OFFICE OF THE CITY COUNCIL

117 WEST DUVAL STREET, SUITE 425

4^TH FLOOR, CITY HALL

. JACKSONVILLE, FLORIDA 32202

Finance Committee Budget Hearing #7 Minutes - amended

August 28, 2015

9:00 a.m.

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

In attendance: Council Members Bill Gulliford (Chair), Anna Lopez-Brosche, Danny Becton, Aaron Bowman, Lori Boyer, John Crescimbeni, Reggie Gaffney

Also: Council Members Tommy Hazouri, Matt Schellenberg, Joyce Morgan ; Kirk Sherman, Kim Taylor, Phillip Peterson, Tommy Carter, Robert Campbell – Council Auditor’s Office; Jessica Morales – Legislative Services Division; Peggy Sidman and Paige Johnston – Office of General Counsel; Jeff Clements – Council Research Division; Sam Mousa and Ali Korman Shelton – Mayor’s Office; Mike Weinstein, Angela Moyer, Cal Ray – Finance Department

Meeting Convened: 9:00 a.m.

Chairman Gulliford convened the meeting with a quorum present and the members announced themselves for the record.

Page references from this point refer to Council Auditor’s Meeting #7 Wrap-Up handout – August 28, 2015.

JEA

Deputy General Counsel Peggy Sidman explained that the General Counsel’s Office has issued a memo stating that the change in the JEA’s discount rate to the City was a permissible modification of the agreement, not a termination of the agreement. Ms. Boyer pointed out that the discount was listed in the tariff sheet attached to the service agreement, not in the body of the agreement, and therefore the JEA had authority to change the tariff at its discretion without any further Council approval. If the discount had been in the agreement rather than the tariff sheet, then Council approval would have been needed. Chief Administrative Officer Sam Mousa related the history of the service agreement with the JEA and the City’s discount. He met yesterday with JEA leadership and the OGC and was informed that the City is required to pay the new tariff without the former discount pursuant to the terms of the service agreement. Mr. Mousa said that he could not speak to whether the School Board currently receives the discount that it used to receive. Melissa Dykes, CFO of the JEA, said that the timing of the change in streetlight tariff was tied to the development of a new LED streetlight tariff and the associated cost of service study. Chairman Gulliford asked that copies of the City/JEA service agreement and the resolution that authorized it be distributed to all members of the Special JEA Agreement Committee for discussion in that venue.

In response to a question from Council Member Boyer, Ms. Dykes stated that the JEA could unilaterally terminate the extra large customer rate discount if its cost of service study determined that the discount was no longer warranted by actual cost of service. In response to a question from Chairman Gulliford, Ms. Dykes explained the factors that go into the cost of service analysis, which include debt service. Council Member Crescimbeni requested the JEA to provide a list of all its customers currently receiving a discount of any sort.

Jody Brooks of the Office of General Counsel reported that there is no specific law or regulation on the use of the JEA’s fuel cost credit (i.e. the City using the credit to pay down debt rather than the JEA returning the credit to the customers), but inherent in the concept of crediting the customers for a proportional share of their payment to the utility is a direct benefit to the customer. Chairman Gulliford believes that customers would benefit from City debt reduction as much if not more than from a direct credit on their bills.

Motion: tentatively approve the JEA budget as proposed – approved unanimously.

Mayport Ferry

Kirk Sherman reviewed the ferry budget and Council Member Crescimbeni noted that the proposed budget changes are merely bookkeeping entries to recognize a difference in the timing of the operational transfer. Because the transfer will be fairly seamless, the City and JTA budgets may need technical amendment to reflect actual revenues and expenses which should balance out from one operator to the other.

Motion: approve the Mayport Ferry Subfund 451 budget as distributed – approved unanimously.

In response to a question from Council Member Boyer, Chairman Gulliford explained the derivation of the 50/50 split of the ferry capital costs for the December/January ferry haul-out and inspection between the City and JTA, which was a practical compromise to ensure that the transfer of operations to the JTA would take place. Council Member Boyer expressed concern about the source of the JTA’s capital contribution and whether is might be from local option gas tax or sales tax revenues that are already pledged to other project lists.

Motion (Crescimbeni): insert a placeholder in the CIP budget in the amount of $1.5 million of Banking Fund borrowing to provide the City match for a federal grant application for ferry capital improvements for the slipwall repair project – approved unanimously.

Sam Mousa announced that Governor Rick Scott has announced a statewide state of emergency in recognition of Tropical Storm Ericka. The Mayor has not yet declared a City state of emergency but may do so as conditions warrant. Council President Anderson explained the City’s emergency procedures, noting that if the Mayor declares an emergency then a special Council meeting will be called as soon as possible to hear a presentation and to determine if the emergency declaration should continue or be cancelled by Council vote.

JTA

Motion: on p. 8, approved Auditor’s recommendation #1 to decrease local option sales tax under Bus Operations on Schedule O by $459,506 and decrease the Bus Contingency line on Schedule P by a lilke amount to balance revenues with expenditures - approved unanimously

Motion: on p. 8, approve Auditor’s recommendation #2 to increase BJP gross sales tax proceeds under Engineering on Revised Schedule O by $886,062; increase the Transfer to COJ for Debt Service (BJP) under Engineering on Schedule P by a like amount; increase New Sales Tax – Operating under Bus on Revised Schedule O by the same amount and increase the Contingency line under Bus on Revised Schedule P by the same amount – approved unanimously.

At the request of JTA CEO Nathaniel Ford, JTA’s general counsel Richard Milia explained the history of the “sales tax for tolls” and the JTA’s right to utilize the revenue from that tax, which he says is unilaterally under JTA’s control pursuant to state law, City ordinance and the agreement between the City and JTA. Council Member Boyer recounted the City Council’s understanding of the recent 10-year extension of the gas tax and the JTA’s responsibilities under that agreement to begin construction immediately on projects on that list. She has concerns about the JTA’s overhead charge against gas tax revenue and the change of a line item from “reserve account” which cannot be spent without further City Council approval to “contingency account:” which can be spent without Council authorization. She does not disagree that the JTA has the right to control the use of the sales tax proceeds, but believes that the City Council has the right to approve JTA’s budget which includes those funds. Chairman Gulliford suggested that the City Council and the JTA board have a joint meeting and frank discussion about the issues Ms. Boyer has raised, and that the JTA budget be approved as proposed with the understanding that the budget can be amended during the fiscal year as conditions warrant and discussions continue. Council Member Hazouri expressed a desire for a holistic solution to the question of how much control the City Council has over salary increases of City employees, Constitutional officer and independent authority employees.

Motion (Gaffney): approve the JTA budget as proposed – dies for lack of a second.

Mr. Milia contends that JTA is an entity of the State of Florida not of the City of Jacksonville and that the authority is only required to submit a budget to the City for City funding and that any other budget submission to the City is a matter of courtesy. Mr. Ford emphasized that the JTA wishes to have a close and cooperative relationship with the City and to be a partner with the City Council in furthering the City’s goals. He pledged JTA’s cooperative effort to continue a dialogue with the City regarding authority over use of

Motion: on p. 8, approve auditor’s recommendation #3 to add narrative language in the JTA budget ordinance to clarify that any sales tax revenue in excess of the approved budget amount will require Council appropriation prior to expenditure –

Motion (Crescimbeni): amend the Auditor’s recommendation to require that any local option sales tax revenue collected in excess of $80,886,162 may not be expended without future Council appropriation, with the understanding that the City and JTA will engage in a process of dialogue following the adoption of the City budget - approved unanimously.

Motion: on p. 9, approve Auditor’s recommendations #4 through 10 as presented with 1 change in item #7 to change the funding source from Bus – Contingency to non-local option gas tax capital reserves; delete item #11 and authorize the JTA to keep its employee cap at 736 and retain $314,980 in administrative expenses – approved unanimously.

Mr. Ford explained the JTA’s process for determining the future of the Skyway and explained that the $4.15 million in proposed capital expenditures is for immediately necessary maintenance and safety items. In response to a question from Council Member Bowman about the future of fares on the Skyway, Mr. Ford said that the authority will be conducting a fare study for the entire JTA system in the next fiscal year.

Motion: on p. 10, approve Auditor’s recommendation #13 to change the Contingency line item in the operating budget to Operating Reserve and clarify in the budget narrative that the use of reserve funds requires prior Council approval – withdrawn

Motion (Boyer): adopt the Auditor’s recommendation with an amendment to provide that the Operating Reserve can be used as a grant match without further Council approval – withdrawn.

Motion: tentatively approve the JTA budget as amended – approved unanimously.

Chairman Gulliford urged the Council President to form a special committee to examine the relationship between the City and the JTA, including appropriate use of the local option sales tax and gas tax.

Fire and Rescue Department

Fire Chief Kurt Wilson describe the history of the department’s chaplaincy program, the assignment of officers to that duty and potential expansion of the program by hiring one or two additional personnel, possibly civilians, devoted exclusively to that duty. He described the difference between the chaplain, the non-religious counselors and the available Employee Assistance Program (EAP) option. Mr. Mousa suggested hiring a retired or former firefighter on an hourly basis using part-time hours without benefits.

Motion (Crescimbeni): on p. 1, item #6, appropriate $37,500 for 1,500 part-time hours to hire a civilian chaplain – approved unanimously.

Neptune Beach landfill tipping fee

Council Member Boyer questioned whether budgeting General Funds to make the solid waste enterprise fund whole in recognition of the failure of Neptune Beach to make its landfill tipping fee payments could possibly impact on the negotiations with that city. Chairman Gulliford urged that the Auditor’s recommendation not be adopted until he completes his ongoing negotiations with the Mayor of Neptune Beach on this matter, which is showing some promise. Mr. Mousa suggested the possibility of placing a marker or IOU in the solid waste fund committing to make up the shortfall should negotiations fail to produce a satisfactory resolution with Neptune Beach.

The committee was in recess from 12:00 p.m. to 1:00 p.m.

Fire and Rescue Department (resumed)

Chief Wilson explained the department’s dependence on its mobile data terminals and that 24 of 89 apparatus do not have working units. Council Member Crescimbeni questioned why borrowing is proposed to be reallocated from a portion of carryover funds from the breathing apparatus purchase approved in the current fiscal year for the purchase of these computers. Angela Moyer explained that the breathing apparatus purchase will not use the entire $7 million and $470,000 is proposed to be allocated for this purchase.

Motion: on p. 1, item #6, reduce carry-forward for breathing apparatus purchase on Schedule AF by $470,000 and add that budget capacity to the Banking Fund schedule for purchase of mobile dispatch terminals; remove the remaining $1,258,100 from the carry-forward schedule - approved unanimously.

Chief Wilson recounted the history of the department’s safety officers and made a proposal to reclassify downward some of the positions that were classified up to chiefs and captains in the spring of 2015. In response to a question from Council Member Bowman, Chief Wilson stated that positions that are demoted downward from district chiefs will experience a pay reduction of 15%. In response to a question from Council Member Becton he stated that the metrics the JFRD keeps are not yet able to prove any measurable cost savings from reduction of accident and injury claims from the return of the safety officers earlier this year; the results are anecdotal for the present until improved record keeping over time provides hard data. Mr. Mousa reiterated that the department is very safety-conscious and the safety function will continue as it has since it was reinstituted in February, it will just be done with captains rather than chiefs. Chief Wilson said that because of

Motion: on p. 1, item #6, reduce district chief positions back to their prior ranks as follows: revert 2 rescue district chiefs back to rescue captains; demote 1 quality improvement rescue district chief to rescue captain; demote 3 rescue captains to rescue lieutenants; demote 6 suppression incident safety officer district chiefs to suppression captains; delete 4 of 6 suppression district chief positions and reclassify as suppression captains; reclassify 2 district chiefs to suppression captains into existing vacancies; reclassify 1 district chief to a firefighter; reclassify 2 vacated district chiefs to firefighter positions; demote 4 suppression captains to suppression lieutenants; and allocate $330,779 in savings to the Special Council Contingency fund – approved unanimously.

Kelli O’Leary, Director of Employee Services, explained the City’s tuition reimbursement policy and when the requirement was instituted for fire captains to have college degrees (2007 professional growth and development plan adoption). Deputy General Counsel Derrel Chatmon explained that the bachelor’s degree requirement was instituted in part in reaction to a report by the City’s Human Rights Commission about the JFRD. Since that requirement and the attendant tuition reimbursement program to obtain the required degree have been in operation since that time, although it is not specifically required in the collective bargaining agreement with the firefighters union, it is considered binding as a result of past practice and employee expectation and cannot be changed without undertaking negotiations with the union. Council Member Crescimbeni expressed frustration with the lack of a specific dollar obligation for the JFRD as exists in the Fraternal Order of Police contract and an on-going obligation based on practice and not a negotiated agreement. Council Member Boyer questioned why the “past practice” principle didn’t apply to non-JRFD, non-JSO employees when the City eliminated tuition reimbursement for those employees. Mr. Chatmon said that the City was never challenged by City employees when it was eliminated and now that 3 years have elapsed a new past practice has been established for those employees.

Inspector General’s Office

Motion: on p. 2, item #9, approve $2,700 from Special council Contingency for build-out/moving costs to move the office to the Yates Building - approved unanimously.

Former Inspector General Advisor Sheryl Steckler reviewed the first year history of the IG’s Office and noted that the number of complaints is rising rapidly for just the City of Jacksonville cases and will increase rapidly again in January when the jurisdiction of the IG extends to the constitutional officers and independent authorities. She explained the importance of adding sufficient staff to enable the office to obtain national accreditation to provide the City and the citizens with assurance that the IG is properly performing its function. Ms. Steckler presented a two-tiered enhancement request for the IG’s Office, the first tier encompassing 6 new employees at a cost of $485,364 requested immediately and the second tier encompassing 6 additional employees at a cost of $426,300 requested to become effective in January 2016 when jurisdiction expands to 14 additional entities. Council Member Boyer expressed reservations about the IG Office having a legal counsel independent of the Office of General Counsel.

Motion (Boyer): in addition to the 4 positions authorized in the proposed budget, approve the addition of 2 positions (Director of Investigations and Accreditation Manager and Contract Oversight Specialist II) at a cost of $184,000 –

Motion (Crescimbeni): allocate an additional $350,000 from Special Council Contingency “below the line” to the IG’s office for unspecified enhancements, to be appropriated by Council at a later date - approved unanimously.

Having returned from the Emergency Operations Center, Council President Anderson gave the committee an update on Tropical Storm Ericka.

Property Appraiser’s Office

Motion: o restore $182,312 “above the line” from Special Council Contingency to the Property Appraiser’s budget to salaries and benefits for restoration of market survey salary adjustments – approved 6-1 (Crescimbeni opposed).

Jacksonville Public Library

The committee discussed a library-provided handout showing a proposed plan for restoration of library hours at branches around the city and posed questions to Library Director Barbara Gubbin about how the decision was made to add hours to some libraries and not others. Council Member Crescimbeni requested that the library provide each council member with the monthly library attendance gate count by branch. Council Member Boyer asked the library administration and board to provide the Council with a white paper on the potential for restoration of bookmobile service other automated remote checkout system to serve areas that are a long distance from any library branch.

Motion: on p. 2, item #10, allocate the $1 million from the library’s designated contingency to add operating hours as described on the library’s enhancement program – approved unanimously.

Motion: on p. 4, item #33, approve Auditor’s recommendation to add a provision in the budget stating that the library cannot expend fine revenue until it is received - approved unanimously.

Emergency contingency

Motion: move $1,712,868 from General Fund/GSD fund balance to the Emergency Reserve fund - approved unanimously.

Vacant Property Foreclosure Registry

Caleena Shirley, Housing Operations Manager in the Planning and Development Department, distributed statistical information on the number of properties registered and the amount of revenue collected over the past 5 years and anticipated revenues in the future resulting from the fee increase, recognizing the future revenue projection is very difficult since this will be the first renewal period. Council Member Boyer proposed that a portion of the projected new revenue be placed in the registry fund and a portion in General Fund revenue so that it can be used for any legitimate purpose. Angela Moyer suggested that the revenue be received in a Special Council Contingency fund and then allocated to permissible uses at a later date when collections are realized. Ms. Shirley noted that the department’s instruction has been to bring proposed uses of the funds to the NICE Committee for review and then to the full Council for approval. Ms. Boyer requested that the item be deferred until later in the meeting and that the administration determines an appropriate allocation of the funds to allowable uses in a way that frees up General Fund dollars for other uses.

Public Defender

Public Defender Matt Shirk requested a reduction in his departmental request for new file servers from $25,000 to $10,000.

Motion: on p. 2, item #11, approve $10,000 in IT charges for new file servers - approved unanimously.

The committee was in recess from 4:13 to 4:19 p.m.

Art in Public Places

Council Member Boyer asked for clarification from Council Member Crescimbeni about the projects included in the $68,553.74 from Special Council Contingency for Art in Public Places maintenance expenses and studies. Ms. Boyer posed questions about the eligibility of the Haverty’s Building and a Montgomery Correctional Institute building that may be a warehouse for allocations. Krisit Holochek of Art in Public Places answered questions about the various uses of the funding.

Public Service Grants

Council Member Crescimbeni distributed and discussed a table showing which entities are going to receive funding and which are not, and how additional allocations to the PSGs would reach additional agencies. Council Member Schellenberg advocated for throwing out the ranking list and starting over from scratch to ensure the fairness of the process. Council Member Boyer noted that the several million dollars in Jacksonville Journey programs address some of the same areas of need as the public service grants and urged that both funding pools be considered in tandem, especially when comparing funding for PSGs to funding for the Cultural Service Grants. Council Member Morgan expressed some concern that certain agencies are recipients of multiple funding sources and hoped that attention is being given to a fair distribution of grant funds across the whole community.

Motion (Brosche): amend the PSG grant funding list to add $238,126 from Special Council Contingency to fund L’Arche Harbor House ($124,094) and the first unfunded agency in each of the 4 priority categories -

Motion: (Bowman) add $608,695 from Special Council Contingency to fund the partially funded agencies and the next 2 unfunded agencies in the following categories: homeless persons and families (United Way of Northeast Florida, daniel Memorial and Clara White Mission), adults with physical, mentor or behavioral disabilities (Jacksonville Area Legal Aid, North Florida School of Special Education and The Arc of Jacksonville) and low income persons and families (Women’s Center of Jacksonville, Northeast Florida Healthy Start Coalition and Salvation Army) – approved unanimously.

Motion (Gaffney): allocate $608,695 from Special Council Contingency “below the line” to the Jacksonville Journey budget and allow the agencies that were unsuccessful in the PSG process to reapply for funding in a new scoring process – withdrawn.

Motion (Becton): increase the allocation from Special Council Contingency from $608,695 to $700,000 – fails 1-6

Vacant Property Foreclosure Registry

Motion (Boyer): allocate $460,000 from Code Compliance fund balance to Vacant Property Foreclosure Registry revenue to relieve the General Fund of its funding requirement within the Regulatory and Compliance Department for nuisance abatement, mowing and other eligible uses in the vicinity of vacant properties and restore $460,000 to the Special Council Contingency fund – approved unanimously.

Phillip Peterson confirmed that the committee’s action earlier in the day with regard to the Mayport Ferry was to remove the $8.5 million in ferry capital projects from the CIP out-years (beyond 5 year) listing in addition to providing $1.5 million in FY15-16.

Food and beverage

Motion: on p. 19, approve Auditor’s recommendation to revise Attachment A to reflect budgeted expenditures for Subobject 05206 - approved unanimously.

Special Council Contingency status: $1,820,343 to the positive.

Pending information requests

· Chairman Gulliford asked that copies of the City/JEA service agreement and the resolution that authorized it be distributed to all members of the Special JEA Agreement Committee for discussion in that venue.

Public comment

Joe Strasser expressed concern about the City spending money it doesn’t have to give the money to private agencies.

Mike Belle representing L’Arche Harbor House reiterated his earlier comments that his agency has provided detailed, factual evidence that they did not receive a fair scoring and ranking in the PSG process and requests that a review be done for procedural, objective errors in the scoring process by reading the reviewer comments on each of the applications. A limited review of procedural errors would restore fairness to the process.

Meeting Adjourned: 5:35 p.m.

Minutes: Jeff Clements, Council Research Division

9.3.15 Posted 8:30 a.m.

Tapes: Finance Committee Budget Hearing #7 – LSD

8.28.15

Materials: Budget handouts

8.28.15