City Council: Work Session

110 SE Watula Avenue Ocala Ocala, FL 34471 City Council: Work Session www.ocalafl.org Minutes Tuesday, August 23, 2022 12:00 PM Proposed FY22/23 Budget 1. Call to Order 2. Roll Call Present: Council President James P. Hilty Sr Council Member Kristen M. Dreyer Pro Tem Barry Mansfield Council Member Jay A. Musleh Council Member Ire J. Bethea Sr Excused: Mayor Reuben Kent Guinn Municipal Officers/Others Present: The meeting was also attended by City Clerk Angel Jacobs, Fire Chief Clint Welborn, Police Chief Michael Balken, TPO Director Robert Balmes, Deputy Police Chief Louis Biondi, Marketing & Communication Manager Ashley Dobbs, Division Head Sanitation Dwayne Drake, Multimedia & Communications Coordinator Danielle Dyals, Director of Airport Matthew Grow, Chief Planning Official Aubrey Hale, Budget Director Tammi Haslam, Director Community Development Services James Haynes, Deputy Director Ocala Fiber Network Kenneth Jamerson, Director of Facilities & Fleet Management John King, Senior Budget Analyst Cindy Krepps, Senior Budget Analyst Sadie Daniel, Director of Public Works Darren Park, Director of Electric Utility Doug Peebles, Director of Telecommunications Mel Poole, Director of Parks & Recreation Preston Pooser, Strategic & Legislative Affairs Administrator Jeannine Robbins, Director of Finance Emory Roberts, Procurement & Contracting Officer Daphne Robinson, Chief of Staff Chris Watt, Ocala Police Dept Representative, IT Representative, The Press and other interested parties. 3. Public Notice 4. Public Comment 5. Topics for Discussion a. Proposed Budget - Fiscal Year 2022-2023 Budget Director Tammi Haslam reported on the proposed budget for fiscal year 2022-2023. The City-wide budget totals $970,633,613. The City budget increased due to the following: pensions, employee salaries, benefits, and electric funding. The General Funds balance totals $138,432,730, and the flat millage rate is 6.6177 ($6.3 million revenue generation). The estimated Ad Valorem revenue for fiscal year 2022-2023 totals $39,695,043; the revenue is split between four funds. Page 1 of 4 City Council: Work Session Minutes August 23, 2022 The General Fund receives funding from four enterprise funds (15% transfer to the General Fund). The Sanitation and Water Resources Fund transfers increased from 10% to 15% this year. The General Funds reserves fund balance is fully funded at 20%, which is crucial for maintaining the City cash flow for a natural disaster/unforeseen economic event. City Council identified several community sponsorships that will receive City funding from the FY23 budget. The wage increases were funded for the following employees: non-union, IBW, and Fire Department. The City is undergoing wage negotiations with the Police Union. The pension plans were funded, and health insurance premiums increased, which was offset by a contribution from the American Rescue Plan Act. The City will continue to prioritize public safety and operate in a lean manner. The Downtown Development Districts will maintain a flat millage and generate $9,972. The Infrastructure Surtax was renewed in November 2020; and will generate $9.1 million for FY23. Funds will be allocated to the following: 60% transportation ($5.4 million), and 20% Fire & Police ($1.8 million). To note, the funding source can only be used for capital items or projects. The enterprise funds are considered balanced revenue to expenditures and have met the minimum reserve requirements. The Airport Fund relies on grant funds for capital projects and the Electric Funds operating costs have increased due to rising fuel costs. Council Member Musleh asked if the Electric Fund includes rate stabilization or capital improvements. Ms. Haslam responded no, only operating funds. The rate stabilization reserve lives on the balance sheet and is not part of the budget. Ms. Haslam commented the Golf Fund remains flat compared to the current year. The proposed contribution from the General Fund is expected to decrease from the current budget. The Ocala Fiber Network and Sanitation Fund will maintain a flat budget for FY23. The Sanitation Fund will be purchasing equipment in the current year, which decreases capital requests for next year; no capital program for 2023. The Water Resources Funds proposed budget remains flat. To note, reserves are funded in accordance with City policy and transferred to the General Fund. Capital improvement projects must be valued greater than $5,000, with a lifespan +5-years. The City will annually fund the following: replacement of fleet/facilities, and IT requests. The proposed Capital Improvement program totals $46,364,070; and consist of 40 projects. The majority of the development services projects are located within the City’s community redevelopment areas and funded with CRA monies. The Electric program consists of four projects, and the projects are funded by the Electric Construction Fund. The Engineering Department is responsible for the construction and modification of City owned facilities. Furthermore, Budget funding supports the design/construction of Fire Station #8 and the fire training facility. The budget allocated $300,000 for the Parking Lot Improvement Program, and $4.5 million for the Transportation Rehabilitation & Improvement Program. Page 2 of 4 City Council: Work Session Minutes August 23, 2022 The Facilities Maintenance projects consist of the following: restoration/replacement of roofs, HVAC replacement, and general facility upgrades. The project budget totals $1,075,000. The Ocala Fire rescue will purchase three new LifePak cardiac monitor defibrillators, to replace the 25-years old units. The fleet vehicles replacement costs total $6,358,575, for FY23. The plan is to replace the following vehicles: forty-nine police vehicles, two fire rescue trucks, three pickup trucks, one transit van and a utility terrane vehicle. Council President Bethea asked how far away a Police Officer must live to qualify for a take home vehicle. Police Chief Balken responded the department is undergoing negotiations with the Union, to expand the driving range to 35-miles. Council President Bethea noted several Police Officers live outside of the City limits. He expressed concern regarding personal use of City vehicles. He suggested the City evaluate personal use of City vehicles. Ms. Haslam commented Information Technology proposed to expense $1,684,350, for technology purchases (laptops, desktop computer, tablets, and software). The Ocala Fiber Network proposed to expense $3,811,500, for expansion/maintenance of projects. The Recreation & Parks is requesting $411,600, to support four projects. The funds will be allocated from the General Fund; except for the aquatic center’s upgrades, which will be funded using the 1/8-Mill Neighborhood Enhancement Fund. The water resources project cost totals $12,561,780, for FY23. The projects consist of the following: lift station improvements, water & sewer lines, water treatment and reclamation facilities. The funding will be allocated from several funding sources, such as the Water Construction Fund, and Sewer Impact Fee Fund. Council President Bethea asked if the City received State funding for the Septic Tank Program. Strategic & Legislative Affairs Administrator Jeannine Robbins advised the City applied to receive grant funding from the Septic Tank Abatement Program. The line item was vetoed during the regular budget process; however, the City applied for local grant funding. Council President Bethea asked if the grants funds will support water and septic. Ms. Robbins responded the grant funds will be used for the septic tank abatement process and connection to sanitary sewer; no water component. Ms. Haslam summarized the budget presentation. The City-wide budget totals $970,633,613, and the General Funds balance totals $138,432,730. The General Fund is balanced with a flat millage rate of 6.6177, and reserve requirements have been met (General and Enterprise Fund). Raises in accordance with bargaining agreements have been funded, and the approved CIP requests are fully funded for the proposed year. City Council should consider the unknown fiscal impact of the proposed amendment to the State Constitution on the November ballot, granting an additional homestead exemption. Page 3 of 4 City Council: Work Session Minutes August 23, 2022 The City used $3.1 million in revenue to balance the General Fund for FY23, and the debt service on the loan (fire fee funding) will increase by $2.8 million next year. Fire Station #8 will be staffed with fifteen additional personnel, and the City will continue to reprioritize projects due to increasing costs. The City will schedule a meeting to discuss the fire assessment revenue increase ($2.3 million) for FY23. Council Member Musleh requested the City provided instructions for denying the fire assessment increase at the pending fire assessment meeting. He favors supporting the proposed budget. Council Member Dreyer asked if the City has a contingency plan. City Manager Pete Lee responded the City is working on creating a contingency plan. He noted the proposed budget is very conservative, and the City removed 25% of the budget requests. Mr. Lee thanked City Staff for their hard work preparing the budget. Council President Bethea stated he supports the proposed budget, and requested the City draft a contingency plan. Ms. Haslam thanked City staff for their hard work preparing the budget. Council President Bethea thanked the Budget Office and City staff for their hard work preparing the budget. 6. Adjournment Adjourned at 12:34 pm. Minutes _______________________________ ________________________________ James P. Hilty Sr Angel B. Jacobs Council President City Clerk Page 4 of 4