DeFuniak Springs City Council Budget Workshop Meeting Minutes Council Chambers June 9, 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 General Discussion/Follow Up Mayor Campbell turned the budget workshop over to City Manager Koby Townsend. Mr. Townsend thanked staff for their efforts in preparing the budget. He stated that he would be referring to actual expenses and asked the question: if utility transfers were eliminated, how would we correct that gap? He noted that he had removed items that had cost offsets, and highlighted $12.8 million in revenue and carryover offsets. Mr. Townsend posed the question: "What is a transfer?" as the council works through the budget. He presented these figures in a pie chart, stating that each department was responsible for their share. The goal was to find $2.5 million in savings. He stated there was $168,000 in surplus, and for the exercise, the sale-back program was cut, helping them reach a $3 million reduction target. Mr. Townsend explained all reductions and noted that meeting the goal would require cutting 21 full-time positions. This was an exercise the staff conducted to explore options. Mr. Harrison asked ifs six oft those 21 positions were critical. James Hurley, City Marshal answered yes. Mr. Townsend mention that the vacant positions included: June 9, 2025 Budget Workshop 1 One in administration Two in the police department One in public works One maintenance technician Mr. Harrison stated that he is not advocating to remove any positions and emphasized that personnel costs should be the last resort for a city. Councilmember Sconiers asked about the impact ofthese costs on the city. Mr. Townsend responded that rapid cuts would result in a massive change, but if done gradually, it allows for evaluation and adjustment. He also said that from a citizen's perspective, the changes would be significant. He noted that no services would be eliminated, but they may take longer to deliver. He emphasized that they were trying to meet a specific financial goal. Mr. Sconiers asked if recruitment and retention would be affected by the cuts. Councilmember Cosson likened the process to "ripping the bandage off" and asked if a longer- term model was an option. Mr. Townsend said he had three models the city could consider and reaffirmed the goal of achieving a balanced budget. He stated that revenues need to grow at the same pace as expenses. Mr. Bierbaum thanked staff and the city manager for their detailed work. He acknowledged that personnel is the largest budget line item and admitted he had often approved requests for new hires too easily in the past. He urged the council to make responsible decisions and stated his preference to aim for $0 in utility transfers, although he was not advocating to cut 21 positions. He said the city should grow at a sustainable pace. Mr. Cosson proposed a three-year approach to avoid drastic changes and supported Mr. Townsend's recommendation. Mrs. Heavilin suggested revisiting the budget and evaluating it against actuals. She emphasized the need to "sheezal down" and said costs began rising with the establishment ofthe CRA. Mr. Cosson stated that he supported reducing the CRA by 50%. Mrs. Heavilin said that the city needs to retain key positions. June 9, 2025 Budget Workshop 2 Mr. Harrison emphasized that the city is growing and that personnel is its largest cost. He suggested looking at vehicle costs and incentivizing employees to save money, noting that finding more revenue will take time. Mr. Hurley took the podium and discussed vacancies in his department. He said there's "a lot of bleeding" the city doesn't notice and suggested turning off lights and A/C systems to save money. He mentioned that the city is paying for 12 vehicles and that every department should examine where they can cut costs. Mr. Bierbaum encouraged councilmembers to avoid finger-pointing between departments and acknowledged that the CRA was intended to help the city spend more frugally. He supported freezing positions and warned that inaction causes priorities to be forgotten. He said private businesses make tough decisions behind closed doors-but the council must be transparent and do what's right. The council agreed to avoid interdepartmental blame. Mrs. Heavilin asked ift the city could reduce utility transfers by 10%. Mr. Townsend answered that eliminating $3.4 million was the full amount oft transfers. Mrs. Heavilin suggested cutting public safety and discretionary spending and even proposed selling the cemetery. She asked if eliminating $1.2 million was a realistic goal. Mr. Bierbaum asked for a longer-term plan and proposed targeting $3.8 million over time. Mr. Cosson pointed out that dragging the process out could prolong high water and sewage rates. He suggested freezing six positions and reducing CRA funding by 50%, and questioned the return on investment from the Economic Development Agency. Mrs. Heavilin argued that Main Street would still perform regardless ofCRA funding. Mr. Bierbaum disagreed, saying the CRA reinvests funds and increases property values. The council agreed to place the hiring freeze discussion on an upcoming agenda. Mr. Cosson suggested five years is too long, and Mr. Bierbaum proposed reducing by $1 million over three years. He said $570,000 in cuts over five years would be sustainable. Mrs. Heavilin noted that most cities keep transfers under 10%. Mr. Bierbaum recalled that in 2019, the council reduced transfers from $1.7 million to $700,000 and advocated for using actuals to guide decisions. June 9, 2025 Budget Workshop 3 Mrs. Cosson asked if three years was a good compromise. Mr. Bierbaum wanted to know if the council agreed on eventually going to zero transfers. Mrs. Heavilin disagreed, suggesting instead to stay under 10%. Mr. Cosson proposed a freeze on raises, and Mr. Bierbaum stated the city is currently under that level but still believes the number is high. Mr. Harrison emphasized the need to address infrastructure issues and said CRA funding helps with projects the city can't otherwise afford. He also noted that state discussions on reducing sales tax would affect revenues. Mr. Sconiers pointed out that transfers are always going to be part of the equation. He said replacing sewer infrastructure is expensive and won't happen until transfers are handled. He advocated working with the county to share services and proposed asking the sheriff to support sustaining certain programs. Mr. Harrison warned that cutting 21 positions could lead to the loss of institutional knowledge and unforeseen challenges. He advocated for continued collaboration with the CRA, even if its influence isn't currently obvious. Mr. Bierbaum said that the $570,000 goal was achievable. Mrs. Heavilin asked where that amount would come from, and Mr. Townsend responded: from grant matches, operations, cemetery funding, and personnel. Mrs. Heavilin asked how much ofthe budget accounts for growth. Mr. Bierbaum stated that ad valorem revenue is a smaller part of the budget and that most revenue comes from sales and gas taxes. He said the city should take a holistic view. Mrs. Heavilin claimed Main Street would keep operating no matter what, but Mr. Bierbaum disagreed, emphasizing its return on investment. The council decided to move forward with the hiring freeze conversation. Mr. Bierbaum reiterated that a phased reduction over time is better and recalled that they had successfully reduced transfers inj the past. Mrs. Cosson asked if a 30-day pause was a better approach. Mr. Harrison asked if the group could agree on a five-year timeline. Mr. Townsend committed to bringing back analysis and stated that he could prepare both two- year and five-year outlooks, depending on the council's priorities. June 9, 2025 Budget Workshop 4 Mr. Bierbaum noted that council members are elected based on specific qualifications and should not let their personal professional backgrounds overly influence public decisions. Mr. Cosson added that collaboration and respect for each other's expertise are essential. Mr. Harrison thanked the staff for their efforts. The next meeting is scheduled prior to the first meeting in July. Mayor Campbell opened the floor for public comments. Mrs. Lisa Sorrows said she heard mention of cutting job positions and benefits and voiced concern. She emphasized that the buyback program is an important benefit for employees. 3. Adjournment Meeting Adjourned 4:40 PM. Approved: Bob Campbell, Mayor ATTEST: Minutes taken by Rafael Ali Clerk CORPORATE City Proper notice having been duly, given SEAL 1901 I1 June 9, 2025 Budget Workshop 5