Loading...
HomeMy WebLinkAboutFebruary 17, 2012 Approved Meeting MinutesCITIZENS' BUDGET COMMITTEE Meeting Date: February 17, 2012 Conference Room 3 MEMBERS PRESENT: MEMBERS ABSENT: OTHERS PRESENT: CALL TO ORDER John Culverhouse, Chair Ron Knaggs, Vice Chair Edward Lounds Jane Bachelor Patricia "Pat" Ferrick Richard Pancoast Stephanie Morgan Jay L. McBee James Clasby William Donovan Bill Casey Dan Kurek Craig Mundt Dana McSweeney Carl Hensley Faye Outlaw Marie Gouin John Tucker Mark Satterlee Laurie Waldie Robert O'Sullivan Audrey Jackson Kathryn Hensley Beth Ryder Jennifer Hill Don West John Ferrick Karen Smith Mike Monahan Michael Quinn Mr. Culverhouse called the meeting to order at 7:34 a.m. He introduced Mr. Donovan, the new member. APPROVAL OF MINUTES -January 20th Meeting Mr. Lounds made a motion to approve the minutes. Mr. Knaggs seconded, adding as amended. The amended minutes were unanimously approved. CBC UPDATE -JANUARY BOCC BUDGET WORKSHOP Mr. Culverhouse asked for a member who attended to give an update. Mr. Knaggs remembered the presentation was three to four slides with all good news. The budget was moving along as planned. One side note was that the revenue does not come in evenly Citizens' Budget Committee February 17, 2012 Page 2 through the year. The exceptions were foot-noted and seemed reasonable. One bit of very good news was from Utilities. Not only did they pay back their loan, it looks like they will not have to borrow the money budgeted for this year.. He had a follow up conversation with Ms. Waldie and listed the four reasons for the savings. The rate restructuring amounted to almost nothing when it was implemented, which is what Ms. Waldie said would occur. Ms. Hill said that Mr. Knaggs covered most of what she covered in the presentation. She added that property taxes come in early in the year. They were about 76% of the revenue. It was 74% last year at the same time. FY 2011 was the first year in a long time that the Building and Code Fund operated in the black. So far this year, that trend is continuing. Revenues are exceeding expenses in the Landfill Fund. They are keeping a close eye on the Golf Course Fund. Replacing the greens seems to be helping to recoup some of the customer base. and increase revenue. At the end of the first quarter, expenses were exceeding revenues by about $17,000. The season starts in the second quarter. They are expecting it to be self-sufficient for the year. She was speaking about Fairwinds. The quarterly reports were sent to the members. Ms. Outlaw added that the Board had asked staff to look into increasing program fees for Cooperative Extension. Ms. Neal and Ms. Smith met with University of Florida (UF) staff and it was not supported, so it was not recommended to the Board. Other fee increase proposals were approved for the building permits function and a couple new areas of fees in Public Works, the Mining Permit Fee and Right-of-way Fee. They will be brought to the Board for consideration and adoption. The Board settled on the dates to go to Washington. Last year's trip netted about $15 million. The Courthouse renovation has been completed. The sand replacement project at the inlet was the other high profile project. The Board's efforts paid off. They are planning to go in March. Mr. Knaggs said they approved a position for Planning & Development. Ms. Outlaw added that it was for Building. Mr. Knaggs said the mining fees are expected to generate an additional $200,000 in revenue to offset the costs previously incurred. Mr. Lounds asked about the reason for not increasing the OF fees. Are the fees they are now charging covering the expense of the meetings? Ms. Smith said the OF policy is that they are an education institution and they can only charge fees to cover the program, not the staff. The fees charged now cover the cost of the programs. It does not cover the cost of the staff. Mr. Lounds said there was discussion about getting Indian River County (IRC) to chip in on the cost ofmulti-county staff. He asked for an update. Ms. Outlaw said it was under consideration by the IRC Board. Ms. Smith said they have not taken action. She knows the Indian River Citrus League did support IRC helping to fund the citrus agent position. Next, there will be a meeting of our Chairman with the IRC Chair. She-does not know the timing of the meeting. Mr. Lounds asked if the Advisory Committee could do a little backstage work to help. Ms. Outlaw and Ms. Smith thought it would be beneficial. Ms. Outlaw hopes the meeting of the Chairs will elevate the discussion in IRC and cause some funding to be brought to the table. Citizens' Budget Committee February 17, 2012 Page 3 Mr. Lounds asked if we got all we will get from FEMA. Ms. Outlaw said we are in the closeout phase for the Courthouse project. FEMA has paid all approved by Project Worksheets. We have received money from insurance companies. Right now, they are reconciling the two processes, hoping both have not paid for the same damage or it would have to be reimbursed. Federal Highway reimbursed for Indian River Drive. They have a streamlined process and we received the money upfront. Mr. McBee asked if there was money in the pipeline for Tropical Storm Fay. Mr. West answered that there were a couple claims. One project was Taylor Creek that has been closed. out.. There was a large ditch in Port St. Lucie. It was recently closed out and completed. Mr. Lounds summarized that we have all we will get from FEMA. Mr. Knaggs asked if IRC was the only County that was not assisting. Ms. Smith said the agent does not do much in Martin County. There is another multi-county agent that Martin County does fund. They do not share anything with Okeechobee County. OF says to have the current agent, he has to be multi-county. St. Lucie County is footing the bill. Mr. Knaggs asked. what percentage is IRC. Mr. Lounds estimated 30% and gave some explanation of duties. OTHER ISSUES Follow up Discussion on Budget Reviews Ms. Outlaw said it is actually the review of the departments' budgets. A breakdown (see attached) of the General Fund and Fine & Forfeiture by order of the highest funded down to about the lowest funded operation was requested by the Committee. The operating budget is the biggest challenge. They did not prepare a department review for the meeting. She feels the. process is still evolving. Staff will provide the needed information to get through. the process. The matrix highlights that it will be a challenge to further reduce budgets without hitting on the personnel side. It is typical in government operations that the bulk of the costs are on the personnel side in most cases. She hopes there will not be any reductions to personnel based on creative ideas brought forward. Mr. Lounds asked about the Tax Collector's progress in providing drivers' licenses. Ms. Outlaw answered that the Tax Collector bringing the process into the Administration building is on schedule. The work is underway and he is making plans to move everything here. The County has no input except making sure his space is ready. His plan is to have the transition made by June and she thinks he will. Mr. Lounds said the conversion costs tax dollars somewhere and asked if we are on target. Ms. Outlaw said he gets some fees to help cover that operation. She does not know if it is break even. The biggest potential cost impact to the County would have been if he kept the functions at the sites, the County would have incurred the leases because the County is required to house Constitutional operations. It was important to find County owned space. Mr. Lounds asked about the Citizens' Budget Committee February 17, 2012 Page 4 conversion of the space. Ms. Outlaw answered that the Tax Collector is paying for that. Mr. Lounds asked Major Monahan if he was still down in road patrol. Major Monahan said they lost a certain number of positions in the budget process. They are at the current authorized strength on road patrol and detectives. It is lower than it was in previous years. 9-1-1 response is up. Ms. Bachelor asked about the personnel numbers. It is salaries and benefits. She asked about the percent used for benefits. Ms. Gouin answered that they do not use a straight percentage. They use costs and percentages. It depends on the position. It can range from 40-60%. Mr. Casey said the last meeting they said they didn't want to impact staff levels. They have done quite of bit of cutting staff over the years. It seems the media has articles on expenses related to government services as it relates to benefits. Is there anything besides charging more to the employees, such as a combined clinic to all government agencies? All government employees should be enough to satisfy a need to be profitable. Is there a way to combine the benefits? Ms. Outlaw answered there is a way, but it would take the political will of all the elected bodies. Mr. Casey anticipated that, but he thinks we may be there. How long have we been talking about saving money? How long have the other agencies been talking about saving money? It's put up or shut up time. Mr. Lounds said the health insurance is an example. Mr. Casey thinks they should be able to get all but the Fire Department. Ms. Outlaw feels it would be a yeoman's challenge. It would be worth pursuing. We are seeing reductions in medical costs because of our health center. Mr. Anderson had reached out to other municipalities, but they didn't come onboard for a number of reasons. They plan to go back to the City of Fort Pierce and Fort Pierce Utility Authority after one year of operation because they expressed interest during the planning stages. The City of Port St. Lucie operates a health center for their employees and has seen a reduction in their medical costs. There are other expenses that the clinic does not help, examples are retirement and vision. In addition to savings from the clinic, they took the reserves in the Insurance Fund and put $2 million per year to write down the premiums. That reduces the amount of the annual funding. They should be able to do that three or four years. The premium is on the County side. The employee premium has not changed. Mr. Donovan has three employees and paid Blue Cross $64,000 last year. It lowered to about $40,000. One of the things they did was use Healthy Kids. Has the County looked at that option? Ms. Outlaw said it was an interesting concept. We have not looked into that. At the FY10 Strategic Planning Session, the Board had discussion on changing-the employees' side of health insurance. When the State started discussing employees paying 3% of their retirement, the Board pulled back. Ms. Outlaw reported that the Health Insurance Advisory that includes all the Constitutional Officers has been reactivated and has been tasked with looking at the health insurance program. You will probably see some recommendations in the next two years. Mr. Knaggs said that in the last session Ms. Outlaw said the contract negotiations were Citizens' Budget Committee February 17, 2012 Page 5 coming up. He asked her to briefly describe the process. Ms. Outlaw answered that under the current contract the County has a number of items they can bring to the table. The union does as well. They both give notice of their items. They set dates for meetings, usually once a month, until they reach an impasse. Then they have an executive session with the Board for direction. They decide if they want mediation or the Board to take action. The three year contract ends at the end of September. She hopes the next contract will be three years. There are about 240 employees, of the 650, represented by the union. Mr. Knaggs asked if the policy has been to follow the union contract with the nonunion employees. Ms. Outlaw said they try. Mr. Knaggs asked if everything, including health benefits, is on the table. Ms. Outlaw said if they put it as one of their items. It would be impact bargaining, if it were to be changed, and subject to negotiations. Mr. Knaggs asked what input the Commissioners have in what goes on the table. Ms. Outlaw confers with the Board. They are on the front and back end. Mr. Donovan added that his recommendation about Healthy Kids would need to be negotiated because the County would pay the employee's cost and still save money. Everybody would benefit. Ms. Outlaw said they would have to learn the details to move forward with that. Mr. Knaggs asked about the schedule to determine what is needed versus what is desired or what is mandatory and what is nice to have. Personnel is a tough issue and may be down as low as possible. The other options are operating and capital. Maybe they should go after programs. Ranking a program might be easier. Programs cover operating and personnel. Ms. Outlaw called them functions when she presented options. They will hit both sides, operations and personnel. Mr. Knaggs said his preference would be to start with something that has programs to use as a test case. There are not a lot of programs in the County Administrator's department. Ms. Outlaw said Parks, Recreation and Facilities (PRF) is really program based. There are some in Housing. PRF is the biggest department with programs. Mr. Knaggs is open to start with PRF. Ms. Outlaw said they could do an organizational chart by functions and programs for each department if the Committee feels it would be helpful. Mr. Knaggs would like the chart, but does not want to slow down the process. Mr. Lounds said the breakdown he was trying to achieve is essential, support for essential services, nonessential services and administration. He asked Ms. Outlaw if the $9 million under operations for PRF includes the fairgrounds, ballpark and golf course. Ms. Outlaw said it includes all that are General Funded. The golf course is an Enterprise Fund so it is not included. The athletic fields, sports programs and funding for Digital Domain Park is in there. Mr. Lounds asked if any suggestions to get them on a more pay as you go fee would reduce the operation cost. It would offset it. Mr. Casey added that as long as the collection of the fees does not cost additional money. Ms. Outlaw asked if the fees go back to that department. Ms. Gouin explained they do as part of the revenues for the General Fund. It is not included in the numbers for personnel, operating and capital. Ms. Outlaw added that it is not an Enterprise Fund that has to break even. Mr. Lounds said he would not want to set up a $10 fee that costs $12 to collect, but if the golf course is below competitive prices, maybe they should bolster their prices. Ms. Outlaw answered that they had just done that. Mr. Lounds thinks they should take that example to the Fairgrounds and review the ballpark. He feels it costs a great deal to support the Mets Stadium. Ms. Citizens' Budget Committee February 17, 2012 Page 6 Outlaw said there is a gap between revenues for Spring Training and the bed tax portion that funds the operation and the costs. It has been going down. This year it is about $600,000. An increase in attendance and sales will increase the money back to the County. When tourism increases, it will help. General Fund kicks in and picks up the gap. Mr. Knaggs asked about next month. Ms. Outlaw reported on the February 28t" Board workshop. They will do an update to the Board on Fund Balance numbers. Fund Balance is used to help balance the budget. The last update showed about $8-9 million out of balance for FY14 so the Committee took on the task of putting together recommendations. There are always changes. We budget the tax revenue at 95% collection. Last year 97% was collected so there will bean increase in revenue. There will be an updated number of where we will be in FY14 if all things hold steady. That may impact how the Committee wants to hold their review. She asked them to consider waiting until after the update to decide how they wanted to proceed. Some of the gap will be closed. OMB is finalizing the numbers. Mr. Culverhouse agreed that maybe they should wait. Ms. Outlaw added that the Board asked that the CBC be at the table for the workshop at the Fenn Center. The Constitutionals, State Agencies and Outside Agencies, who are funded from excess fee revenue, have been invited. Part of the goal is to be sure everyone understands fund balance and has an opportunity to ask any questions. There is always a challenge when the Comprehensive Annual Financial Report (CAFR) comes out. She plans to boil down the total number to the operating fund balance number. The Board is going in a different direction. They want the other agencies involved on the front end so that when the budget is developed, everyone will have a good understanding. Mr. Casey asked about delinquent tax revenue collected later. Ms. Gouin answered that it goes into the fund it is supposed to go into. If more than anticipated is collected, it goes into the General Fund. Mr. Casey confirmed what Ms. Gouin had said. He asked about the FY14 shortfall. Did they change any collection of revenue based on property value? Ms. Gouin answered that they used the FY11-FY12 numbers for revenue and expenses. They will also use those numbers for FY13. The only changes are the reclassifications. Some changes were taken to the Board in December. They took a picture in time and anticipated numbers staying the same. They know there will be changes. Mr. Casey said there have been some positive results to value. They believe the bottom was hit. He asked what increase would be needed to cover an $8-9 million gap. Mr. Knaggs said the number for the property taxes comes from the Property Appraiser (PA). The current PA is not willing to give estimates. The County has not tried to anticipate increases in values in their budget increases. Ms. Bachelor thinks it is a valid question to know what it takes. They have a good idea. Ms. Gouin said they did anticipate a decrease when they knew there was a 5% drop. Mr. Knaggs clarified that because they were told by the PA to expect it. Mr. Casey asked about stress testing. What would a 1 % or 2% change be? Ms. Hill answered that in FY12 the General Fund and Fine and Forfeiture Fund are budgeted just under $100 million in property taxes. If the value were to go up 5%, it would yield about $5 million, roughly 1 % per million. Mr. Casey summarized for Citizens' Budget Committee February 17, 2012 Page 7 property values to cover without any changes, you would need an 8 - 9% increase between FY11-FY12 and FY12-FY13. Mr. Casey said maybe they should look at stress testing. He gave an example from a board he and Mr. Donovan are on. Ms. Outlaw said they do it. They do not have a computer program, but it is part of the yearly process. In a prior year, we called it scenarios. Ms. Outlaw went back to the questions of what would be needed. They are looking at the $8-9 million projection for FY14. She stressed projection, which is no longer good in that we know we have 2% to the good and the numbers are being refined. When we get to the wall that we no longer have savings, we estimate that we would need a 21% increase in property values to cover the $21 million gap. Ms. Hill added that the projection for FY 14 is a $21 million operating gap but we have approximately $13 million in fund balance to get through that year. 8% might get you through FY14 but there would be no fund balance for FY15. Ms. Outlaw said at some point the County will have to solve the question of whether to change tax revenue or expenditures. Right now expenses and revenue are out of balance by $21 million. We are fortunate to have fund balance money to plug the gap. Budgets are so tight, we are no longer able to accumulate savings. You can see the trend as you cut things out. Each year they try to stay ahead of the curve by accumulating savings. They will always have fund balance, no question, but normally it will be 5-10%. It has been about 45%. Mr. Casey asked about the balance. Ms. Outlaw said reserve and fund balance are the same. Mr. Knaggs added that it is the pot of money not earmarked. It can be spent in the future. We had a big savings account that has been dwindling down as the revenues have been exceeded by the expenses each year. The loss has been funded by using the surplus money. The surplus money is gone in FY14. Mr. Knaggs is concerned about the years after FY14. Mr. Casey said they will have some fund balance. Mr. Knaggs said there is no inflation built in. Ms. Outlaw believes it will be a huge challenge in the future. The County and Agencies have not given a cost of living adjustment (COLA) in the last five years, but she asked how long you can go. If you took the County Administrator out of the equation and look at the rest of the employees, 64% are making $25,000 and under. At some point, something will have to be done. Our employees are becoming the working poor. The Tax Collector has a couple working for him that has to go to the-food bank and the two of them work. He has been encouraging her to recommend a cost of living increase. She feels that pain. At some point, COLA will have to come back into the equation. It has been five years without an increase. Mr. Knaggs said the Sheriff's Department has not replaced a car in years. The deputies have not had an increase in five years. Mr. Donovan said, "But they have jobs." Ms. Outlaw said that was appreciated. Mr. Knaggs said there is a $21 million gap sometime in the future. The figures don't reflect an increase in property values, inflation or basic COLA. He disagreed that they should wait until after the next meeting to decide. He would like to see the two things they asked for. He'd like to get started. Citizens' Budget Committee February 17, 2012 Page 8 Mr. Donovan said he is not an expense person but an income person. If we get enough income, we can cover the expenses. Real estate taxes are not going up. Where could we get more money, grants? Ms. Outlaw said grants have dried up. The grants do not come into the operating budget. He is trying to figure out how to bring more money in. He thinks the stadium is fantastic, even though we subsidize it; the small businesses make a lot of revenue from it. Ms. Outlaw answered that they had gone through a host of revenue initiatives. In various areas, they are seeing incremental increases but not millions of dollars. The largest source of revenue is property taxes. The other sources are State revenue sharing and sales tax. The economy is out of our control. Mr. Donovan asked if there is an advocate that fights with the State for the County. Ms. Outlaw said there is. A lot is based on the size of the County. We go to the local delegation every year. The Commissioners go to Tallahassee. We have someone in Tallahassee as a state lobbyist. Mr. Casey asked about delinquent taxes. They are sold. Ms. Gouin said discounts are also a factor in the amount collected. Value Adjustment Board and additions and deletions to the role affect the amount. We are not given numbers during the year. Mr. Knaggs added that you are looking at a budget two years out, that is the reason for the 5% rule. What occurs will never equal 100% of what was told two years prior. Mr. Casey and Mr. Knaggs discussed the budgeted number. Ms. Hill explained that the number they used in FY12 equals the amount on everybody's total tax bills, it does match. But, 100% will never be collected because of discounts. On other generic revenue sources where we budget $100,000 for fees, it is a guess. It is discounted 5% to be conservative. Mr. Donovan asked if the property tax discounts could be reduced. The discounts are established by State law. Ms. Hill said some legislation, that she had seen proposed, went the other way. Ms. Gouin said there are a lot of bills proposed that would hurt more than help us. Ms. Outlaw said sometimes they take money for the State. Mr. Lounds thanked Ms. Outlaw, staff and the Chamber of Commerce for continuing to move on the Task Force issue. The heartbeat of the community is small business. Anything that moves the recommendations forward will help. He repeated his thanks and wishes that it moves forward. Ms. Outlaw expressed her appreciation. She feels it will be a huge benefit to the small businesses in the County. There has been a lot of good feedback. Mr. Satterlee said it will be on the Board's Informal agenda for March. They have been working with the Task Force to iron out differences. Most of them are ironed out and they planned to meet in the next week. Mr. Lounds asked when it would come before P & Z. Mr. Satterlee estimated April. Mr. Lounds encouraged all to understand that it is a boost to the economy. Mr. Culverhouse said anything that could be done to get local business here instead of neighboring counties and encourage the ones here to stay is a benefit: Mr. Lounds added that if they hire two or three employees, it is a boost. Ms. Outlaw asked for the plans for March. Mr. Knaggs had mentioned his desire, maybe they should vote. Mr. Lounds thinks it is the purpose of the Committee, and they should Citizens' Budget Committee February 17, 2012 Page 9 move forward. Mr. Culverhouse said they would get the appropriate department heads to discuss the functions. Ms. Outlaw clarified for March that they would bring PRF broken out by various programs and functions. That would be tough because Ms. Lowery is the Interim .Director and they are overwhelmed with the reorganization and budget. It was decided to do Housing. Mr. Knaggs asked for Housing and the overall chart. Ms. Ryder said that all Housing is grant. funded not General Fund funded. They meant the Department, Housing and Community Services. Mr. Lounds asked about progress on finding a PRF Director. She plans to put the PRF and Human Resource Director positions out the following week. Mr. Donovan asked for the Library budget. It is online and the link would be sent. Ms. Outlaw repeated that March would be Housing and Community Services and they will bring the breakdown of all the operations on a programmatic or function basis. Ms. Outlaw reminded them that the Board asked that the Committee be at the February 28th workshop at 10:00 a.m. at the Fenn Center. Mr. Lounds asked about the Research and Education Park. Ms. Outlaw answered that Mr. DeVries is working every day, trying to get tenants to come in. As the infrastructure is moving, it puts them in a better position. The CBC meetings are scheduled at 7:30 a.m., the third Friday of the month in Conference Room 3. ADJOURNMENT Mr. Knaggs made a motion to adjourn the meeting. Mr. Culverhouse adjourned the meeting at 9:04 a.m. Respectfully submitted by: Brenda Marlin The next CBC regular meeting will be held on ,Friday, March 16, 2012 at 7:30 a.m., in Conference Room #3, at the St. Lucie County Roger Poitras Administration Annex.