August 11, 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, Katrina Brown (arr. 9:26), Bill Gulliford, Sam Newby, Matt Schellenberg

Excused: Greg Anderson

Also: Council Members Danny Becton, John Crescimbeni, Garrett Dennis, Al Ferraro, Jim Love (arr. 10:38 a.m.), Lori Boyer (arr. 1:00 p.m.); Peggy Sidman and Paige Johnston – Office of General Counsel; Kirk Sherman, Kim Taylor, Philip Peterson, Brian Parks, Tommy Carter, Heather Reber, Elena Korsakova - 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: 9:01 a.m.


Chairwoman Brosche convened the meeting and the attendees introduced themselves for the record. Ms. Brosche established procedural ground rules for the committee’s deliberations for this year’s budget hearings. The Council Auditor’s recommendations will form the basis of the committee’s agenda and original motions, and the administration may offer additional motions based on latest available information. A running tally of proposed changes/enhancements that will require additional revenue resources will be kept for action at a wrap-up meeting if not dealt with at a hearing. Vice Chair Matt Schellenberg and Council President will offer motions for consideration on behalf of non-Finance Committee members who may be present. The Council Rule regarding speaking time (5 minutes first time, 3 minutes second time) will be enforced, with responses to council member questions not counting against the council member’s time.


Introduction by Administration

Chief Administrative Officer Sam Mousa said the proposed budget does not reduce any service levels or personnel complements from the current year budget. Public safety (police and fire) is the Mayor’s top priority. There are some minor service level increases where recurring revenues would allow improvements; no one-time revenues are used for on-going services. Mr. Mousa complimented Budget Officer Angela Moyer and the Council Auditor and his staff on the preparation and preliminary review of the budget and said he and Finance Director Mike Weinstein will be present at all meetings to answer questions. In response to a question from Council Member Gulliford, Mr. Mousa said that there are no extraordinary lapses imposed on departmental budgets. He also said that there are no major changes to the budget since it was introduced, only minor tweaks with identified funding sources.


Council Auditor’s Introduction

Council Auditor Kirk Sherman gave a brief overview of the 8 budget-related ordinances and the budget review and adoption timeline. Because of solid growth in the value of taxable property (although not yet recovered to pre-recession levels), estimated ad valorem revenue is projected to increase by approximately $42 million at the same millage rate. He explained how the Save Our Homes amendment keeps the tax levy on homesteaded properties from rising more than the rate of inflation or 3%, whichever is less. The Council is ultimately responsible for approving budgets amounting to $4.9 million for the City proper and the independent authorities. The City’s General Fund budget is proposed to increase by approximately $35 million, the special revenue funds are nearly unchanged as are capital projects, and the enterprise fund budgets are down by $16 million. The budgets of the SMG public venues are being combined into a single, more easily understandable budget. The number of full-time authorized employees in the General Fund is going up by 87 positions (including 40 police officers and 40 community services officers in the JSO and 4 new positions in the Building Inspection Division).


Council Member Gulliford noted that 12 positions in the Fire and Rescue Department are converting from grant-funded to General Fund-funded, and that the same applied to some positions in the Sheriff’s Office last year. New council members need to recognize the future impact when accepting grants to hire new positions.


The former Intra-Governmental Services Department has been disbanded and the majority of those positions transferred to the Finance and Administration Department which is picking up most of the services Intra-Governmental Services formerly provided. Total General Fund personnel expenditure (salary and benefits) is proposed to increase by $30 million or 4.84%. In response to a question from Council Member Becton, Mr. Sherman indicated that the $3 million allocated in the current year budget for salary increases to restore the 2% salary reductions imposed in 2010 was not expended and remains to be reallocated if the Council desires. CFO Mike Weinstein said that the Council had allocated $740,000 specifically to restore the 2% reductions for non-collectively bargained employees and, while those funds were not specifically used for that purpose, a majority of the employees for whom that would have been applicable have received other types of increases or are no longer employed by the City. The cost to restore the 2% reductions to the remaining employees is down to just over $200,000.


Page references from this point refer to Auditor’s Budget Hearing #1 handout.


Mr. Sherman noted Auditor’s recommendation #1 on p. 17 to decrease the Communication Services Tax revenue by $2,595,751 as a result of changes in the state’s revenue projection for this revenue source. This reduction will also have a negative impact on the Jacksonville Port Authority’s budget which utilizes a portion of this revenue.


Motion (Schellenberg): p. 17, approve the Auditor’s recommendation #1 to reduce the Communication Services Tax revenue by $2,595,751 – approved unanimously.


Motion (Schellenberg): on p. 17, approve Auditor’s recommendation #2 to reduce the Build America Bonds interest rate rebate by $151,749 to $449,649 – approved unanimously.


Motion (Schellenberg): on p. 17, approve Auditor’s recommendation #3 to reduce indirect cost recovery by $46,270 – approved unanimously.


Motion (Schellenberg): on p. 17, approve Auditor’s recommendation #4 to reduce the Court Fines - Traffic by $64,670 – approved unanimously.


Motion (Schellenberg): on p. 17, approve Auditor’s recommendation #5 to increase Payment in Lieu of Taxes - FPL by $41,457 – approved unanimously.


Motion (Schellenberg): on p. 17, approve Auditor’s recommendation #6 to increase half cent sales tax revenue by $451,885 – approved unanimously.


Motion (Schellenberg): on p. 17, approve Auditor’s recommendation #7 to increase 7th Cent Gas Tax  revenue by $128,122 – approved unanimously.


Motion (Schellenberg): on p. 17, approve Auditor’s recommendation #8 to increase 8th Cent Gas Tax revenue by $728,107 – approved unanimously.


Motion (Schellenberg): on p. 17, approve Auditor’s recommendation #9 to increase county sales tax revenue by $1,193,018 – approved unanimously.


Motion (Schellenberg): on p. 17, approve Auditor’s recommendation #10 to increase Surplus Gas Tax revenue by $2,729,315 – approved unanimously.


Finance Director Mike Weinstein explained the reasons for the difference in the administration’s revenue projections from some sources versus the Council Auditor’s projections. Partially it is a matter of timing (the auditors have another month of data on which to base their projections) and partially it is related to the degree of conservatism in estimating.


Chairwoman Brosche said that she has initiated a project to work with the City Procurement Division to develop a system to share the City’s active vendor list with the Tax Collector’s Office so that the Tax Collector can ensure that all the companies on the list hold current City business licenses.


Mr. Sherman explained the need to take some action regarding the unspent revenues of the Northbank and Southbank Downtown CRAs. Mr. Mousa said that the administration was unaware that the Ordinance Code has a provision applying to the downtown Community Redevelopment Areas (Northbank East and West and Southbank) that differs from the state statute regarding use of CRA funds remaining unspent at the end of a fiscal year. The state statute says that unspent CRA funds can be swept back into a government’s General Fund for reallocation; Jacksonville’s Ordinance Code provides that any Northbank and Southbank CRA funds unspent at the end of the year must be segregated into an account to be retained only for downtown uses. Mr. Sherman offered two options: waive the Ordinance Code to allow the unspent funds to be swept into the General Fund or leave the unspent funds in the CRAs and find $4.69 million to make the proposed budget whole. Mr. Mousa said that the current fiscal year will have a relatively healthy fund balance and could be a funding source for this transaction if that is Council’s desire; the required reserve fund balance should be achievable. Council Member Katrina Brown advocated for leaving the CRA funds in the CRA accounts and using year-end reserves to make up the $4.7 million needed.


Council Member Crescimbeni noted that the Northbank combined CRA is still cash negative compared to its obligations and the proposal to use reserves would add to the subsidy the General Fund already provides. He also noted that if the Downtown Investment Authority board, which governs the two downtown CRAs, decided to expend all of its TIF revenues annually, the need for General Fund subsidy to meet all of the CRAs obligations would increase. In response to a question from Councilwoman Brown, Mr. Mousa said the administration has no interest in advocating for any change in the current ordinance regarding those downtown CRA funds. Council Members Schellenberg and Crescimbeni requested additional information on the history of General Fund subsidies to the downtown CRAs. The committee will take no action until after it has heard from Council President Boyer on the subject.


Mr. Sherman reviewed several pages of overview of departmental and non-departmental expenditures and answered several questions about particular line items. With regard to the additional accrued pension liability payments the City is making to the Police and Fire Pension Fund, Council Member Gulliford said that the agreement for those additional payments provides that the payments would be discontinued when a permanent funding source for the pension amortization obligation is established.


Motion (Schellenberg): on p. 28, remove the $650,000 Subfund 011 Economic Grant program allocation and the $100,000 Subfund 011 QTI allocation from the Schedule of Capital Projects Not Lapsed Schedule AF – approved unanimously.


Motion (Schellenberg): on p. 36, approve Auditor’s recommendation #1 reduce the transfer from General Fund GSD to Subfund 259 by $929,295 and reduce the General Fund GSD transfer to Subfund 4F6 for interest due by $3,238 - approved unanimously


Motion (Schellenberg): on p. 36, approve Auditor’s recommendation #2 reduce the Medicaid funding by $1,190,672 - approved unanimously


Motion (Schellenberg): on p. 36, approve Auditor’s recommendation #3 to remove the carry-forward from FY15-16 in the amount of $650,000 for economic incentive grant payments and $100,000 for QTI payments and instead fund them out of the FY16-17 budget – approved unanimously.


With regard to the Schedule of Capital Outlay Projects Not Lapsed, Ms. Moyer said that the dollar amounts listed are maximum amounts. If the actual amounts are lower by year-end, the lower amount will be carried over.


Motion (Schellenberg): on p. 28, approve Auditor’s recommendations #1 through #6 – approved unanimously.


Mr. Mousa pointed out that the Public Buildings – Other Construction Costs item in Subfund 5A1 for $95,000 is the funding allocated for office space build-out for the Inspector General’s office in the Yates Building. He noted that a resolution has been introduced in City Council to urge the Inspector General’s return to City Hall; no action will be taken to expend any of those funds until the resolution is acted upon by Council and the future location of the IG is determined.


Motion (Schellenberg): on p. 29, approve Auditor’s recommendation #1 to revise budget schedule A2 to reduce the Court Costs $65 fee Trust revenue to $247,891 and to increase the Driver Education Safety Trust to $300,000 to match the proposed budget – approved unanimously.


Motion (Schellenberg): on p. 33, approve Auditor’s recommendation to delete the duplicate listing of $1500 for food for the Annual Homeless Veterans Stand-Down Event – approved unanimously.


Motion (Schellenberg): on pp. 35-36, approve Auditor’s recommendation to attach a Revised Attachment B – Chart of Council Member Salaries Being Waived – approved unanimously.


Motion (Schellenberg): on p. 39, approve Auditor’s recommendation that the Finance Committee, through its budget deliberations, pursue the elimination or reduction of borrowing for vehicle purchases– approved unanimously.


Motion (Schellenberg): on p. 42, approve Auditor’s recommendation to remove the first sentence of the waiver language referencing SMG’s competitive procurement policies – approved unanimously.


Sam Mousa addressed the subject of performance measurement and described the difficulty of comparing Jacksonville with other jurisdictions because of differences in how cities define their terms and include or don’t include a variety of costs when determining unit costs. The administration is undertaking a performance measurement program that compares Jacksonville’s performance year over year, which will be reported in future budgets.


Motion (Schellenberg): on p. 46, approve Auditor’s recommendations to add provisions to the FY16-17 budget ordinance regarding a recapture review for contributions to subfunds with negative cash balances and a proviso regarding the deposit of library fines into a special revenue fund – approved unanimously.


The committee was in recess from 11:55 a.m. to 1:00 p.m.


Inspector General’s Office

Interim Inspector General Steve Rohan and Lisa Green, Chief of Investigations addressed the committee. Mr. Rohan explained that he had arranged for contribution from the independent authorities toward the budgets of the Inspector General’s Office and the City Ethics Office in the following amounts: Ethics Office - $5,000 from each of the JEA, JTA, JPA and JAA for a total of $20,000; Inspector General’s Office - $85,000 from the JEA and $10,000 from each of the other 3 authorities for a total of $115,000. These figures represent the first year of a two-year commitment on the part of each of the authorities. The IG will keep records of how much time and resources


Motion (Schellenberg): approve the Inspector General’s requested budget amendment to appropriate independent agency contributions in the amount of $115,000 to the IG’s Office and $20,000 to the City Ethics Office – approved unanimously.


Mr. Rohan explained his budget enhancement request of $114,698 for one full-time investigator and 1,300 part-time hours for an administrative assistant position


Motion (Schellenberg): approve the IG’s request for appropriation of $114,698 for one full-time investigator and 1,300 part-time hours for an administrative assistant position, notary fee and AIG membership, hardware/software maintenance and licenses, other operating supplies to purchase new cell phone, desks, chairs, file cabinets/shelves and supplies, interview room and conference room furniture, travel and employee training


Motion (Gulliford): amend to add “pending satisfactory review by the Council Auditor’s Office”


The Schellenberg motion as amended by the Gullford motion was approved unanimously.


Motion (Schellenberg): move the $302 not allocated for expenditure in the IG’s budget to Special Council Contingency – approved unanimously.


In response to a question from Council President Boyer, Kirk Sherman indicated that he had just received the Inspector General’s second amendment request and had not had a chance to review the calculations contained therein. Mr. Rohan and Ms. Green explained the sequence of employee hiring in the office over the past year. Council Member Crescimbeni questioned the amounts, if any, appropriated to the IG’s office in the current fiscal year for office build-out and furniture purchases and expressed concerns about the delay in hiring approved personnel and reallocating salary dollars to furniture acquisition. Mr. Sherman indicated that his staff had had the chance to do a review of the handouts just distributed by the Inspector General and found that the numbers appeared to balance correctly.


Ethics Office

Ethics Officer Carla Miller advocated for a budget enhancement to add additional staff to the one full-time and one part-time employee currently working in the office using the new income from the independent authority contributions to the Ethics Office as the funding source. The Chair repeated her comments from the beginning of the meeting that the committee would not be considering any enhancements during the departmental hearings but would keep a running tally of requests to be considered at a wrap-up meeting at the end of the process if funds are available.


Motion (Schellenberg): appropriate $15,000 in salaries and $5,000 in benefit costs to the Ethics Office


Motion (Crescimbeni): amend the motion to appropriate $20,000 to the Ethics Office with the Council Auditor to determine the exact amount for salary and benefits within that cap


The Schellenberg motion as amended by the Crescimbeni motion was approved unanimously.


Sheriff’s Office

In response to a question from Council Member Schellenberg, Sheriff Mike Williams and JSO Budget Officer Bill Clement reported that 105 personnel are in the DROP program and will be retiring during the new fiscal year. The Sheriff discussed recruitment and hiring and reported that he is taking a comprehensive look at inmate health in the corrections system with an eye toward making changes to improve efficiency. Committee members posed questions about the increase in worker’s compensation heart and hypertension claims and what steps the department is taking to try to reduce those claims.


Motion (Schellenberg): on p. 54, approve Auditor’s recommendation #1 to increase the employee cap by 1 and to appropriate $74,442 to fund a Public Safety Analyst position to be fully reimbursed by the State Attorney’s Office – approved unanimously.


Motion (Schellenberg): on p. 54, approve Auditor’s recommendation #2 to bring process service in-house with a total cost of $295,017, a savings of $134,655 to the Special Council Contingency fund - approved unanimously


Motion (Schellenberg): on p. 55, approve Auditor’s recommendation #3 to include $507,132 in the budget to match the COPS grant, offset by an increase in the Sheriff’s salary lapse - approved unanimously.


Motion (Schellenberg): on p. 55, approve Auditor’s recommendation #4 to reduce the SMG overtime reimbursement revenue by $801,911 to correct an erroneous calculation, with $675,669 being covered by savings in jail meal costs under a new contract and a charge to Special Council Contingency of $126,842- approved unanimously


Council Member Gulliford asked Sheriff Williams to become personally involved in meetings about the future of Hemming Park and to suggest ideas for how the undesirable behaviors in the park can be curbed. If the Ordinance Code needs to be amended to make the JSO’s enforcement more effective, the Council is willing to consider making those changes. Mr. Crescimbeni reiterated that the Council is ready and willing to make whatever Ordinance Code changes are needed to make JSO’s enforcement better.


Finance Director Mike Weinstein explained the change in state law several years ago that changed the presumption and burden of proof for heart and hypertension workers comp claims to place the burden of (dis)proof on the government. He described the City’s vehicle replacement policy for police cars. In response to a question from Council Member Bowman, Sheriff Williams explained his department’s change in hiring qualifications to no longer require a college degree for initial applicants. That change opens up the potential applicant pool and should make recruiting easier.  In response to a question from Council Member Katrina Brown about overtime usage, the Sheriff explained how squads of officers are deployed to attack high crime areas. The Sheriff also answered questions about the arrangement the department has with apartment complexes to provide free or reduced rent to police officers in exchange for enhanced security services at the complex, noting that the details of the arrangements vary from complex to complex about what exactly the officer is expected to do. Ms. Brown asked for information about how many officers are participating in such residential arrangements and what duties they perform. She is concerned that some apartments are implying to residents that the resident police officers are providing security services for the complex when the written agreements may not require much if any real security service.


Sheriff Williams described the upcoming pilot program beginning in spring 2017 to test body cameras for police officers using 4-6 vendors providing different types of cameras. Bill Clement said the COPS grant has two more years to run subsidizing the salaries of officers, after which the full cost will be the City’s responsibility. Council Member Schellenberg asked the Sheriff’s Office to report back on whether they have considered using cloud storage for data rather than purchasing servers.


Fire and Rescue Department

In response to a question from Council Member Brown, Fire Chief Kurtis Wilson explained the reasons for the reduction in ambulance revenue projections despite the increase in the number calls and transports, which include reduced Medicare and Medicaid reimbursement rates and the proliferation of stand-alone emergency rooms which reduces transport distances and therefore the mileage charge revenues. Revenues are also decreasing in the fire inspection function because of an increase in non-payment of bills. A settlement of a lawsuit over fire inspection fees will be coming to the City Council in the next several months and that will offer an opportunity to re-think the billing and collection process. Chief Wilson answered a question about the increase in overtime costs due to increased vacancies in the department due to firefighters retiring under the DROP program and increased absences due to injury and illness. Filling vacancies is limited by the number of personnel in a fire academy class and the timing of their graduations.


In response to a question from Council Member Gulliford, Chief Wilson explained how the department’s hiring of several ambulance billing collection personnel has led to substantially increased revenue. The chief reported that the department is now buying lighter weight rescue vehicles on lighter chassis which has drastically reduced operating costs. Chief Wilson explained the status of the department’s SAFER grant-funded positions – 67 employees hired 3 years ago with the federal government paying the salaries for 2 years (3 years for veterans). The department has applied for a grant for an additional 26 positions. In the first seven months of this fiscal year EMS calls were up 7% and fire calls were up 5%. The department is projecting 150,000 total calls this year, over 80% of which will be rescue calls.


Chief Wilson explained the department’s staffing requirements and overtime usage required to keep units operational because of minimum per piece of apparatus. There currently are no restrictions on how many hours a firefighter can work in a week or month and how much overtime they can accrue, and there are no regulations on how many consecutive hours an employee can be on duty.


Property Appraiser’s Office

Property Appraiser Jerry Holland noted that he has not budgeted for any pay raises in the new budget as requested by the Mayor’s Office despite the fact that inadequate salaries have cost him 5 employees in recent months who left for higher salaries. The Mayor’s Office did not approve his office’s $165,000 request for new computer change technology that would allow aerial photographs of properties to be compared for purposes of determining building changes, which would allow a reduction of personnel assigned to that tax. Mr. Holland reported that the office has experienced a substantial increase in productivity in the last year both in terms of illegal homestead claims identified and of number and dollar amounts of liens levied. Sam Mousa said that the administration is willing to review the Property Appraiser’s budget and if there is sufficient available unexpended salary, the Mayor’s Budget Review Committee is willing to consider reallocating the salary dollars to the purchase of the computer software. Mr. Holland explained that Department of Revenue regulations don’t allow reprogramming of funds from salaries to other uses, so he doesn’t believe this approach would work. Mr. Mousa said the administration will work with Mr. Holland to explore options.


Motion: on p. 68, approve Auditor’s recommendation #1 to make various minor adjustments in the proposed budget to align the Mayor’s budget with the budget tentatively adopted by the Council several months ago and subsequently approved by the Florida Department of Revenue – approved unanimously.


Motion: on p. 68, approve Auditor’s recommendation #2 to reduce the postage line by $417 to match the DOR-approved budget – approved unanimously.


Motion: on p. 68, approve Auditor’s recommendation #3 to approve the Property Appraiser’s corrected budget of $10,174,143 to incorporate all changes made since the tentative budget approval several months ago - approved unanimously.


The Special Council Contingency fund stands at a positive $1,019,519 at the end of Hearing #1.


Outstanding items

·        CRA budgets – in the City budget or approved separately?

·        Vehicle purchases – waiver for borrowing or use fund balance?

·        Waiver of $25,000 minimum threshold for CIP projects – waive to include $4396 project

·        Property Appraiser change comparison software request

·        Ethics Office personnel enhancement request




Meeting adjourned: 3:41 p.m.


Minutes: Jeff Clements, Council Research

8.12.16     Posted 9:00 a.m.

Tapes:  Finance Budget Hearing #1 – LSD


Materials: Council Auditor’s Budget Meeting #1 handout - LSD