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HomeMy WebLinkAboutMarch 16, 2012 Approved Meeting MinutesCITIZENS' BUDGET COMMITTEE Meeting Date: March 16, 2012 Conference Room 3 MEMBERS PRESENT: John Culverhouse, Chair Ron Knaggs, Vice Chair Edward Lounds Jane Bachelor Patricia "Pat" Ferrick Richard Pancoast Craig Mundt Carl Hensley James Clasby William Donovan Bill Casey MEMBERS ABSENT: Dan Kurek Jay L. McBee Stephanie Morgan Dana McSweeney OTHERS PRESENT: Faye Outlaw Beth Ryder Marie Gouin Jennifer Hill Sandi Morando Don West Mark Satterlee John Ferrick Laurie Waldie Karen Smith Robert O'Sullivan Joe Cimino Garry Wilson Michael Quinn Toby Long Lee Ann Lowery Michael Brillhart Heather Young Diana Wesloski .Susan Jacob Stefanie Myers Sophia Holt CALL TO ORDER Mr. Culverhouse called the meeting to order at 7:36 a.m. APPROVAL OF MINUTES -February 17t" Meeting After a motion and second, the minutes were unanimously approved. SUNSHINE POLICY -ASSISTANT COUNTY ATTORNEY, HEATHER YOUNG Ms. Young handed out a memo and attachment (see attached). ,She explained the three basics of the Sunshine Policy. The meetings have to be noticed in advance, open to the Citizens' Budget Committee March 16, 2012 Page 2 public and minutes have to be taken. She then defined a meeting. That is when two or more members have any type of discussion in regard to matters that might come before the body in the future for action. The members need to avoid discussing issues in person, by letter or email and avoid responding Reply All to emails. Ms. Young gave her phone number for any future questions. Ms. Ferrick asked if minutes must be taken at a special meeting by staff or Committee member. Ms. Young answered that it doesn't matter who takes the minutes. It normally would be staff. The meetings don't have to be recorded, but minutes have to be written. REVIEW OF BOCC WORKSHOP Fund Balance Update Ms. Outlaw updated- the Committee on the February 28t" Board Budget Workshop using the attached PowerPoint presentation. The primary topic was the current status of our fund balance. The Legislative session is now closed and there are some things that will impact FY14's shortfall. The major challenge. for the group is to have a plan for a sustainable budget. Everyone must work cooperatively. Property values coming back would be the panacea. Mr. Knaggs asked about the savings achieved in the past year. Shouldn't they be reflected in future years? Ms, Outlaw answered that it is. Budgets will be trimmed back, where appropriate, in the budget process. Not the entire amount, because some of the savings were vacant positions. There will be a modest reduction. Utilities is another example that will have to be investigated. Mr. Knaggs said there are a number of recurring things on the schedule. When you gain knowledge of recurring, you adjust the budget. He did not feel it was done in the presentation. Ms. Outlaw said he was correct. Some of the $9 million would be recurring in FY12, 13, 14 and maybe 15. It would accumulate to help in the future. Ms. Outlaw agreed except for saying all three. years. As an example, the Health Insurance budget would reflect the amount, but the direction from the Board and the Constitutionals was to go on a year-by-year basis, based on what is in the health insurance reserve. A jump in health cost is predicted. Identified recurring savings will be reflected in the budget. Per State Statute, the ad valorem tax collection must be budgeted at 95%. Typically, you are going to collect more than that. Mr. Knaggs feels there is no safe way to project it. Mr. Knaggs asked Ms. Outlaw if she agreed that the savings achieved should become the actual and be reflected in the upcoming budget, if they were expected to be recurring. She did agree. That would almost close the gap in FY14. Assuming nothing else changes, it could even help FY15. Ms. Outlaw said how the voters vote on the amendments in November will affect FY14. Mr. Knaggs started to ask how much the property values would need to increase, but Citizens' Budget Committee March 16, 2012 Page 3 decided they lag behind. Ms. Outlaw said that 1 % in property taxes generates about $1 million. June 1St we will know where we will be in property values. Mr. Knaggs said we keep shoving the gap down the road, which is good. Ms. Outlaw agreed. Mr. Knaggs said property values would need to go up about 20%, but we can't predict three years in the future. Mr. Knaggs thinks it may go down next year and then hopefully start going up. Mr. Pancoast asked about Beau Rivage. Ms. Outlaw said that Mr. Brillhart would address the issues.. Mr. Pancoast asked about the 3% retirement funding. Ms. Outlaw said the Judge ruled that it was illegal to take the 3%. Since the employees pay the 3%, it reduces the County's share by 3%. They will continue to budget that way until the ruling goes through the appeal process. Mr. Pancoast asked .about the $900 million expansion at FPL. Ms. Outlaw did not know the value, but it will affect the collection the year after it is added to the tax role. Mr. Satterlee thinks the project will not be complete until 2013, so the effect may not be until 2014. Mr. Hensley said he wouldn't depend on any of it recurring. It is savings for one year. Mr. Knaggs disagreed. Mr. Lounds said the savings could be put in a cubby hole. Ms. Outlaw said they were correct. The additional revenue from the tax collection would close the FY14 projected gap. Mr. Hensley asked if she could guarantee the collection next year. Ms. Outlaw said she cannot guarantee anything. The point is that they have to budget 95% collection; but through collection or the lien process, they get more. It would probably be enough to close the FY14 gap. Some of the items will be changed during the budget process. She does not expect the next budget to be $3.4 million under the current budget. The current BOCC operating budget is $40 million. Mr. Casey said Collections is an unfair category to use because you will always collect more than 95%. You will never have every tax payer pay in November. But you can't budget for it. But he agreed with Mr. Knaggs, that you will always have a higher number. Mr. Knaggs said philosophically it is very good news, for a variety of reasons, because it helps to close the shortfall. His negative side says, but we still have a $21 million shortfall, it is just another year out. We are hoping things improve during the intervening period. We have to depend on the tax collection number to fill the shortfall. When he ran a business, you never drove budget to budget; you drove the current year off last year's actuals and justified any increases. You cannot attain the comparison if you don't put the $3.4 million in the budget. He thinks it is a mistake. Ms. Outlaw understands, but is not going to reduce the budget by $3.4 million. There will be spirited discussions. Because of unfilled positions and utilities she cannot. She will reduce where she feels it is appropriate. Mr. Knaggs said she missed his fully justified increase point. Last year's prices should not drive the current year for gasoline prices. Ms. Outlaw thinks they are saying the same thing. But Mr. Knaggs expects her to start at $3.4 million dollars lower and justify the increases. Ms. Outlaw said that even though she does not use the same vernacular her staff would tell him that it is what she does. They are in agreement. Mr. Mundt asked if Mr. Brillhart would discuss the potential Medicaid charge from the State and impact. Ms. Outlaw answered that he would. Citizens' Budget Committee March 16, 2012 Page 4 Mr. Lounds asked if there is any increase in commercial building. Mr. Satterlee reported that they track all building permit activity each month. They are seeing a steady increase in the number of building permits. Commercial permits are still lagging somewhat. They received 81 building permit applications on Wednesday because the building code is changing. Ms. Outlaw thought the permits were for repairs, not new structures. Mr. Satterlee said it is a lot of that. They are seeing more single family houses. Mr. Lounds is more interested in the commercial end. He feels that as the commercial goes, so goes the economy. We play catch up with the housing values. Mr. Satterlee feels it is good to see activity and Mr. Lounds agreed that all activity increase is good. Mr. Lounds asked about the City's commercial activity. Mr. Satterlee had not heard that there had been an increase. Ms. Outlaw summed up that the picture is better, but we are not yet out of the woods. Most of the comments had been on point. Next, would be to hear about the items from the 2012 Legislative- Session. They will continue to monitor and update the Committee and the Board. The budget is balanced for FY14, but we have to look out for FY15 or FY16. Constitutional Amendments Michael Brillhart passed out and put the attached spreadsheet, 2012 State Legislative Issues of Fiscal Importance to County on the screen. Most of the legislation had not been signed by the Governor. They looked at projected fiscal impact. Other items could have regulatory or operational impacts, but for the most part, the spreadsheet shows the fiscal issues. The issues that deal with Constitutional Amendments will be on the November 6, 2012 ballot. They would require 60% voter approval to be implemented. They all have a January, 2013 implementation date. Mr. Casey clarified that any impact would be only on future income. Ms. Outlaw agreed that we wouldn't lose anything, we just wouldn't gain. Mr. Casey asked if the Beau Rivage number was only income or income less expenses. Mr. Brillhart answered it was only income. It does not include drainage, right-of-way maintenance issues or other operating expense. Ms. Outlaw said the challenge is that the County does not have a separate budget for Beau Rivage. It has not been an area where millions of dollars were spent on an annual basis. The money collected goes into areas outside of road improvement, so it will have an impact. Mr. Brillhart asked the members to change the number on the County Medicaid Contribution to $5,145,053. Ms. Ryder would be able to address any questions. There is a tremendous amount of backlog in the State's system for Medicaid billing. The State is trying to make the 67 Counties pick up the backlog dating back to 2001. They have examined the backlog & redirected funds to the Counties by their formula. The projected impact to our County would be $5.1 million for FY13. We have $1.4 million budgeted this year for medical services and nursing homes. It would be a big change. Mr. Brillhart also mentioned a revenue decrease. The hopes are that the Governor vetoes the bill and we Citizens' Budget Committee March 16, 2012 Page 5 are billed a number more consistent with the current year. Ms. Outlaw explained the revenue decrease. The portion that we owe comes out of our'/2 Cent Sales Tax revenue and Revenue Sharing money. Ms. Hill added that they are proposing to withhold the portion that is owed from the. State Revenue Sharing money. Going forward they are proposing to withhold our portion from the % Cent Sales Tax money. Ms. Outlaw said that would be even more impactual. It could potentially affect the money we use for debt service payment. Ms. Gouin explained that the collection for the'/2 cent sales tax is about $6 million. We pay debt service on $5 million of that. State Revenue Sharing is about $3 million. There is $900,000 of debt service payment. Ms. Outlaw said there was a real impact there. Ms. Hill added that there is some language in the bills saying the State would make sure there was enough money to cover debt service obligations. They have not fully analyzed the implications. Ms. Ryder emphasized that it is an estimate based on the backlog from 2001. The number is going to go up. They do not have January -April, 2012 in the number. It is substantial. The one saving grace is that $1.8 million is protected according to a chart provided by the State. Ms. Ryder wishes someone in the room had the Governor's ear. She has been processing the invoices for many years and we only authorize payment on invoices where the State supplies a valid address, so they can prove it is a St. Lucie County resident. The billings have been inaccurate through the years. They cannot go back to 2001 and justify. She has served on State-wide committees. They delete any billing that they cannot prove is a St. Lucie County resident. Ms. Ryder's job is to pay for St. Lucie County residents and the responsibility of other Counties to pay for theirs. The State has decided to reverse the situation. They would withhold the money until we provide documentation and ask for a refund. Ms. Outlaw said they shifted the burden of proof. Ms. Ryder feels it should be brought to the Governor's attention. She heard in open session that the Counties only pay what they had budgeted. That is not the case for St. Lucie County. We authorized what was accurate. It is a legal expense of Ms. Ryder's department. She thinks there is some misinformation going up the ladder. Florida Association of Counties put out a good letterto the Governor, laying it all out, and they are hopeful that he will veto the bill. Ms. Hill said the last estimate of the backlog was over $15 million for St. Lucie County. The way they are collecting it is by withholding up to 50% of our State Revenue Sharing, which is in the ballpark of $1.5 million. The impact over time would be $15 million. The spreadsheet shows the one year impact. The second phase is going forward. Shifting the burden of proof is changing the numbers from the ballpark of $1.4 million each year to approximately $3.6 million. Ms. Ryder added that another wrinkle is if we don't appeal it, we get a 15% discount. If they do appeal, it is a risk that they would not accept the documentation and 100% would have to be paid. Ms. Outlaw said there is an incentive if you don't appeal. Stefanie Myers is the person in charge of this function. Ms. Petrick asked about correcting the Medicaid number. Ms. Myers informed the Committee that the State has had four different computer systems Citizens' Budget Committee March 16, 2012 Page 6 since 2001. The average error rate in FY 11 was 68%, based on our ability to verify the addresses. Another County had 73% error rate. Instead of proving the invoice is for a resident, Stefanie's group now has to prove a negative, which means they have to figure out which County the patient does reside in. It is very time consuming. She thinks it is worth it to be responsible with the taxpayers' money. Mr. Casey asked the chance of the nursing homes or assistant living facilities are overcharging.. Ms. Myers answered that with the nursing homes we pay $55. It is a set rate. Mr. Casey asked if they paid $55 for someone who was not there. Ms. Myers gave illustrations. Sometimes patients put the address of someone they are visiting when they live out of state. Often times they put the nursing home address as prior address. The State then sends the invoice to St. Lucie County. The State says they are going to fix the system and be able to make corrections within 10-15 days. DCF does not verify addresses. Mr. Donovan asked if they have a Medicaid card with the address. Ms. Myers answered that there is no address, just a number. They send a notice once a year for renewal, if the notice is not returned, they assume the address is correct. Most people that get married do not report it to Medicaid. It may change the level of income and make them ineligible. Mr. Lounds asked about the 68% not being residents. Ms. Myers said they cannot verify the 68% being residents. She gets bills in error, they say other locations. The State is not making those corrections. Mr. Lounds asked about the expense to get what they need to track this. Ms. Myers is diverting staff and Ms. Outlaw has approved Manpower staff to help. The deadline for the first backlog is September 1. Information Technology is helping with software. It is a statewide effort. Ms. Outlaw added that there is a cost to the County. She confirmed that if they did not challenge the 68% in error they would receive a 15% discount on the hit. By challenging, we are subject to 100% but are able to go through the process of proving they are not St. Lucie County residents. But it impacts staff time to prove. Ms. Myers explained that they have people searching the Clerk of Court records in other Counties to verify. It is time consuming. Mr. Donovan asked about driver's license to verify. Ms. Myers said people don't always update their addresses. Mr. Donovan said he has to show his card and driver's license. They agreed that it doesn't make sense. Mr. Brillhart continued with Communications Services Tax and explained the qualifications for the Additional Homestead Tax Exemptions for Seniors. Tangible Personal Property would have the same expected impact for three years and then go up. They do not expect much impact from the exemption for surviving spouse of military veteran or first responder. If all items on the list were signed by the Governor and the three Constitutional amendments were passed, it could have a minimum. impact of $4.45 million beginning in FY14. Ms. Outlaw asked if the requirement for the amendments to pass was 60%. Mr. Brillhart answered that it is. Ms. Bachelor asked about a dollar amount for the first Additional Homestead Tax Exemption. Mr. Brillhart said the Property Appraiser (PA) told him that if it passes they will get a program that would identify the criteria based on applications. The homeownerwould have to apply. The PA's office would have to calculate by Parcel ID. They do not think it Citizens' Budget Committee March 16, 2012 Page 7 would be a tremendous amount, but they don't know. Ms. Hill added that the Board would have to adopt an ordinance and we should have the numbers before they made a decision. Mr. Brillhart handed out two pages on 2011 amendments (see attached) and explained the military exemption procedure and Homestead/Non-Homestead Property item. Ms. Outlaw summarized that when the economy turns, our values and tax revenue would be changed. It would almost be impossible that the run up that we saw before could happen again. Mr. Brillhart said that value added commodity would be almost eliminated. Ms. Outlaw agreed. Ms. Outlaw said voter approval rate is normally high to ballot questions that relate to tax exemptions. Mr. Culverhouse agreed that especially when it saves the taxpayers money. Mr. Culverhouse asked if there was anything the committee could do. Ms. Outlaw answered that Ms. Ryder's suggestion was to contact the Governor or individuals active in the State circuit. The Board has sent letters. Mr. Culverhouse thanked Mr. Brillhart, Ms. Outlaw and staff. He suggested they have the Housing and Community Services presentation the next month. Mr. Lounds thinks they should have Ms. Ryder come back and explain her Department's responsibilities and how they do it. Ms. Ryder was invited to return. Ms. Outlaw suggested Ms. Ryder zero in on which part is responsible for the Medicaid billing. Ms. Ryder thanked Mr. Lounds for his kind words. There were compliments for Ms. Ryder and her staff. Mr. Lounds asked her to also explain Community Transit and Veterans Services. Mr. Knaggs asked to do a review of four things that impact the Committee from the Informal and Budget meetings. One is timely, Draft Ordinance 12-003. Itwas presented to Planning and Zoning the night before. Mr. Satterlee presented it to the Board earlier. Mr. Knaggs thought someone, maybe the Chair; should speak in Public Comment before the Board votes. Mr. Satterlee gave the history and future schedule. It will require two Public Hearings before the Board. They hope to schedule the first one for May 1. Mr. Knaggs said Mr. Satterlee's presentation to the Board was the same as he presented to the Committee. The Committee approved it and Mr. Knaggs feels they need to voice their support. Mr. Culverhouse said he would be there. Mr. Satterlee feels it would be important for the Planning Board to know that it was not a staff generated .issue. It came out of the community. It was decided that Mr. Knaggs would present reviews from the Board's Budget Workshops at the next meeting. Ms. Ryder announced that next Thursday, March 22nd, the Ribbon Cutting would be held for the Hurston Branch Library expansion. The Friends of the Library are providing the funding for at least two years for the Children's Librarian. Ms. Outlaw added that their contribution is what drove the Board to keep that library open and going forward with the expansion. Ms. Jacob added the opening would be at 11:00 a.m. The expansion almost Citizens' Budget Committee March 16, 2012 Page 8 doubled the square footage. It is the first library construction in almost 10 years. She welcomed the members and said it was incredible. ADJOURNMENT After a motion and second to adjourn the meeting, Mr. Culverhouse adjourned the meeting at 9:15 a.m. Respectfully submitted by: Brenda Marlin The next CBC regular meeting will be held on Friday, April 20, 2012 at 7:30 a.m., in Conference Room #3, at the St. Lucie County Roger Poitras Administration Annex.