Fort Walton Beach Council minutes — 05-20-08 special minutes — reading text

MINUTES OF THE SPECIAL COUNCIL MEETING 139" OF THE CITY OF FORT WALTON BEACH, FLORIDA MAY 20, 2008 INTRODUCTION A special meeting of the City Council of Fort Walton Beach, Florida, was held on Tuesday, May 20, 2008 at 5: 30 p. m. in the Council Chambers at City Hall, with the following members present: Mayor Mike Anderson f"'" i Councilmen: Mike Holmes, Dennis Reeves, Bill Garvie, Dr. Wayne Pullen, Jim Hartwell, and Mike Minich. I I Absent: Councilman Virgil Miller; Interim Finance Director Brandy Wunker Also Present: Joyce Shanahan, City Manager; Helen Spencer, City Clerk; Toni Craig, City Attorney; Department Directors. PURPOSE Consideration of major budget policy issues to guide the development of the Fiscal Year 2008-09 Operational Budget and Capital Improvements Program. CALL TO ORDER The Mayor called the meeting to order and welcomed everyone. He requested anyone who wished to address Council to approach the podium after being recognized, and then state his or her name and address for the record. 1 PLEDGE The Mayor led in the Pledge of Allegiance. BUDGET POLICY ISSUES The City Manager mentioned the purpose of the meeting is to give Council greater input into the budget process, to look at policy decisions and help guide staff as they prepare the budget. She said some of the issues may not have enough information to make a decision tonight but Council will see them at the August budget meetings. She mentioned staff continues to look at re- organization of the City as a whole and the issues about partnership opportunities and service levels will be presented in August. She also said staff did not plan to talk about the golf club, storm water utility, and fire assessment fee as they will be discussed at a separate workshop meeting. Charlotte Dunworth, Budget and Grants Manager, went through a PowerPoint presentation that started with the objectives of the meeting are to assist City Council in understanding the City' s available revenue sources and plan of operation, and allow revisions as desired, to establish service levels and fun~ ing mechanisms in accordance with City Council' s priorities, to ascertain City Council' s position on policy issues critical to developing the FY 2008- 09 budget, and to prepare a balanced budget that matches ongoing expenditures with ongoing revenues, provides maintenance of current infrastructure, and maintains prudent cash reserves. The presentation included information on the economy based on the local unemployment rate, bed taxes, housing affordability, and the City' s population; a recap of the FY 07- 08 revenues of all funds and the general fund; the ad valorem revenues and the estimated loss of revenue as a result of Amendment One; the FY 07- 08 expenses of all funds and the general fund; personnel expenses for wage adjustments, cost- of-living adjustments, performance evaluations, medical benefits, and pension contributions; and other expenses for operations & maintenance, capital outlay, and capital improvements; the general fund reserve level of 31. 20/0; the benchmarks used to ascertain how the service levels compare with similar municipalities; and a local comparison of the assessed value and millage rate. City Council's position on the following policy issues is critical to development of the FY 2008- 09 budget: Strategic Plan Goals - General Fund Reserve level, Cost- of- Living Adjustment, Compensation Alternative, Healthcare Benefits, and Defined Contribution Plan; and Other Issues - Separation Incentives, Utility Tax Cap, Interfund Transfers, and Outside Agency Funding. 14s0cia' Council 5- 20- 08 BUDGET POLICY ISSUES cont. Strateaic Plan Goal: General Fund Reserve Level Policy Decision: Should the unreserved/ undesignated portion be maintained at 300/0? The presentation included information that the fund balance is a measure of the financial resources available, that GFOA recommends 150/0 of operating revenues at a minimum and more for coast communities, a FLOC revenue expert recommends 25- 30010 of expenses minimum for coastal communities, the City' s auditors recommend 33%) of operating expenditures, that the Fund balance I should fund one- time outlays or and not fund recurring expenses, and a portion could be capital projects used for non- recurring expenses while maintaining a 300/0 reserve. Staff recommendation is to maintain unreserved/ undesignated reserved at 300/0 of expenditures, and adjust unreserved/ designated fund balances as needed. 0 of expenditures, and Dr. Pullen moved to maintain unreserved/ undesignated reserved at 300/ adjust unreserved/ fund balances as needed. Mr. Minich seconded motion and it designated carried unanimously with Holmes, Reeves, Garvie, Pullen, Hartwell, and Minich in favor ( Miller absent) . Strateaic Plan Goal: Cost- of-Livina Adiustment 1, 2008? Policy Decision: Should there be an annual cost- of- living increase effective October 08 The presentation included information on the COLA' s received in FY 03/ 04, 04/ 05, 05/ 06, 06/ 07 and 07/ and fire for the General, Police, Fire and the April CPI of 2. 60/0; to retain public safety personnel, police COLA' s are based on surrounding jurisdictions; and the purpose of the COLA is to ensure wages keep for performance on an employee' s anniversary date. pace with inflation, exclusive of any additional reward Staff recommendation is to budget a 20/0 COLA for all employees (fire union excluded) effective October 1, 2008, pending funding availability. is Kabe Woods, 240 Brooks Street, President of Okaloosa Citizens Alliance Inc. commented the question do not should there be fewer employees who get a regular adjustment or the same employees who get as much. He then read the following statement: I am Kabe Woods and I live at 240 Brooks Street in Fort Walton Beach. I am the I am President of KLW Properties, a private investment firm and real estate brokerage and President of Okaloosa Citizens Alliance Inc. Over the next 2- 3 years Fort Walton Beach City government will be facing some of its most significant fiscal challenges in many years. Because of various citizens initiatives, legislative actions and a general a new fiscal downturn in the economy, the trend of annual revenue increases for the City will reverse and paradigm will prevail. the beginning. With state Rough estimates of 50/0- 150/0 in local revenue reductions may only be revenues down $ 3-$ 6B this year and the possibility of another $4-$ 6B next year, aggressive action on the local level must be taken now. as fiscal stewards. Tough budget times bring great opportunity and remind us of our core responsibility I on what We are also pushed to prioritize and focus our energies on Citizens most crucial needs and services. government does well - providing core government and The Okaloosa Citizens Alliance has been looking at county and city spending now for several years have talked with you on many occasions. out and We have committed to a solutions based approach and to bring ideas to you that are thought that have substance. To that end we have several suggestions for your consideration. of First, aggressively pursue economic development opportunities. According to the Department GDP in Florida at $7. 8 billion. We also have the Commerce, our area has the fourth smallest Metropolitan on the real estate industry highest government share of GDP at 330/0 and the second highest dependence a " blue ribbon" commission of elected officials and citizens be established as soon at 290/0. We suggest as possible whose mission is to grow and diversify our overall GDP. Special Council 5- 20- 08 141 BUDGET POLICY ISSUES cont. Strateaic Plan Goal: Cost-of- Livina Adiustment cont. Kabe Woods continued: Second, renew your commitment to providing core government services. Public safety and security is the highest priority and should not be compromised. Essential services such as fresh water, sewer, storm water management and street maintenance not only must be delivered, but in some cases need additional resources allocated in order to meet minimum service levels. With public safety and essential services requiring a greater proportion of a shrinking budget, quality of life areas such as parks, recreation, museums and libraries will need to manage with fewer resources or completely change their operating models to reduce costs. Consolidation, disintegration and elimination of some of these services are all possibilities that should be considered. Third, and more specific to this meeting, the Council and City leaders should put " laser focus" on delivering city services faster, with better quality and at lower cost to taxpayers. Some specific recommendations: 1. Decide today that ad valorem tax collections will be no more than the 2006 level of $5. 3MM. That is approximately a 10%