FBCC holds first Budget Workshop for FY2020

Submitted by Suanne Z. Thamm
Reporter – News Analyst
August 8, 2019 – 3:00 p.m.

The Fernandina Beach City Commission (FBCC) held its first FY2019-2020 budget workshop on August 7, 2019 before a sparse audience in City Hall Commission Chambers.  Mayor John Miller opened the meeting by stating that revenues anticipated from the introduction of paid beach parking later in the budget year had been pulled from the proposed budget.  This action left the proposed budget with a deficit of about $380K.  He asked for discussion from the commissioners on possible ways to make up that deficit.

Vice Mayor Len Kreger suggested moving some of the expenses that would be charged against the General Fund to funding via impact fees, which are collected to fund growth.  He said that the need for a new fire truck was related to population growth.  He also suggested that a portion of the money set aside to fund roads and sidewalks be funded by impact fees, since much of that work is needed due to increased growth.  He asked the City Manager to scrutinize the budget for professional services to see if that budget could also be reduced.

Commissioner Chip Ross acknowledged that there are not currently five votes to pass the budget as proposed.  While understanding that the city needed to come up with a way to cover the shortfall created by removing the anticipated revenue from paid beach parking, Ross said he believed it was important to understand the needs of the city that are not addressed under the current budget:

• Replacing/repairing beach walkovers
• New city hall
• Boardwalk 
• New roof for Police Station
• Streetlights
• Fire Station No. 2 improvements
• MLK and Atlantic Recreation Centers
• Replacement trees
• Cemetery repairs
• Centre Street sidewalk and landscape replacements
• Waterfront needs, such as stormwater, sidewalks and Front Street
• Alachua crossing

Since both Vice Mayor Kreger and Commissioner Mike Lednovich had indicated their opposition to the budget as presented, he asked for more input from them on areas that they would cut.

Kreger acknowledged that the proposed budget did not address all the beach walkovers.  He said that walkover repairs/replacements would not be done in one year, but would be comprehended over 5 years in the Capital Improvement Plan.  He suggested eliminating $50,000 that had been set aside to underground utility wires along Front Street.  He said that this was purely an aesthetic improvement that could be postponed.

Addressing Ross, Kreger said, “The assumption that we are not supporting something that has not come before us to be approved is ludicrous.  Why would you put a million dollars for something [paid beach parking] in a budget before the commission has approved such a measure?  If we had just done the budget without this assumption, we would be just fine.”

Ross said that the big bugaboo for him is funding beach walkovers.  He suggested using the money collected for beach renourishment [the MSTU commonly called the Sand Tax] to fund a bond to pay for all the walkovers.  Kreger agreed that it was an interesting concept, but believed that it needed further consideration of all the ramifications, since the fund applies to county as well as city beaches.  But first, Kreger said, the city needs a walkover plan.

The Mayor tried to return to the topic of the anticipated beach parking revenues.  He acknowledged Kreger’s concerns over the U.S. Corps of Engineers (USACE) position that city residents cannot be exempted from paying for beach parking.  He asked Kreger whether he had a specific dollar amount in mind that would allow him to support the budget.

Kreger said, “I’m not going to commit to anything unless I see data.  If you can get a letter from USACE stating that the city’s plan to pay for city residents out of taxes already paid, good luck.”

Miller asked, “Would that change your mind?”

“Change my mind for exempting locals?  Yeah.  But that is an issue with process.  I want to see all the numbers.  The city has been talking about paid beach parking for ten years.  Personally I think it changes the character of the town.  I don’t know how I’d vote until I see the data.”

Kreger said that he goes by Main Beach at least five times a day and that other than holidays he has yet to see all the parking spaces taken.  He said he would have problems charging for parking to use other recreational facilities at Main Beach, such as the skateboard park.

In response to a question from the Mayor, City Manager Dale Martin said that USACE will not provide an answer in writing to Kreger’s question.  

“If we try to exempt city residents,” Kreger asserted, “I can assure you there will be complaints to USACE.”  Kreger added that in previous correspondence the USACE has said that since beach renourishment is paid for by all the taxpayers, any paid parking scheme must be applied equally to all beach parking users.  Otherwise, continued federal funding for beach renourishment will be jeopardized.  He said the USACE has enforced this in New England and New Jersey.

Martin said, “Let me be clear:  we are NOT exempting locals.  We are paying for locals and we can demonstrate to the USACE and anyone else that every single paid beach parking pass will be paid for.  No one will be exempt.  I can demonstrate that if the city is ever audited.”  Martin gave as example a city resident applying for a beach parking pass.  Upon application, the city would transfer the fee from funds already collected in taxes to the beach parking account.  “Who pays for it is immaterial; it’s paid for.  So technically no one is exempt, and I think that is a critical distinction. that is not being made clear.”

Kreger was not satisfied.  “That’s a work around that does not provide equal access and I would not support that.  Period.  You’re not paying and the people in the county are paying for your money.”

Kreger and Martin engaged in discussion with neither one being swayed by the other.  Kreger said, “If you want to engage in manipulations and work arounds that jeopardize current and future beach renourishment contracts in the millions of dollars …”

Martin replied, “I have no problem writing the USACE and explaining the workaround.  Let’s see what they say.  I believe it meets the intent.”

Kreger said, “Oh, come on.  I won’t support it.  That’s just sneaky stuff.”

Ross said he was tired of talking about this because it is clear that Kreger and Lednovich will not support it.

Lednovich said, “Paid beach parking is changing the DNA of this city.  I don’t think that five commissioners should make that decision.  I think these folks [pointing to the audience] should make that decision.  It should be on a referendum.  Once it’s done, it’s here to stay. So let the people decide.”

Kreger said, “Let’s back up a bit.  [The FBCC] hasn’t been asked; we haven’t gotten a proposal for any paid beach parking. Period. It was injected in this budget.  That’s not how you do stuff.  Let the proposal come in, get a yea or a nay, and that could pass with three votes.  Don’t put it in the budget first.”

Miller explained that he was just trying to clarify for the current situation.

Kreger allowed that the issue of paid beach parking could come back to the FBCC at any time, but that through his suggestions he had already provided suggestions to make up the budget shortfall by removing it from the current budget.

Public comment

The FBCC took public comment from nine speakers.

Suggestions for budget savings included:  eliminating outside legal contracts; cutting a proposed deputy city manager position; closer review of basic line items; eliminating dune walkovers where people clearly disregard them; better review of service contracts.

Retired city controller Patti Clifford raised questions about transparency and said that the placement of the half-mill conservation levy in the budget was misleading.  She had two pages of concerns that she agreed to send to commissioners for their consideration.

Former Commissioner Roy G. Smith accused the FBCC of having “champagne tastes with a beer budget.”  He said that the FBCC’s plans were too ambitious to be carried out all at once, and that the city needed to get back to basics.  He said that the FBCC was “screwing the people” with the proposed conservation levy.

Commission discussion continues

Commissioner Ross tried to allay fears about how the Conservation Levy would be used.  He said that the money would be “lock boxed” to be used only for land purchase, not staff or maintenance.

With respect to concerns raised by one speaker that the public had been kept in the dark about the budget, City Manager Martin explained that in developing the budget for the city he had first met with each department head and then shared his proposal with the commissioners individually to allow them to ask questions and  provide input.  He emphasized that once he formally presents his proposed budget, the budget becomes the responsibility of the City Commission to modify as they see fit while keeping in mind the restrictions imposed by their approval of a tentative millage rate.  He said that the purpose of the budget workshops and public hearings is to let the citizens provide input to the commissioners.

Following public input Kreger restated his belief that pressure on the general fund could be removed by using impact fees more effectively.  City Comptroller Pauline Testagrose and Kreger engaged in extended discussion over capital funds and the effect on the city’s reserves resulting from fund transfers.

Commissioner Lednovich interjected his concern that the FBCC should have been presented with two budget scenarios, one including paid beach parking revenues and one without.  He asked the City Manager and the Comptroller to suggest cuts to cover the elimination of the assumed beach parking revenues.  “The City Manager runs the city;  he is the expert in this.  Instead of the five of us sitting here struggling with this, they come back to us with a revised budget and recommendations for cuts.”

Ross still wanted to hear from Lednovich what services he would cut from a policy perspective.

Lednovich replied, “Commissioner Ross, I don’t think it’s a matter of cutting services.  My view is that for years and years and years the city put off improving its facilities.  What created that shopping list you gave us [at the beginning of the meeting]?”

Ross responded that when city commissions don’t want to raise taxes, maintenance and replacement projects get deferred.

Lednovich suggested that the reserve funds have built up because of those decisions.  “Isn’t it time to spend some of the reserve funds?” he asked.  “We would not jeopardize the city by going below the legally required 20 percent reserve mandate. But we could utilize the excess reserves to accomplish some of these things. That’s my answer.”

Currently the city has $2.5M over the required 20 percent reserves.  Lednovich suggested using $380K of that amount to fund the current shortfall.

Commissioner Phil Chapman echoed facilities concerns raised by Ross earlier.  “Those are all big ticket items,” he said.  “We are going to have to sit down and develop a plan to deal with these.”  He cited the aging Atlantic Avenue Recreation Center built in the 1950’s.  “We keep putting repair money into that building.  If you have an old car you reach the point where you say we can’t keep putting new parts into an old car.”

“We talk about the image of the city,” Chapman continued.  “The image of this city in a lot of places is old and tired.”  He asked the FBCC to consider an idea proposed by Sal Cumella, city  preservation planner, to establish a $30K rehab grant program for the Historic District.  “People talk about the historic nature of the island,” Chapman said.  “A lot of the character is the historic buildings downtown, and we are slowly losing those.  And, like a tree, when it’s gone, it’s gone.  Just ride along the ocean.  Those old, cute beach cottages are being sold and replaced by big, tall things.  Those weren’t representative of the character of the island when I moved here.  As far as I’m concerned, with the size of this budget, a $30K start up fund is not a lot and I think it would help us do a lot to preserve our character.”

Chapman went on to say that the budget process can be analogous to the squeaky wheel process.  “We have groups in this city that want a particular thing.  … People need to step back and view this city as a whole.  But unfortunately we are divided into parts, and the parts are not coming together to make the whole.  I would like the FBCC and the public to come together to decide what are we going to do about a new City Hall.  Some day it is going to have to be rebuilt.  The fire station.  They are making firetrucks wider with new technology and safety features.  They don’t fit into the fire bays.  The Atlantic Rec Center.  Personally it is a little embarrassing to go into the auditorium, because it’s tired.  It’s lived a useful life and it’s time for a reborn rec center.  I have major concerns about all these big ticket things coming down the road.”

Kreger commended the city’s committee that put together the Capital Improvement Plan this year for the first time.  He said nothing was deferred.  In years 2-4 of the plan major projects are slated to be tackled.  He said that capital improvements are being brought into the city’s annual visioning process, so the FBCC will be working on that this winter.

Mayor Miller asked the City Manager to look into tapping reserves and funding some items from impact fees.  “I think this has been a productive meeting,” Miller said, “and we have several more meetings ahead.  I hope we get more of the public here for input.”

The next FBCC Budget Workshop is scheduled for August 13 at 6:00 p.m.  in City Hall Commission Chambers.