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HomeMy WebLinkAbout07-12-2012 workshop ~ ~ City Council of Peachtree City , Budget Workshop Minutes July 12, 2012 6:00 p.m. The Mayor and City Council of Peachtree City met in workshop session on Thursday, July 12, 2012, at City Hall. Mayor Don Ha(jdix called the meeting to order at 6:00 p.m. Others attending: Vanessa Fleisch, George Dienhart, Kim Lear~ard, and Eric Imker. City Manager Jim Pennington noted that Financial Services Director Paul Salvatore was en route from New York and would not be attending. Pennington continued that staff had presented the City Manager's Recommended Budget, and Council had requested another workshop for additional discussion. Haddix noted that Imker had a list of requests and recommendations and asked him to reserve 20 minutes at the end of the meeting for discussion. Imker said Council had received their budget books in mid-June, and he had been working with Salvatore since that time. He hOd found a change that was disturbing in the five-year model. At the end of the model (FY17), there had been a reserve balance of 24%, which was $1.3 million above what the policy required. Two weeks later, the model had dropped to $0.5 million, which was a significant change due to an error. He noted they were still in the positive. Dienhart asked if it was an error or if something had changed. Pennington said new information had come in. Imker asked if staff could provide a more c::omplete explanation at the next workshop. Imker said, based on that reductjpn, he began reviewing all the budgets to see what requests seemed reasonable and where hE; had questions. In the Non-Divisional items, Imker noted the contingency of $45,000, and he suggested dropping that to $30,000 or $15,000. Imker felt there could be reductions in the Mayor and Council Education and Training budget and the Mayor and Council Salaries. Haddix noted that any funds removed from the salaries would have to be readded. In the City Manager budget, Imker recommended dropping the dues, fees, education & training line item to $15,000, which was the expected total FY 2012. He also asked staff to look at the Administration Operating Supplies. Under City Clerk, he indicated a desire to eliminate the Laserfiche Support ($5,000 annually) and get rid of the program. Imker then asked, at the next workshop, to get a definitive number of new full-time and part- time positions being requested. Imker asked Finance and Purchasing to reduce their respective Education & Training line items to $10,000, the amount expected to be used in FY 2012. He noted that there could be a duplicate item in the Information Technology budget, $20,000 for software purchased in FY 2012. Imker then asked that the Police Department find $60,000 to cut from their budget to cover the annual cost of financing their docljment imaging system. He indicated that, if they could only find $30,000, he would support delaying the document imaging system until mid-year. If no cuts were found, he would support postponing the system until FY 2013. ",....... City Council Budget Workshop July 12, 2012 Page 2 Dienhart asked what the savings would be to get rid of two cars and replace them with motorcycles. Imker said 10 vehic:::les were identifiedin the Police Department budget (one CID car, eight patrol vehicles, and 'one motorcycle). He c,ontinued that Police Chief Clark had tentatively agreed to give up a car for a motorcycle at a savihgs of $50,000, which did not count toward the $60,000 he was asking him to find for the records management system. Imker continued that, while he agreed with. Fire Chief Ed. Eiswerth. that each the department's apparatus needed two people at all times, he was still asking the department to find $50,000 in cuts. Imker was not asking for any changes in the Emergency Medical Services budget. For Public Works, Imker said he wpnted to understand why no funds were programmed for path resurfacing in FY 2013. Even so, the budget wentfrom $4 million in FY2012 to $4.5 million in FY 2013. Imker said he wanted to understand why and that he needed that information before he could recommend cuts in the budget. Fleisch noted that the deferred maintenance of City facilities was being put back in the budget to avoid future long-term problems. Imker then turned to Recreation, which had a $1.6 million budget (excluding Kedron, Gathering Place, and Library). He said Kedron's budget was $647,000, which was an increase of $30,000, but he did not see a need to chqllenge it. He added that half of the money paid out for Kedron came back in revenue from the facility. Imker said the Gathering Place budget of $200,000 covered the contract with Fayette Senior Services, and did not need to be changed. He asked that the Library find $25,000 to cut from the $1 milnon budget. Imker suggested that the savings come from the Book and Vide9.. Purchas~s IineItem of $140,000. He recognized that they wanted to purchase and replace materials, but felt Peachtree City was subsidizing several other areo libraries that were not spending as much. Imker said he had no changes to suggest for the Building or Planning Departments. Imker concluded that his suggestions totaled a $200,000 savings in the proposed budget. Learnard said that she might not agree with every recommendation, but as taxpayer and hearing that government needs to live within its means, she appreciated his work. She noted that Peachtree City was close to the tipping poiht for those who wanted to preserve public safety. Haddix said, every year, they took a "scrub and Band-Aid" approach to the City's budget. He said the City needed to perform a needs assessment, evaluate priorities, and establish the budget in that manner. He added that he was still doing due diligence regarding the salary reduction imposed upon him by Council. Dienhart said needed to hear from public safety regarding the recommendations. His understanding was that the PoliCE; Department needed records software. Imker's challenging them to find savings was great, but Dienhart did not want to see the City hit the tipping point Learnard mentioned, when publiC safety began to decline. Learnard said the ultimate goal yv'as a balanced, sustainable budget with no use of reserves. They were on target to reach thaf goal in 2017. ~. ..,.. "c., . '. City Council Budget Workshop July 12, 2012 Page 3 Fleisch said she was interested [n obtaining input from Library Administrator Jill Prouty on the Library, knowing that they served a large area. Fleisch said she wanted balance in what residents had to pay. She had' not been surprised by the increases in the Public Works and Buildings & Grounds budgets because of the neglect that had been ongoing. She was concerned about putting press Lire on the Ponce Department during this economy, noting the previous year's exercise of 10 cars versus nine cars. Haddix said postponing the records software for a year was a good example of Band-Aids, and was postponing a problem or expense while not getting rid of it. The projected balanced budget by 2017 still could be overly optimistic, based on the revenue projections in the intervening years and the ongoing state of the economy. Imker said he had asked departments the previous year for about $0.5 million in cuts from the proposed budgets. Over the course of FY 2012, almost $400,000 of those cuts had been reinstated. Imker said he preferred to retain the money up front and dole it out as crises arose. Otherwise, they would never see a savings. Imker continued by saying the proposed 0.3 millage rate roll-up, which he considered a tax increase, equated to $0.5 million. Two years ago, the digest experienced 4.6% decrease, and it saw an additional 1 .6% decrease the previous year. Those decreases had a corresponding loss of revenue. Although the City had planned 0.213 mill increases both years, they had made adjustments to avoid increasing the millage rate. Imker said he was having a hard time finding those adjustments for FY 2013 - if residents wanted same services, they would have to pay the same taxes instead of seeing the average $30 savings due to value decrease. That meant the City would have to do the "roll up" on the millage, and they were asking residents to pay the same taxes as last year. Imker said he could not see cutting Recreation by $0.5 million. That would have resulted in a much greater value decrease than had been seen to date. He estimated residents were maintaining an average of $13,00'0 on fair market value of their homes, for $30 in taxes that were not an increase, but were simply not decreased. Haddix asked if any citizens had comments. Eric Snell, Patina Point, said he had two major concerns. He asked how the City determined the 20% reserve level, noting that the City was currently at 34%. That amounted to $4 million of excess reserves sitting in the bank, which was an inefficient use of taxpayer funds. . The overage at 2017 was still showing as 4% excess reserves. Snell said he did not understand Why the City was looking at a tax increase when that money was sitting in the bank. Imker said, two years previously, Council had planned the overage to allow them to spend it down over five years. They had leveled but the drop in the reserves to protect the City's credit rating. Snell said he had opposed that approach the previous year and felt taxes should have held steady. Council could reestablish the taxes when the funds were needed. Imker said failing to do the roll up of .3 mills had resulted in a revenue reduction of $500,000, and that was per year. After five years, it would be $2.5 million. With the economy, the renegotiation of the Local Option Sales Tax (LQSt), and the July 31 Regional Transportation Special Purpose Local Option Sales Tax (T-SPLOSt) vote, there were too many unknowns. Council would be waiting until August to finalize thepudget. ,..,< ~ City Council Budget Workshop July 12, 2012 Page 4 ~ Imker noted that a $6 million reserve (20%) vvOS three m()nths of operations. Analysts agreed that was a reasonable number. Snell 'said he was fine with 20% but not with 34%. Snell said he was also concerned about the ongoing issuance of debt. The model showed several items dropping off in 2017, but he suspected those would need to be replaced, and replacement costs were not sh<;>wing on projections. Snell was specifically talking about the proposed Bond Indebtedness millage rate. Imker Clarified that was only part of the picture. The City's current debt level was $16 million (they were allowed up to $100 million), with an average interest rate of 2.5%. That debt would go down over next five years. Snell noted the bond millage rate showed an increase - Council explained the model inCluded a possible General Obligation Bond for street paving, which staff had recommended if the Regional T-SPLOST failed. Imker offered some additional documents to Snell to explain the City's total debt, of which the bond millage only reflected 25%. Haddix noted that the model reflected assumptions that would change. Snell said he continued to have concerns that the City was maintaining inflated reserves rather than adjusting the tax rate. Haddix adjourned the workshop at 6:53 p.m. ~~ ".,..,