplated. A review of City membership in organizations was requested. It was recommended CGS (Clearwater Gas System) retain its membership in the Chambers of Commerce, a business to business organization. It was stated the City’s membership should be dropped as the City’s funding of Chamber tourism activities already is substantial. Discussion ensued regarding benefits to the City provided by Chamber of Commerce membership. It was stated funding tourism activities through the Chambers of Commerce is much less expensive than costs associated with the former City Tourism Office. It was recommended the City cancel its membership in the U.S. Conference of Mayors and National League of Cities, for a savings of $7,000. Support for membership in the U.S. Conference of Mayors was deemed important. It was recommended the City Commission travel budget be decreased. The Interim City Manager said the travel budget is based on past City Commission expenditures. Concern was expressed budget constraints not limit the City Commission’s need to increase involvement. It was suggested unused travel funds could be transferred to retained earnings. It was felt the trip to Philadelphia to attend Phillies games is a Chamber of Commerce driven event and offers few benefits to the City. It was stated the presence of the Mayor, City Commission, and City Manager in Philadelphia has been a positive activity and is the type of interaction and support of the Phillies that has retained the team’s Spring Training Camp in Clearwater. It also was recommended that operating supplies be reduced by $500. A detailed list of transfers out of retained earnings was requested. Ms. Wilson estimated salary savings will increase from 0.5% this year to 2%. A compilation of mid-year budget amendments will be provided. In response to a question regarding the Harborview Center, Finance Administrator Margie Simmons said the facility’s cash deficit does not reflect building depreciation. In response to a question, Ms. Wilson said the City Commission budget for electronic items, such as laptop computers, cell phones, etc., has increased only 1%. A review of special revenue and special program funds was requested. A spreadsheet related changes to the allocations of designated reserves was requested. Concern was expressed additional costs for the Police Department not be funded from unretained earnings. It was recommended retained earnings only be used during hard times. It was stated with retained earnings well above the required 8% level, and relatively little debt, it is appropriate to budget them as recommended by the City Manager. It was stated the use of retained earnings over a limited time period is acceptable. Support for maintaining the same millage rate was reiterated. The majority supported the use of retained earnings for the Police Department. It was requested a review of enterprise funds, the Jolley Trolley, and funded construction projects be scheduled. The City Manager indicated the need to balance quality of life issues, with infrastructure and maintenance issues. ITEM #4 - Adjourn The meeting adjourned at 3:36 p.m.