FBCC: Retreat? Advance? or Maintain Status Quo?

Submitted by Suanne Z. Thamm
Reporter – News Analyst
January 27, 2022

On January 26, 2022, the Fernandina Beach City Commission (FBCC) held its annual visioning session at the City Golf Course Clubhouse.  Facilitated once again by local business consultant  Cindy Jacoby, this workshop differed from previous ones with an agenda that was heavy on the “how” as opposed to the “what”.  Commissioners discussed a variety of problems and issues facing the City today and grappled with balancing sometimes competing needs for City services and resources.

This Commission gravitated away from identifying more initiatives, concentrating on completing projects already under way such as waterfront resiliency efforts and addressing serious needs that impact services for City residents, such as City employee wages and affordable housing.

While different philosophies on the role of government are reflected among the five Commissioners, there was remarkable agreement on some issues and what appeared to be a determination to make serious decisions on behalf of the City within the first quarter of 2022.

Employee wages

The first topic on the agenda was discussed before an audience consisting mostly of City employees, anxious to hear what the future held in store for them with respect to increased wages.

Denise Matson, the City’s Human Resources Director, gave a sobering presentation on the problems of recruiting and retaining staff in today’s job market.  She explained that there have been no adjustments to salary ranges in over 13 years.  Turnover from 2018-2020 exceeded 20 percent with most reasons for leaving involving pay, but for the last fiscal year the rate increased to 27 percent.  [The state average turnover is 10 percent.] The average length of service for those employees leaving the City is less than 3 years.

Matson said that the Covid-19 pandemic has significantly altered the labor market.  The state unemployment rate reported in December 2021 was 3.9 percent.  Because of the City’s inability to offer competitive salaries, vacant positions are advertised for weeks or months until they can be filled.

She presented a 5-tiered action plan that the City is pursuing to address personnel issues.  Tiers 1 and 2 have already been implemented: raising the minimum wage last October to $15/hour and effective January 1, 2022 adjusting salaries of employees who serve critical needs to support City operations (Maintenance Technicians, Mechanics, Heavy Equipment Operators, Water and Wastewater Plant Operators).  The remaining tiers require action by the FBCC, including revising the Pay and Classification Plan effective April 1 for all employees except Directors.

In discussing Matson’s proposal, Commissioners wholeheartedly and enthusiastically endorsed the recommended changes.  They acknowledged that in a service industry, most of the funding goes to salaries for those who provide the service.  In Fernandina Beach, three-quarters of the general fund (property taxes) funds City salaries.

Commissioner Chip Ross, however, sounded a note of caution.  “I totally support this plan, but I don’t see how we can take $2M from the General Fund to pay for it.”  Currently the City budgets $17M for salaries.  

Commissioner Bradley Bean said, “My priority is people.  And I am against a tax increase.  We can have our cake and eat it too.”

Vice Mayor Len Kreger said that the City must remain competitive.  He also supported looking at management-level salaries (directors).

Mayor Mike Lednovich said, “The most valuable asset of our City is those people there,” pointing to the large contingent of City employees who occupied at least 40-50 seats in the room.

The FBCC individually and collectively agreed to support measures to raise the City salary budget by $2M in the  upcoming budget.

Ross said, “The people in this room [city employees] make the City happen.”  His comment was followed by a round of applause from the audience.

Mayor Lednovich concluded the discussion by stating, “This goal will be funded.”  The FBCC will vote on this item at their February 15, 2022 Regular Meeting.

Capital Improvements

Commissioners have regularly been forced to delay or abandon various projects and maintenance efforts for financial reasons.  They have frequently identified previous Commissions as well-intentioned but short-sighted people who “kicked the can down the road” on important matters.  As a result, the City has many needs ranging from beach walkovers to streets to waterfront resiliency.

The three biggest groupings of needs were identified at the workshop:  Completion of the Amelia River seawall and associated pedestrian walkways ($20M est.); Rejuvenating and repairing downtown infrastructure, to include sidewalks, lighting, landscaping ($20M est.); and replacing or repairing City Facilities ($20M est.).  Commissioner Bean also added trails to the list.

City Manager Dale Martin allowed that there is not enough money available in the annual Budget to fund all the City’s capital needs.  He reminded Commissioners that in the past they have discussed issuing a General Obligation Bond (GOB) to at least fund some of the identified needs.

Commissioners were in agreement on the need to continue investigating the mechanics and implications of bonding.  Consensus was that any bond should not exceed $25M.  City Staff was tasked to develop hard estimates for elements included in the three major groupings of needs to allow the FBCC to select which projects would be covered by money raised via the GOB.

Referred to as the “Smorgasbord of capital needs,” this information will be provided to the FBCC in March at which time Commissioners will select which projects, if any, should be funded via bonding.  Consensus among Commissioners appeared to be that they wanted to see proposals for tangible projects that would benefit citizens throughout the City, as opposed to benefitting just one area, such as the riverfront or the beaches.

Should the FBCC decide to go forward with a GOB, their recommendation to do so would go before the voters on a referendum, probably this November.  City Attorney Tammi Bach reminded Commissioners that should they decide to proceed with a voter referendum, the City is prohibited from advocating for or against its passage.  Any lobbying on the referendum’s behalf must be conducted by individuals or outside groups.

Language for the proposed bond question must be received by the Nassau County Supervisor of Elections by July 19 to appear on the November ballot.

Also noted was the availability of approximately $6.5M for capital improvements under the American Rescue Plan (ARP).  The City has committed $4.1M of that to water and wastewater improvements, but the remainder of the money has not yet been committed.  Martin advised Commissioners that the Treasury Department has issued new rulings that give localities greater flexibility in spending that money.

When asked to identify potential uses for the money, Commissioners cited a variety of projects ranging from City Hall to the seawall, stormwater mitigation, beach walkovers, trails and many more.

Waterfront

Commissioners continued to discuss the need, if any, for a waterfront plan,  whether commercial activities should be allowed in the proposed park, and the future of Atlantic Seafood.  They resurrected their discussions over the previously first approved then disapproved waterfront park plan.  Consensus seemed to be that neither the City residents nor the FBCC wanted any new commercial development in what will be the park area south of the boat ramp.

The exception to their ruling was Atlantic Seafood, which must move to make way for the new seawall/walkway.  After some discussion, Commissioners appeared to agree that they would support a new facility for Atlantic Seafood south of the boat ramp, limited to 1,500 square feet and a 500 foot deck.

The Atlantic Seafood business leases property from the City.  Their lease has 4 more years to run, and Anne Coonrod, who holds the lease, has consistently claimed that it is not cost effective for her to build new unless the term of her lease is extended.  The FBCC did not discuss the term of the lease, but directed the City Manager and the City Attorney to communicate their position on size of a new structure to Coonrod.

City Marina

Despite reconfiguration of the City marina, the need to dredge continues.  The next dredging cycle, scheduled for fall 2022, has been budgeted at $650K.  City Manager Dale Martin reported that in consultation with Oasis Marinas, the City Marina’s management company, plans to replace the existing boaters’ facilities building have been postponed so that money can be reprogrammed to dredging.

Commissioners discussed among themselves and with Oasis representatives possible ways to lower the costs of regular dredging.  Marina Manager Taylor Fitzsimmons and Oasis representative Eric Bradley reported that Fernandina Beach is one of Oasis’ most important properties.  Currently there are 42 long term slip holders with a waiting list of 75.

When asked how their other marinas cover dredging costs, Oasis responded that it is built into their business plan.  The FBCC asked Oasis to provide them with a plan soon on how marina revenues  from long term slip holders and transients could help offset dredging expenses.

Debt Resolution 

The City Marina currently carries $14M in debt, with $10M owed to banks and the remainder to the City’s Utility Fund. Servicing the debt costs $715K each year.

Commissioners discussed how this debt might be lowered.  The anticipated $7M reimbursement from FEMA will be applied, thereby cutting the debt in half.  Commissioners also discussed wiping out the internal loan that has been borrowed from the City’s Utilities Fund.  

The FBCC will formally discuss resolving the debt to the Utilities Fund at an upcoming meeting.

Marina Insurance

It would cost the City $362K each year to insure the City Marina against damage from wave action generally caused by hurricanes.   This would be a significant cost without which FEMA could refuse to fund repairs to future hurricane damage.

Commissioners instead directed the City Manager to direct an appeal to the state for a waiver of this requirement.  If granted, the waiver will clear the way for possible future assistance from FEMA should the marina receive significant damage during a storm.

Affordable Housing

A problem that has plagued municipalities around the state and the nation is finding ways to provide reasonably priced housing for people in the workforce.  The cost of land and construction has made home ownership out of reach for many of the people cities depend upon to meet the needs of their citizens for basic services, health and safety and education.

Vice Mayor Len Kreger reminded Commissioners that the City’s Comprehensive Plan requires the City to contain a variety of housing.  Other than Habitat for Humanity, there is no program to address the housing needs of low income workers in the City.

Confusion in the public’s mind is caused when they merge “public housing” with “workforce housing.”

Commissioner David Sturges, a builder by profession, noted the lack of available property in the City to build housing for middle to low-middle income earners.  He suggested that the City’s current inventory of public housing covers about 10 acres.  If the City could secure permission from HUD to build upwards over existing housing, the amount of housing available to low income families could double.

City Attorney Tammi Bach noted that such a move would involve an increase in density, which could result in a public outcry of opposition.  However, she agreed to check with HUD on the City’s ability to build more low income housing atop existing housing.

Closing Remarks

In summing up what could torpedo the actions the FBCC prioritized, the facilitator received the following comments from Commissioners:

• Upcoming elections and new commissioners who do not support the goals
• Budget
• FaceBook and other social media
• “The next big thing” that distracts the FBCC from its goals
• Keeping staff focused on their normal work and the identified FBCC priorities
• Misinformation about funding that spreads  through the community

Commissioner Bean called for a workshop on budgeting and suggested that this year the City start out by considering a rollback budget from the start. City Manager Martin reminded Bean and the other Commissioners that it is his job under the City Charter to propose a budget that addresses the City’s needs to the FBCC.  Once he presents it, it is up to Commissioners to decide if reprogramming resources or budget cuts are necessary.  “I present a Budget reflecting what I believe the community wants,” Martin said.

Commissioner Ross said that he came out of the workshop with two major goals:  paying City employees a fair wage and a reinforced belief that “if we work hard, we can have an attractive, workable waterfront.”