OFFICE OF THE CITY COUNCIL
117 WEST DUVAL STREET, SUITE 425
4TH FLOOR, CITY HALL
JACKSONVILLE, FLORIDA 32202
FINANCE COMMITTEE BUDGET HEARING #2 MINUTES – 3rd amended
August 11, 2017
Location: City Council Chamber, City Hall – St. James Building; 117 West Duval Street,
In attendance: Council Members Garrett Dennis (Chair), Danny Becton, Lori Boyer, Katrina Brown, Reggie Brown, Reggie Gaffney, Matt Schellenberg
Also: Council Members Greg Anderson, Tommy Hazouri, Jim Love; Peggy Sidman and Paige Johnston – Office of General Counsel; Kyle Billy, Brian Parks - Council Auditor’s Office; Crystal Shemwell and Katrin MacDonald – Legislative Services Division; Sam Mousa, Ali Korman Shelton and Jordan Elsbury – Mayor’s Office; Mike Weinstein and Angela Moyer – Finance and Administration Department
Meeting Convened: 9:02 a.m.
Chairman Dennis convened the meeting and the attendees introduced themselves for the record. Council Member Becton reported that the Special Council Contingency fund starts the day at $1,064,966 to the positive. Council Member Boyer requested that a running tally also be kept of the capital contingency fund.
Ryan Ronnie King of the Library Board of Trustees
gave an introduction to the library system and its usage, programming and
classes. He noted that the library was named Florida Library of the Year last
year despite the financial limitations
it faces. Mr. King requested an $850,000 restoration of cuts to the materials
acquisition budget from the last couple of years and also requested a $1.1
million betterment to allow a number of libraries to be open on Sundays.
Page references from this point refer to Auditor’s Budget Hearing #2 handout.
Council Auditor Kyle Billy pointed out that the state Library Enhanced Access Program (LEAP) grant was moved from the Jacksonville Journey budget to the library budget. In response to a question from Council Member Gaffney, Mr. King said that the library’s top priority is restoration of its materials acquisition budget, followed by restoration of funding for hours of operation to make those hours consistent and expanded across the library system. In response to a question from Council Member Boyer, Mr. Billy indicated that materials could be purchased with capital funds. Ms. Boyer asked the library to provide a range of options for funding restorations for the committee’s consideration later in the budget process if available funding can be identified. Jennifer Giltrop, the interim Library Director, explained the successes of LEAP program and said that a request to the Mayor’s Office for a $46,000 increase to expand the program within its current 10-site footprint was not included in the budget proposal. Chief Administrative Officer Sam Mousa explained relationship of the LEAP program to the new Kids Hope Alliance, which should become operational in the spring of 2018 and which will make recommendations to the City Council for how to spend the available funding.
Ms. Giltrop explained the library’s weekend staffing procedures and
said that the enhancement request is to open more library branches on Sundays
and to provide for full-time weekend staffing instead of using overtime hours. Ms. Giltrop explained that the enhancement
request is to open the remaining 5-day per week libraries a 6th day
on either Friday or Monday, resulting in all libraries being open 6 days per
week. In response to inquiries from CM
Boyer and Reggie Brown, Ms. Giltrop explained the methodology for staffing the
current five libraries open on Sundays through overtime, and stated that the
Library would look into other possibilities for staffing Sundays in the future.
In response to a question from
Council Member Reggie Brown, Ms. Giltrop explained the number and amount of
state and federal grants the library system receives and discussed staff cuts
as library hours were cut over the years. In response to a question from
Council Member Becton, Ms. Giltrop described the evolution of libraries in the
digital age into community hubs and creative spaces rather than just
repositories of books. A myriad of electronic resources are available both in
the libraries and online for access at home or on mobile devices. In response
to a question from Mr. Becton, Mr. Mousa described the administration’s
interest in improving the library system after the Mayor’s immediate priority
of public safety is addressed. In response to a question from Council Member
Katrina Brown, Ms. Giltrop clarified that their $46,000 request for LEAP
expansion did not include any funding for adult programming so would not be
affected by the Kids Hope Alliance creation.
Council Member Schellenberg pointed out that usage statistics differ widely from branch to branch and said it seems that libraries in neighborhoods where you might expect high usage see less traffic than others. Ms. Giltrop explained that usage patterns differ widely among neighborhoods, that differences in square footage play a large part in gate counts, and that checkout of materials is only one measure of a library’s usage. Council Member Boyer urged the Library Board to find a way to prioritize Sunday hours when the libraries are available to the largest number of people, rather than more weekday hours when children are in school and many adults are at work. Ms. Giltrop noted that the library has an agreement with Duval County Schools to host field trips from schools, which have to take place in the morning, and hosts many home schoolers, so weekday hours are very important as well. Council Members Gaffney, Love and Hazouri advocated for finding the resources somewhere in the budget to increase library funding.
In response to a question from Council Member Anderson, Budget Officer Angela Moyer detailed the $350,000 computer refresh expenditure in the internal service charge category and Mr. Billy explained the increased allocation of City overhead charges to the library budget. In response to a question from Mr. Anderson, Teresa Eichner of the Finance Department explained that a future Oceanway area library on the Northside is listed in the CIP at $11.8 million and described the elements of that project cost. Council Member Reggie Brown asked about the library’s strategy for dealing with the homeless population that tends to congregate in the downtown library and Ms. Giltrop explained the library’s code of conduct and their partnership with Friends of Hemming Plaza and its social worker who helps connect those patrons with available services. She noted that 11 of the libraries have security guards, the rest do not. Chairman Dennis noted the high priority that the committee members seem to be expressing for the library’s needs and urged them to look hard for potential funding sources through the next several days of budget hearings.
Information Technology Division
In response to a question from Council Member Schellenberg about progress on the procurement of a new ERP (Enterprise Resource Planning) system to replace the City’s financial, procurement and human resource computer systems, ITD Chief Ken Lathrop said that the RFP was issued last August, 8 responses were received and 4 were selected to make full presentations to the City. The fourth and final presentation will be next week, then the department will begin final evaluations and the selection process. Mr. Lathrop reported that the Planning Department’s new public access system (developed in-house by ITD) is ready for the testing phase and should be rolled out by the end of September. Council Member Becton suggested that interested council members be given the opportunity to test the public access features on behalf of the constituents who will be using the system. In response to a question from Council Member Reggie Brown, Mr. Lathrop described the division’s recruiting and hiring practices, the difficulties encountered in filling positions, and the use of salary funds for contractual services when employees can’t be hired. In response to another question from Mr. Brown, Mr. Lathrop described his division’s grant activities. The division does not write grants directly but uses the services of the City’s grant office. There are relatively few grants available for ITD functions that are not public safety-related. In response to a question from Council Member Becton, Mr. Weinstein explained the Contingencies line in the budgets of the enterprise funds, which represent the contributions of those funds to the reserve fund created by the savings generated from pension reform. The Contingency Fund will be used to pay the costs associated with the pay raises over the next 3 years resulting from the pension reform program.
Council Member Boyer asked Mr. Lathrop to review any new projects in ITD’s 5-year IT Capital Program. The new items added this year are Fleet Management System – Replacement; Grants Management Software; Medical Examiner’s Office case management system; Computer Refresh; Microwave Radio Sites; and Portable Radio Refresh. Some projects listed in last year’s ITEC plan have been deleted.
Motion (Boyer): postpone approval of the 5-year ITECH plan until the CIP budget hearing day pending a comparison of projects added, projects deleted and project dollar amounts changed – approved.
The committee was in recess from 11:48 a.m. to 1:02 p.m.
C.J. Thompson, Chief of the Fleet Management Division, responded to questions about budgeting for fuel prices.
Motion: on p. 25, approve Auditor’s recommendation to remove 5 Public Works vehicles from the Schedule B4c vehicle replacement list placed there in error – approved.
Council Member Boyer asked for additional information on trends in the vehicle replacement fund and the progress being made toward going to an all pay-as-you-go system for replacements, particularly considering the debt service requirements on funds borrowed for vehicles. Ms. Moyer explained that the payments from departments for vehicles purchased through borrowing go directly to the debt service on those vehicles. Mike Weinstein stated that the purchase of new vehicles for an expanded fleet (i.e. new fire trucks for new fire stations, police cars for additional new officers) is difficult to accommodate with a pay-as-you-go system. Council Member Reggie Brown stated that there are federal grants available to pay for training for drivers who need commercial driving licenses, and there may be grants available for vehicle purchases. Mr. Thompson discussed the division’s process of considering the acquisition of electric vehicles where they are suitable. Chairman Dennis indicated his interest in getting to a pay-as-you-go basis for vehicles. Mr. Weinstein said that the administration’s expectation is that that point will be reached in 3-5 years if the pace of appropriating $23-25 million per year for that purpose continues throughout that time frame.
Group Health Insurance
At the request of Council Member Boyer, Mr. Billy described the group health insurance “contribution holidays” and reported that the current balance in the claims reserve account is approximately $43 million. The Council has two options for dealing with the accumulation of excess reserves – either reduce the bi-weekly ontribution rate or continue to collect the contributions at the same rate and make distributions in the form of contribution holidays after payment of claims when actual costs are known.
In response to a question from Council Member Schellenberg, Mr. Mousa said the administration is very close to being ready to ask for approval of legislation to enact a program that will offer City employees an option to utilize the UF Health hospital and clinic system for employee and family health care at an attractive price, to the benefit of both employees and UF Health. Mr. Mousa also stated that the City has bid out its contract for administration of the self-insurance system and a new contract will take effect January 1, 2018. In response to a question from Chairman Dennis, Mr. Mousa described the methodology for deciding on 5 contribution holidays rather than decreasing the employee premiums slightly over 26 pay periods.
City Wellness and Fitness
Mr. Billy noted the Auditor’s Office’s concern with the fact that the wellness/fitness program costs $500,000 per year and the City is spending a combination of third-party accumulated contributions and current revenues to meet that expense. The reserves will be exhausted in a few years if the spending and contributions continue at this rate. Mr. Mousa said that the $500,000 is the first-year cost and may or may not stay at that rate in the future, depending on the results achieved. Diane Moser, Director of Employee Services, described the Go365 smartphone app and the accumulation of points for purchase of goods and services by engaging in healthy behaviors and activities. The City’s actuary will begin analyzing data after 18 months of experience to determine what effects are being produced (i.e. lower prescription drug claims).
Council Member Boyer asked whether the City Wellness and Fitness Subfund 64H was an all-years fund or whether any unencumbered balance at the end of the year needs to be specifically carried over to the next year. Mr. Parr said that the City is awaiting signatures on a one-year contract with Humana for the Go365 that will be encumbered before September 30th to begin on January 1, 2018, which will be a $500,000 successor to the original $500,000 contract effective March-December 2017.
Office of Ethics, Compliance and Oversight
Carla Miller, City Ethics Officer, said that Jacksonville’s ethics program and Inspector General’s Office are unique in having been created by the City Council proactively because they are good ideas, and not created by citizen referendum after an ethics scandal. Ms. Miller reported that her office held 43 ethics training sessions for over 1,000 City employees and appointed board and commission members. Council Member Brown asked the ECO office to consider pursuing grants and other third-party funding. In response to a question from the Chairman about personnel, Ms. Miller said that the next need would be a full-time trainer. Mr. Dennis asked Ms. Miller to provide information on the cost of increasing her office to 3 full-time personnel.
Inspector General’s Office
Motion: on p. 36, approve Auditor’s recommendation to increase Permanent and Probationary Salaries by $5,775, increase Medicare contribution by $84 and increase Group Life Insurance by $20 (total $5,879) – approved.
The departmental request for an increase in the employee cap and funding for one Executive Assistant position was deferred to the discussion of requested enhancements toward the end of the budget hearing process.
James Hoffman, the Inspector General, described his early months in office and the need for a full-time executive assistant position. Mr. Mousa said that the Inspector General did not request an additional position during the budget preparation process and urged the IG to focus its effort on immediate needs and not spread itself too thin over too many agencies. Mr. Hoffman said that he did make the request to convert a part-time position to full-time during the Mayor’s budget review process, but was unsuccessful.
In response to a question from Chairman Dennis, Dr. Kelli Wells, Director of the Florida Health Department in Duval County, explained the department’s co-location relationship with Agape Community Health Center in a facility on the Westside and the plan to expand its clinical services at that Wesconnett location after Agape’s departure from that facility. She said that none of the $150,000 allocation in the budget for the Wesconnett center is for rent – the Health Department already rents the entire building. In response to a question from Council Member Boyer about her opinion on the privatization of the jail health care by the Sheriff’s Office, Dr. Wells said that there are advantages to a system that leverages and coordinates community health resources and agreed to Ms. Boyer’s request that she review and comment on the JSO’s proposed contract for jail medical services.
Motion: on p. 38, approve Auditor’s recommendation to revise Schedule B6 to correct amounts – approved.
Motion (Schellenberg): revise the previous motion to approve the corrected amounts for the sexually transmitted diseases, immunization and hospital emergency room alternatives amounts on Schedule B6, and place the Wesconnett-Westside Area allocation of $150,000 “below the line” until the wrap-up session pending further information regarding an e-mail sent to several council members regarding Agape’s vacation of the space – approved.
Jacksonville Housing Finance Authority
Motion: on p. 40, approve Auditor’s recommendation to revise Schedule N to increase miscellaneous services and charges by $7,523 to correct 3 calculation errors – approved.
Medical Examiner’s Office
Mr. Mousa said that the administration has been working with Dr.
Rao, the Medical Examiner, to handle the growing workload at her
facility with additional equipment and the budget increases the employee cap by
2. He said, in response to a question from Council Member Gaffney, that the
administration recognizes the need for expansion of the Medical Examiner’s
facility, but an expansion is not in the CIP for construction in the next five
years. Council Member Reggie Brown urged the City to apply for available grants
for the office. Dr. Rau Rao said that her staff has no expertise
in grant writing and would need the City to assist in that area. Mr. Mousa will
look into having staff provide the needed assistance. In response to a question
from Chairman Dennis, Mr. Mousa reported that the counties being served from
the 3rd Judicial Circuit are paying an appropriate fee for services that was
recently updated. Mr. Dennis suggested that the administration explore Orange
County’s recent construction of a new medical examiner facility with innovative
funding sources. Dr. Rau Rao thanked the administration for being
extremely supportive of her requests during the year for assistance in
providing equipment and increasing salaries to keep badly needed personnel.
Military Affairs and Veterans Department
Bill Spann, Director of Military Affairs and Veterans Services, described the increase in veterans visiting the office and the department’s outreach activities, hoping to reach 10,000 veterans served by the end of the fiscal year. Council Member Reggie Brown suggested that the department consider buying or renting a canopy or tent to shelter attendees at the annual Memorial Day commemoration because of the heat and sun. Mr. Spann reported that they have already begun planning to begin next year’s ceremony half an hour earlier and to shorten it by half an hour to reduce the amount of time spent in the heat.
In response to a question from Council Member Boyer, Mr. Billy reviewed the balances in the City’s various reserve funds (emergency reserve, operating reserve, Hurricane Matthew reserve, pension reform reserve). Ms. Boyer questioned the rationale behind the proposal to increase the percentage targets above the ranges already set in the Ordinance Code, given that those ranges were just adopted one year ago with the administration’s participation. Mike Weinstein said that the administration felt that the cost savings produced by the pension reform plan should be split between one-time expenditures (primarily capital improvements) and savings, with relatively little being used for current operating expenses. He said that the 5-7% range on the reserve accounts is a relatively low amount, and that a rate of 15% and above would help earn the City a AAA bond rating and 12% a AA rating. He said the City did achieve a AA- rating just this week on its latest bond issue, which was excellent given the relatively small reserves currently being held. Mr. Billy agreed to provide a variety of reserve amount scenarios calculated based on current year third quarter budget summary data. Mr. Weinstein agreed to provide the committee with the language from the recent bond rating documents that addressed the importance of sufficient reserve accounts to the rating. Mr. Mousa said that the proposed budget includes very generous employee raises, a $131 million capital improvement program (the largest in many years) and other enhancements, so some portion of the healthy revenues should be deposited into savings accounts. The budget proposes to increase the emergency reserve because it is more restrictive and less susceptible to being tapped for non-emergency uses. Mr. Billy said that the operating reserve is currently funded beyond its maximum range and the emergency reserve is funded below its maximum range.
Motion (Boyer): postpone discussion of the emergency contingency range and amount to a future meeting – approved.
· ITECH 5-year plan – deferred to CIP hearing
· Inspector General request for a new Executive Assistant position
· ECO office addition of a full-time trainer position
· Health Department $150,000 allocation for Wesconnett-Westside clinic
· Emergency Contingency range and appropriation amount
Hurricane Matthew Reserve
Angela Boyer suggested that if the committee is uncomfortable creating a new reserve fund, the $7 million could be immediately applied to the $20 million of hurricane-related expenditures already made. Mr. Mousa said that the City has a very good idea of what items and amounts will be reimbursed by FEMA (roughly 75% of $50 million). FEMA regulations required all of the City’s RFPs for storm remediation work to be redone because FEMA does not allow contracts to include JESB or local proximity requirements, which City contracts normally contain.
Council Member Boyer asked the administration and/or Council Auditor to be ready to address the annual Debt Affordability Study at the CIP hearing day. She also suggested that the Sheriff’s Office be scheduled for the resumption of its discussion on either Friday, August 18th or Wednesday, the 25th, and that they be requested to provide the necessary information in writing in advance of those dates so the committee can prepare.
Special Council Contingency
Brian Parks reported that the Special Council Contingency fund stands at $1,059.087.
Meeting adjourned: 4:41 p.m.
Minutes: Jeff Clements, Council Research
8.15.17 Posted 5:00 p.m.
Tapes: Finance Budget Hearing #2 – LSD
Materials: Council Auditor’s Budget Meeting #2 handout - LSD