OFFICE OF THE CITY COUNCIL

 

CHERYL L. BROWN                                                                                                                     117 WEST DUVAL STREET, SUITE 425

            DIRECTOR                                                                                                                                                                                                 4TH FLOOR, CITY HALL

   OFFICE (904) 630-1452                                                                                                                                                                                  JACKSONVILLE, FLORIDA  32202

     FAX (904) 630-2906                                                                                                                                                                                                               

  E-MAIL: CLBROWN@coj.net

 

FINANCE COMMITTEE BUDGET HEARING MINUTES

August 24, 2012

9:00 a.m.

 

Location:  City Council Chamber, 1st floor, City Hall – St. James Building; 117 West Duval Street

    

In attendance: 

Council Members John Crescimbeni (Chair), Greg Anderson, Lori Boyer, Bill Gulliford and Clay Yarborough

Excused: Johnny Gaffney, Stephen Joost

 

Also: Council Members Matt Schellenberg, Doyle Carter (arr. 9:21), Reginald Brown (arr. 9:44) and Don Redman (arr. 10:58);  Kirk Sherman, Kim Taylor, Heather Reber, Kyle Billy and Robert Campbell  – Council Auditor’s Office; Peggy Sidman – Office of General Counsel; Ronnie Belton, Glenn Hansen and Angela Moyer – Finance Department; Jessica Deal – Mayor’s Office;  Jessica Stephens – Legislative Services Division; Jeff Clements – City Council Research Division,  Steve Patterson and David Bauerlein – Florida Times-Union; David Chapman – Financial News and Daily Record; Kevin Meerschaert – WJCT; Steve Cassada – Council Staff Services

 

Meeting Convened: 9:04 a.m.

 

References from this point refer to the Council Auditor’s Handout for Meeting #6 - August 24, 2012.

 

Budget shortfall discussion

Council Auditor Kirk Sherman reviewed the administration’s August 16 memo from CFO Ronnie Belton to Finance Chairman Crescimbeni that estimated $11.85 million in additional cost savings and revenue enhancements and commented on the likelihood of achieving the target figures.

1)      Savings achieved through competitive bidding: employee health insurance re-bid will likely total $1.56 million (not the $3.5 million projected); facilities management contract may save up to the $750,00 projected, but is still contingent upon negotiating a contract with Global Spectrum and also contingent upon what cost savings can be achieved from SMG’s continued operation of EverBank Field through the 2012 football season;

2)      State shared revenue projections: will likely generate $1,955,526 (not the $3 million projected);

3)      FY12/13 debt service savings: the projected $2 million savings seems reasonably attainable;

4)      FY11/12 debt service savings: savings will likely be between $500,000 and the full $1 million projected; further research needs to be done to determine whether the impact of 2 previous ordinances that utilized these debt service savings have already been added into the calculation and spoken for a portion of these savings;

5)      Additional staffing reductions: Mr. Sherman is skeptical that the full $1 million in additional staffing reductions can be achieved, given the amount of position reductions that have already taken place in the current fiscal year and in the proposed budget;

6)      Council Auditor recommendations: $600,000 in saving s already achieved through committee action last week.

 

Mr. Sherman estimates that a reasonable savings/new revenue estimate would be $4.35 million,  leave the budget $4.5 million short at this time with Sheriff’s Office and court technology issues still be resolved.  In response to a question from Chairman Crescimbeni, Mr. Sherman indicated that the Mayor has the authority to shift funds between accounts in accordance with the Ordinance Code, up to the limit of the overall budget. 

 

Public Libraries

Library Board Chair Brenda Simmons-Hutchins  questioned the percentage of budget reduction applied to the library system versus other departments and advocated for restoration of at least a portion of the $4.6 million in overall reduction.  Library Director Barbara Gubbin reported that the library system plans to deal with the reductions by closing all libraries on Sunday, most branches on Monday, and reducing hours at all libraries on the days they’re open.  The library surveyed its users for their preferences about various kinds of budget cuts and found that the most negative reaction was to the loss of funding for new materials purchases.  The cuts to days and hours and the staff reductions will cause widespread personnel shifting due to civil service bumping procedures; some personnel will have to be re-trained for new jobs and others may leave the system altogether.

 

Motion (Boyer): on p. 3, approve Council Auditor’s recommendation – approved.

 

Motion (Gulliford): restore $830,000 to the library budget by reducing Special Council Contingency and creating a designated library special contingency fund, with funding to be determined later in the budget process – approved.

 

The committee requested that Director Gubbin provide the committee with information on how the additional funding, if realized, would be prioritized for expenditure.  Friends of the Library President Harry Reagan gave a brief advertisement for the organization’s book sale this weekend.

 

Mayor’s Office

Mayor’s Chief of Staff Chris Hand outlined the reductions to the Mayor’s Office budget, particularly the elimination of the travel budget.  Mr. Hand described the confusion the led to the Mayor being enrolled in the Florida Retirement System with the City making a matching contribution.  The Mayor cannot withdraw from the FRS until his term ends in 2015 and he plans to repay all contributions to the fund made by the City on his behalf. 

 

Motion (Gulliford): on p. 8, approve Council Auditor’s recommendation #1.

Motion (Boyer): amend the Gulliford motion to retain the Education Commissioner support position but keep it unfunded until the private funding promise becomes a firm commitment – approved.

In response to questions from Council Member Schellenberg, Mr. Hand explained how various reductions in the Mayor’s budget attempt to meet the overall goal of 10-15% reductions in all departmental budgets.  The Mayor has used public-private partnerships to obtain loaned executives at a cost of $1 per year and will use private contributions to travel in the upcoming fiscal year for economic development purposes.  The salary increases in the Mayor’s budget are primarily attributable to the promotion of the deputy CAO to the CAO position replacing the former CAO who was paid $1 per year and the hiring of a very experienced former Florida Attorney General’s Office employee to run the Public Accountability Office within the Mayor’s office.

 

Mayor’s Boards and Commissions

Rep. Mia Jones of the Mayor’s Office answered questions about the staff and operations of the Civil Service Board.  Council Member Brown urged the creation of a Mayor’s African-American Advisory Commission with the same staff and resources as the Mayor’s Asian-American, Hispanic and Women’s advisory commissions.  Council Member Carter said that he would explore the ramifications of the proposed elimination of the Contractor Certification Coordinator in the Construction Trades Qualifying Board to ensure that the City would not be reducing its revenues by virtue of the elimination.

 

Office of Economic Development – Facilities Management

In response to a question from Council Member Schellenberg, Sports and Entertainment Director Alan Verlander reported that the SMG protest to the Professional Services Evaluation Committee’s selection of Global Spectrum to manage the City’s public assembly facilities was denied by the PSEC last week and the committee’s recommendation has gone to the Mayor for his selection.  He also noted that the Equestrian Center will be deleted from the management contract for whichever company wins the award.  Mr. Verlander has not been involved in discussions about whether Global Spectrum will operate the rest of the facilities if it is awarded the management contract but SMG continues to operate EverBank Field.  The committee discussed with Mr. Verlander and OED Executive Director Paul Crawford the possibility of the RFP process failing and having to be re-done.  The Budget Office has offered a deficit reduction package that anticipates $750,000 in savings from a new facilities management contract.  CFO Ronnie Belton explained the problem with reaching a final decision on the facilities management RFP given the pending protests and the Jacksonville Jaguars’ contractual rights to have a veto power over the EverBank stadium operator decision.

 

John Byrnes the CFO of SMG/Jacksonville said that the base bids of the two RFP competitors are very different and would not produce the equal savings that the Budget Office suggests.  SMG’s current contract runs through March 31, 2013. Mr. Byrnes said that SMG’s proposal would save the City $1 million over the current contract cost and that SMG would be willing to implement that contract and its savings as of October 1, 2012 at the start of the new fiscal year.  In response to a question from Council Member Boyer about whether SMG would be willing to give the City the same savings beginning October 1 absent a contract award, Mr. Byrnes said that would be a very difficult decision for SMG to make.  It does not make economic sense for the facilities to be split between two companies since both would then have to have separate administrative staffs at a greater cost than one staff for all facilities. General Counsel Cindy Laquidara explained the RFP award and protest process and the Jaguars contractual rights.

 

 

Beaches landfill tipping fees

Jim Hanson and Jim Jarboe, the city managers of Neptune Beach and Atlantic Beach, were in attendance for the discussion.  Council Member Gulliford explained the history of the Interlocal Agreement between the City of Jacksonville and the two beaches cities, including  the provision related to the imposition by Jacksonville of a full cost uniform solid waste charge.  He believes that the two parties have got to sit down and negotiate a full and final resolution to the many issues related to the interlocal agreement.   Mr. Gulliford said that counting on the revenue from the Beaches tipping fee is a very tenuous proposition.  Deputy CAO Cleveland Ferguson said that Jacksonville plans to bill the two cities for both FY11/12 and FY12/13.  The FY11/12 billing was deferred until the two cities had hired their consultant and produced a report on whether the conditions had been met under the Interlocal Agreement that would make the tipping fee effective.  In response to a question, Cindy Laquidara stated that the City’s decision to budget or not budget the Beaches tipping fee does not affect its legal ability to bill and collect the fee.

 

Motion (Boyer): remove the Beaches landfill tipping fee from anticipated revenue in the budget and  increase the Special Council Contingency deficit by that amount – approved.

 

In response to questions from Chairman Crescimbeni about billing for yard waste tipping fees for Beaches yard waste, Jeff Foster, Acting Chief of the Solid Waste Division, stated that Jacksonville deducts the value of the Beaches billings from the City’s overall billing from the Old Kings Road Landfill where yard waste is deposited because of the on-going disagreement over the Interlocal Agreement.  $57,000 in Beaches yard waste costs has accrued.  Cindy Laquidara will investigate the situation and report back next week.

 

Office of Economic Development – Facilities Management (resumed)

 

Council Member Yarborough asked for a schedule of the remaining balances on all outstanding bonds that paid for the various public facilities (arena, ballpark, Times-Union Center, etc.).  Cindy Laquidara will investigate the FY2003-04 loan from the City’s capital projects account to the Sports Complex operating account.

 

Sports Complex Capital Maintenance Fund

Motion (Yarborough): on p. 39, approve Council Auditor’s recommendations #1 and 2 – approved.

 

OED Acting Director Paul Crawford described the process of applying tourist development tax funds to capital needs at the sports complex.  Seventy percent of the portion of the TDC tax that is deposited into this fund is dedicated to EverBank Field and the remaining thirty percent to the arena and Baseball Grounds.  The City and SMG jointly evaluate and decide on the projects to be done each year.

 

At the conclusion of the meeting Mr. Sherman reported that the Special Council Contingency fund is facing a deficit of approximately $13.5 million, with several million dollars in potential offsetting revenues as discussed at the beginning of the meeting.

 

The remaining items from the Meeting #6  agenda were deferred to the August 30th wrap-up meeting.  The Chairman cautioned that any further delays in the schedule will cause the need for scheduling an additional meeting next week.

 

Meeting adjourned: 1:19  p.m.

 

Minutes:           Jeff Clements, Council Research Division

8.24.12       Posted: 2:00 p.m.

 

 

Tape:               Finance budget hearing  8.24.12

                        Legislative Services Division

 

Attachments:    Council Auditor’s Handout for Meeting #6, August 24, 2012