OFFICE OF
THE CITY COUNCIL
CHERYL L. BROWN 117 WEST DUVAL STREET,
DIRECTOR 4TH
FLOOR, CITY HALL
OFFICE (904) 630-1452
FAX (904) 630-2906
E-MAIL: CLBROWN@coj.net
FINANCE COMMITTEE BUDGET HEARING MINUTES
August 23, 2012
9:00 a.m.
Location: City Council Chamber, 1st floor, City
Hall –
In attendance:
Council Members John Crescimbeni (Chair), Greg Anderson, Lori Boyer, Johnny Gaffney, Bill Gulliford and Clay Yarborough
Excused: Stephen Joost
Also: Council Members Robin Lumb, Matt Schellenberg, Warren Jones, Kimberly Daniels and Doyle Carter; Kirk Sherman, Kim Taylor, Kyle Billy, 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, David Bauerlein – Florida Times-Union; David Chapman – Financial News and Daily Record; Kevin Meerschaert – WJCT; Steve Cassada – Council Staff Services
Meeting Convened: 9:05 a.m.
Kirk Sherman reported that his staff has been reviewing the administration’s proposal made at the last meeting to fill the revenue gap. They are making progress and agree with some of the numbers presented; others require more investigation and verification of reasonableness. He will have a report at tomorrow’s meeting after further conversation with the administration.
References from this
point refer to the Council Auditor’s Handout for Meeting #5 – Independent
Authorities - August 23, 2012.
Independent Authorities
JEA
Kyle Billy of the Council Auditor’s Office gave an overview of the JEA budget and its annual contribution to the City. JEA will not be incurring any new debt for its electric system capital in the fiscal year, using existing borrowing capacity and current revenues.
Motion (
Council Member Gulliford expressed concern with the JEA contractor pre-qualification process, feeling that the JEA’s excessively rigorous requirements are shutting out qualified contractors and keeping local businesses from being able to bid on jobs. The contractors filed suit over a recent pre-qualification for a pipeline job and prevailed in court; thereafter a local company won the bid. Mr. Gulliford asked for a meeting of himself, JEA and the contractor community to discuss the issue, to which JEA CEO Jim Dickenson agreed.
In response to a question from Council Member Boyer, Mr. Dickenson discussed JEA’s reclaimed water projects and plans for expansion. He noted that retrofitting existing developments for reclaimed water distribution is extremely difficult and expensive, so JEA is concentrating on providing the service to new developments and to single big users such as golf courses and office parks. Chairman Crescimbeni urged the adoption of a policy requiring installation of reuse water mains in all new developments, whether the JEA is ready to serve them in the near future or not. Eventually the state will require the City to do more in the way of reuse and it will be worth the investment now.
In response to a question from Council Member Schellenberg, Mr. Dickenson explained why the JEA charged the City for chilled water service for the new courthouse for several years before the courthouse actually opened. The charge was for the debt service on the construction of the chilled water plant which had to be paid regardless of whether the plant was operating or not. In response to a question from Council Member Anderson, Mr. Dickenson explained JEA’s bond refinancing policy and practices and noted that all of their bond ratings have been increased or upgraded in the last year. Council Member Gulliford suggested that the JEA consider participating in City economic development incentives since new companies and new growth is good for JEA’s bottom line.
The committee congratulated Mr. Dickenson on the end of a long and distinguished career as he attended his last budget hearing before retirement.
Mr. Billy gave an overview of the authority’s operating and capital budgets. He noted that the passenger revenue line is down substantially because the Skyway is operating free service; the revenue for that line item is from parking.
Motion (Gulliford): on p. 48, approve Council Auditor’s recommendations #1 – 7: approved.
Council Member Schellenberg asked questions about CTC operations and usage. In response to a question from Council Member Boyer, JTA Executive Director Michael Blaylock reported that the JTA is now allocating $3 million per year for construction of the unified Regional Transportation Center $10.9 million total accumulation) to provide funding for the center in the absence of a federal TIGER grant. The JTA is close to agreement with Greyhound for them to relocate to the convention center site; negotiations with Amtrak and planning for bus rapid transit to serve the center are continuing.
Ms. Boyer announced a meeting of the Regional Transportation
Study Commission next Monday at 2:00 p.m in the Lynwood Roberts Room of City
Hall to discuss the future of transportation and growth in the
On behalf of Council Member Joost who is excused today, Council Member Gulliford said that Mr. Joost believes the Mayport Ferry operation should be a JTA function since it is a transportation facility. He hoped that the JTA would be able to look to its contingency funds to make a contribution toward the ferry operation for the coming year. Blair Fishburn of the JTA answered several questions about the Skyway operation, revenues and obligation to the federal government to continue the operation. The system will reach the end of its depreciation period in 8 years, and the City had a 40 year agreement with the federal government for the system. Council Member Schellenberg posed questions about free bus ridership for citizens age 60 and over and about the future of the local option gas tax which is due to expire in 2016. Council Member Boyer expressed concern about the City’s independent authorities all benchmarking their executive director salaries to the other authorities, not to the salaries of comparable agencies in other cities. In response to a question from Council Member Redman about installation of new bus shelters, Mr. Fishburn said that more than 50 have been installed downtown and an additional 80 on high traffic bus lines. Shelter advertising has produced approximately $30,000 in the current fiscal year.
The committee congratulated Mr. Blaylock on the end of a long and distinguished career as he attended his last budget hearing before retirement.
Mr. Billy gave an overview of the authority’s operating and capital budgets, noting that the City does not contribute any funding to the JAA and that the JAA reimburses the City for use of City-provided services.
Motion (Boyer): on p. 59, recommend approval of Council Auditor’s recommendations #1-5 – approved.
In response to a question from Mr. Schellenberg, JAA CEO Bob
Grossman explained that the authority is still in the study process for its
spaceport operations and is seeking a potential operator.
Mr. Billy gave an overview of the authority’s operating and capital budgets. The only substantive change to the JPA budget as proposed is an allocation of $200,000 to the operation of the St. Johns River Ferry.
Motion (Gulliford): on p. 68, recommend approval of Council Auditor’s recommendations #1 and 2 – approved.
Council Member Schellenberg questioned the authority’s very low cash flow; without the City’s annual contribution the JPA would have almost no cash generated from operations. The authority is consciously using cash revenues to pay down its large debt from the construction of the TraPac terminal because that makes the most sense in the current fiscal environment. Council Member Gulliford thanked the JPA for its contribution to keeping the Mayport ferry operating for one more year while the ferry commission gets organized and seeks a permanent funding solution. Council Member Jones noted that the City’s contribution to the port authority started decades ago as the equivalent of 1 mill ($800,000). If the City had continued to contribute 1 mill, that would be $45 million to the port currently which would generate thousands of jobs.
Council Member Boyer asked about the rationale behind splitting the aviation and seaport authorities some years ago. General Counsel Cindy Laquidara explained that federal funding regulations prohibited diversion of aviation funds to other purposes so that played into the decision to separate the operations. Ms. Boyer is interested in finding ways that the operations of the authorities can benefit the City budget, either directly or indirectly.
The committee was in
recess from 11:45 a.m. to 12:54
References from this
point refer to the Council Auditor’s Handout for Meeting #5 - August 23, 2012.
Council Member Boyer asked if it was correct to assume that, given the still-pending budget deficit, those departments that have already had their budgets approved should not assume that their budgets are finalized. Chairman Crescimbeni agreed that no budgets are to be considered final yet.
Finance Department
Mr. Sherman and Mr. Belton are still in negotiation about how to implement a $305,430 lapse. In response to a question from Council Member Boyer about why the department’s proposed budget is not 10-15% lower than last year as requested of all the other departments, Mr. Belton said that he plans to achieve those savings after the budget process is completed – he needs all hands on deck throughout the budget process and will work on the reduction afterward.
Motion (Gulliford): on p. 2, approve the Council Auditor’s recommendation – approved.
Self-Insurance
Council Member Gulliford asked about the threshold amount that triggers use of excess loss insurance coverage, Risk Manager Twane Duckworth said that it varies by the area of operation - $1.2 million for worker’s compensation, $2.5 million in some areas and $5 million in other areas.
Neighborhoods Department
Motion (Gulliford): on p. 12, approve the Council Auditor’s recommendation – approved.
Mr. Sherman noted that, since the bill to waive the automatic increase in City user fees is being withdrawn from City Council, a new ordinance will need to be introduced to amend the Ordinance Code to reflect the new fee schedule.
Council Member Boyer suggested that the City needs to change
the way that building-specific internal service charges are levied against
departments. She does not think it is
equitable for departments to be charged different rates that they can’t control
because they are assigned their location.
Ms. Boyer also asked questions about the balance in the foreclosure
registry fund and the potential for using those funds to restore some of the
code compliance officers proposed to be eliminated. The foreclosure registry fund balance is
currently approximately $1.2 million.
Elaine Spencer, Director of the Neighborhoods Department, said that
there is a lawsuit pending in
Motion (Boyer): on pp. 11-12 restore the 8 code compliance officer positions on an unfunded basis.
Motion (Yarborough): amend the Boyer motion to keep the 1 currently filled, funded senior code compliance officer position funded and active.
Boyer motion as amended by Yarborough amendment – approved.
Animal Care and Protective Services
In response to a question about why animal licensing fee revenue is projected to decrease substantially, Division Chief Scott Trebatoski said that the primary cause is a change in the business model of one of the veterinary practices that sold the largest number of animal licenses. The practice no longer sells vaccinations and licenses without charging for a full office visit so their number of licenses has dropped substantially. The City will hold a vaccination and license event at Animal Care to try and attract citizens who have decided to skip licensing their pets.
Motion: change the name in the chart of accounts from Animal Care and Control to Animal Care and Protective Services – approved.
Mosquito Control
Motion (Gulliford): on p. 14 approve the Council Auditor’s recommendation – approved.
The committee expressed its thanks to Animal Care and Protective Services Chief Scott Trebatoski, Mosquito Control Chief John Shellhorn and Code Compliance Chief Kimberly Scott for the good work their divisions are doing meeting the public’s needs with professionalism in difficult fiscal times.
City Council
Motion (
Discussion of City Council parking in the City Hall garage. Discussion of the reduction of one Research Assistant position due to a retirement.
Motion (Yarborough): on p. 29, approve Council Auditor’s recommendations #2 and 3 and hold over #1 to a future meeting – approved.
Tourist Development Council
Motion (
Office of Economic Development
Mr. Sherman showed a comparison of the former JEDC budget with the proposed Office of Economic Development budget and discussed personnel and service changes. The Downtown Investment Authority is currently budgeted within the OED for now until the DIA is formally created and funded, at which point its budget will be separated to its own unit. Discussion of why some costs related to special events are budgeted to the Special Events Division and others are budgeted to the Office of Economic Development.
Council Member Schellenberg asked the Office of General
Counsel to provide information on whether the City could require all new
appointed employees to participate in a defined contribution pension plan
rather than the defined benefit plan. In
response to a question from Council Member Boyer about whether the OED budget
as proposed has any “closing fund” for economic development projects, OED
Acting Director Paul Crawford said that it did not. The administration hopes that the Council
will allow a project closing fund to be created but without funding until some
future date when Council agrees to provide resources. Ms. Boyer also requested that additional
information be presented in each budget process showing the amount of
cumulative QTI and REV grant obligations accrued to date. Chairman Crescimbeni suggested that a rolling
spreadsheet be presented along with each proposal to grant a QTI or REV grant.
OED Special EventsFund
This represents a transfer of the former Special Events Division of the Parks and Recreation Department to the OED’s jurisdiction.
Motion (Gulliford): on p. 41, approve Council Auditor’s recommendations #1, 2 and 3 – approved.
Motion (Yarborough): on p. 39, eliminate the position transfer from Administrative Services to OED – approved.
In response to a question posed earlier about participation in pension plans, Deputy General Counsel Steve Rohan said that the City Charter provides that some employees must be in the defined benefit pension plan, some employees may be in the defined benefit plan, and others may choose which plan they prefer to be in. Some employees covered by collective bargaining have the right under those agreements to be in the defined benefit plan. Whether some categories of employees (such as appointed officials) may be compelled to be in a defined contribution plan is a complicated question of pension law. John Germany of the General Counsel’s Office is researching the question and will have an answer for the committee.
Public Parking System and Garages
Kirk Sherman noted that the parking garage account is running a sizeable deficit, but the division is working on whittling that deficit down. Public Parking Division Chief Jack Shad said that rates are set by the City Council, with some limited authority to the division to offer temporary promotional rates. The division has budgeted approximately $150,000 for automated gate equipment in parking garages in the upcoming year.
Mr. Shad indicated that he has had conversations with CAO
Karen Bowling about the process for moving the
JEDC Closeout
Motion: on p. 47, approve Council Auditor’s recommendation – approved.
Peggy Sidman read language from pending Ordinance 2012-354 regarding the DIA’s appointment of and executive director and other staff. Ms. Boyer stated that the OED budget approved earlier allocated $200,000 for the salary of the Executive Director of DIA and wondered how this would interact with 2012-364 that creates the position but did not set a salary range.
Ms. Sidman reported that Ordinance 2007-1136 authorized
Motion (
Meeting adjourned: 4:05 p.m.
Minutes: Jeff Clements, Council Research Division
8.23.12 Posted: 4:30 p.m.
Tape: Finance budget hearing 8.23.12
Legislative Services Division
Attachments: Council Auditor’s Handout for Meeting #5, August 23, 2012
Council Auditor’s Handout for Meeting #5 – Independent Authorities, August 23, 2012