MINUTES OF THE SPECIAL SARASOTA CITY COMMISSION MEETING OF SEPTEMBER 08, 2004, AT 6:00 P.M. PRESENT: Vice Mayor Mary Anne Servian, Commissioners Fredd "Glossie" Atkins, Danny Bilyeu, and City Manager Michael A. McNees, City Auditor and Clerk Billy E. Robinson, and City Attorney Richard J. Taylor ABSENT: Mayor Richard F. Martin and Commissioner Lou Ann R. Palmer due to travel to Russia and France related to the Sarasota Sister Cities Association Program PRESIDING: Vice Mayor Servian The meeting was called to order in accordance with Article III, Section 9(a) of the City of Sarasota Charter at 6:00 p.m. City Auditor and Clerk Robinson gave the Invocation followed by the Pledge of Allegiance. 1. FIRST PUBLIC HEARING RE: PROPOSED ORDINANCE NO. 04-4570, APPROVING A BUDGET; AND MAKING APPROPRIATIONS OF SUMS OF MONEY FOR ALL EXPENDITURES OF THE CITY OF SARASOTA AND THE ST. ARMANDS SPECIAL BUSINESS NEIGHBORHOOD IMPROVEMENT DISTRICT FOR THE FISCAL YEAR BEGINNING ON OCTOBER 1, 2004, AND ENDING ON SEPTEMBER 30, 2005; PRESCRIBING THE TERMS L CONDITIONS AND PROVISIONS WITH RESPECT TO THE ITEMS OF APPROPRIATION AND THEIR PAYMENT, i PROVIDING FOR SUPPLEMENTAL APPROPRIATIONS AND REAPPROPRIATIONS PROVIDING FOR THE SEVERABILITY OF PARTS HEREOF IF DECLARED INVALID ; ETC. (TITLE ONLY) = PASSED ON FIRST READING (AGENDA ITEM I) CD 6:03 through 6:22 Vice Mayor Servian stated that the item is regarding the first public hearing for proposed Ordinance No. 04-4570, approving the fiscal year (FY) 2004/05 budget; opened the public hearing and requested that Staff come forward for the presentation. Gibson Mitchell, Director of Finance, and Christopher Lyons, Deputy Director of Finance, came before the Commission. Mr. Mitchell stated that the item is the first of two required public hearings for the adoption of the budget for the City; that proposed Ordinance No. 04-4570, included in the Agenda backup material, adopts a budget for the City and the St. Armands Special Business Neighborhood Improvement District (BID) for the fiscal year beginning October 1, 2004, and ending on BOOK 57 Page 28610 09/08/04 6:00 P.M. BOOK 57 Page 28611 09/08/04 6:00 P.M. September 30, 2005; that the General Fund budget as proposed requires no increase in the City's current operating millage of 2.6917 mills; that the St. Armands BID Board of Directors has approved a 2.0 mill levy on the BID for FY 2004/05; that the 2.0 mill levy on the BID will be in addition to the Citywide millage rate of 2.6917 mills; that the Truth in Millage (TRIM) Act requires the proposed operating millage rate for ad valorem taxes be measured in terms of the aggregate rolled-back rate which is the millage rate necessary to yield the same ad valorem tax revenue as generated for FY 2003/04; that the aggregate rolled-back rate is 2.4478 mills; that a 2.7268 proposed aggregate operating millage Citywide is proposed as the St. Armands 2.0 mills are averaged into the City's operating millage; that the higher operating millage is used to calculate the increase over the rolled-back rate; therefore, the percentage increase over the aggregate rolled-back rate of 2.4478 mills is 11.398 percent. Mr. Mitchell continued that the preliminary certification of taxable value of the City is $6,469,113,503 or a 15.97 percent increase over the FY 2003/04 preliminary certification of taxable value; that the proposed operating millage of 2.6917 mills will yield $13,918,378 in ad valorem tax revenue for the General Fund which is an increase of $1,440,128 or 11.58 percent over the FY 2003/04 budget; that the TRIM Act also requires the specific purposes for which the ad valorem taxes are being increased; that the specific purposes are increased police pension contributions of $932,777, fire pension contributions of $200,000, and health insurance contribution increases of $758,242; that the City's voted debt service millage is proposed at 0.3267 mills, a 28.70 percent decrease from the current debt service millage of 0.4582 mills; that the total millage required to finance the proposed budget is 3.0184 mills which is a 0.1315 mill decrease or 4.17 percent less than the current rate of 3.1499 mills. Mr. Mitchell further stated that the impact of the millage decrease to the average owner-occupied taxable home of $167,680, as of October 2003, which in the City is $142,680 after the $25,000 Homestead Exemption, would be an $18.77 decrease; that the proposed Ordinance also includes a 2.0 mill levy on taxable property within the St. Armands BID; that the certified taxable value of the St. Armands BID is $113,675,307 or a 14.3 percent increase over the FY 2003/04 preliminary certification of taxable value, which will yield approximately $210,000 in ad valorem tax revenue for the St. Armands BID; that the specific purposes for which the ad valorem taxes are being increased are promotional activities at a cost of $20,000. Mr. Mitchell referred to Section 9 of proposed Ordinance No. 04-4570 and stated further that Section 9 was added in consultation with the City Auditor and Clerk sO adoption of a special appropriation would not be required by the Commission each time revenues are collected in the development review process; that a brief summary of the proposed FY 2004/05 budget has been presented; that Finance Staff will discuss the changes in the FY 2004/05 budget as presented in the July 2004 budget workshops. Mr. Lyons referred to computer-generated slides of the Budget Summary FY 2004/05 and Budget Workshop Changes displayed on the Chamber monitors; and stated that a summary of the changes since the July 2004 budget workshops will be presented; that the first change is in the General Fund which is considered the most difficult change; that the Commission will recognize the changes since the Budget Workshop Changes were presented during the Budget Wrap-up Session on July 9, 2004; that the document has slightly changed; that the budget shortfall as of August 2, 2004, in the amount of negative $1,461,822 was the starting point; that the July 1, 2004, certification provided additional ad valorem tax revenues of $405,428 resulting in a decrease in the deficit to negative $1,056,394; that workshop changes were then made resulting in a deficit of negative $1,422,185; that since the time the cost allocation numbers have been adjusted based upon salary increases which is the reason for additional revenue of $53,730; that the General Fund deficit is a negative $1,368,455, which is slightly lower than presented at the Budget Wrap-up Session. Mr. Lyons continued that few changes were made to other funds; that changes to the Special Revenue Fund include a separate Public Art Fund which was requested by the Commission; that the Budget Summary by Fund, included in the Agenda backup material, indicates a line item for Public Art in the amount of $86,000; that $86,000 has been budgeted by consolidating all public art expenditures in the Public Art Fund; that the $86,000 is comprised of the $30,000 budgeted in the General Fund to supplement acquisition of public art as well as the amounts which were budgeted in the Public Works and Planning and Redevelopment Departments for maintenance of public art; that the line item for Development Services included the transfer of BOOK 57 Page 28612 09/08/04 6:00 P.M. BOOK 57 Page 28613 09/08/04 6:00 P.M. the Brownfield project for the sole purpose of convenience; that the funds were removed and moved to the Penny Sales Tax line item which is more appropriate; that the decrease in the Development Services fund is a negative $1,214,179; that the increase in the Penny Sales Tax fund is $1,221,000; that the $6,821 difference is additional Cost of Living Adjustment (COLA); that the Commission raised the COLA from 2 percent to 3 percent; that the $6,821 difference is the additional cost of the COLA basically for the Building and Zoning Department which is funded in the Development Services fund. Mr. Lyons further stated that the line item for Housing and Community Development includes impact fees for affordable housing; that impact fees from the Sarasota County School Board are included; that the impact fees will be collected and funneled through for the affordable housing program; that the impact fees were not included in the Housing and Community Development's budget at the time the FY 2004/05 budget was presented; that the Commission raised the COLA but requested the cost of medical to offset the increase; that the line item for Gas Tax includes a decrease of a negative $704 which is the reduction in medical costs; that the line item for the Community Redevelopment Agency indicates an increase of $30,000; that the Commission requested clarification regarding City Attorney charges which were not included in the Tax Increment Financing (TIF) fund; that an estimate is provided as to the amount which should be budgeted in the TIF fund; that nothing has changed in the Debt Service Funds; that decreases are indicated in the Enterprise and Internal Service Eunds generally due to the reduction in medical costs. Mr. Lyons stated further that during the budget workshop sessions, a 3 percent COLA was factored into the Enterprise and Internal Service Funds; that calculating a 2 percent COLA at the last minute was too difficult; that the budget is reduced since the 3 percent COLA was already factored into the funds; that the expenditures for health insurance actually reside in the line item for Self-Insurance which is the reason the decrease of a negative $129,402 is significantly larger than the other line items under the Internal Service Funds; that the contributions come out of the various funds into the Self-Insurance fund as a premium; that claims are then paid out, which is an expensei that the Claim expense is naturally reduced by half of the extra 1 percent salary adjustment. Mr. Lyons stated that a question may be if something will change between the first and second public hearings; that the situation is likely since the Commission recently approved the acquisition of the property on the northeast and southeast corners of Fruitville Road and US 41; that sufficient time was not available to factor the acquisition into the budget; that the manner in which the acquisition will be funded requires discussion with the Finance Director, who was out of town; that a revised TIF schedule was produced; that the Expenditures category includes the line item for 2005 FFGFC US 41 and Fruitville Road properties; that originally, the debt service over 10 years was indicated at $700,000; that the amount of debt service has increased to $750,000; that the Finance Director based estimates on the $4.875 million acquisition; that the acquisition agreement indicates $4.875 million plus closing costs and the requirement for the City to pay the financing costs which is the reason for the increase in the annual cost to $750,000; that in FY 2004/05 only $120,000 is indicated since the City will only be paying interest; that a principle payment will not be incurred until FY 2004/05; that the impact is substantially less for FY 2004/05 than originally envisioned; that the ending balance for the TIF fund now indicates a deficit of negative $583,818; that some work regarding certain modifications for Gulf Stream Avenue was budgeted for $116,000; that the Engineering Department desires to make the improvements sooner and will be including the request on the Agenda of the September 20, 2004, Regular Commission meeting; that $116,000 will be added back into the ending balance of the negative $583,818 if the Commission does not approve the request; that the Engineering Department desires to fund the $116,000 plus slightly more during FY 2004/05; that the hope is to have a purchase order by the end of 2004; that the fund balance will either be a negative $583,818 plus another $116,000 or will remain at $583,818. Mr. Lyons continued that funds have been identified for the project two times; that $600,000 is budgeted for FY 2003/04 for the First Street Streetscape project line item under the Downtown Master Plan/Other Projects category; that Public Works only requires $300,000 of the $600,000; that $300,000 is available for FY 2004/05; that Staff is proposing $116,000 be transferred out of the First Street Streetscape project for FY 2004/05 to fund the US 41 and Fruitville Road project. Vice Mayor Servian asked if funds have already been transferred out of the First Street Streetscape project? BOOK 57 Page 28614 09/08/04 6:00 P.M. BOOK 57 Page 28615 09/08/04 6:00 P.M. Mr. Lyons stated yes; that small amounts were transferred for the appraisal and the environmental studies. Vice Mayor Servian asked if $300,000 remains after the amounts which were used for the appraisal and the environmental studies? Mr. Lyons stated that a little over approximately $100,000 is available. Vice Mayor Servian referred to the line item for Self-Insurance under the Internal Service Funds category of the Budget Summary by Fund; and asked if Staff is comfortable with the ending balance? Mr. Mitchell stated yes. Vice Mayor Servian stated that the Self-Insurance Fund remains a concern considering the age of employees and the claims which are being made; and closed the public hearing. City Auditor and Clerk Robinson read proposed Ordinance No. 04-4570 by title only. On motion of Commissioner Atkins and second of Commissioner Bilyeu, it was moved to pass proposed Ordinance No. 04-4570 on first reading. Motion carried unanimously (3 to 0): Atkins, yes; Bilyeu, yes; Servian, yes. 2. PUBLIC HEARING RE: PROPOSED ORDINANCE NO. 04-4574, TO UPDATE AND MODIFY PROJECTS RELATED TO LEVEL OF SERVICE STANDARDS IN THE CAPITAL IMPROVEMENTS PLAN OF THE COMPREHENSIVE PLAN OF THE CITY OF SARASOTA (A/K/A THE SARASOTA CITY PLAN (1998) ; STATING FINDINGS OF ACT; ADOPTING BY REFERENCE AN UPDATED SCHEDULE OF LEVEL OF SERVICE PROJECTS BY REFERENCE INTO THE CAPITAL IMPROVEMENTS PLAN OF THE SARASOTA CITY PLAN (1998) ; REPEALING ORDINANCES IN CONFLICT; PROVIDING FOR THE SEVERABILITY OF THE PARTS HEREOF, ; ETC. (TITLE ONLY) = PASSED ON FIRST READING (AGENDA ITEM II) CD 6:22 through 6:25 Vice Mayor Servian stated that the item is regarding proposed Ordinance No. 04-4574, which is to update and modify projects related to level of service standards in the Capital Improvements Plan (CIP) of the City's Comprehensive Plan, also called the Sarasota City Plan, 1998 Edition (City's Comprehensive Plan); opened the public hearing and requested that Staff come forward for the presentation. David Smith, AICP, Senior Planner II, Planning and Redevelopment Department, came before the Commission and stated that the public hearing is to consider an update to the City's Comprehensive Plan, specifically the Capital Improvements Chapter; that Illustration CI-7 will be updated which is a table in the Capital Improvements Chapter; that Illustration CI-7 identifies the level of service of capital projects which are excerpeted from the Capital Improvements Plan; that State Statutes require the level of service of capital projects be adopted as part of the City's Comprehensive Plan and for the capital projects to be reviewed and updated each year; that Staff recommends approval of proposed Ordinance No. 04-4574. Vice Mayor Servian asked if the capital projects were modified and updated last year? Mr. Smith stated yes. Vice Mayor Servian closed the public hearing. City Auditor and Clerk Robinson stated that no one was signed up to speak; and read proposed Ordinance No. 04-4574 by title only. On motion of Commissioner Bilyeu and second of Commissioner Atkins, it was moved to pass proposed Ordinance No. 04-4574 on first reading. Motion carried unanimously (3 to 0): Bilyeu, yes; Servian, yes; Atkins, yes. 3. CITIZENS' INPUT CONCERNING CITY TOPICS = (AGENDA ITEM III) CD 6:25 There was no one signed up to speak. 4. OTHER ATERSADMNISTAITVE OFFICERS (AGENDA ITEM IV) CD 6:25 CITY MANAGER MCNEES: A. stated that many public hearings regarding budgets have been attended; that the public hearing held at this time has been calm which is pleasing; that the citizens are BOOK 57 Page 28616 09/08/04 6:00 P.M. BOOK 57 Page 28617 09/08/04 6:00 P.M. not organized in massive uprising over the FY 2004/05 budget or the overall tax picture of the City, which is a compliment to the Commission and Staff for the hard work and effort to bring forth a budget which pleased the entire community. VICE MAYOR SERVIAN: A. stated that the second public hearing regarding approval of the fiscal year (FY) 2004/05 budget will be held at the September 20, 2004, Regular Commission meeting, at 6:00 p.m. 5. ADJOURN (AGENDA ITEM V) CD 6:26 There being no further business, Vice Mayor Servian adjourned the Special meeting of the City Commission of September 8, 2004, at 6:26 p.m. MARY ANME SERVIAN, VICE MAYOR ATTEST BalwE Retereso BILLY E ROBINSON, CITY AUDITOR AND CLERK