MINUTES OF THE SARASOTA CITY COMMISSION WORKSHOP MEETING OF JULY 20, 2011 PRESENT: Mayor Suzanne Atwell, presiding, Vice Mayor Terry Turner, Commissioners Paul Caragiulo, Willie Shaw, and Shannon Snyder, City Manager Robert Bartolotta, and City Auditor and Clerk Pamela Nadalini ABSENT: City Attorney Robert Fournier The meeting was called to order by Mayor Atwell at 8:04 a.m. Finance Director Christopher Lyons, Financial Administration Department, came before the Commission. 1. MISCELLANEOUS 1) EQUIPMENT REPLACEMENT FUND Mr. Lyons gave the budget presentation for the Equipment Replacement Fund and stated that approximately $1.7 million will be allocated to fund the police radio system and approximately $300,000 of the Enterprise Resource Planning (ERP) software will be funded from the Equipment Replacement Fund. 2) GAS TAX Mr. Lyons gave the budget presentation for the Gas Tax and the $0.05 Local Option Fuel Tax (LOFT). A discussion ensued concerning the State's elimination of transportation concurrency requirements. 3) PENNY SALES TAX Mr. Lyons gave the budget presentations for the1989-1999, 1999-2009, and the 2009-2024 Local Option Sales Tax (L.O.S.T.), also called the penny sales tax, and stated that the penny sales tax is projected at $5,253,000 for fiscal year (FY) 2011/12 compared to the original projection of $8 million; that many projects were removed from the list which the Commission can re-add if the revenues of the penny sales tax are higher than anticipated. 4) TOURIST TAX Mr. Lyons gave the budget presentation for the Tourist Tax which is a County tax; and stated that a portion of the Tourist Tax is allocated to the City based on population; that the City currently has an approximately $2 million fund balance. 5) OFFICE OF TOURISM, TRADE, AND ECONOMIC DEVELOPMENT (OTTED) Mr. Lyons gave the budget presentation for the Office of Tourism, Trade, and Economic Development (OTTED). 6) COUNTY OCCUPATIONAL LICENSE TAX Mr. Lyons gave the budget presentation for the County Occupational License Tax, a portion of which is received by the City. A discussion ensued concerning the manner in which proceeds designated for economic development are used. Budget Workshop -1- 07/20/11 2. CITY MANAGER'S OFFICE Deputy City Manager Marlon Brown came before the Commission, distributed a memorandum and a document prepared by the Office of the City Auditor and Clerk which lists the staff cost associated with the Advisory Boards; and gave an overview concerning whether the boards were legally necessary, possible change to the frequency of meetings, and associated administrative costs. Mayor Atwell noted Commission consensus to accept the Staff recommendations with changes to the following City advisory boards: Bobby Jones Golf Course (BJGC) Advisory Board: Convert to a board which reports directly to the BJGC Director and add one representative to the Parks, Recreation, and Environmental Protection Advisory Board (Parks Board), Citizens With Disabilities Advisory Board: Change meeting frequency to a quarterly basis, Human Relations Board: Change meeting frequency to a quarterly basis, Parks Board: Expand to include three representatives with expertise in the operations of the BJGC, the Robert L. Taylor Community Complex, and the Lido Pavilion and Swimming Pool, Van Wezel Performing Arts Hall (VWPAH) Board: Convert to a board which reports directly to the WWPAH Executive Director, and Youth Advisory Board: Expand to include additional members from other municipalities within the County. Mayor Atwell noted Commission consensus to direct the City Auditor and Clerk and the City Attorney work together to make the attendance regulations for the City's advisory boards more stringent and to require all City advisory boards to submit quarterly written reports. A discussion ensued concerning the attendance of multiple Commissioners at advisory board meetings and actions which can result in a violation of the Florida Govemment-n.fe-Sumahine Law. The Commission recessed at 9:15 a.m. and reconvened at 9:24 a.m. 3. POLICE 1) POLICE Sarasota Police Chief Mikel Hollaway, Sarasota Police Captains Lucius Bonner, Jeffrey Karr, and Wade McVay, and Finance Department Manager Lisa Gladdue, Sarasota Police Department (SPD), came before the Commission. Mr. Lyons gave the budget presentation for SPD and stated that the budget has increased which is mostly attributed to the increase in retirement contributions. Mr. Hollaway stated that the past two years have been very challenging for SPD; that many new ideas have been implemented to improve SPD; that SPD stresses the importance of community policing; that SPD attempts to be very efficient in its responsibilities to protect the citizens of the City. Vice Mayor Turner stated that the previous Commission had an extensive discussion concerning whether the vehicle take-home policy was saving or costing the City money; and asked the status of the results of the analysis which Staff was directed to conduct during the spring of 2011. Mr. Bartolotta stated that Staff has not conducted the analysis requested by the previous Commission; that the research revealed a 2002 study conducted by an outside firm; that the City Auditor and Clerk has been requested to update the study rather than the City's Manager Office and Budget Workshop -2- 07/20/11 SPD; that the placement of the vehicle take-home study on the audit schedule for the Office of the City Auditor and Clerk is not known at this time. Vice Mayor Turner stated that the answer provided is not appropriate during budget discussions. A discussion ensued concerning possible reductions in the budget for the Independent Police Advisory Panel and the Police Complaints Committee, the exclusion of 16,000 parking citations issued by SPD Officers from the revenues for the Parking Management Division, the value of the Community Resource Team, the concern of approximately 33 percent of sworn officers will be retiring in the near future, the high electrical cost for the SPD Headquarters, possible security concerns with the consolidation of the City and SPD Information Technology Departments, and maintaining the continuity in command. Mr. Bonner stated that 107 of 175 sworn officers are in the patrol division; that SPD has implemented a policy for SPD Officers to become aware of the community which they patrol and develop relationships with the residents; that everyone is being asked to do more with less; that the level of service delivered by SPD on a daily basis is one to make everyone proud. A discussion ensued concerning the necessity of the audit to determine the long-term costs associated with the vehicle take-home policy, the development of a method to charge City residents who use City resources needlessly rather than taxing the entire City. Mr. Lyons stated that 16,000 is the actual number of parking citations issued; that revenues are only under the Police Budget; that the reason the tickets are only reflected in the Police budget is because the Parking Management is controlled by SPD; that 21,000 was the number of issued citations estimated for budget purposes. 2) PARKING MANAGEMENT Mr. Bartolotta stated that the budget before the Commission was submitted prior to the action taken by the Commission; that Staff recommends deferring the discussion until the July 21, 2011, Special Commission meeting at 8 a.m. Vice Mayor Turner requested that copies of the memorandum from the City Manager to the Commission and the financial backup documents be provided to the public. City Auditor and Clerk Nadalini stated that copies will be available for the public at the July 21, 2011, Special Commission meeting scheduled at 8 a.m. 4. INFORMATION TECHNOLOGY Information Technology (IT) Director Chance Craig came before the Commission, gave a computer- generated presentation concerning the Enterprise Resource Planning (ERP) system including the purpose, status of the City's current computer systems, benefits of the ERP, applications identified as suitable for conversion to the ERP, estimated cost savings, impacts of not implementing the ERP, and the proposed timeline for implementation of the ERP. A discussion ensued concerning the addition of three employees since FY 2010/11 and the estimated Staff reduction throughout the City with the implementation of the ERP. In response to a question by Commissioner Caragiulo asking how to explain the cost-benefit to a citizen within 30 seconds, Neighborhood and Development Services Director Timothy Litchet came before the Commission and stated that a Commissioner could explain the benefit to the public as improving efficiencies by allowing electronic transmittal of documentation and integration between departments for easy reference. Budget Workshop -3- 07/20/11 A discussion ensued whether the City shouid provide more vigorous analysis regarding the return on investment when making large purchases and the software and services which will be provided by the likely vendor for the ERP. Commissioner Snyder stated that Staff should keep a record of instructions on how to perform necessary transactions manually using forms in the event the computer system fails. A discussion ensued concerning the percentage of public reçords in a digital format and the manner in which the City. Auditor and Clerk is custodian of a digital record not in her possession. The Commission reçessed at 11:07 a.m. and reconvened at 11:21 a.m. 5. VAN WEZEL PERFORMING ARTS HALL Van Wezel Performing Arts Hall (WWPAH) Executive Director Mary Bensel and Finance Department Manager Tony Becich, VWPAH, came before the Commission. Ms. Bensel gave a presentation concerning the elimination of the City's subsidy to the WWPAH, the success of the WWPAH season, the diverse scheduled programming for FY 2010/11, and the award winning VWPAH season; and stated that Wilde Lexus who has donated over $1 million to the arts is being selected as one of the ten best companies in the U.S. supporting the arts. Ms. Bensel gave a presentation concerning the scheduled programming, grants received in 2011, the WWPAH educational and outreach programs, the marketing of the WWPAH, the sponsors for the 2011 season, the tenth anniversary of Friday Fest, capital improvements since 2007, and possible future capital improvements. Mr. Lyons gave the budget presentation for the WWPAH. Ms. Bensel stated that the WWPAH has offered to collect utility payments for the City. The Commission recessed at 12 p.m. and reconvened at 1:01 p.m. 6. UTILITIES Utilities Director Javier Vargas came before the Commission. 1) WATER AND SEWER Mr. Lyons gave the budget presentation for Water and Sewer including the Renewal Replacement and Improvement (RRI) Fund, the Water and Sewer Utility Stockroom Fund, the Water and Sewer System Revenue Bonds Interest and Sinking Fund, and the General Utility Reserve. Utilities Director Javier Vargas, Public Works Department, came before the Commission; gave a presentation concerning the budget breakdown including expenses and additional projects within the RRI Fund; gave an overview concerning the future of the City's utilities; and stated that Staff is minimizing and deferring any porrowing until 2016; that one fulltime position in the billing office has been eliminated; that the addition of payment centers at locations such as Amscot, Global Financial, the Van Wezel Performing Arts Hall, and other City facilities is being considered. Mr. Bartolotta stated that the transition will be made over approximately two years. A discussion ensued concerning the manner in which the new water meters are read, ensuring the public is educated regarding the new water meters, alternative methods in which the City can become debt-free, and the sale of the City's water effluent in the near future. Budget Workshop -4- 07/20/11 2) FACILITIES MANAGEMENT Mr. Vargas gave the budget presentation for Facilities Management. Mr. Bartolotta stated the. Administration is still marketing the first floor of the City Hall Annex. 7. COMMUNITY REDEVELOPMENT AREA FUND Mr. Lyons gave the budget presentation for the Community Redevelopment Area Fund and stated that the estimated funds available in the Newtown Community Redevelopment Area Fund have decreased since fiscal year (FY) 2009/10; that that the projected expenses for the Community Redevelopment Area Fund reflects a transfer of $2,531,746 to other funds in FY 2011/12 for services provided by the General Fund in the Community Redevelopment Area. 8. FINANCIAL ADMINISTRATION 1) FINANCIAL ADMINISTRATION Mr. Lyons gave the budget presentation for the Financial Administration Department, stated that Staff is seeking authorization to hire an. Assistant Purchasing Manager; and gave an overview of workload taken by the Financial Administration Department, specifically the Finance Division. Mr. Lyons stated that the City considered outsourcing payrol!; however, the cost to outsource payroll is greater than the City's cost of $50,000; that the previous Commission requested a policy for special events be drafted; that in his opinion, FY: 2011/12 is not the appropriate year to implement a policy for special events; gave an overview concerning the history of the Commission's allocating funds for special events. Mr. Lyons stated that the Commission must decide whether to allocate a specific amount of funds annually or allocate funds on a case-by-case basis. Mr. Bartolotta gave an overview concerning the disadvantage of allocating a specific amount of funds for special events. Mr. Lyons stated that the previous Commission considered directing organizations to seek funding through the County's Grantsin-Aid Program which is funded with taxpayer dollars. Mayor Atwell, Vice Mayor Turner, and Commissioners Caragiulo and Snyder stated that the City cannot provide funding for special events due to the difficult economic situation. Mr. Bartolotta stated that the Downtown and Newtown Community Redevelopment Agency (CRA) Advisory Boards will be making recommendations to the Commission; that the recommendations of the Downtown CRA. Advisory Board may include funding for the Chalk Festival. Vice Mayor Turner stated that social infrastructure projects proposed in the Newtown Community Redevelopment Area which focus on children should be considered. In response to a request by Commissioner Shaw for clarification of funding special events, Vice Mayor Turner stated that the Commissioners agree the City should not be giving funds to charitable organizations for special events from the General Fund or the Community Redevelopment Areas Fund; that a distinction is the City should consider allocating funds for social infrastructures in the Newtown Community Redevelopment Area which focus on children. Budget Workshop -5- 07/20/11 Commissioner Shaw stated agreement with the direction of the Commission not to give funds to charitable organizations for special events with the exception of social infrastructure projects in the Newtown Community Redevelopment Area which focus on children. Mr. Lyons gave an overview concerning the November 30, 2010, report of the City's finances by Fitch Ratings which is included in the Agenda backup material. A discussion ensued concerning the reconciliation of Staff time when a Staff member is assigned to one department but is working for another department. 2) UNCLASSIFIED Mr. Lyons gave the budget presentation for Unclassified budgeted items. Mr. Bartolotta stated that the Human Resources Director has been requested to distribute information presented at the July 20, 2011, Retiree Meeting regarding retiree healthcare prior to the Town Hall meeting. Mr. Lyons continued the budget presentation for Unclassified budgeted items. A discussion ensued concerning whether the City is getting a return on the investment into the lobbying efforts of Howard Marlowe and Company and the Commission's finding methods to further reduce the budget without the use of funds from the Revenue Stabilization Fund. Mr. Bartolotta stated that the Commission should certify the roll-back millage rate of 2.9249 mills sO ad valorem property taxes remain the same rather than decreasing by 7 percent. A discussion ensued concerning the remaining budget process at the conclusion of the current Budget Workshop and the reason for creating the Revenue Stabilization Fund. Mr. Lyons stated that the approximate $65,000 cost for the special election must still be included in the budget. 9. DEBT SERVICE Mr. Lyons gave the budget presentation for Debt Service and stated that the millage rates do not include the proposed special assessment for the Glen Oaks Estates Subdivision which will be presented to the Commission for approval at the August 15, 2011, Regular Commission meeting. 10. CAPITAL IMPROVEMENT PROGRAM Mr. Lyons stated that no changes have been made to the Capital Improvement Program since the presentation at the May 18, 2011, Commission Workshop. 11. TWO-YEAR PROJECTION Mr. Lyons gave the budget presentation for the two-year projection and stated that a proposed 17 percent millage rate increase is included in the two-year projection presentation to balance the FY 2012/13 budget. A discussion ensued concerning the proposed 17 percent millage rate increase for FY 2012/13 to balance the budget and the possible consideration to eliminate the Deferred Retirement Option Plan (DROP) program. The Commission recesses at 2:49 p.m. and reconvened at 3:02 p.m. Budget Workshop -6- 07/20/11 A discussion ensued concerning the use of the roll-back rate and alternatives to balance the budget without significant reductions to the current level of service, the financial impacts to employees whose positions are eliminated, requiring people in the DROP to retire, and whether to move forward with a special election at a time the Commission is looking decrease expenditures. Mayor Atwell noted Commission consensus to further discuss whether to proceed with the special election at the July 21, 2011, Special Commission meeting. Mr. Bartolotta stated that the Commission proposed to reduce the Neighborhood Grant Program from $50,000 to $25,000; that Staff is now recommending the Neighborhood Grant Program be reduced to $35,000 rather than $25,000 which would allow grants to be limited to no more than $3,000; that Staff would still be able to offer the same number of grants in two cycles. Human Resources Director Kurt Hoverter came before the Commission, distributed and gave an overview concerning the retiree healthcare plan presented at the July 20, 2011, Retiree Meeting including the actuarial cost for the gold and teal medical plans offered through Cigna healthcare insurance company; and stated that the trust fund established to pay the Other Post-Employment Benefit (OPEB) unfunded actuarial liability is in better condition than originally anticipated; that the trust fund may actually have an approximately $23 million balance at the conclusion of the current year; that Staff anticipates having $27 million in the trust fund by the end of 2012 which is still only 20 percent of the OPEB unfunded actuarial liability; that the use of the health clinic was promoted to the retirees during his presentation. Mr. Bartolotta gave an overview of the proposed format for the July 20, 2011, Town Hall meeting at 6 p.m. which was previously used at the. July 21, 2010, Town Hall meeting. Mayor Atwell, Vice Mayor Turner, and Commissioner Caragiulo agreed to use the format used at the July 21, 2010, Town Hall meeting. 12. ADJOURN Mayor Atwell adjourned the Budget Workshop of the City Commission of July 20, 2011, at 3:28 p.m. Budget Workshop -7- 07/20/11