The budget before the Brooksville City Council on Sept. 5, 2017 is the “stepping stone” for council to make the necessary changes in order to preserve the “long term stability of the city of Brooksville,” explained Interim City Manager Lyndon Bonner.
“We’ve listened to what the experts have told us. We’ve listened to what the citizens said and we’ve acted upon all the input of the professionals. It has yielded you a document I’m very proud to say works from all the perspectives I can come up with,” Bonner continued.
Considering all budgets said Bonner, “You have a $46,734,404 ‘all in budget.’” Specifically, the general fund portion of that is $7,239,708 and the city is basing their budget on a 98% rate of return on millage.
After at least an hour of discussion as well as a tie vote on adopting the proposed millage rate the city council of four members (with Council Member Bernardini absent) approved a tentative millage rate of 6.9763 which will yield a 6.89% increase on ad valorem tax revenues over the current year’s rolled back rate of 6.5266.
The council faced an initial stalemate on the vote for adopting the tentative millage rate with Council Member Kemerer and Mayor Battista in favor of the 6.9763 rate and Council Member Kahler and Vice Mayor Erhard voting against it.
However, it was eventually worked out by way of a motion to send a letter to the county in regards to an MSTU. With agreement on sending the letter, Kahler switched her vote for approval of the 6.9763 tentative approval rate. In this way, she felt that all options would be on the table in order to fix the budget for FY 2019.
Kemerer began conversation relating to keeping the millage at the same rate as FY 2017 prior to the tie vote.
Kemerer stated, “At one point in time there were three people on the dias that believed we should possibly use the existing millage rate, the 6.6426. If in fact that had been done, we had decided to leave it at that point, was it your intent that we take additional monies out of the budget or we fund that differential out of the reserves? It would have been about $130,000 cut.”
If taken out of the reserves Kemerer said it would have put the reserves at $450,000. “Since at one time, three of you were for that, I just wanted to put that out there to see if we could get any discussion on that,” explained Kemerer.
Erhard explained, “My thought on that was consolidation of departments.” She said that there was discussion but nothing beyond that. She leaned towards consolidating departments in order to take the $130,000 out of the budget, instead of reserves. Her position proved to be still in favor of making the reduction as she voted against the 6.9763 rate.
Kahler stated that if she was going to vote for the 6.9 rate, then she wanted the ability to tell the residents that they are doing all they can to fix the budget problems and all options are on the table in order to get the budget under control for next year. She did say that she would lean towards taking the $130,000 out of the reserves rather than a budget cut.
In regards to the budget and proposed millage rate she said, “We really haven’t fixed the problem. We’ve bandaid-ed it to a different degree to what we’ve bandaid-ed in the past. ”
Kemerer said that if they did take the $130,000 out of reserves to allow for the lower millage rate of 6.6426, it would put the pressure on them to make the necessary changes quickly.
“It would put us under tremendous pressure to act and act quickly,” said Kemerer. “We would have to agree that there would be major changes in how we do business… The question becomes do we want to put additional pressure on ourselves to make that happen?”
Kahler said, “I would personally prefer to have the pressure on us to make sure that we are doing what we have been talking about for the last few months.”
Erhard agreed, “I concur that under pressure we’ll make that happen…”
Battista did not feel the same way. He remarked, “My fear is that we’re not going to get an MSTU (Municipal Service Taxation Unit). My fear is we still need to stay with our fire department and neither one of those two fixes are going to come about and we will have then put ourselves in the hole on the millage and can’t recoup… I think we’re all mature enough to do what we said we’re going to do and we don’t need to force ourselves to do what we said we’re going to do.”
He said they need to start building the reserves up. He stated, “I don’t see why we have to give up what we’ve worked on for 50 plus hours of budgeting when we don’t know what the future is regardless of our good intentions to proceed.”
In response Kahler stated, “We are surrounded by unincorporated areas. We are one city and people can move two houses away and get out of our tax structure.”
She continued, “We are increasing the fire assessment because we are offering them a better service. We’re getting them that sixth person so that they can have those two vehicles. I think a very easy case can be made in the increase to the fire assessment because they are going to get a higher value… Right now I don’t know how we would make that argument on the general fund side. It’s basically us still doing the same thing, but charging more money, which because we sat here makes sense to us, but does not necessarily make sense to our constituents or business owners…”
Mr. Bonner explained that taking the $130,000 out of reserves to keep the rate at 6.6426 will cause the city to drop below the 3% level they are required to maintain.
He stated that the wheels are turning to find solutions to the issues as they have been in communication with both the Sheriff’s Office and Chief Hechler of Hernando County Fire Rescue. They are trying to find other means of revenues, will be undergoing a water and sewer rate study, addressing deferred capital issues, examining employee benefits and retirement plans.
Bonner said, “Please understand that the $130,000 is on top of everything that’s not being done this year.” This includes not buying new vehicles and the hard time the city is facing in terms of staffing possibly due to salaries.
“I’m pulling for you and I know you’ll do the right thing,” he remarked encouragingly.
In terms of capital improvements, Kemerer said, “I’m not sure we really understand how big of a problem we have to deal with.” He said that Parks and Rec Director Mike Walker has been waiting 5 years for capital improvements. The city must figure out how to control employee benefits salaries but still remain competitive.
“Having listened to Mr. Bonner it does bring back up the problems that we truly have. $130,000 is a small amount in the reality of what we’re going to have to face next year. I’ll go on record. I’ll do this for one year to give us the $130,000, but our commitment should be to get it back down to last year’s rate next year. ” Kemerer stated, “I will not vote again to raise the millage rate.”
There was discussion about holding a referendum to ask the voters if the city should keep it’s fire department. “It needs to be done in early spring,” said Battista.
“It’s something the city manager candidates are already aware of so I think you’ll be doing this in the fall or winter,” said Bonner.
Battista gave the following words of encouragement. “We are growing. We have Freedom Gardens ninety-some odd apartments, they’re not on this year’s tax roll, but they will be next year. Flagstone Pavers is basically going to double their operation. They’re going to load up with employees with the largest number of employees we’ve had within one entity. We have a number of restaurants coming in, houses… There are businesses coming here that are going to give us a little relief.”
The roll call vote on the tentative 6.9763 millage rate was 2-2 with Kemerer and Battista voting for approval and Erhard and Kahler voting against it. Council Member Bernardini was absent for the vote.
Discussion ensued on how to proceed. Kahler wished to add conditions that the city would contact the county in regards to a Municipal Service Taxation Unit. The council recently voted against sending a letter to the county in support of an MSTU.
Erhard stated, “If we’re listening to the people who we represent and work for, if I remember correctly, I’ve heard a number of those people say that we still have ‘overhead’ that’s the kind word for fat in my opinion. We talked about alternatives, we spoke of exploring options, but we never followed through and did those things so now we’re going to sit up here and we’re going to push this budget through. We as a council should have worked a little bit harder to explore those alternatives and those options. I’ve made my decision, I’m not going to change it.”
In regards to an MSTU Kemerer stated, “We have no power with the county. We never have. We never will. We need to be careful of our expectations of what it will do for us because the county won’t care…They will want to take the whole Sheriff’s budget out of their budget and make it a full MSTU. I’m in favor of the patrol side of it. I’m not so sure I want to opt out of all of it… I don’t look at it as a primary way to solve our structural problem. It is a piece of it.”
He said that he is still in favor of sending a letter to start the process in order to get some answers. Addressing Kahler, “I’m hesitant about you making it a condition of the budget. To me the 6.9 is a fundamental decision. I respect the decision of the Vice Mayor. She says we have $130,000 of costs that needs to come out. That’s something we struggled with and we didn’t come up with $130,000 to remove.”
As far as expenses, Kemerer stated, “The ones that are hurting us the most are the ones we cannot control.” He listed workers comp, pension and health insurance. “Not only are we paying more but we are increasing future liabilities at an extremely fast rate.”
“Again I haven’t been here all my life. I don’t have the emotional attachment that everyone else has. By nature I look at things from a numbers standpoint. Based upon what I know today, I will tell you, I do not think this city will survive if you maintain a defined benefit programs, period. The city is not going to survive if we’re going to pay extremely high premium on services we provide,” said Kemerer.
“We’ve never gotten quarterly financials. Now with full staffing are we going to get that quarterly information,” Kemerer asked Bonner.
Bonner replied yes.
“Everyone wants to cut the administrative side. Without the administrative side we’ll end up where we were back in March, April, May- we didn’t know we were losing money. Maybe it’s because our accounting staff wasn’t fully staffed,” said Kemerer.
Kemerer and Bonner said they avoided a 12% increase to ad valorem by taking $270,000 to $280,000 out of the healthcare fund and $100,000 in fire truck sales.
Kahler agreed that they cannot depend on any one save. “There are dozens of changes that are going to have to be made across the board. So far every option has been left on the table except for telling the county we are interested in exploring the option of an MSTU. I don’t know that I will even want it when the numbers come. But we’re not going to get numbers unless we ask and the Sheriff is not the right one to ask because we already know that he does not want one and he does not actually have the authority to implement it…”
Battista stated that there will always be knocking heads between the Sheriff and BOCC because even with an MSTU- the BOCC has to approve the millage for that in order to support his budget.
Battista said it’s very commendable to give city of Brooksville residents a break, but does nothing for their budget next year and very possibly would cause them to have extra expenses. “It probably adds a mill on costs that we would have to pay the Sheriff for services rendered…”
Kahler stated that there could be a savings according to the research she has done and it shouldn’t be dismissed.
Discussion ensued on the original letter Kahler drafted to request the county to consider an MSTU. Council came to agreement that instead of asking the county directly to consider an MSTU, they should rather send a letter asking them what they envision an MSTU would look like and what options the city has in its regard.
Council passed a motion to draft a brief letter to the county commission asking for their MSTU methodology and how it would impact the city. The motion passed 4-0.
Kahler made a motion to reconsider the resolution for the 6.9763 millage rate for FY 2018. The motion passed 3-1 with Erhard voting nay.
Kemerer moved for approval of the resolution to adopt the tentative millage rate of 6.9763. The motion was seconded and passed 3 -1 with Erhard voting nay.
The next item on the agenda was the approval of the resolution setting the tentative fire assessment rates which was approved 3-1. The tentative tier 1 rate is .97 per $1000 of improvement and the tentative tier 2 (vacant lots) rate is $135. Erhard voted nay for approval.
The net proceeds for the fire department is estimated to be $803,877. Bonner explained that will be about $100,000 less of a burden on the general fund budget.
The tentative budget was also approved 3-1 in roll call vote.
Update:
At the final budget hearing on Sept. 13., the city council voted to adopt the millage rate of 6.9763, 3 -2 with Council Members Erhard and Bernardini voting against it. The budget was adopted in the same manner, 3-2, with Erhard and Bernardini voting nay.