City Commission Workshop Meeting

APPROVED: 7/17/2014 City Hall City of Eustis, Florida 10 North Grove Street Post Office Drawer 68 Eustis, FL 32727-0068 Meeting Minutes - Final* City Commission Workshop Thursday, June 19, 2014 4:30PM City Hall CALL TO ORDER: Mayor Bob ACKNOWLEDGEMENT OF QUORUM AND PROPER NOTICE Present: 5- Linda Bob; Albert Eckian; Michael Holland; Karen LeHeup-Smith; and Kress Muenzmay I. Workshop Item 14147 Budget Workshop Dianne Kramer, Acting City Manager, explained the purpose of the workshop was to begin preparation ofthe FY2014-15 budget. Jim Myers, Finance Director, provided a review of the current state of the City's revenues citing an estimated 2. 5% increase in the tax roll plus an estimated $5,578,337 in new construction for a total property value increase of approximately 3.41%. He stated that the building permit revenues are up approximately 29% and also noted an increase in utility tax collections and an increase of approximately 5% in most of the state shared revenues. Mr. Myers then cited a variety of issues to be addressed including the following: 1) pension cost increases; 2) new fire substation operating and personnel costs; 3) additional economic development costs; and 4) a potential small increase in insurance costs for a total anticipated increase in expenses of $607,000. He noted that the actual increase in health insurance is not known yet. He explained that the final tax roll information will not be available until July 1st and that there have been no state-shared revenue estimates posted to-date. He expressed the hope that those will be received prior to the actual budget workshops in July. Mr. Myers reviewed the preliminary General Fund reserves for FY2013-14 with a slight overage of $486,985. He then reviewed the preliminary General Fund overview for FY2014-15 with an estimated overage of $264, 735. The Commission discussed the amount of the reserve with Ms. Kramer explaining that the amount set by policy is equal to more than 90 days due to it being set previously as a number rather than as a percentage. Mr. Myers explained that the anticipated Ending Reserve is $4,039,367 with an actual target reserve for 90-days of $3,525, 775 for a positive difference of $264, 735. The Commission discussed the previous plan to resolve the difference between recurring revenues and recurring expenses by the end of 2014 with Mr. Myers explaining it was later extended to the end of 2015. Mr. Myers then reviewed the General Fund Recurring Revenues and Expenses with a negative difference of $273,039. He then reviewed the following organizational requests: 1) Chamber of Commerce- $20,000; 2) Early Learning Center- $10,000; 3) Bay Street Players- estimated $8,000; 4) Trout Lake Nature Center- estimated $5,000; 5) Open Door- unknown amount; and 6) Eustis Little League - unknown amount. City of Eustis, Florida Page 1 Printed on 71312014 City Commission Workshop Meeting Minutes - Final June 19, 2014 II. Commission Discussion The Commission discussed supporting those organizations that reach out to the community including the Chamber and Lake Eustis Museum of Art (LEMA) . They reviewed the amount of funding the Trout Lake Nature Center received the previous fiscal year noting they also receive other grants and compared their revenues and expenses noting the amount of surplus. It was noted that part of those funds are probably from a capital fundraising campaign for the purpose of constructing a permanent facility. Commissioner LeHeup-Smith reported that Open Door is seeking support from other local government agencies with Ms. Kramer noting they will be providing a presentation to the Commission at the July 17th meeting. Ms. Kramer asked the Commission to inform staff as soon as possible if they want to reduce or eliminate any organizations so that they can be notified. The Commission discussed reducing funding to the Bay Street Players, possible issues with Eustis Little League, the possibility of assisting the League with maintenance rather than funding and possibly providing some assistance for the next Amazing Race for Charity. Ms. Kramer indicated staff could explore some possibilities with the League and Public Works with the Commission asking whether or not the City's fields could accommodate the Little League. Joe LaPolla, Parks and Recreation Director, responded positively depending on their scheduling. Christie Bobbitt, Chamber of Commerce Executive Director, noted differences in the size of the fields and the pitching mounds but indicated that the League could possibly utilize the City fields for softball. The Commission discussed providing a grant of $1,000 to the Little League to be used as they see fit noting that if Bay Street Players is reduced from $8,000 to $4,000 then the remaining funds could be used to provide $1,000 to LEMA, $1,000 to the Little League and $2,000 to Open Door. Concern was expressed about donating to the Early Learning Coalition due to it being a Lifestream program which is a large program with other available funding. The Commission then discussed the use of matching funds, the benefit to the community of the Amazing Race for Charity, and continuing support for the Chamber of Commerce at its current amount. Mr. Myers reviewed the pay plan and reported that a 1% increase would cost an additional $113,644.21. He stated that there are no funds in the budget at that time for the continuation of the three-tier pay plan with Ms. Kramer explaining that the budget does not appear to have funds available to continue the three-tier plan. The Commission questioned what impacted the budget to prevent the planned pay increases with Mr. Myers noting the $607,000 additional costs previously cited. Mr. Myers reviewed the recurring revenues and expenses and the reserve levels for the operating funds noting a deficit in the Street Improvement Fund of $605, 769 noting that fund will be impacted by the reduction in the City's gas tax revenues with Ms. Kramer noting that fund has been running in a deficit for several years. Discussion was held regarding the upcoming losses in the gas tax revenues. Mr. Myers then noted a surplus in the Water & Sewer Fund of over $3 million and in the Stormwater Fund of $522,239. He added there is only one capital project budgeted for FY2014-15 in the Storm water Fund part of which will be funded by the Lake County Water Authority. He reviewed the anticipated decrease in the Local Option Gas Tax with a total decrease over the next three years of $232, 911 . He explained the only way for that revenue to increase is for the City to grow faster and have more roads. He then reviewed the Street Improvement Fund revenues and expenditures for FY2013-14 with an estimated deficit of $234,334 in the current year. He reviewed possible options for addressing the deficit: 1) reduction in expenditures; 2) increase in supporting transfers from the General and Storm water Funds; 3) adding a transfer from the Water and Sewer Fund; and 4) a possible new revenue source from a streetlight assessment program. City of Eustis, Florida Page2 Printed on 71312014 City Commission Workshop Meeting Minutes - Final June 19, 2014 Ms. Kramer explained the proposed streetlight assessment program would require a study noting that Mount Dora and Leesburg are considering a similar program. She noted that Casselberry already has the program and implemented it when their gas tax revenues went down. She noted that residents that pay for streetlights through homeowner's association fees do not pay the fee . Funds raised are strictly used to pay for streetlights in the City and to expand lighting into areas where it is needed. She added that Mount Dora budgeted $15,000 for their study. The Commission discussed the proposed program and whether or not to exempt homeowner's associations since streetlights elsewhere in the City also benefit those residents. The Commission requested that the personnel costs be broken out for the Street Improvement Fund with a suggestion that the City could save money by privatizing some of the work. The Commission discussed the quality of work obtained from private workers and the need for a study to determine the viability of outsourcing. Ms. Kramer explained that the employees assigned to the different areas don't always just work in that area but may work in all of the other areas as well. The Commission expressed concern regarding the amount of the deficit and lack of reserve in the Street Improvement Fund. John Futch, Public Works Director, commented on how much the department has saved the City by self-performing a variety of projects. He noted that previously and in other cities that department is funded through the General Fund. He commented on problems other agencies have had with trying to contract with private companies and emphasized the amount of work performed by the department's employees. The Commission further discussed outsourcing, the state of the budget, reduction in interest revenue and the local option gas tax, increase in pension costs and the need to increase recurring revenues. Ms. Kramer reviewed the just value changes for 2014 compared with other cities in the county noting the City is #4 in dollar amount of increase and cited other cities that had a higher percentage of increase. She then reviewed the commercial just value changes and the amount of increased tax roll based on annexations. She compared the City's cost per resident with Tavares, Mount Dora and Leesburg. Mr. Myers noted that the formal budget preparation meetings would be July 14th and 15th. The Commission questioned whether some of the Water and Sewer Fund and Storm water Fund reserves could be moved to other areas for one fiscal year only. III. Public Input- None IV. Commission Direction No further direction was provided by the Commission at that time. V. Adjournment - 5:45 p.m. Mayor/Commissioner *These minutes reflect the actions taken and portions of the discussion during the meeting. To review the entire discussion concerning any agenda item, go to www eustis.org and click on the video for the meeting in question. A DVD of the entire meeting or CD of the entire audio recording or verbatim transcript of the meetmg can be obtamed from the office of the City Clerk for a fee City of Eustis, Florida Page3 Printed on 71312014