HomeMy WebLinkAbout07-11-2011 workshop
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City Council of Peachtrel:! City
. Workshop Meeting Minutes
July 11, 2011
The Mayor and Council of the City of Peachtree City met in a workshop session on Monday, July
11, 2011. Mayor Haddix called the workshop to order at 6:30 p.m. Other Council Members
present: Vanessa Fleisch, Eric Irriker, Kim Learnard, and Doug Sturbaurri. Staff present: City
Manager Jim Pennington, Financial Services Director Paul Salvatore, Administrative Services
Director Nikki Vrana, Amphitheater Manager/CVB Executive Director Nancy Price, Fire Chief Ed
Eiswerth. Police Chief Skip Clark, Public Services Director/Stormvv(Jter Manager Mark Caspar,
Assistant Finance Director Janet Camburn, and IT Administrator Matt Robinson.
The purpose of the workshop was to review the proposed budget for FY 2012. Pennington said
the Council consensus following the June 20 budget workshop had been to remove the
proposed millage roll-up, which had been done.
Salvatore reviewed the revisions made to the City Manager's proposed budget, which included
a Fund Balance increase of $831,385 in the Cash Reserves, which was by design due to the
challenges expected for FY 2013. Additional staff proposals included replacing Rescue 8 instead
of an ambulance remount for ($11.194) [numbers in parentheses indicate a negative effect on
the budget]. the difference in the annual lease payments and the higher priority. Staff proposed
an increase in the annual debt s~rvice for the Kedron bubble of ($13.998) to reflect the cost
increase of the bubble due to structural issues from $250,000 to $454.255. The increase to the
General Fund for the bubble was $204,255, which to be reimbursed to the General Fund from
the loan proceeds. Legal Contingency could be reduced from $150,000 to $100,000 (currently
budgeted at. $25.000) based on the FY2011 projection. Three part-time Customer Service
Representatives were added for Kedron Fieldhouse, based on the reorganization and using part-
time rather than full-time employees. The savings factor was increased from 1.5% to 2.5% in
anticipation of additional reorganization. The 0.098 mill roll-up in the ad valorem tax revenue
was eliminated. The City collected less tax revenue in 2011 and would do so in 2012. The net
impact on the FY 2012 fund balance would be $216,183. and the increase in the fund balance
with the proposed revisions woul(j be $1.092,568. In addition, Salvatore said staff proposed
changing the projected millage rate increase for FY 2013 from one mill to 1. 1 mills due to the
elimination of the roll-up in FY 2012, which could be spread out over several years rather than
increased at one time.
Salvatore added that the increase in the cash reserves was by design with FY 2013 in mind.
Local Option Sales Tax (LOST) negotiations would be held in 2013, and they would be based on
the 2010 census. The Special Purpose Local Option Sales Tax (SPLOST) fUl"ldswould also be
depleted.
Vrana clarified that the request for three part-time Customer Service Representatives was based
on the assumption that Recreation Administration would also be housed at Kedron. Pennington
verified Vrana's statement.
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Salvatore went over the budget summary for the General Fund, noting the projected revenues
and total uses of funds were $27,763,524. The estimated revenues included taxes - $23,860,406,
licenses & permits - $641,637, intergovernmental (grants) - $300,000. charges for services -
$1,456,738, fines & forfeitures - $1,252.070, investment income - $76,974. and miscellaneous _
$131,448 for an estimated total of $27,719.293. An additional $1.136,799 was projected from
other sources with a surplus carryover expected of ($1.092,568).
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City Council Workshop
July 11, 2011
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The uses of the funds includect $25,425,234 in appropriations for Departmental operating
expenses. Those expenses include executive services, $392,394; economic development,
$85,148; Administrative Services,.. $2,257,591; Financial. Services/IT, $1,166,805; Public Safety.
$13,796,753; Public Works. $4,426,090; Recreation & special events, $2,421.036; tourism support
services, $182,777; and Community Services, $696,640. The projected salary vacancy/other
savings were ($635,631). He added it was up to management to identify the savings.
General Administration costs were projected at $449,161, with the appropriations including
Council Contingency, $0; not-for-!;>rofit organizations, $26.757; general liability insurance, $89,243;
Development Authority bond. $138.843; miscellaneous legal feeslclaims, $100,000; other
expenses, $49,318: and administrative/technical contingencies, $45.000.
Transfers to other funds/authorities were projected at $2.524,760 and included a transfer to the
Public Improvement Program (PIP). $47,275; transfer to debt service, $2,469,985; Development
Authority of Peachtree City, $7,500; and transfer to the Amphitheater Fund, $0.
Salvatore said the appropriations for FY 2012 included 25.6%for Police, 23.9% for Fire/EMS. 15.9%
for Public Works, 9.1 % for non-divisional & transfers, 8.7% for Recreation & Special Events, 4.5% for
Administrative Services, 4.2% for Financial Services/IT, 3.7% for the Library, 2.5% for Planning &
Zoning, 1.4% for City Council & City Manager, and 0.3% for Economic Development. Imker
pointed out citizens could ask to s~e the employee payroll at any time.
Salvatore reviewed the five-year financial projections, which included increases each year in
the model budgets. He continued that the Public Works budget would increase by $2 million in
each of the out years to replace. the SPLOST funds, although that amount might not be spent
each year. He added that the City's pro rata share of LOST funds would also shrink due to the
2010 Census figures and the 2013 LOST renegotiations, as well as any further decline due to
economic conditions, so there would be a $500,000 in LOST revenues beginning in FY 2013. The
model showed the use of cash reserves in FY 2013 of $718,322, FY 2014 of $1.308,484, FY 2015 of
$1,029,353, and FY 2016 of $1 ,006,452. Millage rate increases of 0.008 were included forFY 2014
and FY 2015, with a rollback of 0.096 mills projected in FY 2016.
Salvatore explained a 1.1 mill increase was shown for FY 2013 that could be spread out. It was
shown in FY 2013, but they would need to wait to see what happened with the LOST negotiation
and the regional transportation SPLOST.
Council briefly discussed whether the five-year projections should have any effect on the
decision for the FY 2012 bUdget. Salvatore explained that Council had a budget policy that 20%
be kept in reserve. There were mahy ways to get there, and the five-year model was a guide to
aid in complying with the policy guidelines. The model would change 1,000 times before FY
2016.
Imker asked Council for recommendations to reduce the projected 1.1 mill increase in FY 2013.
Haddix asked what was Council's goal - to preserve all services and fee structures exactly as
they were or increase fees for optional services so they paid for themselves, relieving the tax
burden on the residents. Haddix. said everything else rode on those fundamental questions.
Sturbaum said he had $92,000 in possible cuts, which were not a lot of cuts, but was a first pass.
He said he would forward his spreadsheet to the other members.
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July 11, 2011
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Imker presented his recommendations for the proposed FY 2012 budget. His cuts included the
reduction of $50,000 in litigation services as shown in Salvatore's presentation, reducing the line
item from $150,000 to $100,000, and a reduction of one police vehicle, saving $11,000.
Other changes proposed by Imker included an additional $162,000 in revenue from the savings
from the Public Facilities Authority Renegotiation Bond and $125,000 from the sale of a portion of
Newgate Road to the developer of the senior apartment complex. He stated he understood
the Newgate Road sale revenue could not be included in the bUdget until that sale actually
happened. He recommended reducing thePIP Contingency by $35,000, reducing Dues & Fees
by $8,000, reducing Books & Periodicals by ,$4,000, reducing Small Tools/Equipment by $24,000,
reducing Department Contingencies by $81.000, as well as a $100,000 reduction in the $240,000
recommended in the proposed budget for 2% pay in lieu of salary increase line item. The
proposed changes totaled $539,000.
Imker's alternate proposal impact on the five-year budget projections included $5 million in cuts
- removing $500,000 from Public Works contingencies beginning in FY 2013, removing $250,000
from LOST contingencies beginning in FY 2013, $800,000 for the out year rollup impact of
department savings beginning in rY 2012, saving $400,000 by revamping the evaluation system
(merit pay), reducing the Public Improvement Program (PIP) contingencies from FY 2013 to FY
2016, changing to a single persorial leave policy, and keeping the 457 pension program, but
adjusting the 401 A program.
Imker also discussed possible projects for the Public Facilities Authority bond proposal, which he
estimated would cost approximately $3,039,255, with debt service of $393,594 annually spread
out over 10 years at 5% interest.~e noted that the City would probably get a better interest
rate, but there was no cost estimate on the dredging needed of the Lake Peachtree lagoon.
He estimated the City could save $162,000 by renegotiating three existing bonds.
Imker said taking $200,000 out of this budget now had an impact of$800,000 savings in the
future four years of the five-year model.
Revamping the evaluation system' (merit pay) could save $405,000 over a five-year period,
according to Imker's alternative proposal. Currently, a one-step pay increase averaged $782, a
two-step increase average $1,506, and a three-step increase averaged $2,181. The current
average employee earned a two-step increase per year of approximately $1,490. A new
system to move towards matrix and less subjective evaluations was needed where only one and
two-step increases could be given. The new average step increase might be 1.5 steps at
approximately $1,144. Imker said, when applied over 236 employees, the savings could be
$81.000 annually, and $405,000 over a five-year long-term plan. He asked the City Manager to
look at moving toward a matrix evaluation system with only one and two-step increases.
Imker addressed a change to a single personal leave policy, saying that a first-year employee
was able to earn 31 days time off via holiday time, birthday time, vacation time, sick time, safety
time, perfect attendance time, snow time, catastrophic sick time, and employee comp time. If
a new single personal leave police was established to save three days, as an example, the
impact over 236 employees was approximately $50,000 annually, $250,000 over a five-year long-
term plan.
Imker's alternate five-year model showed no millage rate increases for FY 2012 or 2013, but
included proposed millage increas~sof 0.197mills in FY 2014,2015, an 2016. He also projected
the use of at $ 1. 169,422 from cash reserves in FY 2013, $1.588,974 in FY 2014, $797,036 in FY 2015,
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City Council Workshop
July 11, 2011
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and $148,101 in FY 2016. He poinfed out that, with this projection showing FY 2016 with zero mils
and only a $150,000 use of reserves, was as close as one could expect to having a financially
sustainable budget in the future.
Imker referred to the employee pension plan, saying he wanted to keep the 457 plan because it
allowed employees to save their own money for retirement. He wanted to adjust the 401 A
program, which the City matched employee contributions up to 2%. Imker proposed either
eliminating the 401 A plan, the City's contribution, and returning $600 of the City's request for
employees to contribute to health insurance costs, or to have everyone go to 2% contributions,
adding that some got 5%. Stopping the City's contribution could save the City $250,000.
Imker said that, if all his proposals were adopted, the City would only need to use $150,000 in
cash reserves in FY 2016 compared to $1 million in FY 2016 in the current proposed budget. The
City would be able to manage out any projected small millage rate increases.
There was a heated discussion between Imker and Haddix regarding Imker's proposed cuts, with
Haddix saying he wanted to understand what the actual physical impact of the proposals to cut
programs would be on the City.
Fleisch said that, after the re-organization, staff started looking at the Human Resources policies,
and more personnel were needed in Human Resources to do that. She also wanted to look at
different software for payroll that could save the City money in the long run.
Learnard said she would rather see Council enumerate the tasks at hand so they would know
what needed to be done, including items from Retreat such as the necessary Human Resources
training, consolidated leave polic;ies, and pre-employment drug testing. Haddix said he was
leery about cutting back on education because any problems that might result could cost more
than the training. Fleisch said the additional employee requested for Human Resources had
been cut from the original budget, adding that one more person to help could affect the
money spent on litigation.
Imker asked Pennington to evaluate the needs of Human Resources as far as additional
personnel. keeping in mind policy changes in the next six months. After that job was done, staff
needed to evaluate whether the employee was still needed, possibly leading to the addition of
a full-time or contract employee. Haddix added that all of Imker's suggestions regarding merit
pay and holiday hours merited examination. He said there should also be a reasonable look
taken at any areas that would benefit from a private-public partnership, which had proven to
be cost effective. Sturbaum agreed, saying Council would be remiss if all the opportunities were
not examined.
Learnard asked if the City could live with not increasing taxes, not cutting services, and working
smarter.
Haddix opened the floor to the public.
Tim Lydell said taking the Lizzie Borden approach to the budget could leave everyone with bad
morale. His employees did not get 30 days off the first year, and he agreed that should be
reviewed. CouncH should h<:we () s!r()teQic lookatwhere theY'vVanted the Cityto go. He
recommended getting citizens involved in the process with a citizen committee that looked at
the budget on an ongoing basis.
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City Council Workshop
July 11, 2011
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Steve Allen said Council neededto focus on rElvElnue,odding that if as much time was spent on
revenue creation the City might not be in this situation.
Learnard read a letter from Caren. Russell, who was unable to attend the workshop. Russell said
it was important to maintain services and the look of the City even if an increase in taxes was
needed.
John McGregor said the City's issues resembled some of the federal government's issues. There
were City services that were disCretionary, but Public Safety was always off-limits in budget
discussions. The City needed to look at the efficiency of how those services were delivered.
Salvatore said the public hearing for the budget was on the July 21 agenda.
Imker asked if there would be a oew proposal based on the potential budget cuts. Salvatore
said his presentation for the public hearing would include any changes from the workshop, and
there would be communication between Council and the City Manager so Council would have
an idea on the changes that would be made.
There being no further discussion, the meeting adjourned at 8:25 p.m.
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