DelFuniak Springs City Council Budget Workshop Meeting Minutes Council Chambers April 28, 2025 1. Call to Order Mayor Bob Campbell called the meeting to order at 3:00 PM. Present: Mayor Bob Campbell; Mayor Pro-Tempore Todd Bierbaum (Seat 1); Councilmember Josh Sconiers (Seat 2); Councilmember Amy Heavilin (Seat 3); Councilmember Glen Harrison (Seat 4); Councilmember Danny Cosson (Seat 5). Absent: Also, present were City Manager Koby Townsend, Interim Finance Director Danielle McDaniel, and City Clerk Rafael Ali. 2. City Council Goals/Objectives Mr. Townsend presented what he expects from the first budget workshop. Mayor Campbell asked if the manager has any priorities. Mrs. Heavilin asked what happens if property values increase. Mayor Campbell also asked what revenue sources are expected to improve. Mr. Townsend stated that he doesn't believe there will be any changes aside from the current increases. He added that the only expected increase may be in planning fees. Mr. Bierbaum also brought up concerns regarding sanitation. He stated that there are two possible paths to address the issue: one is to continue working with the county, and the other is to perform an internal analysis to determine whether it is more efficient to keep the funding within the city instead of sending it to the county. He noted that the analysis should be fairly straightforward. Mr. Bierbaum added that, depending on the outcome of the analysis, the city would know whether it should remain within the current Memorandum ofUnderstanding (MOU). Mr. Townsend stated that the city needs to evaluate what distribution it is receiving back from the county each year. Mr. Bierbaum expressed concern about cash flow. He stated that keeping the funding in-house could help address the city's cash flowi issues. April 28, 2025 Budget Workshop 1 Mrs. Heavilin added that cash flow will be more apparent this year, as it is being broken out in the budget. Mr. Bierbaum noted that in 2018 and 2019, the city's budget was heavily dependent on grant funding. Mr. Harrison asked if the $800,000 in question is related to sanitation. Mr. Bierbaum responded that it comes from the one-cent sales tax. / Mayor Campbell agreed with Mr. Bierbaum and emphasized the importance of ensuring that calculations are accurate and completed in a timely manner. Mr. Bierbaum stated that for local roads and bridges, the city budgeted $50,000. Mrs. Heavilin asked whether there are other interlocal agreements in which the city performs a financial reconciliation or "true-up." Mr. Townsend stated that he will check the interlocal agreements to see if there are any others like this. He also mentioned that the city collects franchise fees. Mr. Cosson asked whether residents living in the city pay both city and county taxes. He also questioned whether the city is receiving its fair share of services in exchange for what it pays to the county. Mr. Townsend responded that the city will need to review all internal agreements it has with the county. Mayor Campbell stated that Freeport has similar arrangements with the county. He also noted that Destin pays Okaloosa County for sheriff services. Mr. Sconiers stated that Paxton takes care ofi its own right-of-way maintenance. Mr. Bierbaum added that Freeport has an agreement with the county whereby the city purchases the: materials and the county provides the labor. Mrs. Heavilin asked ifMr. Townsend is considering salary increases. Mr. Townsend stated that it would likely take over $400,000 to provide salary increases for all employees. Mr. Bierbaum stated that the city should work from a flat budget, adjusting only for changes in revenue and contractual obligations. April 28, 2025 Budget Workshop 2 Mr. Bierbaum stated that the city had $3 million in transfers and emphasized the need to get transfers under control. Mrs. Heavilin said she would like to reduce the CRA allocation from 90% to 50%. She then asked the council for their thoughts on that proposal. Mr. Cosson stated that, considering the current budget, he supports the idea. He added that completing the back-alley project would be a major benefit to the business community. Mrs. Heavilin asked how much the city received through the CRA. Mr. Bierbaum stated that the CRA gives the city the ability to bond out projects, which the general fund does not have the authority to do. Mrs. Heavilin explained how the CRA can borrow funds to get projects completed. Mr. Bierbaum further elaborated that bonding allows the CRA to fund necessary improvements, such as downtown curbing. He emphasized that the city should be thoughtful and appreciative of what the CRA enables. He added that if CRA funding is lowered, it can always be increased again later. Mr. Sconiers mentioned that there is legislation being considered that would eliminate the CRA's ability to bond out projects. Mr. Bierbaum proposed that staff be tasked with looking into an across-the-board cut totaling approximately $2.8 million. Mrs. Heavilin noted that 70% oft the city's budget is allocated to salaries and wages. Mr. Bierbaum pointed out that in 2019, the salary budget was $1.4 million. He added that the council at that time lowered it to $700,000, suggesting it's time to reevaluate. Mr. Townsend brought up the overall utility budget. Mr. Bierbaum responded that the increase in the utility budget is largely due to employee raises. Mrs. Heavilin asked how many full-time equivalents (FTEs) the city had in 2019 and whether the city has added 28 employees since then. Mr. Cosson asked whether the council is actively trying to find ways to cut the budget. He also asked how long the Economic Development Alliance (EDA) has been receiving funding from the city. April 28, 2025 Budget Workshop 3 Mr. Townsend responded that Main Street received $33,333, the EDA received $45,000, and Tri- County received $30,000. Mr. Cosson questioned what benefits the city has received from the EDA in return. He asked whether there is a record showing how much has been given to the EDA and what the city has gained from that investment. Mr. Harrison stated that the work done by the EDA is not short-sighted and often takes years to produce results. He added that the city can expect an increase in staffing levels as part of natural growth. Mr. Harrison emphasized that the city needs to find ways to increase its revenue and that additional revenue is indeed expected. Mayor Campbell also acknowledged the role oft the EDA. The council then had a discussion on employee pay increases over time. Mrs. Heavilin asked Mr. Bierbaum why he wants to eliminate transfers. Mr. Bierbaum responded that he sees a strong need for infrastructure investment. He added that this conversation is the first step in moving the city in that direction. Mrs. Heavilin stated that some of these budget adjustments should happen naturally since they occur annually. She added that she would like to see relevant graphs and data before meetings for better preparation. Mr. Bierbaum remarked that while a perfect definition of the budget situation may not be possible, the goal should be to get as close as we can to understanding it. Mr. Harrison asked what year the city underwent reconstruction. Mr. Townsend responded that it occurred in 2021. Mr. Bierbaum stated that, realistically, the budget could be reduced by a third. He also mentioned the importance of continuing current financial trends. Mr. Hurley emphasized that instead of just looking at raw numbers, increases must be clearly justified. He added that the town has changed significantly over time. Mr. Cosson asked whether it would be possible to reduce transfers down to zero. Mr. Bierbaum responded that while reaching zero may not be feasible, a more reasonable and controlled numberi is achievable. Mr. Hurley stated that the city should focus on becoming more effective in its operations. April 28, 2025 Budget Workshop 4 Mr. Bierbaum suggested implementing cost controls, including negotiating fixed-cost contracts. He emphasized taking a holistic approach to budgeting. Mr. Harrison pointed out that efficiency can be incentivized. Mr. Cosson noted that in the state of Florida, if an employee can save the state $1 million, they are eligible to receive 1% ofthe savings as a reward. Mr. Bierbaum stated that the city had raised rates in order to bring the cemetery and airport out of deficit and that this trend should continue. Mr. Cosson asked how soon employees could be encouraged to submit ideas that save money and whether a formal policy could be implemented to support it. Mr. Bierbaum said he had submitted this idea already, but felt that the timing might not be ideal. However, he added that he fully supports it. Mr. Townsend confirmed that all employees are empowered to ask questions and offer ideas for improvement. Mr. Cosson suggested that employees be rewarded financially for valuable cost-saving ideas. He pointed out that Florida has had similar incentive programs in place for over 30 years. Mrs. Heavilin said she likes the idea in theory but does not believe it will solve the immediate issue ofd determining what to cut from the current budget. Mr. Townsend mentioned that gas expenses will increase by 10%. Mr. Harrison clarified that he wasn'treferring to bonuses but to lasting structural improvements. He noted that often the people doing the actual work are the ones with the best ideas for solving problems. Mr. Bierbaum expressed interest in developing clear goals and objectives for the Public Works department. He wants to see the department be more proactive in addressing current issues. He added that it's essential to understand where funds are going and to ensure there is transparency and accountability. Mr. Bierbaum stated that he wants to ensure projects are actually being completed. He emphasized that there are issues that need to be fixed but aren't being addressed. He questioned why the council is only now finding out about a pump needing replacement. He added that funding should not disappear into a "black hole" and that accountability is crucial. April 28, 2025 Budget Workshop 5 Mrs. Heavilin emphasized the importance of having the Finance Department fully staffed. Mr. Bierbaum clarified that his comments were not meant to criticize employees, but rather to highlight the need for improved accountability and structure. Mr. Hurley asked where unused funds end up. Mrs. McDaniel responded that those funds go into the fund balance. Mr. Townsend added that reviewing the utility budget would show some carryover funds. Mrs. Heavilin stated she wants to ensure the city maintains at least three months of general operating funds in reserve for hurricane preparedness. She also said she would like to see the city hire an Assistant Finance Director, repeating several times that the position is necessary for improved efficiency. Mr. Cosson agreed that many of the challenges Mr. Townsend is facing involve finance and human resources. He shared that someone had informed him they could help offload some ofthat burden from Mr. Townsend. However, Mr. Cosson expressed doubt about the need for an Assistant City Manager, saying the city doesn't need to spend another $100,000 on a new position. Instead, he emphasized the potential of cost-saving ideas from current staff and noted that cross-training is currently lacking. Mayor Campbell commented that a supervisor recently received a pay raise that was higher than necessary. Mrs. Heavilin asked whether a Deputy City Manager position could be created to manage the departments directly. Mr. Townsend responded that the Public Works department is structured similarly to the Police and Fire departments. Mr. Cosson asked if the proposed position was already funded, and Mrs. Heavilin confirmed that it was. Mr. Bierbaum said he wasn't convinced that a single position was the solution. He suggested that perhaps adjustments were needed at the supervisor level instead. Mrs. Heavilin proposed finding a compromise and stressed that whatever the role ends up being, the decision must be clear. She noted that the position should be capable of assuming responsibility in the event that the City Manager is unavailable. Mr. Harrison asked what changes would make Mr. Townsend's job easier and noted that having the right people in the right roles can lead to cost savings. Mrs. Henderson added that the responsibilities currently falling on Mr. Townsend, especially regarding supervisor oversight, should be reevaluated. Mrs. Heavilin pointed out that with a 13:1 ratio of reports to the City Manager, the organizational structure should be reconsidered. April 28, 2025 Budget Workshop 6 Mr. Cosson reminded the council that changes like this don't happen overnight but asked if a new employee could be brought on to support Mr. Townsend. Mr. Townsend replied that the team would bring back the relevant organizational charts for further discussion. 3. Community Priorities 4. Public Comments 5. Adjourn Meeting Adjourned 5:0 PM. Approved: bo / kebh Bob Campbell, Mayor ATTEST: Minutes taken by Rafael Ali d 6 City Clerk CORPORATE Proper notice having been duly given - a SEAL 1901 : April 28, 2025 Budget Workshop 7