BOARD OF COUNTY COMMISSIONERS
SEMINOLE COUNTY, FLORIDA
MAY 21, 2009
The following is a non-verbatim transcript of the BOARD OF COUNTY COMMISSIONERS SPECIAL MEETING OF SEMINOLE COUNTY, FLORIDA, held at 9:03 a.m., on Thursday, May 21, 2009, in the SEMINOLE COUNTY SERVICES BUILDING at SANFORD, FLORIDA, the usual place of meeting of said Board.
Chairman Bob Dallari (District 1)
Vice Chairman Mike McLean (District 2)
Commissioner Dick Van Der Weide (District 3)
Commissioner Carlton Henley (District 4)
Commissioner Brenda Carey (District 5)
County Manager Cindy Coto
County Attorney Robert McMillan
Deputy Clerk Eva Roach
Commissioner Henley gave the Invocation.
Commissioner Van Der Weide led the Pledge of Allegiance.
Cindy Coto, County Manager, addressed the Board to state staff will be presenting an overview of the budget development process as it relates to FY 2010. The Fiscal Year 2009/10 budget booklet was received and filed. She stated as in the last three budget years, staff’s approach has been a proactive one in which they have maximized the reserves to assist offsetting the impacts of property tax reform and the present economic conditions. She stated the budget process was initiated in November 2008 due to the anticipated deficits. The deficit grew to $35 million in November and by March it went up to $42.8 million. Staff will be presenting the newest projection which will reflect a further decline in the revenue. As the situation is deemed primarily to the impact of the property tax reform, their approach is to create a long-term sustainable plan for not only next year, but well into the future to continue to provide public services for the community’s well-being and overall quality of life. The County’s loss of the annual general revenue is estimated at $70 million with a deficit of operating revenues to expenditures now projected at $47.2 million. Staff believes this forecast to be an optimistic view. The County has reduced their general revenue budget over the last two fiscal years by $25 million and they now have to address another $47 million. The need for physical stability is more critical now and the challenge before staff is to right side the organization, not only for today, but to service well into the future. Staff continues to balance this challenge with the needs of the community by providing the services that continue to define Seminole County as a place that residents choose to live and work. In an effort to achieve more cost-effective service delivery, a zero-based budget development methodology was employed. The objective was to redirect effort and funds from lower priorities to higher priorities, improve the overall efficiency, effectiveness and reduce their spending. This approach resulted in reductions totaling $28.1 million and that number is contrasted to the $10 million that was presented to the Board on March 3. She stated she is pleased with the efforts of staff to not only meeting the March work session objective but surpassing it. However, as the deficit has continued to grow, these reductions are not sufficient to meet the deficit position which they find themselves today. Staff’s presentation will focus on the recap of the March 3 work session and an update of the financial status with the work that has been accomplished. Staff has included in the budget book the results of the citizens and business surveys conducted by PMG Associates, Inc., and those will be presented to the Board at the June 9 meeting. Also, included in the budget booklet is an analysis of options, such as pay reductions, furloughs, reduction of work hours and reduction in work force. This information is provided to give the Board an overview of the opportunities and challenges each of those face. Also, included in that information is a survey conducted by 100 local government agencies and what they are doing to meet their fiscal challenges. Staff has also submitted to the Board responses of information they recently received. The package (received and filed) includes a memo on Fertilizer Ordinance and Pollutant Removal Credits, Energy Conservation Initiatives undertaken by staff, a memo and associated backup on information received relating to a number of Budget Development Issues, and a more indepth 5-Year Forecast. She concluded by stating she believes this year will be a major milestone in their effort to ensure future financial stability. The budget development process thus far has yielded $28 million in proposed General Revenue Fund budget reductions. Staff will continue to identify and implement additional opportunities to increase the effectiveness and efficiency. She stated staff is seeking Board action for the following: (1) Approve staff recommendations regarding Outside Agency Funding as of October 1, 2009; (2) Approve staff proposed budget reductions and authorize the County Manager to take all necessary action to implement reductions in accordance with current County policies and procedures; and (3) Provide direction on staff recommendations with regard to a Stormwater Utility Assessment and a Millage Rollforward.
Lisa Spriggs, Fiscal Services Director, addressed the Board to display a PowerPoint Presentation (received and filed) and state she is going to touch on the forecasted status and give the Board up-to-date information that they have available today. She said staff will discuss some of the recommendations they can use to get through these challenges. She displayed and reviewed the March 3rd Work Session Recap relating to County-wide $987 million; $36.4 million Transfers & Excess Fees; $950.6 million Spendable; $226.1 million General Revenue Operating Budget; $13.7 million Program Fines & Fees; and $212.4 million Tax Supported Cost of Programs as outlined on pages 2 through 7. She displayed and reviewed Graphs (pages 8 thru 12) relating to Where Tax Supported Programs Go, the Quality of Life Services, What Programs are Mandated or Partially Mandated and what services the County is responsible for providing.
Robert McMillan, County Attorney, left the meeting at this time.
Ms. Spriggs continued by reviewing a graph showing the Forecasted Budget Status for FY 2010. She reviewed Tables (page 14 and 15) relating to the General Revenue Forecast (Structure Imbalance, Sales Tax, County Revenue Sharing, State and Local Gas Taxes, Projected Net Deficit before Ad Valorem Tax Factor, Property Taxable Assessments and Property Appraiser Projection).
Chairman Dallari stated he would like to see what the difference is for last fiscal year and this fiscal year instead of comparing the taxable assessments from 2006 to this year.
Ms. Spriggs continued by reviewing the philosophy they used in the development process as outlined on pages 16 and 17. She stated the focus was to structurally balance and to ensure that they right-side by bringing the expenditures in-line with the revenues over the long term. Staff took a long-term view and a long-term approach. She displayed and reviewed the Consensus Driven Process and stated that doing a long-term financial plan involves the support of everyone (BCC, public and staff). She stated staff’s approach was to focus on the long-term sustainability within the budget process and she reviewed same as outlined on page 20. She displayed a table (page 21) and recapped the $42.8 Structural Imbalance (Showing the Decline over the last 3-4 years).
Mr. McMillan reentered the meeting at this time.
Ms. Coto stated the State legislature decided that the property tax reform was very critical. If they did not have that, the market could have done self correction and the County could have dealt with this issue within the reductions that have taken placed over the last two years as well as the ones they are proposing today.
Ms. Spriggs stated the impact on Seminole County is 48% and if they look at that statewide, local governments are large employers and supporters of the economy. There was never a study done on what the property tax reform did, but the natural instinct of local governments was they have less revenue and they would cancel projects. Once the projects are cancelled, that would affect the private industry as well. Discussion ensued.
Ms. Spriggs stated the next table (page 22) recaps the $43 million Use of Reserves. The County’s projected deficit comes to $33 million.
Upon inquiry by Commissioner Carey, Ms. Spriggs advised the County would have saved about $5 million last year if everyone froze salaries across-the-board.
Ms. Spriggs reviewed the Proposed Budget Reductions table as shown on page 23.
Chairman Dallari stated he would like to know which departments are being paid for by the General Fund.
Ms. Spriggs stated she can provide a detail of that at this afternoon’s session.
Commissioner Carey stated she would like to know what departments are cost-allocated out and what percentage is collected back.
Ms. Spriggs stated the Sheriff’s Office has agreed to freeze salaries and $3.8 million was factored in for the jail. The Sheriff has absorbed half of the cost of bringing that jail on-line. She stated staff is proposing that the BCC’s staff salaries be frozen and that would generate $1.6 million. The total reduction from the $43 million is $28.1 million.
Upon inquiry by Commissioner McLean, Ms. Spriggs advised the Property Appraiser and Tax Collector offices are freezing salaries and the Clerk’s office has indicated that they are not giving out raises next year. The Supervisor of Elections has reduced their salary budget but did not eliminate the possibility of giving out raises.
Upon inquiry by Chairman Dallari, Ms. Spriggs advised she will check and see if the Clerk’s office is going to furlough three days for this year. She stated statutorily, all of the Constitutional Officers’ final budgets have to be in by June 1st.
Ms. Spriggs continued her presentation by reviewing the difference between the FY 08/09 and 09/10 budget. She stated based on where they are today, the deficit has a gotten little worse than they thought. Based on the most recent discussion with the Property Appraiser, they are looking at a tax roll decline of 10-12%. What they are factoring in for the countywide tax roll is 11%. She displayed a graph (page 26) showing where they were in March and where they are today. She stated the table on page 27 shows the forecasted budget status and it is based on doing the recommended reductions with no revenue enhancements.
Upon inquiry by Commissioner Van Der Weide, Ms. Spriggs advised she is hearing that other counties are having more property assessment reductions than what Seminole County is reflecting.
Ms. Coto stated she believes the counties to the south and north are predicting pretty significant reductions.
Ms. Spriggs stated the table on page 27 shows that they not only have a structural balancing problem, they have built up their reserves, but they only can live off of them for maybe the next two years.
Commissioner Carey stated everyone recognizes that living off the reserves is a bad idea and they will probably not see growth in this County like they did in 2004, 2005 and 2006 because they do not have the ability to do that again.
Ms. Coto stated during the normal years, they will probably see between a six or eight percent growth factor in the ad valorem revenue stream. She said when the market stabilizes; she anticipates that they will be looking at two to three percent.
Ms. Spriggs displayed and reviewed the graph on page 28 showing the shortfall and reserves; however the reserves would be depleted within a two-year period. She stated after the County cut about $58 million with the recommended reductions and cuts over the last two years, they are still in this state.
Upon inquiry by Commissioner Carey, Ms. Spriggs advised staff factored in almost a 2% growth and she explained how they came up with that.
Ms. Spriggs displayed a table showing the Forecasted Recommended Option of a roll forward rate plus stormwater assessment and reductions. She stated staff’s recommendation is a long-term approach and it is one that does it all at once or looks at correcting the situation today so that they are not doing this every year. She explained how the roll forward rate works in addition to implementing a stormwater assessment to pay for the stormwater program. She displayed a graph and table showing the Forecasted Recommended Option (page 30) and Forecasted House Bill 1B Formula (page 31) and she reviewed same. She reviewed a slide (Tax Comparison) on page 32 showing the impact of a resident based on what staff is recommending.
Commissioner Carey left the meeting at this time.
Ms. Spriggs displayed a slide on page 33 showing the difference of Estimated Change in Tax Bill.
Commissioner Carey reentered the meeting at this time.
Ms. Spriggs displayed two slides that were not included in the packet and reviewed the differential for 2008 assessed taxable value for residential property ($225,000).
Mr. McMillan left the meeting at this time.
Ms. Spriggs reviewed the second slide consisting of the 2009 assessed taxable value.
Commissioner Van Der Weide left the meeting at this time.
Commissioner Carey stated she would like to know what is the tax bill based on the current rate for a $225,000 home.
Chairman Dallari recessed the meeting at 10:37 a.m., reconvening it at 10:45 a.m., with Commissioner Van Der Weide and Mr. McMillan being in attendance.
Ms. Spriggs reviewed the Stormwater Utility Assessment Program on page 34 and what the program will cover. She stated if the Board implemented the fee, that will generate about $15 million for the entire program and additional capital needs and it will offset general revenue of about $6.8 million. She displayed a table and reviewed the total impact of a single-family resident. She reviewed the Status of Other Operating Funds as shown on page 36 relating to Fire/Rescue District, Tourism Tax Funds, Building Fund, $2 Technology Fee Fund, Water & Sewer Fund, and Solid Waste Fund. Ms. Spriggs stated all of the funds are impacted and reductions are being made in all of these areas. There is still a gap and additional revenue is needed in order to maintain services. Staff will continue to look at efficiency measures and cost savings. Collectively these costs are not enough to fill the gap even based on the current reductions.
Commissioner McLean stated it would be nice to have information about some of the personnel options and discussion about outside agency funding.
Commissioner Carey asked if staff spoke to the School Board representatives as she is sure that they are probably taking advantage of the tax increase that the Legislature is allowing them to do this year.
Ms. Coto stated the Superintendent of Schools made a presentation at the Mayors and Managers meeting Tuesday, and he indicated that they have obtained approximately $20 million in federal stimulus money and that prevented them from doing as many layoffs as they had anticipated. However, that money is only available for two years and they do not have another source. She stated Mr. Vogel indicated that the Legislature had provided some relief in allowing them to do a ¼ of a mill increase. It could be put in place this fiscal year and the subsequent fiscal year, and then it would have to be placed on the 2010 ballot. If it is not approved by the voters, then they would have to come up with other alternatives.
Commissioner Van Der Weide stated the state of California went to the ballot for six tax increases and they all failed miserably. There is going to be a multiple list of increase in taxes by the time the next election rolls around. That is going to put the public in a worst mood than they are in now. Chairman Dallari stated he doesn’t think this is an appropriate time to do a tax increase. He stated he would like additional information as to where these cuts are coming from. He stated he is not sure that they are as slim and trim as they need to be on some of the expenditures.
Commissioner Carey stated she feels staff has done a great job in getting where they are. She stated this County has grown a lot over the last five years and they didn’t have some of the departments and positions as they do now and she is not sure they can’t do a little deeper cutting rather than raising taxes.
Commissioner McLean stated he feels they need to look at this situation as different than anything they have dealt with before. He said he feels with the County being more conservative, that it affects them more, when they have these types of challenges. He suggested that they look at permanent solutions and changes. He stated he feels that Ms. Coto has done an excellent job in trying to move this down to a zero-based budget.
Ms. Coto stated the Legislature has passed another bill for the 2010 ballot that will further decline the ad valorem taxes for first-time homebuyers. She stated she feels it is important to note that of the $28 million identified, $16 million of that was just in the BCC operation. She said to find another $19 million out of the $88 million, they will need drastic service delivery reductions. She said she has spent months reviewing line item budgets and the well is pretty dry. There will be things that they will no longer provide to the residents.
Commissioner Carey stated while they had a lot of growth and id a lot of “feel good” things, she feels they can go back and look at some of those areas, find further reductions and look at outsourcing some things that they do not need to be doing inhouse.
Commissioner Van Der Weide stated the results of the survey did not show the questions that the Board was looking for. This thing is not going to turn around on a dime and the County is probably going to be facing a problem next year that will be even bigger. The County is going to have to determine what they are going to do sooner or later.
Commissioner Carey stated they haven’t seen the worst yet as most of the foreclosures have not been worked through the courts yet. She said they probably will see more foreclosures in this calendar year than last year.
Upon inquiry by Chairman Dallari, Commissioner McLean advised he feels it would be helpful to go over the alternatives regarding personnel costs and outside agencies funding.
Commissioner Carey stated she feels it would be good to have an opportunity to look at the additional information given to the Board and return after lunch for a final discussion.
Chairman Dallari recessed the meeting at 11:14 a.m., reconvening at 1:32 p.m., with all Commissioners and all other Officials, with the exception of Deputy Clerk Eva Roach, who was replaced by Deputy Clerk Sandy McCann, who were present in the Opening Session.
Ms. Coto advised she has distributed an information sheet (copy received & filed) showing General Revenue Funds operating expenses by department for FY 2009 and FY 2010.
OUTSIDE AGENCY FUNDING
Commissioner Carey expressed her concern with the County Manager’s proposed 50% funding cut for the Central Florida Zoo, stating they were funded in the amount of $300,000 in FY 08/09 and reduced to $150,000 for FY 09/10. She said currently the zoo is in the growth mode and she does not feel they are prepared for this much of a cut.
Ms. Coto stated that the zoo has not incurred the type of cuts that other agencies have in the past; and the other issue is the Tourism Development Tax is being used for the construction of Jetta Park. Also, TDC dollars are down by 33%.
Commissioner Henley stated two years ago the Board told the Community Agencies that they needed to become more self-sufficient. He said the County has supported the zoo for many years – well beyond what was committed to.
Commissioner Van Der Weide reminded everyone that the TDC tax was originally done to help the zoo.
Commissioner Carey suggested not cutting the zoo so deep this year and then making an additional cut next year.
Commissioner McLean recommended using a “stair step” approach – cutting the zoo 25% this year and another 25% next year. He said he would also like to see that approach done for the Central Florida Sports Commission.
Commissioner Henley stated he believes the County Manager’s recommendation is reasonable in light of not knowing what the cost of Jetta Point is going to be.
Upon inquiry by Commissioner Van Der Weide, Fiscal Services Director Lisa Spriggs advised the TDC Reserves are at $3 million.
A brief discussion ensued with regard to MyRegion funding and Ms. Coto advised that to date she is still awaiting information from the organization.
Motion by Commissioner Carey, seconded by Commissioner McLean to approve funding the Central Florida Zoo in the amount of $225,000; and revise the reduction of the Central Florida Sports Commission funding to half of what the County Manager proposed.
Districts 1, 2, 3 and 5 voted AYE.
Commissioner Henley voted NAY.
Commissioner Carey stated that MyRegion is still meeting and having a lot of discussion about regional issues, including transportation. Chairman Dallari said that until MyRegion submits their mission statement and other pertinent information, the funding amount will remain at zero.
Commissioner Carey commended Commissioner Van Der Weide for spearheading the funding reduction for the East Central Florida Regional Planning Council. She said there is also some new legislation that would eliminate the requirement for the ECFRPC to review DRI’s.
Assistant County Manager, Sabrina O’Brien, addressed the Board to advise SB 360 has gone to the Governor for signing; however the Florida Association of Counties is strongly urging the bill be vetoed.
Economic Development Director, Bill McDermott, addressed the Board to advise the ECFRPC voted to send a letter in opposition to the bill.
Motion by Commissioner McLean, seconded by Commissioner Carey to approve the revised recommendations regarding Outside Agency Funding as of October 12, 2009.
Districts 1, 2, 3, 4 and 5 voted AYE.
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Commissioner Carey stated she would like more information on reduced hours for the work week and has asked Director of Information Services, Rob Beach, for information on the cell phones and pagers. She advised that there are 266 County cell phones and 208 pagers for a total annual cost of $123,379. She said that in these economic times, a lot of corporate America are eliminating all cell phones including for managers. She further said that they need to take a harder look at this.
Chairman Dallari agreed that the County Manager needs to look at a lot of things in order to cut the budget further.
Ms. Coto advised that she has cut 40 cell phones. Whereupon, Commissioner Carey stated she does not believe that is enough.
Chairman Dallari stated he would like to see Ms. Coto work with each Commissioner so that they can understand where the cuts are coming from and to possibly make further cuts to the budget.
Commissioner Carey said she believes Ms. Coto has made a good start and that the Board needs to give her authority to do the things she is recommending today; but she does not feel they have done all they can and that they are where they need to be fiscally.
Commissioner McLean reminded the Board that this process has been ongoing since last November and it has been a painstaking process to get to this point. He said he is not saying that there cannot be any more cuts; but he doesn’t want to have short-term solutions for long-term problems. He added that he feels the Board should give the County Manager authority to move forward.
Commissioner Van Der Weide stated many County employees are very anxious about their employment and he believes the County Manager should be given authority to proceed. He said there is an issue with health insurance for a temporary period. Whereupon, Ms. Coto advised if the Board approves her recommendation, as written, it will address that issue for that month.
Motion by Commissioner McLean, seconded by Commissioner Carey to approve staff’s proposed budget reductions; and authorize the County Manager to take all necessary action to implement reductions in accordance with current County policies and procedures.
Under discussion and upon inquiry by Commissioner Van Der Weide, Ms. Coto advised that the reduction in staff will be done within the next two weeks.
Commissioner Henley stated the Board doesn’t have any choice and are put in this position not as a result of the actions of the BCC. He said it goes to prove that cutting taxes is not always the answer to everything.
Chairman Dallari advised he will not be supporting the motion because he feels there are other ways of reducing the budget. He said other counties are furloughing employees and cutting the work week. He stated that he does not have enough information on how this will affect each department.
Commissioner Carey said that, in her opinion, there are still things that need to be looked at, including furloughs, reduced work week, and other things. She added that she will not be supporting Ms. Coto’s next recommendation to increase the millage.
The Chairman stated that without understanding the big picture, he is not willing to tell a County employee that he/she is being laid-off.
Commissioner Van Der Weide said that he expects to have additional meetings to discuss some of the other items that are on the table (as alluded to by Commissioner Carey). He further said that this is not a pleasant thing; however, with the budget deficit, there is no other way to make up that much money. He added that the Board is not finished yet.
Commissioner McLean agreed that there should be more discussion on other issues.
Districts 2, 3, 4 and 5 voted AYE.
Commissioner Dallari voted NAY.
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Discussion ensued with regard to the County Manager’s recommendation to approve a Stormwater Utility Assessment and Millage Rollforward. Commissioner Carey stated she still believes that they have an organization that is not yet “right-sided” and she will not support a millage rollforward.
Commissioner McLean said he does not see anything that will make up for the lack of a stormwater fee or rollforward, which is in the amount of $20 million.
Commissioner Van Der Weide stated that he doesn’t think they have exhausted everything to cut the budget. He added that he would like to have more information on the rollforward as to what it comes out to in dollars and cents.
Ms. Coto advised that she will receive the tax rolls from the Property Appraiser on June 1st and the tentative TRIM rates will be set on July 28th.
Commissioner Carey reiterated that staff needs to seriously look at furloughs and reduced work week hours; and until everything is done to reduce the budget, she will not be voting for the rollforward in millage.
The Chairman clarified that the direction, at this time, is the Board is not interested in looking at the Stormwater Utility Assessment or Millage Rollforward, and would like to see some alternatives.
Upon inquiry by Commissioner Van Der Weide, Director of Fiscal Services, Lisa Spriggs, advised the percentage of reserves is currently at 20% to 25%. Whereupon, Commissioner Van Der Weide commented that if they have to use some of that, then they will.
Commissioner Carey stated that since there is not much going on in the afternoon BCC meetings, discussions and updates about the budget can take place then.
There being no further business to come before the Board, the Chairman declared the meeting adjourned at 2:24 p.m., this same date.