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 30, 2012

9:00 a.m.

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

In attendance:

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

Also: Council Members Carter (arr. 9:16); Kirk Sherman, Kim Taylor, Kyle Billy, Robert Campbell, Phillip Peterson and Heather Reber – Council Auditor’s Office; Cindy Laquidara and Steve Rohan – 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 and Steve Patterson – Florida Times-Union; David Chapman – Financial News and Daily Record; Kevin Meerschaert – WJCT; Steve Cassada – Council Staff Services

Meeting Convened: 9:10 a.m.

St. Johns River Ferry Commission

Kyle Billy of the Council Auditor’s office presented a draft budget for the commission prepared by himself in conjunction with HMS Global, the current ferry contract operator. The budget includes both the City’s $200,000 contribution and the JPA’s $200,000 contribution. In response to a question from Council Member Gulliford about the $10,000 contribution pledged by the Beaches cities, Mr. Billy said that that contribution and several other pledges are not being budgeted yet because they have not been received; the budget will be amended to recognize their receipt later. Mr. Billy is working with the Accounting Division to invoice the Beaches cities for their contribution.

Motion (Gulliford): approve the Ferry Commission budget – approved.

References from this point refer to he handout entitled Council Auditor’s Wrap-Up Items – August 29, 2012.

Health Department

Dr. Bob Harmon, Director of the Health Department, described the work of the security guards in the City-owned buildings that are occupied by the Health Department. They regularly respond to incidents and work with the Sheriff’s Office to secure the buildings and parking lot. Dr. stated that the City contributes relatively little to the health department budget compared to what other counties contribute to their departments. Council Member Joost urged the City to send the state a bill for the security services since the occupants of the building are overwhelmingly state employees.

Motion (Anderson): on p. 17, move the funding for the security guards “above the line”.

Motion (Joost): on p. 17, move half of the reserved funding ($75,530) “above the line” and split the cost for security guard service with the Health Department – approved.

In response to a question from Council Member Boyer, Dr. Harmon explained the federal metabolic research grant with the Health Department and St. Vincent’s Medical Center and the City’s $640,000 match to the state Medicaid funding. The grant will study how to identify and provide care for persons with conditions related to obesity, diabetes and other weight-related diseases in a cost-effective way, including diverting patients from emergency room care to primary care clinics. Ms. Boyer questioned spending more on this grant next year than in the current year when so many City programs and employees are being cut.

Human Rights Commission – ITD charges

ITD Chief Usha Mohan and George Chaktoura and Charlene Taylor-Hill, Executive Director of the Human Rights Commission discussed the history of the Human Rights Commission’s case management system and its charges. ITD believes that whichever funding method was contemplated (maintenance or project), ITD expected to be paid for the service is provided, which may or may not have been JHRC’s understanding. None of the ITD personnel who were involved in the early history of this project are still employed by the City so ITD does not know what conversations may have taken place and what understandings existed several years ago. Ms. Mohan said that the division allocates its charges to departments based on past year’s usage, so the fact that JHRC had a big allocation in FY11-12 led to a big allocation in FY12-13, despite the fact that the workload won’t be that big in the coming year. If JHRC doesn’t need the programming services, those hours can be allocated to other departments for other projects. Ms. Mohan agreed that the ITD cost allocation method is problematic and needs to be revised. Council Member Boyer urged the administration to tackle the Citywide cost allocation problem immediately.

Motion (Gulliford): keep $4, in ITD maintenance charges in the Human Rights Commission budget and shift the remaining $114,510 back to ITD’s budget as an extraordinary lapse – tabled until later in the meeting.

The committee asked the Council Auditor’s Office and ITD to meet during the lunch break to try and come up with a solution that incorporates the committee’s sentiment that ITD should bear the brunt of the cost for this project in a way that cannot be shifted to other departments. Ms. Taylor- Hill asked the committee to be sure to leave sufficient funding in the JHRC’s budget for necessary ITD maintenance items. Council President Bishop and Council Members Joost and Gulliford all expressed their frustration with the Council’s inability to get a handle on the cost allocation problem and urged the administration to solve the problem once and for all.

Court Issues

Traffic Court relocation – will take place in January. Court Administrator Joe Stelma said that the move would save $544,000 for court rent and $250,000 for Clerk of the Courts rent. Kirk Sherman said that the savings would be considerably less for the upcoming budget based on two factors: 1) the rent savings will be for 9 months, not a full year, and 2) there is still $325,666 in long-term build out costs that are still payable to the landlord of the Beach Boulevard facility. He estimates the cost savings for FY12-13 at $62,193. Mr. Stelma recounted various handicapped accessibility problems of the new courthouse including failures of several areas to meet federal Americans With Disabilities Act requirements. Cindy Laquidara explained that the City has two options for how to solve the courthouse accessibility problems – either do the renovations itself and bill Turner Construction or compel Turner to do the renovations through the project’s “force account.”

Motion (Joost): recognize the rent savings of $62,193 from moving Traffic Court from the Beach Boulevard location to the new courthouse – approved.

Kirk Sherman urged the administration to take the necessary action by tomorrow (including signatures by the Mayor) to inform the landlord of the City’s intention to end the lease early. Chief Administrative Officer Karen Bowling, General Counsel Cindy Laquidara, Deputy CAO Cleveland Ferguson and Joe Stelma discussed how to process the lease cancellation and to make the courthouse sufficiently handicapped accessible for traffic court to be operational as of January 2, 2013.

Court technology/request (a) – Joe Stelma and Mike Smith of Court Administration discussed the continuing problem the courts have with ITD charges and the MTEC help desk contract services.

Motion (Gulliford): on p. 4, approve departmental request (a) to remove $40,000

Motion (Boyer): on p. 4, approve departmental request (a) to move development of Family Court Case Management System to Clerk of Court’s office, remove $40,000 for MTEC costs, allocate $91,000 to the Mayor’s budget - approved.

Court technology/request (b) – the court requests funding for a second full-time IT person to be stationed at the courthouse at a cost of $70,000. The committee declined to make a motion on the request.

Finance Department lapse

Motion (Joost): on p. 9, recommend approval of Chief Financial Officer’s proposal to eliminate 1 position, downgrade 2 psitions and redline 1 position – approved.

Public Library funding allocation

Motion (Gulliford): on p. 5, recommend approval of Library Board’s recommendations for use of the $830,000 budget restoration: 1) $500,000 to new materials purchases and 2) $330,000 for restoration of Sunday hours at 5 locations (Main, Highlands, ) and move the funds “above the line” -

Motion (Joost): amend Gulliford motion to apply $38,000 to Special Council Contingency – approved.

$1,465,000 deficit in Special Council Contingency fund at this moment.

Courthouse ADA issues

Dave Schneider of the Public Works Department reported that there are between 100 and 500 doors in the courthouse that are in dispute as to the proper pull force. ADA-compliant doors require no more than 5 pounds of pull force. Fire doors are allowed to be up to 8.5 pounds of pull force. At the 5 pounds of pull force many of the doors don’t latch properly for fire code purposes. Turner Construction contends that fire regulations trump ADA requirements and the doors are properly set. The solution could range from $500 per door for new closer hardware to $10,000 per door for electric closers, or $5,000 to $5 million depending on the number of doors and the cost of the solution. Mr. Schneider also discussed various options for addressing the accessibility of the judges’ chambers, ranging from lowering the floors to installing ramps to re-categorizing the chambers as non-public areas with no renovations needed.

The committee was in recess between 12:01 and 12:42 p.m.

Jacksonville Human Rights Commission – ITD issues

The administration has worked out the issues between the JHRC and ITD and the parties have agreed to the Mayor’s budget for this project as proposed.

Police and Fire Pension Fund board

Chairman Crescimbeni said that he has heard that there may be some unrealistic assumptions built into the latest Police and Fire Pension Fund actuarial report. Cindy Laquidara and Ronnie Belton reported that the City has invoked its rights under its agreement with the fund to have its actuary review the report’s assumptions and results. Depending on the results, if the City’s actuary and the PFPF’s actuary disagree over the reasonableness of the report, those two actuaries choose a third actuary to resolve any disagreements. Mr. Belton did not wish to disclose on the record what particular items are being reviewed because of on-going union negotiations. Chairman Crescimbeni will meet privately with Mr. Belton to ensure that particular questions he wants answered are being explored by the City’s actuary.

Motion (Joost): on p. 12, approve Council Auditor’s recommendation #1 – approved.

PFPF Executive Director John Keane delivered a revised budget to the committee on behalf of the pension fund board. Chairman Crescimbeni questioned by the reports of the fund’s active employees differed from one committee meeting to the next; Mr. Keane did not know who prepared the report the committee was reading and could not account for the discrepancies.

Cindy Laquidara addressed the plan’s Senior Staff Voluntary Retirement Plan. She and ECO Officer Carla Miller are collecting documents related to the plan’s establishment and funding and will be meeting with the PFPF board in September to discuss the matter. Ms. Laquidara has opined that the fund was not legally established; the PFPF’s attorney believes that it was. The City will attempt to resolve the issue with the board short of litigation. In response to a question Ms. Laquidara stated that the Council has the authority to not fund the PFPF’s administration budget because the City is not obligated to fund a pension plan that should not have been created without authorization.

Mr. Keane answered questions from committee members about the fund’s vehicle replacement policy. The committee discussed the fund’s operating expenses and the Council’s ability to determine what are “reasonable” expenses that need to be paid to operate the fund. Mr. Crescimbeni recalled the discussion at a previous meeting that compared the administrative costs of the PFPF versus the costs of the General Employees’ Pension Plan. Cindy Laquidara said that she is willing to prepare a request for declaratory judgment that will

Motion (Joost): on p. 16, reduce the PFPF budget by $650,000 by extraordinary lapse and apply that to the City’s employer contribution to the Police and Fire Pension Fund – approved 5-1 (Boyer opposed).

Council Member Yarborough asked several questions about the fund’s administrative budget and requested more regular communication between the PFPF and the City Council. Committee members asked questions of Mr. Keane and Mr. Sherman about the operation and funding of the Senior Staff Voluntary Retirement Plan and its relation to the PFPF. Mr. Keane also answered questions about the fund’s legal expenses.

Kirk Sherman asked for clarification of the committee’s earlier action regarding the $650,000 extraordinary lapse and the committee made a clarifying motion.

Motion (Joost): on p. 16, reduce the Operating Expenses line by $650,000 to $7,149,223 and reduce the Trust Fund Revenues line by $650,000 to $8,403,292, and on p. 15 reduce the City’s employer contribution to the Police and Fire Pension Fund by $650,000 to $121,369,612 – approved.

Sheriff’s Office budget

Motion (Joost): reduce Sheriff’s Office budget by $145,620 for reduced private security guards assigned to the new courthouse – approved.

The Sheriff reported that he could reallocate funds from a domestic violence trust fund to pay for some operations for which it is not currently used and use the $700,000 freed up by that change to fund the EverBank stadium event traffic control costs.

Motion (Gulliford): on p. 5, approve the Sheriff’s proposal on #8.c. to shift $700,000 from a domestic violence trust fund as revenue to the JSO budget and use the $700,000 General Fund offset to allocate to the JSO’s cost of providing traffic control – approved.

***Motion (Joost): on p. 5, approve Council Auditor’s recommendation 8.a. – approved.***-

***Motion (Joost): on p. 5, approve Council Auditor’s recommendation 8.c. to apply $76,000 to the cost of security services inside EverBank Field, and apply the remaining $2,461 to the Sheriff’s Office lapse – approved ***

Motion (Gulliford): delete the budget for the Education Commissioner support staff position from the budget temporarily until the private funding commitments are received – withdrawn.

$669,833 Special Council Contingency balance.

Public Works – Beaches yard waste tipping fee

Public Works Director Jim Robinson explained how the problem arose with the Old Kings Road Landfill, with the City paying only a partial amount of the total bill for its portion of yard waste tipping fees but not the portion for the Beaches tipping fees. The committee asked how the administration plans to pay the past due amount ($57,000) to the landfill; Mr. Hansen will bring a proposal to the Finance Committee next Wednesday.

Facilities management contract

In response to a question from Council Member Gulliford about whether the Jaguars’ insistence on having SMG operate EverBank Field could give Global Spectrum a cause to withdraw its RFP because a major facility is withdrawn from the portfolio, Cindy Laquidara said that it would.

Chairman Crescimbeni asked if the committee was interested in addressing either Gateway Community Services (reduction of funding for the detox center), the restoration of positions to the Construction Trades Qualifying Board or the restoration of the position of Executive Director of the Council for Elder Affairs.

Motion (Boyer): restore $75,000 in funding to Gateway Community Services (up to $435,499) for the detox center and add the $75,000 deficit to the Special Council Contingency – approved.

Motion (Joost): amend the Boyer amendment to reduce the overall Public Service Grant allocation by $75,000 to pay for the increase in the Gateway Community Services allocation –withdrawn.

Council on Elder Affairs

Council Member Redman urged restoration of funding for the staff position for the Council on Elder Affairs. Jessica Deal of the Mayor’s Office said that the Special Services Department has a staff member who will act as staff to the council

Motion (Gulliford): restore funding for Executive Director of Council on Elder Affairs – dies for lack of a second.

References from this point refer to the Council Auditor’s handout for Meeting #8 – August 30, 2012.

Capital Improvement Program (CIP)

Motion (Boyer ): on p. 3, approve Council Auditor’s recommendations 1.a, b, c and d – approved.

Council Member Boyer believes that the committee is missing several substantial pieces of information about CIP projects in the proposed plan (i.e. previous year expenditures on projects and listing of projects previously funded but not expended) and suggested that the committee postpone discussion of this item until a future committee meeting in September. Mr. Hansen explained that staff are currently at work on reconciling information in three different databases and hope to have the project complete by next Wednesday. The committee will get a report next Wednesday and perhaps schedule a special committee meeting the following week. Phillip Peterson reminded the committee that a decision needs to be made to provide a figure for the budget to be tentatively approved by the City Council on September 11^th.

Council Member Carter advocated for inclusion of a new project (a new road from Chaffee Road to Cecil Commerce Parkway) in the CIP – $300,000 to complete design and engineering of a road project for FY12-13 and then a $3 million project for after the 5-year CIP period to construct 2 lanes of the 4 lane road. Steve Diebenow representing the property owner stated his client’s willingness to provide a letter of commitment to provide the $300,000 private donation immediately upon passage of the budget. The committee will take up the project next Wednesday.

Banking Fund

Motion: on p. 24, approve Council Auditor’s recommendation to allow Auditor, Budget Office and General Counsel to revise the schedule to reflect the earlier decision to remove $696,100 for vehicle purchases – approved.

Ronnie Belton and Mark Stickney of the Finance Department made a presentation on the City’s debt utilization and the plans to pay down more debt than is incurred in the next few years, including refinancing up to $395 million in debt in the coming fiscal year. The City has 3 major pools of debt – Better Jacksonville Plan debt with specific revenue pledges, Enterprise Fund debt with specific revenue pledges, and General Fund debt. The City has issued $601 million of the $687 million in authorized Banking Fund borrowing, leaving $86 million yet to be issued. The FY12-13 budget adds $25.2 million in new borrowing authorization. The City has strong bond ratings is complying with all of its debt management policies except for the ratio of Overall Debt to Estimated Full Market Value of Property, which is under stress because of the falling real estate values in the last couple of years. Council Member Gulliford suggested that locking in historically low interest rates by converting most short term commercial paper to longer term bonds would be a wise move before an economic upturn causes interest rates to rise. Council Member Boyer asked if an Ordinance Code waiver is needed in the budget ordinance because the City is in violation of 2 of the 4 debt coverage standards; Ms. Sidman will check and prepare an amendment if need be.

Grant Schedules

Motion (Anderson): o p. 33, incorporate two accidentally omitted grants totaling $13 million – approved.

Motion: on p. 40 correct the department name for a Keep Jacksonville Beautiful grant to the Neighborhoods Department – approved.

Motion (Joost): on p. 41 change current grant award amounts for FIND Mayport docks and Pottsburg Creek dredging projects – approved.

Motion (Joost): on p. 41 approve the grant overmatch of $2.787 million for senior center meals – approved.

Motion: on p. 43, approve the addition of 2 grants to Public Works from FY12 Congressional Authorization ($485,000) and Florida Highway Beautification grant ($2 million) – approved.

Public Safety Initiative (Jacksonville Journey)

Council Member Yarborough noted that, despite the pledges made by the previous mayor, the Journey is no longer receiving the private funding and grants that were promised to be long-term funding sources and the full burden has fallen to the City taxpayers. Council Member Joost noted that the City has reduced the overall funding for the Journey as grant funding has been lost so the public is not paying more than before, and stated that the program has had a tremendous impact on reducing crime in the community and has been a good investment. Dave Roman of the Mayor’s office addressed the loss of grant funding and described several of the Journey’s program initiatives.

Motion (Anderson): change the name of the is program in the budget and accounting system from Public Safety Initiative to Jacksonville Journey – approved.

Council Member Yarborough questioned several of the Journey allocations for school-related programs (i.e. Team Up after-school program) and asked why the School Board is not contributing to the programs.

Motion (Boyer): on p. 45, approve Council Auditor’s recommendations #1 and 2 – approved.

Special Council Contingency Fund – deficit of $668,689.

Council Member Boyer will send a list of questions for Public Works to Legislative Services for the record; Mr. Crescimbeni will pose the questions on her behalf tomorrow.

Meeting adjourned: 5:28 p.m.

Minutes: Jeff Clements, Council Research Division

8.30.12 Posted: 5:30 p.m.

Tape: Finance budget hearing 8.30.12

Legislative Services Division

Attachments: Council Auditor’s Handout for Meeting #, August 30, 2012