By Chip Ross
City Commissioner
September 21, 2020
Lednovich wrote:
“There’s fat in the proposed budget, so why can’t the city lower your taxes?
For the past six months I’ve been preaching about “non essential” spending by the City Commission. Mostly what I’ve heard in response, including last Tuesday’s public workshop on the proposed 2020-2021 millage rate, has been crickets.
In order to fund the proposed 2020-2021 city budget, the City Commission is being asked to reach into the City’s piggy bank — it’s reserves — to the tune of several million dollars. That will get us thru one year. What happens in 2021-2022?”
An Alternative Viewpoint:
First let’s acknowledge that the City Commission has already voted to cut $1.9 million from the budget and reduced the millage rate to reduce taxes. In November of 2019 the City hired a financial sustainability expert – STANTEC. They recommended that if the City set the millage rate at 5.853, the City would be able to offer the current level of services and pay all their debts for the next 10 years.
Following the advice of STANTEC, with the agreement of all City Commissioners, the City manager prepared a budget at the 5.853 millage rate, which represented a .5 mill decrease from last year and decreased taxes.
To further decrease taxes, the City Commission voted to further decrease the millage rate by .377 mills to the adjusted roll back rate which is the cost of inflation added to the roll back rate. Additionally, the City Comptroller received updated information from the State that predicted a $900,000 short fall in revenue from State sales tax.
The Commission directed the City manager to produce a budget that was funded by the adjusted roll back rate, the projected State revenue sales tax decrease, and fund $145,000 for non-profits.
To get to the “adjusted roll back rate”, fund the sales tax short fall, and non-profits, $1.9 million in expenses were removed from the originally proposed budget. This was accomplished by eliminating $500,00 budgeted to decrease the golf course debt, and eliminating $700,000 budgeted to decrease the marina debt. A code enforcement officer, a failing fence at a playing field, reduced travel and training, the purchase of 13 vehicles and several capital projects were also eliminated for $335,000. The remaining $135,000 came from money not spent this year.
The current proposed adjusted roll back rate does not spend any money from the 20% mandated reserve fund. In fact, the proposed adjusted roll back rate budget has $200,000 budgeted for contingencies.
Lednovich wrote:
“There’s about $450,000 in budget cuts that need to be made to get to the true rollback rate. The most uttered question when discussing lowering property taxes is: ‘What would you cut from the budget?’”
Alternative Viewpoint:
If $1.9 million in cuts isn’t enough, then an additional $450,000 of services needs to be removed from the operating budget to get to the “true roll back”. Cutting capital expenses or reducing the number of vehicles the City buys isn’t going help with future budget reductions. It only pushes the expense into the following years.
Cutting a service such as code enforcement leads to a need for fewer vehicles. Cutting certain Parks and Recreation services leads to less upkeep and fewer needs for equipment, facilities and personnel. If you want to make meaningful reductions in the tax rate, what services are you willing to cut?
Lednovich wrote:
“It’s asked as if every single line item in this budget is essential to delivering services to city residents and visitors. My pushback remains they’re not all essential.”
Alternative Viewpoint
It is true that a significant amount of the City budget funds non-essential services which many, myself included, believe are important to the quality of life in the City. For example, 17.3% of the budget or approximately $4 million dollars is budgeted for Parks and Recreation. Yet no one is recommending that the services of the Parks and Recreation Department be cut.
Lednovich wrote:
“To answer the “what would I cut” question, I’ve gone line-by-line examining the 492-page detailed budget document. Here’s what I’ve found:
The City Commission’s budget is $314,800. A large chunk — $185,000 — pays for City legislative lobbyist Buddy Jacobs ($85,000), City Commissioner salaries ($60,000) and the Main Street organization ($40,000).
But there’s another $70,000 that easily can be eliminated for the short term.
– $20,000 for miscellaneous under professional services. I’ve dealt with enough organizational budgets in my lifetime to recognize that budget items labeled miscellaneous is code for ‘fat.’”
Alternative View Point
$20,000 for miscellaneous expenses is a professional services contingency fund used to handle “unexpected expenses”. For example, this fund was used to pay for the ADA required captioning of the Charter Review Committee meetings.
– There’s $5,500 for a ‘visioning’ facilitator and food. Our city is populated with many former business consultants, one of whom I’m sure would volunteer their time/expertise to lead City Commissioners for its one day January event to identify key priorities for the upcoming year. The 2020 visioning session was led by City Manager Dale Martin. On the food front, I’m quite capable of buying my own coffee and bagel and going out for lunch.”
Alternative View Point
This should be eliminated and put back into reserves or used to help pay for replacing the downtown Christmas tree.
Commissioner Lednovich wrote on September 15:
“– $15,000 for 4th of July fireworks. The City is not in the entertainment business. It’s here to provide police, fire, water, emergency medical services, stormwater relief, etc., etc. Shouldn’t Main Street and the Tourist Development Council be reaching out to local business sponsors to fund this?”
Alternative View Point
Many of the downtown local businesses are having trouble meeting payroll. The Light Up Amelia 4th of July Festival is a community event. This should be funded.
Also, in the spirit of frugality it appears there will be no downtown Christmas tree this year. The greater than 12-year-old, 20-foot artificial tree usually placed in the marina parking lot appears to be in unusable condition. The $20,000 budgeted to replace the tree was cut from the initially proposed budget. I believe the purchase of a new tree should be funded.
Lednovich wrote:
“– Almost $10,000 to pay for City Commissioner ‘team development’ and money to attend the annual Florida League of Cities meeting. I team build with my fellow commissioners at every City Commission meeting and workshops. And, I attended the 2019 FLOC meeting in Orlando. Frankly, I believe that conference was a waste of taxpayer money.”
Alternative View Point
The Florida League of Cities strongly advocates for home rule with the Florida Legislature for cities like ours. They lobby for us. The annual conference provides an opportunity for municipal officials and senior staff to learn from municipal experts, share ideas with peers, discuss strategies for Florida’s future and hear about the latest in products and services which improve the efficiency and effectiveness of city governments.
Lednovich wrote:
“– Economic development/opportunity consumes another $15,000. What’s been the bang for the buck so far? Can someone provide me a viable example of return on investment?”
Alternative View Point
$10,000 of the $15,000 pays the City’s previously committed obligation to the State of Florida for giving tax break credits to Lignotech. In return Lignotech agreed to provide 50 high paying jobs.
$5,000 of the $15,000 funds the City’s contribution to the Nassau County Economic Development Board whose mission is to create, grow and attract business investment to Nassau County, Florida, and offer high-wage jobs to its residents and our future workforce.
Lednovich wrote:
– The City Manager has $87,283 budgeted for a Comprehensive Plan Revision Manager that’s now going to be used 100% to hire an outside consultant under the guidelines of “what can we get for $87,283?” How about we cut it half and start the process with $40,000.
Alternative View Point
The City Commission unanimously voted to rewrite the Comprehensive Plan and Land Development Code. Originally a consultant was to be hired at the expected cost of $250,000 to perform this task. An alternative plan was to hire a Senior Planner for $87,283 for up to a year to work with the Planning Board and other citizens to perform the rewrite cost at a much-reduced cost. It is unrealistic to believe that a qualified professional with the needed skills can be hired for $40,000. An alternative, which I am not advocating, is to save $87,283 and not do the rewrite.
Lednovich wrote:
“For those keeping score at home our tally is now $110,000 of the $450,000 we need.
– Under the non-departmental category there’s $50,000 on the line item “City Hall Assessment/Design.” This much I know, our current city hall needs repair and it’s bursting at the seams with people. The solution is to start relocating some departments to the Peck Center which has plenty of room. Let’s spend $20,000 on how to do that and save $30,000.”
Alternative View Point
The Peck Center needs $1.5 million dollars’ worth of repairs to the brick mortar or the building will fall apart. This should have been done years ago. Likewise, City Hall needs renovation. Hiring an experienced professional to determine the extent of repairs needed to City Hall is necessary to determine how much money to put aside for serious structural repairs. Moving people to the Peck Center will not fix City Hall.
Lednovich wrote:
“– There’s $40,000 budgeted in the Tree Trust account for a Bosque Bello Cemetery Master Tree and Landscape plan. How about using that money to actually plant real trees.”
Alternative View Point
I agree that trees should be planted with the Tree Trust Fund. However, this has nothing to do with the tax funded operating budget. The money for planting trees comes from fees generated by tree removal. This fund is not paid for by tax receipts.
Lednovich wrote:
“– Have the cellphones of city staff stopped working? Because there’s $26,080 to purchase 46 new cellphones in this budget. Also on the technology front is $17,325 for new desktop computers. That’s a total of $43,000.”
View Point
After looking into this item, it was brought to my attention that the vast majority of the $26,080 pays for cell phone service, not new phones. It’s tough to use cellphones without service plans.
The IT Department has an ongoing replacement plan for computers. The computers being replaced have become obsolete. Putting this off only moves it into next year’s budget. If the objective is to decrease the cost of computers than the services that require the computers should be eliminated.
Lednovich wrote:
“– The City has three vehicles – each with about 55,000 miles driven – slated to be replaced for about $110,000. No, keep them in the fleet until they hit 100,000 miles.”
Alternative View Point
Using mileage as the sole determinate of replacing vehicles underestimates the actual condition of many vehicles.
One vehicle is a 8-year-old police patrol car. Patrol cars are used constantly for 12-hour shifts. With long periods of sitting at idling speed and severe use, actual wear and tear on a vehicle is equivalent to 3-3.5 times the mileage. For safety reasons the City attempts to replace these vehicles every 7 years.
One vehicle is a 10-year-old Ford Escape utility vehicle. This vehicle is funded by the Utility Fund and has no effect on the general operating budget or the ad valorem tax rate.
One vehicle is an 11-year-old maintenance pickup truck that is in poor condition due to the working conditions that it is used for.
Putting off these purchases only moves it into next year’s budget. If the objective is to reduce the amount of money spent on vehicles the services that use those vehicles should be curtailed or eliminated.
Lednovich wrote:
“Now we’re at $293,000 in savings thus far.
There are two big ticket items listed in the Capital Improvements.
– $225,000 for expansion of the City Marina mooring field that will take years for the City to recoup its investment. Is it essential now, no.”
Alternative View Point
This one is somewhat complicated.
This expense is not part of the operating budget, but funded by the marina enterprise fund. Eliminating this expense will not impact decreasing the tax rate.
The project can be completely abandoned. However, there are consequences to that strategy.
The City Commission applied for and received a grant from FIND [Florida Inland Navigation District]. FIND only pays half of the project or $112,500 and only pays when the project is completed. To date it appears the City has spent approximately $115,000 planning for the mooring field. Half of that would be reimbursed if the project was completed. If the project is not completed, the City will have spent $115,000 with no benefit. Additionally, FIND takes a dim view of municipalities accepting grants and then not using the money. This may affect our ability to obtain grants in the future.
It would seem prudent to have the new management group evaluate this project and make a recommendation about how to proceed.
Lednovich wrote:
“– $250,000 to remove utility poles on Front Street and bury the lines underground. This also can wait.”
Alternative View Point
This project was recommended in the CRA plan in 2004. The subsequent waterfront resiliency plan recommends undergrounding these lines to prevent storms from blowing them over. To even begin the process of flood protection on North Front Street, the lines must go underground to provide the necessary space.
We can wait for a storm to take down the lines, allow the waterfront to be without power while we wait for FPU to replace the poles and lines, and allow the downtown to flood. Alternatively, we can begin to build the defenses to prevent storm and flood damage.
Lednovich wrote:
“Our total is $768,000 saved, more than enough to meet the $450,000 threshold to operate under the rollback property tax rate while making a small dent in the amount we take from reserves.
The City Commission will set the millage rate at its Sept. 22 meeting. There is a public hearing prior to the vote.
So “what would you cut?” There’s the answer.”
Alternative View Point
The “adjusted rollback rate” which cut $1.9 million from the City’s initially proposed budget, is calculated to produce the rollback rate and a “cost of living” adjustment for inflation. At this rate, the City will still likely need to readjust the budgeted expenses as new maintenance issues arise.
Like an old house, the City Commission is continually being presented with the additional costs of an aging City’s infrastructure. Our buildings are continually in need of repair and restoration. Realistically, with a rate that accounts for inflation, with budgetary shifts of money, and with dedicated staff, the City will find a way to maintain the services that support our quality of life.
chip ross
Chip, it seems just don’t understand the urgency in tightening the purse strings now in face of the significant impact the pandemic has had on our local, regional and national economy. Citing Stantec’s millage recommendation from November 2019 when COVID was yet to emerge is like saying all is OK since a November 2019 annual physical showed no problems but then the patient received a possible lung cancer diagnosis in March but has decided not to undergo any medical treatments and just wait it out and see what happens..
As I have argued all along, non-essential spending should be halted IMMEDIATELY except that funded by grants or revenue such as the federal forfeiture funds. A hiring freeze except for department head positions. The underground/above ground utilities financial evaluation has repeatedly shown that neither one has significant advantage over the other. Above ground is more susceptible to damage but less expensive to restore. Below ground is more storm proof but initial installation costs are significant and should there be damage, major expenses to repair.
If a household is facing a 30 – 40% cut in revenue, do they keep spending at their current level? Of course not, they trim their budget to the absolute essentials and avoid raiding their savings. That is what the City is facing and should do NOW!
Commissioner Ross’ detailed review of the proposed city budget shows an excellent understanding of city operations. He has worked tirelessly and wisely on our behalf and deserves our vote.
and the Main Street organization ($40,000).
This should have been cut years ago, it’s a redundant expense that City staff should be doing in-house. Private enterprise should be picking up the cost of Main Street, not the taxpayers. Ridiculous.
“It only pushes the expense into the following years.”
Well – isn’t that the whole point? To push current expenses into a future time when additional revenues are available?