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02/25/2025 - Strategic PlanningTuesday, February 25, 2025 9:00 AM City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 Morningside Recreation Complex, 2400 Harn Blvd, Clearwater, FL 33764 Council Work Session Special Work Session Strategic Planning Work Session February 25, 2025Council Work Session Special Work Session 1. Call to Order 2. Presentations Review guidance from strategic planning workshop held on January 30, 2025 and build on those discussions. 2.1 3. Adjourn Page 2 City of Clearwater Printed on 2/19/2025 Cover Memo City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 File Number: ID#25-0157 Agenda Date: 2/25/2025 Status: Agenda ReadyVersion: 1 File Type: Action ItemIn Control: Council Work Session Agenda Number: 2.1 SUBJECT/RECOMMENDATION: Review guidance from strategic planning workshop held on January 30, 2025 and build on those discussions. SUMMARY: Council held a strategic planning work session on January 30, 2025, to review the strategic plan, long term financial forecasts of major funds, and discuss strategies for budget planning led by facilitators Hal Beardall and Rafael Montalvo from the FCRC Consensus Center at Florida State University. This meeting is held to review the first workshop and further build on those discussions. ·Welcome - Hal Beardall and Rafael Montalvo from the FCRC Consensus Center at Florida State University ·Principles ·Tools and Strategies ·Additional Guidance ·Next Steps Page 1 City of Clearwater Printed on 2/19/2025 1 CITY OF CLEARWATER STRATEGIC PLAN IMPLEMENTATION STRATEGY CITY COUNCIL WORKSHOPS January-February 2025 Workshop 2 February 25, 2025 Objectives  Review possible guidance emerging from Workshop 1  Build on Workshop 1 discussions to further develop and prioritize, as appropriate, principles to guide budget preparation  Build on Workshop 1 discussions to identify and assess strategies and tools available to staff in budget preparation  Provide other budget related guidance to staff as appropriate 9:00 Welcome Agenda review Summary review of Workshop 1 discussions Objectives and potential outcomes of discussions Principles Review potential principles emerging from Workshop 1 discussion Discuss and prioritize using a paired comparison methodology Council discussion of the results Tools and strategies Review possible tools and strategies staff might use in budget preparation Rate using acceptability scales Discuss results, and rerate as appropriate Additional potential guidance Address additional questions relevant to budget preparation Next steps 12:00 Adjourn 2 CITY OF CLEARWATER STRATEGIC PLAN IMPLEMENTATION STRATEGY CITY COUNCIL WORKSHOPS Discussion Worksheet 1 Principles The following statements are drawn from discussions at Workshop 1. The facilitators will ask members to discuss the statements using a paired-comparison methodology -- i.e. members will discuss the priority of only two of the statements at a time, comparing them against each other. The facilitators will provide more detailed instructions at the workshop. Please note that the list is NOT currently in priority order.  Consider the pattern of city investment in different areas of the city over time – how much the city has invested and how recently, in each area  Ensure needs are addressed  Maintain a balance of needs and quality of life projects and programs  Include projects that will enhance revenue in the future  Take care of what we have first  Maintain target levels of reserves (assumes minimum required levels are maintained, target levels TBD)  Avoid millage increases in budget forecasts An order of priority among the statements will emerge from the exercise. Strategies and Tools The following strategies were raised in Workshop 1. Members will initially rate the acceptability of each approach using the scale below. Members will then discuss the results and, as appropriate, revise their ratings. Strong support This is very close to what I would say. Support This may not be what I would say, or may not be my first choice, but I am good with it. Minor reservations I may ultimately be able to support this, but need additional clarification, refinement or discussion first Major reservations As I currently understand it, I cannot support it  Allow the use of reserves for one-time capital costs if needed to avoid service level cuts and/or millage increases in the current budget year, as long as minimum required levels of reserves are met.  Allow for small millage increases in the out years of budget projections, if needed to meet goals. If this is done, continue looking for ways to avoid the millage increase in the intervening years.  Allow the city to cover a greater percentage of costs for some facilities and programs. 3 CITY OF CLEARWATER STRATEGIC PLAN IMPLEMENTATION STRATEGY CITY COUNCIL WORKSHOPS Discussion Worksheet 2 Questions for Additional Guidance Members will discuss the following questions.  What level of reserves should the city strive to maintain?  Should the city consider hiring a third party or an additional position to pursue sponsorships/donations and public-private partnerships?  Are there programs the city should evaluate for adjustment?  Additional questions from staff? |1CITY OF CLEARWATER 2025 Strategic Planning Special Work Session 100 S. Myrtle Ave. | Clearwater, FL 33756 myclearwater.com 01 Introductions and Background Review of Planning Objectives and Potential Outcomes 02 Review Strategic Plan Strategic Planning Process 03 Background Information Fiscal Year 2024/25 Budget Review Review of Financial Forecast for Major Utility Funds, General Fund, Central Insurance Fund 04 Longer Term Strategies for Addressing Budget Council Exploration of Approaches to Providing Needed and Desired Services & Projects Agenda |4CITY OF CLEARWATER Our Operating Focus: Strategic Plan Deployment Planning & Policies Community Feedback Interactive Data Strategic Plan Annual Budget Citywide Alignment toward OutcomesInforms Enables •Continued Plan Alignment: - Identification of Desired Outcomes - Operational & Capital Planning - Coordinating Links Between Plans •Measure Plan Performance: - Enhanced Performance Measures - Creation of Transparency Dashboards •Ongoing Team Engagement: - Annual Employee Health Fair - New Employee Orientation - Executive Leadership Academy •Organizational Culture: - Clearwater Thrive Campaign 2025 Implementation Strategies: Our Vision: A Community that Thrives from Bay to Beach |5CITY OF CLEARWATER Our Operating Focus: Measuring Work Plan Performance |6CITY OF CLEARWATER All Funds Fund Amended FY 2023/24 Approved FY 2024/25 Increase/ (Decrease) General Fund 203,208,415 226,606,480 12% Utility Funds 224,302,937 214,623,190 (4%) Enterprise Funds 31,089,511 48,774,190 57% Internal Service Funds 83,319,622 87,294,240 5% Special Revenue Funds 42,596,317 23,384,897 (45%) Capital Fund 160,836,802 152,838,700 (5%) All Funds: Fiscal Year 2024/25 |7CITY OF CLEARWATER FY20 FY21 FY22 FY23 FY24 FY25 93.9 96.9 100.7 109.2 119.4 134.5 19.7 21.3 24.5 28.9 32.3 35.4 17.7 16.9 18.9 20.3 23.2 24.6 17.1 12.1 53.5 36.2 29.1 33.9 0.9 0.6 1.0 1.0 0.8 2.4 Personnel Other Operating Internal Services Transfers Debt Service General Fund: Expenses by Category (millions) |8CITY OF CLEARWATER Budget Strategies: Fiscal Year 2025/26 •Reductions to Department Operating Budgets -Aligning Present Budget Levels to Historic Actual Spending •Adjustments to Staffing -Efficiency Gain through Technology Projects and Modified Service Hours •Reductions to planned Capital Improvement Projects •Reductions to Third-Party Event and Agency Funding •Future Focus on Opportunities for Savings and/or Additional Revenue -Review Fee Structures for User Fees across Departments -Utility Rate Studies: Continuous Focus on Operating & Capital Savings -Analysis of Development Impact on Public Safety Facilities & Service Financial Forecast Major Utility Funds, General Fund & Central Insurance Fund CITY OF CLEARWATER STRATEGIC PLAN/BUDGET STRATEGY RETREAT SESSION 1 FACILITATOR SUMMARY January 31, 2025 Report prepared by The FCRC Consensus Center The Florida State University 2 TABLE OF CONTENTS BACKGROUND .................................................................................................................................................. 3 WELCOME INTRODUCTIONS AND AGENDA REVIEW ...................................................................................... 4 INTERVIEWS SUMMARY ................................................................................................................................... 4 PRESENTATIONS ............................................................................................................................................... 5 DISTINGUISHING NEEDS AND WANTS ............................................................................................................. 6 APPROACHES TO BUDGETING ........................................................................................................................ 11 STAFF BUDGET MEMO ................................................................................................................................... 16 PICKLEBALL COURTS ....................................................................................................................................... 19 CONCLUDING REMARKS ................................................................................................................................. 21 APPENDIX A --- MEETING EVALUATION ......................................................................................................... 22 3 BACKGROUND On January 31, 2025, the City Council of Clearwater Florida met for a retreat at the Morningside Recreation Center at 2400 Harn Blvd., in Clearwater. The objectives of the meeting were to: • Review the strategic plan, and budget and revenue trends • Review upcoming budget challenges • Identify and explore potential measures and strategies for addressing budget challenges The agenda, as modified in the course of the meeting, appears below: January 31, 2025 Objectives • Review budget and revenue trends • Review upcoming budget challenges • Identify and explore potential approaches, measures and strategies for addressing budget challenges in the coming budget year and longer-term 9:00 Welcome Agenda review Summary review of interviews Objectives and potential outcomes of discussions Background information Clearwater strategic goals and their relationship to budgets Budget and revenue trends Review trends Key challenges for upcoming budgets Longer-term strategies for addressing budget challenges Needs and wants How do you think about what the city must do and what it should do? Approaches to providing needed and desired services and projects In an ideal world, how would you advise staff to approach service provision and project development? Current-year measures for addressing upcoming key challenges Review initial set of measures developed by staff Council discussion to: Understand and refine measures, as appropriate Next steps Additional information or revision of alternatives, as needed 12:00 Adjourn 4 WELCOME INTRODUCTIONS AND AGENDA REVIEW Mayor Bruce Rector welcomed participants and offered the following comments: Welcome, and thank you all for coming out and being here. I hope we all approach this much the way we did last year. There should be no fear, there should be no “gosh I’ve got to get in there and fight for this or that, they want to take this away from us.” That is not why we are here. We are here to talk about how we can work together as a team, City Council and staff to make our local government work more efficiently, more cost effectively, more innovatively and provide the best, the fastest, and the most streamlined service to our citizens that we can possibly provide. We all know that over the years we’ve got lot of programs that have been there a long time, and maybe we have some things in our local government that we wouldn't start doing today if we weren't already doing them. So we want to have a forum where we can talk about those things today. I know the City Manager asked many of you to do that already with your staff. And I've seen some of those results. I really appreciate that because I know, and the council does, you've already had some hard conversations within your departments about ways we can do things differently. And I want you to know that today, we're free to have those discussions again. No one should be worried about what we're going to talk about. This is an open discussion, much like it was last year. We had a really good session and everyone was participating. But more than anything, I just appreciate you all being here, coming prepared, and being part of our team. Because we've already done so much after the hurricanes to put, as I tell folks, put Humpty Dumpty back together again. You have done an amazing job. You are the pride of Clearwater and an example to the rest of the country how to recover your city from a disaster. We thank you for that and we look forward to today's session. Jennifer Poirrier, City Manager, reviewed the overall objectives of the workshop and introduced the facilitators: And good morning. Very excited to be here today. I know all of us really enjoyed last year's retreat. This one is a little different as this is serving as our strategic planning session. We have a lot of goals today. I know that we will achieve all of them. The focus is going to be more on budget strategy. We completed a budget exercise in response to Council's conversations and direction from the dais. The team has done a phenomenal job. I have sent you a memo that outlines that, along with the outcomes. While that will be a part of the conversation today, really what we need is at the philosophy and the strategies that you want us to accomplish. We need to focus on that bigger picture more than the details. We have with us today the FCRC Consensus Center, created by the Florida legislature in 1987 out of Florida State. It's been around for a long time. They assist public and private interests in designing and conducting consensus building, strategic planning, dispute resolution services. Hal Beardall, facilitator, further reviewed the agenda and other materials. He noted that the facilitators would first review themes from the pre-workshop interviews with Council members. That would be followed by background presentations from staff. The bulk of the time would be reserved for discussion of potential Council guidance to staff regarding longer-term budgeting strategies. INTERVIEWS SUMMARY Hal Beardall reviewed a summary of themes emerging from the facilitators’ pre-workshop interviews with Council members. 5 We had one-on-one Zoom conversations with each of the members, an average of about 45 minutes. Those focused on broad questions, to give us some insights before we started today. The summary is not going to be everything you mentioned, but it tries to capture much of what all of you said in the form of themes. We were focused on the themes that were most directly related to the discussion today. Several of you talked about individual projects and other issues as well. That's not in there. You'll have lots of opportunity to talk about those in your budget process. Note that some of the themes start with “all members”, some with “some members.” “Some members” does not mean those who didn't mention that theme didn't agree with it. It just didn't come up in every conversation. When it says, “all members”, it came in every conversation. The first theme is a perception of similar or compatible approaches to fiscal policy or issues. All of you described yourselves as fiscally conservative. And you believe your colleagues shared that orientation. It was very pleasant for us to see a very high level of mutual respect. And you all felt you have a good relationship with each other, personally and professionally, and felt comfortable sharing your views with each other. Distinguishing between wants and needs was a consistent theme among the conversations. And of you said there is a need to do that. There may be a little variation on how you saw those. Some were more focused on what you felt were essential services, others on spending that would complement or enhance the economic life or quality of life in the city. And others looked at opportunity costs, and making sure that that if you have already made certain investments, you follow through and take full advantage of those. You discussed a number of tools for dealing with the current-year budget and possible millage rates increases. You also talked about spreading capital spending over longer periods of time, vacancy freezes, or limiting overtime, and new sources of fees and revenues that perhaps you need to explore. Several of you talked about a kind of cultural change and a higher level of innovation, maybe looking at some things that have traditionally been done with a new set of eyes and approach. Most members explicitly discussed a need to seek points of commonality and compromise, and to develop a common approach. And I think that's where we're trying to go by the end of today -- a sense from you of how you want to approach budgets in the longer term. And the last one there is that all of you noted, as the mayor said at the beginning of this meeting, a really high level of respect and appreciation for the skill of the staff, the value of that staff and the importance of staff morale. PRESENTATIONS Staff provided Council members with background information in two sets of presentations: Strategic Plan and Current Budget Kayleen Kastel, Budget Director, provided a refresher about the current strategic plan and background on the current budget. A video of her presentation, including slides and remarks, can be seen at: https://youtu.be/xHsunSuxRMM The presentation begins at minute 15.20 and continues through minute 24.34 of the video. Financial Condition of the General Fund, Major Utility Funds, and Central Insurance Fund Jay Ravins, Finance Director, reviewed the financial condition of the general fund, major utility funds, and central insurance fund. A video of his presentation, including slides and remarks, can be seen at: https://youtu.be/xHsunSuxRMM 6 The presentation begins at minute 34.50 and continues through minute 46.31 of the video. DISTINGUISHING NEEDS AND WANTS The facilitator noted that the first question picked up on the interview theme of distinguishing needs and wants. He posed the following questions: • Individually, how do you think about needs and wants? • What's a need, what's a want, and what else should the Council consider? Each member first responded in turn. The facilitator then opened the floor for members to ask each other questions about their answers and discuss a possible common Council approach to the questions. Council member responses and discussion Facilitator comments appear in italics • A need is something that we need in our city to keep it safe, to keep our quality of life and our standard of service where it is. I identify those as needs. Wants, are the extras, the ancillary stuff that is outside of that big picture of safety and quality of life and level of service. • So there are a number of things in that, it's a brief statement, but details and data play a role. You need to have some sense of that. Then safety, quality of life, which is different. The last thing was level of service. So safety, level of service and quality of life are all in the mix for you? • And they overlap. • That pretty much covers it, but safety's number one and for me. My first term had COVID in the middle of it. A lot of the wants never got addressed, or needs, because COVID just stopped everything. So I came out of the box the second term as let's get some of the things we've talked about done. Clearwater talks a lot about things but just doesn't ever do anything. But in the last couple of years, we've really moved along on some of the capital improvements that we really needed. Without getting into specifics, capital improvement needs definitely that haven't been addressed in a long time needed to be done. I think it's a real balance between what our needs are and what our millage rate is. I'm glad we went through this exercise of cutting back, but I think I would speak for all of us, we've got to really look at the list and say, what is really needed? And what's a want that could be put off? That kind of thing. • Is there anything in the mix other than needs and wants? You talked about capital improvements that you've deferred for a long time. Anything else in the needs bucket? Anything in the wants bucket? Not specific projects, but types of things? • Well, one of the things I think we've addressed in the last year or two is the strategic plan. Putting it out there in front of people. That was something that we never really did. Now when we spend money, when we want to address something that has a cost to it, it has to align with one of our strategic goals. I think is really, I think the public really needs to have that. And that's something that I was really glad we did. And I'd like to see that carried on. 7 • First, for me, it's people. We can't have a high-performing local government if we don't have high-performing people. So I'm happy, and I think the Council is happy that we did the pay rate study, and we got competitive with the rest of the region for all of our teams. We just reached an agreement on collective bargaining with our police and fire to try to make sure that they're competitive. So for me, people are priority. And it's a huge part of the budget. The challenge is to remain competitive, we've got to find savings in other places, non-people related. When people are majority of the budget, that's going to be challenging. As far as needs, I think it's basic services that people expect everywhere in every community across the country from their local government. It's water, sewer, streets and roads, public safety. They talked about the aggressive conversion of the water plans, combining the water plans, 3-1. That's pretty important, because we're really, really vulnerable. We do our best not to be a news story. With the past three storms we had this year on spillages into Tampa Bay. We want to protect our local waters. We need to upgrade a lot of things. So for me, that kind of thing is a need. In addition to public safety, but the sewer, the water, streets and roads, those are our most basic needs. • In many circumstances, it's very clear to me when identifying a need versus a want. For example, public safety, infrastructure, staffing – those are a need. And a want is a beautification program, for example. But then there are other things that it's not so clear. Specifically to needs, for me, that would include, especially when allocating general funds, projects that ensure future fiscal health, public private partnerships, any project that there's a return on investment that's tangible what I like to describe as “feed the beast.” Looking at our future, it produces more revenue coming in. It might not be perceived initially as a need, but it's going to “feed the beast.” • So there’s an in-between category of things that will improve your fiscal health over time? • Yeah. An example would be the marina, right? It is a huge investment. However, that is imperative to our tourism industry. It is revenue generating. So it's not just we're building a marina, it's actually going to contribute to our fiscal health. There are clear black and white buckets, but there's a lot of gray. I really would like to see more of a progressive approach of how to generate more income, really looking at tangible return on investment and engaging in projects that are a little bit more innovative versus just buy a building and do something and then give it away. Actually look at public private partnerships to improve our fiscal health. • What do we do? Each one of you, I believe, or majority of you probably answered that in your head based on what you do and your budget for your own life. You have things that are needs and wants. If your roof's leaking, you need to fix the roof. That's a need versus a want of replacing or increasing your landscaping. Don't read into that. I'm not saying parks are not important, just giving an example. So when I think of needs and wants, that's kind of where I'm coming from. What is local government? What are we supposed to be doing for the citizens, businesses, and stakeholders? Then branching off from there. I don't think that we can get very specific yet because you are the experts. I am not an expert in any one of the things. I rely heavily on your advice. You know the market for what's going on in your industry and how we should pave that path going forward. With that said, that's where I would like you to use that home mentality and think, what is a need for my department versus a want? This want could be great, but do we need it? So that's where I would think with needs and wants, just a basic 40,000-foot view. 8 • If I could ask you to expand on a couple of things there. You mentioned citizens, businesses, and stakeholders. Can you say more about what kinds of things might constitute leaky roofs for each of those? • Something that pops in my head for leaky roofs is North Beach. We have drainage problems there. That's what a leaky roof would be. In my department, if I'm seeing something from an infrastructure standpoint, it could be from my employees, maybe I have a deficit in this area and I really need to fill this position versus my forklift isn't working over here. Something that's really imperative for operations so that you guys can accomplish your tasks in a meaningful and productive, effective way. Trying to stay at the 40,000-foot level. • Can you come down a little bit? In the North Beach example is an infrastructure piece. That's for citizens and businesses and other stakeholders. What kinds of things for businesses, for example, might be a leaky roof? • I think you nailed it. When you look at infrastructure, each person is different. You all have your own mindset and philosophy on how local government should operate. Mine is very basic. I don't want to get too specific. But at the end of the day, government exists to protect its citizens with basic needs. That's why we're here. So when I think of problems that would affect a citizen and a business, it's, are we keeping their water on? Are we keeping the sewer flowing? Are we keeping the lights on? Things like that. The important needs it takes to drive businesses and drive the community. Then we branch out from there. • There are common elements to what you've all said. Infrastructure is one of them, and quality of life. You mentioned a gray area of projects that will “feed the beast.” You mentioned different groups affected by all of this. This is an opportunity to ask each other questions. What do you, as you listen to each other, want to know more about in what each of you said? • I think what was said earlier is important -- for needs, we won’t get the community or the private sector to participate in doing renovations or consolidation of the water treatment plants. But there are lots of other things where the taxpayers don't have to be the ones to solve the problem. We can partner with the private sector, community donors to do them. An example is the Long Center. In Ocala that they had just put in an indoor aquatics facility, $25 million or so, brand new, great facility. Not a penny of tax money went into that. It's something the community did without relying on taxpayers. I think it’s a really good point that aside from the basic needs, are there lots of things that are maybe not wholly funded, but there could be a community contribution to help us do these wants. Maybe we are not asking the community to participate in and support these enough. Or we maybe need to encourage the community, rather than to look to us for all the funding, to help participate and get projects done. • Just wanted to respond to both. When I listen to what you're saying, I feel that there's value to it. But again, I'm the shade of gray. You are absolutely right our job is to take care of the basic needs of our citizens as well as their safety. And then I'm looking at what you're saying, and I agree as well. My crux all the time is balancing that with the expectations of citizens about quality of life. Our citizens really enjoy a great city. We do provide a lot more than their needs. And so how do I balance my constituents saying, I know it's not water, I know it's not infrastructure, but that's a service I value. That is a project that I value. That is one of the reasons Clearwater is so beautiful and so successful in many ways. My challenge all the time is balancing what we need to provide with other things our citizens value as well. Sometimes they're in conflict. Sometimes what we 9 think is just a need or a want, our citizens disagree with that. How do I provide that quality of life to my citizens without being a crutch all the time and having excessive spending? • I think we have to stay focused on what we want to be when we grow up as a city and identify what it truly means when we throw words on a board that say, this is our vision and our mission as a city and it's to thrive from bay to beach. What does thrive mean for needs and wants? We have expectations from a lot of citizens that live here, that want or plan to move here, and businesses that grow and sustain because of who we are as a city and what we've grown up to. There are a lot of moving parts that are much deeper than just our safety infrastructure and our level of services. We have over 110 beautiful parks in our city. We have world renowned beaches. We have spring training baseball, minor league and major league. We have some unbelievable venues for the arts from Coachman Park to Capitol Theater to Ruth Eckerd Hall. All those moving parts relate to that level of service that you're discussing that our citizens rely on and pay their taxes towards. We have to find a way to continue to provide that level of service and to live in that vision of thriving from beach to bay. But there's a cost to it and finding that balance. I don't want to see us get away from who we are and just start focusing on identifying needs of safety infrastructure, level of service and people. We would be leaving a lot of what a lot of our citizens qualify as needs and what makes us who we are as a community. So I think there is a balance. • I'm trying to be vaguely specific. I don't want anybody to think that I don't understand the wants. I'm a human just like you. I get the wants, I see the need for parks, I see the need for libraries. I'm just giving you that vague specific rationale of what a local government at its core should be doing. I agree the 110 parks that we have, the citizens spoke and put value into that. But every dollar we spend on something is taking away from another dollar somewhere else. And, if we're being honest with ourselves, when we drive from Tarpon Springs down to the Skyway, each one of you can point out infrastructure issues when your car hits a pothole, when you run through the two-foot puddle, whatever it is. From the outside looking in, I see the shiny thing before the important thing. I'm not saying that right now we need to cut. I'm not trying to convey that in any way, shape or form. I'm stating that we need to be focused on really important things that will keep our citizens, our businesses, our city, you guys, operating and running effectively and efficiently. Then continue to try and take care of everything we have now but invest in those other key critical areas so that they're not being left to the side. So when you see “Beautiful from Bay to Beach,” that's not just because of our parks, that's also because of our roads and sanitation, and making sure that our roads and parks and everything's looking beautiful. I'm not going to mention every department, but each of you is critically important. • To summarize, prioritizing is implicit in what you're saying. There is a range of things that you're comfortable saying are important that go beyond the basics, but the basics are the priority problem – infrastructure and other core needs that maybe haven't been addressed. You also said the citizens have said a broad range of quality-of-life issues that aren't purely wants are important to them. It almost sounds like partnerships, greater partnerships is also a need that some of you are seeing. And the theme of balance runs through many of your comments. • We're not saying quality of life is not important, we're just saying we first have to take care of those basic needs. And what the five of us have seen, three of us in just 10 months, is how many people come to us every week from this community, I wouldn't say with their hand out but wanting us to dip into the general services budget to write a check to help them either solve a problem or start something. I told a reporter the other day, we're glad to participate as a city in 10 the conversation, but that's a community problem. Our 1800 employees can't do it all with taxpayer money. We can't make the city thrive. We can't increase that quality of life by ourselves. It takes everyone, businesses and residents, community, gathering behind a cause and supporting and solving problems. Again, I'm not saying quality of life isn't important. I've been very vocal about supporting the arts. Arts are incredibly important in the future of this community. The Sound has done amazing things. I think we would just like to see more community effort to solve these problems. Too often they think, hey, we just go there, they'll write a check, and we'll take care of it. And we've got to get out of that pattern and start doing some more of these quality-of- life conversations as a community instead of just as a local government. • I have an interesting poll here by National Research Center 2024, on quality of life in Clearwater. Most people enjoy living in Clearwater. It's a very high percentage. And also on governance. There's not sagging confidence in government. The things that really suffer are housing options. We have higher property values here because people are moving here because of the parks and all the things that we offer. And it's hard to find an affordable housing here, so it's a balance. If you're looking for low-cost living, you're not going to be living in Clearwater. But if you're looking for quality of life, we got it, we really do. Our issue is maintaining that. The Long Center was built basically with public money. People came together, it wasn't the government, but now Clearwater has to maintain it. There's almost a bigger cost to maintain it than to actually build it, as with most capital projects. I'm really happy, and I think most people are, with where they live here, their neighborhoods are good. But we definitely have some spots in Clearwater that aren't as vibrant as other spots. Downtown is one. We've been talking about this for decades. How can we turn that around? And it affects people that live elsewhere in Clearwater. But we don't want to forget about anybody else. Trying to maintain that balance is hard. I think that we're all cognizant of the great things Clearwater has, so we need to maintain that. And maintaining things, there's a cost to that. • So what else on this question of needs, wants, and other considerations before we go to break? • Very enjoyable conversation. I think we're all on basically the same page, and what we're doing is prioritizing those needs. And then as we get into the bottom end of the needs, they get into a gray area of is it a need, is it a want, is it, and when you discuss those, it's quality of life and different things like that. We all highly value safety, infrastructure, people. We've invested, this Council's invested in staff, in police, fire, our leadership team. I think it's important that as we move forward, that we are having these discussions on how we can increase revenue streams in the city and private partnerships. Maybe some of the processes that we go through on some of our capital projects, I know staff has a lot of suggestions on ways that we can increase revenues to increase them, to offset, because we will not sit in a room or a town hall and discuss raising the millage rate on our citizens. Especially in a climate and environment that they're living in, and so many are struggling to pay bills month to month. Meanwhile, they look at their city government, and we're increasing wages across the board to staff, our leadership team, police, fire, and we got raises not too long ago. How do we then turn around and solve those challenges? The easy button is, let the citizens carry that burden. I think we're all in unison, that's not fair to do to them. We owe them that due diligence and that responsibility to tighten our belt, to go through exercises like this, to find ways to increase revenues. I think that's part of being a high-performing government. It can be uncomfortable at times. I think it takes a layer of compassion, and this council has it. To many, it might just be numbers on a budget sheet and a line item, but I know this council sees deeper than that with a layer of compassion, and we see the lives that it affects. 11 We see jobs that could be lost. We see home incomes that could drastically change for people and it's a people thing, not just a number thing. So we are compassionate about that as well. But I think that we're going in a great direction as a city. They say that good organizations have a staff that has trust and faith in their leadership team, and I think we're there, but I think extraordinary organizations have a leadership team that fully trusts and believes in their staff. I think that's where we are, so I look forward to moving forward. APPROACHES TO BUDGETING The facilitator posed the following questions: • How would you articulate advice to staff based on this discussion? How would you pull together all that you heard? • What is your advice, individually and collectively, to staff in terms of approaches to budgeting, especially beyond the coming budget year? Each member first responded in turn. The facilitator then opened the floor for members to ask each other questions about their answers and discuss a possible common Council approach to the questions. Council member responses and discussion Facilitator comments appear in italics • I'm going to stick with what I originally said. You are the leaders in your department. You know your department, you had a great exercise of seeing where you could save money. Treat it like it's your budget for your house, making ends meet, making sure your critical needs are taken care of. And if you can cut money and save dollars, great. I think in government, we're under the mentality of use it or lose it, right? While that still may ring true, we can save that money and put it into another department. Should something else arise that is critical and you're able to show and explain to us why you need that asset or that thing, I don't think any one of us are here would not say, let's see where we can work that into our budget and make it happen. My overall approach would still be, make your budget what you personally would use for your budget at home. Look at your bank account, see what vacations you can do, you're seeing if you need that roof repair, or if you can remodel your kitchen. Do that with your budget within your department, treat it like it's your own personal bank account. And I think great things will come from that. • I want to really voice my appreciation of the efforts that were put forth in this memo. I like the direction that the staff did, and when you're talking about an annual savings of over $2 million, and then when you add the six-year total reduction of another 5.7, this is something that I appreciate, this is a great effort. I also like the process or the focus that they used. • Can I ask you to hold that for a moment, we'll come back to the memo collectively in a moment. For now, just longer-term direction. How would you suggest staff approach budgeting? • I would like to see a continuation of the process in the memo: better alignment of community needs when making those fiscal decisions, sharing of resources. Another one I appreciate, 12 evaluating the project scopes that are already in place now and in the future. Reviewing of applicable fee schedules is also another option. • First is, every department, everybody in every role, including our five roles, going through an abandonment exercise, asking ourselves, would we start doing this project or this program today if we weren't already doing it? And if the answer is no, we're simply maintaining something that we've been maintaining for years, then what resources are we taking away from other places in local government that can help our city thrive? I think in every department, there's got to be something, given the age of our city, that we would not start doing that today or not do the same way, if we weren't already doing it. Hopefully our staff has started that with this exercise because I think that that's collectively what we want them to do. And staff's feedback from individual departments may be different every budget year, on what they would do or not do. The easiest thing to do is just say, "Okay, we can save 10% by just, we'll cut four positions." I don't want us to cut people or positions. What I want us to do is look at savings in the delivery of services, the way we deliver services. I'm impressed by what I've heard already from our library services. They have come back with some ideas on delivery. That world has completely changed in the last five to 10 years. When we established our library locations, you found a book on the shelf, you checked it out. Now I'd say maybe half of our checkouts now are electronic reading materials. And it's an Amazon world where you go online, you pick your book and you order it, and they deliver it to your house. You don't go to a library or somewhere else and pick it up. That's an example of what might happen throughout the entire local government. Are we delivering our services in a way that serves our citizens the best, but also is the most economically efficient way to provide them today? If we all do an analysis of that, we will find areas where we can not only deliver more quality but save money. And then revenues. In the past, there's been a sense that the City Council wanted us to give it away, particularly when bringing events here that might inspire economic development. I think there's space for us to capture more revenues. I don't want to charge the little kid from down the street more to use the rec center. But we do have facility users that come from out of town, like Clearwater Marathon. Those event operators expect to pay fair value for the city services they're using. Taxpayers footed the bill to support those events because it was good for the city. We need to look across all departments, not just Parks and Rec, to say, are our fees consistent with what other cities recover for those same services, to be fair to the taxpayers, and also support other things that we're doing? In every department we have procurement activities. Make sure that in today's world with electronic bidding, that we're getting the best prices in our procurement throughout the city. We have folks who come to our council meetings and talk about every penny we're spending and how it's outrageous and how we're not getting the best price and why is it going there and there. 99% of that's unfair, but it doesn't relieve us from the duty to make sure we're always getting the best vendors and the best price in this competitive bid. Improving those processes is another area where we can save. • What he said. I think it's a good practice for all departments to always realize efficiencies and all employees should find ways to save money. And their ideas may be out of the box, but the heads of the department should listen and possibly find ways to do things that are more efficient. A lot of things are easier now with technology. And if they can pass that savings on to the people that we serve, that's a good thing. When I was first elected, FTE was just a dirty word. The City Manager at that time didn't want to even talk about one-half FTE hiring because it was a lot of money. But we got into a position where we needed to really have better staff in departments to just to do the job. I agreed with bringing the salaries up to at least 75% of what everybody else 13 offers. It's amazing to me how everything is just going up. Luckily, because most of our budget is based on land value, land value has been going up. So we really haven't had to raise the millage. But to the average person, that's more money out of their pocket. So we need to find ways we can offset that. Maybe we could find ways to bring in more money through our enterprise funds without really raising basic rates. Using technology, maybe there are ways that we can bolster the bottom line. So I think we've got a good start here. The last financial thing that I saw about six months ago was a millage rate increase in ‘28. Now we're stretching it out 10 years if we can. That is based on property values. If we can do that, that's a service that I think everybody will appreciate as long as it doesn't cut back on a lot of the things that make Clearwater what it is. Why people enjoy living here is because we have a lot of things other communities don't. So I think we've started a good process, and I'd like to continue that. • Very well said, agree with all of it, and I don't need to circle back and touch on everything. An overarching theme is that we need to concentrate on maintaining what we currently have whether it's, you know, capital projects or parks or infrastructure, roads and things like that. Take care of what we have before we start venturing to add to what we have. Let's ensure that we're thriving beach to bay with what we have as of now. I appreciate the projections and it's nice to see a millage increase move, but I also don't believe that a frozen millage rate for 10, 12 years necessarily should be looked at as a win. So many of our community will tell you property values doubled in the last handful of years. Therefore your ad valorem taxes that you pay have doubled. Millage staying the same is great. Not raising it is a good thing, but our citizens property values have been going up and therefore they are paying higher property taxes. The projections are awesome, but there's so many moving parts. We don't know if we're under pretty tight inflationary pressures. We have no idea of reimbursement rates and we take conservative approaches of 50% or less. We have no idea of how the real estate market is going to perform. We're pretty reliant as a city on property taxes. I think we saw a 3.5 estimation that is definitely on the conservative side. While we look and see this very conservative picture on so many moving parts, shifting on any of those can drastically change that picture. I respect that, but I think strategies for finding additional revenue sources are very important, whether it's the delivery and how we deliver projects, whether it's public private partnerships, whether it's operating as a government more efficiently, more effectively, whether it's being more technologically savvy as a municipality, I think all are very important. • As you hear each other on this, do you think you all sound consistent with each other? • I would say yes. There's variation, but I wouldn't say that there's a major difference that would be earth shattering or quaking. I think that we're all basically on the same page. • I think overall, yes. I just think that there are slight variations on certain topics and different degrees of prioritizing or definitions that need to be honed in on. But overall, I would say yes.– • I want to make a point that was brought to my attention. I understand our citizens are under duress with the millage rate. You were talking about how property values are going up. So even though the millage rate stays constant, you're still out of pocket more. But I don't want to ignore the citizens who don't own property. Renters. One of the things that affects every single human being is utilities. Everybody has to have water and electricity. We're focusing so much on the millage rate. I just want to at least go on record acknowledging that we also care about those people who rent who perhaps are feeling like, hey, there's so much focus on the millage rate. 14 What about our utilities? Utilities are used by everyone. Why are you not looking at that? I want to acknowledge that, and I recognize it and it's something that I would like to consider further. • Don't be mistaken. Those folks who are renting, they're paying, the millage rate affects them. If the property owner is paying more taxes, they pass that on in the rent. I've seen the recent numbers the past month. The rents are not decreasing at all throughout Tampa Bay. They're continuing to climb even throughout this most recent crisis. So the millage rate definitely affects renters. It's not as direct and it's not as perceived as it is with homeowners. But it does. • I don't know the number for Clearwater, but in Pinellas County, there are 407,000 parcels that are homesteaded. Homesteaded properties only go up 3% a year. The majority of people who live in Clearwater are homesteaded. So that really doesn't affect them as much as the renters or people that have second homes or businesses. Just wanted to put that out. • Some of the things you've talked about -- operating efficiencies, vacancy freezes -- can be done immediately. There are a number of things in here that can't be implemented quite as quickly -- technology, partnerships, additional revenue streams. Nothing definitive, but what kind of timeframes would you expect for those? • I don't think you can take every idea or innovation and group them all together. They're all going have different information. The trick is to start implementing them. Some will take time to show a difference, and others that are low-hanging fruit such as the use of the green at Coachman Park. I think we're charging about the same rate for use of that space we charge for event space use at any other park around the city, and that's a unique venue. That's one where we could probably adjust our fees. That would be an immediate change. We've considered charging for parking at events in downtown Clearwater. We weren't ready to jump on that because of concern over getting the Sound going, but with more activity lately, I might consider that too. We've probably been undercharging on Clearwater Beach, particularly during the spring, for parking. On some things, there are immediate short-term benefits. On others there will be a process of three or four years. It's about beginning the process on all of it. Over time, we will achieve a lot of savings. • I agree. I don't think we can put a one-size-fits-all approach on this. Each issue should come to us. We, as policy makers, look to you to know your departments and where these things can be cost- effective. Where is that low-lying fruit? We see certain things. Parking comes to mind. Areas that we are experiencing, or that we see when we're combing one portion of a budget, but that's where you guys would know where the quick fixes are. To put a timeframe on everything, I don't think is realistic. As AI that picks up, look at how that could help you be more efficient or streamline or fix processes, arrive at conclusions quicker. We all know technology has gremlins. That's why it's hard to put a timeframe on something like that: you don't want to be the first one to it, but you don't want to be the last one to it. There's that gray area. But take the blinders off and look for ways to be efficient and think outside that box. Again, I think government was stuck in the rut of use it or lose it. Do not think that. If you're able to save money, save it. Then if you have a valid concern for something your department needs, bring it to us. Let us make the decision to try and make you the best department for the city overall, so everybody's winning. • I think I speak for the other four, we are in no way saying any of our staff are inefficient today. None of us are saying that you're not already professionally doing all these things. But we also know that some of you have come in the last four or five years, and you inherited ways of doing things that you wouldn't start doing if you were leading that department today. I want to just 15 make sure everybody understands, at least for me and I think the other four, you all do a great, highly professional job, and we appreciate the work you do. And we're not in any way trying to say that you're not already trying to operate efficiently. We just know you can inherit things and have to feel like you have to continue some things that maybe don't make sense. • What he said -- really. Staff does an incredible job. You know, we have these emergency situations, the hurricane, you guys stepped up what you did in Clearwater just blew everybody away. All down the beaches, they are still scrambling to figure out what to do. We got Clearwater cleaned up pretty quick. It was hard work. You were working around the clock, seven days a week. And departments work with each other in Clearwater. That's great, because instead of saying, that's not my department, you jump in and help each other. But everybody has a different way of seeing things. Somebody maybe saying, here's how we can improve this. If everybody listens and maybe tries something like that, that that's how things get done better. These new things seem to come up two or three times a year and are great. I'll give you an example: FDOT’s toll by tag. They don't have the stations you go through to pay a toll. You're not paying somebody to collect the money. It's just a license plate, boom. Mobile pay for parking was a great thing. It's a lot more efficient. Now, public facing, it's a little difficult because we have an older generation. Some don't have smartphones. We have to look at each thing to see if it can be implemented. Maybe not right off the bat, but after all the little tweaks are done to it. • You're 100% correct, we have an absolute amazing staff. I know we all sit on regional advisory boards and such. Pre-storm, I'd walk into some of these meetings, they'd say, "Wait, what's going on at City Hall?” "You guys have a mess going on there," or whatever it was. And we would deal with it, and it is what it is. Post-storm, we walk into some of these meetings, and the first thing they say is, "Your staff is on it. You guys did amazing during the storm. How did you do it?” "And kudos to you." So thank you. I walk into those meetings a little more proud now than I did to talk about fishermen and stuff. To your question, when it comes to technology, innovation, delivery models and processes, I don't think putting an expectation on that is fair because it is pretty broad. I do think we need to change our way of thinking and the way we approach things. I don't want the answer to be because that's how we've always done it. That's not always the best answer. Last Council meeting we had a lot of questions about a CMAR versus a construction administration from us neophytes. Are we duplicating services? It seemed like it. We read and we think, oh, we could cut and chop and do this. But then you give us the reasons -- cost- effectiveness, ease of delivery, output, and performance is better. Those are things that make sense. That’s why we're not there to poke holes or find fault. It's the same thing we're doing with these discussions to change our approach and our way of thinking. So often government is kind of thrown in a box. We have a great team. We have what we think is a pretty good council, and we should be able to perform at a higher level than those surrounding us. I think there's no expectations on timeframe, but the expectation is to change our way of thinking and have the green light to be innovative in how we approach some of these challenges. • I agree. Timelines really should be project-specific. Having said that and having closely watched Clearwater’s government in the last 10 years and being involved in the last two, I have to say how pleased I am with the change of culture. It has been adopting more of a private sector culture, more assertive, not waiting, being more productive and self-evaluating and thinking outside the box. I would like to see that continue. I think that's going to affect the timelines, if we adopt that private sector assertiveness approach versus the government approach, which is slower, which I acknowledge is sometimes necessary. We're dealing with taxpayers' money, so there have to be 16 regulations and processes that we need to follow. But there's a middle ground where the snail pace and the warp speed of the public sector can merge a little bit. I think that's a trend that I see, I see it in the leadership. I see innovation and a different culture being adopted. I am very pleased with it, and I think that should continue. If it does, I think that’s going to affect timelines. • I heard a lot of detail. I won’t try to summarize, but two things that did stand out. There are some low-hanging fruit that many of you see. And you are looking to see the process change, to see the culture change further, without necessarily having specific expectations for when that would bear fruit. STAFF BUDGET MEMO The facilitator noted that originally, an additional focus of the workshop was to have been developing agreement on strategies to address current-year budget issues, the budget exercise conducted by staff and described by the City Manager potentially addressed those issues. Staff therefore requested feedback and guidance from Council on whether the measures resulting from that exercise, as outlined in the staff budget memo provided to members, meet with Council approval and were sufficient. Jennifer Poirrier, City Manager, reviewed the measures described in the memo. The facilitator then posed the following questions: • How comfortable are you with the measures outlined in the memo? • Does the approach outlined in the memo still need adjustment for the next budget year? Council member responses and discussion Facilitator and staff comments appear in italics • When you say you're going cut FTEs, what FTEs? And so we might have advice to the staff on specific FTEs that would be eliminated. I thought I had heard there might be more FTEs eliminated that what is described here. But in general, I think the buckets feel like we're on the right track. • I can clarify that there's nothing else being proposed at this time. The categories on the slide and the information in the memo are aligned. There is a description in the memo of the positions that we're talking about. Two departments are impacted by this. One is the library. We discussed rearranging hours and being closed on Sundays, with a net change of an hour. Seven and a half positions are impacted. The other department is police, where we talked about the technologies that have changed, and so has the report writing. It's four part-timers and one full-time position that are impacted. Those specifics are in that memo. There isn't anything additional that's being proposed in terms of cuts outside of those. • We're trying to figure out budget philosophies. You all were able to see what these proposed changes do to our 10-year forecast. We've had conversations about starting from the desire to not have a millage increase up here on our 10-year forecast. But we've also had conversations about not relying so much on general fund reserves to balance the budget. On that 10-year forecast, it still shows using the general fund reserves for project. 17 • What we are looking for as a team from a budget preparation standpoint is, is what we've done enough? It sounded as if some members were saying yes this is good, but do we need to go further with that? Because of our budget exercise, we have other options if we need to cut more. That's what we're trying to understand from the Council -- what is the budget philosophy? Given what these impacts do to our financial forecast as a starting point, is that good enough or do we need to look further? If we need to look further, yes, there could be potentially additional cuts. If we don't need to look further, and this is a good starting point for us, then we would not be proposing anything additional. • These are fine for me. When I just said what I said it was because I heard that there were other FTEs that might be eliminated outside these here or proposed. But if this is all we're proposing, then this is fine. • If that's the question, I agree. I would love to find so much in savings over two or three years that we can consider reducing the millage. Our citizens would love that. They need it. My problem with talking about that now is the reality of having spent $70 million on hurricane recovery and not knowing what our property values are going to do in the short term. I would love to plan for that, but we need to be cautious and conservative right now. I think that trying to plan for no millage increase right now is the smart thing to do, the conservative thing to do for us, for the citizens. I don't think we can plan for more right now. I think we need to be conservative. I'm very happy we've gotten it down to where we're not forecasting a millage increase. That's huge. • On number three, Reductions of Planned Capital Improvement Projects, Moccasin Lake Nature Park Stormwater Repairs. Does that relate to the Standard Apartment flood that we had? • That's something that we're looking into long term. When we look at what happened to the Standard, I don't think you could identify necessarily one particular thing that that was the fault with Moccasin Lake. We're certainly evaluating the entire scope of projects that are all associated with the stormwater. We believe there may be even a runoff issue as far down Alligator Creek near the mouth of the bay that could be causing issues upstream. There are other projects that you could talk to even more specifically. But this talks about where the funds are coming from as opposed to eliminating any attention we would give to Moccasin Lake. This is about relieving it from the general fund. We believe that is a project that should be paid by the enterprise fund of the stormwater fund. This is about taking the project out of the general fund not eliminating it. • That's where I was coming from, because I didn't want to see $900,000 eliminated for something that might have been an issue with the Standard. If we're taking it from other sources, that's fine. • All things considered, I think this is a great start and I'm satisfied with it. There are too many variables, and I think it's too soon to make very solid decisions on the next 10 years. We don't know what our fee reimbursement is going to be. We don't really know what the ramifications are to our tax base of the new properties on the beach. What will they do with renovations, buyer sales and all that? Other communities that have had this happen to them had a significant dip, but then a rebound. We don't know if that's going happen to us because it's a different world now. So there are too many variables for me to make a major decision that long far off. But what I see here, I'm very happy with. It's a good start. I think that I would, however, like to just have the opportunity to hear my colleagues' opinion on the pickleball only because I've gotten so many calls like I usually do about pickleball, and I think it warrants at least a discussion. 18 • So just for clarification, while I did mention that I don't think we need to shoot streamers and plan a party if the millage stays the same for 10 years, I do not think it's realistic to lower it now. I was not saying this needs to go further. I'm extremely comfortable with what has been presented to us. It almost may go too far. My point in saying there are so many moving parts and we need to be conservative is that we're looking at a 10-year forecast. In two years, we're going to look at another 10-year forecast and it could be drastically different. So I'm comfortable, even if the millage went up in year eight or nine. While I want it gone, we have enough time between now and then to continue to work towards the goal of eliminating it. I didn't want that to go the wrong direction. I'm extremely comfortable with this. Regarding pickleball, thank you because I was going say it. My question would be, if not this project, which one? I do receive a lot of calls from our Countryside community. They feel there's a lot of discussions within the City and this Council on Clearwater Beach and storm recovery, on downtown and where we're at with development, but there are aspects of their community that are equally important. Sometimes they feel they might be left out or hear statements that say “it's Countryside, they're fine, they have everything they need” when we don't know if that's true. So, if not this project, what instead? Maybe Art could speak to it. Why was this project picked in Countryside? Is there some significance to it? Is it definitely identified as a need versus a want? • This is a great start. From looking at having to raise the millage by 2028 to this, you have done a great job. Don't stop. I think that there should be an annual exercise. If I'm director of it I'm going to constantly look for ways to be more efficient because if we're able to lower the millage rate, I am all for that. I don't know how many of you live in Clearwater, but you know the cost of living and what it's like to live here. Imagine your millage going down a little bit. Who's going balk at that? If you're able to be efficient and find those intricacies within your department, cut it, do the savings, let's try and pass it on to our taxpayers. And if there's something in your budget the next year that needs to be done, as long as you make it make sense, I don't think anybody's going balk at it. So don't stop being efficient, because this is a great service. • I want to warn you, lowering the millage rate, that's easy to do. Raising it back up again, it's going be toughest thing you ever do. So you have to watch what it is and make sure we're not lowering it on a whim. Because next year when you need it, raising it is going be tough. I think this is good. And I think it's a lot better than the 2028 millage rate increase. Because we're pushing it out, which is always good. But I want everybody to know that in four years, there may be a new council. And every four years, they have a different idea on how things are going to go. So we can be conservative, and we can push it out, but can’t necessarily say how it's going be when we get to that point. I hope everybody gets elected again. But I've been through it a couple times and I've seen things that we planned that just kind of go down the tubes when new council comes in. So just wanted to throw that out and let you know. • So here's the deal. I am okay with us getting to a point where you're being efficient, we drop the millage rate, and then you make something make sense to me and me making the decision to re- raise it should we have to. Because if you give me a valid reason to stand in front of constituents that makes sense and I can tell them the why and how it's affecting them, they shouldn't have a problem with it. We're all realistic human beings, right? Make it make sense. It's when there's government overspending that we're all sick and tired of, that's when there's the issue. I completely understand the warning, I get it. I work in government, I understand it. I've literally knocked doors in the neighborhoods so I don't lose my job, to keep funding. I just want you to 19 know that I'm not scared to fight for you as long as you're making it make sense for me. That's all I'm asking for, efficiency. So I get the ebb and the flow of things, 100%. (Note: The following exchange occurred after the discussion of pickleball courts. It is included here because it forms part of the discussion, described here, of other measures in the staff budget memo.) • To summarize some of what was in that conversation, I think we heard that while some of you expressed that you would love to see the millage rate come down, you don't think it's realistic for current planning to push for that. You think what's been done with the millage rate so far is very good. Some of you even expressed some flexibility on that if there were a need. So no need to push harder on millage rates for now. • You've all said you're very comfortable with the measures in the memo for the coming budget year. These measures do reflect some one-time use of reserves for capital costs over the next 10 years, while maintaining at least the required minimum reserves in all years of the projection. I did not hear any suggestions for a different approach in your comments, so I would assume you are okay with that approach. Is that correct? • Yes, yeah. • I'm okay with using reserves to some extent. I do caution the community that we had three storms last year, and we talked about $70 million out of pocket. We hope to get a lot of that back, but we had tremendous damage from Helene particularly, and we have still not yet had a direct hit. We got lucky on both of those. I mean, Helene, as bad as it was with the storm surge, it was 100 miles off coast. And then Milton, we got lucky with that, that it went a little bit south of us. So if we think $70 million for the storms that came through, we need to be careful to make sure our reserves are healthy, because if we had a direct hit like we're talking about just with the current state of our water plants, we're going to need healthy reserves, potentially. • I’d like to check in with each of you about this. Is each of you okay proceeding with this approach? • Each Council member in turn said yes or nodded assent. PICKLEBALL COURTS The facilitator noted that several members had expressed an interest in further discussion of why pickleball courts were included in the memo and opened the floor for discussion of the issue. Council member responses and discussion Facilitator and staff comments appear in italics • The pickleball courts in countryside would be a new amenity, with new maintenance. It's an add. That's why the budget philosophy is important. I've heard a couple of different ones just in here, all very well articulated, but if the theme is maintaining what we have, then we're not going to be bringing forward new adds. If the theme is to make sure that a millage increases in the projection does not occur, we're going be doing so by not adding things that are new while looking for efficiencies and while also looking for ways to increase other revenue sources. And so that is why it 20 was picked, it's why a lot of the theme in here is maintaining what we have and identifying what we absolutely have to do, trying to define those wants versus needs. • And for me, that totally makes sense, but there are other projects outside of just that? If not this, what? Edgewater Park, State Street Park, there's other parks that we have on the docket to spend money on. I was just asking if Art would speak to it or if you could, on what the significance of it is. This wasn't just, hey, there's a couple of pickleball people in Countryside that had asked for a court. When was the last time we spent money in Countryside? When's the last time we built something there? Is there more significance to this line item than just a dollar amount and not expanding versus Edgewater Park or other parks? • And I think we're missing the point talking about pickleball courts at Countryside. It’s about racket sports and how pickleball courts in Countryside fit into our overall plan -- tennis courts, racket sports throughout the city, including the McMullen Tennis Center, which used to be a jewel. How does adding pickleball courts in Countryside fit within our plan for racket sports throughout the city and perhaps generate more revenue from the use of these courts? You can teach tennis lessons on any of our courts in town and not pay any fee to the city for doing that. I think it's a broader question and there are ways to do that. I think you even said that there are ways to get these done outside of maybe general services budget to serve that community. I'd like to see a broader discussion on racket sports in general. Cape Coral has a racket center. It's pickleball, brand new. They put it all together. They have a plan for how they do that and how they're going pay for it. And look at other communities around the country that are seeing the surge in pickleball demand -- not just a court here, a court there, but seeing how they are handling racket sports throughout the community. • When I read about the pickleball courts, I literally groaned. In two years on council, I've heard more citizens on pickleball than on millage. That's how passionate people are. And those people are the people I represent, right? When I knocked on doors in countryside, one of the number one things I heard was, “We're the stepchild. We feel ignored.” I know geography plays a role, but that's a valid concern. Let's just take a breath and see, maybe postpone it, because this is one of those topics where the people that we represent are passionate. Pickleball numbers are larger than tennis and golf together. I'm not saying hard yes or hard no, but I think it warrants a discussion and maybe consideration of postponing it, or maybe asking staff about a replacement. Over the two years I've been on Council, that is one of the most communicated things to me, how important that is, from a community that feels ignored. I don't want to dismiss it. • I'll simply say that there is a need for pickleball courts in the city limits of Clearwater. We have four courts right now that are solely for pickleball. That's it. The rest of what we try to do to meet that need is to use the tennis courts that we have. We have put lines out there for them. We also have McMullen. It is not as robust in tennis as it had been in the past. Tennis has changed; sports change over the years. And so now we've converted pickleball courts out there, and we're looking at the future of McMullen to see whether or not we need as many tennis courts there, and how we can convert it to pickleball courts. Obviously, McMullen is a revenue generator for the city. It doesn't cover all the costs. It covers about 60% right now. We certainly can have goals to try to make more money in that as a revenue source for us. But our master plan was just completed. Pickleball courts were the number one thing asked for throughout the city. We are opening six more pickleball courts on Clearwater Beach, which are already going to be packed. An employee 21 will sit out there for the first couple of weeks just to handle the rules and regulation, so we don't have fights and everything else going on. • All of our indoor recreation centers have pickleball programs. If you came in this morning, you saw pickleball being played indoors. I understand, too, the need for the bigger look. Do we now take something like McMullen and have a partnership with someone to come in to operate that? That's one of the things we put forward in the past. One of the reductions could be you take the McMullen Tennis Complex and handle it like we do our golf courses. The City owns three golf courses, but we don't operate any of them. We already lease those out. In 2008, 2009, we went through a terrible economic downturn. There were tremendous cuts through all departments. We lost 55 FTEs that were never put back. That means we changed the level of service. We closed restrooms, we cut lights off on tennis courts. We reduced service levels at all of our rec centers, time of operation and all those things. Now you're faced with that again as far as what we're trying to bring forward. I understand what you're saying. As far as the pickleball courts, I believe there is a need. As far as Countryside specifically, we have started to put some investments back in Countryside at several of our parks. We're trying to maintain things. One of the reasons the pickleball courts are in the possible cut was simply because we were looking at new things rather than maintaining what we had. They would be new. I think it's needed. I think we need more than just those in Countryside. But I do understand what you are saying. We have an issue and opportunity at Stevenson's Creek Park where we have lawn bowling and shuffleboard. We're having to deal with some issues there. It's in a flood zone. That's a beautiful piece of property, something we can look at in the future, too. And I think we're hearing you. • To summarize some of what was in that conversation it sounds like you want to see more information about and alternatives to including the pickleball courts among the measures in the memo. More information, contextual information. So that's sort of been put back on the table in some fashion. CONCLUDING REMARKS Mayor Rector adjourned the meeting and thanked everyone for participating. 22 APPENDIX A --- MEETING EVALUATION CITY OF CLEARWATER STRATEGIC PLAN IMPLEMENTATION STRATEGY – CITY COUNCIL WORKSHOP 1 MEETING EVALUATION SUMMARY Below is the compilation of meeting evaluations received from four of the five City Council members participating in the workshop on January 30, 2025. Members were asked to rate each of the following statements using a scale of 1 to 5, where 1 means strongly disagree and 5 means strongly agree. Disagree Agree 1. Please assess the following aspects of the meeting. 1 2 3 4 5 = Avg The agenda packet was very useful. 0 0 0 0 4 = 5.00 Overall, I am very satisfied with the meeting. 0 0 0 0 4 = 5.00 2. Do you agree that each of the following meeting objectives was achieved? Review budget and revenue trends 0 0 0 1 3 = 4.75 Review upcoming budget challenges 0 0 1 2 1 = 4.00 Identify and explore potential measure and strategies for addressing 0 0 0 2 2 = 4.50 budget challenges 3. Please tell us how well the facilitators helped the participants engage in the workshop. The facilitators made sure all perspectives were heard and respected. 0 0 0 0 4 = 5.00 The facilitators helped us arrange our time well. 0 0 0 0 4 = 5.00 4. What did you like best about today’s meeting? • In depth discussion from all council members • Opportunity to hear from my colleagues • The facilitators did a great job staying on point • Facilitation of discussion, discussing needs vs wants, structured time management. Ability as Council to have an open discussion together without being on the dais. 5. How could the meeting have been improved? • Good use of time • I do not have one at this point 6. Do you have any other comments that you would like to add (Please use back of form if needed)? • I do not. Thank you both! • Wish we could have more frequent, open dialogue discussions as a team. Great job! CITY OF CLEARWATER STRATEGIC PLAN/BUDGET STRATEGY RETREAT SESSION 2 FACILITATOR SUMMARY February 25, 2025 Report prepared by The FCRC Consensus Center The Florida State University 2 TABLE OF CONTENTS BACKGROUND .................................................................................................................................................. 3 WELCOME INTRODUCTIONS AND AGENDA REVIEW ...................................................................................... 3 SUMMARY OF WORKSHOP 1 OUTCOMES ....................................................................................................... 4 PRINCIPLES ........................................................................................................................................................ 4 Paired Comparison Methodology .................................................................................................. 4 Paired Comparisons ....................................................................................................................... 5 PRIORITIZATION CRITERIA .............................................................................................................................. 16 POTENTIAL BUDGETING TOOLS AND STRATEGIES ........................................................................................ 17 ADDITIONAL QUESTIONS ............................................................................................................................... 22 STAFF HIGHLIGHTS ......................................................................................................................................... 27 BUDGET MEMO DISCUSSION ......................................................................................................................... 28 CONCLUDING REMARKS ................................................................................................................................. 31 3 BACKGROUND On February 25, 2025, the City Council of Clearwater Florida met for the second in a series of two budget retreat workshop at the Morningside Recreation Center at 2400 Harn Blvd., in Clearwater. The objectives of the meeting were to: • Review possible guidance emerging from Workshop 1 • Build on Workshop 1 discussions to further develop and prioritize, as appropriate, principles to guide budget preparation • Build on Workshop 1 discussions to identify and assess strategies and tools available to staff in budget preparation • Provide other budget related guidance to staff as appropriate The agenda, as modified in the course of the meeting, appears below: February 25, 2025 9:00 Welcome Agenda review Summary review of Workshop 1 discussions Objectives and potential outcomes of discussions Principles Review potential principles emerging from Workshop 1 discussion Discuss and prioritize using a paired comparison methodology Council discussion of the results Prioritization Criteria Tools and strategies Review possible tools and strategies staff might use in budget preparation Rate using acceptability scales Discuss results, and rerate as appropriate Additional potential guidance Address additional questions relevant to budget preparation Staff highlights Budget memo discussion Next steps 12:00 Adjourn WELCOME INTRODUCTIONS AND AGENDA REVIEW Jennifer Poirrier, City Manager, welcomed the Mayor and Council and other participants, reviewed the overall objectives of the workshop and introduced the facilitators. She noted that the overall purpose of the workshop was to build on the January discussions to understand the Council’s budget philosophy and priorities. Hal Beardall, facilitator, further reviewed the agenda and other materials. He noted that the facilitators would first review outcomes and themes from the January workshop. That would be followed by 4 exercises to allow Council to work with those outcomes to further develop and prioritize principles to guide budget development. SUMMARY OF WORKSHOP 1 OUTCOMES Facilitator Rafael Montalvo reviewed a summary of themes emerging from the facilitators’ pre-workshop interviews with Council members. These included the following (these items were also included in Council members’ packets) Potential budget process principles (in no particular order): • Consider the pattern of city investment in different areas of the city over time – how much the city has invested and how recently, in each area • Ensure needs are addressed • Maintain a balance of needs and quality of life projects and programs • Include projects that will enhance revenue in the future • Take care of what we have first • Maintain target levels of reserves (assumes minimum required levels are maintained, target levels TBD) • Avoid millage increases in budget forecasts Potential budget preparation tools/strategies: • Allow the use of reserves for one-time capital costs if needed to avoid service level cuts and/or millage increases in the current budget year, as long as minimum required levels of reserves are met. • Allow for small millage increases in the out years of budget projections, if needed to meet goals. If this is done, continue looking for ways to avoid the millage increase in the intervening years. • Allow the city to cover a greater percentage of costs for some facilities and programs with fees. Additional questions touching on budget preparation approaches: • What level of reserves should the city strive to maintain? • Should the city consider hiring a third party or an additional position to pursue sponsorships/donations and public-private partnerships? • Are there programs the city should evaluate for adjustment? PRINCIPLES Paired Comparison Methodology For this exercise, Council members were asked to consider the potential principles described above, summarized by the facilitators from portions of Council discussion at Workshop 1. Members considered two of the principles at a time, selected at random by the facilitators. They then discussed which, if either, should be the higher priority. After the discussion, participants formalized their collective sense of the answer by a show of hands. The steps in the process were the following: 5 Step 1 – Present Initial Comparison: Facilitators presented two of the principles for members to discuss on a whiteboard in the following format Principle X is of greater or equal priority compared to Principle Y Step 2 -- Discuss: Members discussed their individual reactions to the proposition. Step 3 – Show(s) of hands: The facilitators asked members to raise their hands if they believed Principle X was a greater or equal priority comparted to Principle Y. If the poll indicated that the group’s collective answer is “no”, Principle X could only be a lesser priority. If the poll indicated yes, the order of the two items was reversed (Principle Y is of greater or equal priority comparted to Principle X) and members raised their hands again. If their collective answer was “yes”, then the principles were of equal priority (both principals cannot be of greater priority, but they can both be of equal priority). If the collective answer is “no”, Principal Y could only be the lesser priority. The facilitators then introduced a third item and asked members to compare it to one they had already considered. The process was repeated until members had considered all the principles and established an order of priority. The results of the polls for each comparison are represented in this document using the following formats. If only one poll is needed to establish the order of priority Yes No X > Y 1 4 Y > X NA NA If two polls are needed to establish the order of priority: Yes No X > Y 4 1 Y > X 5 0 Paired Comparisons Comparison 1 Consider the pattern of city investment in different areas of the city over time (A) Is an equal or greater priority compared to Take care of what we have first (E) 6 Council member discussion Facilitator and staff comments appear in italics • Just looking at the options as presented, I would say “taking care of what we have first” is of greater importance than considering what we have on the horizon, because it's the investments that will affect us here and now, mainly like infrastructure, whereas we can restructure the future of the city and where those investments are going to be taking place, how to pay for them, and when to put them into our future going forward. • It's something that's being done daily, “taking care of what we have.” “Considering the pattern of city investments,” that's long-term planning. So “taking care of what we have” is the greater priority. • Can you help me understand what we mean by “the pattern of city investment”? • This emerged from the discussion of the pickleball courts -- what investments has the city made in countryside in recent years, and what investments has it made in other areas might be one of the considerations. The discussion broadened to whether the history of investment in any area compared to investment in other areas should be a consideration. • For me, pickleball courts are far different from sewers or streets and roads. It's hard for me to answer that. Since we've used pickleball as an example, our team did a great job with McKay Park Pickleball Courts in getting the Foundation to donate $150,000 towards that. In hindsight, we might have been able to get more investment from other folks on Clearwater Beach -- that kind of thing. For that kind of investment, when we have the opportunity to get community participation in some things, I would say it's lower. That said, there are other infrastructure investments would be an equal priority for me. • I kind of agree. We tend to put our money in areas that need it the most. It's mostly been beaches and downtown because we have problems there. We seem to be talking about that more than we talk about any other place in the city. But Countryside is starting to get old -- everything we have in Clearwater is not brand new. So we have to be careful about front- loading things that really need help all the time. I hear from people in Countryside “All you talk about is downtown, the beaches. What about us?” I think that we've got to be careful to include all areas of the city. If you want to use a pickleball court, that's fine. It's something that Countryside needs and wants. To zoom out, I understand you're not just talking about pickleball. But if we constantly just put our efforts in areas that really need it first without talking about other areas, that will get us in trouble. • So it’s not black or white? • If it wasn't black or white, I'm going to make it worse. That's the point. What we're trying to get to is how we prioritize our budgeting decisions, the philosophy behind it. I think we need to establish criteria or a scoring method that prioritizes. Is it urgent? Is it a safety concern? Is this a mandate, county, city, state, or federal? Are we vulnerable? Is infrastructure getting old? Once you rate and score on those, you have a better idea where it falls. These are a too broad to just pick one over the other. If you fill in the blank with anything at random, each time we discuss it, we could flip. So I'm a little challenged on this. 7 • In addition to the city investments not all being the same, the second item for me is not all the same either. If we say, “take care of what we have first,” I'm not for making that a priority if whatever we're doing is archaic or outdated or something that we would never start today, or a program for which participation has fallen way off because the private sector offers people more attractive ways to pursue it. For me, that's the mixed bag, too. • I agree with what everybody here has said. First, I was thinking of infrastructure, the buildings that we have now, the infrastructure we have now, how to update those, maintain those, and keep them in operational order. But also looking to the future and making sure that that infrastructure, sewer lines, gas lines that aren't being tended to will have money come down the road. So I can see why you said they go hand in hand. So for me, these two are of equal importance, if this is how we're putting it, because of needing to do those things. If the need's there, bring it to us, let us systematically work out an approach with city staff. I don't know if we will say one of these is of greater priority because of where we've landed. I agree with everything you guys have said. When I was given the choice, I intentionally tried not to get in the weeds because then there's going to be exception to everything, whether it's pickleball, investments, whatever. So I tried to not get too deep into it and try to come up with specifics because, then it would be flipping with each case scenario. • When I think of “taking care of what we have first,” I was also thinking about everything that we have now that we need to take care of it, meaning our infrastructure. But I understand your points. When you asked about criteria, that question actually popped into my mind, and then I said, no, let's just stick to first impressions. Because if we do go deeper, I will flip with every specific example. For me, “taking care of what we have first” is still a priority because I take it as everything that we have now, we need to make sure that it's in working order, whether it's infrastructure or our capital assets. • Question to staff: Is there a point system or criteria in use right now (no details)? • Yes • I would add one more thing. The facilitators meant this to be about geographical equity among areas of the city. We thought about using those words and then thought this would be clearer. • I'm going to say they are equal priorities. Because I do believe that taking care of what we have first. • If you plug in “take care of what we have first” and think infrastructure and sidewalks and stormwater and those projects, then absolutely we would all say that is the priority. If consider that “the pattern of city investment” is about pickleball courts, a dog park, we would always say that. If considering “the pattern of city investment” is about roadways, sidewalks and things of that nature, then we would flip it. So it just depends. • So basically because of the complexity and the variation inherent in each of these, you're putting them on the same level. Your discussion makes it clear why. Conclusion 1: Yes No 8 A > E 3 2 E > A 5 0 For the Council collectively Consider the Pattern of City Investment in Different Areas of the City Over Time (A) and Take Care of What we Have First (E) are equal priorities. Comparison 2 Take care of what we have first (E) is a greater or equal priority compared to Ensure Needs Are Addressed (B) Council member discussion Facilitator and staff comments appear in italics • I'm going to need a definition of needs. Are we talking clean air, clean water, safety? Are we talking about transportation, housing, food insecurity? • At the last meeting, you talked about what is a need versus what's a want? So, however you thought about it then. There was a lot of commonality, although not 100%. • “Ensure needs are addressed” could be an equalizer when addressing the patterns of spending throughout the city. If Countryside infrastructure is in dire need, then we would be addressing it because that is the need. I'm trying not to get into the weeds because then everything is going to be equal to everything else. And it can address “what we have first.” So the statement “ensure needs are addressed” to me is quite significant. It has a lot of implications that actually bumps it up in priority because it touches all the other priorities. • For me it would be the other way around. I think “ensuring needs are addressed” would be the greater priority because it does address other priorities. • I'm seeing them as equal from a 45,000-foot view. We could get into the weeds and on each issue we're all going to have a different take on it for various reasons. If we're “taking care of what we have first,” that should address certain needs. If a need comes before us from staff, I think that we, through that guise or filter take what's there and try and make the best decision for the city or that area at the time. So I see it as an equal issue again. • It’s hard to think back to exactly what we talked about last month but needs to me are basic needs like trash pickup, safety, fire, all the important things that we have an obligation to give our citizens. I look at that as more important. If you define it as other needs that aren't as important as that, it might be the other way around. • I'm still not entirely clear on what the top one means. But I agree the bottom item for me is essential services, the basic services of local government, and that's public safety, streets and roads, those things. But I'm still not clear on what we're talking about on the top one. 9 • Just to interject from my 40,000-foot view, I see what we have first as those, our police departments, our fire departments, the infrastructure, everything that is set in place now as local government. That's why I'm saying it's essentially for me vague, but the same or equal. Because we still have to take care of what we already have established while ensuring needs are addressed. • I'm not real clear either. Is taking care of what we have first, is that like the infrastructure that we have we take care of first? Like building, maintenance, that kind of thing? Are we talking libraries, parks and recreation? We have a lot of stuff that's not necessarily a need. So I don't know if that's what we're talking about with the top item or not. • Without getting into the weeds, needs, safety concerns, clean water, clean air, common spaces, these are needs. Those should be primary for us as a government to provide. So I'll go with that one. I think we should be more focused on philosophy surrounding budget decisions, how we evaluate and prioritize. I feel that we're in an incremental budget process as most governments are. And it seems that we're shifting into a priority-based budgeting process. I think those are discussions and how we rate those priorities from urgency and safety on down to through needs and wants brings us to that. I think there’s more value to me in that. But for the sake of exercise, “ensure needs are addressed.” • But maybe the outcome of this is you actually need a list of criteria that you're all in agreement with or at least roughly in agreement with. • I just think using criteria would be responsible. You take your strategic plan, you see where different projects and programs fall into, how many boxes are we checking as far as delivery to our citizens, and we prioritize urgency and needs down to wants. We don't budget incrementally from one year to the next and try to fit everything into it. You prioritize, consider revenues, and live based on your means. What can you fit onto that table of programs and plans based on the money sitting on your table and not based on the previous year's expenditures. It's a different train of thought and philosophy, and worth discussing. Conclusion 2: Yes No E > B 1 4 B > E NA NA For the Council collectively Ensure Needs Are Addressed (B) is a greater priority than Take Care of What we have first (E). Comparison 3 Consider the pattern of city investment in different areas of the city over time (A) is a greater or equal priority compared to Include projects that will enhance future revenue (D) 10 Council member discussion Facilitator and staff comments appear in italics • When you say, “different areas of the city,” do you mean geographical areas? • Yes. • So 45,000-foot view. What I'm seeing between these two is that it depends on how general or specific the items are. For me, it's really hard without examples. I think maybe we’ve got five people thinking of different examples for each one of these. • We could still “consider a pattern of investment in different areas of the city” that includes projects that will enhance revenue. Even with parks, you don't consider parks as a revenue source, but we could be thinking of things to do in the park that would be revenue source. So I think to me it's really two different things that could be mixed or not. • With sports tourism, they can be revenue sources for sure. It's not just user fees. And we know that there's a proposal in Tallahassee to eliminate property taxes, so I don't know where that goes. But anything we build or develop, once it's completed, that raises our property value assessment for that property, and that increases revenue too. • I don't know if that's what we're talking about. Perhaps I'm oversimplifying, but I think of this exercise as a very preliminary exercise so that a pattern emerges. And then once that pattern emerges, then we can drill down and go into the weeds. This is a very first step to emerging a pattern of consensus, or at least of opinion, and I'm going to keep it simple. I would reverse it. “Include projects that will enhance revenue in the future” is greater, because I feel that that has a direct correlation with the success of our future financial stability and success. By really thinking about the revenue in the future and being proactive, that will trickle down and help us with all our other priorities. I'm going to try to not ask for specifics and really consider this as a very preliminary step in establishing a pattern. • I'll go with the “include projects that enhance revenue in the future” for the simplification pattern side. From the 42,500-foot level. • I agree with that. Whatever we think of, we ought to be thinking of how it would help the city with some type of revenue. Because we do have an awful lot of things in Clearwater. We've got more parks than anybody around, libraries. I mean, we really give our citizens a lot. And it would be good to start thinking of ways that we could monetize that. • I would have made them equal priorities. Conclusion 3: Yes No A > D 1 4 D > A NA NA For the Council collectively Include projects that will enhance future revenue (D) 11 is a greater priority than Consider the pattern of city investment in different areas of the city over time (A). Comparison 4 Include projects that will enhance future revenue (D) is a greater or equal priority compared to Ensure Needs are Addressed (B) Council member discussion Facilitator and staff comments appear in italics • Again, safety, water, air, needs are addressed is going to be paramount. • I agree. I'm just trying to stay vaguely specific, but I find myself going into the weeds. • You've got to figure out what the next step is. For me, the basic services of local government are what they are. They're well known. And at a minimum, we have to provide those. • The way that I'm articulating this generally in my head is that if we're looking to include future revenue, outside of the box revenue that we're not maybe generating now, that will help us ensure the needs that we address now with current revenue. I don't think that saying yes to the top one as being greater is necessarily neglecting what we have currently. • And all of these are priorities. They were drawn from your discussion of guidance. So we're looking for an order, but we're not looking to say any of these are not priorities. • I think what we're driving at the end of the day, taking a long route to get there, is at what point would we raise taxes? You know, if all we had was enough revenue to cover basic services, would we be willing to raise taxes to do anything more than that? Conclusion 4: Yes No D > B 1 4 B > D NA NA For the Council collectively Ensure Needs Are Addressed (B) is a greater priority than Include projects that will enhance future revenue (D). Comparison 5 Include projects that will enhance future revenue (D) is a greater or equal priority compared to 12 Maintain a balance of needs and quality of life projects and programs (C) Council member discussion Facilitator and staff comments appear in italics • I think the first thing that comes to mind is that if we are successful in enhancing our revenue, then we'll have less need to evaluate needs against quality-of-life projects, right? Enhancing our revenue will help us balance those two. So I agree with that statement. Conclusion 5: Yes No D > C 3 2 C > D 5 0 For the Council collectively Include projects that will enhance future revenue (D) and Maintain a balance of needs and quality of life projects and programs (C) are of equal priority. . Comparison 6 Avoid millage increases in the out years (8, 9, and 10) of current year budget forecasts (G) is a greater or equal priority compared to Maintain a balance of needs and quality of life projects and programs (C) Council member discussion Facilitator and staff comments appear in italics • This is where I would need specific examples. Trying to say something like this, perception becomes people's reality. If you're saying no to one over the other, somebody's going to run with that -- Councilmember so-and-so doesn't want me to enjoy my quality of life through programs and projects I have. Which is not true case because I want you to enjoy your life with the financial freedom you have by not raising taxes. So that's where I'm at. • When we're talking about avoiding millage increases in the budget forecast, is this being forecasted in one or two years? Or are we looking at a ten-year forecast like we did in the opening? Because I find problems in predictions and forecasting so far out in government. There's so many unpredictables -- markets, housing, the economy, inflationary pressures, legislation, that when we're getting eight, nine, ten years out, it's too unstable. • Because these build on your previous discussion, I'm going to add some words we should have included. I'm going to say the far end of the projection, not next year. Because that's what you were talking about last time. 13 • I agree with that. Processing our last meeting, I was really focusing on that ten-year projection of no millage increase. And when I look at just the last six years of what's happened, no one predicted a pandemic. Two incredible storms. The workforce, the changes, the price of commodity, all the tariffs that are coming out. We can't predict it. To commit ourselves to a ten-year forecast when there's so many variables makes me uncomfortable. I think we're going to be forced to make decisions that might be negatively impacted by restricting ourselves to this ten-year forecast when I don't think it's realistic. • So this is the one time that I'm going to stay in the weeds, like, “out years” means what? • Let's say, because I'm drawing on the previous discussion, years eight, nine, or ten. • That makes a big difference. In years eight, nine, or ten, maintain balance, needs, quality of life, projects and programs are far more important to me because of the uncertainty of years six, seven, eight, nine, and ten. But if you're telling me that's year one, two, or year three, avoiding the millage increase discussion is far more important. If we exhaust that discussion and do everything we can, such as this, to get to that same answer, I'm okay with it. • It's like a trick question. Nobody wants to say, yeah, we're okay with millage increases, no matter what. But we're not talking about now. We're talking about in the future, which will happen. I'll go back to Clearwater being Bright and Beautiful from Bay to Beach, and our mission is to give our citizens as much quality of life as we can and maintain infrastructure. So I'm going with the maintain a balance. It's the most important. • I feel really strongly about this. To consider a millage increase down the road is one thing. To forecast it, I think is poor leadership. And particularly considering, I don't know how serious it is, a proposal now in Tallahassee to eliminate real property taxes. I don't even know what our source of revenue is going to be. I've got considerable concerns about that proposal. And I'm sure many other municipalities in Florida do. I just think we owe it to our taxpayers to do our best to do what they do -- live within their means. To consider this, if we needed to, to maintain those things at the top, yes, I think we all would. We love our quality of life here. We love all the things we provide. And so if we had to consider it in the moment, I think we all would. But to forecast it, I don't think is good leadership. • We didn't include this language in the principles, but if you look down at the corresponding strategy here, it says, “and continue to look for ways to eliminate that as you approach those years.” So, years 8, 9, and 10, and continue to look for ways to eliminate it. • I would also say, as I said last time, to forecast a millage decrease is not good leadership either. In the moment, if we had to consider it to keep our quality of life, I think we all would. • There are a couple things that I feel like we need some clarification on. Forecasting is a requirement for us to compete and be eligible for the FGFOA budget award that we continue to get. And the longer you forecast out, the more points you get. There's a lot of things being said in terms of poor leadership about forecasting. I want to make sure Council understands. • I'm not questioning forecasting 10 years out. I'm talking about forecasting a millage increase. • I just want to make sure that the Council understands why the forecasting is there and where the 10 years comes from, including the millage increase. Because it shows the impact of our spending by staying on this track. 14 • We don't have to forecast a millage increase. I think we're all okay with the 10-year forecast. If our spending is appropriate, we don't have to -- if we're going to commit to monitoring our spending, we don't have to forecast a millage increase. We have to make some decisions and some of them may be tough on what we plan to do long term. • I know this exercise is difficult. Creating a budget is difficult right now in our CIP. We are sitting on 147 projects over the next seven years that equate to over $541 million. That's what's funded. We don't have what's unfunded, which is a lot. It exceeds that. So we're trying to get some priorities to help us go through these 147 projects to get them prioritized. • I again have the problem with the word forecast because they're based on so many assumptions that are manipulated with small percentages. If we truly just want to see years 8, 9, and 10 not show a forecast, then we just manipulate the spreadsheet with our assumptions, and it gets us to the place where one doesn't show up. I feel we're putting too much weight and value on basically an assumption about something that's far down the road. • Jennifer, if you could, please get us that list of what those 147 projects are? Conclusion 6: Yes No C > G 4 1 G > C 3 2 For the Council collectively Avoid millage increases in the out years (8, 9, and 10) of current year budget forecasts (G) and Maintain a balance of needs and quality of life projects and programs (C) are of equal priority. Comparison 7 Avoid millage increases in the out years (8, 9, and 10) of current year budget forecasts (G) is a greater or equal priority compared to Maintain target levels of reserves (F) Council member discussion Facilitator and staff comments appear in italics • So this is target levels and you're going to talk about what those are. Not minimum required levels. You have adopted policy that sets a minimum required level. In this last budget forecast, staff has drawn on reserves in excess of that minimum required level for some one- time capital project costs. So avoiding the millage increases in out years is a greater or equal priority compared to maintaining target levels of reserves over and above the required minimum. Yes, Council. • Just to clarify. So it's not the required reserve, but margin the above that? Yes. 15 • So actually this, this is actually a discussion that I've had a lot over the last two years when we had more. Levels of targeted reserves and the discussion was, well, if you have so much, are you not providing more services to the citizens or are you charging us too much? And I've had several conversations with constituents about that. Just wanted to put it out there. So you're okay. So avoiding eight, nine over maintaining. So is it okay to use the reserves over and above the minimum for one-time capital projects? I don't put years eight, nine and 10. I don't put too much stock in assumptions of the forecast. So “maintain target levels of reserves” is to me is vastly more important. We just saw it with two storms. How important sitting on reserves were in unexpected times. Recessions where a city that relies heavily on tourism. You have a gulf oil spill, a hurricane, a red tide. We're exposed to quite a bit of risk in our community financially. And I think maintaining target levels of reserves for stability and flexibility are vitally important for our city. • That's why we have minimum levels. It's a balance because you don't want to be sitting on too much. People saying, why are we paying so much tax? And you're just sitting on it. But you need to have enough to cover things that happen that we don't account for. So the target level versus the minimum level, I would say more for the top one than the bottom one. Okay. Yeah, I think they're both equally important. Definitely. I think the last time we had this meeting we had spent $70 million on hurricane recovery type things. We'll get hopefully most of that money back, but not. I mean, it takes a long time sometimes. And we didn't even get a direct hit. The storm was 100 miles off our coast. So I think they're both equally important. • I have nothing to add. Conclusion 7: Yes No G > F 3 2 F > G 3 2 For the Council collectively Avoid millage increases in the out years (8, 9, and 10) of current year budget forecasts (G) and Maintain target levels of reserves (F) are of equal priority. . Outcomes The following three tiers of priorities emerged from the exercise: Tier 1 • Ensure Needs Are Met (B) Tier 2 (in no particular order, all equal priorities) • Avoid millage increases in the out years (8, 9, and 10) of current year budget forecasts (G) 16 • Maintain target levels of reserves (F) • Include projects that will enhance revenue in the future. (D) • Maintain a balance of needs and quality of life projects and programs (C) Tier 3 (in no particular order, all equal priorities) • Consider the pattern of city investment in different areas of the city over time (A) • Take care of what we have first (E) Facilitator Comments on Outcomes • There are the beginnings of some differentiation here. You have three tiers of priority coming out of this exercise, and themes in the discussion that point to the logic behind them. • Ensuring that needs are addressed is the top priority. That was clear in your discussions throughout the exercise. • There was a lot of discussion about other things up here: Include Projects That Will Enhance Revenue In The Future will make it easier to take care of needs, achieve that geographical equity and to address quality of life. And, there was also a sense that you might as a council want to move in the direction of doing more with explicit criteria for evaluating projects. • You found Taking Care Of What You Have First unclear. On that one, the detail made a great deal of difference whether it was something you thought the city should continue doing or having. But there was uncertainty there. And Consider The Pattern Of City Investment In Different Areas Of The City Over Time goes to the third tier, in part because you thought it might be taken care of by Ensure Needs are Met, and in part because it might not be a good guide to what is most urgent. So that's the logic of your discussion. • And all of the principles are important. PRIORITIZATION CRITERIA In response to suggestions of the desirability of more detailed criteria during the principles exercise, Jennifer Poirrier, City Manager, reviewed the City’s current prioritization process. • I'm not going to go through the individual criteria because I don't want us to get lost in that. I'll give you some examples, because one of the objectives of having this workshop is for us to be able to update our criteria on this project list and then be able to rate them in accordance with those priorities. For example, some things are legislatively required. There are different mandates the legislature every year that require us to have projects or to do different things. That will obviously place some priority on a project. • I just wanted you to know that we do have a method to rank these. Yesterday, we met with a firm to look at other ways to prioritize our projects just to make sure that, you know, we are doing it the most efficient way. I know that our budget team is also internally having conversations about how to better prioritize our projects and then communicate how those projects are prioritized. 17 • You guys see the capital improvement list in the budget. And so you have that. But we want you to understand how we put them in the budget and rated them in the budget. That's just some examples in terms of what's in here. I don't want to go through it all because you'll be like, well, that doesn't make sense. Exactly. That's why we're trying to update our list with new priorities. • Could you just read off the 10 criteria? We won’t discuss – we (your facilitators) will be really draconian about so we can get through the rest of the day. • Regulatory compliance, alignment with city strategic plan, public perception and public relations, level of service, operating efficiency of the city, maintenance and cost, safety and security, risk, and return on investment. Scale and magnitude. That's it. • We can take a couple of questions for clarification. We obviously can't fully clarify all of those now. The point is staff is going to bring that back to you and today’s outcomes back to you and engage with you in a discussion of how to translate the outcomes into criteria. And they'll have some thoughts on that. That's the starting point. • And, you know, we mentioned what we did last year in April. So right after three of you were elected in April, we had our strategic work plan. That was much more detailed in terms of what we were going to be working on the next year. And so I think that would be a good time to show you what our strategic work plan is and how we got there based on these criteria. And you can let us know if the criteria are appropriate or not. We're still early in our budget process. • I think it's important for Council to be a part of those as elected officials. We're held accountable on the ballot. If we're responsible for establishing policies in our community, if we're responsible for truly listening to the needs, the wants, the desires of our constituents, I think it's important that we are a part of those higher-level discussions on establishing priorities. Are any of the criteria weighted? Are they prioritized? • Short answer is yes. • There was a lot of discussion about looking at what the city is doing now and thinking about whether you would do the same thing if you were starting from scratch today. And Jennifer, I believe that's the question you posed to departments when you came up with that memo. • Absolutely. And we continue to pose that as we go through the budget process. It was a great question. It was mentioned at the dais. You know, we're citing our source, but we are absolutely using that question. And we will be doing something similar going forward every year. POTENTIAL BUDGETING TOOLS AND STRATEGIES Council members discussed three budget tools or strategies that addressed aspects of Council discussions at Workshop 1. Members addressed each in turn, first rating the strategy or tool under discussion using the following scale. Strong support This is very close to what I would say. Support This may not be what I would say, or may not be my first choice, but I am good with it. Minor reservations I may ultimately be able to support this, but need additional clarification, refinement or discussion first 18 Major reservations As I currently understand it, I cannot support it The facilitator then opened the floor for members to identify their reservations, ask each other questions about their answers and discuss a possible common Council approach to the item. Strategy 1 Allow the use of reserves for one-time capital costs if needed to avoid service level cuts and/or millage increases in the current budget year, as long as minimum required levels of reserves are met. Rating 1 Rating Strong Support Support Minor Reservations Major Reservations Members 3 2 0 0 Council member discussion Facilitator and staff comments appear in italics • Let’s understand the reservations first. • My reservation is going back to millage rate increase. I would want to know what exactly is causing us to raise taxes overall that we weren't able to accomplish from maybe taking just the cost out of reserves. So I just see that as my minor reservation, whereas, you know, we can look to the three hurricanes we've had over the past year, the $70 million I alluded to, we were able to take that out of reserves to meet the city's needs to take care of our citizens. However, I would really need to know more about why we're going to a broader tax increase versus utilizing those reserves and trying to replenish them to a minimum standard. • But this is a not-increase tax. It says to avoid the millage rate. • Well, it's the devil's in the details. I missed that apparently, just reading too much into it. In that case, I strongly support it. [Numbers in table above have been adjusted to reflect change.] • It's a balance of making sure we're not underprepared or unprepared. The other side of the equation is overtaxing the citizens. We're not in the business of taking their money as a bank account and storing it under our mattress. It's a rainy -day fund, and I think it's there as a tool. When used responsibly, it's very effective. We shouldn't be afraid to use it, but any time we do, we need a plan for how we replenish it Strategy 2 Allow for small millage increases in the out years of budget projections, if needed to meet goals. If this is done, continue looking for ways to avoid the millage increase in the intervening years. Rating 1 Rating Strong Support Support Minor Reservations Major Reservations 19 Members 0 3 0 2 Council member discussion Facilitator and staff comments appear in italics • The reason that I have major reservations is because if you're already planning to incorporate that, I think you're starting on the wrong foot. I think that's why we discussed budgeting, the priorities of the city and why we're going to make sure we don't ever look to raise millage rate. • So I think there's other ways to get there and avoid it. You'll probably never see me in a situation where I'm going to support any type of increase, minor, moderate or otherwise. • Does the second sentence of that strategy help any with that? • It does not. • So you'd rather choose to not have it in there in the 10-year projection? • Correct. • I think that the budget projection will probably eventually show where a millage raise or increase would be necessary if on a current path, if things aren't steadied or put into a more efficient way, right? So I think you're going to see that in a projection. Does that help? • No, because I would like to get to where, okay, we know where that tipping point is going to be. I'm not even going to entertain getting to that point. What can we do now to ensure that doesn't happen? • Yeah, absolutely a last resort. We have raised taxes on our residents year after year for a long time. Even if municipalities or county governments have rolled back their millage, they haven't done it enough to offset the increase in the property value. Their taxes have been going up and up just because their equity in their homes has gone up. They don't have more money in their pockets to pay their taxes with. So for me, we need to recognize that, appreciate that, thank our residents for having tolerated yearly tax increases and to only project or forecast a millage increase as an absolute last resort. That's an absolute fairness to our residents who have been patient for a long while. • When I read this statement, I'm really focusing on the words “allow” and “out years of budget.” And so when I look at the statement, I perceive it as that allowing the consideration in that such a long forecast will allow us the flexibility to respond to all the variables. That's where I'm taking it. • It's the weight that we're putting into the words “predictions” and “assumptions”. Some of us are putting more weight into that. If I'm going to a Bucs football game, and I see there's an accident at the airport, I don't not go to the Bucs game. I know I can reroute myself to get there. I'll get there on time. I'll see the kickoff. I'll get to see the game. And I avoided the accident. But I didn't just not go and, you know, I wasn't fearful of going because I saw it eight years down the road. I had time to course correct and be to where we felt comfortable. • I look at this differently. Every council meeting, we talk about issues that come to us from different departments, about costs being raised on products and services and even pay. We've 20 raised the pay now. Every year, everything gets raised. So I understand that even if we don't do a millage increase, taxes seem to go up because of property values. But then I look on the other side of it. That's for people who own second homes. If they're homesteaded, they only go up 3%, which is a little bit less than everything else. People know that every year, things cost more, and it costs more to run the city. I'm not saying just raise the millage rate. I don't like that. If I'm looking out eight to 10 years, we have projects, I could tell you, we got a lot of projects. I mean, not just buildings, I'm talking about big infrastructure projects. It's $100 million just on North Clearwater Beach. And then we're moving the sewer plants and all those big things. So it doesn't bother me if I'm looking out eight years and saying there could be a millage increase in eight years. • The city manager has to put together a budget that projects 10 years out. I wasn't okay with the 2028 millage increase but I'm fine with pushing it out further. And I think we're doing a good thing going through the departments and really trying to be fiscally responsible. But we know that things are going to cost more money every year. And we're an older city. We've got a lot of infrastructure projects that need to be done. So I'm fine with an eight-year projected millage increase on this year's budget. We're going to look again next year. Maybe we can push it out. • What percent of our community would have any idea our projections 10 years down the road? Would it be 1%, 2%? We would have no idea. I mean, so many are worried about living through this year for their families or the next year to worry about it. It's not broadcast. We don't fly it behind an airplane. It's not on the website. It's a projection, an assumption 10 years down the road. I just don't give it that much value as others. • I think it's a message to yourself, assuming we're just going to do what we do. And eight years out, you know, we're going to-- here's what's going to be. I think when you factor that in you don't have a millage increase. It's a message to everybody, including us as a team. We're going to do everything possible to live within our means. • If you put in there, forecast eight years out, well, okay it is what it is. No, we have eight years to figure it out. So to me, it's a message to the community that we are committed. We are going to live within our means. And we are not well, OK, we’ve got this fallback, eight years from now. No, we have eight years to figure it out. And we're living in a world now where within the next year or two, artificial intelligence may completely change everything we're doing. And it could lower the cost of almost everything. So, I just think-- but I think it is-- whether the community is paying attention to it or not, it's a message also to ourselves. I'd be against putting it in there at any point, because I just don't think it's good discipline to have that as kind of an excuse. When we have plenty of time to do lots of different things to make sure we stay within our means. • I think I'm hearing agreement – “You've got eight years to fix it”, not “it's going to happen.” • I do think there is something to the messaging, though, because every year, homeowners get their trim notice. Then you see whether the city or the county is doing it. That's setting the tone for those families on their future. Are they going to have the next kid, but then they'll have to get a bigger house to accommodate another room? What does their future look like now? And then say they get word, potentially eight years down the road, Clearwater's going to raise taxes. Well, I think we're going to forego on the kid, you know, let's just stay where we are, make sure we can hunker down and still make our payments, because times are already tough. So I think future planning for our residents gets affected. I think we're assuming it's a safety net, we're going to do nothing. All of us work tirelessly to be in our community, listening and speaking to our residents. Those are the opportunities that we have to convey the message that we are committed to work 21 hard and tirelessly to make sure we are not raising your millage rate. That's the message that gets out, not just letting them assume because they might have seen it or heard it, or it's a safety net. It's the message we give them when we speak to the thousands of residents a week. I think that holds more value than an assumption. • This is all about how I perceive a millage increase in years eight, nine and ten and all the variables. I want to clarify that if I'm going to be sending a message, it will be coming from my mouth. My message is not, “I'm considering millage rate over living within my means.” I'm saying I want to have the flexibility to make decisions, which is given to us if we don't assign an arbitrary importance to years eight, nine and ten of a forecast for avoidance of a projected millage increase. So if there's going to be a message, that's my message. That I just want the flexibility in decision making now without tying our hands to an eight, nine, or ten-year projection. Thank you. Strategy 3 Allow the city to cover a greater percentage of costs for some facilities and programs from fees. Rating 1 Rating Strong Support Support Minor Reservations Major Reservations Members 5 0 0 0 Council member discussion Facilitator and staff comments appear in italics • Can you elaborate on “cover a greater percentage of cost”? Is this the city spending more money to cover a greater percentage of facilities and programs? Or the city charging more-- where are we going? • Charging more money is really where that's going, I think. Charging more money, from fees. • So generating revenues to offset other budget-- this is a specific set of potential revenues. For instance, if you wanted to use the green in Coachman Park for an event, you would pay-- instead of paying what our field rental or normal rates are for that space, you would pay market rate for that kind of space, a unique market-competitive asset. So for instance, Iron Man ran the half marathon. I don't know what they paid for the use of the space, but they would pay market rates for use of that space. So program fees, rec fees, things like that. Paramedic fees, user fees, service fees, parking fees. • Are there particular programs and projects that you think this would make particular sense for in the short term? • I'm going to give you a specific example. There are people who use rec centers and their services who don't live in the city technically but are in proximity. I would think there should be a differentiation between residents and non-residents. That's another opportunity to increase revenue. Groups versus individuals. I would like to see how we compare with what other cities are charging and see if that's an opportunity that we're not fully taking advantage of. 22 • I support it because I think it's a healthy exercise to do a regional feasibility study to make sure that our fees are in the right ballpark. And I don't necessarily know if we need to be the highest and the most extravagant. And we don't need to be the lowest. And if we find gaps and holes in those, then we probably need to raise or lower them. • I can speak to that. I know all of our kids' youth sports programs, if you live in Clearwater, you pay a certain price for a rec card. If you live outside of Clearwater? I'm sure Art and Mike could speak to it. But you get complaints all the time about the amount that those families from Safety Harbor or Palm Harbor coming in have to pay. So I do know we do that. But it's a balance in finding the sweet spot. We talked about downtown parking at one point. At the time, we all said let's hold off on this, but during big special events and sold-out concerts and things like that, it's probably worth looking at a differentiate there. I think it's a healthy exercise. ADDITIONAL QUESTIONS Council members addressed three questions posed by staff based on Council discussion Workshop 1. What level of reserves should the city strive to maintain? Council member discussion Facilitator and staff comments appear in italics • I think industry standard is 16.7%. They say two months of revenues is usually kind of a lower comfort level. I don't know what our target is. I think in that process you need to evaluate your risk. Your value exposed to it. Recessions, red tides, oil spills, hurricanes, emergencies like that. And you figure out what level gives you that comfort or stability, that flexibility when we do get hit by something like that. • Have we raised the minimum? Where are we at on the minimum reserve? It's six months, right? • We're talking about a couple of funds. And we're talking about in excess of that. For the general fund, it's 8.5% versus the 16.7%. That 16.7% is what GFOA recommends as a best practice. We're a little unique in that we have a central insurance fund that has a significant level of reserves that supplements our general fund reserves. That's why at the last strategic planning work session, I provided you a graph that had both general fund and central insurance fund to show our total level of reserves. But even having said that, we have not been at the 8.5%. We've typically been closer to 20% with general funds. So that with the central insurance fund, we're well in excess of the standard recommendation. Even with that, with GFOA, it's still the minimum. And their recommendation for hurricane-prone areas would be a much higher level of minimum. So that helps our bond rating. • And so 16% is where we need to be for the favorable bond rating, or in excess of that? • Well, we require 50% for our utility funds and 25% for all other enterprise and internal service funds. And we exceed those. So when it comes to the bond rating agencies, we're well in excess of what a AAA-rated city would need for reserve levels. We have a very, very healthy level of reserves that's far in excess of what the bond rating agencies would be concerned about. 23 • But we don't have a target. I mean, I haven't heard of a target. As we're discussing here, what target? • This is a follow-up to earlier conversations. What we're asking for is your target over and above what's required. We talked about the different funds and what's required in those. Going back to our 10-year forecast you all appreciate so much, it shows how much annually we need to use from general fund reserves in order to balance the budget. And our policy requires that it be due to one- time expenses. There's been some discomfort on the Council about how much of our general fund reserves we are using to balance the budget. There was conversation that we need to get that under control. And so this is about, let's dive into that so that we can make sure that, again, our budget that we're projecting takes into account the direction that the Council wants. • So we're talking about over and above what is required in best practice. Is there a rule of thumb that we could agree upon for direction as to what you want to keep in there? The options seem limitless. But just wanted to see if there was something that would build in some comfort level with the Council and that will either maintain a percentage or a dollar amount that is over and above that. And we can use the rest to fund these one-time projects. • I would like to, because if the general fund is supposed to be around an 8.5%, we're closer to 20, I would like to see something on paper that shows me those details of what it looks like if we lower it to 15% or 14%, something like that, to give us a better option. Hey, this is what you have currently. Here's three more options if we've lowered it to here. I wouldn't recommend we go any lower here for x number of reasons. Does that make sense? That would give us a better adjustment on answering this question to the extent that we can. • We provided the 10-year forecast to you all and the projects that are being funded out of that. We could do it any number of ways. Part of our budget strategy has been to put money away for projects that we know are going to be coming up in future years. So that is part of what that balance is there for. And so it's a matter of just what amount or percentage you guys would be comfortable with. I know that there's been some reservation about taking $20 million out of reserves. I think last year for budget it was $11 million we took out of general fund reserves to balance the budget. And there were conversations about, let's not make that a habit. We certainly don't want to continue to do that, which is what drove this conversation today. • I don't have any problem with the 10-year forecast. I have a problem with making assumptions that far out, rather than being disciplined and trying to avoid those assumptions. But I don't have any problem with the 10-year forecast. I get why it's important. In that regard, our finance team has given us great guidance over the years. Our reserves are as healthy and strong as they are because of the great guidance they've given us. • I don't want to see us get close to the minimum. I think particularly in Hurricane Alley, that's dangerous. That said, I think there is a level where we've got more than we need in there. And we do need to commit to the taxpayers, to their tax money. We need to put it to use for their benefit. I would rely heavily on our finance team to tell us what you all think, Jay, is a cushion that would be benchmarked with other coastal communities in our situation. What would be healthy but not too many reserves? But I think we need that because of our proximity to the coastline. • I completely agree with that. The city's savings account, the general reserves that we have, are for the gray sky periods, right? For us to be able to make sure that we can pay our employees, make the fixes we need when those bad times come. And that's why if it's 8.5%, I wouldn't want 24 to be anywhere near that. I understand when those times come, being right off the coast in a hurricane-prone area, we need to be ready. Like we were. You guys all did fantastically over the past year. What percentage would you guide us towards that would be a sweet spot where we could save more money off that 20% but still be at 16 and 1/4. I don't know what that would look like. I can do the math myself on the documents I have. • I can speak to that off the top of my head. We did mention the GFOA recommendation of 16.7%, two months. That is a guideline or a target for the general fund, in addition to maintaining central insurance fund reserves at the level that they have been historically. • To me, it is a pretty reasonable and healthy level of reserves. But I qualify that, because if we really get hit with a major hurricane, there's no level of reserves that's probably going to be adequate, and definitely no level that we could defend carrying for that reason at the taxpayer's expense. So it's a balancing act. And there's no perfect solution. But to me, if we have our required 8 and 1/2%, but we target to maintain at the GFOA best practice, in addition to maintaining our central insurance funds, I think on a relative basis, we're as healthy as anybody can get their insurance on. • I like that. That's what I like. Yeah, I like that as well. I think that's important. We put our faith in Jay. You know what the numbers look like. No pressure. • What does a red tide during our summer months do to our tourism, do to our tax base? Do we have the ability to get through a four-month season with red tide? You know what that map looks like. And I obviously would greatly appreciate your direction in there. And we do have reserves for a reason. And we have them for projects that are needed. And I think those one-time expenses are places where we're vulnerable. And our North Beach apartment complex, and Alligator Creek, the Cooper’s Bayou, these are infrastructure problems for which one-time expenditures of reserves are warranted and needed. There's a reason that we bank that money in the reserves. And there are times we use it. But I'm with you having that comfort zone and that cushion. Water consolidation plan moving forward is not cheap as well, and very much vulnerable and needed. We have those on the horizon. And finding that sweet spot of comfort is important. • Is there still information you would like in writing? • No, that's great. That's just what I wanted to hear. Yeah. Should the city consider hiring a third party or an additional position to pursue sponsorships, donations and public-private partnerships? Council member discussion Facilitator and staff comments appear in italics • There was discussion at the last meeting about possible public-private partnerships, soliciting sponsorships, donations, other revenue sources generally. Staff looks at that as a specific set of skills needed to pull that together and move it forward. So that's the question to you. • I spoke about the public-private partnerships, and then the mayor added sponsorships and donations. I've had some time to think about it. I really would like this opportunity to hear more about what you meant. What does that look like, a sponsorship, donation? Is it specific to a 25 project? I just want you to explain it. I would appreciate the opportunity to hear what your thoughts are. Because that's not what I meant by public-private partnerships. • Well, it's a mix of things. I'm most familiar with sports facility assets. And so regularly, the company I work for, we go out throughout the community and even throughout the country and get sponsorships for athletic facility complexes. • For naming rights? • Naming rights, or even simply to get the Frenchy’s Foundation to donate $150,000 to the McKay Park pickleball court. Well, the overall park, but primarily pickleball. There's a lot of money out there, I think, for community partnerships to help either improve our facilities or build facilities. • I think, although the Parks and Recreation team did an amazing job with that, we don't have the bandwidth on our team to go out there and seek those things. Often, that's done on a percentage basis. Whatever they can get, they get a commission on. Bring in some third parties to not just get in sponsorship donations. We've got my favorite event, the Incredible Dog Challenge coming back in April. Nationally televised on NBC. They just came there last year, and the television crew raved about the venue, the backdrop, the water, and all that. Why don't we have more of that? Well, our team doesn't have the bandwidth to go out there like we would, as a company, seek events. We go to trade shows, and we have booking people. Much like Ruth Eckerd Hall does for the Sound. Somebody would go out there and seek event operators to come in and use Eddie C. Moore Complex and all these things. But we just don't have the bandwidth. • It's not our company --I'm talking about other people that would be willing to come in and do that kind of thing for all of our assets. You're looking for a process in place with the appropriate personnel that's needed to actively seek out these partnerships or donations or whatever. For example, I know I have a couple of friends of mine who want more sun structures or protection at Coachman Park. And they're willing to donate to that. So you're looking at a process in place that lets us engage with those people and have them donate whatever benches, etc. • My experience is, unless you've got somebody dedicated to marketing and securing that kind of thing, it just doesn't happen. Because like most municipalities, we just don't have the bandwidth and staff to go out there and market and drive it. But if you have somebody you can engage to do that, we'll end up with more revenue. And even if we have to give somebody a cut of it to go out there and do that, I think that would be a good opportunity for us. • We already have one company in place, a company that does the naming rights for us. And they go out specifically looking for naming rights on any kind of asset that Clearwater owns. But I don't know if they go into anything more than that. But I'm sure there are companies that do that. And I'm all for that. • Short answer, yes. Most cities are on this perpetual search to find additional streams of revenue. We just sat here and discussed it briefly on user fees and service fees and program fees. And we're searching for those additional revenues so that we don't get to a point of projecting anything down the road that we do not want to send the wrong message about. • With respect to the roles and responsibilities associated with this sector, I agree. I don't think we have the bandwidth and the manpower to take that on with respect to program management, sponsorship, recruitment, sales, activation. Not that we don't have the competency or talent. It's a full-time job. I do think that it's worth exploring to be successful in it. I think you have to have 26 sellable assets. We do. We have a world-renowned marina that we're just building. Why is Marine Max not throwing money at it? We're talking about sponsorships. We have 110 parks. Without even much effort, there was a beautiful donation done by the Frenchy’s Foundation for pickleball courts. We have baseball stadiums, hopefully softball fields. There's a lot of sellable assets for us. I don't know if the group we have is doing that, but the only one I've seen come back is in our own backyard, and that's BayCare. And I think any of us at the table probably could have helped solidify that or made that phone call. So I say yes, it's definitely worth looking into. • I'm all for this. It'll definitely be an asset, especially to alleviate staff's burden on this and get people that are experts within that field to go out, secure those donations, secure the naming rights. They have a litany of different things, not just naming rights, that you could do with this park. They give you these ideas and then go out and secure it, even if they're taking a fraction of the percentage or what have you. I think it's worth its weight in gold, for sure. • So are we leaning towards hiring a staff member to do it that works exclusively for us or outsourcing? • I would outsource this. • Outsourcing. It doesn't necessarily have to be a for-profit. You could set up a sports and recreation tourism nonprofit or something like that. There are different nonprofit organizations that might be interested in helping, too. We've got 1,800 employees and keeping them and replacing them and hiring and doing all that. Plus to take on a salary cost when we're trying to right size. Some type of partnership with an outside group would work better. • I completely agree, 100%. Are there programs the city should evaluate for adjustment? Council member discussion Facilitator and staff comments appear in italics • Well, as far as staff, I know that we did a big cut in 2008, 2009. We haven't ever brought back the number of staff we had before, so we've been trying to build it since then. And so I don't know about anything we would cut staff-wise. We're really need staff. But as far as programs, I don't know. I guess leave that to the city manager. I think she's doing that now. She's going through different departments and kind of seeing what's working and what's not. • Yeah, I've been impressed by what I've heard from the staff already. I'm trying not to be hard on the library. Love the library. But I've been impressed with what I've heard about some innovative things they're doing over there. It is not just Clearwater's libraries; it's libraries all across the country. How are they still relevant? How do they still provide materials in an Amazon world? Where folks are not going into Barnes and Noble very much anymore, or a library, they're getting their materials online. And so I've been impressed by the things they've looked at to say, wow, it's a good point. How can we better serve our citizens by maybe providing materials electronically rather than with a warehouse for them to come in and look at a book on a shelf? • So, but there are examples, not just library throughout the city. I've already heard through the city manager that I've been impressed with what they're doing to just look at the delivery of 27 services. And I think the other thing too is, I don't know what analysis we're doing as far as participation in programs. If there's participation in certain programs that's trending down, maybe people are choosing to go to the private sector, we need to take a look at those too. I think every department is looking at the delivery of services and the way we're delivering them today. It's been a healthy analysis so far. • I will leave it to the staff. I think when I read the memo that was sent by the city manager and what they have done so far, I think they're in the right direction. And at this point, I'm not ready to make any decisions on any programs. I will defer to staff for recommendations. • I think this is a healthy process, evaluating our programs and their effectiveness and cost-benefit analysis. I think staff is doing a wonderful job with the recommendations. I know there are some discussions that have been had about our many advisory boards, and maybe that list seems to continually get longer and longer. I don't know if there's the ability to combine or realign and how that could be shuffled. I know that takes a heck of a lot of staff resources, times, and manpower to manage those. I think that could be one. The library does seem to get picked on quite a bit, and I feel for staff in there. We support our library systems, obviously, and love our employees that work there. I think we could be helpful as a council and a city at moving into that transition as libraries are getting away from books and publications and getting into tomorrow's creative space-making centers, literacy centers, workforce development, meeting spaces, technology hubs, AI, educators. They're becoming more of a community center, and I think there might be some additional revenue streams with that versus trying to get away from, but helping support and grow in those community needs, and every library has its own community need that's different from the next. I think staff is doing a wonderful job of finding those areas where we can make adjustments to programs and evaluating. STAFF HIGHLIGHTS Jennifer Poirrier, City Manager, requested time to showcase staff efforts to rethink City projects and activities with the objective of finding efficiencies. Facilitator and staff comments appear in italics • We listen to the direction from the Council and what it is that they're looking for from us, and we don't just wait to implement those things at budget. We look to implement them right away, and so I'm going call up Marcus to just for five minutes, to highlight some of our successes that have been able to be a reality thanks to the Council's support and having a competitive pay plan. • Angel joined us a little less than a year ago. He was a kind of a combined targeted hire where we went out and said we really want to grab somebody out of the private sector experience that has been running commercial engineering firms and could brought that experience in. The City Manager helped support that, HR helped support that, and then we got lucky to get Angel. He's started to bring in some of that private sector mentality that's out there on how we drive these things a lot faster, a lot more cost effective. He's been able to hire his team that's here. Sam was here before Angel, but he's been working with them a lot. They're holding engineering firms a lot more accountable, enforcing that schedule, driving that price down, and then rolling that into how do we do cost effective designs? In less than a year, they're already tallying up over $20 million in savings for the city. I don't think a lot of folks see what they're doing, but they're constantly carving and holding people accountable. 28 • Can you give a couple examples, maybe the Countryside Boulevard one? • Sure. On Countryside Boulevard, we were going to put sheet piling down that whole creek where the sidewalk failed during the hurricane. Instead of that, they looked at new solutions. We have geo bags that are out there. It's a fraction of the cost and they will give us the same results. Over by Countryside Bagels, the design going in was significantly oversized for what we needed. We really needed to start downstream and work our way up, and that was going to be multiple, multiple years. It'd be a couple decades before we get up there. So, they shrank that design back down to what we truly need at this point and knocked off a couple more million there. It's time after time. They looked at the natatorium and asked do we truly need the mechanical screening up over that? Are they actually going be able to see that? So, engaging with planning, working through that with them. So, just time after time, they keep dialing in, are there more cost-effective solutions that we can get to? So, I appreciate it that they do it every day, and it's been enjoyable to watch. • So, thank you for that. I wanted to end on a high note. Are there any questions that the Council has for us? BUDGET MEMO DISCUSSION • Are we going to be talking about budget cuts and what’s in the annual reduction memo? There were a couple of things on that that I wanted to talk about. Can we kind of drill down on that? I'll defer to staff if you're willing to take those questions now. • Certainly. At the last meeting is the Council appreciated the memo and staff was to move forward on it. We're developing the budget, so no action has been taken yet. If you have questions or want to discuss that further, it would be fine to ask those now and see if there is consensus to do something different. • So there were a few things. I think we've all been talking one-on-one with different people about the reductions. Number one was the Countryside pickleball courts. Eliminating them as we opened the nice pickleball courts on the beach, which were great. I'd like to not eliminate that completely. Maybe we can go out and see if there's somebody that would like to contribute, as the Frenchy’s Foundation did to the beach and see if we can knock that price down a little bit. I don't want to write it off and say that's never going to happen. • Sure. • There was an explicit request at the end of the last meeting for staff to come back with at least alternatives for you to consider. • I just wanted to make sure we weren't sweeping that one under the table. Now, the other two things. It's kind of near and dear to me, but, you know, both of these events have been 46 and 48 years in Clearwater. Ruth Eckerd Hall, you know, they started back in 1977. I think they opened in '83, but it was a private fund that got together, that built the facility, and then Ruth Eckerd took it over to do that. We have a great working relationship with them. They really give our community a lot higher standing than a lot of communities around us, just because we have that cultural event here. And now we expanded it to the Sound and the Bilheimer Capitol. They do so much for the community. I just hate to see a reduction of $220,000 in what we give them every year. 29 Tampa gives the Straz in the millions of dollars a year, and we give what is it, 450,000? Historically, it's budgeted at $419,000, and I think cutting it in half is just not a good thing to do. Ruth Eckerd doesn't make money hand over fist. The money they make, they put back into the facilities. I was talking to Bobby about the money they're putting in the new sound system and other things. They want to be successful. So I don't want to see a reduction in what we give them that will hamper what they give back to the community. • The other one, and I've talked at length to Steve Weinberger about this, is the Clearwater Jazz Holiday. You have that in here as a high impact event, and a cut of $25,000. I've seen Steve struggle for years with this because he puts on the Jazz Holiday at the beginning or the end of our fiscal year, and he books things a year ahead of time. He lost a lot of money last year because he booked things, and then we had the hurricane, everything was canceled. I know he gets a lot of money from sponsors and the community. I know we're doing more to support him, maybe in kind instead of cash, which is a good thing, because he needs police, he needs a lot of other support that Clearwater can give him instead of just cash. But I'd like to see us consider as a Council, or maybe DDB, giving him a multi-year contract where he doesn't have to sweat so much every year when he's already committed the funds. I'll just put that out there and see if there's any other discussion on that from other Council members. • Regarding Ruth Eckerd Hall, I'm aligned with you. This is a great partnership. I love their youth programs. I hire their young musicians for all the events that we do at the Historical Society. So I like the fact that they are reinvesting in the youth programs. And they not only maintain our buildings very well, they actually invest a lot, which adds to the value. So I'm aligned with you regarding Ruth Eckerd Hall, and not eliminating that, not decreasing it like that. And about Jazz Holiday, I think we could be flexible, whether they go to the DDB or get the funding up front so that they're not sweating it throughout the year. • I think I'm open to that as well. Both of them, Ruth Eckerd and Jazz Holiday, are just one event. All through the year, they have programs with kids, getting them into music, and it's much more than one event a year for the Jazz Holiday. And Ruth Eckerd does the same thing all through the year, and they give on multiple events on all their facilities. • We're sitting in here today because it is a tough balance. Because we do not want to project any possibility of raising or even discussing millage rates, rightfully so. I'm in support of that. But then we can't sit here and say, we want to support everything. Things cost money, there's two sides of a math equation, and we have to find that balance. • Jazz Holiday, I agree. It’s tough to put that organization in that position every year of not being sure where they're going to be funding-wise. I think the DDB is probably the best vehicle to continue to support that. I think maybe even giving that organization some peace of mind and finding a way not to do it just this year. Let's find a three-year commitment kind of thing, and give them stability so they can plan accordingly and put on a great event. • As far as the Council, I know we all love each other. We all are committed and working hard. I don't feel we get enough opportunities to have these kinds of discussions. I hope that when we do get them, you throw us challenges, really push us. We want to make the tough decisions and have those tough conversations. With the budget discussions, what we're asking for is almost a fundamental shift in our thinking about how we approach the budget. Incrementally year-by-year trying to cover expenditures is an outdated model. Take your revenues. You have to live within your means. Incremental, it's an easier approach. There's far less controversy. It's good when 30 stable revenues and expenses are growing. When you have challenging inflationary pressures, declining revenues, unplanned infrastructure need, pension negotiations, that makes it hard to stay in that incremental model. So I hope this isn't just a one-off, but a change of philosophy. We can continue to find ways to truly become more of a priority-based budgeting model, rank and weight expenditures and truly evaluate the effectiveness of each program versus its cost and truly find ways to deliver a more efficient, effective, higher performance government that we all know we're capable of. Thanks for the opportunity. Good work today. • I like the thought of funding for Jazz Holiday out of the DDB. When it comes to Ruth Eckerd Hall, this was something when I was first brought in a few months ago, I questioned pretty hard on it. And then heard from staff's point of view, all the money that Ruth Eckerd Hall puts into the property itself, not to mention just Ruth Eckerd Hall, but the Sound also. Essentially, we're giving them a drop in the bucket for what they're putting into it. So the taxpayers, are making out in a good sense with the return on investment they're getting out of Ruth Eckerd Hall. I know that these are very specific. However, I would be for making sure that we stay the course with Ruth Eckerd, especially when looking at other jurisdictions, other cities, and what they put into their funding of different things. • I would just always go back to stressing maybe getting that third party or finding somebody that works well with the staff and trying to think outside of the box and bringing revenues and other funding sources to parks and things like that to help offset costs. • So here's the conversation I have, and I'm sure the other four have the same experience. Every week I someone comes in with a project or an idea they want the city to fund. Always a challenging conversation. Yesterday I said to the person, how do your neighbors feel about this? And she says, what do you mean? I said, that's who you're asking to fund this. If you're asking the city to pay, you're asking your neighbors. It's not my tax money. It's the tax money we're collecting from your neighbors. This is a great idea. Wow, this would be wonderful. Serve the community X, Y, and Z. But I said, I would rather see the community solve this problem rather than looking to the city government to solve the problem. I gave her two sources to connect her with some groups out in the community that I think can help her. I'm glad we've started the conversation, hopefully, we’re just trying to start the conversation with the entire community. Instead of looking to us for the money, as you historically have, are there ways we can get the community, broader communities, private donations, maybe folks who really enjoy going to Ruth Eckerd Hall performances. Maybe they pay a little bit more. But are there alternatives to just looking to the taxpayers and these folks to fund some of these things? • We haven't made any decisions yet, but I think just getting the entire city and all the organizations that have benefited from city's sponsorship in the past to start thinking, okay, can we ask the community, larger communities. The whole Tampa Bay Rays thing some of the commissioners have said, well, the bed tax is a way to really take these kinds of projects off the taxpayers. • There's another source of revenue, potentially, for us, and we just got some money here this past TDC meeting or recommended from the County Commission for some large projects. I compliment the staff and the city manager on starting this conversation about, are there other ways we can minimize or lessen the burden on the taxpayers by asking our community to step forward? We have some really wealthy organizations and people have been incredibly successful in business and other endeavors. Not just in Clearwater, but throughout Tampa Bay, they could 31 do more to help support all these things. Staff is, you know, challenging our assumptions and seeing if there are other ways to do it, I thank you for that. Because whether or not we land on immediate changes, I think the conversation you've started is really important, and we want to continue it with our community. - CONCLUDING REMARKS Mayor Rector adjourned the workshop. He thanked Council members, and thanked staff for attending again today. He noted that Council really appreciate staff sitting in, listening, and being transparent about what all are trying to do, work together to make the city of Clearwater better than it's ever been.