OFFICE OF
THE CITY COUNCIL
117 WEST DUVAL STREET, SUITE 425
4TH FLOOR, CITY HALL
JACKSONVILLE, FLORIDA 32202
904-630-1377
FINANCE
COMMITTEE BUDGET HEARING #5 MINUTES
August 24, 2016
9:00
a.m.
Location: City Council
Chamber, City Hall – St. James Building; 117 West Duval Street,
In attendance:
Council Members Anna Lopez Brosche (Chair), Aaron Bowman (arr.
10:09), Katrina Brown (arr. 9:53), Bill Gulliford, Sam
Newby (arr. 9:05)
Excused: Council Member Greg
Anderson
Also: Council Members Lori Boyer, Jim Love, Scott
Wilson (arr. 9:45), Doyle Carter (arr. 10:15); Peggy Sidman and Paige Johnston –
Office of General Counsel; Kirk Sherman, Kyle Billy, Kim Taylor, Brian Parks - Council
Auditor’s Office; Katrin MacDonald – Legislative Services Division; Sam Mousa
and Ali Korman Shelton – Mayor’s Office; Mike Weinstein and Angela Moyer –
Finance and Administration Department
Meeting Convened:
9:03 a.m.
Chairwoman Brosche convened the meeting and the attendees introduced
themselves for the record. Ms. Brosche said that the session would begin with a
review of the annual debt affordability study, followed by an explanation of
how this year’s CIP document was created. She explained that proposed amendments
to the CIP that have a negative impact on the Special Council Contingency fund
will be considered as enhancements to be discussed at the Finance Committee’s
wrap-up meeting. The Chair said that the 5- and 3-minute time limits on first
and second speaking opportunities will be applied to each of the various
meeting sections.
Debt affordability study
CFO Mike Weinstein emphasized that the purpose of the debt
affordability study is to determine how much debt is prudently affordable given
the resources available for debt service. He said the City’s standard rule of
thumb for debt issuance is 50% in the year the project is first ready for construction,
then 25% and 25% in the following years. There are many definitions of “debt”
and the measures of how much is authorized, how much is issued and how much is
paid off are constantly moving targets.
City Treasurer Joey Greive reviewed the debt affordability study,
including the various ratios required to be reported by the Ordinance Code. As
of July 31, 2016 the City had $2.36 billion in outstanding debt, including
$1.26 billion in Better Jacksonville Plan debt and $1.1 billion in general City
debt. The 5-year projection shows paydown of existing debt exceeding new debt
authorizations by $10 to $14 million per year. The City currently has 95.5% of
its debt in fixed interest rates and the remainder in variable rate
instruments, with more debt being converted to fixed rates over time as we
continue to experience historically low interest rates. Mr. Greive said that when
considering the City’s overall financial condition, the ratings agencies take
both the City’s and the School Board’s debt into account since the same
citizens are responsible for paying off both sets of borrowing. He also pointed
out that this year’s presentation is somewhat different than previous years
because of the changes made to the debt affordability report at the request of
last year’s Finance Committee – several new measures and changes in the minimum
and maximum limits and target rates in several ratios. The Council Auditor and
Council President Boyer have suggested several additional refinements which
will be included in the final version of the document to be distributed later.
Randall Barnes, the City’s new debt manager, reviewed each of the debt
ratios in more detail. All of the City’s debt ratios are above or below the
relevant minimum and maximum thresholds and most are at or near their adopted
targets.
Mr. Greive and Chief Financial Officer Mike Weinstein explained the
City’s cash flow from ad valorem tax collections and how that affects the
timing of borrowing. The City tries to use cash for its expenditures when it is
available (November-December when the majority of property taxes are paid by
mortgage companies) and to delay borrowing until later in the fiscal year.
Council Member Gulliford asked questions about the change in debt service
pledges from
In response to a question from Chairwoman Boyer, Mr. Weinstein said
that the City does not coordinate with the School Board on debt issuance. He
described the process of factoring bond issuance over several years after the
authorization and described the complexity of the timing. The Mayor has
directed the staff to ensure that the City is paying off more debt than it
issues over the next 5 years. Ms. Brosche asked for guidance on how to ensure,
for the committee’s purposes in dealing with CIP amendments, that changes made
this year don’t negatively impact those trends in future years. Mr. Weinstein
and CAO Sam Mousa said the targets are constantly moving and the committee
should not be afraid to make reasonable project changes; there will inevitably
be project changes over the next few years that will balance themselves out. In
response to a question from Council Member Gulliford, Mr. Mousa stated that the
City’s General Fund was pledged as a potential revenue source to pay the BJP
bonds, but was never used for that purpose. The City is projecting that BJP
revenues will turn positive (collections exceed debt service obligations for
previously completed projects) in October or November of this year. When that
happens there will be funding available for new BJP project borrowing.
Theresa Eichner of the Budget Office described how the 5-year CIP was
developed, beginning with legal mandates (i.e. ADA accessibility settlement),
Ordinance Code minimum expenditures and departmental requests.
Page references from this point refer to Council
Auditor’s Meeting #5 Handout.
Capital Improvement Plan
Motion (Schellenberg): on
p. 2, approve Auditor’s recommendation #1 to adjust project names, numbers and
prior year funding amounts for schedule presentation purposes as necessary for
continuity – approved unanimously.
Motion (Schellenberg): on
p. 2, approve Auditor’s recommendation #2 to remove several project amounts
(Sidewalk construction – new: $278,179; Roadway resurfacing: $1,312,016; ADA
compliance – curb ramps and sidewalks: $549,863) from the CIP schedule as they
were recently funded by CDBG funds and are not in the budget; for the ADA
sidewalk construction project only amend the current year budget, not the
5-year CIP schedule - approved
unanimously.
Motion (Schellenberg): on
p. 3, approve Auditor’s recommendation #3 to remove the transfer from fund
balance in from the Cecil Gymnasium Trust Fund (subfund 1DC) and appropriate
$350,000 from available entrance fees and investment pool earnings within the
Cecil Gymnasium Trust to transfer to the Cecil Aquatics project; also, reduce
the Transfer Out to the Equestrian Center – Practice Ring Cover project by
$1,300,000 within the Cecil Gymnasium Trust Fund and instead appropriate
$1,300,000 from available funds from the Gain on Sale of Real Estate within the
Cecil Commerce Center Trust Fund to transfer to the Equestrian Center –
Practice Ring project – approved
unanimously.
Motion (Schellenberg): on
p. 3, approve Auditor’s recommendation #4 to reduce the appropriation of Gain/Loss on Sale of Real Estate within
subfund 324 for the Countywide Parks & Recreation Projects project and
offset with increases in investment pool earnings ($14,626), rental of city facilities
($14,622) and transfer from fund balance ($91,330) – approved unanimously.
Motion (Schellenberg): on
p. 3, approve Auditor’s recommendation #5 to correct the subobject to account
for Library Fines that will fund the Collaborative Spaces project at the Main
Library – approved unanimously.
Motion (Schellenberg): on
p. 3, approve Auditor’s recommendation #6 to amend the CRA Exhibit to correct
the FY 2016/17 appropriation amount to $233,824 for the Riverplace Blvd.
Improvements -
President Boyer recommended that the committee defer action on Auditor’s
recommendation #6 because the DIA will be discussing this project and no action
may be necessary due to over-appropriation for this project. The item was
placed on the Pending Items list.
Motion (Schellenberg): on
p. 3, approve Auditor’s recommendation #7 to remove the $4,396 borrowing for
the Roadway Safety Project – Pedestrian Crossings and replace with $4,396 of
residual funding within the 5‐year
Road Program - approved unanimously.
Motion (Schellenberg): on
p. 3, approve Auditor’s recommendation #8 removing the grant-funded portion of
projects (Moncrief/Dinsmore Road Bridge ‐
$500,000, Julington/Cormorant Pond ‐
$202,450, and Trout/Moncrief Pond ‐
$1,186,350) from the CIP as the grants have not yet been received –
With regard to recommendation #8, Ali Korman Shelton of the Mayor’s
office said that although the projects were approved by the Legislature for
funding, the City has not yet received the grant funds from the state for these
projects.
Motion (Boyer) – amend #8
to add these projects to the CIP 5-year plan as a Year 1 funded project -
The Schellenberg motion as amended by the Boyer amendment was approved unanimously.
Motion (Schellenberg): on
p. 3, approve Auditor’s recommendation #9 to reduce the “Transfer” amount on
CIP schedule for Countywide Parks & Recreation Projects by $1 to match appropriation
amount – approved unanimously.
Motion (Schellenberg): on p.
3, approve Auditor’s recommendation #10 to reduce the “Paygo” amount for
Stormwater Pump Stations – Pump Replacements by $1 to match appropriation
amount – approved unanimously.
Motion (Schellenberg): on p.
3, approve Auditor’s recommendation #11 to approve the budget appropriations of
the various 20+ subfunds that make up the funding for CIP projects – approved unanimously.
Motion (Schellenberg): on p.
3, approve Auditor’s recommendation #12 to allow the Budget Office and Council
Auditor’s Office to adjust CIP schedules as necessary to reflect Council’s actions
– approved unanimously.
Motion (Schellenberg): on p.
3, approve Auditor’s recommendation #13 to revise JAA’s Capital
Schedule to reflect the City portion for the Fire Station #56 – Relocation
project at $2,500,000 – approved
unanimously.
Motion (Schellenberg): on p.
3, approve Auditor’s recommendation #14 to reducing the debt
service within subfund 461 (Stormwater Services) by $150,000 -
Sam Mousa requested that the $150,000 be allocated to the Drainage
System Rehabilitation capital maintenance account – approved unanimously.
Mr. Mousa clarified with the committee that the intention of
Recommendation #8 above was that when the grants are received for the several
projects, the administration will need to file legislation to appropriate the
funding but the projects will already be listed in the CIP for FY16-17
expenditure.
Council Member Gulliford suggested that use of CDBG funds should be
the subject of a future Finance Special Committee meeting. He believes that an
adopted policy regarding use of CDBG may be merited. President Boyer said that
the suggested minimums and target amounts for several types of CIP expenditures
(roadway resurfacing, facilities capital maintenance, bulkhead
repair/replacement and countywide parks and recreation) do not address funding
sources, just total expenditure amounts. Mr. Weinstein said that he and Mr.
Mousa met this year with the City’s CDBG staff to see how those funds could
best be put to use to get projects moving immediately, and that is reflected in
this year’s budget.
President Boyer recounted the Special CIP Committee’s lengthy
discussions about the proper use of the stormwater fee revenues. The City has
traditionally allocated most of the revenues to operational uses and used any
remaining funds for capital projects or debt service. Other jurisdictions
utilize stormwater utility fees for capital purposes first and use little or
none for operating expenses. The $4 million minimum funding for capital
projects and $6 million for drainage system rehab is the result of the
committee’s deliberations. Mr. Mousa requested that the Council waive the $4
million/$6 million minimum appropriations from current revenues on a one-time
basis because of the availability of $2,086,767 in the form of a reimbursement
from the JEA for BMAP credits previously paid for by the City that was paid
back pursuant to the new contribution agreement between the City and JEA.
Mr. Mousa stated that the administration has been meeting with the
Auditor’s Office to discuss appropriate allocations of approximately $18
million in fair share sector funds (traffic signals, sidewalks, bridge
widenings, etc.). A preliminary schedule of uses has been prepared and will be
shared with the committee.
Debt management fund
Motion (Schellenberg): on
p. 8, approve Council Auditor’s recommendation #1 to revise various schedules
as follows: Schedule B4 to reduce the FY 2016/17 Payment for Stormwater
Projects by $150,000 as previously discussed in the CIP Handout, resulting in a
reduction to both Charges for Services and Debt Service within the Debt Management
Fund; Schedule B4 to decrease the FY 2016/17 payment for the Ed Ball Building
by $101,439 and increase the FY 2016/17 payment for Capital Improvement
Projects by the same amount; and Schedule B4c to change the description “Short
Term Commercial Paper” to “Short Term Debt” - approved unanimously.
Motion (Schellenberg): on
p. 8, approve Council Auditor’s recommendation #2 to allow
the Council Auditor’s Office and the Office of General Counsel in coordination
with the Budget Office to make any necessary changes to Schedule B4, B4a, B4b,
and B4c to reflect the actions of the Finance Committee – approved unanimously.
President Boyer noted the importance of adopting the detailed CIP
project pages, with full scope descriptions, before the end of the process. Ms.
Eichner said that the final revised CIP book will include the detailed pages
reflecting any amendments made by the Finance Committee. Mr. Sherman said that
the authority to make changes approved in Recommendation #2 above includes the
authority to incorporate the final versions of CIP project descriptions with
project scopes in the CIP book assembled and published by the administration at
the conclusion of the budget process. Ms. Sidman said that language will be
incorporated in the CIP referencing the adoption of the detailed CIP project
scopes which will be published at a later date.
Council President Boyer distributed and discussed several pages of
proposed amendments and discussion items.
Page references from this point refer to
Council President Boyer’s proposed amendments handout
Motion: on p. 1, approve
Boyer amendment #3 to move up the Southside Incinerator ash site project from
Projects Not Lapsed to Year 2 of the CIP (FY17-18) in the amount $2,500,000
(adding $300,000) and deleting the Southside Incinerator – Outer Sites project
($2.5 million) from the Beyond 5th Year listing – approved unanimously.
Motion (Boyer): on p. 1,
approve Boyer amendment #4 to adopt a new project scope for the Cecil Mega Site
Development and allocate $1 million from the Cecil Commerce Center trust fund
to construct a gravel site access road in FY16-17 and list $2.5 million in
FY18-19 for road paving if the property is sold for development – the motion
was tabled while the Council Auditor
researched the current funding level in the Cecil Commerce Center trust fund.
Motion: on p. 1, approve
Boyer amendment #7 to revise the project scope for 8th Street tree
planting project to include hardscaping, brick pavers, irrigation, historic
lighting and benches to match the recently-completed streetscape improvements
on Jefferson Street – approved
unanimously.
Motion: on p. 1, approve
Boyer amendment #7A to change the project scope and description from relocation
of Fire Station #12 to demolition and reconstruction of Fire Station #12 at the
same location – approved unanimously.
Motion: on p. 3, approve
Boyer amendment #4 to clarify that the Southside Boat Ramp Project is the boat
ramp located between Friendship Fountain and the Acosta Bridge adjacent to
River City Brewing Company, to put the project in the 5-year CIP with a Year 4
(FY19-20) allocation of $500,000 of borrowed funds – approved unanimously.
Motion: on p.4, approve
Boyer amendment #9 to de-authorize the Railex project which has been abandoned and
de-appropriate the $300,000 encumbered – approved
unanimously.
On p. 2, item #5, President Boyer brought the committee’s attention to
the projected future operating costs of a proposed replacement Dallas Graham
Library on Myrtle Street. The $1.2 million operating cost will bring with it
some difficult decisions about the effect of those operating costs on the rest
of the library system (would there have to be a trade-off of reduced hours at
other libraries to pay the increased operating costs of the new library?).
Library Director Barbara Gubbin said the library system doesn’t have the funds
to build a new library without a partnership with a private developer; the
board is exploring several options.
Motion (Schellenberg): on
p.2, approve Boyer amendment #11 to allocate $5 million per year in the
Wastewater Fund (JEA $15 million for septic tank remediation) in Years 3, 4 ad
5 of the CIP - approved unanimously.
Public Works Director John Pappas described the several different (similarly
named) funds that provide resources for roadway striping, new signal
installation and existing signal restoration. He explained that every possible
funding source is explored for potential use depending on the nature of the
project, including fair share/mobility fee sector funds where eligible.
President Boyer said that it appears the City changes it priorities
from year to year according to the “consent order of the day”, whether it be
TMDL and BMAP activities for river cleanup or the ash site settlement or the
ADA accessibility settlement. Large amounts of money are programmed over a
series of years, but the actual spending often trails off over time as new
priorities come along and displace the previous priorities. In answer to a
question Mr. Pappas said that the City has over 17,400 sidewalk curb cut ramps
that need ADA remediation work; 980 ramps have been completed, 807 are
currently under contract for remediation, 2,500 have been assessed and are
ready for construction when funding can be allocated, about 12,500 are nearing
the end of the assessment process. The total CIP allocation for the project is
$36.5 million.
Motion (Boyer): on p. 3, approve
Boyer amendment #2 to move the three segments of the Jax Baldwin Trail project
from Tab 5 (Projects Not Lapsed) into the 5-year CIP with $180,000 of FDOT
funding ($70,000 for the Brandy Branch segment and $110,000 for the Cary Forest
segment) in the FY16-17 budget; the third segment will be dealt with at the
Friday wrap-up session – approved
unanimously.
Motion (Schellenberg): on
p. 4, approve Boyer amendment #10 to reduce the transfer from General Fund to
the JSO by $355,000 and utilize the $355,000 previously allocated to the
now-abandoned firing range improvement project from a prior year to fund the
lead removal project (approximately $150,000) and allocate the remainder to the
Special Council Contingency fund – approved
unanimously.
Motion (Schellenberg): on
p. 1, approve Boyer amendment #4 to revise the Cecil Mega Site Development
project page to allocate $1 million I FY16-17 for construction of a gravel
access road to the site and allocate $2.5 million in FY18-19 for potential future
paving if a purchaser is identified – removed
from the table and approved
unanimously.
Motion (Gulliford): amend
the CIP to program $800,000 of CDBG funding in FY18-19 for design and
construction of a permanent community center in Mayport adjacent to the Mayport
Boat Ramp to replace a temporary trailer facility and to construct a parking
lot at the site – approved unanimously.
Motion (Schellenberg for
Wilson): amend the CIP to program $600,000 of CDBG funding for construction of
a Southside senior center in FY18-19 – approved
unanimously.
President Boyer said that she had heard that consideration was given
in the past to constructing a senior center at Cuba Hunter Park when that park
was previously approved. Council Member Bowman requested that a comprehensive
study be done of existing senior center locations and identification of good
locations to serve the Southside of the City.
Deputy General Counsel Peggy Sidman cautioned the committee about the
need for specificity in making and approving motions for amendments to the CIP
– the staff has been delegated the authority to refine project documents for
final publication, but the staff needs direction about the exact location,
scope, amounts for design, engineering, land acquisition, construction, etc. in
order to prepare project listings that reflect what the committee actually
intended. Mr. Weinstein cautioned the committee that CDBG funds can’t be
committee years in advance as some of today’s amendments propose and
recommended that borrowing be substituted as the funding source for those projects.
Council Member Schellenberg said that difficult prioritization needs to be done
about the future of senior centers – some with very low attendance need to be
closed and others opened in locations that will generate greater attendance.
The city doesn’t necessarily need more centers, but they need to be better
located.
Sam Mousa recommended that the committee program borrowing for future
years’ projects if another specific funding source has not been identified. The
administration will work on finding other funding sources and not all of these
funds will be borrowed
Motion (Schellenberg): program
$1 million of borrowing for expansion of the Mandarin Senior Center in FY18-19
- approved unanimously.
Motion (Schellenberg for
Love): move $750,000 in the Five Points renovation project up from FY20-21 to
FY17-18 and move the $3.2 million up to FY18-19 ($1.6 million) and FY19-20
($1.6 million) – withdrawn.
CFO Mike Weinstein said that a project of this size should probably be
considered as an enhancement at the Friday meeting because of the effect that
that amount of borrowing would have on the City’s debt ratios, amount of pay-go
funding available and other borrowing priorities for future years. Mr. Mousa
said that use of the term “enhancement” was not correct because the funding is
not proposed for FY16-17, but the considerations of effects on other projects
and borrowing needs is a valid concern.
Motion (Gulliford): on p.
64 of the CIP, move $750,000 in construction funds (from borrowing) in the Five
Points renovation project up from FY20-21 to FY17-18 – approved unanimously.
Motion (Boyer on behalf of
the DIA): on page 3 of the Boyer Handout, the DIA requests that the Adams and
Forsyth Streets 2-way project be split into two projects to be funded in the 5th
year (FY20-21): Adams Street design and engineering - $979,725 (plus $6,531,500
for construction in Beyond 5th years); Forsyth Street design and
engineering - $1,025,944 (plus $6,839,625 for construction in Beyond 5th
years). Mr. Mousa urged that Downtown CRA tax increment funding be used for
these projects rather than General Fund resources and that the projects
therefore be removed from the CIP so that CRA funds can be used as the source.
Projects must be de-listed from the CIP for at least 3 years before CRA funding
can be used – withdrawn.
Ms. Boyer will verify the number with the DIA and may offer a similar
amendment at the Friday wrap-up session. Peggy Sidman reiterated that projects
listed in the City CIP cannot be funded with CRA funds. Mr. Mousa strongly
recommended that the projects be constructed with CRA funding rather than
General Fund dollars, despite having been previously listed as City-funded
projects.
Motion (Boyer on behalf of
the DIA): remove the following DIA projects from the CIP: Liberty Street Road
Diet (beyond 5th year); Monroe Street 2-way (5th year
design and engineering, beyond 5th construction); Pearl Street 2-way
(beyond 5th year); Wayfinding Signage (beyond 5th year);
Hogan and Julia Street 2-way (beyond 5th year); Hogan Street Plaza
(beyond 5th year); additionally, split the Adams and Forsyth Street
2-ways project in the CIP into 2 projects: Adams Street 2-way design and
engineering - $979,725 (plus $6,531,500 for construction in Beyond 5th years);
Forsyth Street 2-way design and engineering - $1,025,944 (plus $6,839,625 for
construction in Beyond 5th years) – dies
for lack of a second.
Motion (Schellenberg):
remove all of the DIA’s downtown projects listed above from the CIP – withdrawn.
The committee will take up this item at tomorrow’s meeting.
Pending items
·
JSO firing range lead removal project
·
Boyer – funding additional ADA settlement
compliance
·
Southside parking project $550,000
·
P. 3, recommendation #6, Riverplace Boulevard project
·
P4, #4 allocation of Fair Share dollars
·
Neighborhood Enhancement Trust Fund balance (K.
Brown)
·
Jax Baldwin Trail Segment 3 dollar amount
The Special Council Contingency fund currently stands at $1,714,998 to
the positive, pending the addition of the amount in the budget for lead removal
at the JSO firing range.
Meeting adjourned: 12:43 p.m.
Minutes: Jeff Clements, Council Research
8.31.16
Posted 6:00 p.m.
Tapes: Finance Budget Hearing #5
– LSD
8.24.16
Materials: Council Auditor’s Budget Meeting #5 handout - LSD
8.24.16