TOWN OF
TOWN COMMISSION WORKSHOP MINUTES - REVISED
COMMUNITY CENTER,
PRESENT: William E. Stacey,
Mayor;
1. CALL TO ORDER
Mayor Stacey called the meeting
to order at
2. ROLL CALL
The roll call was performed.
3. INVOCATION
The Commissioners dispensed with the invocation.
4. PLEDGE OF ALLEGIANCE
Mayor Stacey led the audience through the Pledge of Allegiance.
5.
DISCUSSION
ON BUDGET STRATEGIES FOR FISCAL YEAR 2009
Mr. James Bursick, Town Manager, explained that what he did when preparing the backup for today’s workshop was to prepare an outline of items that they would be going through and some detailed backup information. He told the Commissioners to feel free to ask any questions that they might have at any time during the presentation.
The first item the Town Manager reviewed
was the FY 2008 financial position. He said that the Town Accountant has
prepared a projection of what the rest of the year will look like. Fortunately,
it does not look as bad as what they had originally thought it would look like. He said that they did not budget the First
Responders dollars, but it looks like they will be getting those dollars
(approximately $37,550) after the
Mr. Bursick reported that they have received $44,000 from FEMA for repairs to the pier.
They have close to $35,000 in their Contingency Fund, which they have not needed to use so far this year. Additionally, staff has also been very careful with the expenditures made by each department.
Mr. Bursick covered the projections for the FY 2009 Budget. He started by going over the revenues and what impact the constitutional amendment will have on their revenues. With the Homestead Exemption, they are looking at a $65,376 reduction in ad valorem taxes. He said of the 1,606 properties in the Town of Melbourne Beach, 1,071 properties receive the homestead exemption, which equates to 67%.
As far as portability, they do not know what impact that will have on the Town due to a lack of information of real estate transfers.
Vice Mayor Price noted that the actual turnover in the Town of Melbourne Beach is relatively low, so he felt that the impact would probably also be low.
It is unknown what impact the $25,000 exemption for tangible personal property for businesses will have on the Town.
The limitation of 10% in the annual increase in assessments on non-homestead properties and businesses will only affect the Town during times when the market is experiencing extraordinary property value increases.
Mr. Bursick moved on to the economic impact for the General Fund Revenue for FY2009. He said that projections are below fiscal year 2008 as follows: state revenue sharing ($10,000), half cent sales tax ($8,000), local option County gas tax (no impact), building permit fees ($5,000), communication services tax (no impact), interest on investments ($4,000), and ad valorem property taxes due to reduction in property values (unknown). We will not know the effect on property values until the certification is received from the Property Appraiser which should be around June 1st. The total projected revenue short fall is approximately $130,000.
It was noted that there has been a drop off in building fees because of the reduction of construction activity.
The Commission had a lengthy discussion about the revenue that they get from the County for First Responder ($37,541).
Mr. Bursick reported that it is pretty safe to say that they will not receive those funds from the County next year.
Vice Mayor Price explained that this is a tax that goes into the County coffers for ambulance services (first responder services). The Town Commissioners all agreed that we should be allocated a fair share of First Responder Taxes.
Vice Mayor Price wanted First Responder funds budgeted since it appears that we will not know how much the Town is to receive until after budgets are approved. Vice Mayor Price suggested that the Town should formally request the County’s anticipated funds to assist us during the budget process. The Commission directed the Town Manager to send a letter to the County asking what funds our Town is likely to receive.
Mr. Bursick moved on to expenditures. He reported that he expects the Town’s contribution to the Police Pension Fund to increase by $40,000. He explained that the primary reason it has gone up this year was because it has been low for the past couple of years. He said that historically they were paying $110,000 and $120,000 then it went down to $80,000 last year and $60,000 for fiscal year 2008. Next year the projected contribution is $100,000.
Vice Mayor Price expressed that the earnings on investments are falling and that this fact will impact negatively on all pension plans.
Mr. Guglietta suggested looking at putting the police retirement plan under the State.
Mr. Bursick said that they could look at that.
Vice Mayor Price commented that the State has made serious errors which have cost the municipalities who chose to invest through State mandated investments.
Mr. Bursick projected audit fees to increase by $15,000. He reported that they were getting new audit proposals and the fees will probably go up to $30,000 from the $15,000 that they are being charged now.
There may be an increase in the general employees’ retirement contribution. He said that ½ of 1% increase equals $1,500.
Mr. Bursick discussed the Consumer Price Index (CPI)/Inflation rate. He said that the second half of 2006 to the second half of 2007 was around 5.1% according to the consumer price index. He looked at the closest index for this area, which is the Tampa/Clearwater/St. Petersburg region. He said that this will have an impact on some of their expenditures.
The next item discussed was salary
adjustments. In October 2006, the
comprehensive adjustment to employee pay scale and salaries resulted in the
placement of most employees at the bot
Mr. Bursick noted the large increase in health cost experienced by the Town in March, 2008. He said that the cost of dependent coverage and the out-of-pocket expenses for employees have increased. Because of this increase, it more than offset the cost of living adjustment. He felt that they needed to do something for their employees this year so that they can meet their living expenses.
Commissioner Guglietta suggested looking at having the Town pay for all of the dependent cost of the insurance for employees who have to pay for dependents. He was told that there was a very small amount of employees who needed dependant care.
Mr. Bursick moved on to capital expenditures. He intends to resubmit their grant application for the dune crossover in FY2009, if it is not funded in the current budget year. The estimated cost of the crossover is $75,000 ($36,900 of this amount was transferred to the Ocean Park Capital Improvement Fund in FY07).
Mr. Bursick reported that they need an additional storage facility. He said at this time they do not have any additional covered storage space, and they could use one more storage unit. He said that they are looking at a couple areas inside fenced areas.
Commissioner Evans asked the Town Manager if they were looking at a block building. Mr. Bursick answered yes and said that the size they are looking at is about a 20’ X 20’ building.
The Commissioners talked about
disposing of the old fire truck. They
agreed to give it to someone who can utilize it such as
Mr. Bursick made the Commissioners aware that there are some vehicles that will need to be replaced in the future.
Mr. Bursick reported that some
residents have asked for landscaping along
The total projected increase in expenses (not including salary adjustments and a factor for inflation) is $56,500, and the total projected shortfall in the General Fund is approximately $186,500.
Mr. Bursick came up with a list of some potential options for addressing the projected General Fund shortfall for FY 2009. He said the reduction to expenses needed to compensate for the entire shortfall would equate to 9.3% of the total General Fund budget. He felt that it was safe to say that this level of reduction would result in severe reductions in service levels, including the lay off of employees.
The Town has adjusted their fees for services, i.e., building permits, site plan reviews, facility rentals, etc., on a regular basis. The remaining revenue sources that could be adjusted to address the projected shortfall are Ad Valorem Property Taxes and the Public Service Tax.
Mr. Bursick explained that an
increase in Ad Valorem Property Taxes is restricted to the 10% above rollback limitation
for
Mr. Bursick commented that the
adjustment to the Town’s Public Service Tax rate is the remaining source with
enough capacity to provide sufficient funds to address the projected
shortfall. The Town currently levies
6.65% on electric and gas services under this tax. He said that
Mayor Stacey asked how the Commission felt about a rate of 9.5% for electric and water services.
Commissioner Evans expressed that they have no other choice but to raise additional revenues. She said that the big key for success is to educate the community.
Vice Mayor Price commented that they have approximately 1,600 properties in Town. With a shortfall of $180,000 or less, say $160,000, they are looking at an average increase of a $100 per property owner. That amount would get them where they need to be.
Commissioner Evans disagreed with Vice Mayor Price. She said that they are not addressing the situation they are facing with capital needs, stormwater improvements, etc. She suggested doing what they need to do this year so they don’t have to do this again for a couple of years. She said that this community wants to maintain the level of services that they have, if not improve them.
Vice Mayor Price said that they would need to start looking at ways to fund long range stormwater improvements.
Commissioner Evans noted that they could look at getting some funding from grants. She expressed that they needed to be realistic and practical and not terribly optimistic about getting help from somewhere else.
The Commission talked about directing the Town Manager to look into raising the utility taxes to a recommended area of 9.5%.
Commissioner Evans suggested that they may also want to consider raising the millage rate and set the money aside to be only used for capital improvements and stormwater improvements. She noted that this would require a referendum. However, she believes that this Town would vote for an increase if they understood what they were getting.
Mayor Stacey questioned if they should about talk about stormwater improvements at this time.
Mr. Bursick explained that a rate study would need to be done before they have such a discussion.
Vice Mayor Price made it clear to the Town Manager that everything is on the table. What this Commission wants to do is bring this Town into operating solvency. They need direction from him on what they can do in this budget year to start the process. He reiterated that everything is on the table. He instructed the Town Manager to come back to them with a recommendation and they will do their job after they look at his recommendations.
Commissioner Tennant thought that Mr. Bursick had made recommendations (referring to his memo) and he is waiting for the Commission to make some decisions.
Mr. Bursick stated that these were options for the Commission, but he would come back to them with his recommendations to address next year and future budget years, including capital projects that need to be completed.
Commissioner Tennant commented that the taxpayers might get less of a tax bill this year with the property tax amendment being passed, meaning that this would probably be a good year to make the necessary increases.
Commissioner Evans expressed that what they are asking for is the best way to finance their future and they will need to defer to the Town Manager for the answers.
Mr. Bursick stated that he would put some recommendations together, incorporating the best solutions. They can then hold another workshop to discuss his recommendations. He suggested holding the workshop at the end of April or the beginning of May.
With nothing further to discuss,
today’s meeting adjourned at
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TOWN OF
______________________________
William G. Stacey, Mayor
ATTEST:
________________________________
Lenore R. Milan, CMC, Town Clerk