August 26, 2016

9:00 a.m.


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

In attendance: Council Members Anna Lopez Brosche (Chair), Aaron Bowman (arr. 9:57), Katrina Brown (arr. 12:22), Bill Gulliford, Sam Newby, Matt Schellenberg

Excused: Greg Anderson


Also: Council Members Lori Boyer, Reggie Brown. John Crescimbeni (arr. 9:05), Garrett Dennis (arr. 9:14), Joyce Morgan (arr. 9:17), Reggie Gaffney (arr. 10:40);  Peggy Sidman – Office of General Counsel; Kirk Sherman, Kyle Billy, Kim Taylor, Brian Parks - Council Auditor’s Office; Katrin MacDonald – Legislative Services Division; Sam Mousa and Ali Korman Shelton – Mayor’s Office; Mike Weinstein and Angela Moyer – Finance and Administration Department


Meeting Convened: 9:00 a.m.


Chairwoman Brosche convened the meeting and the attendees introduced themselves for the record.


Kim Taylor reported that an error needed to be corrected from yesterday’s meeting. The negative impact to the Special Council Reserve fund from the downtown CRA actions should be $4,237,969, $112 less than reported yesterday. Ms. Brosche reported that the Special Council Contingency stands at a negative $2,696,003 at the start of the day.


Page references from this point refer to Council Auditor’s Meeting #7 Handout


Finance and Administration Department

In response to a question from Council Member Schellenberg, CFO Mike Weinstein explained the addition of several positions, including an unfunded position, to increase the staffing of the Accounting Division to keep up with the workload and to provide flexibility to hire replacement personnel when employees stop working and run out considerable leave time before officially leaving the payroll.


Motion (Schellenberg): on p. 8, approve Auditor’s recommendation to correct the allocation of administrative costs to reduce the City’s administrative costs by $243,367, with a corresponding positive impact on the Special Council Reserve – approved unanimously.


In response to a question from Council Member Schellenberg, City Risk Manager Twayne Duckworth reported that case law in the workers’ compensation area has changed considerably in recent years with regard to allowable expenses and time frames and the City has been adjusting accordingly. The City has seen its workers’ compensation claims fall in the current year.


General Employees Pension Fund Administration

Council Auditor Kirk Sherman made a suggestion that the GEPP be funded in an amount equal to the greater of the dollar amount or the payroll percentage calculation method, even if actual salaries come in lower by the end of the year. This will assist in paying down the unfunded accrued liability more quickly.


In response to a question from Council Member Anderson, City Treasurer Joey Greive reported that the City’s investment management fees are 57 basis points (0.57%) compared to 62 basis points (0.62%) for similar public pension systems. He noted that the City reduced its number of domestic stock managers from 10 to 6 during the past year.


Mr. Sherman reported that the GEPP funding ratio stood at 66.8% as of October 1, 2015; the Corrections Officers Pension was at 50.03% and Police and Fire Pension Fund at 43.1%.


Police and Fire Pension Fund Administration

Motion: on p. 20, approve Auditor’s recommendation #1 to reduce Personnel Services by $13,834 on Revised Schedule AC and decrease Trust Fund Revenues on Revised Schedule AB by the same amount – approved unanimously.


Motion: on p. 20, approve Auditor’s recommendation #2 to move the salary line for the Executive Director from a non-Oracle line to an Oracle salary line - approved unanimously


Motion: on p. 20, approve Auditor’s recommendation #3 to increase the Indirect Costs budget to $3,342 and increase the Trust Fund Revenues by the same amount, and adjust Schedules AB and AC accordingly – approved unanimously.


Motion: on p. 20, approve Auditor’s recommendation #4 to add the authorized cap of 8 employees to Schedule AC consistent with the prior year’s handout, and add 1,040 temporary hours to Schedule AC to be consistent with other independent agencies - approved unanimously.


New PFPF Executive Director Tim Johnson thanked Beth McCague for her outstanding work as the Interim Executive Director. He said that the staff is ready and the office has the resources to begin tackling his 5-year improvement plan and that he will have a very positive story to tell at next year’s budget hearing. The four major tenets of his improvement plan are: 1) focus on governance best practices and fiduciary responsibilities; 2) transparency for better trust and reputation (including hiring a part-time public records specialist and digitizing all records); 3) great service to members, including developing a relationship with the pension office beginning from the first day of employment; and 4) placing a high priority on solvency.


Council Member Gulliford suggested that the fund owning its office building may not be the best use of the PFPF’s assets and perhaps the fund could get a good deal on vacant space in City buildings. Relocation into a City building would also be a symbolic gesture of unity with the City. Mr. Gulliford suggested that Mr. Johnson come to a future Finance Committee Special Committee meeting to make a more detailed presentation on his plans for the PFPF. Council Member Crescimbeni requested information on the PFPF’s current and historical asset allocations comparable to the information provided for the GEPP.


In response to a question from Council Member Crescimbeni about the PFPF’s use of outside legal counsel, Beth McCague explained that the Office of General Counsel will be used to provide some services to the fund on non-pension-specific items (public records law, Government in the Sunshine, procurement, personnel issues, etc.) and an independent counsel will be contracted to perform pension-specific duties. The board is in the process of developing an RFP to hire a new attorney to replace its long-time pension law firm, the Klausner Firm from South Florida. Mr. Klausner’s contract expires at the end of October and he has agreed to continue on a temporary basis until the Fund hires its new attorney. Ms. McCague said that the fund’s research has shown that the hourly rate for pension attorneys will be considerably higher than the rate that has been paid to the Klausner firm in the past.


In response to a question from Council Member Dennis about how the current asset managers and other consultants will be evaluated either retained or replaced, Mr. Johnson explained his methodology for evaluating risk-adjusted returns for managers within asset classes and getting more information on how the fund custodian is making returns from the City outside of the immediately visible fees. President Boyer expressed grave concerns about the person giving the PFPF board its fiduciary training at the upcoming workshop and suggested that the Office of General Counsel be invited to participate in that workshop and address fiduciary responsibility in general. Beth McCague said that General Counsel Jason Gabriel will be meeting with the PFPF board on September 1st to discuss how the OGC and the board wish to interact and what services the OGC will provide to the Fund.  


In response to a question from Council Member Anderson about the fund’s 7% assumed rate of return, Mr. Johnson said that the plan he left in Pittsburgh had an assumed rate of 7.75% and the board there decided to increase the risk of its assets to produce a higher return to keep the assumed rate at that level and pay the accrued obligations. Somehow the income generated by assets must meet the obligations of the fund, so the rate of return decision must be based both on the historical investment market returns and adjusting the design of the plan that produces the payment obligations to maintain a prudent balance.


Page references from this point refer to Council Auditor’s Wrap Up List and Enhancements Handout


Wrap up list

#4 Building Inspection and Development Services: Sam Mousa said that the administration took a closer look at what activities are and are not eligible for payment with building inspection and development fees and recommends a change in how some expenses are categorized as a result


Motion (Schellenberg): on p. 1, item #4, approve the administration’s proposal to move some operations of the Building Inspection Division to the General Fund resulting in a negative impact on Special Council Contingency of $180,380; move one General Fund-GSD position from the Fire Department to the Building Inspection Division, with a positive impact to Special Council Contingency of $77,560 - approved unanimously.


Motion (Schellenberg): on p. 1, approve recommendation #5 to reduce the FY16-17 employee cap in the Fire and Rescue Department by 12 positions and reduce the department’s salary and benefits line by $822,964 to the benefit of the Special Council Contingency fund; also recalculate the department’s lapse and allocate an additional $1,196,519 to Special Council Contingency for a net positive impact to Special Council Contingency of $2,019,483 - approved unanimously.





Motion (Gulliford): allocate up to $8 million of FY15-16 year-end fund balance (the projected excess fund balance over the reserve funds target of $77 million)  to the FY16-17 budget in Special Council Contingency for one-time uses (capital expenditures, pay-go projects, or rectification of the $4.2 million transfer from the downtown CRAs to the General Fund) -


In response to a question from Sam Mousa, Brian Parks of the Council Auditor’s Office said that the projected year-end fund balance is currently estimated at $85 million. President Boyer asked Mr. Gulliford to amend his motion to delete the potential to fund the $4.2 million deficit operating revenues caused by the Committee’s decision to reverse the proposed transfer of fund balance from the downtown CRAs.


Amendment (Gulliford): remove the possibility of use for the $4.2 downtown CRAs fund  balance for rectification of the reversal of the use of the downtown CRA  -


The Gulliford motion to allocate $8 million in FY15-16 year-end fund balance as amended was approved unanimously.


Motion (Schellenberg): on p. 1, approve Auditor’s recommendation #1 to remove reference in the budget ordinance to Section 106.309 of the Ordinance Code as it relates to the CIP – approved unanimously.


Motion (Schellenberg): on p. 1, approve Auditor’s recommendation #2 to revise Schedule B to add a missing line title for Ad Valorem Taxes - approved unanimously.


Motion (Schellenberg): on p. 1, approve Auditor’s recommendation #3 to remove Attachment C from the budget ordinance and the corresponding language relating to that Attachment within the ordinance because the attachment is unnecessary given existing language in Sec. 106.422(c) of the Ordinance Code that requires Mayoral certification of the original and revised employee caps on a quarterly basis - approved unanimously


Motion (Boyer): regarding the Shot Spotter pilot project, allocate the $202,438 in excess budget for the Sheriff’s Office firing range lead removal project “below the line” earmarked for the Shot Spotter pilot project capital expenses (pending receipt of additional capital funding from other sources)  and reallocate the $150,000 allocation of Jacksonville Journey funds for the Shot Spotter program to the Special Council Contingency fund – approved unanimously.


Mr. Mousa distributed and discussed a preliminary Shot Spotter pilot project budget and answered questions about how the pilot project would be pursued.


Motion (Schellenberg): on p. 1, approve administration recommendation #7a to allocate Fair Share Funding to 26 projects as shown on a handout list for Sectors 2.1 through 6.2 at a total of $17,374,805 – approved unanimously.


Mr. Mousa answered questions about how the list was compiled, how the phasing would occur for projects for which these appropriations are not sufficient to cover the full project cost, and project timing. President Boyer thanked the administration for their hard work in compiling this list and putting accumulated fair share funds to work.


Motion (Schellenberg): on p. 1, approve Auditor’s recommendation #7(b) to remove the Jax Baldwin Trails from the budget, leaving them in the CIP – approved unanimously.


Motion (Schellenberg): on p. 1, approve Auditor’s recommendation #7(c) to approve the project descriptions for the CIP projects added during the CIP Budget Hearing - approved unanimously


Motion (Schellenberg): on p. 1, approve Auditor’s recommendation #7(d) to amend the CIP listing for the Northbank Riverwalk project scope to remove reference to the project beginning in FY17 - approved unanimously.


Property Appraiser – on p. 2, item #8 Property Appraiser Jerry Holland and Kay Ehas, Chief Administrative Officer for the Property Appraiser, explained the department’s request for new aerial photography and change detection technology ($112,000) and for computerized building sketch software ($263,000). The committee took no action on the request.


Court cost uses: Deputy General Counsel Peggy Sidman reported that legal research has determined that the $65 Court Innovation fee may be used for the hiring of additional attorneys the Court Administration has requested to be funded by City General Funds.  The committee declined to appropriate General Funds to the additional attorneys pending a future request by the Chief Judge for use of the $450,000 carry-over in the Court Technology fund.




Motion (Schellenberg): allocate the $8 million of year-end fund balance to pay-as-you-go vehicle purchase – dies for lack of a second


Motion (Boyer): amend the Office of General Counsel budget to increase the employee cap by 1 paralegal position and increase the salary and benefits line by $76,067 - approved unanimously


Motion (Anderson):  allocate $5,135,901 of the $8 million FY15-16 year-end fund balance to the purchase of self-contained breathing apparatus for the Fire and Rescue Department with cash instead of borrowing, and deposit the resulting debt service savings of $569,828 from the avoided borrowing in the Special Council Contingency fund – fails 1-6


Motion (Schellenberg): on p. 2, approve Enhancement Request #1 to increase funding for the City Council’s vacant ECA position up to $55,000, with a net negative effect on the Special Council Contingency of $28,512 – approved unanimously.


Motion (Schellenberg): on p. 2, approve Ethics Office Enhancement Request #2 to allocate an additional $38,509 from Special Council Contingency to the Ethics Office for salary and benefit increase for the one full-time employee ($13,784) and to provide 1,300 part-time hours ($24,725) for an executive assistant – approved unanimously.


Motion (Gulliford): on p. 2, approve Enhancement Request #9 to appropriate $140,726 of prior-year revenue in the 5-Year Road Program to the Railroad Crossings project – approved unanimously.


Motion (Gulliford): on p. 2 approve Enhancement Request #8 to amend the Jacksonville Journey budget to increase the LEAP supplies account by $4,913 - approved unanimously.


Motion (Gulliford): on p. 2, approve Enhancement Request #10 to add SAFER grant revenue of $5,274,990 (2-year amount) and add 27 FTE positions to Schedule B1-a for new firefighters – approved unanimously.


At the request of Council Member Gulliford, Mike Weinstein explained how the administration budgets for payment of large legal settlements and said that the administration is not inclined to create an account for that purpose which would give opposing legal counsel a rationale for making claims on that fund because it is available. Mr. Mousa said that the administration has always been able to find funds in reserves and reallocating other unused funds to meet settlement payment needs.


In response to a question from Council Member Gaffney, Public Works Director John Pappas said that the City has a $6.5 million backlog of sidewalk repair projects. Mr. Mousa said that figure does not include the $30+ million for the ADA settlement sidewalk work. $5.5 million is allocated in the first year of the new CIP for new sidewalk construction and $2 million for sidewalk repair.


In response to a question from Council Member Anderson, Kim Taylor said that library materials acquisitions are budget as a capital expenditure. Library Director Barbara Gubbin stated that the Library Board’s original budget request to the Mayor’s Office prioritized materials acquisition over addition of new hours and said that the addition of extended library hours in the coming year should be considered a permanent move – the board does not want operating hours and personnel added in in one year only to be reduced again the following year.


Motion (Boyer): use the $8 million in additional FY15-16 year-end carry-over as follows: $500,000 to new library materials; $1 million for sidewalk repairs; $3 million for ADA settlement sidewalk construction; and $3.5 million for pay-as-you-go vehicle purchases -


Council Member Crescimbeni suggested to Ms. Gubbin that the library consider changing its policy on book checkout lengths and hold times to reduce the normal 3-week checkout for newly released books that generate huge hold lists and lengthy waiting times. Reducing the borrowing length would reduce the long wait times for books on hold.


Council Member Bowman recommended amending the Boyer motion to reduce the vehicle pay-go allocation by $500,000 and shifting that amount to the sidewalk repair account. Council President Boyer advocated for leaving the $500,000 in replacement vehicle pay-go in order to help build up the vehicle replacement fund’s capacity to replace vehicles without borrowing. Budget Officer Angela Moyer said that appropriating cash into the vehicle replacement fund has a multiplier effect because of avoided borrowing costs and the ability to build up the reserve for pay-go purchases faster without the need to pay debt service on borrowing for purchases.


Motion (Bowman): amend the Boyer motion to reduce the vehicle pay-go allocation by $500,000 and increase the sidewalk repair account to $1.5 million - second withdrawn.


Mr. Pappas reported that the City has completed 980 sidewalk curb cut ramps, has 807 currently under construction and has 2,500 ready to bid. Mr. Mousa said that the $8.5 million currently being discussed for sidewalk ramps ($5.5 million in the new CIP plus the $3 million additional in the Boyer motion) would construct approximately 4,500 ramps ($1,900 apiece). The total ADA sidewalk liability is $20-25 million.


The Boyer motion was approved unanimously.


The Special Council Contingency stands at $255,846 to the positive.


Motion (Schellenberg for Morgan): appropriate $100,000 from Special Council Contingency to the City Council budget for council member postage –


Chairwoman Brosche recounted that the Finance Committee had previously approved $1,000 for postage for each of the 14 district council members and $28,500 in the Council central budget for future allocation by the Council President. Ms. Boyer noted that usage of the postage fund in the current fiscal year is very heavy and the amount of the FY16-17 appropriation will likely be depleted before the end of that fiscal year if the spending trend continues.


The Morgan motion failed 0-6.


Motion (Anderson): allocate the remaining $255,846 in Special Council Contingency to right-of-way mowing and litter control -


Motion (Gulliford): allocate $7,500 of remaining Special Council Contingency to City Council postage and $248,346 to right-of-way mowing and litter control – approved unanimously.


Council President Boyer congratulated the Finance Committee and Chairwoman Brosche for outstanding work on this year’s budget.


Ordinance language amendments

Motion (Brosche): approve the Office of General Counsel’s budget ordinance amendment (OGC handout) to insert language regarding provision by the Public Service Grant Council of a complete list of the PSG recipients and funding allocations to the Council Auditor’s Office, Office of the Mayor, City Council and Director of the Finance and Administration Department  approved unanimously.


Motion (Schellenberg): authorize the General Counsel’s Office and Council Auditor’s Office to make all necessary changes to titles, tables of contents, the Ordinance Code, journal entries, schedules, attachments and editorial and text changes to incorporate all Finance Committee actions into the budget ordinance and its attachments – approved unanimously


The committee members expressed gratitude to Chairwoman Brosche for her leadership and the smooth functioning of the budget hearings. Ms. Brosche in turn congratulated and thanked the committee members, Council staff, Mr. Mousa and the administration, the Budget Office, the JSO officers in attendance at the meetings and everyone involved in the process for their outstanding work throughout the budget process.


Meeting adjourned: 1:07 p.m.


Minutes: Jeff Clements, Council Research

8.26.16     Posted 5:00 p.m.

Tapes:  Finance Budget Hearing #7 – LSD


Materials: Council Auditor’s Budget Meeting #7 handout - LSD