A SPECIAL MEETING OF THE BOARD OF COUNTY COMMISSIONERS
BUDGET WORKSHOP
The Lake County Board of County Commissioners met in special session on Monday, August 19, 2002, at 10:00 a.m., in the Board of County Commissioner’s Training Room, Lake County Administration Building, Tavares, Florida. Commissioners present at the meeting were: Robert A. Pool, Chairman; Welton G. Cadwell, Vice Chairman; Catherine C. Hanson; Jennifer Hill; and Debbie Stivender. Others present were: William A. Neron, County Manager; Mr. Gregg Welstead, Deputy County Manager; Sanford A. Minkoff, County Attorney; Wendy Taylor, Executive Office Manager, Board of County Commissioner’s Office; Barbara Lehman, Chief Deputy Clerk, County Finance; and Toni M. Riggs, Deputy Clerk.
I. DISCUSSION OF PROPOSED FIRE ASSESSMENT
Mr. Bill Neron, County Manager, stated that, over the last several weeks, since he presented the budget to the Board, there have been discussions of various issues that have budgetary implications for next year. Staff attempted to put those items on an agenda for the workshop today for Board consideration. Mr. Neron stated that, at one of the Board meetings several weeks ago, it was requested that staff give a brief overview of the fire and rescue budget.
Mr. Steve Nash, Director of Public Safety, addressed the Board and directed their attention to the information that was presented to them, which included several charts. Mr. Nash explained that, in 1985, the County had 14 districts and, they were consolidated into six districts. At this same time, the County started the ad valorem tax to start paying for those districts and, in the budget process, the County took control of those six districts. In 1989, the County started charging a $35 residential fire assessment, with paid firefighters working eight hour shifts and volunteering after that time period. In 1992, the County established the 24 hours a day/seven days a week (24/7) fire stations, and the volunteer status has grown to where they are today. Also in 1992, the County established a position for an Emergency Services Director, and a Fire Chief, with the department that is now known as Public Safety. In 1998, because of the growth, the County went from $35 to $82, with a five year plan to increase staffed stations to 12 and paid firefighters to 75, by the end of Fiscal Year 2003. The County currently has 93 firefighters and 12 stations, with another station opening in the Four Corners area in November, and it will have three firefighters, a paramedic, and two firefighter EMTs on duty for each shift. The other station is in Astor, and it is replacing one that was already located there. Mr. Nash stated that there are plans for another station in the Lake Jem area. In 2002, the fire assessment fee for residential increased to $94.50, and they are looking at an increase of $5 for next year, under the five year plan that started in 1998. However, the growth was much more than anticipated throughout the County, as well as the demand for fire services, so the Board approved to add firefighters to take care of those conditions, but they did not change the amount of the assessment fee, therefore, the money was taken out of the Contingency Reserve Fund to cover those additional costs. Mr. Nash noted that this fund currently reflects a zero balance. Staff is suggesting an increase from $94.50 to $118.13, for replacement trucks, the new station in the Lake Jem area, the new station in Grand Island area, and an additional 12 firefighters to increase personnel in the rural stations.
Mr. Nash discussed the Insurance Service Organization (ISO) rating that determines the amount that someone is going to pay for homeowners insurance and stated that the County’s rating is based on an assessment that was done 17 years ago. In talking to Mr. Neron, Mr. Nash stated that they feel it is necessary to have another rating assessment done right away. He noted that the current assessment is based on the 14 volunteer stations, not on the paid firefighters, or assessments approved over the years by the Board. By doing a new assessment, staff feels they could save individuals $200 to $400.
Mr. Nash stated that staff is presenting a request to increase the assessment from $94.50 to $118.13, which will take care of the Public Safety contingency budget, the stations they want to build, the planning, the fee assessment study for next year and the future, and the additional firefighters. He explained that the dollars were projected out to the year 2003, based on the five year plan approved by the Board. He noted that there is no current approved five year plan that has been approved by the Board. Mr. Nash stated that staff is looking at a fee assessment study, to be part of the master plan study they are doing for the growth in the County.
Commr. Cadwell stated that the County is looking at the cities’ annexations and potential annexations relative to the County’s future. He questioned whether there were any areas right now where the County has borderline stations that they should consider closing and perhaps utilizing the cities in those areas.
Mr. Nash explained that there are several stations that the County inherited and, when they assimilated all of the volunteer stations, those became paid stations. They did not plan ahead of time where they were going to put those stations and, to save money, they have not moved a lot of those stations. For the future, staff is looking at placing a modular building in Lake Jem for about $300,000 which is about one third or less of the cost of a permanent structure. They can test the modular building for two or three years against the growth in that area and then build a permanent structure over time. They still have volunteer services in many cities, and the cities have fire stations. In Mascotte and Groveland, they have contracted services where the city fire department provides unincorporated coverage, as well as their own city coverage. The contract has increased 7%, due to costs. Mr. Nash stressed the need for a good five year plan that is incorporated and integrated with the rest of the County.
Mr. Neron stated that they really need to develop the next five year master plan for fire protection/station location, which staff will be starting next fiscal year, and they really need to be working hand in hand with the cities, because the least expensive portion of the equation is building the station, with the most expensive part being manning that station 24/7. Staff is looking at every option of working with the cities including some joint manning of stations. Commr. Cadwell stated that the Board quickly raised the level of fire service and, once they raised that service, there was an expectation of a level of service throughout the County. He stated that all of that growth was approved by the Board, and he feels that the $118.13 is in line. He further stated that, even though it is a tough year to have any kind of increase, the department grew because of the expectations of the people that live in the County.
Commr. Stivender stated that there have been a couple of meetings in Lake Jem, and approximately 50 people were in attendance at each of those meetings. The increase was explained to them, and they had no problem with it, because it is a health, safety, and welfare issue. She stated that she did not have anyone out of those 100 people object to the additional amount, because they know the protection is going to be there.
Commr. Hill stated that the notice did go out to the citizens of the County indicating the $118.13 fee. In June, the Board reassessed the RV parks and the hotel and motel rooms, and those were adjusted to a lower fee of $64.45. She questioned whether those will now be assessed at $118.13.
Mr. Sandy Minkoff, County Attorney, stated that the fee started at $64, but it is a proportionate increase just like single family residences.
Mr. Nash explained that they are wanting a response time of six minutes or less in the urban areas, and 12 minutes or less in the rural areas, but he believes that they can show that they can meet the demands in the Lake Jem area and change their ratings from nine to at least six. Mr. Nash stated that they meet that demand in about 75% of the County, but one of the areas where they do not meet that demand is in the Lake Jem area. He stated that they did a thorough study in that area, which included time studies. Mr. Nash stated that their goal is still to try and meet the demands throughout the County.
Commr. Hanson stated that Commr. Cadwell talked about this Board approving all of this growth, but there may have been a Board sometime in the past that also contributed to the growth, but a lot of their concerns for providing services are actually in the rural areas that have been approved over the years and not necessarily subdivisions approved by this Board. She stated that people are expecting a higher level of service, and the report shows that the County has come a long way in a very short time from purely volunteer service. She questioned what would happen if the assessment rate being proposed today is not approved and what the worst case scenario would be, if their reserves are at zero.
Mr. Neron explained that, if the proposed rate is not approved, they would not be able to hire additional firefighters and, as vacancies occur, they probably will not fill them. He stated that the fire/rescue is a separate municipal service benefit unit (MSBU) fund, so they have to live within the revenues generated. If the increases are not there, they need to go back and recalculate the revenues and adjust their expenses and, in an operation such as this, the primary expense is people, so they would probably be putting a freeze on filling vacancies and not filling some of the additional positions that are anticipated for next fiscal year. In response to the question from Commr. Hanson about whether it would be devastating to the system, if this issue was put on hold for a year, Mr. Neron explained that they would probably not have the manpower to open up some of the new stations, and it would slow down the progress that the County has been making over the years.
Mr. Nash explained that they would have less than $200,000, if they were to receive no increase on the enhancements. He stated that they saved the 5% that was approved five years ago for this next year. If the proposed rate was not approved by the Board, it would mean that they would not hire the 12 firefighters, which were part of the enhanced budget that would meet the demands in the new stations, and they would probably not build the station in the Lake Jem area. It would affect their needs for personnel, stations, and apparatus needed to provide the service. Mr. Nash stated that staff would hope to have the ISO here before January, and it would probably be three to five months before they could have the readings. He feels that a study could be completed within a year.
Commr. Hanson stated that, in 2002, when the Board approved the $94.50, they looked at doing a mix of ad valorem and assessment, and she questioned whether staff has looked at this at all, because the vacant lands are still pay nothing for fire protection, and the commercial owners pay a very low rate mostly because they do not generate a high number of calls for fires, or health care/emergency services.
During the discussion, it was explained that staff just completed work on a Request For Proposal (RFP) for another fee assessment study and, when the consultants are hired, staff can have them look at doing a mix of ad valorem and assessment as part of that study, and they can give the Board alternatives for consideration. Mr. Neron stated that he felt it was almost going to have to be a Board policy decision.
Mr. Nash stated that there has not been any increase in services related to the September 11, 2001 world tragedy, but they a looking in the future to fill a current vacant position with a security person that can look at the terrorism issue and coordinate grants from the federal and state levels. He noted that the job title has been changed to include these particulars.
Commr. Cadwell stated that, as the Board moves through these issues today, they are certainly not going to circumvent the public hearing process in September but, if staff is moving completely in the opposite direction of the Board, staff needs to know today, so that they can form alternatives before those hearings.
After some discussion, Commr. Pool stressed the importance of having the public hearings and having the opportunity to hear both sides to an issue.
At this time, Commr. Pool recognized the following Constitutional Officers present in the audience, Mr. Ed Havill, Property Appraiser, and Sheriff George E. Knupp, Jr.
II. FUNDING FOR LIBRARY SYSTEM
Mr. Neron addressed the item pertaining to the funding for the library system and stated that there were discussions earlier in the year about two libraries who want to make a change in status, with regard to the County system. He stated that the Leesburg Library wants to become a member library where there would be joint funding between the City and the County, with it being primarily a City facility, but a member of the County’s overall system. The Cooper Memorial Library in Clermont, which is currently a member library, wants to become a fully County funded library, which would mean there would be a change in the financial status, as well as a change to the employees of the Cooper Memorial Library who would then become County employees. Mr. Neron stated that, in realizing the financial crunch of the County, staff has worked with Mr. Ron Stock, City Manager, City of Leesburg, and his staff, to try and reduce this year’s costs, and a proposed interlocal agreement has been drafted whereby they would become a member library, and there would be no out-of-pocket County dollars this next fiscal year. There would be some additional funds from state sources to help offset some of the computer costs and book costs. Staff also worked with Cooper Memorial Library, with both their board and the City, whereby they also reduced the potential costs this first year for out-of- county new dollars to about $40,000. Mr. Neron stated that, if the Board wanted to make those changes, they would be looking at about $40,000 of additional costs this next fiscal year. In working with Ms. Wendy Breeden, Director of Library Services, and Mr. Fletcher Smith, Director of Community Services, and staff, when looking at the full implication of those costs in the following fiscal year, they estimate their costs, in the 2004 fiscal year, to be no less than $750,000, but they could be less depending on further negotiations. He noted that Ms. Breeden and Mr. Smith were here to answer questions, as well as representatives from Leesburg and Clermont.
Commr. Cadwell stated that he is the liaison for the Library Board, and they met Thursday of last week and had some discussion about these possible changes. He also met with Mr. Stock and talked to him about the Leesburg Library coming into the system and, while there are going to be implications of costs in the future for the system, not having the largest library in the system would be a missed opportunity for the County. He stated that, to some extent, the Cooper Library is a separate issue and should be treated as a separate issue. Commr. Cadwell stated that the Board members should know that they cannot continue to fund libraries out of the General Fund, and they need to see if there is interest next year in looking at a dedicated funding source for libraries, now that they have raised that level of service. He stated that he was never in favor of this before because all of the library services were provided by the cities, and the County was contributing money. He stated that, in talking to Mr. Stock, they do not want to come into the system at the expense of the other libraries, and he appreciates them taking that stance and trying to work with the County. He stated that, in what Mr. Neron has been able to work out with Clermont and Leesburg, he feels that they should bring in those folks and work on those interlocal agreements and bring them to the Board for discussion, with the Board knowing that they need to look at a different funding source for libraries in the future. In regards to whether the Board wants to see one year agreements, or multi-year agreements with the funding negotiated on an annual basis, Commr. Cadwell suggested that Mr. Neron talk to both of the cities to find their comfort level on the issue.
Commr. Pool stated that he appreciated Commr. Cadwell taking that stance and there is an expense and some issues at hand, but Cooper has provided service to a lot of Lake County residents, and the City is willing to give the County a pretty good rate on the building. He stated that the Board needs to find a dedicated funding source that enhances and maintains the system. He stated that Board needs to cease the opportunity, and he would appreciate staff coming back with some idea of how to best fund the libraries with other than the General Fund.
Commr. Cadwell stated that, in working with those interlocal agreements, while the County’s own library budget has been reduced this year, the contribution to the cities has not and any cuts taken to the library budget has been done on a County level, not to the cities, so the agreements should not be at the expense of the County’s contribution to the other libraries.
Ms. Breeden addressed the Board and stated that the total budgeted amount for libraries is approximately $4 million for 2002-2003, which includes about $400,000 to $500,000 for grants. The baseline budget is about $3.39 million, and about $900,000 of that goes directly to the cities.
Mr. Neron stated that the direction from the Board is to work with both the Cooper Memorial Library and the City of Clermont, and the City of Leesburg, to reflect interlocal agreements and bring those back to the Board for consideration.
Commr. Hill stated that these are two different requests. She stated that one library wants branch status and a very high level of service, and the other wants to be a member, which is a different level, and she was not sure that they can afford to do the branch status. She questioned whether both of them could be brought in as members, with staff determining those costs, and whether they are adding personnel to those libraries.
Mr. Neron explained that, in regards to the Leesburg Library, the County will not be adding any real additional out-of-pocket County costs for the first fiscal year. The additional costs will be covered by state grants for some computerization and books. With the Cooper Memorial Library, there is an additional $40,000 of out-of-pocket County expenses this next fiscal year, which could increase significantly the following fiscal year depending on how they draft the interlocal agreement. Mr. Neron stated that he will have to meet with Mr. Wayne Saunders, Clermont City Manager, and Cooper Memorial and bring that back to the Board. It was noted that right now the County is paying Cooper Memorial $196,228 which is in the baseline budget, and nothing will be paid to Leesburg this year.
Mr. Wayne Saunders, City Manager of Clermont, explained that Cooper Library is not a City library, it is not owned by the City, and there are no guarantees of what the City of Clermont would do if the Cooper Memorial Library Board was to decide to do something different than what they are doing today. Mr. Saunders stated that this is why their Board has approached the County, because the majority of the patrons are non-city. As far as their City Council is concerned, they are willing to try and continue towards the proposal being presented to the Board today.
Commr. Pool asked staff to help them find funds, other than General Fund dollars, and to find some way the citizens could embrace and support a plan to enhance and improve, or at least maintain, a library in their vicinity.
Mr. Neron stated that staff has provided the Board with statistical information relating to the libraries and their success. In response to a question as to how they would cut $500,000 from the library budget, staff has indicated in their memorandum that, if the Board should direct staff to cut that amount from the proposed library budget, it would have to come in operating hours. As noted, the plan is based on reducing operating hours for all existing branches to four days per week, for six or seven days per week. Until the Board tells staff how much they want cut from the budget, they will prepare a proposed plan and bring it back for consideration. As part of that plan to reach that amount ($500,000), staff felt they would have to close one branch library.
Ms. Breeden stated that she felt there was validity in going back and reviewing the hours of operation, and they plan on doing that this next year.
Commr. Cadwell stated that the County requires the cities to keep a level of service, if they want County funding, so it would be difficult for the County to cut their level of service but require the cities to maintain their level of service and, in the areas like Astor and Paisley where the kids are riding busses and do not get home until later in the evening, there may be areas where the libraries need to keep the later hours.
Commr. Hill stated that Ms. Breeden has done a wonderful job compiling this information for her, and they chose the number of $500,000 a year because that is how much library services will go up each and every year. She did not want to get into the argument of operating hours and days of operation, and she was looking more at a 40 hour week to a 47 hour week, and she was not sure that it should be required that a library service be open on Sundays. She felt that the libraries should determine their own operating hours and adjust to the appropriate level to get to the $500,000. Commr. Hill stated that she was looking at getting to the $500,000 level, so they can maintain this year, and then bring it back on the ballot as a level of service that they want and are willing to pay for and get it out of the General Fund and get a designated funding source, so they know where they are going every year.
Commr. Cadwell stated that, when they are talking about what they are providing in the County office, and with the County libraries, that budget, except for the addition of the new folks, has actually been reduced from last year and, if you look at the statistical information that has been provided to the Board, you can see the increase in the circulation per capita, and this is a positive thing that they can do out in the communities, and cutting it now would be a mistake, when they are trying to go to the voters and ask if they want to dedicate a funding source for libraries. To continue to keep the level of service they have in those areas would be the way to show the folks that they can continue to have this service, if they can pay for it.
Ms. Breeden stated that she has not heard that any of the cities are cutting their budgets this year, but the County does require each library to be open two nights a week and have some weekend hours.
Commr. Pool stated that the libraries are there today and are functioning very well and citizens can recognize that they need a dedicated funding source to keep these libraries open, to keep them staffed, and to keep them growing. He stated that they must ask the voters for their approval as they go forward but they need to try and bring in Leesburg and Clermont and let staff take care of the hours, but reduce and cut back where they can.
Ms. Breeden stressed that $500,000 will require closing one library. She stated that, when she did the plan, she based it on closing East Lake. She noted that East Lake and Citrus Ridge are currently in leased spaces.
Mr. Neron stated that he hears the majority of the individual members saying that they would like to reduce hours to some extent. He stated that he would like to work with Ms. Breeden and Mr. Smith and bring the Board a graduated plan, and some estimated cost savings, for the Board’s consideration between now and the public hearing. It was noted that he would also check with the cities on their schedules and hours of operation, to be added to the list, as well as their proposed budgets, and see where they can make some minor reductions and look further at major reductions.
RECESS & REASSEMBLY
At 11:10 a.m., Commr. Pool announced that the Board would take a ten minute recess.
III. SCHOOL RESOURCE OFFICERS
Mr. Neron stated that, during the last discussion on the issue of School Resource Officers (SROs), it was explained that there was a shortfall in funding for five SROs in the amount of $260,000. He stated that Commr. Cadwell has been representing the Board on this issue.
Commr. Cadwell stated that he met with Ms. Pat Saylor, Superintendent of the School Board, and her staff, and Sheriff George E. Knupp, Jr. and his staff, and came to a gentleman’s agreement that they would start school with those positions in place, and that the School Board and the County would split the cost this year for those five SROs. He would encourage the Board to move forward and ask the County Manager to include the cost of $132,500 in the budget for this year. Commr. Cadwell stated that the School Board and the Sheriff have also agreed to start meeting right after the budget process this year, to develop a long range plan. He stated that, in looking at the SRO program, he is of the opinion that the Sheriff should be the person providing those officers for that service.
Commr. Stivender stated that she agrees with what Commr. Cadwell has stated but she wants to make sure that they do not come back next year and have the same problem, and there needs to be a different funding source other than the General Fund. She stated that, if the program goes back to the schools, then they will need to address raising their taxes.
Commr. Pool noted that Sheriff Knupp and Ms. Susan Moxley, Assistant Superintendent, Lake County Schools, were present for the discussion.
Major Mark Palmer, Sheriff’s Department, presented the Board with statistical information relating to arrests, which he reviewed with the Board at this time. Major Palmer stated that it is their posture to keep the SRO program, because it is a safety issue, and a program that is very much needed.
Staff clarified that the School Board is funding 9 ½ SROs, and the County is funding 2 ½ SROs.
Commr. Cadwell stated that, during the next year, he wants the whole Board to be privy on how the system works with the D.A.R.E. officers and, when they begin to meet to discuss these issues, he would like the Sheriff’s Department to separate the middle school incident reports from the high school incident reports.
Commr. Hill explained that the State has given the County authorization to charge a three dollar fee onto traffic violations, and she questioned whether there was any reason why they could not use that three dollars for the SRO program, or the D.A.R.E. officers, and incorporate a traffic segment into their program.
Mr. Neron stated that Commr. Hill sent him a memorandum regarding the three dollar fee, as explained, and he forwarded the information to the Sheriff. The legislation allows the Board to do a surcharge of three dollars for each traffic citation, but that money has to be earmarked for driver education.
It was noted that this issue would be discussed later by the Board, with legal staff reviewing the legislation.
Commr. Cadwell stated that it has been a concern of the School Board that they have been paying a higher percentage for SROs than anyone else, with money from their Safe School fund. He asked that Ms. Moxley provide them with a copy of their Safe School budget, to be reviewed in their joint discussions after October.
IV. PROPOSED FUNDING FOR SOUTH LAKE HEALTH CENTER
Mr. Neron stated that, several weeks ago, on the Board’s agenda, there was an item to propose a multi-year lease for property in South Lake County, to be used to replace the existing Health Department Annex in that area. It had a proposed budget of $180,000 for renovation to the building, and an annual lease of about $81,000. After realizing that this was not proposed for funding in next year’s fiscal budget by the County Manager, the Board asked Mr. Rodger Amon, Administrator, Lake County Health Department, and Mr. Fletcher Smith, Director of Community Services, to go back and see whether they could reduce these expenses and bring the issue back to the Board. As shown in the attachment, they have worked to reduce the renovation costs from $181,000 to $100,000 and they have renegotiated the terms of the proposed lease from $81,000 to $64,344. If the Board approves the item, it will still require an expenditure this year, which will have to come out of the reserve for contingency, because there is no other funding source available. The ongoing expense would be $64,000 for the lease, which is not proposed for funding at this time. Mr. Neron clarified that the sales tax cannot be used for a privately owned facility.
Discussion occurred regarding the position of the owner, in terms of his responsibility for renovation costs, with staff clarifying that it would be interior renovation to retrofit an open area to a clinical facility.
Mr. Smith explained that South Lake Hospital currently has a lease with the owner, until August, 2004, and the County would be sub-leasing the building from South Lake Hospital at a reduced cost per square foot.
Mr. Rodger Amon, Administrator, Lake County Health Department, explained that they are one of four partners in the project, and they have discussed coming together with a collaborative on the medical side, and they have also talked with their community alliance about some other social service agencies, with hopes to create a one-stop shop in that facility. If this proposal is denied, Mr. Amon explained that he would continue the operation at the current facility, but it does not meet code, and it is not handicap accessible. If he had an audit from the state, he would probably not be able to keep that facility open, so he would probably have to discontinue services in that facility. Mr. Amon further discussed plans for the community services, support services, and the possibility of relocating the vital statistics office.
Commr. Hanson stated that they have been talking about this issue for a long time, and she believes that they need to move ahead and take advantage of this situation.
Commr. Stivender stated that she agrees with Commr. Hanson but, in regards to the expenses that were incurred from the facility downtown, they are going to be renovating another building, and she wanted to make sure that it was going to cost $100,000 or less.
It was explained that there was an assessment from the County architect, and there were costly areas of renovation including changes to the restroom area. The phone system and computer system will be moved from the existing office in Clermont. After further discussion, it was determined that the cost to renovate would be established at $100,000 or less.
Mr. Neron stated that they will have to look at the property and see if there are any other County needs and, if it is declared surplus, they can then go ahead an offer it for sale or lease.
Commr. Pool stated that he appreciates the Board members recognizing the need in South Lake County, and it would not be fair for individuals to have to travel to Umatilla or Tavares for services. The facility does not meet code and, therefore, it is a responsibility of theirs to provide that service. He would like to have that building declared surplus as soon as possible, so it can come back to the Board to help offset some of the expenses.
Mr. Sandy Minkoff, County Attorney, suggested that the Board would want to renew the lease with the landlord before they sign the lease with South Lake, because they do not want to spend $100,000 to renovate the building for a year’s lease. They need to go beyond 2004, if they are going to put this much money into the rental space.
Mr. Neron stated that he will take this as Board direction, to proceed and develop a proposed revised lease and package and bring it back on the first agenda for the Board’s final approval with all of the budget amendments.
V. REVIEW OF GENERAL FUND ALLOCATIONS TO OUTSIDE AGENCIES
Mr. Neron stated that the Board had requested a list of funding for outside agencies. He stated that Ms. Sarah LaMarche, Director of Office of Budget and Administrative Services, included information showing the General Fund expenditures by cost center, and she also highlighted the grants, as well as legal, or other mandatory requirements, for a Board expenditure.
Commr. Stivender referred to Page 54, Expenditures by Cost Center, East Central Florida Regional Planning Council (ECFRPC), and stated that it indicates that this is mandatory.
Commr. Cadwell explained that the legislation says that the county will be a member of the ECFRPC, and the funding formula is approved by the ECFRPC in the individual counties, by agreement with that planning council.
Commr. Stivender stated that she attended the League of Cities meeting and talked with Ms. Sandra Gwen, Executive Director of the ECFRPC, who indicated that her services were limited with the County, because the County has its own planning staff doing most of the work, and staff works with the Department of Community Affairs (DCA). She questioned why the Board is paying the ECFRPC, if the work is being done through their own staff.
Commr. Cadwell explained that Development of Regional Impacts (DRIs) are required to go to the ECFRPC, and the County is required to be a member. He stated that the Board could have them make a presentation and explain the services that they provide to the County. He noted that the ECFRPC will be receiving a national award at the end of the month for their work at Four Corners. He stated that the new law requires school boards and counties and cities to have interlocal agreements, and those attending the meeting and representing the cities and the County asked that the ECFRPC coordinate that effort, as opposed to it being a county, or a school board initiative.
Commr. Stivender suggested that the other Board members, who do not serve on the ECFRPC, be updated with information.
Commr. Cadwell stated that, between now and the final budget hearing, he would like to have some discussion about the Economic Development Council (EDC) and their additional requests. He noted that the requests did not make the budget, but he wanted to make sure that the Board had a clear understanding of those dollars, and he still feels the importance of the EDC to Lake County.
Discussion occurred regarding the grant that the County gets for acting as agent for the state to inspect underground fuel storage tanks, and the issue of animal control. Staff explained that some cities provide the animal control service, and the County provides it for many of the cities. Mr. Neron explained that, if the Board wanted to provide the service in only the unincorporated area, they would have to set it up as a municipal service benefit unit (MSBU) but, as long as it is coming from the countywide General Fund, the County will provide services to the cities, as requested. He noted that, when considering the number of calls they have to cover in the area, staff is doing a very excellent job, with very limited resources.
VI. SOLID WASTE FUNDING ISSUES
Mr. Neron noted that the Board has in their backup material a summary sheet, with regard to the solid waste program, as it is today. In April this year, he presented the Board with five options to fund the solid waste program. Based on the decisions made by the Board in April and subsequently and carried forward to date, the Board agreed to do a non ad valorem assessment of $173.50, which goes to the residents in the unincorporated area. The Board also agreed to do a millage rate of up to 1.25 mills for all property owners in the County, to help offset the cost of the program. The Board agreed to reduce the tipping fee at the Covanta plant from $95 a ton to $45 a ton, which benefits the commercial customers throughout the County, as well as those cities that tip at the plant. They are hopeful that, by reducing the tipping fee, they can get those cities that are now taking their solid waste out of county to come back to the plant, which allows the County to go to the maximum tonnage rate (163,000 tons) at the plant, to reduce the costs. The first class notices have gone out with the rate of $173.50, and the notice of the millage rate of 1.25 is being mailed today. Mr. Neron explained that staff has received the RFPs, and they are proposing a contract with an outside vendor, to privatize the materials recycling facility portion of their recycling program, which will save a net of $250,000. Mr. Neron stated that they have eliminated 13 positions, and he is happy to report that many of those individuals have been placed in open and vacant positions in the County. Based on the Board’s direction to go to universal collection, they have renegotiated the hauling contracts with the three franchise haulers, to an average rate of $125, from the current non-universal rate of about $128. He stated that they could recommend that the proposed millage be reduced from the 1.25 to 1.09, when they go into the final budget hearings, and this would be the staff recommendation at this time.
Staff clarified that those who subscribed to service in the unincorporated area paid $236.00 last year, and now, under universal collection, everyone is going to subscribe to service, so they will pay $282.50 under the plan before the Board today. It was further clarified that the $282.50 is based on a homeowner with a $125,000 home. Mr. Neron stated that he needs to know from the Board today whether this is the direction that they were continuing to move in because there are several options they could consider that are even worse than the ones before the Board today. He stated that he has shared with the Board members individually, and he has handed out to them, some of the options he reviewed with them, but he wanted to point out that there are probably 100 variations that they could come up with depending on how they want to approach this issue, and staff needs Board direction today. In terms of a time frame and whether there are any other options, Mr. Neron stated that it would depend on the option.
Mr. Neron stated that he had received a memorandum from Mr. Jeff Cooper, Support Services Director, over the weekend, and he had not had a chance to review it with Mr. Sandy Minkoff, County Attorney but, if the Board chose to select a different scenario, they might be able to make the tax billing. He explained that this would involve sending out a revised first class notice, with an expense to every homeowner in the County, and the Board adopting the assessment roll and having an additional set of public hearings, before the tax bill is mailed.
Commr. Hanson stated that she is prepared to move forward on the solid waste issue, if the millage rate is set at 1.00 mill.
Mr. Neron stated that he needed to publicly state to the Board that staff can work with a millage rate of 1.00, but he did not feel that staff could work with anything lower and, therefore, he would not recommend going any lower than the 1.00 mill. He explained that, after discussing this with staff, a portion of it would be coming from the $1.4 million in reserves and another portion of it would be coming from further cuts in the operational side. They looked at several options last week and, until he got further direction from the Board, he did not make any proposed decisions. Mr. Neron stated that 1.00 mill is not doable and, as the County Manager, he does not feel comfortable with it, but he feels they can survive for one year at that rate.
In regards to the 163,000 (tons) minimum plant capacity, Mr. Neron explained that, if the County commits to full capacity, the overall operational costs of the contract to Covanta are less than they would be at the lesser capacity, which would be about $1 million a year. He stated that the County will have to do everything they can to assure they get to that level, or buy garbage at $45 a ton, to make sure they meet the 163,000 tons. Staff feels relatively sure that the County can get to that amount, if they can get several of the cities, who are currently hauling elsewhere, to bring their garbage to the County at the $45 a ton rate. It was noted that the notice will be going to the public tomorrow.
Commr. Hanson stated that the Board has made a decision, and she hopes that the Board will stick by that decision, because what they are doing to the public, and what they did last year to the public and to the system, throws everything in a turmoil. She has expressed to the County Manager that she would be willing to take the hit, and it is going to be tough, but the Board is basically back to where it was in 1990, when there was discussion about mandatory collection.
Commr. Hill stated that the ad valorem tax is probably the most unfair tax developed in America, but she understands the reason for it. She stated that, if they are going to do the mandatory ad valorem, she questioned whether it could be used for the annual principle and interest payment. She also questioned whether going to the 163,000 tons will reduce Covanta’s contractual expenses.
Mr. Jeff Cooper explained that the budget for Covanta is $10,262,000 and, by taking the full capacity (163,000 tons), the costs will be about $9,460,000. He explained that they want to do this because the ash disposal bonus fee has never been charged, and it is possible that the County may have to pay that fee, which would be anywhere between $850,000 to $1 million a year. Mr. Cooper explained that, if they go to any other scenario other than full capacity, the $10,262,000 would be used to pay the costs plus the ash disposal bonus fee. He stressed the point that the County does not have enough money budgeted to pay the ash under any other scenario. Mr. Cooper noted that the County makes no money off of the ash.
Discussion occurred regarding refinancing the bonds, with Mr. Minkoff explaining that the contract provides that, if there is a refinance, the County would pay all of the costs.
Mr. Neron stated that he is meeting with the County’s financial advisor and bond counsel later this week to review some of the ongoing discussions they have had with Covanta.
Mr. Cooper stated that the bond payment, on an annual basis, is $7.8 million, and they are trying to pay $1 million a year on the line of credit principle, and the interest is a sliding scale. They are currently budgeting $440,000 this coming fiscal year for the interest.
Commr. Pool explained that, as stated earlier by Commr. Hill, the ad valorem tax is not a fair tax, because it depends on the value of your home, or land, and it is not based on what you may provide to the incinerator and/or the garbage stream. In talking to several citizens and, after having Mr. Minkoff research this idea, he has indicated to him that it is not legal without legislative approval to endorse an additional one penny. He stated that the idea is to ask the voters of Lake County to add one penny, to go from seven cents to eight cents, and, in four short years, the bond and the plant could potentially be owned by the County. The one penny generates $20 million a year, and it is the most fair and equitable way to generate dollars, but it would take their legislators to allow them to have a binding referendum from the taxpayers that would say that they could embrace a one penny increase for four or five years. Commr. Pool noted that, in order for the plant to be owned by the County, they would have to negotiate this possibility with Covanta, but there is an opportunity to pay off the bond issue and buy that plant in a five year period.
Commr. Hanson suggested that the idea presented by Commr. Pool may be something that the County Manager’s Blue Ribbon Committee could look at for the following year, but she did not think it would help them this year.
Commr. Pool stated that he found a lot of support for the one penny, and the people would like the opportunity to vote on something like that in lieu of ad valorem taxes.
Mr. Minkoff stated that the other source of revenue that the Board has available to them is the utility tax, but it would charged to only people in the unincorporated areas, and it could be used for this purpose, but there is no other significant revenue sources available to the Board.
Commr. Hanson stated that this is why the Board originally decided on the assessment, because it was the fairest way to go and everybody paid something, and the reason they are looking at millage this year is because the assessment has risen so high and it is entirely a burden on the unincorporated citizens, because of changes that have occurred with the cities, and she believes it is fair. She stated that the incinerator at the facility, whether it be a landfill, or an incinerator, is there for the use of the cities, whether they choose to use it or not, because the County has an obligation to provide a facility for solid waste. She stated that, if they are going to have a millage, they need to have it on the assessment and have it on the tax bill that shows that it is for solid waste.
Mr. Neron sated that he had a conversation with Mr. Bob McKee, Tax Collector, who has made a request to the Department of Revenue and, as far as they know, there will be no prohibition for them to separately identify that millage rate for solid waste on the notice, even though it is part of the County’s General Fund overall millage. They can track the revenue from year to year and, if something happens in the future where they can reduce those dollars, they can make that millage go away.
Staff discussed the different scenarios (1 through 3) that had been distributed to the Board noting that Scenario 3 is a non-universal scenario where the residential hauler cost is being paid by the individual resident. Mr. Neron noted that he would have other calculations for the Board’s consideration tomorrow for the Board meeting, and other scenarios and options. He understands that the Board wants staff to continue as they are currently proceeding.
Commr. Cadwell stated that Commr. Hanson is right, the Board did go to the non ad valorem assessment to make sure that everybody was involved in paying for solid waste at some level. If they did not have tipping fees that could be as high as $150 to $160 a ton, they would not be having this discussion but, with the deal that they have to live with now, there has got to be a way for everybody in the County to participate at some level in solid waste, whether or not they are in a municipality. Commr. Cadwell stated that, while this may not be the fairest way to do it, he has not had anyone come up with any other way to fund it any better than what the Board has before them today.
Mr. Lewis Stone, Attorney representing the City of Eustis, addressed those present and stated that the City of Eustis has a special meeting scheduled for this Thursday at 4 p.m. to discuss this issue. The City recently renegotiated its agreements with its hauler, and the County strongly encouraged them to take their garbage outside of the County. Mr. Stone explained that, at that time, they were discussing how it would hurt the County by going over the minimum requirement and, when they negotiated their contract with their hauler, they gave them a little more on the hauling side, because they were going to be able to see a savings on the other side. He explained that it certainly does not make sense to the citizens in the City of Eustis that, if you live in Marion County, you are going to get a reduced tipping fee and not have to participate in the real cost of the system, and the users of the system are not paying the cost of the system. From a legal standpoint, Mr. Stone suggested that they look carefully at the bond covenants. He stated that the funding mechanisms that are required in the bond talk about tipping fees, and other lawful methods of other available funding. The other available funding is non ad valorem, as opposed to ad valorem, and other lawfully available funds. He stated that these bonds were not referendum bonds, and the Board should look very carefully as to whether or not they can use ad valorem taxation and general revenues of the County. He further stated that, had it been the intent of the bonds at the time to use general revenues of the County, to use ad valorem, it would have said so in the document, as opposed to being silent on it. The funding mechanisms that are stated in the bond documents do not include ad valorem. Mr. Stone stated that enterprise operations are to be funded by enterprise funds, pursuant to Florida Statutes that speak specifically to the legislative intent that county solid waste systems be considered enterprises and be funded that way. The Florida Statutes require that there be a substantial benefit to cities, if the cities are being taxed. If a city is not receiving the benefit, then the city should not be required to pay for it, which is exactly the situation here. Mr. Stone stated that he knows that the City Commissioners are concerned about the notion of an ad valorem assessment, based on their recent history, and it should be an enterprise and, if it costs $190 a ton to do it, then the people who use it ought to pay $190 a ton. Mr. Stone clarified that this is a problem that everyone inherited and was not the fault of anyone sitting here today.
Mr. Minkoff explained that there have not been any recent issues involving double taxation, and the Supreme Court has ruled that, if there is any benefit to the cities, then it is not a double taxation question. In this case, the Florida Statutes mandate the counties to have a waste system for the entire County including the cities. The County having a waste-to-energy facility, in reading the contract, he does not believe would be a double taxation question. In regards to the enterprise fund issue, there are rules that they are supposed to be enterprise, but that is for money coming out, and he does not believe there is any prohibitions against subsidization of enterprise funds using general revenues. He stated that he will talk with Mr. Stone and address his comments and look further at the law.
Commr. Hanson stated that it is an unfortunate situation that the unincorporated folks cannot opt out of the system, and the Board has to negotiate for them and, as the cities pull out, that is where the burden falls. She stated that other counties have a combination of ad valorem and assessment fees to fund their solid waste enterprise fund.
Mr. Neron stated that, when staff was renegotiating the franchise rates with the three franchise haulers, they asked those franchise haulers if they would work with their city clients, if they went to $45 a ton and, if it would benefit the city to get out of the existing agreements to haul that solid waste out of County and bring it to Covanta. All three franchise haulers said they would work with the County, and the various cities, to try and get those rates, and all of them have committed to do this where it makes sense.
Mr. Doug McCoy, Waste Management, addressed those present and placed on the record that they are willing to work with the County and the cities, as noted by Mr. Neron. Mr. McCoy stated that they are a vendor for both Lake County and numerous cities in Lake County, and they would look toward their cities for guidance. He stated that, with a 90 day notice, they are in the position where the garbage can be moved anywhere their current clients wishes it to go, and the rates will be adjusted according to travel time. Mr. McCoy stated that, if the City of Eustis wants them to negotiate with the County, to take the waste from Eustis to their facility in Orange County, the transportation cost will be built into the tipping fee. The collection rates are probably similar, but the rate to send the garbage to Orange County is actually built into the disposal fee, not the collection fee.
At this time, Mr. Jim Myers, City of Eustis, discussed the City’s current fees with the Board.
Discussion occurred regarding the language in the bond covenants, with staff noting that questions will be presented to the County’s bond counsel.
Mr. Neron stated that Sumter County’s rate is $25 a ton, and Marion County negotiated a rate of about $35 to $37 a ton, so there is very little opportunity for cities to be pursuing Lake County, but all of this will be taken into consideration when addressing this area of the issue. He noted that staff will be bringing back certain interlocal agreements and contracts, as early as possible.
There being no further business to be brought to the attention of the Board, the meeting adjourned at 12:35 p.m.
ROBERT A. POOL, CHAIRMAN
ATTEST:
JAMES C. WATKINS, CLERK
TMR/BOARDMIN/8-19-02/8-26-02