Board of Commissioners Special Meeting

MINUTES BOARD OF COMMISSIONERS SPECIAL MEETING SEPTEMBER 23, 2020 5:05 P.M. A special meeting of the C ity of Madeira Beach Board of Commissioners was held at 5:05 p.m. on September 23, 2020 in the Patricia Shontz Commission Chambers at City Hall, located at 300 Municipal Drive, Madeira Beach, Florida. MEMBERS PRESENT: John B. Hendricks, Mayor Doug Andrews, Vice Mayor/Commissioner District 3 Helen "Happy" Price, Commissioner District 1 Nancy Hodges, Comm issioner District 2 John Douthirt, Commissioner District 4 (via telephone) MEMBERS ABSENT: CITY STAFF PRESENT: Robert Daniels, City Manager Clara VanBlargan, City Clerk Patty Kordis, Deputy C lerk Thomas Trask, Interim City Attorney 1. CALL TO ORDER Mayor Hendricks called the meeting to order at 5: IO p.m. 2. ROLL CALL City Clerk Clara VanB largan called the roll. 3. PUBLIC COMMENT Mayor Hendricks opened to public comments. C ity Manager Robert Daniels read an electronic public comment from Dylan Hubbard, 170 Johns Pass Boardwalk, stressing concern about the sand intrusion at John ' s Pass Vi llage. He urged the City to work with the county and state government to help do something about it. The sand causes significant issues to safety, drainage, parking, accessibility, and hinders the businesses in the area. 4. lTEMS FOR DISCUSSION A. Resolution 2020-18, Forward Pinellas Nomination - Mayor Cookie Kennedy, lndian Rocks Beach September 23, 2020, BOC Special Meeting Minutes Page 1 of 10 Interim City Attorney Tom Trask read Resolution 2020-18 by title only: RESOLUTION 2020-18 A RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE CITY OF MADEIRA BEACH, FLORIDA, NOMINATING JOANNE MOSTON KENNEDY AS THE CITY'S REPRESENTATIVE TO FORWARD PINELLAS, AND PROVIDING FOR AN EFFECTIVE DATE. Cookie Kennedy, Mayor of Indian Rocks Beach (via telephone), said she would like to be re- appointed to serve for the next two years on Forward Pinellas and to represent the City. She was happy to work with the City on issues in Madeira Beach such as with parking, sidewalks, streets, or crosswalks. Mayor Hendricks said the sand intrusion to John's Pass Village and the channel is the real concern. He said Mayor Cookie Kennedy would be an excellent nominee for Forward Pinellas. Interim City Attorney Tom Trask read Resolution 2020-18 by title only: RESOLUTION 2020-18 A RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE CITY OF MADEIRA BEACH, FLORIDA, NOMINATING JOANNE MOSTON KENNEDY AS THE CITY'S REPRESENTATIVE TO FORWARD PINELLAS, AND PROVIDING FOR AN EFFECTIVE DATE. Mayor Hendricks opened to public comment. There were no public comments from the audience or electronically. Commissioner Price said she would like to schedule a meeting with Mayor Cookie Kennedy to discuss the sand issue at John's Pass. Commissioner Price motioned to nominate Mayor Cookie Kennedy to the Forward Pinellas position. Vice Mayor Andrews seconded the motion. ROLL CALL: Commissioner Price "YES" Vice Mayor Andrews "YES" Commissioner Hodges "YES" Commissioner Douthirt "YES" Mayor Hendricks "YES" The motion carried 5-0. September 23, 2020, BOC Special Meeting Minutes Page 2 oflO Mayor Cookie Kennedy thanked the Board for its support and said she would be glad to meet with the Board about any issue and concern. B. Ordinance No. 2020-22, Establishing the Millage Rate for FY 2021 Millage Rate (Fiscal Year beginning October 1, 2020 and ending September 30, 2021) - 2nd Reading & Public Hearing - Andrew Laflin, Financial Consultant Vice Mayor Andrews said he would be voting "no" on the proposed millage rate increase. To increase the millage rate again would be meaningless. The millage rate was increased 25% last year and issues continue to exist. There has been lack of fiscal responsibility and cover up from the highest levels of the City. To list a few reasons given, employees were paid time and half during COVID to sit behind closed doors; since borrowing $15 million a year early, Feds lowered interest rates three times; and the Crystal Island project came in $4 million overbudget. Instead of allowing the contractor's engineer to oversee the project, the City hired an engineering consultant to do it for an additional $200,000 to make sure the project ran smoothly. These problems are not the taxpayer's responsibility to fix. It is time to be accountable and to tighten the belts to show things will be done differently and not make it the burden of the taxpayers. Commissioner Price explained that the City is a full-service City, and the upkeep takes money. She received phone calls from people that are not happy with the City's services. If they do not keep the departments funded, the services will deteriorate, and she would not want that happening. The millage rate of 2.875 is much lower that other beach towns: St. Pete Beach 3.15; South Pasadena 3.50; Treasure Island 3.61; Safety Harbor 3.95; Gulfport 4.04; Tarpon Springs 5.37; Belleair Bluffs 8.35; Clearwater 5.96; downtown Clearwater 6.925; and St. Petersburg 6.76. If they want to keep up with their neighbors and stay a clean and progressive town, the very small increase in the millage rate needs to be approved. Departments do not need to be cut this late in the game. She will vote "yes", which is the right thing to do for her town. Commissioner Hodges thanked the Vice Mayor for his suggestions and said she did not originally vote for the increase the first time, but the second time she did. Since being on the Board she could state many things that happened. Four years ago, no employee received a raise and did not for four consecutive years. Employees put their City job before anything else. It is important to think that the employees will want to continue working for the City. She is in favor of keeping the City as is, not increasing the millage rate, and moving forward and making the needed changes. Mayor Hendricks thanked Vice Mayor Andrews for his comments. He said he was first opposed to the millage rate increase. They need to tighten the belt and not loosen the purse. When discussing this they talked about not giving the employees a raise due to them being paid time and half for two months during COVID. There are residents with a tight budget, some struggling, and some retired on a fixed income. The hit does not need to be placed on the residents of Madeira Beach. Staff are being paid a high salary. He is in favor of an increase based on merit but not a two percent increase across the board. He does not support the millage rate increase, he did not before, and not now. We need to get a handle on things and generate new revenue sources. Mayor Hendricks opened to public comment. September 23, 2020, BOC Special Meeting Minutes Page 3 of 10 The City Manager read an emailed comment from Kathy Kapusta, 399 150th Avenue, opposing the millage rate increase. Many residents suffered financially due to pay cuts, furloughs, and layoffs. They had to make adjustments and the City should do the same. The main reason stated for the millage increase is for employee pay increases. She does not feel the truth is being said about employee raises and promotions by the City Manager. During the pandemic, some employees favored by the City Manager received sizable pay increases of over 10% and one employee, with little experience, received a promotion and over 50% pay increase. Neighboring cities pay substantially less for the same position for employees with many years of experience. The Commissioners should not accept such behavior by increasing the millage rate. Mayor Hendricks said they just reduced the amount to be given to the Library due to the pandemic. After doing so, he does not know how in good conscience to increase the millage rate and give the employees a 2% across the board raise. Financial Consultant Andrew Laflin said he could prepare different scenarios if the Commission would like to explore different options. Right now, at 2.875 millage rate the General Fund is largely balanced. There is a carryover of about $43,000 on a $10.4 million budget for the General Fund. Without making any cuts they could reduce the millage rate, which will eat into the unassigned reserves in the General Fund. The reserves are strong, and they could do that. The Fund Balance and the total unassigned Fund Balance in the September 30, 2019 financial statements was $6.30 million. They can afford to use Fund Balance to pass the budget. A consensus needs to be made at the meeting. The rolled-back rate is 2.5973. To get a majority vote on the millage rate they could go as high as 2.6809. Last year's rate was 2.75 and 2.875 is proposed. To go with last year's 2.75 requires a two-thirds vote, which is four out five voting for it. To only get a majority would be 2.6809 or less. Mr. Laflin confirmed to Vice Mayor Andrews that an eighth of a point in the millage rate would result in about $187,000. They would have to cut $187,000 somewhere out of the budget to balance the budget if not using some of the Fund Balance carryover. If no cuts are made, they could use Fund Balance to balance the budget since there are ample funds there. Interim City Attorney Tom Trask read Ordinance 2020-22 in its entirety. ORDINANCE 2020-22 AN ORDINANCE OF THE CITY OF MADEIRA BEACH, FLORIDA, ESTABLISHING THE MILLAGE RATE FOR FISCAL YEAR 2021; PROVIDING AND ANNOUNCING THE NAME OF THE TAXING AUTHORITY, THE ROLLED-BACK MILLAGE RATE, THE PERCENTAGE INCREASE OVER THE ROLLED-BACK MILLAGE RATE, AND THE MILLAGE RATE TO BE LEVIED; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, Florida Statutes s. 200.065 requires the adoption of the millage rate by separate vote and prior to the adoption of the budget; and WHEREAS, Florida Statutes s. 200.065 requires that prior to adoption of the millage-levy ordinance, the September 23, 2020, BOC Special Meeting Minutes Page 4 oflO  following be publicly announced: the name of the taxing authority, the rolled-back millage rate, the percentage increase over the rolled-back millage rate, and the millage rate to be levied; and WHEREAS, in no event may the millage rate adopted exceed the tentative millage rate adopted. NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF COMMISSIONERS OF THE CITY OF MADEIRA BEACH, FLORIDA: Section 1. The name of the taxing authority is the City of Madeira Beach. Section 2. The rolled-back millage rate for fiscal year 2021 is 2.5973 per $1,000. Section 3. The fiscal year 2021 proposed millage rate is 31. 72% higher than the rolled-back rate. Section 4. The millage rate to be levied for fiscal year 2021 shall be 2.87500 per $1,000. Section 5. This ordinance shall become effective immediately upon its adoption. Attorney Trask suggested, instead of voting down the ordinance and having them bring another ordinance to the Board sometime in the future, he would recommend making a determination at the meeting what the millage rate would be, correct it in the ordinance, and adopt it corrected. He does not consider it to be a substantial change, and therefore it could be adopted that way. If voting it down, they would have a series of things they would have to do because the timelines would be lost and not met, and they would have to re-advertise. The suggestion would be, after deciding a comfortable millage rate, they could add it in the ordinance and do the numbers as to the rolled- back rate and the percentage of increase in the adoption. Before voting on it, the numbers would have to be reworked so he can announce the rolled-back millage rate and what the percentage increase would be, so they could fill that in before the Board actually adopts it. Vice Mayor Andrews motioned to keeping the millage rate in Madeira Beach, Florida at 2.75. Commissioner Hodges seconded the motion. ROLL CALL: Vice Mayor Andrews "YES" Commissioner Hodges "YES" Commissioner Douthirt "YES" Commissioner Price "NO" Mayor Hendricks "YES" September 23, 2020, BOC Special Meeting Minutes Page 5 oflO  The motion carried 4-1; 5:42 p.m. The Interim City Attorney said since the Board determined what the millage rate would be the ordinance itself needed to be addressed. Financial Consultant Laflin said the rolled-back rate 2.5973 would not change. He recalculated the percentage increase using the 2.75 millage rate and reported it to be 5.8792. Attorney Trask read the enacting portions of Ordinance 2020-22 as follows: NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF COMMISSIONERS OF THE CITY OF MADEIRA BEACH, FLORIDA: Section 1. The name of the taxing authority is the City of Madeira Beach. Section 2. The rolled-back millage rate for the fiscal year 2021 is 2.5973 per $1000. Section 3. The fiscal year 2021 proposed millage rate is 5.87918% higher than the rolled-back rate. Section 4. The millage rate to be levied for the fiscal year 2021 shall be 2.7500 per $1000. Section 5. The ordinance shall become effective immediately upon its adoption. Attorney Trask said that was Ordinance 2020-22 in its entirety and the ordinance was ready to be adopted. The City Manager asked if that would be in the realm of a simple majority vote, and Attorney Trask confirmed yes. Vice Mayor Andrews motioned to adopt Ordinance 2020-22, as the City Attorney had just read it. Commissioner Hodges seconded the motion. ROLL CALL: Vice Mayor Andrews "YES" Commissioner Hodges "YES" Commissioner Price "NO" Commissioner Douthirt "YES" Mayor Hendricks "YES" The motion carried 4-1; 5:52 p.m. September 23, 2020, BOC Special Meeting Minutes Page 6 ofl0 C. Ordinance No. 2020-23, Adopting the Budget for FY 2021 (Fiscal Year beginning October 1, 2020 and ending September 30, 2021) - 2nd Reading & Public Hearing - Andrew Laflin, Financial Consultant Financial Consultant Andrew Laflin said this item is to adopt the budget pending the change in the millage rate. He would propose that all other numbers to the budget remain unchanged other than the millage rate. They would reduce ad valorem taxes in the General Fund and then increase the Fund Balance carryover because of that change, otherwise all information would remain the same. The budget before the Commission is based on a budget workshop held on July 22 nd , August 19, and on September 2, which they went over in detail the budget line items. Adopting the budget would be as is plus accounting for the change in the millage rate that would result in a reduction of ad valorem taxes in the General Fund and an increase in the Fund Balance carryover. By making that change would result in approximately $170,000 of additional Fund Balance carryover. Commissioner Price said that would be dipping into the reserves for $170,00 to balance the budget. Vice Mayor Andrews said he had a couple of suggestions that would make sure the employees received an increase. The Marina numbers make no sense. He does not blame the new finance person. It should be mandatory for department directors to be at the Commission meetings to provide accurate sensible projections and to be prepared to answer questions. If they cannot make it to the meeting, they should send a representative in their place. They have had many budget workshops and have not gotten answers to any of their questions. According to the documentation they have received on actual numbers for this year and confirmed by the finance consultant, the Marina needed less than $1.7 million to operate in Fiscal Year 2020. If that is the number for operating the Marina this year, why are they forecasting expenditures of nearly $2.4 million to run the same Marina. That is a $700,000 increase of currently unjustified dollars. Why the need for $700,000 to run the operations in Fiscal Year 2021. If they took the $700,000 out of the budget, they not only would have to raise the proposed millage rate, they could probably lower it a quarter of a point. All the employees could get raises. He suggested cutting the Marina budget by $190,000. He would like to cut some money out of the Marina budget somewhere to make it a $2.2 million budget, which still leaves $500,000 of an unjustified increase over last year's actual spending. The budget would be clear, they would not have to raise taxes and dip into savings, and everybody could get a small raise. Mayor Hendricks asked if the $200,000 purchase of the sanitation truck for the beach was needed in Fiscal Year 2021 and could they wait to purchase it in another year. They could continue collecting the trash on the beach the way they have done it many years. Public Works Director Jamie Ahrens explained the reasons why they needed to purchase the truck in Fiscal Year 2021. Vice Mayor Andrews said the purchase of the trash truck could wait another year. However, it would be better to cut the $700,000 from the Marina budget, since there is no justification for it. Marina Manager Brian Rau explained they did not know how much fuel to buy. They have two tanks, one diesel and one gas. Each hold 10,000 gallons of fuel and when a tank gets down to 2,000 gallons of fuel, they must buy 8,000 gallons each time. They also do not know what the price of fuel will be. This year the cost is significantly cheaper per gallon, on average $.65 gallon cheaper. There is a set monetary markup per gallon of fuel, which give them the profit margin. The more September 23, 2020, BOC Special Meeting Minutes Page 7 of 10 fuel sold, the higher the profit. He does not know how many gallons will be needed in Fiscal Year 2021 and he does not know how much it will cost. To date, they have sold over 60,000 more gallons of gas than last year. Vice Mayor Andrews asked the need for the $700,000 buffer in the budget, gas prices could drop. If they operate the Marina at $1.7 million. This year everything is good and fuel prices are low, so why are they trying to be conservative and raise the millage rate on their citizens and give the Marina a $700,000 bubble because they do not know the price of gas prices. If it cost $1. 7 million to operate the Marina this year and they change it to $2.2 million next year by cutting $700,000 in the fuel account, that would still give a $500,000 buffer. If in the coming July, the Marina is running out of money they could do a budget adjustment. He has no issue in doing that and taking it from Fund Balance since there is a lot there. The City Manager said he talked to the Finance Consultant about doing that when it was brought up. Vice Mayor Andrews said it cleans the problem up completely and they do not have to increase the millage rate because it is not known how much gas will be needed at the Marina and how much it will cost. If they need the money again, that means they sold a lot of gas and they have great profit margins. They could dig into the extra funds and do a budget amendment with that. There is no problem to do a budget amendment when somebody is profitable, and they are using profits to do a budget amendment. This way, they do not ridicule themselves by making a mistake and telling the residents they need to increase the millage rate because the City is not willing to tighten the belt. It would be an easy budget amendment. They would not have to search line by line in the budget to find the money somewhere else to cut. Commissioner Price asked if it would constitute another second reading of the budget if making all the changes. Attorney Trask said it would not be considered in his mind as a substantial change. The percentage of the overall budget would be so small. Once he reads the ordinance the Commission could give direction to the financial consultant to adjust the budget in Exhibit A that could be done. Make the change and the budget can be adopted at the meeting. Commissioner Price asked where in the Marina budget there a $700,000 increase is. Vice Andrews explained that the $700,000 is not seen in the document before them for they are looking at budgeted numbers. The financial consultant, Andrew, gave them actual numbers at the last meeting shown in a different document. It showed that the Marina will have spent $1. 7 million this year. For Fiscal Year 2021 that number is $2.374,000. He would just cut fuel purchases to make it easy, so if they would need to do a budget amendment, they would have only one line item to add money to, which will be from profit. Doing it this way, they could plan and budget better next year. He has an issue with giving crazy numbers and raising the millage rate right now. Mr. Laflin asked the percentage of diesel sales and unleaded fuel sales to decrease. Marina Manager Rau recommended lowering the commercial diesel some but mostly in the unleaded. Maybe 70% in the unleaded and 30% in the commercial diesel. Mr. Laflin said that would be reducing the total by $200,000, and then reducing 70% unleaded and 30% commercial diesel of the $200,000. If making the reduction in revenue and keeping the cost of fuel sales what it is the gross profit percentage is 23%. In Fiscal Year 2019 it was 24%, in Fiscal Year 2018 it was 18%, in Fiscal Year 2017 it was 20%. In Fiscal Year 2020 through August it was September 23, 2020, BOC Special Meeting Minutes Page 8 oflO 34%. Budgeting right now without changing the cost of fuel sales is 23% and making the final change, revenues are $1,780,000. The cost of fuel sales is at $1,370,000. He asked if they would want to adjust the cost of fuel sales or leave it as to show a profit percentage of 23%. The City Manager recommended leaving it as is. The Board agreed. Attorney Trask read Ordinance 2020-23 in its entirety. ORDINANCE 2020-23 AN ORDINANCE OF THE CITY OF MADEIRA BEACH, FLORIDA, ADOPTING THE BUDGET FOR THE FISCAL YEAR BEGINNING OCTOBER 1, 2020 AND ENDING SEPTEMBER 30, 2021; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, Florida Statutes s. 166.241 requires the adoption of a budget each fiscal year; and WHEREAS, the amount available from taxation and other sources, including balances brought forward from prior years, must equal the total appropriations for expenditures and reserves; and WHEREAS, at a minimum, the adopted budget must show for each fund, as required by law and sound financial practices, budgeted revenues and expenditures by organizational unit which are at least at the level of detail required for the annual financial report required under s. 218.32(1); and WHEREAS, the adopted budget must regulate expenditures of the municipality, and an officer of a municipal government may not expend or contract for expenditures in any fiscal year except as pursuant to the adopted budget; and WHEREAS, the City of Madeira Beach Fiscal Year 2021 Budget is balanced; is presented at the level of detail required to file the annual financial report; and shall regulate expenditures of the City for the period beginning October 1, 2020 and ending September 30, 2021; NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF COMMISSIONERS OF THE CITY OF MADEIRA BEACH, FLORIDA: Section 1. The budget for the fiscal year beginning October 1, 2020 and ending September 30, 2021 attached hereto as Exhibit A is hereby adopted. Section 2. This ordinance shall become effective immediately upon its adoption. September 23, 2020, BOC Special Meeting Minutes Page 9 ofl0 Attorney Trask said the changes will be noted in Exhibit A and attached once the ordinance is adopted. Vice Mayor Andrews motioned to approve Ordinance 2020-23, adopting the budget for the Fiscal Year beginning October 1, 2020 and ending September 30, 2021 , with the changes the City Attorney has made. Commissioner Hodges seconded the motion. ROLL CALL: Vice Mayor Andrews "YES" Commissioner Hodges "YES" Commissioner Price "YES" Commissioner Oouthirt asked if it included not doing the truck fo r the beach. The Mayor said the truck was not taken out of the budget. Commissioner Douthitt "YES" Mayor Hendricks "YES" T he motion carried 5-0; 6:22 p.m. 5. ADJOURNMENT Mayor Hendricks adj ourned the meeting at 6:22 p.m. ATTEST: Clara VanBlargan, MMC, MSM, City September 23, 2020, BOC Special Meeting Minutes Page 1.0 of 1.0