A special MEETING OF THE BOARD OF COUNTY COMMISSIONERS
may 10, 2011
The Lake County Board of County Commissioners met in a special budget workshop session on Tuesday, May 10, 2011 at 9:00 a.m. in the Bob Norris Auditorium at the Agricultural Center, Tavares, Florida. Commissioners present at the meeting were: Jennifer Hill, Chairman; Leslie Campione, Vice Chairman; Sean Parks; Jimmy Conner; and Welton G. Cadwell. Others present were: Darren Gray, County Manager; Sanford A. “Sandy” Minkoff, County Attorney; Wendy Taylor, Executive Office Manager, County Manager’s Office; Barbara Lehman, Chief Deputy Clerk, County Finance; and Susan Boyajan and Shannon Treen, Deputy Clerks.
discussion of fiscal year 2012 budget
Mr. Darren Gray, County Manager, recapped that they kicked off the budget season a couple of months ago and received some preliminary estimates from the Property Appraiser which indicated that the revenues from property values would see another ten percent decrease. He specified that he would focus this presentation on three funds, one of which was the general fund, which was the largest fund they need to look at, including how to balance the fund, a report about some of the issues and challenges with it, and his recommendations. He related that another fund he would discuss was the fire rescue fund, and he recapped that a couple of months ago Tindale-Oliver showed a presentation to the Board regarding the update of the fire-assessment study, which they will go over, as well as the fire issues and needs. He also would be discussing the parks funding, including the large project in South Lake, the Sorrento park, and the passive parks, and he would end the presentation with a budget timeline to inform the Board where he is in the process and the schedule he envisioned through the summer. He noted that since the constitutional officers’ budgets are not due until the end of the month, they have just estimated those after talking with them. He stated that their ad valorem revenues were expected to decrease related to the decline in property values he referred to previously, pointing out that their projections for fiscal year 2011 were very preliminary at this point, and he had already asked the departments to cut their budgets by at least 5 percent and to look at ways to do things differently to save money. He added that those budgets were due by the beginning of April and that he has already had several budget meetings with the department heads.
Mr. Gray presented a chart which gave a five-year comparison of the general fund millage rates, pointing out that the County was at 6.47 mills in 2007, had a statutory reduction in the millage in 2008, and decreased further to 5.2263 in 2009 through the present. He explained that the ambulance and public lands were county-wide millages, and he pointed out the MSTU for parks, roads, and stormwater, as well as the Fire EMS in the unincorporated areas. Another chart that was displayed illustrated that there has been a 19 percent decrease in total county-wide millage from FY 2007 to 2012, and the Parks MSTU was a 17 percent decrease, noting that this directly relates to the services they provide. The next power-point slide was of a bar graph of the gross taxable value which showed an estimated 31 percent decrease from 2008 to 2012 in property values. He explained that the general fund had three major revenue sources, the ad valorem or property taxes, which was the biggest one which brought in $104 million in 2008 but only $74 million projected for next year; state revenue sharing, which has remained constant over the last four or five years; and state sales tax, which has remained stable with a slight increase this year over the previous year. He presented another bar graph comparing the revenues over the last five years broken down into the fund balance, which has decreased over the last couple of years; ad valorem, which has also decreased during that time; and other smaller sources of revenue, and he noted that the revenues have gone down from $231 million in 2008 to $150 million in 2012. He illustrated the general fund expenses with another bar graph, which showed that a huge part of their general fund went out to other uses such as their constitutional officers and the Covanta payment and which he did not have direct control over as the County Manager. He noted that the bottom tier representing personal services showed a decrease due to layoffs and deleted positions over the last couple of years.
Commr. Conner asked to see the hard numbers regarding personal services and asked him to research that.
Mr. Gray stated that he could get that for him. He reported that the new budget director would be putting models together of all of their major revenue funds, projecting those out for five years, and he presented a chart which showed another five-year history of the general fund, including fund balance, revenues, expenses, and reserves of 28 percent, which he opined was very healthy. He pointed out that next year the reserves were projected to go down to $18.7 million or 14 percent if other factors remained the same, which he did not recommend, and he had recommendations about how they could reduce expenses in other areas. He explained that there were only a few things that they have added to the budget this year, including economic gardening to help business growth and retention and a revolving loan fund for businesses. He also noted that since they have not upgraded or added computers in the County for a couple of years, they are now at a point where a computer upgrade and replacement program needed to be done.
Commr. Conner asked if they were looking into leasing computers.
Mr. Gray responded that computers were so inexpensive now at about $400 per computer that it would probably be better and more efficient to buy them outright, although they would look into that.
Mr. Gray continued to explain that they also wanted to include server upgrades to the budget, since servers are the backbone to their whole computer system, and they eliminated that expense from last year’s budget because of the restraints they had in the budget. He related that they have estimated expenditures and revenue in the general fund budget without actually having hard numbers which showed a preliminary shortfall of $16 million. However, he had recommendations to get that number down to an amount that was comparable to this year’s, the first step being to look at the department budgets to try to reduce the line items by a total of $4 to $5 million. He stated that the next issue is the possibility of getting some of the tax money from the hospital taxing districts to recoup some of their Medicaid expenses that were paid out of the general fund, which would be coming before the Board in June, and he reported that they have started discussions with those taxing districts.
Commr. Conner asked who had jurisdiction over that and whether the hospital districts had the authority to grant or deny the County’s request for that money.
Mr. Sandy Minkoff, County Attorney, responded that the statute states that the Board can require them to pay after the County sends them a written request asking them for that money, and the taxing district could either pay or challenge it. He opined that they could probably only receive half of the entire cost or $1 million, and he reported that so far South Lake has given the County a very favorable response to either pay that cost or to work with the County alternatively to deal with indigent health care and that they were setting up a meeting with North Lake in the next couple of weeks.
Mr. Gray commented that constitutional officers make up a large percentage of the County’s budget, and he was hoping to work with them to reduce that amount by about $3 million. He pointed out that the biggest expense in the general fund is the Sheriff.
Commr. Hill reported that Ms. Emogene Stegall, Supervisor of Elections, was concerned since this was going into a presidential election year with added elections, additional mailings, new ID cards due to redistricting, and postage, as well as seven constitutional amendments to go on the ballot this year resulting in a several-page ballot. She specified that Ms. Stegall would be asking for a 5.7 percent increase in her budget, which was about a $200,000 increase, but everything was subject to change until they get all of the feedback from Tallahassee. She related that the Tax Collector indicated that a tax decrease would be in his budget, but he would be taking over the driver’s license offices in the future and was waiting to see how much of the capital costs they would be recouping from the state to help with that transfer. She stated that they have had several conversations with the Sheriff and have another meeting with him set up for this week, and she asked for Board direction about whether to request a three percent decrease due to the pension fund contribution transfer.
Mr. Gray interjected that they would be working on estimating that this week so that they could figure out about how much of a savings they would realize from the decreased retirement rate the County would have to pay.
Commr. Hill continued to report that the Clerk was on board with the County, and although he has not given the Board a set number yet, she did not think he would request an increase in funding. She added that all of the constitutional officers were waiting to see what the legislature would do and how the pension funds play into that.
Mr. Gray added that the bigger picture was that the County has to ask the Sheriff to reduce his budget by a couple of million dollars.
Commr. Hill commented that the Sheriff needed to understand where the Board stood, and she pointed out that they have not cut his budget for years. She also commented that she believed he was willing to work with them.
Commr. Cadwell related to Mr. Gray that the Sheriff’s arguments regarding that issue would not be based on what the County does regarding its employees, but rather on what Fire Services would be doing with their budget as a better comparison to his department.
Mr. Gray stated that his final recommendation would be an optimistic look at how much revenue actually will decline and to anticipate that it would be less than what was predicted. He related that they will have the preliminary estimates from the Property Appraiser on June 1 which would give them a good indication of the expected revenue. He mentioned that they look at the last couple of years to make their projections based on things that have actually happened such as market conditions and economic factors when putting together their model for up to five years out, and they would just update the model if things change during the year.
Commr. Campione opined that there was a whole wave of foreclosures that was coming up in the next year or two as a result of the moratorium that was put in place by the federal government, which was also going to affect their revenues for the next couple of years.
Mr. Gray commented that every indication they have seen is that they would be in about the same position next year as they are this year, and he summarized that he was looking at taking a total of about $4 - $6 million to balance the general fund.
Commr. Conner opined that a lot of their expenses were energy related, and he asked whether there were components in the energy grant which they could use for their own organization to decrease their own energy costs, although he realized the energy grant was complex.
Mr. Gray assured him that he would put that on his list and would look into that. He then went over the challenges the County faces for FY 2012, such as declining revenues, minimal capital expenditures, furloughs, constitutional offices, the FRS changes, additional state mandates, and their reserve levels, which he recommended to keep at the 20 percent level. He commended their employees for keeping their medical benefits fund in good shape and overfunded this year by keeping claims low, and he mentioned that they have not had a lot of catastrophic issues that they have had to pay out. He suggested that they take some of those savings to reduce some of the furloughs for the employees, and he presented a chart illustrating several scenarios ranging from eliminating all of the furlough days to eliminating six furlough days for exempt employees only. He recommended that they treat all employees the same and reduce the furloughs by half to six days next year for all employees, which would also help the employees with the three percent they would have to pay for retirement benefits next year.
Commr. Conner commented that claims can fluctuate from year to year, and he did not want to get in a situation where the medical benefits fund was underfunded. He predicted that the news on the claims would not be as good this year, since they have allowed constitutional officers and others to join their program, and he expressed concern about tying the medical fund to furloughs. He mentioned that another approach they had discussed was to treat employees making $50,000 or less differently regarding furloughs than employees making twice that amount.
Mr. Gray responded that staff looked at coming up with a dollar figure for a salary limit, but that was difficult because they also had to look at exempt and non-exempt status.
Commr. Conner opined that the furloughs hurt the lower paid employees the most.
Commr. Cadwell asked if their actuary looked at this, and he pointed out that they were not taking money out of the insurance fund, but only putting less in.
Mr. Gray answered that their actuary has looked at this and that they have triple-checked it. He also confirmed that what Commr. Cadwell noted about not taking money out was correct, and he assured the Board that they monitor that monthly. He also pointed out that the requirement for the employees to contribute three percent to the FRS is slated to go into effect July 1 of this fiscal year, so their plan was to implement this on October 1.
Commr. Campione stated that she was in agreement with this plan of reducing furloughs to six across the board, and she commented that she would like to see furloughs being eliminated altogether, since she believed that they impact productivity and continuity.
Mr. Gray mentioned that it would cost an extra $300,000 to get rid of all of the furlough days as opposed to six.
Commr. Parks stated that he would be interested in seeing the figures broken down for employees making $50,000 and under as well.
Mr. Gray responded that he could do that, and he related that he had planned to set up another workshop with the Board in about a month when they have better information, such as the preliminary estimates from the Property Appraiser and the FRS information, and after he has had the second round of budget meetings with the departments as well as the meetings with the constitutional officers.
Commr. Conner commented that the County’s employees throughout their organization have sacrificed, stepped up, and have done an excellent job, some while taking on two positions; and if they eliminate furloughs, it would be based on their appreciation for that service through this difficult financial situation and not on medical claims experience.
recess and reassembly
The Chairman announced at 10:00 a.m. that there would be a five-minute recess.
fire rescue fund
Mr. Gray recapped that Tindale-Oliver studied their fire assessment fee, which was one of two major revenue sources in the fire fund, and he noted that those fees could only be used for basic fire service, first response, and basic life support. He illustrated on the graph that they collected $18.1 million in fire assessment fees in 2008 and were estimating collection of $16.4 million in 2012 using the rate of $183 that the consultant presented to them in their presentation. He stated that the other revenue source in the fire rescue fund is the MSTU, which was an ad valorem-based revenue based on property taxes that was implemented in 2009, and he pointed out that it has declined in the last couple of years and was estimated to be $2.8 million this year. He explained that this revenue source could be spent for advanced life support and any other use related to fire. He showed a chart which visibly illustrated the revenues in this fund, noting that the majority of the funding came from the assessment and that they operate 23 stations countywide. He then displayed a chart which showed the expenses in the fire rescue fund, pointing out that it was a very labor-intensive department and that personal services made up the majority of the expenses in that fund, as well as noting that the chart shows the small amount spent on capital equipment. He opined that Chief John Jolliff has been doing a great job of looking at the current inventory and fixing anything he could fix to avoid purchasing anything new, but they would have to start replacing fire trucks at some point in the future. He went over the overall picture of the fund, including revenues of $20 million, expenses of $21.5, and a reserve of about $2.8 million this year. He explained that the implementation of the new assessment fee recommended by the consultant in 2012 would leave them a reserve of about $1.8 million, using a fund balance of $3.2 million with revenues at about $20.4 million and expenses of $20.8 million.
Mr. Gray went over some fire assessment rate scenarios on the next slide and explained that the first column was what the consultant had presented to them, which was an 80-20 split, meaning 80 percent would be funded from the fire assessment and the 20 percent for advanced life support. He opined that the study was done very well with better data and reporting than they have had in the past. He pointed out that they had noticed that there were no administration fees included in the study at the time, which were services that the general fund provides to the fire fund such as purchasing, human resources, attorney’s office, and budgeting, which they estimate at about 5 percent or about $1 million. He stated that his recommendation was that they definitely need to include the admin fees and to go with a 75-25 split instead of an 80-20, which was a little more conservative and actually would give them a cushion if something changed and which would bring the residential rate to $181 with the addition of the admin fee.
Commr. Cadwell clarified that his recommendation would lower the commercial rate and raise the residential rate by 50 cents per month, which was $6 per year.
Commr. Campione stated that she supported the 75-25 split and opined that it was a smart way to do it.
Mr. Gray informed the Board that staff’s recommendation in addition to a 75-25 split was to keep the MSTU rate the same, to keep the reserves at a healthy rate, and to work with the cities.
Commr. Cadwell recommended taking small rather than large steps in working with the cities, with enclaves of the cities being the first thing they could look at.
Mr. Gray agreed that if they were truly going to look at duplication of fire services within the county, the first step would be to look at the enclave areas, and he specified that there were about four areas within the county that they could do some pilot programs with and help the cities to cover some of their areas as well. He also recommended in the meantime looking at their own internal fire efficiency study, and he stated that he wanted to get the approval of the Board before he went forward with those ideas. He related that they would definitely have to add a station in Astatula, because they are going to combine their fleet operations at the commerce park. He informed the Board that they are ready for the RFP to go out for the EMS study, which he expected to come back to them this year, and he definitely felt there would be some savings in that area which they could incorporate into the whole scenario.
Mr. Sandy Minkoff explained that they need to run the test regarding the assessment issue without the use of reserves, so they were looking strictly at new revenue and new expense this year, and to run the ALS test to make sure they were in compliance with that court case, because the reserves possibly came from assessments.
Mr. Gray explained that one of the challenges they were looking at in the FY 2012 fund was to update the fire assessment study, which he plans to bring to the Board at the end of the month or the first of June, and other challenges were the declining MSTU revenues, minimal capital replacement, providing a new station for the Astatula fire service, pending legal issues, and working with the cities to cover some areas.
Mr. Gray then gave the Board an update of the parks, and he presented a graph which showed how they divided the stormwater, parks, and roads MSTU money over the last five years. He noted that parks funding has increased as they have brought on new parks in order to operate and maintain those, and this MSTU funded some road maintenance from 2008 to 2010 as well. The next chart illustrated the revenues for the parks fund, pointing out that the majority of the funding comes from the ad valorem MSTU, and a little fund balance rolls over from year to year. He noted that some additional active parks would be opening very soon, and the County needed to add some operating costs for staff to run those areas after they are opened up.
Commr. Cadwell pointed out that even though the operating expenses have been up in the last few years, the personal services have stayed the same.
Mr. Gray commented that that was a very good point, and the fact that the County has taken on more and more acreages of property and has not increased staff over the last couple of years was brought up at the Parks workshop. He noted that they have to have staff in the active recreational parks to keep the facilities up, and he would show the Board how to fund those. He stated that the Board had previously had a discussion on opening three public lands passive areas, but he did not recommend putting the $160,000 needed for those positions in with the funding requests for the active park positions. Instead, staff had a plan to use existing resources before bringing on additional staff.
Commr. Cadwell opined that Lake County’s selling points are the natural resources and parks and that historically people do not pick up their own trash.
Mr. Gray mentioned that the trails and parks are used a lot, and he noted that they put enhancements that would be needed to the Minneola park in the budget, as well as maintenance costs for East Lake.
Commr. Parks reported that Minneola will make the decision regarding the MAC park at their regularly-scheduled meeting next week after hearing public input.
Commr. Campione asked about instituting a no-smoking policy in their parks and to include that in their rules.
Mr. Minkoff related that state law prohibits them for prohibiting smoking in outside areas, but even though they could not make it a criminal violation by putting it in their Code, they have posted no-smoking signs in all of their parks.
Commr. Campione stated that she had information she could give to Mr. Gray regarding a grant of free signs to discourage smoking in their parks.
Commr. Conner asked for specifics regarding what each new park employee would be responsible for and the timetable for instituting that before he approved those positions.
Mr. Parks assured him that they would not add the five requested positions for MAC until that park was up and operational, and it would be phased in. He also noted that if the direction was to outsource some areas, they would then tweak the budget appropriately.
Commr. Conner asked if the School Board would compensate them for use of any of those fields.
Mr. Gray responded that if the School Board was interested in this project, they would be taking care of two of those fields, and the Board would adjust those positions accordingly.
Commr. Cadwell suggested that they word the agreements carefully to ensure that the County will also have use of those fields.
Commr. Parks opined that funding for parks is a worthwhile investment and would be an economic driver for the County.
Mr. Gray gave an update on the search for a regional park in South Lake, stating that they were talking with the owners of all five properties that the Board directed them to look into, and they were hoping to bring some of their findings back to the Board within the next couple of weeks. He also listed some of the other challenges regarding the FY 2012 parks fund, which included declining MSTU revenues, limited funding for operating new parks, no funding for roads out of the MSTU, and minimal funding for large capital future stormwater projects.
Commr. Campione asked for a report on some water projects as far as priorities so that they will have an idea of what they have accomplished already and what was still outstanding regarding retrofitting problem areas.
Commr. Parks asked to include what the Water Authority has done since they have instituted the grant program for stormwater.
Mr. Gray assured the Board that he will bring a report about that back to them.
Mr. Gray gave the Board a quick update of the budget timeline, emphasizing that the budgets were due from the constitutional officers, with the exception of the Tax Collector, by May 30, and stated that they would get some preliminary estimates of property values by June 1. He noted that although the statutory deadline to get the recommended budget to the Board is July 15, he is planning to have the budget to them by July 4. He related that they could schedule the budget workshops for the second Tuesday of the months through the summer, or they have some time set aside at the end of July to have a couple of days in a row of budget workshops. He reported that the County has to have its TRIM rates in by August 4 to the Property Appraiser’s Office, since the last day to mail them out was August 24. He noted that the first public hearing was scheduled for September 6 at 5:05 p.m. and the second and final hearing was on September 20 at 5:05 p.m., with the budget to go into effect on October 1.
Commr. Hill noted that the Solid Waste Alternative Task Force report was tentatively scheduled for July 12 at a workshop session.
ADDENDUM NO. 1-i
RESOLUTION for REGIONAL PLANNING EFFORT WITH ORANGE COUNTY
Commr. Cadwell commented that he wanted to make sure that this resolution would result in a true balanced corridor which would include commercial and industrial sites as well as parks and recreation facilities.
Commr. Parks added that his intent was to include planning the corridor for economic development opportunities in general from South Lake to Horizons West, such as clean manufacturing and clean technology. He explained that this resolution would hold them accountable to take the next step for planning long term for that region, and Orange County would pass a similar resolution. He commented that this was a great opportunity for the two counties to work together.
On a motion by Commr. Parks, seconded by Commr. Campione and carried unanimously by a vote of 5-0, the Board approved Resolution No. 2011-70 regarding the regional planning effort between Orange County and Lake County.
request from laser for additional funding
Commr. Hill related that LASER was requesting another $50,000 to close out this year, because their contributions have dropped considerably. She asked whether the Board would like to schedule this request as a regular agenda item next week.
Mr. Gray explained that LASER has received $51,000 in funding this year and has requested another $50,000 this year as well as a total of $102,000 for next year.
Commr. Cadwell stated that he thought that putting it on the agenda for a discussion at a regular meeting would be the best way to do that, which would also be a good educational process.
Commr. Hill stated that she would put in on the agenda for the next meeting.
There being no further business to be brought to the attention of the Board, the meeting was adjourned at 11:00 a.m.
jennifer hill, chairman
NEIL KELLY, CLERK