A special MEETING OF THE BOARD OF COUNTY COMMISSIONERS
june 11, 2013
The Lake County Board of County Commissioners met in a special workshop session on Tuesday, June 11, 2013 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; Jimmy Conner, Vice Chairman; Timothy I. Sullivan; Sean Parks; and Welton G. Cadwell. Others present were: David Heath, County Manager; Sanford A. “Sandy” Minkoff, County Attorney; Wendy Taylor, Executive Office Manager, County Manager’s Office; and Shannon Treen, Deputy Clerk.
There were no changes to the agenda.
REPORTS – COMMISsIONER campione – CHAIRMAN & DISTRICT 4
appointment to Workforce Central Florida
On a motion by Commr. Conner, seconded by Commr. Parks and carried unanimously by a 5-0 vote, the Board approved the appointment of Ms. Sheri Olsen, South Lake Hospital, to serve as one of the County’s designees as a private sector appointment from the business community on the Workforce Central Florida Board of Directors. Ms. Olsen will replace Mr. Robert Thompson who will be resigning when this appointment is in place as he no longer works for South Lake Hospital, and thus does not meet the specific criteria (representative from a large private sector employer.)
budget quarterly report for the 2nd quarter of Fiscal Year 2013
Mr. Steve Koontz, Director of Fiscal and Administrative Services, gave an overview of the results of the second quarter for the Fiscal Year (FY) 2013 Budget. He reviewed that the budget was adopted on September 25, 2012 for $381.7 million, with the General Fund operating budget at $120 million. He discussed the status of the revenues and stated that the Ad Valorem revenues for the General Fund had slightly decreased from the last two years, but the Fire Rescue Non Ad Valorem Assessment and the Solid Waste Disposal Assessment revenues were the same as the last two years, as expected. He indicated that the State Sales Tax and the Infrastructure Sales Tax revenues were showing some positive trends, because they had both increased about $200,000 in the second quarter, which was ahead of what they had budgeted. He then discussed the status of the expenditures and noted that the departments were running at 50 percent or below the total budget and were doing a good job with their expenditures. He added that the General Fund and Countywide expenditures were slightly below the second quarter of last year. He then discussed an update to the Human Resources Department and pointed out that as of March 31 there were 29 vacant positions and that it took about 69 calendar days to fill positions.
budget work session for the fiscal year 2014 budget
Mr. David Heath, County Manager, stated that this was the first of two work sessions to discuss the plan for balancing the budget, since they now had the preliminary property values and the constitutional officers’ budgets, except for the Tax Collector who was not required to submit his until August 1.
Mr. Koontz noted that he would be giving an overview of the Fiscal Year 2014 budget process and discuss the outstanding issues and challenges the County faced. He explained that with the FY 2013 budget, the Countywide property values had decreased by 6.2 percent, and that while the Public Lands Voted Debt millage increased to ensure coverage of debt payments, the Lake EMS; Fire Rescue; General Fund; and the Stormwater, Parks, and Roads millages were kept at the FY 2012 level. He added that the budget was balanced by reducing the reserves and reducing the operating budgets by five percent for County Departments and Constitutional Offices. He mentioned that there had been multiple budget workshops since the budget was adopted. He discussed the preliminary assessment for FY 2014 and pointed out that there had been a 34 percent decline in property values since 2008 and a decrease of over 150 positions in the General Fund. He noted that the Constitutional Offices made up 57 percent, the departments made up 25 percent, the transfers and non-departmental made up 15 percent, and the judicial support made up three percent of the General Fund budget. He related that they had a conservative projection for the revenues and were expecting the property values to decline by three percent.
Mr. Koontz indicated that the budget needed to be brought down to $111.4 million from $120 million in order to maintain a 7.1 percent reserve level, which meant a decrease in the Solid Waste transfer and reductions to County Departments, Constitutional Offices, Judicial Support as well as others. He stated that the reserves were at 13.4 percent for FY 2013 and were projected to decrease to 6.1 percent even with using a five percent reduction across the board, which was below the seven percent reserve policy. He noted that a six percent reduction for County Departments and the Constitutional Offices would be needed in order to maintain that level, but all other funds would be taken on a case by case basis depending on revenue projections. He explained that they looked at some strategies for saving money for FY 2013 which included discontinuing the South Lake Route 55 with LYNX on June 30 and discontinuing Route 204 at the end of the fiscal year. He added that it also included reducing the Solid Waste transfer, eliminating the remaining expenditures for the Law Library, adjusting the Animal Services fees, and some changes to facilities to decrease utility bills. He then discussed the property values and the Constitutional Offices budgets and mentioned that the gross taxable value for the General Fund was estimated to decline by three percent, but it actually increased 0.21 percent, which was a $145,000 increase in revenue. He noted that there was an overall decrease of 0.8 percent for the Constitutional Offices budgets and that the Clerk of Courts’ budget decreased by 0.21 percent, but it would actually be a 6.1 percent decrease once the excess fees of $240,000 were realized. He indicated that the Property Appraiser’s budget increased by 15.14 percent because of the three GIS positions that were transferred over from the County. He specified that the Sheriff’s budget only decreased by 1.55 percent because of the additional Courthouse security, and the Supervisor of Elections’ budget increased by 2.81 percent.
Mr. Koontz pointed out the issues and challenges the County was faced with. He stated that first was the Florida Retirement System (FRS) impacts from the State causing an increase to the County and Constitutional Offices budgets. He added that the General Fund impact was about $1.1 million, and the total impact was about $1.6 million. He noted that some of the other issues and challenges included the fact that the employees had not had raises in five years, legislative actions such as the Medicaid mandate, the $180,000 request from Tavares for a fire assessment, which the Board did not want to pay, and the outstanding Federal Emergency Management Agency (FEMA) invoice from 2010 for $320,000. He then discussed the proposed department reductions and stated that each department was asked to reduce their budgets by six percent. He explained that Code Enforcement had to make reductions to the foreclosure and demolition program, which was a decrease of $45,000, and Economic Development and Tourism had to reduce their incentives by $175,000. He noted that Public Works reduced their budget by $162,000 by reorganizing the Mosquito Control operations and making reductions in the Umatilla Water System and the Astatula fuel remediation. He indicated that a variety of reductions were made to Public Resources, such as reductions to member libraries and public lands maintenance and restoration, as well as eliminating the Law Library and vacant positions. He noted that there were multiple reductions to Community Services that included the Health Department by $20,510, Lifestream by $52,440, We Care by $4,275, Children Services grants by $9,046, Human Services grants by $2,850, and the Public Transportation transfer by $299,110. He stated that the vacant Budget Analyst position was eliminated in the Fiscal and Administrative Services Department, which resulted in a $56,340 reduction. He related that Public Safety’s cuts included allocating some of the radio maintenance costs to the fire fund, which was $185,000, eliminating funding for Lake and Sumter Emergency Recovery (LASER) of $49,000, and $15,000 of other operational considerations. He indicated that Human Resources had a decline in unemployment costs by $25,000, the funding for Trout Lake was reduced to $3,135, and the $20,000 funding for the Historical Society was eliminated.
Mr. Koontz pointed out that they ran into some significant challenges with some of the departments in trying to meet the six percent reduction, specifying that Probation would actually be adding two new limited duration positions effective October 1. He explained that there had been a significant increase in the workload since January, because more people were going on probation instead of in the jail system. He added that that also meant an increase in revenue and that those positions would be eliminated if the revenues and workload decreased. He also noted that there would be a slight increase in expenses for Animal Services to address a recent audit; however, they did expect a slight increase in revenues as well. He indicated that Information Technology had a small reduction because of the elimination of the three GIS positions, but they could not meet the full six percent since the technical expertise of the staff limited their reductions. He specified that Facilities made a few small reductions, but it was difficult to determine what the operational costs for the Courthouse expansion would be. He explained that he put all of this information into the five-year budget model, and the assumptions included a slight increase to the taxable values for FY 2014 through FY 2017 and a six percent revenue decrease for FY 2014 with FY 2015 remaining at status quo. He stated that there would be a $17.4 million gap between the revenues and expenses for FY 2013 and an $11.4 million gap for FY 2014. He added that the expenses would still exceed the revenues and that the projected reserves for FY 2014 would be 6.3 percent, and at FY 2015 they would be depleted if the expenses were kept at status quo. He explained that for FY 2014 the revenues were projected to decrease by $2.1 million, but there was actually a $145,000 increase. He indicated that the projected expenses would be at $115.2 million, which was a $5.3 million decrease and that equaled a $750,000 shortfall. He remarked that balancing the General Fund would continue to be difficult even with slight revenue increases projected in future years. He mentioned that there was a 1.5 percent projected increase in property values for FY 2015, and in order to balance the budget the infrastructure sales tax could not be used, there would not be a solid waste transfer, nine to 10 percent reductions to departments and constitutional offices would be necessary to meet the reserve level, and constitutional office mandates and other issues would need to be considered.
Commr. Conner opined that the constitutional officers’ budgets were very conservative, and it showed that they were conscious of their budgets. He added that constitutional officers, particularly Sheriffs, all over the State were asking for substantial increases, and that this was the third year the Sheriff had cut his budget.
Commr. Cadwell asked if there would be a reduction in the mosquito spraying schedules.
Mr. Koontz replied that there would not be a reduction at that time.
Commr. Parks related that mosquitos transmitted some of the most deadly diseases and asked if they could be provided an estimate for additional spraying.
Commr. Conner mentioned that it was important to not have a decrease in the spraying schedule.
Commr. Parks asked for clarification on the foreclosure and demolition program reductions.
Mr. Koontz clarified that the funding for that program was completely eliminated, specifying that the money had been used to demolish foreclosed homes or upkeep the ones that were not being taken care of.
Commr. Campione asked how much money was spent on that program.
Mr. Koontz responded that he did not know, but he would get that information.
Mr. Sandy Minkoff, County Attorney, explained that the majority of the expenses were used for the County to purchase foreclosed homes, demolish them, and then clear the property. He added that only sometimes repairs would be done to foreclosed properties the County did not own.
Commr. Conner remarked that he scrutinized the children services grants a few years ago and thought the money was being spent wisely, and he stated that he preferred to maintain those grants at the current level if possible.
Commr. Parks pointed out that he spent a lot of time looking at the reductions in programs under Community Services and thought that department did a great job at budgeting and held themselves accountable for every dollar spent. He opined that the children services grants in particular were worth the dollars spent.
Commr. Campione suggested setting aside a minimum amount of money for LASER in the event of an emergency so LASER would be ready to operate during that period.
Commr. Cadwell mentioned that even though they could not afford to fund LASER completely this year, it was a valuable program, and they should allocate around $5,000 for it each year.
Commr. Conner stated that he would support that. He was also concerned about eliminating funding for the Historical Society. He noted that the Society was still transitioning to their new leadership team and that he had heard that they wanted to go back to having volunteers instead of paid staff, but he wanted to hear that directly from the new leadership team.
Mr. Heath mentioned that he had a meeting with the President of the Historical Society tomorrow to discuss the business plan, and he would bring that back to the Board on July 9.
Commr. Campione asked if some of the decrease in positions from 2007 were due to funding allocation changes.
Mr. Koontz replied that some were due to funding changes, but most were due to early retirement, reduced positions and workforce reductions.
Commr. Conner opined that they could stay on life support for one more year, but 2015 was an unmanageable crisis.
Commr. Cadwell opined that the FY 2014 budget was not achievable under their own guidelines, because they would have to change the reserve policy again.
RECESS AND REASSEMBLY
The Chairman announced that there would be a ten-minute recess at 10:15 a.m.
budget work session for the fiscal year 2014 budget (cont’d)
Mr. Koontz continued the presentation and discussed some of the other funds. He noted that they projected the revenues for the Ambulance MSTU to decrease by $170,000 in FY 2014, but there had actually been a $12,000 increase, which resulted in a $180,000 increase to the fund’s reserves. He added that the total reserves for this fund equaled $765,770. He mentioned that a transfer of $4.9 million would be made to Lake EMS for their operations for next year. He related that they projected the revenues for the Public Lands Voted Debt to decrease by $79,000 in FY 2014, but there had actually been a $16,000 increase. He explained that this was strictly used for debt service, and it could not be used for operational costs for the public lands. He added that if the property values increased in future years, then they could possibly look at bringing the millage rate back down. He specified that the Fire MSTU for FY 2014 was projected to have a $79,000 decrease in revenues, but there had only been a $16,000 decrease. He related that the MSTU funded about 25 percent of the fire rescue operations, and the fire assessment funded the rest, with that budget being $16.3 million for next year. He stated that the reserves in the fund were at about $3.1 million and that it also included funding for capital and automatic aid. He noted that the Parks and Stormwater MSTU for FY 2014 was projected to have a $116,000 decrease, but the actual decrease was only $22,000. He indicated that this MSTU was split with 87 percent going to parks and 13 percent going to stormwater. He explained the challenges for stormwater and mentioned that the reserves had been reduced to $1,600 to maintain operations and that the 13 percent share supported the oversight and administration of current projects, the ongoing maintenance of completed projects, flood plain activities, stormwater permitting and inspection activities, and monitoring and compliance with the Total Maximum Daily Load (TMDL) and the National Pollutant Discharge Elimination System (NPDES) requirements. He noted that there were currently five projects in various stages of development, but once those were completed there would not be any funding for new projects. He added that the funding they had did not even cover their ongoing operations. He then explained the challenges with parks and stated that there were no reserves for FY 2013 and a minimal amount of cash brought forward for FY 2014, and there was also declining revenues. He related that the current maintenance obligations included parks such as the East Lake Park, the Minneola Athletic Complex, North Lake Park, and Pear Park; also the South Lake Trail Phase IIIA and the North Shore Overlook were future obligations that they did not have funding to operate and maintain. He specified that they have also had to reduce staff and the amount allocated for repairs and maintenance.
Commr. Campione asked if they could go back and ask the voters through a referendum if a portion of the funds for the public lands voted debt could be used for operational costs to maintain those properties, and whether the $16,000 revenue increase could be used for operations instead of putting it into reserves.
Mr. Minkoff answered that it was the opinion of the bond counsel that the debt service millage could only be used for improvements at the parks that were purchased, but not for day to day operations. He noted that the Constitution grants counties 10 mills to use for general county purposes, and they could exceed those 10 mills if approved by the voters. He related that the only reason the vote was held was to borrow the money and pledge the revenue. He added that the Board had the legal ability to impose a tax for operations, since they were not even close to the 10 mills.
Commr. Campione asked why they could not go up to the cap and use that for operations as long as they were meeting their debt service.
Mr. Minkoff explained that the Board had the authority to use the money for operations, but it would show in the general fund millage line or in the MSTU and not in the debt service. He added that was because the debt service was only the amount necessary to pay the capital costs of paying the bonds back.
Commr. Conner asked how much was in the reserves for the public lands.
Mr. Koontz replied that there was about $400,000 to $500,000 in reserves in case property values dropped so that the millage rate would not have to change. He noted that the millage rate was raised to .19 mills in order to keep the reserves and make the debt service payments. He indicated that the millage rate could be rolled back if property values increased quicker than predicted, and those funds could be added to the general fund to pay for the operations of the public lands. He related that the original intent of this was for the Board to dedicate a certain amount of money in the general fund for operations and maintenance of the public lands, but to keep the debt service payments separate.
Commr. Campione opined that they should go back and look at what the original intent was and decide whether they wanted to establish that as a policy. She then suggested having two different MSTU’s with one being stormwater and pollution and the other being parks and trails.
Mr. Minkoff mentioned that a new MSTU would need to be created by July 1.
Commr. Cadwell commented that they have committed to the parks and it was their responsibility to maintain them, so there was no way they could reduce the funding. He also related that over the years they have shortchanged stormwater, but they could not continue to do so.
Commr. Parks opined that reducing funding for parks was a direct hit to the brand of Lake County and that he was not supportive of any cuts. He then asked what the direct hit would be to the parks and stormwater system.
Mr. Koontz replied that the overall reductions were close to $330,000. He added that there were some reductions in stormwater, but they have been able to absorb those with some of their reserves; however, they would not be able to do that moving forward. He pointed out that reducing funding to the parks would affect the quality since the County would not be able to maintain the ones that were up to tournament quality.
Commr. Parks stated that it would be more expensive to come back in a few years and try to get the parks back up to tournament quality instead of continuing to maintain them.
Commr. Campione asked if they could use some of the Tourist Development Council (TDC) funds to offset the maintenance costs since some of the parks were great for tourism.
Mr. Minkoff responded that items such as convention centers and large sports complexes would qualify as an allowable use, but North Lake Park would be the only park that might qualify.
Commr. Sullivan expressed that the only solution would be to raise the millage rate if this was a priority of the Board. He added that there were certain things the taxpayers were willing to support, and he thought this would be one of them.
Commr. Campione asked if there was another funding source that could take care of the stormwater compliance requirements.
Mr. Koontz replied that the MSTU was set up specifically for those.
Mr. Heath stated that the County was about $750,000 short of meeting the seven percent reserve policy, and they were down to two options. He related that the first option would be to increase the cuts to the departments, including Veterans Services, Mosquito Control, grants, incentives, and code enforcement officers out in the field, resulting in workforce reductions and impacts to service delivery. He mentioned that the second option was a one-time fix for the General Fund by reducing the Infrastructure Sales Tax reserves by $750,000 for a one-time debt service payment for the Courthouse Expansion project, which would result in a minimal impact to the sales tax. He emphasized that the budget was not structurally balanced and that they would essentially be robbing Solid Waste, taking the reserves down to the bare minimum, and utilizing the Infrastructure Sales Tax, which was not a sustainable method of balancing the budget. He also expressed concern that was the sixth year that employees have not had raises. He added that staff had already been through two sets of furloughs and a three percent hit from the Florida Retirement System (FRS), and the County was starting to lose their best and brightest staff. He explained that the Public Lands and the Fire Funds were balanced and that the Lake EMS Board would be making a funding recommendation to the BCC for the Lake EMS FY 2014 budget that afternoon. He mentioned that they could not eliminate funding for stormwater completely, since doing so would affect the residents’ safety and quality of life. He related that reductions in park repair and maintenance would adversely impact current park operations and that there was not enough money for new projects. He added that there would be a $330,000 reduction for next year in order to balance the budget. He explained that the one-time infusion of sales tax could be increased from $750,000 to accommodate the list of projects the Board was concerned with, which included Code Enforcement, foreclosures, more money for Mosquito Control, restoring the $12,000 for grants, a minimum amount for LASER, and the Historical Society. He pointed out that there would be another budget work session on July 9, the tentative millages would be set on July 30, and then the public hearings would be held in September.
Commr. Conner suggested having a Board discussion about what they wanted to see in the budget for next year, because they needed to figure out a solution for the budget now rather than waiting another year. He indicated that there was money in reserves to balance the budget last year, but they did not have that option for this year unless they used some of the money from the infrastructure sales tax. He commented that it was negligent to have nice parks and not spend money to upkeep them and that he supported raising the millage in order to maintain the parks. He expressed that he was very concerned about using the $750,000 sales tax money and of what the political impacts of that would be to the renewal of the sales tax.
Commr. Sullivan mentioned that they needed to give staff a list of priorities that were important, such as parks and recreation, economic development, roads, and transportation. He related that the County spent a tremendous amount of taxpayer dollars on healthcare and that they should try to find ways within their budget to save money by contracting and finding outside funding sources for their social programs. He added that he would support raising taxes if that helped to fund those programs.
Commr. Cadwell asked where the revenue would come from to fund the items the Board thought was important.
Mr. Heath replied that the cuts would be closer to 10 or 11 percent instead of six percent if they did not use the sales tax.
Commr. Cadwell asked if they could have Mr. Heath bring back a budget showing a millage rate increase that would cover the $750,000.
Commr. Campione stated that they should ask the Sheriff how much the DARE program cost, because she did not like the idea of him having to cut that. She mentioned that they needed to see what the millage increase would need to be to address the additional costs for Medicaid and the FRS. She added that those were costs that were passed on to them by the State, and their budget would not be as bad if it had not been for those issues. She suggested looking at what it would take to cover the costs of the maintenance of the parks. She also noted that there were other capital needs that could be met by using the infrastructure sales tax, such as funding for ambulances and roads and opined that using the $750,000 for the Courthouse Expansion was not the most responsible thing to do.
Commr. Cadwell stated that from staff’s point of view that was the only solution. He expressed that he did not want to make any reductions to parks and also wanted to make sure that stormwater was being taken care of. He then asked if any of the reserves from the Parks and Stormwater MSTU had been used to balance that budget.
Mr. Koontz replied that neither side had reserves.
Commr. Cadwell remarked that there needed to be some reserves for parks and stormwater.
Commr. Conner added that it was critical to show the unfunded mandates any time a millage rate increase was being addressed.
Commr. Campione noted that she wanted to add some items to the legislative priorities when they discussed those, including the FRS process, the Medicaid situation, and to continue to go after workforce training dollars for the technology programs in the County. She pointed out that it was important to have a ready and able workforce for when they tried to recruit companies to Lake County.
The Board reached a consensus to have the County Manager bring back a budget showing an increase to the Parks and Stormwater MSTU millage rate and a millage increase to account for the unfunded mandates for FRS and Medicaid, as well as no cuts to Code Enforcement, Mosquito Control, Community Services grants, LASER, and the Historical Society, while still maintaining the reserves at seven percent.
There being no further business to be brought to the attention of the Board, the meeting was adjourned at 11:42 a.m.
leslie campione, chairman
NEIL KELLY, CLERK