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 #6 Minutes

August 23, 2013

9:00 a.m.

 

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

     Suite 425

 

In attendance:  Council Members Greg Anderson (Chair), Richard Clark, Johnny Gaffney, Robin Lumb, Clay Yarborough

Excused: Matt Schellenberg, Stephen Joost

Also: Council Members Lori Boyer, Denise Lee (arr. 9:31), Don Redman (arr. 9:35), Warren Jones (arr. 9:50) and Bill Gulliford (arr. 10:05)

Also: Kirk Sherman, Kim Taylor, Janice Billy, Phillip Peterson, Robert Campbell – Council Auditor’s Office; Carol Owens – Legislative Services Division; Paige Johnston – Office of General Counsel; Jeff Clements – Council Research Division; Michele Barth – Mayor’s Office; Glenn Hansen and Angela Moyer - Budget Office

 

Meeting Convened:  9:10 a.m.

 

Council Auditor Kirk Sherman updated the committee on the status of the Special Council Contingency Fund, which currently stands at negative $21.8 million (0.5 millage equivalent)

 

References from this point refer to Budget Hearing #6 Handout – August 23, 2013

 

Military Affairs, Veterans and Disabled Services

Admiral Victory Guillory gave an overview of his department’s functions and presented a list of requested budget restorations, highlighting programs such as the new veterans’ hiring partnership.  There is still a big need to make veterans aware of the programs and services available to them and connect them with the benefits they have earned. 

 

Council Member Clark stated that he will comb the budget to identify how proposed budgets have grown from the current year to the proposed budget and then the 13.88% cut was applied to the expanded budget, followed by requests for enhancements.  Council Member Boyer requested information on what services for veterans are available through federal programs that might be duplicated by our City programs.  Council Members Brown and Redman advocated for more funding for veterans services.  Council Member Lee expressed concern about the Mayor taking a hard line against any tax increase at the same time as his department heads come to the Finance Committee to ask for restored funding that will necessarily cause a millage increase.  The administration can’t have it both ways.  Chairman Anderson requested Michelle Barth to obtain a statement from the Mayor’s Office about where the administration now stands on the issue of departmental restoration requests and the millage rate.

 

The committee engaged in considerable discussion of the department’s budget and employee cap and the Mayor’s transfer authority over funding and employee positions.

 

Motion: postpone discussion of this department to the budget hearing of August 30 – approved 5-2 (Anderson and Brown opposed)

 

Yvonne Ward, William Batts representing the Moncrief Springs Association advocated for restoration of funding for Carvill Park which is an important community asset.

 

Debt overview

City Treasurer Joey Greive and Marc Stickey gave an overview of the City’s debt structure.  The City has refinanced over $1 billion in bonds in the past year and has shifted from 10-15% of variable rate debt to only 5-10% by locking in current low interest rates for long terms.  The City has been paying down more than it has been borrowing over the last couple of years.  Our underlying bond rating is AA+ which allows us to borrow at low rates.  The Banking Fund is not a giant “credit card”, it’s a summation of borrowing done since 2008 to borrow for aggregated projects using aggregated revenue sources that replaced the former system of thematic borrowing issues (specific bonds with specific pledges for specific project lists.). It offers greater flexibility in size and timing of issues than thematic bond issues.The Better Jacksonville Plan borrowing represents 51% of the City’s portfolio and 10% is related to enterprise fund activities, so 61% is self-funded and does not use General Fund revenues for payment. 

 

Mr. Stickney reported that all trends are positive for the City’s debt portfolio and ratios over the next 5 years, despite the fact that falling property values have put stress on some of the ratios of debt-to-property-value.  Rising pension costs and relatively small unassigned reserve funds are factors of continuing concern to the bond rating agencies.  In response to a question from Council Member Lumb about how changing accounting standards will affect the City’s reporting of its accumulated pension liabilities, Mr. Greive indicated his willingness to report that figure in future debt reports.  Mr. Lumb noted that the accumulated UAAL is several billion dollars which needs to be published and understood by the media and the general public.

 

Council Member Clark asked for a representative of the City Treasury to attend the meetings of the Finance CIP Subcommittee to provide perspective on how potential changes to the CIP would affect borrowing capacity and debt ratios.  Council Member Lee asked questions about the distinctions between assigned and unassigned reserve funds and requested a list of the various reserve funds.  Council Member Boyer asked about programmatic borrowing authorization versus actual borrowing, how long bond authorizations last if they are not implemented, and how any unused authorization can be applied to projects.  Mr. Stickney reported that the City’s bond counsel says that the City has no outstanding, unissued bond authorizations, but is taking another look at the issue in response to a request from the Council Auditor’s Office.

 

Council Member Boyer urged the committee to look long and hard at the list of projects that have been authorized in the past but bonds were never issued, and to understand where the funding will come from when those projects are actually ready to go to contract.  It does not appear to her that these projects are listed in a way that makes clear that they are still going to be constructed and that money needs to be on hand at that time.

 

Budget Officer Glenn Hansen said that this year’s CIP list is very constrained by the amount of funding available for debt service. Most is related to ADA accessibility and ash site remediation.  Borrowing is done as close as possible to time of actual need.  He updated the progress of the department’s review of the 900 outstanding CIP projects, which is about 70% complete.  The Council Auditor’s Office has been very helpful in the process in tracking these projects back to the 1980s using an antiquated computer system.

 

CIP Projects

Solid Waste Division Chief Jeff Foster explained the advantages of the compressed natural gas fuel conversion plant at the city’s two large landfills to the division’s operations.

 

Motion (Gulliford): on p. 4, remove the compressed natural gas conversion project from the CIP project list – motion withdrawn

 

Mr. Foster answered several questions from the committee about the cost of the purchase of new CNG engine trucks, the purchase of new automated tipping carts, the estimated length of gas production at the two landfills, and other aspects of the total conversion process.

 

Motion (Anderson): on p. 4, allocate the $5.4 million from the CNG conversion project to the Public Works road resurfacing account – motion withdrawn

 

Motion (Gulliford): refer the CIP list to the Finance CIP Subcommittee for review and a report no later than August 28 – approved unanimously

 

Supervisor of Elections

Motion: on p. 4, approve Council Auditor’s recommendation #4 to waive the Ordinance Code and authorize the Supervisor of Elections to purchase electronic poll books with Banking Funds

 

Amendment (Lumb): move the remaining $640,000 from the Gateway purchase funds remaining after the poll book purchase to the Public Works road resurfacing account - motion as amended approved unanimously

 

Parks and Recreation Department

Parks and Recreation Director Kelley Boree distributed a list of prioritized restoration requests and maps of the proximity of the centers to one another to illustrate coverage areas at varying levels of restoration.  The department has talked to JTA about the possibility of purchasing bus passes to transport children from their neighborhoods to regional recreation centers during summer months at a cost of $288,000.  This list of restorations, if restored, would be at a reduced level from the current year, but at a reduced operating level of mostly unstructured, open access, not structured programming. Council Member Boyer cautioned that if the centers are continued on a reduced operational level and private partners are recruited to form partnerships and provide operations and programming, the City needs to reconsider the amount it charges those entities to use the facilities.  She feels the City should not charge full rental price to entities that are filling a service gap the City is leaving unserved.

 

Council Member Lee urged the department to restore recreational programming in parks and community centers and discontinue the practice of licensing facilities to private agencies to run because the liability for the facility ultimately lies with the city which should be fully in charge of the activities there.  In response to a question from Council Member Yarborough, Ms. Boree stated that all community centers will continue to be maintained so that they can be available for private rental purposes, with staffing for those rental activities being provided by the Parks and Recreation Department’s current administrative staff, not center-specific staff.

 

Motion (Yarborough): restore funding for the Parks and Recreation Department’s Priority 1 listed recreation centers at a cost of $614,279

Substitute (Brown): defer discussion of restoration of recreation centers to a hearing next week.

 

The chairman deferred the discussion to a future hearing.

 

Kirk Sherman recapped the Special Council Contingency fund – negative $21,861,979, 0.5012 mill equivalent.

 

In response to a question, Mr. Sherman stated that the budget ordinance and associated schedules need to be put together in the first week of September to be ready for presentation and public hearing at the September 10th council meeting.  Council Member Crescimbeni stated that the September 2nd Finance Committee meeting offers another venue for items that might be handled quickly if the committee stays until the next committee needs the council chamber.

 

Meeting Adjourned:  1:10 p.m.

 

Minutes:  Jeff Clements, Council Research

                8.23.13   Posted 5:00 p.m.

Tapes:      Finance Budget Hearing #6– LSD

                8.23.13

Materials: Auditor’s Budget Hearing #6 handout

     8.23.13