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HomeMy WebLinkAboutMinutes 03-19-2010 CITIZENS’ BUDGET COMMITTEE Meeting Date: March 19, 2010 Conference Room 3 Meeting convened at 7:33 a.m. MEMBERS PRESENT: Carl Hensley, Chair Nathaniel “Nate” Wells Craig Mundt Patricia “Pat” Ferrick John Culverhouse Randy Ezell Dan Kurek Edith Hepburn Edward Lounds Ron Knaggs MEMBERS ABSENT: Dana McSweeney Bill Casey Jay L. McBee Richard Pancoast OTHERS PRESENT: Faye Outlaw Lee Ann Lowery Marie Gouin Jennifer Hill Carl Holeva Mark Satterlee John Ferrick Eva O’Donnell Ryan Strickland Roger Shinn Garry Wilson Bill Hoeffner Joe Smith Derrick Dukes Bill Hammer Liz Martin Beth Ryder Sophia Holt Audrey Jackson Jeff Furst Jack Southard Toby Long Don West Jim David Ken Mascara Bob Davis Shai Frances Karen Smith CALL TO ORDER Mr. Hensley called the meeting to order at 7:33 a.m. CONSTITUTIONAL OFFICERS OVERVIEW Mr. Hensley said that since Mr. Furst asked to make the presentation, he would let him Citizens’ Budget Committee March 19, 2010 Page 2 lead off. An Outside Agency Summary was handed out to the members (see attached). Mr. Furst said that he would make it easy. He knows it is difficult to understand. He would let each officer tell their part after he told the historical part. He gave details of his membership on the Committee. Years back things were not good. The Sheriff would not come to meetings. Relationships between the County and the Constitutionals were horrific. Tax Collector’s employees were not allowed to communicate with anyone except the Property Appraiser in the Property Appraiser’s office. Mr. Furst said some of the best ideas and improvements are the result of working together. He told of a win-win situation with his department and cars for the Sheriff’s office. He told how he reduced the automobile cost in his office to about 18% of the former cost. The first thing he did was change the computer system. His office helped the Tax Collector’s office until they were able to set up their computer system. It is always easy to know what someone else could do better. It is interesting how outside people want to tell them what to do. But they don’t always understand. Mr. Furst read in the paper that St. Lucie County has one of the highest foreclosure rates in the State. The courts have gone to the State to get more money to clear the backlog. Other people are telling the Clerk to cut his budget. People talk to the Supervisor of Elections about saving money. The City and County could combine elections to save money. Ms. Walker knows that, but she does not get to make that decision. She could do it for less if she could put them together. She often gets requests to change the system. She can’t save money and buy new items to change the system. All the Constitutionals have things they have to do. Mr. Furst’s office has to produce a tax roll. The Sheriff has to house the criminals. The court system has to run. The taxes have to be collected. They are charged with specific responsibilities. Mr. Furst could cut his budget, but not in ways that would keep him from putting out the tax roll. The areas he could cut are areas he has expanded that produce revenue. The people and technology he has added, produce revenue. Mr. Furst said the Sheriff cannot control how many sick people end up in the jail. It pushes up his budget. It doesn’t mean they could not do better. They could all do better. In the past, they worked with Committees and Administrators trying to do it better. The Constitutionals met to talk about it the week before. The Sheriff’s office does health insurance better than the rest. Mr. Furst says his health insurance costs are through the ceiling. He’s been saying it is going to consume public bodies. Health cost for Port St. Lucie is $15 million. They haven’t reserved for retired employees and they have to fix the problem. There are big issues and they need to find answers. Make sure that you don’t get carried away with telling the other group what to do. They can do better and have worked with Ms. Outlaw who has a horrendous task. They understand it is a tough issue. Each officer has things they have to make happen. It is easy for outsiders to think a Constitutional officer could eliminate something when they don’t understand it is not that easy. If the Committee wants to get to the bottom of it, he thinks they need to invite each one individually for a full meeting. The Constitutionals will give the time needed to help the Citizens’ Budget Committee March 19, 2010 Page 3 Committee understand what they do. Each is unique. There was a problem with the projector. So as copies were being run of the Tax Collector’s PowerPoint presentation, the Sheriff was asked to be next. The Sheriff distributed the attached handout. He gave history of past years’ budget procedure and told the difference this year. The Sheriff explained that the day after they submit their budget they start monitoring their expenditures, manpower and needs. He tasks the four directors who are over the four divisions (Jail, Administration, Law Enforcement, and Finance and Technology) to oversee the costs, allocations, manpower and needs of their area. They use the data to decide when to replace positions and to determine the next year’s budget. They justify needed funds with three factors. The first is calls for service. In 2001, the calls were approximately 79,000. In 2009, there were 121,000 calls. County population in 2001 was 198,000, last year it was 272,000. The Jail population in 2001 was 780. In 2009, it was 1,382. It hit an all- time high in 2007 of 1,600 inmates. They were responsible for 11 Judges in 2001, 16 last year. Their workload has increased. In 2001, there were 515 funded positions, 621 now. The Sheriff explained that two of the contracts are for food and medical costs at the Jail. Those two are a little over $6 million. The contract for Courthouse security at the entrance ways is approximately $350,000. Technical maintenance contracts for the office are just under $400,000. The crime lab contract is just under $200,000 per year. The debt service on the radio systems is $165,000. $235,000 per year is paid for the contract for out-of- state prison transport. About 3% is discretionary. Since 2004-2005 they have not asked for cars. They have used interest earnings. They have an aggressive forfeiture policy, seizing vehicles used in drug activities and using them in civilian or undercover fleet or selling them. The only new cars are painted green and white. Everyone else drives a used car or an executive car. The cost per resident of the County for law enforcement was given for counties with populations in the 140,000 to 333,000 range. The lowest was Lake County at $203/person. The highest was Collier County at $439/person. St. Lucie County’s Sheriff’s office is at $245/person. Martin County is $411/person. Indian River County is at $296/person. We are in the middle of the twelve counties queried. But we are lower than neighboring counties. Sheriff Mascara said the budget he has submitted and the one he is working on continues to be reasonable and necessary to keep the community safe. This year, they have started to make money on federal inmates in the jail. In the past, because of high jail population, overtime was using the income. Last year the rate for federal inmates was renegotiated. st Because some costs are down, March 1 they brought a check for $125,000 to the County. They plan to continue that trend the remainder of this fiscal year. The PowerPoint the Tax Collector passed out (see attached) was similar to what was presented at the last Strategic Planning session. Mr. Davis thanked the Committee for Citizens’ Budget Committee March 19, 2010 Page 4 inviting them. The Constitutional offices are not departments of the County. Their budgets are funded differently. The Tax Collector’s office maintains records for over 50 Municipal Service Benefit Units (MSBU’s). The difference in 100% collection and the amount collected is normally due to early payment discounts. County tax certificates, taxes in litigation and bankruptcies are also included. The Tax Collector explained that his budget is funded 100% from what he calls user fees, commissions and fees. They make 50 cents for selling fishing license and $3.00 on car registration. 2% commission is made on tax collection. They always earn more revenue than they spend. They call revenue over budget, excess revenue. The excess revenue and unspent portion of their budget is sent back to the taxing agencies pro rata. Because of the formula, the County gets about 80% of it. Last year it was about $5 million. The total excess was about $6 million. The reason for the ability to reduce staff is the internet. They encourage internet and mail- in payments. They are able to have less people at the counter. They have high speed processing and are able to handle mail very efficiently. Mr. Davis expects his budget to be 3% lower than last year. Clerk Smith thanked the group for the opportunity. He shared four slides (see attached) after announcing good news from the Clerk’s office. Clerk Smith explained the way the Clerks of Court Operations Corporation works. All the Clerks send money to the State, and it is doled back out. The Clerk’s Office is also fee based. They receive $1.90 for every piece of paper in the recording division. Clerk Information Technology is the only money that rolls to the next year. Any excess funds would go back to the Board, except Court Operations money is sent back to the State every month. Because Clerk Smith did not want to come back to the County for additional money six months after being elected, nine positions were cut from the Recording Division, and the South County Recording Office was closed. They are trying to run the office as tight as they can and fund in different ways so they do not have to come to the Board. It is his policy that they do their best and run the operation tightly. Mr. Hensley asked the Committee if there were questions. Mr. Kurek asked Mr. Davis why the Board gets back more than other taxing authorities. Mr. Davis explained the State commissions are given to the County for fishing licenses and alarms. The School Board does not pay commission. The Cities only pay on special assessments. Since the Board has 50-60 funds that pay commissions, they pay more so they get more back. Citizens’ Budget Committee March 19, 2010 Page 5 Mr. Knaggs asked for more explanation. Mr. Davis added that commissions total about 2%. They remit back half of that. Mr. Knaggs asked if there is a way to budget that. Ms. Outlaw had told them that she can’t budget for excess revenues so the shortfall does not include $5-6 million in the budgets for the next few years. Mr. Davis does not know about the County’s budget. Ms. Outlaw explained that we wait until the fiscal year is closed to include the excess fees in the fund balance. Her question was if the amount of the commission could be reduced. That would help on the front end. It is the same situation with the Sheriff’s office and the money for the Federal Inmate Program. It would really help if that was reduced from the budget. Mr. Davis answered that it can be done two ways. This County and some others budget 100% of the tax revenue and then an expense of 2% of the collection fee. The excess is pretty predictable. Mr. Furst asked Ms. Outlaw for the amount in reserves. Ms. Outlaw answered $17.6 million in emergency reserves. They have none, because every year they have to go to zero. He cannot predict what is going to happen. He told of his experiences with the hurricanes. He does not have reserves so they need a cushion. He spent money on things not in his budget that year, but at the end of the year, he still returned money to the County. Mr. Davis said that is governmental accounting principles. Most balance sheets have three parts: assets, liabilities and fund balance. Their offices have only assets and th liabilities. They bankrupt themselves on September 30 each year. He has to borrow money for the first two months. He pays it back when they receive the first tax distribution. Mr. Kurek remembered that in the past, they would get an estimate in June or July and include it in fund balance. Ms. Gouin said she could if Mr. Davis would give her a number. But at that time, it would not make a difference. Ms. Gouin said the point being made is that the Tax Collector is collecting 2%, which is more than his budget. She thinks Mr. Knaggs is asking if there is any way of him estimating and telling the County what the excess revenue will be at the end of the year. Mr. Davis said that is not a problem, but the money would be for the following year. Mr. Knaggs agreed that it is what they are talking about. Ms. Outlaw has a $38 million shortfall three years out from when he got involved in the discussion. If the future track record is the same as the past 3-5 years, $15 million could come back in the form of excess revenues and reduce the problem. If the excess revenue number could be reliably predicted, it could be put in the budget and the shortfall won’t be as significant as it appears. Ms. Gouin said the excess fees won’t be as significant since the property values have declined. Mr. Knaggs thinks they could use a number 70-80% of the estimate. Ms. Outlaw said to some extent the fund balance number is built in. Mr. Davis believes they are counting it as beginning fund balance rather than expected revenue. Ms. Outlaw explained they do estimate the amount one year out but not two years. Mr. Knaggs added that since they were looking at three years, they were missing two years of the fees. Ms. Outlaw clarified that he was right. Mr. Lounds asked why the Cities and School Board do not pay commission. Mr. Davis Citizens’ Budget Committee March 19, 2010 Page 6 answered that it was State law. Mr. Davis added that everything they do is State law. He gave the example that he makes $1 million per year registering vehicles and it costs $2 million. They want to transition driver’s license to the Tax Collectors. Some offices do now, but he won’t unless he has to because it will cause unfunded mandates. He thinks he can do it and do it better. And he is willing to do it but does not want to if it takes a million dollars out of local property tax revenue. His association is in discussion with Tallahassee about this issue. Mr. Lounds wished the Tax Collector would take over the driver’s license program. Mr. Davis asked if he wants the excellent service, and if he is willing to pay for it. Mr. Lounds appreciates that things are done right in the County’s offices. The personal touch solves problems. You have to pay for that service. He would rather pay a fee than taxes. Clerk Smith said the State doubled some of their fees, but the money goes to them. Mr. Lounds believes the fees are reasonable. Mr. Davis said they had to fight to raise fees. Some folks came from Broward County to St. Lucie and Martin Counties because they didn’t want to take a half a day off work to get a tag. That’s the trade off for paying smaller fees. Mr. Knaggs also believes in fees rather than increasing property taxes. Boat ramps were used as an example. Mr. Davis thinks collecting an extra fee on boat registrations would be more efficient. He thinks Tallahassee is stuck on no new fees and no new taxes. It hurts locally. He believes the people who use the services should pay for them. Mr. Mundt thinks all the Constitutionals do a great job with their budgets. He quoted Mr. Furst saying they could do better and asked for specifics. Mr. Furst said the Constitutionals met, and they had met with Ms. Outlaw. He thinks health insurance needs to be addressed. If he takes the salary number for his office, without Social Security and retirement, he is at $2.4 million. Health insurance is $1 million. It is ridiculous for a low- end employee. The Sheriff has a better program. Mr. Furst cannot tackle the problem by himself. He knows the County has changed carriers, which he hopes will help. He thinks they all need to figure out how to do it better. Mr. Furst thinks people miss the flip side. St. Lucie County has one of the highest unemployment rates in the nation. Property values are some of the worst in the nation. The foreclosure rate is second in the nation. Three years ago, property value for the median house peaked at $264,000. He is now leading the State in the decline at $101,000. Over 50% of homeowners with a mortgage in this County have negative equity. They owe more than their house is worth. Mr. Furst said Palm Beach County should have added 40,000+ jobs in 2009. They lost 29,000. St. Lucie County went from an expected gain of 6,000 jobs to a loss of 4,700. Our constituents are in a serious bind. He thinks he and the Tax Collector see it more. Mr. Furst thinks we are through the worst of it. But if you are unemployed or underwater in your mortgage, you are still in the middle of it. We are going to have to work together and get through the next couple years, and we will. The good news is the nice weather is why Citizens’ Budget Committee March 19, 2010 Page 7 we will recover. It is a tough time for everybody and government has to share the pain. Mr. Lounds said he agrees. He thinks if a person is not working, they will not register their boat. He thinks the Constitutionals should be creative with fees rather than raise taxes. Mr. Davis said the County cannot raise boat registration fees. They can amend alarm fees and business registration tax. Mr. Davis threw out the idea of a four-day work week, completely shutting down all offices Friday, Saturday and Sunday. It could save. Ms. Outlaw responded that as part of the Board’s May Strategic Planning session, they will have a number of options presented to them. One will be a change in operating hours. It has not been decided if 32 or 37 hours. She is still working the numbers. Mr. Wells asked about the impact of the Community Redevelopment Agency (CRA) in Fort Pierce. Ms. Outlaw said the City’s CRA has no impact on the County. She explained the County collects the property tax revenue, and the portion that goes to the CRA is a pass- through. The problem the city is running into is as the property values drop, it causes a drop in revenue for the CRA. They were not able to fund projects they had planned and still cover their debt service. Ms. Ferrick asked if the Sheriff would have to cover part of the City of Fort Pierce since the CRA would not have the money for police protection. Sheriff Mascara said they continue to patrol both Cities by statute. 12% of the activity was in the City of Port St. Lucie last year. The Sheriff added that his department will continue to work 24 hours a day, seven days a week during the next fiscal year. Mr. Hensley thanked the Constitutionals for coming. TH APPROVAL OF MINUTES – FEBRUARY 19 MEETING th Mr. Mundt made a motion to approve the February 19 minutes. Mr. Knaggs seconded the motion and it was unanimously approved. OTHER ISSUES Four pages were handed out per Ms. Ferrick’s request. They will be discussed at the next meeting. Mr. Knaggs asked about an update. Ms. Outlaw said they are finalizing the implementation of the first phase of the realignment. It will be in three phases. The first phase will be the first or second week of April. Twenty-four employees will be laid off. Mr. Knaggs asked about the second phase. Ms. Outlaw explained that the Board approved the three phases. The second phase is scheduled for July. Directors of the newly consolidated departments are working with the impacted staff on consolidation and Citizens’ Budget Committee March 19, 2010 Page 8 implementation of the July phase. That will mostly impact the division manager level. What will come back to the Committee and the Board will be an update of the new divisional structure and a better figure of dollar savings. th Mr. Hensley announced that the next meeting is April 16, and thanked the Committee. ADJOURNMENT Mr. Hensley adjourned the meeting at 8:52 a.m. Respectfully submitted by: Brenda Marlin The next CBC regular meeting will be held on Friday, April 16, 2010, at 7:30 a.m., in Conference Room #3, at the St. Lucie County Roger Poitras Administration Annex.