To spend or not to spend? That is the question.

Submitted by Suanne Z. Thamm
Reporter – News Analyst
April 8, 2020

Fernandina Beach City Commissioner Mike Lednovich has been vocal on social media in the wake of the Covid-19 pandemic in calling for the City to cut back or delay expenditures on what he deems “non-essential” activities or purchases.  He carried that message to his fellow commissioners at the April 7, 2020 Fernandina Beach City Commission (FBCC) meeting.  

Lednovich voted against almost every Resolution that authorized the expenditure of funds, sometimes joined by Vice Mayor Len Kreger.  He was careful to explain that he did not necessarily oppose the project or the expenditure, but he questioned the timing of committing City funds at a time when the impact on businesses ad residents of the Covid-19 pandemic is not yet known.

In the absence of any definition of “essential services” not all commissioners followed Lednovich’s line of thinking. In explaining their votes on each proposed expenditure, ranging from record scanning in the Building Department to grounds maintaining equipment for the Golf Course, other commissioners explained why they believed the expenditure should be approved.  

Building fund expenditures

There were two Resolutions proposed to authorize expenditures from the $3.3M Building Department fund.  By state law, this fund may only be used to meet needs of the Building Department.  Resolution 2020-42 authorized an amount not to exceed $251,400 to scan Building Department records.  Lednovich was joined by Vice Mayor Len Kreger in opposing this Resolution, which passed on a 3-2 vote.  The dissenters, without disagreeing with the need for the work to be done or the restricted nature of the Building Department funds, seemed to oppose the expenditure on the grounds that it funded work that did not need to be done now and would send a bad message to citizens.  The second Building Department expenditure (Resolution 2020-52) called for authorizing $88,715 from the same restricted fund for a new vehicle and improvements to the Department’s workspace.  Lednovich was the sole dissenter when the vote was taken.

Increase recruitment budget

Lednovich initially opposed adding $3,103 to the previously approved contract with Strategic Government Resources, Inc. to increase recruitment advertising for the now vacant Human Resources Director position and the newly created Deputy City Manager position.  Recruitment efforts have been disrupted by the pandemic. City Manager Martin explained that with the anticipated retirement of Utilities Department Director John Mandrick this fall, the City will need an engineer to replace him.  The job of City Engineer will be taken over by the Deputy City Manager, in addition to other duties.  With that explanation, Commissioners unanimously approved Resolution 2020-53.

Golf course equipment

Resolution 2020-54 authorized the purchase of a greens mower, aerator, and sand pro spiker from Wesco Turf, Inc. in an amount not to exceed $64,868.39 for the City Golf Course.  Lednovich questioned this purchase since the Golf Course is currently closed.  He also suggested that the City might be able to get a good deal on used equipment following the pandemic, when it is anticipated that many golf courses will close.  Commissioners Chip Ross and Phil Chapman argued for approval, citing the need to keep the greens in good shape now with new equipment covered by a 3-year warranty.  Ross said that in the past the Golf Course has purchased used equipment that hasn’t always proven to be a good investment.  He added that one of the mowers doesn’t work at all.  The Resolution was approved on a 3-2 vote, with Kreger and Lednovich voting in opposition.

Northeast Florida Regional Council (NFRC)

Commissioners voted 4-1 to approve Resolution 2020-51 which authorized the NFRC as a sole source vendor for the drafting of Comprehensive Plan Amendments to fulfill legislative obligations in an amount not to exceed $25,000. The State of Florida has mandated certain changes to the City’s Comprehensive Plan which must be in place by September 30, 2020.  Commissioner Lednovich, who did not disagree that the mandated deadline must be met, questioned whether consideration of the matter could not be put off for now.  Other commissioners argued that obtaining the services of the NFRC on this issue was crucial, and that it would take several months to complete the work, which must also be approved by the FBCC.  Lednovich cast the only opposing vote.

Beach Habitat Conservation Plan

All the Commissioners, except Vice Mayor Len Kreger, voted against Resolution 2020-43, which would have awarded RFP 2019-06 to Quest Ecology, Inc. in the amount of $99,500 (50% City and 50% Nassau County) for the preparation of a Beach Habitat Conservation Plan. 

While Commissioners understood the need for such a plan, they questioned moving forward to pay a consultant with City funds when grand funding would soon be available for the work.  Commissioner Ross said that he had verified with both the granting agency and the City’s Grants Administrator that grant money received could not be used to repay the City for the same work already funded.

The questions Lednovich asked with each proposed expenditure:  Do we have to spend this money tonight?  What are the consequences of delaying a vote?

Discussion

At the end of the meeting, Lednovich called for discussion among Commissioners on non-essential spending and non-essential projects.  In an email to City Manager Dale Martin, Lednovich wrote, “[T]he economic and social ramifications as a result of the coronavirus crisis on the City/Island likely will be dramatic and long term. My belief is that the City should begin to be proactive in the judicious use of taxpayer resources going forward and in budget preparations for 2020‐2021. Can we have recommendations from you and City Department Heads on belt tightening measures to enact in anticipation of a significant economic downturn and subsequent recovery period for the Commission’s consideration?”

In introducing the discussion Lednovich asked, “How big of a hit are we going to take [as a result of the pandemic]?”  He said that estimates for certain “at risk revenues”, e.g. fuel tax, sales tax, are projected to fall off for the remainder of the Fiscal Year.  He reported that the Tourist Development Council is anticipating a 50 percent drop in revenues. He stressed that he is not saying that all spending should cease, but that the City should “suspend, postpone, or defer” non-essential expenditures and projects.  “Now is the time to be conservative with taxpayer assets,” he said.  He expressed opposition to continuing with consultants and plans for Front Street, the Alachua rail crossing and the waterfront park.  He also suggested backing off TopTracer because of projected tourism drop-off.

In addition to calling for a definition of essential services, he also asked, “What is the role of the City in economic recovery for small businesses trying to survive?”  He cited information provided to him describing measures taken by other cities to help their local businesses.

Vice Mayor Kreger agreed with Lednovich that this is the time for the City to tighten its belt.  He cited projections that Florida will be the fourth worst hit state economically because of the drop in tourism.

City Manager Martin said, “Many of you fail to give due credit to the staff we have.  If you look at the City Comptroller’s report you will see we are nearly $16M underspent on our expenditures.  We had a $13.5M fund balance as of February 29th.  I think this staff is doing a darn good job of evaluating what is essential and non-essential.  Yes, we need to evaluate the situation as we go forward.  But I believe that this city is in a strong financial position.”  With respect to consultants, Martin added that many are paid out of restricted funds, e.g. airport, stormwater.  He said that the City has not “spent a dime” on City Hall needs assessment.  “I agree that we don’t need to spend money on that right now.  But we can move forward with evaluating the responses we’ve received from potential bidders.”

Martin continued to express confidence in his staff.  “We are moving forward at your direction,” he said to the Commission.  “If you want to change direction, you must tell us.”

Commissioner Chip Ross said, “I believe the key objective should be to reduce expenses without reducing essential city services.  I would argue that in many ways the City has already cut non-essential services.  We have essentially shut down the parks and recreation services, which constitute 17 percent of the City Budget.  Police, Fire and Rescue and Emergency Services may need to increase their budgets during this time.  The other key objective should be to maintain strategic investments that will allow the City to move forward after we get through this.”

Directing his comments to Lednovich, Ross continued, “You are correct.  When a thousand people almost overnight suddenly lose their jobs we are in a crisis.  But we need to realize that the City has been frugal over the years.”  He cited the City’s drop from 335 employees ten years ago to 267 today.  He also cited the City’s strong reserve fund of more than $7M.  “I would argue that many of the things we do today are essential and will continue to be so during the recovery.  We need to be able to look forward to the future and take advantage of the situation to do things that we perhaps could not do under normal circumstances.”

Lednovich agreed with the City Manager that City staff has done a fine job and that his remarks were not to be interpreted as criticism of them.  He said he was asking for commitment from other commissioners not to “spend another dime” on TopTracer or designs for a waterfront park.  “I want to give the City Manager specific direction on where we don’t want him to spend money.  There are two examples I just gave you.  I think the City Manager fully understands not to spend any money on the City Hall assessment.  Unless we take formal action, he is operating in a vacuum.  This is a crucial time for us to give direction.”

There was no consensus among Commissioners to act on Lednovich’s suggestions.