Okaloosa County BOCC — September 2, 2014 — July22,2014 budgetworkshop

July 22, 2014 Budget Workshop A Fiscal Year 2014-15 Budget Workshop of the Okaloosa County Board of County Commissioners was called to order at 1:00 p.m. at the Okaloosa County Courthouse in Crestview. Members present were Charles K. Windes, Jr., Chairman; Nathan Boyles, Vice Chairman; Wayne Harris; Dave Parisot; and Don Amunds. Also present were Gary J. Stanford, Finance Director, and Dave Skarzynski, Budget Analyst, Clerk’s Office; Ernie Padgett, County Administrator; and Greg Stewart, County Attorney. MEDICAL EXAMINER Mr. Padgett stated he was informed the Medical Examiner is out of pocket and will not be present today. HEALTH DEPARTMENT Dr. Karen Chapman, Director of the Florida Department of County Health in Okaloosa County, shared a number of major accomplishments of the department during 2014. Dr. Chapman stated her request for FY 2015 is different than past years. She explained that she is requesting the county's Facilities Maintenance Department take over janitorial services for the Health Department facilities. Dr. Chapman stated janitorial services have been provided on a contract basis for the last 14 years. She advised that she has spoken with Facilities Maintenance Director Don Turner about working this into his budget. Dr. Chapman stated her budget reflects a 5% increase. Upon inquiry by Mr. Amunds, Dr. Chapman said there would be no savings by using county forces for janitorial services. She stated the $74,000 request for janitorial services is more than what was paid this year, adding they were not getting a good product. Mr. Harris expressed his support, saying it is a good move and he thinks this is the first time the Health Department has asked for an increase. Mr. Boyles asked if this budget request takes into account any consideration for placing money into reserves. Mr. Padgett replied in the negative. Mr. Boyles asked how this process is July 22, 2014 -1- Minute Book 71, Page 157 Okaloosa County Board of County Commissioners to be followed with $1.5 Million to go for stormwater recovery and additional funds to be placed in reserves. He asked about carving out millions of dollars from the budget, how those cuts will affect departments, and if the departments will get a second hearing/presentation before the Board when cuts are made. Mr. Padgett responded the commissioners don’t have to make cuts as they go. He said after the Sheriff’s presentation he will make commentary and recommendations on concerns expressed at the last budget workshop. Mr. Boyles stated the budget being presented may not be the one which is adopted, He asked where the $3 Million for stormwater and road repairs is coming from. Mr. Boyles stressed we may not have the funds to give the Health Department a 5.3% increase. Mr. Padgett replied this is the same process we went through last year and if the Board wants to change the process, it can. Mr. Harris remarked he has never been a big fan of performance- based budgets and he has requested the Board go back to a zero- based budget format. He referred to Mr. Boyles’ earlier remarks and said this process does not give anyone an opportunity to come back to the Board. Mr. Boyles asked if the Board can take a few minutes now to hear the County Administrator’s plan. Mr. Amunds suggested that at future workshops, the County Administrator open by providing answers to questions posed at the previous budget workshop. Mr. Windes concurred. Mr. Padgett said that can be done next time. Mr. Boyles stated the elephant in the room is the Board cannot look Dr. Chapman in the face and say it can agree to the increase she is requesting. Mr. Parisot stated at the last meeting the Board approved allocation of $260,000 to continue public transit which brings the total to $3% Million to be found. Mr. Windes commented there is definitely work to be done. Mr. Boyles again asked for Mr. Padgett to present his plan at this time. Mr. Harris recommended Dr. Chapman be allowed to complete her presentation. Dr. Chapman spoke on Medicare revenues and readjusted programs for family planning and STDs. She added this is the first time since 2008 any kind of layoffs had to be done because of a revenue shortfall. Dr. Chapman projected a deficit budget but felt she could make up $125,000 to $150,000 during the year to cover the deficit. At Mr. Amunds’ inquiry, Dr. Chapman July 22, 2014 -2- Minute Book 71, Page 158 Okaloosa County Board of County Commissioners explained the impact on her budget and level of service resulting from Obamacare. Mr. Steve Czonstka, Niceville, asked Dr. Chapman if there are any plans to bring illegal immigrants to Okaloosa County, noting many are being transported to military installations. He expressed concerns about unknown health issues and if screenings will be done. Dr. Chapman replied she has no knowledge of any plans to use Okaloosa County military facilities for immigrants. She added that Senator Gaetz sent a letter to Health Services asking for their specific plans and expectations for the State of Florida but there has been no response that she is aware of. REVIEW OF PRIOR BUDGET WORKSHOP ISSUES Mr. Windes said he feels the bulk of work is done in the County Administrator’s Office but the commissioners are only getting “bits and pieces” on the budget. Mr. Padgett responded that he believes we are all saying the same thing. He understood there to be three issues from the previous workshop. Mr. Padgett stated staff will fine tune the budget as we go, stressing they are always updating as the figures (revenue numbers) come in. Mr. Padgett stated Mr, Parisot requested detailed information on the expenditure levels in the three categories: Public Safety, Essential Services, and Quality of Life. A pie chart was presented on the screen showing the percentage of allocations for each category. Mr. Stanford clarified that he understood Mr. Parisot’s question to be on the General Fund dollars rather than the entire budget and this chart reflects proposed cost distribution for FY 2015 in those three categories. Mr. Padgett gave the percentages: ® Public Safety: 58.2% or $46,449,423 e Essential Services: 31.8% or $25,374,567 ®@ Quality of Life: 10.0% or $ 8,022,406 The pie chart, as well as a bar graph, was used to show the expenditures in the 2012, 2013, and 2014 budgets, and the proposed FY 2015 budget. Mr. Padgett stated the next question was regarding the Unincorporated Parks MSTU. (NOTE: At the July 14 budget workshop, Mr. Padgett recommended a one-time transfer of $500,000 from the MSTU Reserves to stormwater for FY 2015.) He read a portion of Ordinance No. 13-21 which outlined the July 22, 2014 -3- Minute Book 71, Page 159 Okaloosa County Board of County Commissioners purposes for creation of this taxing unit. Mr. Padgett stated last year the Board moved $450,000 to stormwater. The excerpt listed specific parks to be maintained as identified in the Stipulation and Agreement dated February 14, 1984. It also provided for services and improvements within the MSTU for parks and recreational areas as determined by the Board. This ordinance added the provision to provide services and improvements within the MSTU for management and control of stormwater and “such other services and improvements as necessary for the provision of a stormwater utility.” Mr. Parisot told Mr. Padgett he was reading from the ordinance adopted last year but the Board made a commitment that the money in reserves on September 30, 2013 would remain in reserves and would only be used for parks. He said he wants to uphold that commitment made to the citizens. Mr. Parisot added he does not have a problem with “borrowing.” Mr. Amunds asked if the money from Walton County with regard to a Memorandum of Understanding (MOU) on expenses for the Medical Examiner’s Office is factored into the proposed budget. Mr. Padgett answered that Walton County was notified last year they had to make payment toward the Medical Examiner's facility. He stated that has not been factored into the budget. Mr. Windes stated Mr. Parisot was satisfied with Mr. Padgett’s comment on the Unincorporated Parks MSTU but Mr. Boyles is not. Mr. Boyles said last year it was also pointed out there would be a negative annual cost in the Parks budget which will eat up reserves to pay operating costs. He expressed great concern about robbing another half-million dollars from this reserve after the commissioners said they would not do that. Mr. Boyles said this should be fixed but not by slight of hand. Mr. Padgett disagreed, saying it is not slight of hand or robbing the fund. He told the Board they could make a run at a sales tax or a stormwater utility. Mr. Boyles told his fellow commissioners they must take charge and said he believes the suggested direction is misguided. Mr. Padgett responded by telling the commissioners they are the policy makers and staff needs direction. Mr. Boyles was of the opinion that was the subject at the last meeting and asked for alternatives. Mr. Harris said he sees the only foreseeable alternative is to advocate for a referendum. He said we will never achieve anything with piece meal efforts. Mr. Harris objected to throwing good money after bad and added that it is too late this July 22, 2014 -4- Minute Book 71, Page 160 Okaloosa County Board of County Commissioners year to put this item on referendum. He added this problem will never be taken care of if we don't get aggressive. Mr. Amunds felt if the Board makes a promise, it needs to keep that promise. He agreed with Mr. Boyles’ and Mr. Parisot’s earlier comments about not pulling any money from this reserve fund. Mr. Amunds said he believes there is consensus to direct the County Administrator to take that off the table. He continued by stating we should follow up on other revenue sources/income. With regard to the issue of Walton County sharing expenses for the Medical Examiner facilities, Mr. Amunds said just because a letter was sent, does not mean compliance and asked for a report on the follow through. Mr. Padgett replied the Medical Examiner said they billed Walton County for its share of the expenses, adding that he has not seen a signed MOU with Walton County. Mr. Amunds stated if the Board directed a MOU to be established, then it is the county’s responsibility to put it into place. He expressed concern there is no MOU in place or any information on the costs due Okaloosa County. Mr. Amunds stated someone should be held accountable. Mr. Boyles commented the public will certainly hold the commissioners accountable. Mr. Windes said these items will be placed at the beginning of the next budget workshop agenda to answer the commissioners’ questions. He said they will expect more and better answers. Mr. Boyles noted another item on the list is $1.5 Million for road repairs and setting aside additional allocation for General Fund Reserves. Mr. Padgett referred to the reimbursement from FEMA for the April 29 rainstorm event and said the State and Okaloosa County will split the remaining costs. Mr. Stanford explained that per the funding agreement, FEMA will reimburse 75%. The remaining 25% local match will be shared by the State and the county, both with a 12%% share. Mr. Stanford advised that is generally how FEMA and the State provide assistance. Mr. Padgett reiterated the budget is fine-tuned as we go and there are two months left before adoption of the budget. He advised work is continuing on increasing General Fund Reserves. Mr. Boyles commented it looks like we are tossing couch cushions and buying lottery tickets. He said everyone is asking for an increase and asked if he is supposed to nod and smile about these increases. Mr. Boyles stated he has an obligation to July 22, 2014 -5- Minute Book 71, Page 161 Okaloosa County Board of County Commissioners participate in this process and not just wait on the numbers, thinking it will work out in the end. Mr. Harris said he would like clarification from Mr. Hofstad regarding the Unincorporated County Parks Reserve. Public Works Director John Hofstad stated the number being used for this Reserve fund is $2.6 Million. He said a key point during the presentation last year was negative numbers. Mr. Harris stated we will eventually work ourselves right of any reserves, Mr. Hofstad told the Board they have no dedicated revenue source for stormwater. Mr. Amunds pointed to the use of the allocation from the Unincorporated County Parks MSTU. Mr. Hofstad replied that is a policy decision by this Board which could change. Mr. Harris said it is his opinion a zero based budget would clarify a number of these issues. Mr. Windes agreed. STATE ATTORNEY Mr. Chris Plum stated he has no presentation but the budget request is for standard operating costs. Mr. Parisot referred to the line item for building rental in the amount of $9,264 which is for records storage space. He said when the State Attorney moves into the new Shalimar building, we could probably get rid of that cost next year. Upon inquiry by Mr. Amunds about where the increases are, Mr. Plum said they are not significant. He then stated there should be a reduction in salaries from $93,000 to $57,500. PUBLIC DEFENDER Mr. David Lambert, IT Department, stated he is present to answer any questions. There were no questions. CLERK OF COURTS Mr. Don Howard, Clerk of Circuit Court, stated the proposed budget is the same format as past years. He noted there is a slight increase due to retirement costs, a slight increase in office rental costs for the Contracts & Grants Department which is paid to the county, and a slight increase in risk assessment paid to the county. Mr. Howard stated the bottom line is an July 22, 2014 -6- Minute Book 71, Page 162 Okaloosa County Board of County Commissioners increase of $26,900 or 1.91% over last year's budget. He advised there are no new positions. Upon inquiry by Mr. Parisot, Mr. Howard stated he programed in a 3% cost of living adjustment for employees. Mr. Parisot commented if he agrees to pay $500 per employee, his proposed budget will be less. Mr. Howard replied no direction was given on employee increases at the time he submitted his budget. He stated this particular budget covers only 14 out of his 110 employees. Mr. Parisot said he does not believe the Property Appraiser included any COLA. Mr. Howard said a 3% adjustment for those 14 employees is about $21,000. Upon inquiry by Mr. Boyles, Mr. Howard said if the County Administrator is using the budget he presented to him, it includes the 3% cost of living adjustment. Continuing, Mr. Howard stated the reason he did that is because in the past number of weeks, four senior level people in the Finance Department have left. He explained the Internal Auditor retired, the Grant Manager left to work with her husband, a Senior Accountant took a job in Santa Rosa County, and the Payroll Clerk left. Those long-term, higher-salaried employees will be replaced with individuals at lower salaries. Mr. Boyles questioned Mr. Howard's philosophy on the issue of Constitutional Officers following the Board's lead on increases. Mr, Amunds pointed out the Tax Collector’s and Property Appraiser’s budgets are approved by the Department of Revenue and the Board has very little say in those budgets. He felt the Tax Collector and Property Appraiser get larger increases than the Sheriff or Clerk of Courts. Mr. Padgett concurred, saying he has seen it both ways with the Constitutional Officers doing the same as the Board and others not following that path. SUPERVISOR OF ELECTIONS Mr. Paul Lux, Supervisor of Elections, stated his submitted budget does not include any increases because there was no direction from the Board at time of submission. He advised his overall budget reflects a slight increase of just over $30,000. Mr, Lux said there is no money for voting equipment in this budget because it is the Board who purchases the voting equipment and not him. He spoke about various voting machine vendors, associated costs, and certifications of the equipment. July 22, 2014 -7- Minute Book 71, Page 163 Okaloosa County Board of County Commissioners Continuing, Mr. Lux stated he has requested replacement of a vehicle for the Fort Walton Beach office. He stated the current vehicle was purchased in 1997. Mr. Lux said the vehicle is not dependable and the two fleet vehicles he has borrowed are no better than what he has. Questions were posed about the purchase of new voting equipment. Upon inquiry by Mr. Boyles, Mr. Stewart said he believes purchasing new voting equipment may qualify for sales tax referendum but he will verify that answer. VISITOR - CHRIS HOLLEY, FLORIDA ASSOCIATION OF COUNTIES Mr. Chris Holley, Director of the Florida Association of Counties (FAC), stated he was in the area and thanked the Board for interrupting its workshop to give him a moment to speak. He stated he was in Shalimar earlier to present Sheriff Ashley with a Partnership Award for his work on issues they are dealing with in Tallahassee. Mr. Holley thanked Mr. Boyles for his attendance at the National Association of Counties (NACo) meeting. He added that Bryan Desloge was successful in his election bid for the Second Vice President position in NACo, noting it has been twenty years since our area was represented. He then briefly reviewed issues/concerns before FAC both at the state and national levels. RECESS - The meeting was recessed at 2:35 p.m. and reconvened at 2:43 p.m. PROPERTY APPRAISER Mr. Pete Smith, Property Appraiser, stated the Board has a copy of his DOR approved budget and asked if there are any questions. Upon inquiry by Mr. Boyles, Mr. Smith answered this budget has nothing programed in for employee raises. Upon further inquiry by Mr. Boyles, Mr. Smith said he is proposing replacing three old vehicles which are “on their last leg.” He stated DOR is allowing him to move some money around and he will be able to purchase one vehicle in the current fiscal year and the request will be to purchase two vehicles in FY 2015. Mr. Smith stated his budget reflects an 8.8% increase. Mr. Smith introduced Mr. Walt Whittier with Cell Tower Solutions. He explained that Mr. Whittier’s company obtains July 22, 2014 -8- Minute Book 71, Page 164 Okaloosa County Board of County Commissioners complete, accurate information on cell towers which allows for proper assessment for Tangible Personal Property. Mr. Whittier made a brief presentation. Upon inquiry, he said they will begin their research work in the November/December 2014 timeframe and information they obtain will impact assessment at the end of 2015. At Mr. Parisot’s request, Mr. Smith explained the impact and positive return the work of the Property Appraiser's fraud unit has made. Upon further inquiry by Mr. Parisot, Mr. Smith stated they are auditing the non-profits this year. SHERIFF Sheriff Larry Ashley stated his proposed budget for FY 2014-15 is $2.9 Million above the current budget. He said the budget he presented to Mr. Padgett represented a 7% increase but Mr. Padgett recommended only a 3.3% increase. Sheriff Ashley then provided a history of the Sheriff’s budget from 2006 to 2014. He listed ten factors which must be considered in preparation of his budget. At the top of the list were resident and tourist populations. He noted the tourist population has increased by 30%. Those ten factors are: e Resident and tourist populations e Number of calls for service ® Crime rates and crime prevention programs e Emergency response times and citizen safety ® CPI - personnel, fleet, fuel, energy, communications, technology, ammunition, and equipment costs e Officers per one-thousand citizens ratio e Per capita costs e Turnover ratio ® Officer training and safety e Ability to respond and solve crimes against our citizens Sheriff Ashley detailed each of these factors. Some of his Major points were: ® Our per capita costs are 43% less than the national average for agencies serving a similar population size e The Administrator's recommendation would only provide for 1.35 sworn officers per thousand citizens, well below the South Atlantic Region average of 3.12 sworn officers * Since 2007, the call volume has increased 31.4% July 22, 2014 -9- Minute Book 71, Page 165 Okaloosa County Board of County Commissioners e The OCSO is 5.6% above the national average for injured officers as a result of assault ® OCSO deputies are dealing with 74.59% more violent encounters than two years ago e® ocSO is currently 155 vehicles behind the 5-year replacement schedule going into 2015 e There is a 43% failure rate in current in-car video systems ® Okaloosa County is one of the top auto visitors destinations in Florida ® 5,757 traffic crashes were reported in 2013 in this county Sheriff Ashley also discussed the number of service calls in the bed tax jurisdiction. Mr. Boyles noted there is a $2 Million gap between the Sheriff’s proposed budget and what the County Administrator is recommending. He asked the Sheriff what will go away if the gap remains. Sheriff Ashley replied he will have to make reductions in personnel and capital purchases. Mr. Boyles referred to the Sheriff's presentation and request to the Tourist Development Council (TDC) for use of bed taxes to enhance law enforcement in the bed tax district. He said the TDC rejected the request but noted the BCC makes the decision. Mr. Boyles remarked TDC’s emphasis is on marketing. He asked the Sheriff to give his perspective and if a legal opinion supported bed tax dollars for this use. Sheriff Ashley said he feels it is clear if you just look at the statutes. He also referred to the use of bed taxes throughout the State, Sheriff Ashley said public safety is public safety whether it is firefighters or lifeguards on the beach, He stated he does not know where the legal issue is but also said he thinks the Attorney General’s Opinion is clear and the auditor is wrong. The Sheriff added if it is wrong, there are many counties in violation. Mr. Stewart said it is our opinion (Nabors, Giblin & Nickerson law firm) that law enforcement is different. He referred to the Attorney General’s Opinion and said TDC dollars cannot be used for general government services. With regard to lifeguard services, Mr. Stewart stated the statutes were changed to allow for that use. July 22, 2014 -10- Minute Book 71, Page 166 Okaloosa County Board of County Commissioners Mr. Boyles stated there is a risk using TD taxes to fund these services over the County Attorney’s recommendation. He said there is a risk of a lawsuit and findings not in the Board’s favor which would require repayment from the General Fund, which is where these services would be paid from anyway. Mr. Parisot noted work is being done to change the uses of bed tax revenue and suggested pursuing this through FAC. Mr. Parisot then brought up the subject of School Resource Officers (SROs) . Sheriff Ashley said he is not certain why the difficulty exists with the state but they cannot get permission to go to referendum to ask the citizens if they would support a Sales tax to fund SROs. Mr. Windes posed questions about use of TDC revenues. Upon inquiry by Mr. Harris, Mr. Stewart stated if you fund it and you have a (TDC) recommendation against it, you must pass it by a 4/5 vote. It would also require the TDC ordinance to be amended to authorize the use of those funds and to include them in the budget. Mr. Stewart said he recognizes people have differing opinions on the law. He stated that he is not saying the Board will be challenged if it does this but if it is challenged, the Board may have a tough row to hoe. Mr. Windes asked how many counties are doing this, to which Mr. Stewart replied “Bay County.” He added Bay County did it over the objection of its attorney. Sheriff Ashley stated Flagler County uses law enforcement officers to tell people to stay off the dunes and for turtle watch. He said Walton County is funding Code Enforcement Officers to go to hotels and tell people how many can be ina room, Mr. Parisot commented if Okaloosa County becomes the test case, “so be it.” Mr. Boyles said he is willing to test the waters on this and asked the Sheriff if he has an attorney on staff who can provide an opinion on this issue. Sheriff Ashley replied in the affirmative. Mr. Stewart stated specialized equipment for patrolling the beach area is a different animal. He said there is a line there, saying there are specialized functions which can be funded by tourist development dollars. Mr. Windes stated there needs to be language which will please Mr. Stewart and not cross July 22, 2014 -1i- Minute Book 71, Page 167 Okaloosa County Board of County Commissioners the line. Sheriff Ashley stated they will draft something and get an attorney’s opinion. Discussion ensued regarding the $350,000 worth of capital needs the Sheriff mentioned. Sheriff Ashley stated they are constantly looking for funds to covers costs. He said a possible source would be the $1.3 Million encumbered for compensated absences. He said the amount being held is high and he would like to unencumber some of those funds ($750,000) at the end of the year. Mr. Amunds brought up the Board’s policy on the use of thumb drives. He said if the information had been submitted in advance he would have been prepared to ask questions. Mr. Amunds was of the opinion if we are not going to go by this policy, then it should be eliminated. Mr. Boyles echoed Mr. Amunds comments and stated staff did not present’ this information on compensated absences to the commissioners. Mr. Windes said the policy will be addressed on the agenda of a regular meeting. Mr. Padgett stated the use of some of these funds for vested compensated absences could be a win for everyone. Mr. Windes asked if the Board could approve use of these funds by consensus contingent upon a letter from the External Auditor (Angela Balent) concurring with the use. Mr. Stewart said the item should be considered at a regular meeting. Mr. Amunds said it is his understanding that once the funds are unencumbered they will not come back to the Board but the Sheriff will be requesting they be reallocated to his budget for next year. Mr. Padgett said he has spoken with Ms. Balent about that and she recommends it be done. Mr. Harris asked if the Board could be more emphatic about the use of TDC funds to make sure we keep moving forward. He requested not just talk but some action. Mr. Windes stated this issue could go back to the TDC. Mr. Harris again said instead of talking let’s do something about it. Mr. Stewart suggested the uses be specified. He said we can work together to find middle ground and still provide for the Sheriff's needs. Mr. Windes asked if there are any objections to going forward in this direction. No objections were voiced. Mr. Parisot asked about setting a public hearing to amend the TDC ordinance. Mr. Stewart commented that we cannot amend the July 22, 2014 -12- Minute Book 71, Page 168 Okaloosa County Board of County Commissioners ordinance until we know what we are talking about. Mr. Windes directed that when the verbiage is drafted, to also provide a timeline to complete the process. Discussion returned to the encumbered compensated absence funds. Upon inquiry by Mr. Boyles, Mr. Stewart stated those will be Board funds. Mr. Boyles asked if there is room for negotiations, Sheriff Ashley replied there is a gentlemen's agreement. Mr. Stewart stated the Board is under no obligation to spend those returned funds for any particular reason. He said there may be a gentlemen’s agreement in place but the money is surplus funds under the county’s umbrella and to be used at the county’s discretion. Sheriff Ashley stated he does not believe he is obligated to unencumber those funds. Mr. Boyles asked if the Sheriff can reallocate them. Mr. Padgett replied the auditor says he can. Mr. Harris remarked a long-term source of funding must be found. RESCHEDULING OF BUDGET WORKSHOP Mr. Parisot stated currently a budget workshop is set for August 7, at 1 p.m. in Crestview. He said he has a conflict with a Gulf Consortium meeting and noted Mr. Boyles may also have a conflict because of a FAC Board of Directors meeting. Mr. Boyles acknowledged the conflict but stated he will attend the county's budget workshop. Mr. Parisot suggested rescheduling the August 7 workshop to either July 31 or August 4 at 6:00 p.m. Mr. Boyles stated August 4 will work better for him. It was the consensus of the Board to reschedule the August 7 workshop to Monday, August 4 at 6:00 p.m. in Crestview. PUBLIC COMMENTS There were no public comments. ADJOURNMENT There being nothing further to be discussed, the workshop was adjourned at 4:30 p.m. DON W. HOWARD CHARLES K. WINDES, JR., CHAIRMAN CLERK OF CIRCUIT COURT BOARD OF COUNTY COMMISSIONERS (These minutes were transcribed by Teresa Ward.) July 22, 2014 -13- Minute Book 71, Page 169 Okaloosa County Board of County Commissioners