City Commission Workshop Meeting

APPROVED:8/6/2020 MINUTES City Commission Workshop 5:00 PM - Thursday, July 16, 2020 - City Hall CALL TO ORDER: 5:10 p.m. ACKNOWLEDGEMENT OF QUORUM AND PROPER NOTICE PRESENT: Vice Mayor Emily Lee, Commissioner Karen LeHeup-Smith, Commissioner Robert Morin (via telephone), Commissioner Marie Aliberti (via telephone) and Mayor Michael Holland NOTICE OF LIMITED SEATING: DUE TO REQUIRED SOCIAL DISTANCING, THERE WILL BE LIMITED SEATING FOR THE COMMUNITY REDEVELOPMENT AGENCY AND CITY COMMISSION MEETINGS Due to the Governor's orders pertaining to social distancing and the re-opening of businesses and other venues during the COVID-19 pandemic, there will be limited seating available for the July 16, 2020, budge workshop, Community Redevelopment Agency and City Commission meetings. Seating will be limited to the first 21 non-staff member attendees. Once 21 attendees have entered the building, entrance will be cut off. Anyone who is not able to obtain seating is encouraged to watch the livestreaming of the meetings from home and submit any comments or questions to the City Clerk via email at cityclerk@eustis.org. Please note that anyone attending the meeting must sit in the designated seats and cannot sit in clusters in order to maintain the CDC recommended six feet. Thank you for your cooperation. 2. WORKSHOP ITEM 2.1 FY 2020-2021 Proposed Budget Workshop Mike Sheppard, Finance Director, explained the budgetary and TRIM process and provided an overview of the various City funds with an explanation of each fund. He reviewed the various revenue sources noting that the state estimates have not been received yet. He indicated what is included in the budget are his estimates. He stated that the life and health insurance only went up 2.5% for a total cost of $2.5 million City wide. He indicated that the budget includes a COLA adjustment of 2% for a total cost Citywide of $231,515. He stated general and liability insurance will be going up significantly. He projected an increase of approximately 18%. He then reported on the police and fire pension funds stating that the fire went up slightly with the police going down slightly. He explained the changes made to the police pension based on union negotiations which eliminated the cost of living increase for new retirees but retains it for current retirees. They will also contribute a little more with it increasing this year from 4% to 5.5%. He stated that the maximum in the future will be a 1% increase up to a maximum of 7.5% or a minimum of 4% based on the City's contributions. Mr. Sheppard then provided a budget overview for each fund, overall revenue sources, and overall expenditures. He noted the creation of the new Building Services Fund due to a change in state law. He explained the "other financing Eustis City Commission Page 1 of 4 July 16, 2020  sources" of $1.8 million is primarily the interfund transfer from Water and Sewer. He provided an overview of the General Fund expenditures and the CRA Fund. He commented on the additional fund ing received for the CRA from Lake County and the Lake County Water Authority. He then reviewed the Capital Improvement Plan noting there are 51 projects included in the FY20-21 budget for a total of $6,407.948. He explained the revenue sources for the capital project fund include 13 projects through the sales tax fund and five small projects from the General Fund . Mr. Sheppard then stated staff is recommending maintaining the current millage which is 7.5810. He indicated that the millage rate has not been increased in seven years. He presented a graph of the proposed millage and revenue to be received at each rate. He indicated that at the proposed rate the City is estimated to receive $259,000 over budgeted expenditures. If the rollback rate is adopted, then the City would have to utilize Fund Balance to balance the budget. He stated all departments have submitted fairly tight budgets. Mayor Holland confirmed that after the tentative rate is set it cannot be increased but could be decreased with Mr. Sheppard stating it could be increased; however, it would be expensive to do so due to notice requirements. He explained that once the tentative millage rate is approved at the Commission meeting, it will be advertised on the TRIM notice. Mr. Sheppard presented a comparison of the cost to home owners for property taxes at the recommended millage rate versus the roll back rate . He provided a comparison of population and general fund expenditures between the various cities with City Manager Ron Neibert noting that the City has the lowest per capita General Fund spending in the county. Mr. Sheppard reported the City's staff to resident ratio is 1/144 for General Fund staff. He then compared the basic annual household costs for Eustis and the other surrounding cities. He explained they will be asking the Commission to approve the tentative millage rate and public hearing dates. Commissioner Morin expressed concern regarding using a COLA increase with Mr. Neibert stating that staff has concerns regarding the effect of COVID on the next budget year. They were concerned about carrying forward large salary increases. Commissioner Morin expressed support for a flat fee increase rather than a percentage increase. Mr. Neibert stated that nothing would prevent the City from making additional increases during the fiscal year once staff is able to see the impact on the budget. He cited the possibility of doing an additional increase in January or February. Commissioner Morin expressed concern that that would not occur. Commissioner LeHeup-Smith expressed her concern regarding the lowest paid City employees. She commented on the need to try to improve those salaries and noted the salary study the City conducted previously with Mr. Neibert noting that a Eustis City Commission Page 2 of 4 July 16, 2020  number of employees received significant increases at that time. He explained there are two types of consideration - internal equity and external equity - noting the City has done studies and made adjustments based on both. He noted that the Commission previously set a goal of getting the City's salaries into the top 25% of the County but that was not an achievable goal. He commented on discussion they have had with the bargaining units. He stated they will be negotiating again with the police officers on wages. He added that additional adjustments can be made later but he is not comfortable with doing that now due to the possibility of having a deficit budget and having to dip into Fund Balance. He indicated it is not good to operate on a deficit basis. Commissioner LeHeup-Smith asked what happens to monies from property sales with Mr. Neibert indicating it goes into the General Fund; however, that is not a renewable revenue source. He commented on the need to make sure the revenue sources sustain any increases and cited the effect on the bargaining units. Commissioner LeHeup-Smith confirmed that staff's recommendation is to go with the 2% increase in October and then bring up an additional increase in January or February after they get a better handle on the ad valorem revenues. She emphasized the need to make sure that goes on the agenda in January. Commissioner Morin explained he was not suggesting increasing the amount of the increase but to take the same amount of money and change how it is distributed. He recommended giving a bigger percentage to the lowest paid employees. Mr. Neibert indicated the City could do that with the non-bargaining unit employees; however, that leaves very little to use when you go into the bargaining unit negotiations. Vice Mayor Lee agreed with the need to see what the City can do for the lower paid employees. She asked about the line items for Employee Study and Promotional. She confirmed the Employee Study is for training. She questioned the "promotional" noting it totals over $190,000. Mr. Neibert explained most of that is in the City Manager's department and is for events with the remaining being for items such as things given away to children by the police and fire. He noted that a lot of the funding for the events comes from sponsorships which offsets the expenditures. Vice Mayor Lee cited the larger events and questioned the purpose of the smaller events such as First Friday with Mr. Neibert indicating that those events also have vendor fees and sponsorships. Mr. Sheppard indicated that part of that is also economic development which helps the whole City. Vice Mayor Lee questioned whether or not the First Friday events have value with Mr. Neibert indicating the downtown businesses get significant impact from the events. He noted many of those businesses do provide vendor sponsorships for some of the events. Eustis City Commission Page 3 of 4 July 16, 2020  Mr. Sheppard stated that the revenues from events for the next year is estimated at $200,000 with the total cost for the events at about $294,000 with Mr. Neibert noting the City is putting on a significant number of events at a net cost of only $94,000. Vice Mayor Lee questioned the promotional expenses for other departments with Mr. Neibert citing the items given out by the police and fire during educational presentations and the cost for the Citizen's Police Academy. 3. PUBLIC INPUT - NONE 4. COMMISSION DIRECTION - NONE 5. ADJOURNMENT: 5:54 P.M. 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 meeting can be obtained from the office of the City Clerk for a fee. MICHAEL L. HOLLAND City Clerk Mayor/Commissioner Eustis City Commission Page 4 of 4 July 16, 2020