OFFICE OF THE CITY COUNCIL

CHERYL L. BROWN 117 WEST DUVAL STREET, SUITE 425

DIRECTOR 4^TH 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 16, 2012

9:00 a.m.

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

In attendance:

John Crescimbeni, Greg Anderson (dep. 1:30 p.m.), Lori Boyer, Johnny Gaffney, Bill Gulliford, Stephen Joost and Clay Yarborough

Also: Council Members Matt Schellenberg, Don Redman (arr. 9:36), Warren Jones (arr. 3:53); Kirk Sherman and Kim Taylor – 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, David Bauerlein – Florida Times-Union; David Chapman – Financial News and Daily Record; Kevin Meerschaert – WJCT; Steve Cassada – Council Staff Services

Meeting Convened: 9:02 a.m.

Chairman Crescimbeni reported that he had attended the Police and Fire Pension Fund board meeting yesterday (the first meeting for City Council’s two new appointees) and conveyed the Finance Committee’s action to put $650,000 of the board’s administrative costs “below the line” for future consideration. He invited the board to submit a revised budget proposal, if they are so inclined, by Thursday, August 30^th. He also noted that the Special Council Contingency deficit stood at $7.3 million at the end of the last budget hearing, with an additional $5 million shortfall to be caused by the decision not to sweep tax increment funds into the General Fund.

CFO Ronnie Belton outlined several steps the administration intends to take to balance the proposed budget: 1) allocate $400,000 from Risk Management reserves; 2) find $4.25 million in savings from new contracts ($750,000 from a new facilities management contract; $3.5 million from a new employee health insurance contract); 3) $1 million from departmental employee lapses; 4) $2 million in reduced debt service from additional bond refinancing; 5) $600,000 in savings from the courthouse project; and 6) growth in state shared revenues of $3 million. Total savings and revenue enhancements are projected at $12.25 million.

Mr. Belton answered questions about the process and timeline for the new facility management contract. The Professional Services Evaluation Committee has ranked Global Spectrum as the top ranked proposer and yesterday denied the ranking appeal by SMG. The recommendation has gone to the Mayor for a final decision, then PSEC will begin contract negotiations with the winning company. SMG will continue to operate EverBank Field throughout the upcoming football season regardless of which company wins the award for the rest of the facilities. Committee members questioned the timing of the discovery of the contractual savings and why they weren’t calculated into the Mayor’s budget proposal.

References from this point refer to Council Auditor’s Handout for Meeting #3, August 16, 2012 unless otherwise noted.

Parks and Recreation Department

Department Director Kelley Boree explained the sizeable shift in personnel from the Public Works Department’s right-of-way and grounds maintenance division back to the Parks and Recreation Department - a reversal of a shift in the other direction that took place several years ago. She also explained the funding ratio between the City and University of Florida for agricultural extension agents. The department has budgeted $1 million in anticipated revenue from private sources for the operation of now-closed community centers by private groups. The committee engaged in considerable discussion of the shifting of the maintenance personnel from Public Works to Parks and Rec. In response to questions from Council Member Boyer, Budget Officer Glenn Hansen explained that a better cost allocation method is currently being developed to account for the work done by maintenance employees that is attributable to stormwater utility functions to ensure that stormwater utility revenues are used strictly for that purpose.

Motion (Gulliford): on p. 5 approve Council Auditor’s recommendation #1 – approved.

Motion (Boyer): on p. 5 approve Council Auditor’s recommendations #2 and 3 – approved.

Council Member Boyer suggested the need to reexamine the projected revenues from tennis lesson fees, which could have been artificially low in FY11-12 because the City’s clay courts were closed for two months for resurfacing and because several hard courts have been closed for some time pending repairs.

Motion (Yarborough): based on the Kelley Boree memo to Chairman Crescimbeni dated August 14, 2012, recommend approval of shifting one agricultural extension agent from funding entirely by the General Fund to a professional services contract with a 60/40 state/local cost share – approved.

Motion (Yarborough): on p. 5, approve Council Auditor’s recommendation #4 – approved.

Council Member Boyer urged Ms. Boree to begin planning for the provision of after-school options at community centers in the event that libraries are closed on Mondays due their budget reduction. It is especially important to have single day drop-in options on Mondays for children who are not registered for full-week after-school programs. Ms. Boree discussed the funding mechanism for the $2 million construction cost for the proposed water park at Lonnie Miller Park, which consists of council member district bond funds and CDBG funds. She will not authorize construction to begin until a funding source for the estimated $350,000 per year operational costs is identified. Chairman Crescimbeni requested a report on the sources of the $2 million construction cost.

Motion (Boyer): on p. 6, approve Council Auditor’s recommendation #6 – approved.

Public Service and Cultural Service Grants

The committee engaged in considerable discussion with Robert White, Executive Director of the Cultural Council, about the cultural services grant process and the Cultural Council’s administrative costs. Council Member Yarborough advocated for reducing the total amount of the public service and cultural service grants in recognition of the reductions being imposed everywhere in the City budget. Council Member Joost noted that the two grant programs took substantial cuts several years ago before the current City budget reductions began in earnest. The committee discussed why the public service and cultural service grants are funded differently. The Public Service Grant Council carries out an extensive grant review and award process before a list of proposed recipients is presented with the budget. The Cultural Services Grant Council waits until the City Council appropriates a lump sum amount in the budget, then makes its awards afterward. Council Auditor Kirk Sherman explained that the system was set up in the Ordinance Code by a previous council.

Cherise Wilks of the Intra-Governmental Services Department and Edgar Mathis, Chair of the Public Service Grant Committee, explained the mechanism and methodology by which priority populations are determined and public service grants are read and ranked. Funding is based on the quality of the applications and the ranking of the best applications within each “silo” of funds targeted at different priority populations. The committee asked for copies of the scoring matrix and ranking sheets from the grant committee.

Action on Public Service and Cultural Service Grants will be postponed to the August 30 hearing.

Alcohol Rehab Trust Fund

The committee discussed Gateway Community Services and its alcohol detox program with its director, Dr. Candace Hodgkins, who said that the agency’s City funding was cut by 15% last year and is recommended for another 30% cut this year. She requested that this year’s reduction be limited to 15% or the center will be forced to close bed space in its detox center, which is a less expensive facility than taking intoxicated persons to a hospital emergency room or a privately operated detox facility.

Huguenot Park

Motion: on p. 10, approve Council Auditor’s recommendation #1 – approved.

Mr. Hansen answered questions from the committee about the City’s Maximo cost allocation system and how it works. The committee members have heard a good deal of discontent from departmental officials relating to their inability to understand or get an explanation of what the system covers, how costs are allocated among user departments, and how departments can reduce their internal service charges if they are so inclined. Mr. Hansen explained that it is a very complicated software package owned and operated by a third party company with whom the City contracts to analyze and allocate all of its overhead costs. The committee wants a further explanation of what costs are included and how the allocations are made.

The committee was in recess from 12:17 to 1:23 p.m.

Courts

After Mr. Sherman’s overview of the courts budgets, Court Administrator Joe Stelma reported that the Traffic Court currently located on Beach Boulevard near St. Nicholas will not be moving to the new county courthouse because a determination has been made that there is insufficient free parking nearby to serve the 200+ cases per day heard by that court. Chairman Crescimbeni asked the adminstration to explore parking options that would allow the Traffic Court to move out of leased space and into the new courthouse.

Law Library

Motion: on p. 20, approve Council Auditor’s recommendation – approved.

Juvenile Drug Court

Kirk Sherman explained that the proposed transaction needs to be re-characterized into proper form. Since this fund is an all years subfund (does not close out at the end of a fiscal year), there is no carryover as there would be in a single year fund. The proposed amount needs to be removed from a fund balance transfer and recast as a reduction in cash carryover.

Motion: on p. 22, approve the Council Auditor’s recommendation – approved.

Mr. Stelma answered questions about the reduction in revenue from court fines and fees, stating that the fines and additional fees are being levied by the judges in the usual amounts on the same numbers of defendants. What is changing is that fewer defendants are paying the fees. Unpaid fines and fees are turned over to a collection agency, but the collection rate is not good.

Courthouse Trust Fund

Motion: on p. 26, approve the Council Auditor’s recommendation – approved.

Recording Fees for Technology

The committee engaged in considerable discussion with Mike Smith, the information technology director for Court Administration and Richard Commander of the State Attorney’s Office about the on-going controversy over the proper use of 15U recording fees, what services the City’s ITD does or does not provide to state court agencies, and what technology the city is obligated to provide to court facilities. Loree French of the General Counsel’s Office explained the revisions to Article V of the Florida Constitution several years ago that are interpreted and disputed by the parties. The City must provide what is necessary, but there is no exact definition of “necessary”; therefore the City, State Attorney, Public Defender and Court Administration must reach some mutually agreeable resolution as to what is necessary and how sufficiently the City’s proposed allocations of these fees meet that test. She did say that with regard the immediate questions at hand, it is her opinion that the City can use the funds to purchase a network server on behalf of the State Attorney rather than the State Attorney purchasing it herself, and that the City may legitimately include an ITD overhead charge in its billings in addition to the actual cost of services provided. Mr. Commando argued that the State Attorney is a law enforcement agency that needs a highly secure server, and that there have already been breaches of security in the City’s server operation. Chairman Crescimbeni directed the State Attorney, Court Administrator, Public Defender, City ITD and General Counsel’s Office to retire to a meeting room and work out a mutually agreeable solution.

Motion (Joost): on p. 28, approve the Council Auditor’s recommendation #2 – approved.

Motion (Joost): on p. 29, approve the Council Auditor’s recommendation #3 – approved.

Motion (Joost): on p. 29, approve the Council Auditor’s recommendation #4 – approved.

Motion (Joost): on p. 29, approve the Council Auditor’s recommendation #5 – approved.

Motion (Gulliford): in reference to the Court Administrator’s memo the Finance Committee entitled “Proposed new employee for Duval County Court IT”, approve the budget request in paragraph 5.b. for an allocation of $45,000 from Special Council Contingency (plus the $5,000 already in the proposed budget) for a total of $50,000 for purchases of software and hardware valued under $1,000 – approved.

The committee asked Jarik Conrad, Director of Employee Services, reviewed the Administrative Services Department devolution and employee transfers to other departments. The Brown administration decided to reverse the decision made by the previous administration to centralize administrative personnel from each department into an Administrative Service Department, which was never completely implemented. A team made up of Employee Services, Budget Office and other experienced administrators asked the other departments for their input and determined which employees would be transferred to which departments. Civil service rules affect who ends up where because of seniority and bumping rules, which works based on time within job class and within the defined “competitive area”, not based on simple seniority with the City. Veteran’s preference also factors in.

Public Defender

Mr. Sherman said that his office had calculated the net effect of purchasing the Jake Godbold Building and believes it could be paid off in 17 years and would be less expensive than paying the Police and Fire Pension Fund’s lease rate for 40 years. Council Member Gulliford noted that doing so will have an effect on the PFPF’s unfunded liability calculation. The potential purchase will be discussed during the Banking Fund budget.

Clerk of the Courts

Motion (Joost): on p. 35, approve the Clerk’s request that 3 positions with applicable salaries and benefits be moved from one index code to another - approved.

Tax Collector

Motion (Joost): on p. 38, approve the Council Auditor’s recommendation #1 – approved.

Motion (Joost): on p. 38, approve the Council Auditor’s recommendation #2 – approved.

Property Appraiser

Motion: on p. 41, approve the Council Auditor’s recommendation – approved.

In response to a question from Council Member Gulliford about whether the Property Appraiser could charge for some of its services (i.e. on-line mapping and database), Property Appraiser Jim Overton said that state law prohibits charging for anything more than the cost of reproduction of documents; it can’t be a profit center. In response to a question from Council Member Jones, Mr. Overton indicated that every property is appraised every year by formula, and must be physically inspected at least once every 5 years.

Court Administrator Joe Stelma reported back on the results of the meeting of the court officials regarding the use of the recording technology fee. The group had a good discussion and will be ready to address the issues at a future meeting.

Jack Shad, Chief of Public Parking, reported that there is adequate available parking in the courthouse area, but it will be on a paid basis, not free. Chairman Crescimbeni urged Court Administration to vacate the Beach Boulevard leased location and move Traffic Court to the courthouse.

Supervisor of Elections

Council Member Gulliford stated that the election facility at Gateway is a very inefficient space and needs to be replaced with a new building. Supervisor Holland agrees and has been working with Council Member Yarborough on a new location (Ordinance 2012-468). Mr. Holland answered questions about the cost of printing calendars and printing and mailing ballots.

The remainder of the Meeting #3 agenda was moved to the August 30^th wrap-up meeting.

Meeting adjourned: 4:26 p.m.

Minutes: Jeff Clements, Council Research Division

8.17.12 Posted: 10:30 a.m.

Tape: Finance budget hearing 8.16.12

Legislative Services Division

Attachments: Council Auditor’s Handout for Meeting #3, August 16, 2012