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HomeMy WebLinkAboutMinutes 04-17-2009 CITIZENS’ BUDGET COMMITTEE Meeting Date: April 17, 2009 Conference Room 3 Meeting convened at 7:33 a.m. MEMBERS PRESENT: Carl Hensley, Chairman Bobby Rodriguez Edward Lounds Craig Mundt Nathaniel “Nate” Wells Patricia “Pat” Ferrick Edith Hepburn Dan Kurek MEMBERS ABSENT: Barry Schrader Thomas Hickey Bill Casey Richard Pancoast Randy Ezell Jay L. McBee Steven Messer OTHERS PRESENT: Faye Outlaw Lee Ann Lowery Marie Gouin Jennifer Hill Bill Hammer Don West John Ferrick Laurie Case J. Gaines Kathryn Hensley Diana Lewis Garry Wilson Heather Young Carl Holeva Robert O’Sullivan Toby Long Sophia Holt Jim Gilbert Michelle Franklin Roger Shinn Beth Ryder Bill Hoeffner CALL TO ORDER Mr. Hensley called the meeting to order at 7:33 a.m. APPROVAL OF MINUTES th A motion was made to approve the March 17 meeting minutes. It was seconded, and the minutes unanimously approved. A Parks and Preserves Guide was distributed to each member. Ms. Lowery explained that the citizens approved a bond referendum to purchase environmental lands. St. Lucie Citizens’ Budget Committee April 17, 2009 Page 2 County also has areas provided by Mosquito Control and Parks & Recreation. There was no single publication with all the information. So they brought all the departments together and published the attached. The next step is to create an interactive map on the website. SUNSHINE LAW – HEATHER YOUNG Information had been sent out to the members (see attached) before the meeting. Ms. Young reminded the members that the Committee was subject to the Sunshine Law. Even though they know each other outside the meetings, the members must refrain from discussing any item that could come up before the group. Frequently Asked Questions were attached to the memo, and Ms. Young offered to answer any current or future questions. Mr. Hensley asked about exchanging information. Ms. Young explained that the members can talk to elected officials and anyone else not on the Committee. Mr. Lounds asked why the Committee is subject to the Sunshine Law. Ms. Young answered that it is because they make recommendations to, and do fact finding for, the Board of County Commissioners (BOCC). FINANCIAL REPORT – J. GAINES, FAYE OUTLAW & MARIE GOUIN Mr. Gaines introduced himself and explained that there is a Comprehensive Annual Financial Report (CAFR) and a Combined Annual Financial Report. St. Lucie County received an award for their 2007 CAFR. The auditor issues eight different audit reports: a fund level report for each Constitutional office and the BOCC, a report on the CAFR, and a combined report of the BOCC, all Constitutionals, and the County that is sent to the Auditor General. He was pleased to report that this year they issued clean opinions. There were no material internal control weaknesses. The report shows the BOCC and the Constitutional Officers combined but they operate independently. Mr. Gaines felt the newspaper report was not totally accurate. He did not give any numbers when he gave his report to the BOCC. Ms. Outlaw and Ms. Gouin gave a report containing numbers. The newspaper report combined the information. He said he would wait for questions. Ms. Outlaw showed the PowerPoint presentation (see attached) that was shown to the BOCC the Tuesday before. Mr. Mundt asked about a two-year budget. Ms. Outlaw answered that she did not plan to do one. She explained that she wanted to get through a 12-month cycle. After she Citizens’ Budget Committee April 17, 2009 Page 3 understands the details of how it works, she can tweak it to suit her style. Mr. Lounds asked about property values. Ms. Outlaw and Ms. Gouin said Mr. Furst is predicting a 20% decrease. That is what they are using to form the budget. They will get st the official number June 1. Mr. Lounds asked about the Emergency Reserves. Ms. Outlaw gave him the 9/30/08 balance and explained the changes since. Mr. Lounds asked Ms. Gouin about contributions to the reserve fund. Ms. Gouin explained to him the history of funds put into the account. A percentage of the budget was discussed. Mr. Lounds said it is difficult for citizens to understand the difference in private and government budgets. Ms. Gouin explained how Fine and Forfeiture and Fund Balance work. Mr. Lounds used Mets’ Stadium as an example. Ms. Hill added that each year the budgets are reviewed. Ms. Gouin said any extra dollars stay in the same fund. Because Mr. Anderson received the information from Mr. Furst about the property decrease, they budgeted the extra money this year so they could balance next year. Mr. Lounds said it is confusing and sometimes disheartening to sit on the Committee, have to tell the Health Department and other outside agencies that there is no money to help them and find out that there is a $30 million surplus. Ms. Gouin explained that the money was expected to be there. They cut the County’s budget to get it. It was no surprise. Because they were told of the property value decrease, they did the early retirement and a hiring freeze so they could bank the money to enable the County to continue to operate. Mr. Lounds summed up that by telling the outside agencies that we could not give them more money, the County carried over money from last year to balance this year’s budget. Ms. Outlaw answered that was true in part. Ms. Gouin added that we held the line and asked them to do the same. Ms. Outlaw added that Mr. Lounds’ point was taken. But having a fund balance is part of a municipality’s operation and will continue to be until the BOCC and manager allow the organization to spend every penny or there will be deep cuts. Another reason she did not want to do a 24-month budget is that she wants to see if she can find a way to make the budget so transparent that a citizen can understand and see the need for fund balance. She is challenging herself to do that. Mr. Lounds said it has to be transparent to the people who pay the taxes. If they don’t understand, it doesn’t matter how much information they are given. He looks at it with his business experience. In a business, a department must produce a profit. Services to the community are the profits. Mr. Gaines told Mr. Lounds that governments are always going to budget a loss. If you begin with a fund balance, you will plan to have more expenses than revenues because you plan to spend the beginning fund balance. You always budget a loss in a governmental fund. You budget a profit in a business. A budget in a business is a goal. A budget in government is a limitation. It limits what you can spend. You have to budget a little more than you expect to spend to allow for the unforeseen. In the early 90s, the State Citizens’ Budget Committee April 17, 2009 Page 4 did not hit their sales tax revenue projections; they did not have excess and didn’t know where they were going to get the money. Accountants are not good budgeters. He would take a normal bill and multiply by 12 for the year. That is a problem if something unexpected happens. If it is a little on several lines, it adds up. Because of the requirements of Florida statutes, you have to be flexible. Constitutional Officers are prohibited from carrying funds over to the next year. They start with zero every year. The BOCC does not have that restriction. They have to have a fund balance to allow for unforeseen. He gave the example of not having a hurricane in 20 years and having two in three weeks. You have to be able to provide for that. That is prudent budgeting. Mr. Long agreed. He has worked on both sides. The County needs the excess. He agrees with Ms. Outlaw that even though the County must follow the statutes, it should be able to be more transparent. He applauds her for trying. He feels Ms. Gouin and her group have done a great job of preparing for challenges. Suspicion was created in the past as the fund balance increased. He thinks Ms. Outlaw’s suggestion will go a long way in making the public comfortable. They understand the County has responsibility to the County and all the Constitutional Officers to be sure they can do their job. He thinks Ms. Outlaw’s approach is excellent. Mr. Long’s opinion on Mr. Mundt’s question about a 24-month budget is that 12-month budgets are tough enough. When you get that far out, so many things change and you never know what the State will send down. You can count on it being bad and the County having to pay for it; but you cannot anticipate 24 months down the road. Mr. Mundt pointed out that the carry forward amount was diminishing. They need to carefully examine the future budget because there will be less money to apply to it. Ms. Outlaw said they never stop estimating and projecting; but they are not going through the exercise of a 24-month budget. Based on what she has seen early on, if things do not change in terms of revenue, there is a good chance that there will not be much fund balance to carry forward in future years. Mr. Mundt asked about fund balance by department. Ms. Gouin answered that Ms. Holt is working on a quarterly report. The departments should daily review their budgets and raise a red flag if there are issues. Mr. Lounds asked about reports from the Clerk’s office showing discounts taken when paying bills. Ms. Gouin answered that the departments know the available discounts and submit the bills to Finance so they are applied. Mr. Lounds asked if the Constitutional Officers have to give back their overage. When answered yes, he asked why they would ever have one. Mr. Long added that a year before the Sheriff gave back $1 million. They had budgeted for a raise for the deputies. The negotiations with the union took so long; the raise was not effective until July. Mr. Lounds asked since the County has to pay, are they involved in negotiations. Mr. Long answered that the Sheriff is in charge of negotiations; but they are discussed with the Citizens’ Budget Committee April 17, 2009 Page 5 County. Mr. Long said the Sheriff’s Office is being sued now. Their contract says raises are based on funding. There was no money the past year for raises. Mr. Lounds said it is not an automatic raise in the Sheriff’s Department and asked about the school system. Ms. Hensley said there are ongoing negotiations. The compensation committee meets at least every month to discuss issues. The Sheriff’s negotiations are annual. Mr. Lounds commented on how much of his tax bill is not for the BOCC. We pay a lot that doesn’t go to the County. He thinks the public should be reminded. Mr. Hensley said the information is shown in the pie chart. Mr. Mundt asked about the BOCC not accepting the Committee’s recommendation for a Municipal Service Taxing Units (MSTU) for School Resource Officers (SRO). Ms. Outlaw told about the follow up conversation at the BOCC’s informal meeting. They support funding $1.7 million of the $2.8 million in addition to what they are currently funding and have the school district ask the two cities to pick up their share so it would be funded. The County has no say over whether the cities will. There is concern since the cities are talking about layoffs and their budget situations. Regarding the MSTU, the BOCC is split on doing a referendum or resolution. There is support to having a dedicated source. She believes it is a timing issue. Mr. Mundt said if there is not a dedicated source, they will have to find the money during the next budget. Ms. Outlaw thinks the balance that was to go to 2010-2011 may be used for the funding. They will have to look at the rest of the budget. The BOCC could force her into a layoff situation. Mr. Hensley said they could use Emergency Reserves. Ms. Outlaw answered that they have already said they do not want to touch the Emergency Reserves. Mr. Long added that there could possibly be money not spent before the end of the year. Mr. Lounds asked about the City of Fort Pierce helping to fund the SRO program. Ms. Outlaw answered that they did for the first time this year. They are late in getting into the partnership. Ms. Outlaw is bracing for the possibility of having to pay more of the funding. Mr. Hensley added that they may decide to pay less. The School Board and Sheriff’s Office will have to deal with it. Ms. Outlaw said they may have to cut back the program. There are several possibilities. Mr. Lounds asked what the Committee could to do help. Ms. Outlaw said they will bring the finalized budget proposals to the Committee for input. Mr. Hensley is hopeful the $30 million fund balance will be higher. It could be less. Ms. Outlaw said she is requiring departments to hold the line. We have cut back on travel. She does anticipate fund balance. Mr. Mundt asked about Strategic Planning dates. Ms. Outlaw said it is not set. She does not want to spend the time if not needed. Mr. Lounds added, “Keep it visible.” Citizens’ Budget Committee April 17, 2009 Page 6 ENTERPRISE, INTERNAL SERVICE & FIDUCIARY FUNDS – FAYE OUTLAW & JENNIFER HILL The information was sent to the Committee (see attached). If there are questions, please call or email Ms. Gouin. OTHER ISSUES Mr. Wells told of his experience with the Marine Corp in balancing the budget at the end of the year. Mr. Hensley said that is not happening here. Ms. Outlaw added that the County is trying to not spend. Mr. Lounds asked about talking to the BOCC about keeping their appointees active. He appreciates the department heads coming. He feels the Committee is not supporting Administration or the departments by not showing up. It was decided to send a reminder with the attendance records. Ms. Ferrick asked if the dates should be changed if they are scheduled during spring break or religious holidays. Mr. Hensley said the meetings are planned a year in advance. Mr. Mundt prefers the consistency. Mr. Lounds asked about Clerk Smith speaking to the Committee. His presentation is planned for May. ADJOURNMENT Mr. Hensley adjourned the meeting at 8:31 a.m. and thanked the ladies and gentlemen for their time. Respectfully submitted by: Brenda Marlin