A special MEETING OF THE BOARD OF COUNTY COMMISSIONERS
May 1, 2012
The Lake County Board of County Commissioners met in a special workshop session on Tuesday, May 1, 2012 at 9:00 a.m., in the Board of County Commissioners’ Meeting Room, Lake County Administration Building, Tavares, Florida. Commissioners present at the meeting were: Leslie Campione, Chairman; Jennifer Hill, 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 F. Lehman, Chief Deputy Clerk, County Finance; and Courtney Vincent, Deputy Clerk.
Commr. Conner asked that a request to approve a proclamation proclaiming Thursday, May 3, 2012 as the National Day of Prayer in Lake County be added to the agenda.
On a motion by Commr. Conner, seconded by Commr. Hill and carried unanimously by a 5-0 vote, the Board approved adding the request for a proclamation proclaiming Thursday, May 3, 2012 as the National Day of Prayer in Lake County to the agenda.
Proclamation regarding national day of prayer
On a motion by Commr. Conner, seconded by Commr. Hill and carried unanimously by a 5-0 vote, the Board approved Proclamation No. 2012-48 proclaiming Thursday, May 3, 2012 as the National Day of Prayer in Lake County.
COUNTY MANAGER’S DEPARTMENTAL BUSINESS
fiscal year 2013 budget discussion
Mr. Darren Gray, County Manager, gave a presentation to update the Board on the General Fund and the Fiscal Year (FY) 2013 Budget process. He reviewed that the current County-wide millage rate was 5.2263 mills, the General Fund millage rate was 4.7309 mills, property values were continuing to drop and Ad Valorem revenue was anticipated to decrease by eight percent to approximately $69.3 million in FY 2013. He explained that the original assumptions made during the December 2011 Budget Workshop regarding the FY 2013 Budget had anticipated an increase in the Medicaid Budget; however they had not taken into consideration the recent estimated backlog of County Medicaid payments. He added that the assumptions also included an anticipated two percent increase in State-shared Sales Tax revenue, a decrease in the funds transferred to Solid Waste through 2014, an estimated increase in FY 2012 reserves due to yearend closeout, and a target reserves amount of 15 percent. He stated that expenses were exceeding revenues and at the current rate of expenditure the reserves would be depleted by 2014. He noted that, using the original assumptions, even having a five percent decrease in expenses for both FY 2013 and FY 2014 only delayed the inevitable by extending the reserves depletion date to 2015. He stated that the County was required to have at least five percent in reserves and that the average amount for most counties ranged around eight to ten percent.
Commr. Conner asked for information on what the reserve amounts were in other counties. He stressed that the 15 percent reserves amount that Lake County strived to maintain was high compared to the estimated average.
Commr. Campione noted that it was the Board’s policy not to go below 15 percent reserves but that just changing the policy to accommodate a lower reserves amount would not remedy the situation.
Commr. Conner stated that he agreed with Commr. Campione and emphasized the need for the County to reach a point where revenues matched expenditures.
Commr. Parks asked for information on what the minimum reserve balance was for different counties and which counties would be falling below that amount this year.
Mr. Gray replied that he would have more accurate figures in time for the next Budget Workshop. He noted that the current reserves balance for Lake County was 22 percent. He then continued the presentation, discussing the Budget challenges since the December 2011 Budget Workshop. He reviewed that the Property Appraiser had projected an eight percent Ad Valorem reduction, which would result in a $5.9 million reduction in revenues. He informed the Board that a five percent reduction would result in a $3.6 million loss in revenue and a three percent reduction would result in a $2.1 million loss for FY 2013. He then discussed the Medicaid issues, stating that there were currently no Medicaid expenditures budgeted for FY 2013 because the State was going to deduct the required funds from the State-shared Sales Tax Revenue. He estimated that the County would only receive about $7.3 million in Sales Tax Revenue for FY 2013 because the State was going to deduct $4.3 million to cover the Medicaid backlog. He stated that Lake County, along with other counties, would be challenging the backlog charges, which could change the amount being charged to the County. He discussed the Transportation Disadvantaged Program, reporting that the State had cut the amount of Medicaid funding for that program which resulted in the County having to budget an additional $713,041 for the program. He mentioned that the additional funds were needed in order to sustain the basic level of service to provide transportation related to nutritional, medical, and ADA needs. He added that the budget included the suspension of transportation related to work and education which would take effect on May 1, 2012. He then discussed the Library Budget, stating that he had sent letters to all of the library system participants requesting the five percent budget reduction. He added that they were discussing cutting the part time page positions at the larger libraries and eliminating the interlibrary loan program. He mentioned that he had been notified by the Polk County Manager that Polk County did not intend to renew the agreement with Lake County for participation in the Cagan Crossings Community Library. He noted that Polk County provided $200,000 of the approximately $600,000 budget for that library and comprised approximately 40 percent of the library’s patrons. He explained that Polk County had anticipated exchanging access to a new active recreation park in Polk County for the library services in Lake County. He stated that there was no mention of the park in the current agreement and that, because of the number of Polk County residence who utilized the library, it would be an uneven exchange of services because Lake County residents in that area were not likely to use the park.
Commr. Cadwell opined that trading library services for park access was not an even trade. He offered to meet with Polk County BCC to discuss the library issue. He also recommended that if Polk County decided not to renew the agreement that their residents should be charged for use of Lake County libraries.
Commr. Campione pointed out that fees would not completely recoup the lost funding.
Commr. Cadwell commented that revenue from fees could not be anticipated because it was not apparent whether Polk County residents would be willing to pay. He suggested staffing the library to accommodate the number of Lake County residents.
Commr. Conner asked Mr. Sandy Minkoff, County Attorney, if Lake County was allowed to tell Polk County residents that they could not use the Lake County libraries.
Mr. Minkoff replied, “Yes.”
Commr. Conner recommended not allowing Polk County residents use of the library if Polk County decided not to renew the agreement.
Commr. Parks agreed with Commr. Conner’s recommendation.
Mr. Gray explained that Polk County had paid their contribution for this year and that any changes would take place in FY 2013.
Commr. Campione stated that she supported Commr. Cadwell’s recommendation to cut staffing at the library and to talk to Polk County about renewing the contract. She opined that Commr. Cadwell would be successful in convincing Polk County to renew the contract.
Mr. Gray remarked that Polk County would reciprocate if Lake County too such a direct approach as what Commr. Conner was suggesting. He stated that he would talk to the Polk County Manager regarding the contract with the library. He then discussed the courthouse operations and maintenance (O&M) budget issues. He reviewed that the courthouse expansion would be substantially completed on July 31, 2012 with an estimated opening date of October 1, 2012. He mentioned that the Board would receive a construction update during the May 8th BCC meeting. He explained that O&M services included the utilities, custodial services, and repair and maintenance of the facility and the estimated impact would be $1 million, not including additional security costs from the Sheriff’s Office.
Mr. Steve Koontz, Budget Director, continued the presentation, discussing the County Departments Budget. He reported that the number of positions funded through the General Fund would decrease for FY 2013 through the elimination of some vacant positions, adding that an analysis was still being conducted to determine the exact number to be cut. He reported that the proposed County Departments Budget for FY 2013 was $25.9 million, which was a $15 million decrease over the last five years. He stated that the reduction in Medicaid expenses, the completion of one-time expenses such as the cost reimbursement of the South Lake Health Clinic, and the elimination of the Development Processing Manager position had aided in the reduction of expenses. He stressed that each department was reviewing their costs and doing everything they could to reduce those costs and be more efficient.
Mr. Gray resumed the presentation, discussing mandated and discretionary expenditures. He explained that County-funded outside agencies were expected to try to accommodate the five percent budget reduction request. He noted that the proposed budget for the Health Department met the requested five percent decrease and the updated budgets for CRA’s and the Medical Examiner would be received in June. He noted that the budget for Juvenile Justice would be decreased by $150,000 for FY 2013, the budget for Lifestream Behavioral and East Central Florida Regional Planning Council Dues would remain the same at $873,987 and $48,654 respectively, and the Solid Waste transfer would be reduced by eight percent. He added that the Constitutional Offices budgets would be submitted by the first of June and the State had reduced the Clerk of Court’s Budget by $450,000. He then discussed discussing the discretionary expenditures, mentioning that the Social Services and Children’s Services Grants and Aids, We Care, the two State Attorney’s Office Early Intervention positions, Trout Lake Nature Center, LASER, and the Lake County Historical Society would all be cut by five percent. He recommended the elimination of the Health Department position for the Prescription Drug Program funded through the Community Development Block Grant and the elimination of the reimbursements to the cities for nonresidential recreation fees. He also eliminated funding for My Region.Org, eliminated required dues by withdrawing Lake County’s membership in the St. John’s River Alliance, reduced the budget for Economic Development Initiatives, and reported that the Metro Orlando EDC funding was pending a June 12, 2012 presentation.
The Board agreed for Mr. Gray to eliminate the reimbursements to the cities for nonresidential recreation fees.
Commr. Campione commented that the ultimate goal of the Economic Development Initiatives was to increase the tax base through the activities of the Initiative.
Commr. Conner mentioned that the Metro Orlando EDC had helped the City of Tavares expand its commercial base through the development of the sea plane base. He stated that he agreed with Commr. Campione and that he was in support of economic development.
Commr. Campione reported that the Metro Orlando EDC was reviewing how they allocate charges to the counties and the EDC would be giving a presentation to the Board on June 12th regarding those charges.
Commr. Conner discussed the Historical Society, emphasizing how impressive and important their work was.
Commr. Campione asked if the Historical Society operated off of membership dues.
Commr. Conner replied that they must have some revenue but he did not think it amounted to much. He said he would get that answer.
Commr. Campione commented that other Historical Societies operate through membership dues as well as with help from the cities and revenue from membership drives and fundraisers. She stated that if the Board was going to discuss the merits of the different organizations then they should also discuss LASER and whether the Board wanted to continue to fund that group.
Commr. Cadwell replied that they should discuss it, but not today.
Commr. Parks requested to not have the Children’s Services Grants reduced.
Commr. Conner agreed with that.
Commr. Cadwell asked Mr. Gray to provide the Board with a five-year history of the Children’s Services Grants.
Commr. Campione noted that many of the organizations operated on a very thin budget while producing a huge return for the community and the Board needed to be sensitive to that and go back and look at exactly where funds were being allocated.
Commr. Conner agreed with Commr. Parks and Commr. Campione. He commented that a few years ago many budgets of important programs such as Rape Crisis and Children’s Dental Care had been cut in half. He stressed that these were the types of programs the Board wanted to provide for the citizens and that not all programs needed to receive the five percent budget cut if they were producing strong results on limited budgets. He added that the Historical Society should be considered part of that category as well, but reiterated that the Board was not making any decisions today.
Commr. Campione clarified that the Board’s goal was five percent but that they would need to review individual funds to determine what was and was not needed and that not every organization would see such a reduction.
Commr. Cadwell mentioned that part of the reason the County received such a large return on their investments in Social Services was because the programs were run by non-profit providers instead of completely through the County.
RECESS AND REASSEMBLY
The Chairman announced that there would be a five-minute recess at 10:15 a.m.
fiscal year 2013 budget discussion, continued
Mr. Gray continued the presentation, discussing the updated FY 2013 projections. He reviewed that 59 percent of the expense budget came from the Constitutional Offices, followed by the County Departments at 24 percent, Transfers and Non-Departmental Expenses at 15 percent, and Judicial Support at two percent. He then presented four scenarios with different budgetary assumptions. He explained that the first scenario assumed an eight percent decrease in taxable values for 2013 and included a five-year update of Transportation Disadvantaged funding, the impact of Medicaid to Revenue Sharing, the Constitutional transfers remaining at 2012 levels, preliminary Department submittals, the decrease in Solid Waste transfers through 2014, and a 15 percent target for reserves. He reported that, following those assumptions, there would be no reserve funds left by 2014. He explained that the second scenario was the same as the first except that it had the budgets for the Constitutional Officers decreasing by five percent in FY 2013 and another five percent in FY 2014. He reported that, following those assumptions, there would be no reserve funds left by 2014 and the County would be out of money by 2015. He explained that the third scenario only assumed a four percent decrease in taxable values in 2013 and a two percent decrease in taxable values for 2014, with the rest of the assumptions remaining the same as the second scenario. He reported that, following those assumptions, there would be no reserve funds left by 2015. Finally, he explained that the fourth scenario assumed the taxable values remained at the FY 2012 levels through FY 2015, with the rest of the assumptions remaining the same as in the second scenario. He reported that this scenario showed a better picture because the revenues and expenditures would almost balance each other out and that the reserves balance would remain above the 15 percent target in FY 2013, dropping to about 12 percent in FY 2014 and then to about seven percent by 2015. He remarked that this demonstrated that the County could get through the next couple of years if the County helped on the revenue sides as well as the expense side and budgets were cut by five percent.
Commr. Campione asked if the help on the revenue side pertained to the rollback rate.
Mr. Gray replied that that was correct, adding that they would need to keep the revenue the same as the current fiscal year for FY 2013 and FY 2014.
Commr. Campione clarified that the rollback would reflect the millage rate needed to bring in exactly the same revenue as FY 2012 and it would not increase taxes.
Mr. Gray added that most likely people would pay the same amount in taxes that they paid in FY 2012 and that property values and taxes had decreased for the last five years.
Mr. Minkoff commented that the only exception to that would be new construction because value added to the tax roll was not included in that calculation. He explained that, because of that, there would be a slight increase if the County used the rollback rate.
Commr. Campione asked if the effects of new construction on the tax roll had been factored into the projections.
Mr. Gray replied that it was too unpredictable. He explained that the model being used could be adjusted year to year. He noted that new construction had not been factored in at this point. He then summarized the four scenarios, stating that the first three scenarios would not maintain the Board’s policy for 15 percent in reserves but that the fourth scenario projected to keep reserves at the 15 percent target for FY 2013.
Commr. Campione asked if the rollback rate would only be used for FY 2013.
Mr. Gray answered that the decision would be made later in FY 2013 after reviewing the status of the property values. He remarked that there was hope that by 2014 the taxable values might level off but that the County was projecting that would not happen until 2015. He outlined the next part of the Budget process, noting that the budgets from the Constitutional Offices were due by May 30th except for the Tax Collector’s which was due by the first of August. He added that he would distribute the recommended FY 2013 Budget to the Board between July 3rd and July 15th. He asked for direction from the Board on how to communicate with Constitutional Offices and outside agencies concerning the FY 2013 Budget and requested that the Budget Meeting be scheduled for after the Board meeting on June 26, 2012.
Commr. Conner suggested the Board consider increasing the number of volunteers at the libraries in an effort to help save money. He emphasized that he was not suggesting to fire librarians or replacing library staff with volunteers.
Commr. Campione commented that increasing the number of volunteers would not be sufficient to cover the entire five percent budget cut. She noted that staff would have to analyze the different positions and determine which would be appropriate for volunteers and which would not.
Commr. Conner clarified that his suggestion was not meant as a complete cure but rather as something that would aid in decreasing expenses and help the County reach the five percent budget cut.
Commr. Parks asked if the County used to have a volunteer program.
Mr. Gray replied that there was currently such a program and noted that the number of volunteers fluctuates each year.
Commr. Cadwell recommended that the Board analyze Commr. Conner’s suggestion. He noted that the interlocal agreements with the cities would need to be considered because many of those contracts had level of service requirements that would need to be met. He opined that the five percent budget cut was the only option that would make a sufficient impact on the Budget.
Commr. Campione added that they would need to be sure to stress that the five percent budget cut was for both FY 2013 and FY 2014.
The Board reached a consensus to send a letter to the Constitutional Officers and outside agencies, urging them to reduce their budgets by five percent to help maintain the reserves balance. The Board also agreed to set a tentative date of June 26, 2012 for the next Budget Workshop.
There being no further business to be brought to the attention of the Board, the meeting was adjourned at 10:57 a.m.
leslie campione, chairman
NEIL KELLY, CLERK