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HomeMy WebLinkAbout2007 0917 Special City Commission Meeting - Budget '- SUMMARY MINUTES Special City Commission Meeting 1st Budget Hearing Fiscal Year 2007/2008 Monday, September 17, 2007, 6:30 p.m. City of Sunny Isles Beach, Florida A TTENTION ALL LOBBYISTS: CITY LAW REOUlRES YOUR REGISTRATION PRIOR TO ENGAGING IN LOBBYING ACTIVITIES BEFORE CITY STAFF, BOARDS, COMMITTEES OR THE CITY COMMISSION. PLEASE CONTACT THE CITY CLERK FOR FORMS AND ADDITIONAL INFORMATION. AGENDA 1. CALL TO ORDER / ROLL CALL OF MEMBERS The meeting was called to order by Mayor Edelcup at 6:30 p.m., with the following officials present: Mayor Norman S. Edelcup Vice Mayor Lewis J. Thaler Commissioner Roslyn Brezin Commissioner Gerry Goodman Commissioner Danny Iglesias City Manager A. John Szerlag City Attorney Hans Ottinot City Clerk Jane A. Hines, CMC Assistant City Manager/Finance Douglas Haag Assistant City Attorney Fernando Amuchilstegui 2. PLEDGE OF ALLEGIANCE Action: Commissioner Iglesias led the Pledge of Allegiance to the flag. Mayor Edelcup gave opening remarks noting that tonight is our first budget hearing and our second budget hearing will be held on Thursday, September 27,2007 at 6:30 p.m. He said tonight we are going to review the entire budget proposal, and noted that we have had a series of workshops on this budget, and our budget is in fine shape due to the hard work and diligence of City Manager Szerlag and his staff. 3. PUBLIC HEARING ON THE PROPOSED MILLAGE RATE AND TENTATIVE BUDGET 3A. Millage Resolution (Public Hearing) A Resolution of the City Commission of the City of Sunny Isles Beach, Florida, Establishing the City of Sunny Isles Beach Proposed Ad Valorem Tax Millage Levy Rate at 2.3979 Mills per One Thousand Dollars ($1,000) of Taxable Assessed Value Which is 9% Less than the "Rolled Back" Rate of 2.6351 Mills, for Fiscal Year 2007/2008; Providing for an Effective Date. - Summary Minutes: Special City Commission Meeting September 17,2007 First Budget Hearing Sunny Isles Beach, Florida Action: City Manager Szerlag reported noting that we wilJ have a number of components tonight, one is a recap and a sl ight recalibration of the initial power-point that was presented at the last workshop. He said we also have Addenda that updates the current budget document, and we would also like to include organizational positives/accomplishments that we performed throughout the year. City Manager Szerlag did a power-point presentation on F iscal Year 2007/2008 Budget He said the challenges that face us as welJ as other municipalities are that we have a loss of Home Rule that is becoming eroded almost yearly, there are property tax reductions and limited growth in the future. He said we are fortunate in Suuny Isles Beach to still have growth but there is going to be a point where we are essentially built-out and the revenues that we once enjoyed from new construction are being diminished. He said there may be further reductions in Fiscal Year 2008/2009 depending upon what the Legislature does in January, and we will also have increased operating costs for new programs and facilities. City Manager Szerlag said our initial impact is we reduced Operation and Maintenance (O&M) expenditures by approximately $2.9 Million Dollars, however, we did have Proposed start -up costs and other changes that added about $1.5 Million Dollars into the O&M Budget He said we are going to be going on line with the Community Center and at that point we are having a modified start-up, we are not having an entire cost this coming Fiscal Year but we are easing into it in some respects in tenus of OUr O&M costs. He said we are either going to have our opening ceremony sometime in November or the first weekend in December. In tenus of Wireless Island, we are now methodical in our approach, essentialJy there are three tiers: Government Access Hotspots, street level penetration, and verticality, and we are going to try to achieve SUccess in one area before going to the next, and our reduced budget numbers reflect that. City Manager Szerlag also reviewed Fiscal Year 2006/2007 Budget revenues which are higher by $2.4 MilJion DolJars, expenses which are lower by $3.8 Million DolJars, and fund balance with an increase of $6.2 Million DolJars for a total estimated fund balance, as of September 30,2007, of $17.5 MilJion DolJars. He said this is because we have a fiscal conservative approach to budgeting whereby we tend to overestimate our expenditures and underestimate our revenues, the money does not evaporate and with that philosophy we have monies going into the General Fund on a yearly basis. City Manager Szerlag reviewed Fiscal Year 2007/2008 Budget revenues which are proposed at $26.9 Million Dollars, as well as our expenses because we have to have a balanced budget He said that number includes a transfer of $5 MilJion Dollars to the Capital Improvement Fund for proj ects as welJ as a $212,434.00 usage of fund balance asrevenue to balance our budget He said the proposed milJage rate is now 2.3979 milJs, which is a decrease of I 9% from last year's rate of 2.9500, this rate reflects the maximum cap and rolJback effect of the new legislation referred to now as the maximum millage. The effect of that essentially is a BilJion Dollar increase in total property valuations last year provided additional revenues of $2.8 Million DolJars, and this year a $1.5 Billion Dollars increase in valuation only provides about $653,000 in additional revenues. 2 Summary Minutes: Special City Commission Meeting September 17, 2007 First Budget Hearing Sunny Isles Beach, Florida City Manager Szerlag went over the Fiscal Year 2007/2008 Revenue Summary with an overall proposed budget of $26.9 Million Dollars, Expense Summary with a proposed operating budget of$19.3 Million Dollars, lower by $1.5 Million Dollars, and the Operating Budget is a subset of the General Fund Budget, essentially it is the General Fund Budget minus Capital transfers, debt service, and contingencies. He said that there are $1.5 Million Dollars start-up costs for the following: Community Center $646,000.00; Wireless Island $322,000.00; Landscaping $260,000.00 and this is because we are increasing landscaping with the addition of Pelican Community Park, with the biggest impact being maintenance of the baseball field; and other staff and related costs of $250,000.00. City Manager Szerlag said that personnel costs are still the largest portion of the budget of 60% of the O&M budget, with total personnel expenditure for Fiscal Year 2007/2008 of $13.2 Million Dollars which is a 4% decrease over last year's budget, supplies and services costs decreased from $7.1 Million Dollars to $6.1 Million Dollars, and with a centralized Purchasing System we will see even a further reduction next year. He said the Capital Outlay Budget (General Fund only) has decreased from $1.1 Million Dollars to $170,000.00 because we are not buying or we are buying very few vehicles, and what we want to look at for next year is to have more of a trend line that we can take a look at and charge departments for vehicular usage every year in the budget so it doesn't have ups and downs when it is time to buy vehicles, it is a more steady operational cost per year. Public Speakers: none Assistant City Manager/Finance Douglas Haag noted that there are two addendums, Addendum 1 and Addendum 2. He summarized the changes in Addendum 1 to the General Fund is a reduction in the total budget of about $133,000.00, and we discussed some of those items previously in terms of some of the changes involving the health insurance, worker's comp accounts, also some adjustments on the revenue side. He said the other good point is that, originally when we started off with the General Fund budget we had anticipated having to draw down on the General Fund balance of about $642,000.00 and that is now down to about $212,000.00 (last page of Addendum 1, Budget Summary - All Funds), so the good news is the net, we picked up more on the revenue side than expenses. On the expense side we also increased our interest projections, those revenues for General Fund of about $150,000.00. He said the other significant item in terms of dollar amount is we revised our projections based on a more realistic start-up date for Wireless Island, the original projections included in the original budget proposal in July was based on a full 12 months, now we are two months away from the end of Fiscal Year and Wireless Island will not go live on October 1 sr, so we revised those estimates to be more realistic and there is a significant reduction there. Vice Mayor Thaler asked if the numbers for Pelican Community Park will stay the same, and Assistant City Manager Haag said yes, but the net adjustments we have made since July are reflected here, so since the original July proposal, we increased some of the line items in Cultural and Human Services. City Manager Szerlag said that Mr. Haag is correct, at our last workshop session we presented three options and we selected the middle option, which was essentially the start-up for the preponderance of Cultural and Human Services Director Susan 3 Summary Minutes: Special City Commission Meeting September 17,2007 First Budget Hearing Sunny Isles Beach, Florida Simpson's employees on an II-month timeframe, in other words, instead of having an October 1 st date, there would be a November 1 st date where we would consider ourselves being operational in most areas. Additionally, we delayed for 3-4 months the Community Center Coordinator, so it was a modified option that we discussed at the last workshop and those numbers are reflected in the document. Vice Mayor Thaler said then that the feeling is that we are going to open at some extent in November, and City Manager Szerlag said yes. Assistant City Manager Haag said that the rest of the changes, page 5 of Addendum 1, are some transfers and that is to continue the philosophy that we adopted last year in terms of putting the dollars where the accountability and the responsibility is, and the total change to expenses at the bottom of page 5, a reduction of $133,000.00 to General Fund budget. The adjusted totals by department and how those break down that is a separate sheet entitled General Funds - Summary by Department. The other part of Addendum 1 on page 6 are adjustments on the revenue side, reductions primarily due to cancellation of one of the developments, The Paramount, and there is also a increase in the estimates for interest earnings but at the bottom of the page you will see there is no net change in revenues and that is because we have drawn from our existing fund balance in the amount of $2.1 Million Dollars at this point to balance the budget because on the expense side, the expenses have not changed. He said page 7 of Addendum 1 has some comments on some other topics, questions that came up during the workshop sessions or ongoing meetings. Assistant City Manager Haag said Addendum 2 is a listing of proposed changes to the Capital Improvement Projects (CIP) fund, which we just received today. We went back and revisited some of the revenue estimates for the development activity, and made some additional adjustments of approximately $3.5 Million Dollars, but again there is no net change on the revenue side because we have just now increased our fund balance, carry forward for the current year, that is not a reflection of our total fund balance in the Capital Project Fund, it is much higher, that is just a portion that we are drawing down on in effect for the current year, and that is not unexpected. He said it is something that we will be doing over the course of the next several years, we have built up substantial reserves in that fund so now we will be drawing down on it. The next page in Addendum 2, we reproduced the Capital Project Fund revenue budget, so you can see what all those changes net out to, and the proposed line item budget is still the same, $25,344,360.00. In the last couple of pages, we updated our forecast for the Capital Projects to reflect those changes and a few others. One other significant change in the forecast, we have also added some anticipated monies to be transferred from General Fund to the Capital Projects on an annual basis. We are anticipating transferring an additional $5 Million Dollars over and above the $2.2 Million Dollars per debt service, we show some additional monies being transferred out throughout the subsequent years as well. Mayor Edelcup asked if in the current year, the $5 Million Dollars that he was referring to is the $7,210,000 per debt service, and Mr. Haag said yes, they are lumped together. Vice Mayor Thaler asked if the interest rate, the interest on it, is that all kept in one area in the bank, it is separated here on paper, but the use of it can be done at any area, and Mayor Edelcup said the interest earned on Capital Improvement Funds has to stay in Capital Improvement Funds, and cannot be used for operating fund. Assistant City Manager Haag 4 Summary Minutes: Special City Commission Meeting September 17,2007 First Budget Hearing Sunny Isles Beach, Florida said yes, it stays where the funds are and the funds are in the Capital Projects Funds, and we will probably be transferring the $5 Million Dollars from General to Capital during the month of October. Mayor EdeIcup said counter wise, the $12 Million Dollars General Reserve interest on that can be used for O&M because that is in the O&M account, not in the Capital account. Vice Mayor Thaler asked approximately what rates were used, and Assistant City Manager Haag said approximately 4.5%, rates are starting to drop a little bit so we are being a little bit more conservative in our estimates. Assistant City Manager Haag said the last thing he wanted to point out is at the end of20 1 0- 2011, after we net out all of our projects, our projected revenues, we are still showing an anticipated surplus in the Capital Projects, and in this case, injust the Capital Projects Fund of about $5.5 Million Dollars. Mayor Edelcup said and that is without any 200912010 or 2010/2011 transfers from the General Fund, and Assistant City Manager Haag said that is correct, as we went further out it became a little more conservative as far as projecting those transfers. Mayor Edelcup said that it could be as much as $10 Million Dollars higher, a half a million each year in those final two years, so it could be 15. Assistant City Manager Haag said one of the other things we will have some discussions and present some business cases a little bit later on in the upcoming fiscal year is in regards to the Stormwater Fund. We have a number of fairly large projects that involve stormwater drainage and in the past we have anticipated funding those out of Capital Projects Fund, but realistically those should come out of the Storm water Fund, so one of the things we will be presenting a business case for in the upcoming months is in regards to possibly increasing the rates in the Stormwater Fund and then having the Stormwater Fund rightfully bear the full expense of those projects that are stormwater plated, thus freeing up additional funds. Commissioner Brezin said so then you feel that you will not have to do any transfers, you have enough in that Stormwater Fund to cover the projected work, and Assistant City Manager Haag said not presently, between the Stormwater Fund and the Capital Projects Funds we have enough, but there isn't enough just in Stormwater to cover all the projects. Commissioner Brezin said then that you would access it through the Capital Improvements, and Assistant City Manager Haag said the Capital Projects Fund would loan the Stormwater Fund the money until Storm water can pay it back which may take a few years but that is permitted. Mayor Edelcup said that the Stormwater Fund generates revenue every year. Commissioner Goodman said he noticed that there is $25,000.00 for a beachwalk, what kind of beachwalk are we talking about, and City Manager Szerlag said that could be our share that is seaward of Samson Oceanfront Park, where the Da Vinci Corporation has asked and he agreed, to have a dune system placed there for excess sand and part of that dune system would incorporate a seashell hard walkway. He said he doesn't think there will be any cost but he heard before there is no cost and often times there is. Mayor Edelcup said this isn't really a beachwalk, it isjust an area in front of Samson Oceanfront Park. Vice Mayor Thaler said this is really in case of a cost that Da Vinci has assured us that there would be no cost. Commissioner Goodman asked about the budget of $250,000.00 for l74th Street Landscaping, in Addendum 2 on the top of page 5, it is part of2007/2008, and his question is, you don't go in order. City Manager Szerlag said this is not in a chronological sequence, 5 Summary Minutes: Special City Commission Meeting September 17,2007 First Budget Hearing Sunny Isles Beach, Florida but based on our discussions that we had at the last Commission meeting, he was asked to expunge this from the budget document. Mayor Edelcup said it really should have been pushed up to the preceding page. Vice Mayor Thaler complimented staff, they did a lot of work in putting this together and he trusts that we will follow through what we projected to do here for 2007/2008. City Attorney Ottinot said for City Clerk Hines to read the title of the Resolution and Ordinance and that we can have a roll-call vote for both items. Vice Mayor Thaler moved and Commissioner Goodman seconded a motion to approve the resolution. Resolution No. 2007-1146 was adopted by a roll call vote of5-0 in favor. Vote: Commissioner Brezin yes Commissioner Goodman yes Commissioner Iglesias yes Vice Mayor Thaler yes Mayor EdeIcup yes 3B. Budget Ordinance (Public Hearing) An Ordinance of the City Commission of the City of Sunny Isles Beach, Florida, Adopting an Operating and Capital Outlay Budget for the Fiscal Year Commencing October 1, 2007 through September 30,2008, Pursuant to Section 200.65, Florida Statutes (Trim Bill); Authorizing Expenditures of Funds Established by the Budget; Authorizing Encumbrances; Authorizing Issuance of Checks; Providing for Grants and Gifts; Providing for Post Audit; Providing for Severability and Providing for an Effective Date. Action: City Clerk Hines read the title. Mayor Edelcup said he wanted to clarify in Section 5, there is an indication that for checks less than $5,000.00 we only have one signature, for checks over $5,000.00, two signatures, and City Manager Szerlag said that is correct. Vice Mayor Thaler moved and Commissioner Goodman seconded a motion to approve the proposed ordinance on first reading with the recommended minor changes to the Operating and Capital Budget. The motion was approved by a roll call vote of 5-0 in favor. Second reading, public hearing will be held on Thursday, September 27, 2007, at 6:30 p.m. Vote: Commissioner Brezin Commissioner Goodman Commissioner Iglesias Vice Mayor Thaler Mayor EdeIcup yes yes yes yes yes 6 Summary Minutes: Special City Commission Meeting September 17,2007 First Budget Hearing Sunny Isles Beach, Florida 4. MOTIONS 4A. Add-On: $5,000.00 Bonus for City Manager and City Attorney. Action: Mayor Edelcup said he would like to recommend to the Commission that we propose paying a $5,000.00 year-end bonus to the City Manager and City Attorney for the exemplary work that they have done this year. He said historically we probably would have been able to do more but with the budget cuts and the constraints that we are trying to show in fiscal responsibility, it would be more appropriate this year to recommend that we do a $5,000.00 bonus and be payable before September 30, 2007 so it will be in this year's budget, and historically in the future, maybe we can handle it the same way. Commissioner Goodman moved and Commissioner Brezin seconded a motion to approve the $5,000.00 bonus for City Manager Szerlag and for City Attorney Ottinot. The motion was approved by a voice vote of 5-0 in favor. 5. DISCUSSION ITEMS SA. Presentation on Accomplishments in the Past Year. Action: City Manager Szerlag presented a power-point showing over 50 positives and accomplishments completed in the past year including the easement acquisition for the west side of Collins Avenue for streetscape cluster which is a very exciting project that will last for decades once we initiate it, to have a promenade on the west side of Collins A venue and also figure out how the north side of Sunny Isles Boulevard is going to look and we are currently out for RFPs in that regard. He also highlighted our first Atlantic Isle Special Assessment that was successful, and additionally, primarily thanks to Assistant City Manager Jorge Vera, we convinced W ASA not to require a force main on that project and that saved the City and residents over $300,000.00. He also noted that we amended our Noise Ordinance as it relates to decibel noise for construction and non-construction noise, and he reported that the fans have been installed in Ocean IV and that issue is now resolved. City Manager Szerlag said that we have also installed and is operational the "Emergency Weather Bug" system which warns the Police Department of impending severe weather. Mayor Edelcup asked how that gets disseminated to the public, and City Manager said through cable channel 77 and on line. Mayor Edelcup asked what constitutes bad weather other than a hurricane, and Chief Maas said impeding storms with tornados, water spouts, high winds, hail, etc. Vice Mayor Thaler suggested letting the public know such as writing an article in the newspaper, and Chief Maas said they are working on an article which will include contact numbers, also cooperating condominiums will be alerted once we are alerted. Mayor Edelcup said it sounds like an excellent program and to get out public notification that it exists, and asked where it is installed. ChiefMaas said on top of Government Center and it is monitored through Police Communications 2417. City Manager Szerlag said that the second Budget Hearing is scheduled on Thursday, September 27,2007 at 6:30 p.m. to adopt the final budget, and before that time another 3- ring budget document will be distributed with the changes that we discussed. 7 - Summary Minutes: Special City Commission Meeting September 17, 2007 First Budget Hearing Sunny Isles Beach, Florida 5B. Add-On: Schedule a Workshop in December. Action: Mayor Edelcup asked the Commission and staff to think about having a workshop in December 2007 as it relates to the future plans for acquisition of open lands, green space, the north side of Sunny Isles Boulevard and the west side of Collins Avenue was mentioned briefly but we should probably start moving forward and have staff come up with some ideas and plans, and we can plan a workshop in mid-December as we move forward on those two areas. He said the south side of the City has been the area neglected for parks as we have been doing most of our park enhancements south and north of 163rd Street and now is the time for us to start addressing the south end of the City and take advantage of opportunities that may be before us. Commissioner Iglesias said that we will be picking up some after Leisure completes his building. It was the consensus of the Commission to hold a workshop in mid-December. 6. ADJOURNMENT I' 'Mayor Edelcup adjourned the meeting at 7:30 p.m. ... '<..! ~. . ~_/. , ", ~Resp~6tfully.~tib!ll.itted by: Approved by the City Commission on Oct. 18, 2007 ~: A~~ Jane A. Hines, CMC, City Clerk ) 'j ~ ~ 8