Submitted by Suanne Z. Thamm
Reporter – News Annalyst
February 19, 2022
At their February 15, 2022 Workshop, the Fernandina Beach City Commissioners (FBCC) discussed the Budget process for FY2022/23.
This item was placed on the agenda by Commissioner Bradley Bean, who suggested a different way to prepare the initial budget. Bean favored a process that would require the City Manager to first present the FBCC with a budget at the property tax rollback rate, as opposed to presenting a budget that best met the needs of the City, which he is required to do by City Charter (see below).
Sec. 71. – Annual estimate of expenditures and revenues for forthcoming year; submission to city commission by city manager.
The City Manager shall set forth an estimate of the expenditures and revenues of the city for the upcoming fiscal year. The estimate of expenditures and revenues shall be submitted in compliance with the procedures set forth in the laws of Florida. The estimates and budget so given and constituting the recommendation of the City Manager as to the amounts necessary to be appropriated for the ensuing fiscal year shall be supported with information giving the reasons therefore in such detail as may be necessary to afford the City Commission a comprehensive understanding of the needs and requirements of the various departments and divisions of the city government for the ensuing fiscal year.
Bean said that the budgeting process “weighs on his mind and on the minds of citizens,” some of whom brought this matter to his attention. Under the traditional system, Bean claimed, the initial budget leads with a tax increase. “That’s something I think that is backwards,” he said. “It should start from a place of no tax increase, and then we can discuss what we want to add to the budget. Instead of talking about what we can cut, we will talk about what we are going to fund. Let’s start with a budget that was proposed at the rollback rate, and then we can talk about it from there.”
Commissioner Chip Ross responded. He walked Commissioners through a detailed slide presentation that included sources of City revenue and traditional expenditures for those operations and projects funded by the City’s General Fund. He obtained his statistics from the City Budget books. Some of Ross’ slides appear below:
Ross, who included quotes from other Commissioners on several of his slides, presented the one below in response to Bean’s comment that he was willing to fund the employee pay raise and would cut expenditures in other areas. The table below contains operations and projects that Ross suggested as areas for consideration.
He said that growth is not paying for all the services citizens need. The difference between adopting the rollback rate and maintaining the current tax rate is $1.84M. Sixty percent of the City’s budget goes to salaries and benefits for Public Safety and Emergency Services; twenty percent goes to Parks and Recreation. That leaves twenty percent to cover everything else.
“One of the reasons it costs more to live in the City is because of the revenue devoted to Parks and Recreation,” Ross said. “It also accounts for 50 percent of the City’s capital budget.”
Ross built the following assumptions into his calculations:
- No subsidy for marina or golf course
- No staffing increase beyond current level
- Current operating expenses increase 5% due to inflation
- Fund items in 5-Year Capital Budget (approved by FBCC)
“Even at the current millage rate, it will be difficult to fund all the things we funded this year, along with the promised salary increases for City employees, Ross said. “We need to come to consensus on what we want, their priorities, and how we are going to fund them.”
Ross concluded his presentation with 6 questions posed to other Commissioners:
- Is the City Commission committed to funding the proposed salary/benefits increases discussed at the 26 January meeting?
- Is the City Commission committed to maintaining the current number of employees or are they recommending layoffs and not filling vacant positions”
- Is the City Commission committed to funding Police and EMS/Fire services to maintain the current level of services?
- Is the City Commission committed to maintaining the City roads at the current level of service?
- Is the City Commission committed to maintaining the current level of Parks and Recreation services?
- What services and funding is the City Commission recommending to eliminate or curtail to reach the level of funding provided by the rollback rate?
Following Ross’ 20-minute, detailed presentation, Mayor Mike Lednovich raised a point of order. He suggested that Ross was off topic, because the discussion was to focus on process, not the budget details. Lednovich said that following discussions with both the City Manager and the City Attorney, he relied on language in the City Charter Section 71 that directs the City Manager to submit a budget reflecting the City’s needs.
In referring to another part of the Charter, Lednovich said that if 3 members of the FBCC vote to do so, they can require the CM to also produce a budget at the rollback rate.
Vice Mayor Len Kreger supported the Charter language requiring the City Manager to present the FBCC with a budget that meets the needs of the City. “There is no way,” he said, “that the rollback rate can fund this city. No way. You start looking at the numbers [presented by Ross] reflecting the City’s needs, and I’m not sure that we don’t need a tax raise. In my mind the City is at a tipping point of where we are going to be soon. I want to see a budget prepared that meets the needs of the city.”
Bean stressed that the current discussion should be all about process, not the contents of the budget.
Commissioner David Sturges said, “I come to an easy and quick point about all this. Our Charter states that the City Manager is to bring this budget to us [reflecting the needs of the City], not at the adjusted rollback rate. If we intend to do something different than stated in the Charter, we need to change our minds or the Charter.”
Ross said, “I never ask someone to do something that is impossible. We made a promise to our employees [to increase their salary scales] that will add $2M to the budget. I’m sorry, but you can’t go to the rollback rate and spend an additional $2M. It can’t be done without cutting out all the things commissioners don’t want to cut out. Asking the City Manager to do something that can’t be done, because it is politically expedient, I think is absolutely wrong. Why would we spend the time and effort of City staff to develop a budget that can’t be done.”
Bean once again reiterated that his idea for change in the process “came from the people.”
“It’s not politically expedient; it’s doing the will of the people,” Bean said. “The numbers I believe and trust come from the experts: City staff. Right now everything is done by default, and we have to weed through the budget to find what shouldn’t be funded. That’s the backwards way of doing things, and that’s why I’m asking for this change.”
In response to Bean’s statement that he could “read the room” and determined that 3 Commissioners “are not on the team,” Ross said, “I disagree. I think we are all on the same team. We all need to be. And we need a City Manager who is giving us [a budget] that he believes in. The experts have already spoken. The numbers I presented came from the City Budget book.”
Lednovich said he responded to 5 emails all the Commissioners received advocating for the rollback rate. When he asked the writers what services or departments they were willing to defund to reach that, he got no specific responses. “We have kicked the can down the road for years,” Lednovich said. He agreed with Kreger that the City is at a tipping point. “We have agreed to seek voter approval for a $25M bond issue because we don’t have the money to do the necessary things not to upgrade the City, but to get the City back to normal.”
“If two commissioners — and I’m not doing it — want to place a Resolution on the agenda instructing the City Manager to bring us a rollback budget or an adjusted rollback budget, you are at liberty to do so,” Lednovich said.
There appeared to be no interest in such a move.
[Because Fernandina Beach City Commissioners (FBCC) may not discuss City business outside of advertised public meetings, the workshops held prior to each Regular FBCC Meeting have become an important means to allow Commissioners to legally discuss a variety of topics before those topics come to them for action in the form of Resolutions or Ordinances. The workshop topics are chosen by the individual commissioners. Because these workshops are “work sessions,” no votes are taken, although staff may receive direction to prepare an item for formal consideration at a future Regular FBCC Meeting.]