City Council - Regular Meeting

All right, good afternoon. It is Monday, July 20th, 1 p.m. This is the Marco Island City Council operating budget workshop. Jim, would you please call the roll?

Councilor Henry? Here. Councilor Goler? Here. Councilor Dome? Here. Vice Chair Champaign? Here. Councilor Schwan? Here. Councilor Gray? Here. Chair Palumbo?

Here. All right, guys, we're waiting to hear back from Councillor Gray. He was around the city this morning. We hope everything's okay. But we're going to start this for now, and we can have him catch up when he comes in. Councillor Henry, you've been kind enough to lead us in the Pledge of Allegiance. If you're able, please stand.

I'm going to give this one the liberty and justice for all.

All right, Councilors, before we get to the reason we're here, Item 4, Operating Budget Workshop, which will be led by City Manager Lucius. But before we get to that, since we're in our City Council configuration and preparation for our meeting tonight, and last time the light signs seemed to work much better. Councilors, are you okay if we stay with the light sign? Anybody have any objections? All right, so we'll go with light signs today. And with that, Casey, I'll turn it over to you.

Thank you, Council. I'm going to ask Martin. I just have two slides that I would like to show to introduce the budget and go through some big picture summary items. And then from here, we can go through the individual documents that are attached to your agenda. So as you'll see in this slide, our projected revenue for fiscal year 27, which starts this October 1st, is $34 million. It's roughly the same as your FY26 revenue. So we took three steps to balance the FY27 budget, and I just want to take a couple minutes to go through these three steps with you. The first is reallocating money within capital funds. The second is to postpone a FY27 bike lane project. And then the third is we made operating cuts within each department. And ultimately, these are just proposals from your city staff. The decisions are entirely up to the council. So the reallocation of funds. Our goal is to dedicate $1 million in capital to street resurfacing. In order to accomplish that, we are proposing moving 805,000 from the tide leveling project. You may recall we have about 2.1 million in that tide leveling project. The cost of that project is $5 million. We didn't get any additional state funding for that. So one of the questions I'm asking the council to consider is to abandon tide leveling and let's reallocate those funds. And then you'll see we still have about $195,000 dedicated to street resurfacing in the FY27 capital improvement fund, and that is to fund the $1 million. For the drainage, or what we know as the storm pipes that unfortunately collapse and have to be repaired or replaced, We want to dedicate $1.3 million. We tried to shortcut this last year, and we ended up having to use some emergency reserves to fund it. So, again, we would like to take that full $1.3 million from the tide leveling project to fully fund that. And then the Caxambas bridge replacement is $4.5 million. That will be the city's share. $7 million will be funded by FDOT. And there is currently $1.3 million in an existing bridge replacement fund, what you know as our bucket funds. So we want to move that bucket specific to the Caxambas bridge. We have residual $162,000 from the Winterberry Bridge rehabilitation project that we did. So again, we're just looking at cobbling together from every available account and move it into the CACSAMBUS Bridge. We already have $2 million in a CACSAMBUS Bridge fund, and then we'll put $1 million into the CIP for FY27. So by reallocating those funds, it reduces our transfer to capital by 3.5 million. Then we reduced it another 1.5 million by taking out a bike lane project. And again, this is completely up to the city council. If you want to have an FY27 bike lane project, the cost is 1.5 million. It is FDOT reimbursable. But we are still looking for about $2.9 million in reimbursements from FDOT. And I would feel more comfortable coming to you mid-year with a budget amendment once we start to get some of those reimbursements in and then presenting a bike lane project rather than having the city front the funds and then we're trying to find $1.5 million somewhere in the budget to fund that. And then finally are the operating cuts. And as we move through this workshop today, we can go through each department. And as you have questions about their operating budgets, you can look at what they cut or what they added to their budget and ask any questions that you have. Next slide. And this is just for the general fund. Once we get through the general fund, we'll have a quick overview of the building fund, which is a special revenue fund funded from building permits and inspections. And we'll also go through our water and sewer enterprise fund, which is completely funded from water and sewer rates. So just looking at the general fund budget, we are presenting you a balanced budget at millage neutral. We've added no new full-time employees or part-time employees. Every department made cuts. This budget does include health insurance increases at 6%, property and liability insurance increases at 10%, wage increases police are contractual at 6% fire increases are contractual at 4% and we added 3% for general employees the budget is under the spending cap however I want to bring to your attention the spending cap calculation that you have in the agenda packet has been recalculated and we believe the calculation is closer to around 300,000 under the spending cap and So as we go through the documents in the agenda, we'll put that new calculation up on the overhead and show you that calculation. And then also, as we'll talk about in the documents in the budget summary, you'll see that we have transferred $508,000 to the police pension. And that would make sure that we fund that current police pension liability. And then finally, there is a new law that was passed this legislative session and went into effect July 1st, and that requires a two-third majority vote for any millage above the rollback rate. So even if you stay at millage neutral, it will require two-thirds majority vote versus just a simple majority. So my recommendation at this point is that we just walk through the attachments that are on the agenda, if that suits the chair and the council, and then we can go through, um, and answer questions as they arise.

Dr. Lucius, before we move on, I'm trying to do the quick math in my head. Two-thirds of seven. Is that a supermajority, five?

Yes. Okay. I just wanted to make sure everybody understood that. So it will require a vote of five. Very good.

Excellent. Councilor Gray, welcome.

Sorry, I had a family emergency.

That's okay. Hopefully everything's okay.

That's good. All right.

Do we need to motion, Councilor Gray? And are we okay with the workshop?

No, I think just for the record, we'll note that he arrived. Very good. Councilor Schwan, you're up first.

Yes, Dr. Lucius, thank you for the presentation. I do just want to clarify two things. So none of the numbers that you presented us with included any assumption about the August referendum passage for the bond. Is that correct?

That is correct. Okay.

Then second, just for clarification purposes, the numbers also presented do not include the possible November referendum succeeding regarding Florida property taxes. No numbers were built in for that.

That is correct.

And will you be talking to council about the information that you shared with us today about what that number could be then? Yes. Thank you.

I see no other light signs. Casey, maybe this would be better said at the end of the meeting, but I'll just throw a quick blurb in. Councilors, we know last time we did this, unfortunately, when we set our budget last year, Councilor Brecknitz, Chair Brecknitz was not with us. He was in the hospital shortly after he was no longer with us. But I think he had a life well lived, and he spent it right on this dais till the end. However, we found ourselves in a unique position of a stalemate of three to three. Now we need to start thinking about a supermajority of five. So this is our time to ask all the questions, get together with department heads. We need to go into that September meeting To use an analogy similar with appointing of Councilor Dunn, we did all our homework ahead of time and made a quick, swift decision here because we did the preparation. I would recommend we treat this the same way. So when we get to that final meeting, there's no surprise. It takes five now. That's a big deal. So with that, Casey, if you want to proceed.

Thank you. So I'm going to propose that we just go through the attachments on your agenda, and we start with the FY27 budget summary. Okay. So this is a two-page document. The first page is just the general fund, and then on the second page you have the budget summary for your building, special revenue fund, and your water and sewer enterprise fund. And again, I would just draw your attention to the first page of the budget summary with your general fund. You can see a summary of your revenues, which make up the first half of the document, a breakdown of each department. And if you look along the top, you'll see... toward the right, center right, revised, I'm sorry, proposed budget 27. So that's the column we're focusing on today. And then you see a percentage, revised 26 versus proposed 27 gives you a percentage. And you can see where there has been a change in revenue and you can see the percentage changes within each department. Again, our goal being to make cuts within each department to balance the budget and then toward the bottom under transfers out You'll see the five hundred and eight thousand that I referenced that's for the police pension fund our debt service is up to 1.7 million and transfers to capital 2.2 million and I explained how we got to that 2.2 million by making those reductions and transfers from other projects in capital and So that leaves you with a balanced budget for FY27 at $34,318,633. And then as I said, I think it would be beneficial if we get through the general fund, and then we can come back and go through the building service fund and the water and sewer enterprise fund, if that's OK with you. The next document is the spending cap calculation. And because we do have a change, I'm going to ask that Melissa, our budgeting manager, put the updated calculation on the overhead so we're all working from the same document. And she can explain the difference between the document that was in your agenda versus the document we have now. But, again, the gist of it is we're under the spending cap. We believe at this preliminary date we're around $300,000 under the spending cap.

Good afternoon, Council. I'm Melissa Hinton, Budget Manager for City of Marco. Excuse my chicken scratches on it. I was making some notes for myself on this version Mainly the difference between the one that you see in your agenda packet and the one that you see before you on the screen is basically a recalculation of the projected expenditures for 26 that's a fluid number and Whenever I ran the support initially, I pulled it at the first of July, which was capturing all of our expenses year-to-date through the first week of July. And then you do a straight-line average of nine months, ten months, divided, you know, times 12 to come up to your projected income. So I re-ran the calculation again to get a more accurate number and dividing it by nine and a half months because when I pulled the data on Friday, it was exactly nine and a half months we were into the year and then multiply that times 12 to get your more accurate exact projected expenditure. So there's where the decrease came in. But we're still under the spending cap. Basically, what we're doing is for each line item, the first line is for your projected expenditures, which I trued up more accurately on Friday. Your transfer to your general fund is for your capital. In this particular case, it's showing $3,182,576 versus... million ninety seven that's showing on your document in the packet reason for that significant change is because we've had to go and use reserves during the year to pay for capital projects if you recall we did six hundred ninety seven six hundred thousand for For stormwater, for Justin, we did $2,000 for the fire hydrants, and there was another $400 and some thousand. So there's where your difference between, because this is a transfer, even though it's a use of reserves, it's being transferred to capital, so therefore it has to be counted in the spending cap for the current year. And then, of course, debt service was our exact number that we have to pay for our debt service for FY26. Then going through the rest of this, that gives you a total of... $32,918,894 as your total expenditures for FY26 projection. With that, you can deduct any expenditures for grants and gifts, $805,739. Enterprise funds, and that's the charges that we share, our shared cost allocation between what the general fund pays and then the utilities and building services pays us back for those charges. So that's what the $1,492,736 is for. That leaves us a spending cap of $30,000. $30 million. I don't know why I get my millions and thousands to do. $30,620,419. With that, you get to add back in for the new year, for your spending cap for the new year, you can add 3% general fund expenditures, which is your 3% increase from wages, and a 2.8% COLA increase, saying that's 857,372. And with that, I'm gonna put this back up on the overhead so you can see it. So if you'd like, we can get those to you. With the new numbers, we can get those to you. So that leaves you with a spending cap of $32,396,404. And our projected FY27 expenditures, again, with your deductions for your grants, gifts, and enterprise charges, you have $32,084,927. And you're under the spending cap by $311,477. And with that, I'll take any questions.

Thank you for the presentation. We do have some light signs. Vice Chair Champagne, you're up first.

Yeah, thank you very much. Good presentation. My personal opinion is we're stuck again with too little uh... coming in to support the necessities of the city particularly even the mid-year adjustment of three percent plus two point eight percent total of a five percent and we're already as a country running three point four percent likely to go closer to four percent by the end of the year so our purchasing power eats up whatever benefit we think we're getting by adding to the spending cap Because we have $300,000, so to speak, before we reach the top of the spending cap, if we chose as a council to spend that $300,000, $311,477, what effect would it have on the millage rate? Do you know?

There is in your sensitivity chart.

Let me see if I can have that at my at my table And while she's checking I'm assuming let me direct this question at the city manager dr. Lucius assuming We did choose as a council to consume that $300,000 by budgeting at the full spending cap. I imagine you could identify projects that would eat up that $300,000 without any difficulty?

Certainly.

What you see before you on the overhead is what you would need to bring in in addition to cover that $311,000. The reason I say that is because our spending cap is based on a balanced budget, right? So your expenditures match your revenues. So in order, even though we're under the spending cap, we would have to bring in another $311,000 to pay for that extra. So in this case here, you would, looking at a millage rate of 1.2770, if you wanted to add a tenth, that would bring in an additional $185,519. If you wanted to go somewhere closer to the 311, you're looking at the 1.2870 millage rate. That will bring in an additional 371,000. That would cover the 311 under the spending cap.

So to consume the maximum spending cap level, we would go up 0.02 mills.

That's correct.

I mean, folks, that's nothing to be concerned by. Anyway, I'll pass the baton.

I don't see any other light signs. I have a question. So what is neutral on this chart here? Is that the 1.2670?

That's correct. That's the same rate that we voted on last year.

And it's great that you're bringing it up. I was going to ask the same question so we don't have the same conversation as last year. Not that it was a bad one. We just weren't prepared to maybe... deal with it at the time as a 3-3 possible stalemate council. Casey, can I ask just not a specifics, but this budget, everything you've set, and I know there's some serious cuts in there. Does anything have to do with public safety or anything we should be concerned about in that aspect in the cuts?

Well, I think it would be helpful as we go through these documents for us to spend time going through each department's budget and allow you to ask specific questions, allow the department heads to answer. I will say when people think about public safety, they immediately think police and fire, and I did ask police and fire to make significant cuts, and they did. But I would also consider, as many of you know, I often say our water and sewer employees, our public works employees are also first responders. I also put IT in public safety because of cybersecurity vulnerabilities. So I wouldn't pull out one or two departments and say they are sacred from cuts. I think all of our departments are relevant and important and necessary to a high-functioning organization, and they all made cuts. Now, the impact of those cuts, I would argue, are manageable. nobody likes to make cuts but i will also say this is the new norm so i sent you a document today i also sent it to the department heads next year we if the amendment 3 passes we will see a million dollar cut to city revenue uh the following year it'll be an additional 2 million the following year after that it'll be an additional 2.5 million So this is the new norm, and I think for city employees to get used to finding areas where they can be more efficient and make reductions in their budget is going to be required moving forward. And by the way, part of the legislation, if it passes, requires that the city have a public workshop called a 10% reduction workshop in which we demonstrate how we can reduce 10% from our budget. And we haven't even gotten close to 10% in this budget, and it was painful. But that's the direction we're moving in. So long answer to your short question. I apologize for that. But yes, every department made cuts, and you can hear from each department head on where they will feel those cuts in their daily operations.

Thank you, and I appreciate the hard work. Before I turn it over to you, Vice Chair Champagne, you are correct. We, in my opinion, were fiscally conservative. We led the way. Florida now is almost validating that they want to act like Marco, but we did it eight years in advance. So there is some challenge to that. And you have to admit the spending cap was artificially suppressed, similar to the Save Our Homes, because we had eight years of it, but nobody could foresee this was going to be the direction of the state. With that said, we're going to have to make some tough decisions. And your light sign is on, so you're up next.

Yeah. Melissa, I apologize because I gave up the floor too quickly. I noticed on your chart that you indicated red or orange whatever color it was the spending cap max was actually generated 1.4 million dollars I believe the number was and I I think it was like point zero eight millage points up and I guess I'm wondering why you said it was the maximum spending cap was a smaller number Yeah, see where it says maximum allowable by a two-thirds vote, which is a new requirement, is 1.347. I think you previously said the max would be 1.287.

The 1.287 is if you wanted to bring in enough to cover the $311,000 of the spending cap overage.

Then I'm confused. What does the maximum allowable mean?

That is a number that is generated by the state. What it is, it takes your rollback rate times 110% to get you to your maximum millage allowable.

Without a- Oh, maximum. I see the difference. It has nothing to do with our spending cap.

That's correct.

and i just made this as a note on my sheet so for conversation purposes this would be the level if you wanted to go that high which you know um fine with the state but we couldn't get it through because that's violates our spending that's correct all right all right clear i hope clear to everyone my mistake i didn't understand the interpretation there but i do now okay all right so we're really looking at 1.2

eight seven if we chose to use at spending cap level that's correct okay thank you and also just one clarification because this new uh bill that went into effect july 1st it used to be that the maximum allowable required a two-thirds majority vote now the maximum allowable requires a unanimous vote and anything above rollback requires a two-thirds majority vote

So if we, let me clarify that because that's a new point. If we chose to go to maximum spending cap levels, We would need 7-0 vote.

No. So if you go to get the extra 371,000 at 1.287, you just need the two-thirds majority vote. If you get all the way to the 1.347, you need a unanimous vote.

So that two-thirds is not accurate there? It's unanimous, actually?

That's correct. Okay.

Because that just went into effect a couple weeks ago. That's correct. My chicken scratch was before this new bill came out and was passed.

But to clarify, we can't go there because if we tried to go to 1.347, we actually could not go there because it violates our spending cap.

Well, you can raise as much revenue as you want. You can't spend as much revenue as you want. That's correct. So you could raise it and put it in reserves. You can't spend it. The only a bit you can spend is that extra 311. If you raise an extra 1.4, 1.1 of that would have to be socked away into emergency reserves.

Yeah, I'm not so sure that's a wise idea under the financial conditions we're living in these days. But nonetheless, okay, thank you for the clarification.

Vice Chair, if you look at the numbers, the sad part here is we're talking about $1.484 million. I don't want to throw the citizens' money around, but peanuts in today's world with the way things are going up. But that's where we find ourselves, where the cap meets the possible referendums and unique time, is it not?

I just reiterate for everyone's memory as we get into the details by department, inflation rate in the country is definitely going to be in the neighborhood of 4% this calendar year. So whatever benefit we get by the 3% plus 2.8% gets eaten up almost immediately. So in effect, we're staying flat. We need to plant in our head, even though we're granting more money, we're staying flat because the money we're granting is diluting due to inflation rate. And I may be charitable saying it's going to be 4%. It could be higher. Who knows? We'll see.

All set. Councillor Gray, you're up next.

Taxes collected, we show on this chart, at 96.5%.

That's correct.

I'm just intrigued why our yield isn't 100% given the nature of those revenues. It's just looking for some additional revenue. Where does the leakage come from between 96.5% and 100%?

My understanding is the people who take advantage of the discount when they pay their revenues in November – Okay. November, December, January, they get that 4%, then 3%, then 2%. So you've got your discount. People are paying early, so therefore you don't collect 100%.

I pay early. Everybody. So that explains it. So really we're just factoring in the legitimate, intelligent discounts that people are going to take.

That's correct.

Okay, good. I thought maybe we were losing some revenue to unforeseen forces. Thank you for that. You're welcome.

Thank you. I see no more light signs on Casey.

Okay. The next document is the, uh, FY 27 millage calculation. That's the next document in your agenda packet. And it does, um, include all the calculations for millage neutral gives you the property value. So FY27 adjusted taxable value, 18.9 billion. And then adopted millage neutral, 1.267 gives you the ad valorem proceeds of 23.3 million. Oh, I'm sorry, the 23.3 million is from FY26. The projection for 27 is 23.5 million. And also on this document, it also shows what the rollback rate would be, which would be 1.2319. There's also a chart at the bottom of this page, which is kind of interesting because just talking about millage and the different millage rates, if you look back 10 years at FY16, our millage rate was over two mills. And today we're at 1.267. And then the next document, if there are no questions about that, goes through the capital improvement plan and our capital equipment replacement plan. I don't want to spend too much time on this because this is our operating workshop, not our capital workshop. But I did ask Melissa to include these documents since the way we balance the budget was by essentially, you know, Funding these capital projects by reappropriating funds from other projects. And again, that has to be approved by the city council. You're not making any decisions today, but certainly getting direction from you on if you're willing to reallocate the tide leveling funds, postpone the bike lane. Those things are how we reduced our capital transfer, which allowed us to balance the operating budget.

Casey, before you go on, can I go back one? I was going to try to catch you before we moved on. Just a quick maybe statement kind of question. Our millage you said was over two, correct?

Yes.

What it doesn't take into account, though, is the reason it was rolled back is because the property values went up so significantly in value. You hear me talk about the school board. I love the school board. I love the kids. But you hear me talk about how that went from $800 million to $1.7 billion because property values went up and nobody rolled it back or adjusted it. It just kept feeding the budget. So hence the reason we're at a lower rate, but we're still bringing in more money correctly than than 16.

Yes Yeah Thank you spot to clarify that Would you like to move on to the Departmental operating budgets or is there any feedback or questions about the millage rate or about the strategy for the capital improvement plan?

counselors any light signs before I move on

I do have one question for Dr. Lucius. We've been listening about this spending cap for years and years. How did that start? Was that a condition of becoming a city in 96?

It is in the charter, the city charter, which was originally drafted in 1997, and then I believe it was updated in 2010. I don't know if that was added in 2010 or if it was originally part of the establishment of the city and the city charter. But the city charter does place that 3% spending cap.

How can we change that, if we can change that at all?

It would go to a vote of the residents. Any amendment to the charter would have to be voted on by the residents.

Okay. And you said that we could raise the mill rate, but whatever excess beyond our spending gap goes into emergency reserves.

Correct.

Okay. It just seems to me we're the little Dutch boy. We're putting our fingers in the holes in the dike, and we keep having to move because of this cap rate. I think looking down the road long term, The combination of the cap rate and the rollbacks was a double whammy. We got kicked in the butt twice here. And we need to correct that long term. And I think it would be to get a referendum and talk to the people. This can't go on. We can't predict the future. And if we like our island the way it is, we like our swales or our medians and our cul-de-sacs we like our parks somehow we got to pay for this there's no free lunch and i think it would be upon all of us to get it out there and see what the public thinks do you like it enough here that you know i see all these signs save the police save the police well let's pay for it i'm i'm retired i'm on a fixed income but i'm not willing to write the checks that i need to so i think we need to go out and fix this once and for all for the future I was always told, when you become a team member of something, try to leave it better than when you got here. Now, I'm only here for a short time. But I think we need to get our stuff together here. I've got to watch my language. And look at this long term. It may not be popular, but I think we need to do something like that.

If I could speak to that.

Please, absolutely.

So thank you, Councillor Doan, for bringing that up. And we did have some discussions about this earlier in the year about would it, you know, if we were putting the bond on the ballot and then also a referendum to change the spending cap, we thought it would be too excessive to put both of those on this ballot right now. But I certainly do understand your point. I know we've all received emails from former city councillors talked about the importance of possibly getting some of the expenses from under the cap too so at length about that too so I'm not disagreeing with what you said at all I but it just was a decision of counsel that we thought it'd be too much to have on the ballot at once but I think of next year you know between election years something that's not going to get

clouded over. And I think as a city council, it is our responsibility to look long term for our city here. Agreed. Thank you.

Councillor Dome, I don't disagree with you. I can't remember 2001. I don't know if we had a referendum for the cap. I know – I just can't – it's been a while. I can tell you going into especially this election year, this will probably – we're all going to heavily – those of us running are going to be asked about this. Will you raise taxes? We can afford to, for most of the people in Morocco, but we're a very conservative community. But however, I think you are right that we have earned the right to talk about this after an aggressive rollback, being physically conservative with the citizens' money. If taxation is ever raised, it's not without representation at this point. It's with the most representation the citizens have seen in a decade. Just my thoughts on it. Vice Chair Champagne.

I'm going to tag along on the theme, so to speak, that's been brought up here. From 2016 until this 2026 year, the millage rate in this city has declined 39% over those years, at the same time that inflation over those years has increased 36%. So you want to talk about a mismatch in the financial world of running a city, We're reducing intake through taxes and getting eaten alive by inflation at the same time. And that hasn't slowed down. That's continuing, the inflation portion of it. And by the way, the budget that's being presented, in all due respect to the city manager, is presented at a stable rate, not moving the millage rate. To me, that's not the appropriate decision. We need to, if we wish to preserve this city and its infrastructure, infrastructure being bridges, roads, all of the other things, and particularly parks, which we constantly push aside as being unimportant, well, then it's not unimportant. How about canals, clean canals? All of that is going to take money. And to sit here and budget at millage neutral would be, to me, inappropriate. So we need to start thinking about how do we preserve our island and how do we do it in the most financially beneficial way. And I'm not recommending huge increases. just recommending we use what we have as an option which is a spending cap go to the spending cap should we change the spending cap in the future a legitimate question but it needs to be debated there are pros and cons to doing it and I do believe my personal opinion would be yes we need to change it but to what that's a bigger question but I think we need to look into that for future years currently we're in this year looking at next year part of our problem as a city has been that we are 12 month oriented from a financial point of view. That cannot fly, folks. No business runs on projecting 12 months. You look out. What's your strategic plan? What are your views for the next 10 years, quite frankly, and maybe 20 years? What are we going to need and how much? And I can tell you, we are nowhere close to providing strategy for managing the needs over the next 10 years or 20 years we are not we just don't think that way as a council and certainly as a community we think how about the next 12 months well that gets us by for 12 months but it doesn't do anything in planning for the future so we need to start thinking longer term Start thinking what that means. I think people in this city need to start understanding we're going to have to raise money at a higher rate than we've been raising before. And that's assuming everyone wants to maintain the quality of the island. If we don't do that, if we don't raise and spend more money on infrastructure, we're going to start seeing the value of this island decline. And no one in this island wants to see that occur for sure. So I'll pass at this point. I think we should get into looking at the departments and seeing where the variations are, where the opportunities are. And by the way, just for the community, This city, as we begin, as you listen, start with the assumption which is correct, that we are not overstaffed. We are not. I've heard that complaint in the past. We have too many employees. My God, they're consuming all of this money. That's a falsehood, okay? It's not true. So let's move on from there and look at the details. Thank you.

Thank you, Vice Chair. Councilor Schwan, you're still lit up. Do you have another topic? I do not. I spoke.

Thank you. All right.

Councilor Gray? Yeah, just a couple of perspectives, and it may be misguided, but my understanding is when we went to vote in to be a city, that the spending cap at that point was a critical driver to getting just enough people to vote to be a city. So it was that sort of governor on behavior That is why we became a city, just to explain how it came into place. You can discuss the spending cap in the future, however we might. There's also inputs in that spending cap. For example, this conversation about whether the fire department might be looked at a different way and assess that differently actually would alleviate spending cap pressure. So there's more than one way to skin the cat. I have nothing against cats. I was just mentioning that as a comparison. But the notion is we are under expense discipline. We can speculate how and why we got here for a number of reasons. But also, don't lose sight of the fact we had a bonus sales collection for a number of years that actually watered down the need for those tax increases. So if we're going to analyze how we got here, it's important to understand all those components. The question about how efficiently we're running today and where we're going is a different debate. I think what people are, nobody seems to be saying that we're understaffed. I'm not sure if we're saying we're overstaffed. Nothing is indicated to us that our staffing is inappropriate. I haven't heard that from anybody, so I go under the assumption that we're an existing acceptable staff level until somebody tells me otherwise. Thank you.

Thank you, Councilor Gray.

Councilor Goehler. First of all, thank you, Dr. Lucius, for the presentation, and thank you also. First of all, I am so thrilled that you need actually a supermajority to raise people's taxes. You know, maybe if that was the case, we would not have eight years of rollback and get to the point that we are today. So, yeah, I'm kind of excited about that. But I do think that right now talking about raising millage is just not very right thing to do versus that some of us will not even be here. November's around the corner. So I think the next city council should be to talking about it and whoever the people, the citizens will elect. At some point we probably will need to raise mileage. I cannot believe I'm saying that, but at some point we might. But to come out that we are asking the citizens to vote yes on this referendum, to fix the all the bridges and infrastructure, but to turn around and double down on the citizens and say, hey, vote on a referendum, yes, and also give me more high mileage, sir, I don't think that's a good idea. I would be very angry if I were the citizen of the city. But I think that I'm hoping that our citizens will take seriously this referendum.

Councillor Golo, can I stop you for one second? I didn't mean to interrupt. We don't ask them to vote on anything. We just present the facts and they make the decision. Correct, Mr. City Attorney?

Okay, so I would like them to take it seriously how much we need to fix this town. That's all I can say. But asking for a high raising mileage, no. Thank you.

All said, thank you.

Councillor Henry.

Looking at it from a different perspective, kind of supporting what Vice Chair Champagne said, preparing for the future. We have a huge potential that next year we could lose a million dollars. Is this year our chance to just minimal millage within the spending cap? Is it the time to do that not with the intention of pushing the spending, but it's being prepared for next year that we're going to be a million short? we potentially could be a million dollars short in our budget. So when you say thinking of the long term is what I totally agree with. I can't say I want to raise taxes, but what are we going to do if we're sitting here next year? Because four of us will definitely be here. sitting here next year going, OK, shoulda, woulda, coulda. Just a totally different way to spin it. It's not even something I was prepared coming to think in that way. But we have to have a long-term plan. Like right now, we have a balanced budget and we have the money coming in. What are we going to do next year? So it is a long-range plan to think about because we're pulling from all these buckets. to not bring up the referendum. How do the buckets get refilled? So that's just my input. Looking forward to the presentations by everybody.

Councillor Henry and all councillors, I hear what you've said. I agree with you. Actually, the reason I finally decided to rerun experience matters up here Take a look at how much you know now compared to last year, and you are correct. We're going to have a new council sitting here trying to figure this out. Stephen, you're correct, too, being bold enough to talk about the spending cap and different things. Our citizens can't afford it, but, man, they don't like when we work around it or circumvent it. It's probably because we haven't talked about it enough and maybe the aging factor in it and how it does possibly need some attention. looking at modification or at least deep conversation to coincide with the times. Last thing I'll say, at some point, the homestead exemption was a radical, radical thing in Florida. And the homestead exemption isn't even really the problem. It saves you a little bit on your taxes. It's to save our homes where your property is artificially suppressed in its value decade after decade. Somehow it worked. Somehow it got done. I'm preparing for this referendum to pass, not the bridge, but I'm talking about in the state. Councilors, before we move on, and this was a great topic on the bigger picture, anybody else have anything else to say about this? If not, we'll try to hit the specifics moving forward rather than spending. Yes, please.

If I could speak to the issue of the millage that's being presented in our FY27 budget. As Councilor Goler pointed out, I did not think it would be a good year to both raise the millage and ask the residents to approve an infrastructure bond. If this budget is built at millage neutral, assuming we don't have any bond funds, However, if that bond does not pass, well, first let me start. If the bond does pass, you have to raise the millage. You have to raise the millage to pay back the debt service on the bond. So there will be a millage increase because that's what happens with a bond. A bond is secured by property tax revenue. If the bond doesn't pass, I'll be coming back to you. It won't apply to FY27, but I will be coming back to you with strategies to fund our infrastructure in FY28 and beyond. And those strategies may include an amendment to the spending cap. For example, it could include removing infrastructure, removing capital from the spending cap. You could keep the 3% plus COLA, but remove capital. infrastructure spending from the calculation. That's one option. As you said, there are lots of ways to look at this. It could remove public safety from the spending cap. I'll also be asking you to identify revenue for future infrastructure projects, which might mean you get a bond or a loan that isn't voter approved. If it's not voter approved, that calculation hits the spending cap, which means you might have to do both, spending cap amendment and go out for a bond or a loan. So these conversations will continue into next year, and it will be the next council making these decisions. I think for FY27, we're able to fund the projects that we need to fund just one year. We have a one-year plan right now, but we do need to start thinking long-term about our infrastructure, and that will take both revenue and spending cap discussions.

Thank you, Casey. All right, counselors, we're about an hour in. Anybody have any other thoughts on the big picture, spending caps, larger budget? If not, I'm going to try to direct the conversation towards the specifics of these next four items. Light signs if you have any. All right, no final thoughts. Casey, please.

Okay, so turning to the document that reflects the general fund, and this is the larger packet that's in your agenda that has each department, each general fund department, The first page of this document, actually the first, let's see, three pages, identify revenues. So you have your general fund revenues, byline item, and then you have some recreational revenues. And actually there's a fourth page for Racket Center revenues. And then we go into each department. So I did not ask the department heads to do individual presentations, but what I would like to do is just quickly hit each department, ask you if you have questions. If you don't, we'll move on to the next one. If you do, we'll pause and get through the questions on that department. So first starting, are there any questions on the revenue, the first four pages of general fund revenue?

I actually got one. I have one quick one. The gas tax, and I don't know this, has there been any discussion from Tallahassee that with the different changes that something like that would increase? First local, second option?

There's been no discussions that I'm aware of. Okay, thank you.

Councilor Gray. It's just my overarching comment that anything we can do to find additional revenue sources offsets the increased burden we're trying to put on the taxpayers. As I mentioned in the last meeting, the concentration risk on ad valorem taxes is intensifying because you will notice in these revenue pages that some of our alternative revenue sources have all been in decline. interest income, or any number of things. So we are trending towards increasing concentration risk on the ad valorem taxes. I still have, I'm haunted by, I believe there's other revenue sources, hopefully. So we'll go through the expenses, but I still have to park, I don't believe we found all the revenue opportunities we can. But thank you. Thank you, Councilor. Vice Chair Champagne?

Yeah, one basic question as we begin to look at these numbers. Have we used a zero-based budgeting concept where people called department heads are given the chart of accounts in terms of the lines that are budgeted but taking all former years and numbers out of the question? They're all zero, tell me what you need and justify it line by line. Did we take that approach or did we give them last year's expenditure and say how much do you need more?

We do not do zero-based budgeting here. We haven't, at least not that I know of, but we do use prior years as precedents to understand our trends and then project forward.

My point from a business point of view, until we get to some form of zero-based budgeting, you're always going to be over budgeted by line item because It's an add-on. You're not asking people to really justify any expenditure. Just give me an add-on. Or in this year, because you asked for cuts, give me a cut. But whatever's left from the cut, is that truly required in that line item? I think we need to get much more detailed in terms of challenging ourselves when it comes. If we're living in the environment we're describing, where we may be losing revenue, where inflation is eating us, I think we need to start thinking differently on budgeting. And you've got to get to a closer form of justifying every single line item on its own, will constantly be going around in circles because we don't really know, per line item, what is absolutely required. Now, when I say zero-based budgeting, I can tell you it takes substantially more time initially But once you get into the habit of doing it, I think it moves along at a rather rapid pace. And maybe this is an area that AI can assist in. I don't know for sure. But it's something to keep in mind because it's rather detailed. But anyway, that's my point. And I stand by it. Thank you.

Casey? Okay, next is your legislative budget, which is a fairly small budget of $99,000. This reflects the city council's budget, and we reduced that budget by 2.8%. Are there any questions on legislative?

Where would Ron Book's consulting fee show up?

That shows up under professional services in the legislative budget. So his fees are around $82,000, and that's split equally between the general fund, which is here in professional services in the legislative budget, and the other half is paid for from the water and sewer enterprise fund.

Thank you for that. I'd cut that and use that money elsewhere, but that's just me. Thank you.

for a contribution from him to produce the number.

Very good. We'll put that in the think tank. Casey, please.

OK. Next is your executive budget. So this is the budget that I manage. So you have several employees in this budget, including myself, city clerk, recording clerk, the deputy city clerk, HR director. And you see a significant cut here of about 22%. And that's because we do not have an assistant city manager. And I think there are some other small reductions here in operating supplies and things like that. But generally, we saw savings in salary and retirement contributions.

Casey, can I talk to this before we move on? Sorry. Appreciate that we don't have an assistant city manager doing a spectacular job. I don't think we provide health insurance for you two either, do we? You have it elsewhere?

That's correct.

Thank you. The citizens, thank you. I've been speaking about this with you at our meetings. You cannot do it all yourself, and I know you're great at diving in and giving the citizens everything they deserve. Where are we at with – I know we spoke about this with an assistant or with somebody to help out in the administrative part.

Yes. So we plan to fill that position with an administrative assistant.

And they're going to work with you or work with a few different department heads?

Correct. They'll support finance, HR, purchasing, and executive office.

Perfect. Thank you. Do you have a timetable on that?

As soon as we have time.

Great answer. That's the reason why we don't have time.

That's why we don't have time. Yes, we're working on that. We actually had a really great candidate, and that individual actually went to another city department. So we're actually happy for her, and we reopened the search. Next up is our finance budget, and we saw a slight increase in the finance budget, although they did make significant cuts in several line items. But the finance department is up a little bit in wages because, as you know, we do have about three months in this budget of overhire while we have both a controller and a finance manager. As I suggested to you this year, about six months ago, that was my strategy to have some overlap while we still have Carol McDermott, but also create a succession plan with our new finance manager, Chase Calloway. Any questions on the finance budget?

We do have a couple. Vice Chair Champion?

Yeah. Once again, as we did the prior year audit, we heard the audit partner suggest that you're – finance department is understaffed or under skill ability whichever we want to choose as has this budget included money either in higher compensation for more skilled individuals or a new individual

Good afternoon. As Casey mentioned, this budget includes Carol only for three months, and it has Chase, our finance manager. We didn't add any additional employees at this point. We believe that there is a possibility of upskilling our current employees partially just to empower them some more and also to make sure that the tools we have already are being used to the best of what's available. You know, using Munis to its full power with no additional expenses is something we're going to explore. Streamlining our policies and procedures may help us. And so that's what we're looking at to begin with. I did look at every single line. While it's not zero-based budgeting since I wasn't here before, I didn't make any assumptions as to what it should be. So in terms of training, we really looked at what are we going to need, and we did make some cuts, but it's not because we're not getting the training we need. We just, I'm aware of what's out there available and what's appropriate. So we're going to do all we can to make sure everyone's properly trained, and we're doing as much as we can with the staff, making sure they're enabled and empowered to do what they can, helping them learn more. We had a really good meeting with a lot of finance people this morning and just sharing ideas. So that's part of what we're going to do.

You know, and we certainly have lived it, this is the department that has caused the most heartburn for the entire city. And it's not fun for the employees who live that every single day to hear the negativity from the community, from the city council. Nonetheless, some of the comments are valid, others are, as usual, a little hyperbole. So my fear is when we have an audit partner two years in a row tell us we're understaffed or underqualified, it's concerning to me because I have concerns to start with about the work product of the department. I have, by the way, not involving you, two weeks on the job here as a city council, I had major concerns. I thought I was seeing some serious problems. I didn't even know what I was seeing, to be honest with you, in comparison to what came out. And though it wasn't, the audit wasn't as bad this year as the first time around, only because we were more aware of what to look for as a council and community It still wasn't a pleasant report still indicated Many things hadn't been corrected We just can't afford as a department as a city government as a council to have three years in a row come out the same way and the indications from the audit partner is hey, you know, we're nine months into the new fiscal year and You know what the likelihood is of coming out much better? Unlikely. That's disturbing. That's disturbing. And it introduces a level of trust from the community that, quite frankly, none of us like. That's when they start using negative terms about each individual, which is never appropriate. But nonetheless, it happens. I think if you're comfortable and the city manager is comfortable with where you are from a staffing point of view, I can live with that. But I'm telling you, if you guess wrong, we're all going to be paying the piper from comments that will come out. So I think everyone on this council will try to help to the extent that we can. but quite frankly we're not here as roll up the sleeves and get into finance issues. That's not our function, though we'll I'm sure have suggestions along the way. What can you do with existing, are there training programs Forget changing people. Let's say we're going to work with the same staff, which would be a good idea, by the way, if we could upgrade people's skill sets. Are there easily accessible training programs we could get them into or have people come here to present to the people? I don't know what the market is, but are there such programs available?

Yes, let me answer your question in two ways. First of all, I appreciated the fact that our auditor talked about the fact that the audit for fiscal year 26, which is our current year, might not see major improvements because we're nine years in. I'll give you a really, in some ways, trivial example from my past because I was somewhere previously where I came in at the end of the year and I was really two months out and I couldn't fix anything that had happened. And the audit comes through. And we had at that place a problem where we had a policy that said every check over $10,000 has to have two signatures on it. I hadn't been there. As soon as I got there, as soon as I learned that, every single check over $10,000 from going on had two signatures. But we were already, as we were doing the audit from the previous year, already into the next year. So we already had checks in the next year that didn't have $10,000, two signatures. So the next audit, we got dinged for that. And I was much less experienced then, and I asked the auditor, how can that be? I corrected it as soon as I knew about it. Yeah, but you were already into the year. So that's the kind of thing you can't correct after you're already past it. You can make it so you don't keep doing it. So I appreciated that Chris, our auditor, said, don't expect everything that you just saw on the previous audit to be corrected in this year because we're already nine years in. We will definitely work to not repeat it and make sure that we don't keep making those mistakes and improve it. So I wanted to respond on that. In terms of training and staff, well, to toot my own horn a little bit, you hired me, you hired Chase. Casey did. So you've got additional experience coming in. that I can share with the staff already. I also have a track record of coming in other places where we had similar things. We had under-trained staff. People needed help, and I built a great team, and we got rid of all the problems. It didn't happen instantly, but it happened appropriately. There are training programs out there as a CPA. I have to do CPE. But I can share that knowledge. There are lots of free CPE out there that a lot of times it's appropriate to share with your staff that are not certified professional accountants. So those are the kind of things that are out there that won't cost us much more money that we can find. So I do feel like we can make a better use of the software we already have. And that Chase and I together can empower our current staff to learn more and be even more proud of what they're doing. I'm not averse to maybe in the future if it's necessary and there's a budget and it looks like it would be wise to add staff when appropriate. But I don't feel I've been here long enough to judge whether or not we need more staff or different staff yet.

Good. Very good response. Thank you.

If I could just piggyback on that, Vice Chair Champagne, before we turn it over to Councillor Gray. You know, you're right, but you have to also understand the dynamics are different here. This isn't a corporation. So you could see over the course of time when you think things aren't perfect, but you need four councillors to agree with that change of direction. It has to be the right timing. It isn't just simply call the Managers in the office say we're having a change, which can happen in the corporate world. So it's timing. It's a vote of four. It's a lot of things. And I've thought about it very much over the years. I'm so happy with the staff we have in place. I think they're doing a phenomenal job, and they're going to lead us into the future well. What they inherited, they inherited. It wasn't the end of the world, but it had some holes in it. But boy, look at the quality of work we're seeing this year and the detail. So we're in great shape going forward, in my opinion. But I appreciate you bringing it up. Councilor Gray, is your light sign working? I saw it go on and off. I want to make sure it's not acting up. I have you on right now or you're next?

Then there's the answer for now. Okay. That was a great conversation, and it really has been over something that's deeply – I think we have the right team. I'm excited. I think you're going at it the right way, and you can appear into the future and determine clearly what exactly you need to supplement your business, if at all. I think this is a prove-up year. I think we're going through an exercise. This is why I am being very conservative in how we approach this year. I think we're going to get to the right place, but the voters and the community need to know that we got our handle on this correctly. Financial insight is powerfully important and it's going to help drive a deeper level of understanding. And I just want to acknowledge that we just identified we're still on a working journey. Thank you.

Thank you, Counselor.

I see no other light signs. Casey?

Thank you. Next up is our legal budget. And as you'll see, I did reduce it by 5%, but Alan now is going to make his own proposal. City Attorney.

Thank you, counsel, and I'm happy to be here. On behalf of the firm of Weisselrode Healthman, which is actually your law office that supports you, I'm just here sitting in the seat available to you as all of the other 90 lawyers that are with me, behind me. One of the things that I want to just make sure that you realize is that though we've been talking about an hourly rate, Every lawyer that comes before you that works in this firm charges the same rate whether it's a senior partner whether it's a another Lower partner whoever it might be they charge that rate So you get the benefit of that lower rate on everyone who comes before you? We use paralegals where it's available, but track track Typically, I do not do that because they're not senior enough to deal with this city and your complications that you always have and So saying that, what I had proposed originally was a proposal of raising the hourly rate at effective October 1st to $325 per hour with a monthly retainer of $13,500. That was what I suggested. And there was some feedback, some question about whether or not there could be some other opportunities or other offers. I want you to know that the firm wants to continue being city attorney for this city. I particularly enjoy coming here and dealing with all of your idiosyncrasies, dealing with you daily, and enjoy the – every day is different, and I enjoy the work. That saying, I have others that are also as happy to participate. And that said, they had suggested a couple of opportunities, different numbers for you that maybe you might want to consider. We don't have a contract. We don't believe in contracts. I'll tell you why. As we go to council meeting today, you could fire me today. It's up to you. If I have a contract, like you have a city manager, you have to give benefits, you do different things. We're here today, and we could be gone tomorrow with no benefits or anything else other than walking away. We think that's to your advantage, and it makes us do a better job because we're always on the hot seat, and we know it. That said, I'm just going to tell you that it had been discussed about what do we want to do for one year, two years, whatever that might be, and that's the reason we proposed it the way we do. But another option could be the same hourly rate, same retainer, and instead of an increase on a give or take a couple of times, just add a CPI annually to it. Whatever that CPI is or, for example, 5%, whichever is greater. And we don't have to come back unless you don't like who the lawyer is sitting here and there's a different discussion and it's not the money. That's one of the options. Another option would be, so the original proposal was to raise it to $325 an hour with a retainer of $13,500. Another one would be to raise the retainer to $14,000 in an hourly rate of $315. Same kind of idea that you just raise it by percentages or not. If you wanted to go to the second year, which would be the 27, raise the monthly retainer to $15,000, and then the hourly rate jumps again to $335. It's just a numbers game because you control what work that the city attorney does other than the retainer. The retainer is important, and I'll tell you why. We had some discussions about what does it entail. The retainer is one of those things that basically is a set fee. It was intended to be the council meetings regular, just a couple of council meetings a month, a planning board meeting a couple of months, and your magistrate meeting one a month. It has evolved. You do not get charged for whatever council meetings you get, however many they are. And you have special meetings. You don't get charged for those. They're part of that retainer. The planning board meeting, whether there's one, there used to be two planning board meetings a month. That's when that originally was done. but we have dropped back to the one, but that doesn't make a difference as though it's the one. We also have director's meetings that I participate with the department staff. There's no fee. It goes to the retainer. We have other things where I have daily calls from staff. I don't charge for those. I put them into the retainer. If it's any work less than half an hour, it doesn't get charged. So you see it move over to what would be a billing rate, which ends up in the miscellaneous account. I can set up a separate file, a matter number file for any item that you would want to see and call it whatever you want to and get billed to that. It's easy to do, but we haven't had to do that because it becomes a number of bills that come in and need to be looked at. But that's an easy thing from my side to do that. It's a very simple idea that you can control the money. When we were doing vacation rental litigation, you had high bills because we were doing vacation rental litigation that the insurance carrier wouldn't cover. So it was being billed. Today, we're doing other things. But hopefully, you will settle in and you will understand what your jobs are, just like I understand what you need. And we will be able to manage those fees. For example, we're doing code foreclosure items, which prior to, I guess, Chair Brecknitz pushed that, that we start to enforce that. And we have been successful with those cases. And we're moving forward now trying to get you the funds, those penalty monies. And I'm not really sure where they show up in any of the monies, the budgets. But that's not being shown as being beneficial to coming from the city attorney's office one way or the other. THAT'S JUST AN EXAMPLE OF SOME OF THE THINGS THAT WE DO. I LEAVE THOSE IDEAS ON THE TABLE FOR YOU TO TALK ABOUT AND DISCUSS AND GIVE ME SOME DIRECTION BECAUSE I WOULD LIKE TO CONTINUE TO SIT HERE INDEFINITELY AS LONG AS YOU'LL HAVE ME.

THANK YOU, ALLEN. COUNSELOR SCHWAN, YOU'RE UP FIRST.

ALLEN, THANK YOU FOR THAT STATEMENT. thorough descriptions. And what I think is so key, what you pointed out about the flat rate for whatever attorney of the NID attorneys might be working on a particular case, issue, et cetera, because the rate varies so significantly with the expertise in these fields. That alone, if that flat rate goes along, we would be significantly impacted by that. So thank you for pointing that out to the rest of council.

Thank you, Councillor. Councillor Henry.

Do you plan on giving us some sort of a written proposal of these?

No. Whatever direction I get from council, I will put that together in a letter format identifying what that is that would come back before you for formal approval.

And when you say, because I know it's funny, it's technology, because I know the original base proposal is every phone call. I don't call people. I really don't like the phone. You should call me.

I email.

Do we get charged for emails?

No, I don't charge you.

I just do simple things.

Whenever I do something for a council member, it's not a charge. And if I'm working on something that you direct me to work on as behalf of council, that's a charge that gets put into the retainer. It also depends on what that is. But communication with council, whether it be email, whether it be phone call, smoke signals, doesn't make a difference.

Thank you.

Thank you, Councillor. Councillor Gray.

Yeah, real quick. I think this is the only vendor negotiations we're having during our budget workshop. Based on this conversation, I don't think you're going to resolve it now. Well, we can't at a workshop, but we could. I'd leave them at $400,000 until we have some better determination and maybe get some savings. I'm not sure if you're actually – I hate to under-budget and then get negative variances. That's all I can say, but I'm not sure how we – based on this conversation, I don't know if the $380,000 is going to be defendable relative to this conversation. That's all I'd like to solve.

I just thought it would be important to clarify the CPI proposal. Would that be added to the total annual bill? So annually, if the city's annual costs are $380,000 and then CPI is determined at 5%, would there be a 5% add at the end of the year? Like how would that be added on?

It only goes to the hourly or the retainer amount. So it wouldn't be to the total amount. Okay. Nothing else would change.

So if I could just add, Mr. Chair, and I think the increase in retainer equals about an 8% and the increase in hourly rate equals about an 8% increase. So the CPI could end up being 4% or 5% increase, I think. I mean, obviously that's unpredictable. It's year to year, but that's just one way to look at it.

Well said. Plus, we're not locked into a contract, so these could always be up for negotiation at another time. Not that I want to negotiate every year with our attorney, but we have flexibility there. Councillor Schwann, your light sign is on.

Yes. I was just going to follow up. Councillor Gray did bring up about Ron Book's expense, and I actually do agree with Ron Book. I think that would be an $88,000 savings, and I think the monies that we put towards Alan's firm and everybody who's working on this, that might loosen up some money there, too, where it's a better bang for the buck, I think. So just my opinion. Very good. Thank you.

Yes, I reached out to Alan after our council meeting when we spoke about possibly putting this out to bid. And my question was – and first of all, let me start with my wife's a paralegal. I'm in real estate, so I deal with a lot of attorneys, and I have to be very honest. They all said we're getting treated very fairly, and wow, Alan's firm is pretty fair with us. Got to be truthful. So I appreciate that. But I did call to say, can you be a little more fair? Can we have a graduated step up, something that, because we're in a transition year and things are going to be tough with things beyond our control in the state level. And Alan did share with me, I'm already working on this, what we're hearing right now. It's a version of it. So counselors, if you're not aware, and I did this in the very beginning, and thank God I could talk quick. I'm from New Jersey. I would call up and say, Alan, I don't want to run the bill up. And he'd say, you're not, for a conversation. But if you're not aware, call him and find out exactly what we do get billed for so you're clear. But we also have to look at ourselves when we write ordinances that we don't even go through with, when we have whether it be shark fishing or turtles or noise or parking or bringing each other up on ethics charges, they all run the attorney bill up at a huge amount. So we have to be cognizant of what we're doing with that bill also. Hence why I've been here long enough, whenever we set a new ordinance, I'll say to the staff, can you enforce it? Do you have the manpower? Or I'll say to them, how long does it take to look into our wish list? If it's not going to go forward, maybe we shouldn't burden you with it. Just a little something you pick up with a little time in the seat. With that said, Casey, I like what you are looking at. That CPI number of 5% seemed to kind of stick in my mind. Our attorney, like everybody else, deserves a fair raise. They've been very fair to us over the years. That's the one I was focusing on. For no other reason, it just seemed to make sense to me sitting here, right here and right now. Casey, are you looking for some direction on that from us, or...

what's the end result you want here out of this section of our meeting well since ron book's contract came up i think i would like to look up the terms of that contract to see how much longer we have on that contract and then if the council chooses to terminate that contract to reallocate funds that would have to go on a future agenda for you to vote on So I'll take that on as a next step on my end. And then I think just some general direction about how you want us to adjust the legal budget. It sounds like perhaps adjust it 5% up for now, and then... Is that about right?

I was thinking, just my thoughts, if a spreadsheet or something is very simple, we only have a couple directions here. I'd just like to see it on a piece of paper, and I think that CPI and 5% is going to make more sense to me. I can't speak for the councillors. Versus Alan's other couple of proposals, what was it, 325 going to 13.5 a month? Isn't the rate to 325?

and the retainer to $13,500, and then every year it would go up either 5% or the CPI, whichever is greater.

Okay, so you probably just covered it right here and right now, and I think off the top of your head you probably nailed it?

Yes. Well, I don't know what you mean by both. The other was to raise the retainer to $14,000 with a lower hourly rate. And then do the CPI and whichever is greater, 5% or whatever is greater. You might like. Yes. That way I don't come back to you because I won't come back asking for raises every couple of years. It will just happen automatically, but you'll be aware of it. It will come on part of the budget.

I think I misunderstood. What I was presenting was an either-or, but I misunderstood. It sounds like what Alan's saying is it's both increase in rate, retainer, and CPI.

I thought it was either-or also. Alan, can you clarify?

This year, raise the rate to 325 with a retainer of 13,005. Every year thereafter, the CPI or 5%, whichever is greater. So it's not in the same year. I'll say for me, I can use a little time to digest it, have a meeting with you one-on-one, kind of look at the numbers both ways, but we're... Mr. Chairman, I'd be happy to submit a written proposal and send it to council and give you direction because there's nothing, this is a workshop, and this is not going to be effective until October 1st anyway, so nothing's changing in that context.

Councilors, would you find that helpful to just see this in a summary so we could take a look at it in our own time, just digest it? Perfect. I appreciate that, Alan. We do have some more light signs before we move on. Councilor Goeller.

I just have one request for Mr. Alan Gabriel. I mean, I have nothing against your firm, but sometimes I wish you could just answer yes or no. Instead of it's, hey, you can do this or you can do that. I know law is not always black and white. I come from lawyer family, Alan, trust me. I'm not, that's why I never became a lawyer. So I just sometimes when I ask you, is this, I'm sorry, no, I'm not a lawyer. Let me finish first. Okay, so if I ask you, is this ordinance, enforceable. Say yes or no. Don't tell me it's up to you how you feel it. Today you have a high fever or low fever. It's just the way my feeling is.

Please respond to it. I hear you loud and clear. If you call me on the phone, you'll get a yes or no answer.

Yes, you have done that.

If I'm in a public forum like this, I have to respond to the public and not just to you. And I need to be cautious of what my response may be because it gives direction to somebody who may not be our friend.

I still did not get the answer. You're doing the same thing right now.

I'm trying to explain to you why maybe you don't get that yes or no answer.

Councillor Guler, can I jump in here? Please do so. What our city attorney is saying, we tread very lightly sometimes on the conversations we have in public because we don't want to give advantages to those that might be looking to litigate against us or have issues with us. I want to be a yes. He's correct. And it's kind of code where you'll say, hey, that'll be better for a one-on-one conversation your attorney will tell us. So Alan, would it be fair not to defend you, but it's not always black and white, right? There isn't always a clear-cut yes or no.

ALAN M. That is correct. It is never a clear-cut, because you can always be sued. I can tell you that. You can always be sued. Whether they will be successful or not, I would like to say that they will not be successful, but I can't tell you that.

ALAN M. Alan, I never doubt that you had our best interest. It's just sometimes frustrating when any of us ask, and you say, well, it's up to you. I know you've been careful. Thank you for your service.

Thank you. Sorry, I'm sorry. No, no, no. You could always re-ask those questions. That's your prerogative up here. You could always say I don't accept the answer going forward. That's your choice, but I appreciate you asking it. Vice Chair Champaign.

I want to express a concern I have about a potential offering from Alan, which is in the future, well, this year he stated $325 per hour, $13,500 per month. From my standpoint, that's an acceptable kind of proposal. Going forward, though, would be CPI or 5%, whichever is higher. We shouldn't be assuring anyone of what we're willing to pay in the future because we have no idea what the future is going to be. So I'd be very cautious of letting him walk away thinking we're willing to pay 5% or CPI, whichever is higher. No, no. We'll debate that every year as you're new renewal comes up. I don't know if it's going to be 14% as it has been in the past under Jimmy Carter. I don't know. We don't know. We can't possibly know. So I think we want room to negotiate on an annual basis whatever the CPI or 5% happens to be, not to lock it into anyone's mind, ours or his, that, no, it's a done deal. No, it's not. We need to look at it every year before we decide. That's my point.

I mean, I agree we don't want to set the precedent. But, Alan, if I'm hearing you correctly, we have no contract in place. So we can come back every year and say, if you don't renegotiate this, we're not employing you anymore, correct?

That would be correct.

You are correct. Once you set something in motion, it takes a life of its own. However, we do have a fail-safe to say something's come up in the economy. We need to talk about it. Are you willing to renegotiate? If the answer is no, then the answer is we look for another city attorney.

Sorry, I'm not speaking into a microphone. If I can respond to that comment. So this is not unusual for the firm and for some of my clients, having a flat rate and then it increases every year or whatever that would be. But that gets approved. If you wanted to go that direction, it would come to you as end of the year, whether it be the budget time, whatever it might be, however formally you want it to be, that you would see what that number was and it would be approved. It would not just be something that doesn't happen. So it's a way of managing the costs and keeping control of what those fees, so that you know what those fees will be. It won't be any higher under that scenario, it wouldn't be any higher than whatever the CPI or the 5%. Or I originally proposed the flat fee and the flat retainer. I was just trying to address some of the comments that were being made to me.

Yeah, I'm just trying to prevent you and your firm walking away thinking, well, we've got a different deal now.

I mentioned before, I know what it's like to come to a meeting. You never know how that meeting will end. And I'm serious about that. Alan, what'd you call it, mannerisms?

You're bold, I appreciate it, you're truthful, but man, our counsel's firing back a little.

You know, I don't always have the opportunity to have this one-on-one conversation with you all together in a collective body, so I'm enjoying it.

And one last comment before I yield the floor. We're asking every one of our departments to cut, okay? What's inappropriate with asking the legal firm to cut?

The only thing I'm guaranteed is the retainer, frankly. If you don't have any fees and I'm not charging, there's no other work, then there's no other fee to you.

No, I'm saying do your normal work that we request and make some cuts. I mean, that's what we're asking department heads to do. We're not saying, hey, stop doing what you're doing because we know it's more expensive. We're saying do your job and, by the way, cut.

I will tell you that the $325 an hour is definitely a cut that you're getting the benefit of. Remember, we've charged the public much higher than that. And I believe I gave you that information the last time I was here. If you want, I can reiterate what those hourly rates were. You were bold enough to share. And I'm happy to do it again if you want me to. But you are the lowest of the local communities that we represent in terms of public entities.

And I thought that you were a legitimate team member.

I am. I'm sitting here fighting for you.

You want to make a contribution.

Every time I come across the alley, I'm making a contribution. Florida Turnpike loves me.

OK, I think we beat a dead horse here.

Thank you, Vice Chair. Counselor Henry.

JUST A QUICK QUESTION AS YOU'RE SAYING WORKING ON THINGS THAT PREVIOUS COUNSELORS HAD ADVISED. I'M GOING TO USE THE WORD I'M ASSUMING THAT DR. LUCIA SEES THOSE REPORTS BUT THE FORECLOSURE IS GOING AFTER. ARE WE SPENDING hundreds of thousands of dollars, tens of thousands of dollars to collect? Is there a break-even point?

OK, so to the question about that, I'll just tell you that, first of all, if we have a code violation matter that's under $500, I basically send a letter. And I wait for a response. We'll leave it like that. If we have a couple thousand dollars, this is what was council's direction was to go after those dollars. I have in my report you'll see today that there's two code cases that we went after contractors for a couple thousand. They're each a couple thousand dollars. The statute does provide for attorney fees. So if we can't settle it before it goes too far, then we will take it to the end and try and get those attorney fees on behalf of the city.

Because I know you are very conscientious of our city and responsible. You're also watching the number. You're not going to spend $6,000 to try and get four.

No, I won't even spend a dollar to try and get 10.

That's what I just want to make sure, because not seeing the breakdown the way your bill is presented each month, it's the miscellaneous, which is generally the largest chunk. Dr. Lucious, I believe, sees that full breakdown.

Code enforcement does have a separate file number, and because of those attorney fees opportunities, I have broken those other cases into different matter numbers, so you can see what it costs for each one.

Okay. Thank you.

Councilor, I got one more light sign, and then we're going to move on because we have a lot of other ground to cover unless it's something extremely important.

Councilor Gray? Just two fast comments. We can't prognosticate what litigation and what challenges we will face in the next year. We can hope and pray and behave to the best of our ability to keep those bills down, but so all we can do is budge as responsibly and hope that those directions work that way. So just be mindful there's a wild card here, which is what comes at us. And in my past job, we used to look for attorneys with one arm because they couldn't say on the one hand this and on the other hand that, which improves your efficiency. But thank you, but I think we just got to nail the number here. I frankly believe we better sit at 400,000 until we got something different and move along.

That's what we have done in the past years. We have set a number, and typically I'm well within or close to that number one way or the other. It has not really deviated greatly.

Very good. Casey, you heard enough for now on this one, right?

Oh, yes.

Very good. We can move on to the next topic, please.

Okay, so next up is our growth management department budget. Growth management is led by Dan Smith, and this primarily consists of zoning and planning. And you can see his budget is $912,000 with a reduction of 3.5%. Are there any questions for growth management?

Councillor Gray. It's a quickie. The savings in that department was $62,000 versus the budget, comparing budget to next year. And all that came from professional services savings. There's one theme in a number of the budgets that some of the reductions have occurred in professional services and IT support. And it looks like we hadn't used that money previously. So this looks like we're just sort of lining up with past service expenses. Is that right?

No, the professional services are really for services when for hurricanes what happens is We found out that during hurricane season we lose people and we need help with the building permitting process so we put In this case, $48,000. Okay. And for that, previously we were using professional services for things like the master plan for parks and recreation, the comprehensive plan. That's where a majority. Right now, I really, this next year, I really don't have anything in place, but I still have to have that money in there in case there's a hurricane.

So you can beat budget if we have no hurricanes?

Correct. We'll have an old bridge, yes.

Okay.

Chair Champagne. I lost my train of thought, so. Want me to come back to you? Yeah.

Councillor Schwan.

Yes, thank you, Dan. My question, and I don't know exactly where it falls here, but it has to do with the park and rec, which I see Samantha is here today also, with some of the app and app services that we use to manage different facilities at the park. And I don't know what that contract cost is, I think, and that you do use it some. Is that correct?

That's going to be later on in this discussion when we get to Parks and Rec.

Okay.

Okay?

Okay. I wasn't sure where you wanted that. Thank you. Vice Chair.

Okay. I was going to ask, and I will now, does this budget include increases in the fees that you were proposing?

We're going to be increasing fees. You're going to be getting that in the second meeting of August, increasing fees for growth management. Yes, that's correct.

Oh, but that's not in this? It's not in here right now, no. Okay. Upsides?

Dan, I appreciate the presentation. I have a quick question. This was very well done. Your department flies under the radar for a lot of citizens that don't interact. But those who take out permits, those who come in often, always like to see things done quicker. I think you do a great job. I think you're saddled with some older rules as we talk about. Are you staffed up well enough within this? Or be bold. How are we looking at the permitting department? How does that – does this affect our citizens' turnaround time on – No, it doesn't.

We've got a pretty good track record if you were to talk to any of the – contractors, developers in the area.

I've heard nothing but good lately. And I appreciate your honesty and your truthfulness, especially when I give you the chance to try to bring more revenue in, and you say we're doing good. Thank you. Thank you. I see no other light signs. Casey, any closing thoughts? Are we good?

No, we're good. Next up is IT with Jose Duran, and he also cut his budget at 4.8%. He has a $1.2 million budget. And are there any questions for Jose?

This is one we usually move pretty quick through. The only question I really had is, and this is for me moving forward, I don't want to talk about campaigning or different things, but smart city technology, our AI as we talk about a bit, is any of that getting cut in here or is there any hope for that in the future? It's kind of a general question.

So specific to the AI tools, we are making some cuts, specifically with Grammarly, Otter.ai, and we're kind of migrating from ChatGPT to Microsoft Copilot on our licenses. So there's some cost savings on that. And mostly on that, it's just reducing some underutilized AI tools. Excellent. I do want to state there's no reductions that are specific to our cybersecurity.

That was my next question. Thank you. That was what I had. Thank you. Councillor Gray.

Communication is a line item that was budgeted at 183 for fiscal 26, and we're knocking it down to 129 in 27 under the proposed budget, 129,000. The run rate historically has been around that 130,000 level. So there seemed to have been a dramatic spike in the budget. So most of your savings is coming from that communications line item, which seemed to be overstated in 26 relative to the history and you're ratcheting it back. Is there something special going on in this line item?

On communications, we have our RingCentral. Previously before, we had an on-premise phone system, so we reduced that line item. We now have RingCentral as our primary. That's cloud-based. Another piece that we're adding onto that is connectivity to Lee County's Emergency Operations Center. So there's some additional fees that we're going to add on to that. But I think that one's specific to the other contractual services, actually, not communications. Sorry.

Okay. So we're good. The 129 in communications is a pretty hard and fast number for 27. Yeah.

Yes.

Thank you.

Thank you, Counselor Vice Chair.

My question revolves around some of the comments you made on AI. I think by now you probably realize I'm a proponent of accelerating the use of AI in every department. Does this budget support that concept, my concept?

Not fully for all employees. We did have to reduce the number of licenses for the Microsoft Copilot. It's mostly based on usage, employee usage. We tried to lower that user count as much as possible to kind of meet this budget.

I will also add that every department has an IT line in their budget. So it's not really Jose's responsibility to manage the AI programs for every department. For example, if Marsha discovers an amazing AI program that can assist with accounting or technology, i don't know accounts payable then she would come forward with a new initiative to city council and ask for appropriate funding to fund that initiative and put it in the finance budget and every department would do that you may remember we did that two years ago and then as we had to make cuts from each department we ended up cutting some of those new ai initiatives but I'm just saying that because I don't believe the IT budget is the appropriate place for different departments' AI initiatives, and we are continuing to look at those, but AI is not free. There is free AI, but that's not the AI you want to use in municipal government. The platforms we want to use cost a substantial amount, and those are things that take a lot of research, demos, training, and investment, and they are not included in this year's budget.

I think what I'd like to see and it may be unfortunately to the next City Council I think I think we should the City Council should get a presentation from you city manager all department heads of what are they doing with AI in each department I think we need to know a great deal more about how it's being used, what the upside is, what the downside is, if there is a downside. Because as I just look at the business community, the implementation of AI is so accelerated and the savings is so enormous that I can't believe we wouldn't have the same opportunities here. And by the way, I know many people in the community believe AI is intended to cut heads. I don't see that. I see, how do you increase productivity and efficiency of employees? Because I don't think for a moment, as I've already said, that we have excessive numbers of employees. I think what it could do is free up employees to start thinking more. And that would be extremely important, it seems to me, to come up with new novel ideas and creative thinking of how we can increase productivity even more. So somewhere along the line, not today, we probably need a more detailed presentation on AI, how it can benefit the city, what we're doing, what else could we do. We don't have time in the next month or two to do that, so maybe that's a tieover or carryover for the next council. But it seems to me the council needs to hear something like that.

MR. May I? Vice Chair, I agree with you, and that's been on my mind, and I think it's a big-picture conversation. Four people are definitely possibly talking about it the next year. Humbly, maybe five are some of the people sitting in this room. I think it's on my list as one of my goals in the future, smart city technology and AI. If I'm back, we have to start looking at that modernization and not to cut jobs, but to just get into the modernization. But I agree it's not to be dissected for right here, right now. Casey, any closing thoughts on this? Are we okay to move on?

Let's move on.

All right.

Thank you. general government general government fund is is operated by our city clerk Joan Taylor and the budget is nine hundred and sixty eight thousand you actually see an increase there which is primarily due to the last line which is the unassigned contingency that's what we call the city managers contingency and And those are the funds that are used if things come up throughout the year, which they do. But also in order to achieve a balanced budget, we look at, okay, what's left over after we go through the whole budget? There's 138,000 left over. Put it in the unassigned contingency. And then as changes are made in the budget, we pull from that line item. But if there are any questions for our city clerk, she can answer any questions about the general government budget.

Councillor Henry, you're up first.

Actually, thank you for that explanation because that was my second question, was the unassigned contingency. My first question is the line above that, the $100,000 contingency. So there's essentially $238,000. I understand the explanation for unassigned. What is assigned?

Sure. So the $100,000 is something that's set aside to help cover for any liability from our insurance.

Oh, OK. Yeah. Of which we haven't spent any in years.

That I would need to defer to our person.

I'm just looking at the line items on the budget from 23. Okay. Thank you.

Thanks, Chair Champagne. You're going to like this one. I just have a statement, not a question, Joan. And my statement is AI. I see how much time Joan spends on public records requests. And they're valid, and our citizens have every right to request every single record. That's our system, and that's what keeps this governmental system working. But it is a lot of time, and at some point we even charge for it when it's a certain amount. I wonder if AI could do that job. I wonder if it could do it technology-wise. I wonder if it's legal for it to even answer those type of questions. So these are the things that are on my radar. Could some of that be taken off staff where you're freeing up time to do other items? Joan, would you have any knowledge of this? And if you don't, please don't.

Yes, certainly. I mean, that's one of the things, Vice Chair Champagne, I love technology, and I think there's a lot of power that we could harness behind technology. And I agree with you, it's not to reduce staff, but it's to free up time so we can do other things that are meaningful for the community. One of the things that Jim and I and the other members of the city clerk staff is we have been actively contacting and recontacting our software companies that we use. And we do use a public records management software system, and that helps us track the records requests coming in and where they are in the process. Unfortunately, I think there's a lot of people excited about AI, but they haven't been able to figure out how to incorporate it within the software systems, especially I think with the municipalities. This is something that at our clerk's conference, we've brought this up multiple times and challenged a lot of the vendors of, What are you guys doing to bring forward AI? There's a lot of appetite from the clerks to embrace this, but we're just seeing a lag from them, and I think it's because they have to invest money in that in order to bring it forward. So I think it will happen. It's just not going to be at the speed maybe that the private sector may be experiencing things right now.

I appreciate the update. Thank you. I see no other light signs. Casey, anything else on this before we move on? No, sir. All right. Appreciate you.

Next is our fleet and facilities budget run by Joe Parilli, and you can see he has a reduction of 3.3%. Any questions for Joe?

Councilor Gray, you're up first. Thank you. The reductions came into four line items. Operating support IT, other contractual services, about $26,000, electric down $8,000 or $9,000, and water and sewer down about $8,000, and then One that's a little sensitive, beautification, was cut by 5,000 from 30,000 to 25,000. I do worry about the sensitivity of stepping on beautification and their powerful efforts on behalf of the community. There's a couple other reports, so you're the first one into this, that have cut water and sewer rates and utility rates. How is this happening?

So that was based off of an average for the last three years. So I noticed that we had a surplus in the last two years, so I made that cut.

And then I noticed a number of departments do have reduced operating support in IT. Yours was down materially. What drives that?

That unfortunately to make the try to get to the 5% cut I had to remove our work order system So it's we're paying full until April so I would have to cancel that contract next year and does that inhibit your ability to Execute at a high level.

I believe it does so that might be an aggressive cut that might be counterproductive but you're trying to comply with the instructions you were assigned.

You know, I mean, I have to make a decision on whether it's, you know, spend the money to track or to be able to make the repairs. And if I can't make the repairs, then I'm not tracking much. So I have to keep the money where I can use it. Thank you for your answers.

Councilor Goler.

So I just have one question. You have a uniform. You cut it minus 73.6%. What does it mean?

It's just the uniform for my staff. We don't usually use that all the way through the year. It's an aggressive budget for what we end up using.

OK. And the training, is it going to affect our staff?

So what I've been doing for training is because we use POs from Grainger and get our stuff from there, our materials, they offer a lot of training for free because we buy the materials from them. So I've been doing a lot of free training through that.

Okay, thank you.

So I had two questions. Councillor Gray asked one about really what to me was a line item adjustment or maybe an over budgeting for a couple of years, although it comes into us in the form of a cut. But I just want to touch base very quickly. If you can just give us an update, maybe the leasing of the vehicles that we had changed went forward. Is that working out well? Is that looks like it's saving us here, but I don't have the numbers from last year on top of my head.

I mean, I feel like it is. We're still getting data on all this, but the way that it's been working so far is we budget, we get a PO for the year, and then as the vehicles are being replaced, the vehicles are sold, and then that lease is being adjusted. So each department is seeing their lease payments change as the vehicles have been sold.

For me, any information moving forward as we go through the process, I'd like to dive into that a little deeper, but not today, of course. But it seems like, from the looks here to me, working out well, advantageous. But again, I'm just looking at some highlights. I see no other light signs. Casey? And thank you, Jim.

Great. Thank you. Next up is our police department. And our interim police chief cut the budget by 0.4%. And the total budget is $7.2 million. And Interim Chief Bilardo is here to answer any questions.

All right. Chief Counsel Golder, are you up first?

Thank you for being here. I have questions for you. I know you did not go as low as the other departments, but you still did cut some training, which is my – how much it's going to affect our police officers we're cutting down on their training?

Well, training isn't very important. I think it's one of the most important parts. Again, like some of the other department heads, we had to make some decisions in order to get this budget cut back a little bit. So one of the things that we're going to, the way that we're going to respond is we're going to try and do a lot of our training in-house. We do have people on staff that have expertise, so we're going to try to utilize and leverage that expertise as much as possible, save some money in that. But it will impact us, but that's my plan in response.

Okay. And I saw that you are dropping on the promotion. Give me a minute. I think I lost this. The minus 20, what was it? I lost the line.

Is that the promotional material?

Yes, yes. Is it going to affect our police officers' morale?

We use that for when we do public education, our crime prevention. So you'll see a lot of times when we go to a community event, we'll have a table set up. So some of that stuff, some of the giveaways that we have, we cut some. It's a promotional. It's a promotional. It's related to our educational, our public education. One of the ways that we generate interest when we do a – like a presentation or we do any kind of a community education, one of the ways we generate interest, especially if we're dealing with, like, you know, youth, is to have those giveaways. So, again, we had to make some cuts. So that was one of the areas that we made cuts. And what our plan is is that we do have some of the materials left over from the previous year. So we're going to try it. make that last for this next year coming so you know it obviously it will impact but um

But it's not terribly that we cannot operate, right?

Well, I mean, it's going to impact how much it will impact. It really depends on how many things we give away at our events. But we decided that in order to use the money that we had more effectively, at least in our opinion, was to make cuts in that. That was one of the things we decided to make cuts to address that.

Yeah, my biggest concern is the training. We have to make sure our officers are up to the level, the best of the level they can be.

Well, there are some, there is some training that we're not going to be able to do because, you know, if I, for instance, if I have to send somebody away for a specialized training that maybe we can't do a lot of times those that training is they have to travel and then sometimes when they have to travel they also have to you know there's there's lodging there's per diem so we we had to consider you know how can we best Address that and there are we do have folks on staff They do have some expertise so we can address some of those training needs in-house But to be you know to be frank. We won't be able to address everything Thank you, sir.

Thank you Yes Let me start by saying on behalf of the community. Thank you for what you're doing and I noticed the overwhelming positive response for the actions that you are taking in the enforcement area Thank you on behalf of the community. They've been waiting for it They like seeing it happen and they thank you a great deal for for those actions. Thank you Are you in this budget? Did you budget 100% full staffing?

No. We actually did cut one position from the non-bargaining. We cut a command staff position. So we're going to eliminate one lieutenant's position. So I didn't want to take away from patrol. That's the most important part in terms of the community interaction. I didn't want to take anybody out of patrol. So we did, in order to address some of the cuts, we eliminated one of the lieutenant's positions.

And is that a permanent reduction in staff?

It's going to be unless at some point our fortunes change and we're able to put that position back in. For the foreseeable future, I don't see that position.

Very good. I noticed that a category called retirement contribution is up 9.4%, which is a hefty increase in my opinion. Is that the contribution that goes to the pension fund?

Yes. Let me get that up here.

And as you're looking, where did you get the information to justify 9.4%?

These are these are all determined by the contract. So with these are The city contracts with the with our FOP with our union So these that some of these increases you'll see we don't have any control over when when I'm budgeting There are certain things that I'm locked into to to make increases. So you'll look at this retirement contribution from the notes that I that we made and It is determined contractually that that is the increase that has to go towards because based on the contractual salary increases that the officers in the union are getting.

With whom are we contracting that requires this?

The union contract, the labor contract that the city has with the Fraternal Order of Police.

And this is different than the pension fund?

Yes. So this goes into the pension fund that we were discussing. Wow. Last at the last meeting so these this increase though is contracting a contractual obligation that we have based upon the salary or the the pay increases that the officer or the officers that are members of that the union will get I Don't want to spend a lot of time here, but that seems bothersome to me city manager

I don't know what authority, if any, we have here, but for contractual obligation from a union organization to tell us how much we're going to contribute just rubs me wrong. And we already have issues with the pension fund, as we know. So I don't want to spend any more time, but I think we need to look into this a little bit more. I'd like, certainly, the council to understand this better. as I'd like to know more, unless you wish to make a comment now.

Well, you do have contractual obligations, which were negotiated and agreed upon by the city council. So city council approved the current contract with both our police and fire unions. I think I met with each of you and mentioned that – And these percentages are about right, but maybe not exactly precise but generally for your general employees the city Contribute six percent of payroll toward a general employee retirement fund for police last year. It was closer to 37 percent of payroll and FIRE is closer to 47% of payroll. So that's required by your contract. It says in the contract we agree to the city agrees to contribute a certain amount, percentage of payroll to the pension. And then on top of that, the actuary who works for the pension fund also calculates what the city should be contributing. So I believe we're going up in this budget from 37% to 40% of payroll. which is still lower than what the actuary thinks we should be paying. But I will just note, too, again, this is a benefit that our police officers have earned. It's a benefit that they negotiated and that we all agreed to. But just that one item alone, that one line item alone is more than your IT budget. It's more than your legal budget, your executive budget, your general fund government budget, your growth management budget. Just that one line item alone is more than six other departmental budgets. I only point that out to say it's something we have to do. You don't have much choice. It can be negotiated in the future, but it is expensive to run a police department and a fire department. You're going to see the same thing when you get to the fire department next.

Mr. Vice Chair, sorry, if I might, these pensions are state mandated. It's not something we can correct. These are state mandated. We don't control these.

They're negotiated in a contract with your local employees.

But we have to have them, correct? It's not state mandated. Maybe I was mistaken. I apologize for that.

I find it offensive that we're agreeing to these kind of contracts. I, for one, did not know the retirement fund contribution of the fire department when we voted on settling that contract. I think future councils they need to look into the details a heck of a lot more than what we did but those those percentages compared to what regular employees of the city get are offensive now they're they're done deals we have to do what we have to do but going forward the new City Council or even future city councils need to get into this a lot more than what we did. And it's not to be negative to the police or the fire department, but boy, you compensated pretty darn well. And I think we need to begin thinking about balancing that a little bit more, seeing that they already consume more than 50% of the expenses in the city. Anyway, enough of the lecturing But I think we need to learn more about what these contracts are going forward. So I yield.

Well, the nice thing is, for the next go-around, you won't have any Sunshine Law challenges with the councillors, and you could spend as much time with them as you'd like. If I'm here, I plan on ticking your brain a heck of a lot. So just be prepared. Councillor Gray.

Thank you. This is a very important topic that Vice Chair Champagne just addressed. In 23, we paid $776 in retirement contributions. In 24, we paid $910,000. In 25, $1,214,000. Year to date, we paid $970,000, and the budget for this year was $1,246,000, and then next year to your point is $1,362,000. I take it as contractual obligations. I think that's the way it's been centered. The only thing I'm making sure or confirming is there seems to be some variability in those past numbers. Does this number meet our obligation to the best of our knowledge on a run rate? So we do not fall behind in pension obligations.

I believe this number plus the $500,000 lump sum contribution meets our obligation.

Thank you. That's what I thought. I just wanted to make sure the community and everybody heard that. And thank you for the comment on losing a lieutenant because I tried to figure out the non-bargaining wages were down $110,000. And I think you just explained what that was. So the only other question I have is uniforms for next year is budgeted at $60,000. Year to date we're at $76,000. So I'm trying to understand how year to date we're at $76,000 and we're going to cut it back to $60,000 or are we going to go longer between dry cleaning?

We're going to try to be as frugal as we can when it comes to uniforms. When I looked at my three-year average for uniforms, it's about $69,000 for our three-year average for our expenditures. So we're going to try to be a little more frugal when it comes to

So it's the best efforts, but it'd be a quality performance if you got to 60.

And also, a lot of those expenditures, when we hire somebody new, a lot of that expenditure comes with outfitting a new employee. Okay. So right now, we're fully staffed. So we're...

Do you believe you can handle it?

I'm believing that we don't have to outfit anybody new this year, so I believe we can stay at that level.

Okay, thank you. And then the last one, your repair and maintenance budget is basically flat year over year. You think that's a responsible level, the budget for those services? We obviously want to maintain the quality of our equipment.

I'm sorry, which part was that?

It was repair and maintenance. There's a couple different line items in there. When I aggregated them, they were flat and aggregate. And I just wanted to make sure that we were budgeting responsibly.

Councilor Gray, just to let you know, maintenance for his department has been moved to my department.

So you can give him a better deal and cut his costs and it should work for all of us?

Well, I maintain all of his equipment, but yeah.

Okay, good. Thank you very much. No further questions. Thank you, Councilor. Councilor Henry.

Yeah, I guess this is kind of coming from the construction world and being a union contractor, kind of going to the wages thing. There's the benefits to signing a union and negotiating, and I know for me I would have a union plumber and a non-union plumber, and their difference in pay was huge. It was just that one was a union and not. So I just kind of wanted to clarify for that. They're members of the union. And that's how it's negotiated. So it might be. something more that we wouldn't have, per se, negotiated. But then that's where you have to make the decision of, OK, well, if we're not going to give that, what are we going to do? Are you going to have a strike? Are you going to have everybody walk off? Because this is the things they're accustomed to. So I just wanted to put that out there and the fact that, as union members, these are, and I'll use the luxuries that are negotiated for them, that, per se, employees in the private sector, You don't have the same lump together. So just for clarification, it's what they've worked for.

Thank you, Counselor. I have one question, Chief, but I just want to, so I'm clear, and I apologize for the misinformation. Vice Chair, I was trying to refer to the legislative history of chapters 175 to 185, and 185 refers to police officers' plans. These statutes establish minimum benefits and standards for pensions that are provided to local police officers and firefighters under these plans. It goes on to name a wealth of information. check with the staff on this I'm not sure I'm pointing you in the right direction but when I was trying to look this stuff up before the meeting that caught my eye might be something for you to poke around with since it's in your kind of wheelhouse chief I had a question regarding the lieutenant's position correct we cut one lieutenant's position was that filled prior to being cut or was that was that a lieutenant on staff that was me okay there you go I kind of thought I wasn't sure I want to ask that that was me yeah Okay, a question. Within this budget cut, and I'm sure nobody's happy with this when it comes to all first responders, public works, police, fire, and I know you're running a tight one here. Maybe we get some help from the police foundation and all the wonderful people that help out. The way you patrol, are you compromising? I know you say you're not cutting patrol, but for instance, right here during one of these council meetings, the 530 meetings, you had somebody right at the turnabout on Yellowbird before the meeting ended, I believe, or the next day. That was phenomenal. The citizens loved that. Does this budget change the way you're going to patrol? We have, in my time here, through Councillor Schwan, I appreciate bicycle ordinances. We're more heavily patrolling the beach with the turtles and shark fishing. the yellowbird turnabout and different things. Are we changing the way? Are we moving resources from one part of the island to the other? Or is patrolling staying the same in this budget?

There's some procedural changes that we are going to make that will make the patrol, the operation, a little more efficient. But we aren't going to change. We didn't take anything away from our patrol. We're going to change some operational issues that aren't related to the budget. But you will see, I think, you won't see a change on the street with the response. We're going to continue to be as responsive, if not more responsive, going into the future with some of these operational changes that we're making.

I APPRECIATE THAT ANSWER. I WROTE THE WORD DOWN, EFFICIENCY. IF EFFICIENCY EVER STARTS TRANSLATING TO LACK OF RESPONSE TIME OR IS NOT WORKING OUT THE WAY YOU WANT IT TO, PLEASE THROUGH DR. LUCIUS OR TO US OR WHOEVER, JUST MAKE SURE WE KNOW AND WE'LL ACTUALLY DISCUSS IT FURTHER. BUT LOVE WHAT I'M HEARING AND THANK YOU FOR YOUR EFFORTS WITH THAT. COUNCILOR, NO OTHER LIGHT SIGNS? ALL RIGHT.

OK, next up we have fire rescue. And also, I just want to bring your attention to the time. We are after 3 o'clock, and we still have quite a while to go. We want to have a discussion about parks and rec, fire, as well as water and sewer, public works, building departments. So we still have a while. So just keep that in mind.

Thank you for the heads up. I'm going to try to move us along a little. Guys, let's try to keep it to one light sign if we can, including myself.

OK. Our fire rescue budget is $9.5 million. And while there were significant cuts, as you'll see in most of the line items in the fire budget, there is an increase of 3.4%. Chief Byrne is here and can answer any specific questions.

Guys, light signs for Chief? Vice Chair Champagne?

Yes. Is the budget built on 100% staffed

Yes, we are 100% staffed.

There are no vacancies?

There are no vacancies.

Have there been vacancies in the last calendar year?

Yes, one retirement.

Okay, so you have a very low turnover rate.

Very low.

I notice you have the same retirement contribution issue, though... a little bit lower than the police, but for the same reasons I suspect, because of the union requirement.

Correct. Pension benefits are based on contractual obligation, and that amount is set by the actuary. The other thing I just want to point out, and maybe Marcia could clarify, I believe the percentage that the city manager stated was prior to some pension reform that occurred during one of our union contracts, and I believe we've brought that down to about 28% now. It's been a gradual decrease over the years, but we can certainly clarify that for you.

Good. Thank you. At this juncture, I'll keep looking, but I'll pass the baton.

Councillor Gray? Yeah, it's an easy observation. Your wages are up $250,000. Your retirement contributions are up $80,000, which explains the $300,000 increase year over year, just so the community hears it. Those are contractual obligations, and that's the way the cookie crumbles. Thank you very much.

Thank you.

Chief, I have one question. Whether we keep you in the general budget or move to the assessment-based, does that change this budget at all in any way?

That has not changed in this budget.

Very good. Thank you. I see no other light signs. Casey?

Thank you. And code compliance is next. Code compliance has a budget of $739,000. They cut 1.5%. And code is run by Police Chief Bilardo. If there are no questions.

I see a couple light signs coming on here. Councillor Gray?

The change in budget year over year is down 11,000. I love code compliance. I'm serious. I actually think it's a potential revenue driver. I do think that we have a lot of magistrate mitigations. I know we should be very sensitive to mitigating residents. I'm not as sensitive to mitigating visitors. There's a debate, can we get more leverage out of code compliance with a different staffing level and provide a better level of service to the community? We keep them under a very tight budget, maybe it's the right one, but I'm just looking to make sure I understand if there's opportunities.

Are you thinking about increasing the size of the company?

Well, somebody mentioned AI earlier. Actually, my first paycheck I gave back to the city, I gave it for AI development or probing. That was when I first got here. AI said that maybe if some of these people were full-time as opposed to part-time, it might change it. I am not going to get into operations. I am not going to question any of that. I thought I would ask the overarching question, are we running this department as responsibly and effectively as we can?

The majority of the employees in code are part-time employees.

Right.

So I have a couple of full-time code officers and, of course, the supervisor is full-time. Our code administrator is full-time. Could I get more out of them if they were working a full-time job?

I wouldn't say squeeze it. This isn't about squeezing more blood out of a turnip. It's about is there a more astute operating model that we could leverage to better outcomes.

I would say that there's always changes that you can make. I mean, every organization evolves over time. When you look at how they operate, you can do an assessment to see if there's better ways to do things. Our code officers are very effective, so we get a lot out of them for a very small budget, which has very little fat in it. So could they operate more if they were full-time? Sure, they'd be here more. It would cost us more to begin with. We'd have to have a larger budget if we had more full-time employees. So I think that for what we have right now, for employees that a big chunk of them are part-time, they do a ton of work. We get a lot of enforcement out of them. And I think that, you know, I'm sure that if we look at it, maybe there's ways that we could change it if we had to, but I think they do a pretty good job the way they are.

Understood. Thank you. Very good. Councillor Henry.

My question goes to the overtime. If most of them are part-time, where is the overtime coming in?

I do have two full-time employees there. With the overtime, I mean, a $15,000 overtime budget over the course of 12 months is pretty small. And that's actually a cut compared to the previous years. But those full-time employees, because they are hourly, they would be entitled to overtime. If they work extra, they work details, things like that. They do a lot of other things besides code. They do some traffic control for us and that sort of thing.

So do you utilize them sometimes in lieu of, say, using a police officer?

Sometimes. For instance, if we have a special event, like the 4th of July, we'll have code. A lot of our traffic control is code enforcement. We'll come down and help us do traffic control for that. They do a lot of things for the police department when it comes to things like that, especially traffic control when it comes to special events and things like that.

Okay, so that overtime is just for the two?

Yeah, I mean, obviously they get paid a lot less than the police officers do, so their overtime rate is lower, but that would cover those full-time employees. Thank you.

Chief, thank you. The time you spent with me answered all my questions, and I appreciate it. Thank you. Case, I hate to do this with you, but I need like a three-minute break. So let's try to make it quick, guys. If anybody needs a bathroom break or anything to that effect, I'll be right back.

Go ahead. No, go ahead.

Thank you. Next up in our operating budget is Public Works, led by Justin Martin. And Justin's Public Works budget is about almost $3.6 million, and he reduced it by almost 5%. And Justin is here to answer any questions you have.

I don't see any light signs yet. Guys, all right, Justin, you've answered them all ahead of time. I gave you applause last time, Councilor Gray.

I have one question to answer during the break, but I'm so intrigued by streetlights. All of us fixate on certain things, and for me, streetlights, one, there's some efficiencies, but I did talk to a vendor that discusses how they actually have leasing arrangements for streetlights, et cetera, but I noticed in our history, like in 23, we spent $105,000 on streetlights in 24, $65,000 in 2551, And we had a budget of 74,000 this year, and then we're going for 69. Obviously, I guess you repair the bulbs that burn out. I would imagine this isn't a proactive strategy. Have you ever looked at a leasing strategy that might reduce our carrying costs or improve how we approach lighting, street lighting in the future?

Well, we already own this, Justin Martin Public Works. We already own all of the streetlights. What this is for is actually paying a contractor to come in with their bucket truck once a month, check all the streetlights, make sure they're working, and like you said, replace bulbs, replace luminaires as needed. So that's what this is for. So if we did new streetlights, then yeah, leasing would be an option, but we already own these.

Understood, okay.

Thank you vice chair champion Justin are are you? During this fiscal year are you fully staffed? I know you were running some vacancies and

Yes, the last vacant position, the employee starts on August the 3rd. So thankfully, thank God, we were able to fill those two positions. It's been a real challenge with the absence of those two positions. But as of August 3rd, we will be fully staffed.

Very good. That's my only question.

I'll just make a comment before we move on.

Oh, Councilor Schwan.

Thank you, Justin, for the presentation, well, for responding to the questions. I just wanted to note that you came in right at decreasing 4.9%, right under the 5%, and I just think that I just want to recognize you for that. Thanks for all you handle so many things, as all the staff does, but thank you.

You're welcome. Yeah, Justin, I just wanted to thank you, and as the citizens that are watching or might watch this later, why can we move so quickly through some items? Your department lends itself to us speaking to you often on these items, so we've been well-versed in many of these ahead of time, so there's no need to go through. You do an excellent job and made total sense to me, and I agree with Councilor Schwan. Thank you for the... the efficiency there. So, you know, other light signs, Casey, moving on.

Thank you. So last in the general fund is parks and recreation. Samantha Malloy manages parks and recreation, and you'll see two budgets here. One is for parks and rec in general, and then separate separated out is the racket club and racket club budget is 181,000. And the overall parks and recreation budget is 1.1 million with a reduction of 4%.

Councilor's questions on either one of those. Councilor Goler, you're up first.

I just have two questions. Thank you guys for being here. I have one item I saw on parks and recs, reduction of 36%. It was community recreation programs. What is that?

Community recreation programs are, the largest deduction that we did is actually for our fireworks. The recommendation is to get the majority of the fireworks through donations.

Okay. And one more question for you. Is this the Rocketball Club budget that you submitted, does this include the increase of the membership fees?

So we did not, right at this moment, we have not increased that. And the reason why is there's a lot of conversations about what we're going to be doing operationally for the Rocket Center. What we're asking for is at least a good year, because we still have a lot of, the majority of our members are still at the old rate, because they have the rate for a whole year. So it's going to take us a year to get everybody through at the new rate. But some of the conversation that we're having and Parks and Recreation Advisory Committee is having is in regards to opening up the wait list. And in order to do that, we might have to go to a scheduling system. If we go to a scheduling system, we might need to look at the rate, the membership rate.

So we have not started the new rates at all?

No, we have started the new rates. So anybody that is renewing or we have gone through some of the wait list, a small amount of the wait list, all those are at the new rate of the $360.

So it's included in this?

Yes, but not for all 450.

Okay, got it. Thank you. That's all I have.

Thank you, Counselor. Counselor Gray.

It was a guesstimate because I couldn't find my numbers. I think the year-to-date farmer's market revenue is about $105,000 ballpark. And I think we were budgeting sort of a similar run rate for next year's revenue line. And it seemed like we just passed some increased charges at the farmer's market. I was hoping that maybe that revenue number is understated. I just wanted to confirm your assessment on where you think, after the price increases for the farmer's market are implemented...

Right.

Do you have any idea how much that might add to revenue? And this was not a scheduled question, so I apologize.

Yes. So I don't like to increase unless I know for sure. So one of the reasons why we make a little bit more for the farmers market is we actually charge the vendors to go a little bit extra if they want to go outside of their area. So we charge them by a 10 by 12. Some of the farmers market vendors like to exceed that. So they get a rate. So that's not something that is definite that they're going to do it. The increases that we are recommending, we did a ballpark of just an additional $4,000. So I'd rather be more on the conservative side than I'd like to actually make that money that I tell you I'm going to make rather than, you know, come in under.

I love your attitude. You're going to beat budget. Thank you.

If I could just follow up. I was going to ask the same question, and I don't want to put my jump in. Samantha, tonight we're going to approve you under consent agenda. I have no desire to remove you from it for the new fees. A while back we did ask about a little bit of a quick study on the fees and if we're profitable. Does this allow us – I love the farmer's market. Citizens love it. It's an event as much as it is a revenue source. Do these new fees just cover whatever overhead and expenditures we have on there?

Well, so the reason for the new fees, we actually keep in touch with other market managers around southwest Florida, and pretty much everybody is putting in the new fees just because we have additional overhead cost. So it's going to basically hopefully cover the additional overhead cost that we're going to assume.

Excellent. Keeps me from having to ask tonight. I appreciate it. Jeff, something else you want to please?

Yeah, I'd like to just add that one of the things that you're not seeing – that's in this budget is we're cutting back on some programming that we normally have. You're talking about our Easter, Jubilee, things of that nature are going to be cut back a little bit just because of staffing and we're asked for a budget cut. This is where we had to cut it a little bit. So what you're me expecting, if you see something a little bit different, not as much, well, that's part of this budget.

We're going to have to find you some generous donors.

We could use all the money we can get.

All right. Well, I'll do the best I can with that. It's a generous community. We'll put the word out. Vice Chair Champagne?

Yeah, I have some – I want some clarification, Samantha, on the fees for racquetball or at the racquet center. I'm confused. Would you take your time and explain why 100 percent of the membership are not paying the new rate?

Because we have, if you were to sign up for a membership today, it wouldn't be due until this time next year. So we have a lot of, for the next, not the, so if you pay $360 today, your next $360 is this time next year, right? So we had, the majority of our members, they had paid the 188 rate. So throughout this next year, when their renewal periods come, that's when the next. You're losing me. Okay.

A current member is paying $188 despite the fact that the city council mandated a $360 fee.

Because they paid for a year $188. The next time their renewal period comes up, that's when they'll pay the $368.

What is the time frame of a renewal or a membership? Does it last 12 months? Yes. So wherever they fall in a calendar year, they get 12 months of coverage under that period. that rate fee okay I'm starting to understand so some of them are under the 12 month 188 fee and they won't pay the 360 until they get the anniversary time correct okay all right anniversary well said yeah are you fully staffed no at this time no we're not and how many people are you missing right now we are missing one part-timer and one full-timer And what has been your vacancy rate for this fiscal year, generally, ballpark?

I mean for part-timers truthfully we're consistently under one for full-timers recently and it's just because of the the hiring rate it's it's hard to get a good talent in at our hiring rate for Parks and Recreation a lot of them can go you know now i mean they can get a decent rage wage just at some of the new places that are opening up in naples so and and then if i hire if you say okay you can hire them at 21 instead of the 1975 that we're looking for then i have to look at my other employees that have been there much longer and they're only at 21 so it it has been a challenge

Yeah, I'm just wondering, and I'm not trying to get into how your issue of compensation is really with the city manager, not with the city council. I'm merely looking at it from a budget point of view. If you've consistently been running vacancies, there's an easy way to save money in a budget. You just budget. the number of people that you consistently employ and the consistent unemployed or unfilled positions you claim as a saving, even though you keep trying to recruit those people.

My response to that is my staff is tired. We have a small staff and we do a lot and just recently we've actually had to close a little bit earlier because we just didn't have the staff to cover so we've had to close At 6 o'clock instead of staying open until 8 o'clock because we didn't have the additional staff to cover You know, we we really only have a couple of weeks of downtime before and after season because we have summer camp and Our staff it takes all of us to be a part of you know summer camp then when season comes it takes all of our staff and do all the events and programming so our staff wants that extra coverage when we have to cover the front desk then just the simple people coming in and out with the questions and passing that around that's less than our staff can do I think you missed my point I'm not trying to intervene on operations that's your city manager and your department head

those you talk to about pay rates and things of that nature i'm just saying to save money on a budget what's your consistent employment rate at do you if you have 20 employees is it consistently at 18 employees if so take the savings for the two don't stop trying to recruit replacements I'm not trying to intervene on that. I'm just saying it's an easy way to save money. When she says save 5%, bingo. Two vacancies that have been vacant all year, I claim those as savings. Not because I'm not going to try to fill them, but because I want savings. I don't know. That's the way, from a private business point of view, we tend to look at things. So again, it doesn't influence trying to fill the jobs. It's merely a budget item.

However, Vice Chair Champagne, I used to have this debate with our former city manager that that's exactly what we should do. And number one is, it is only a cost savings the first year. The second year, the third year, the fourth year, there's no more cost savings. Additionally, when she does fill those positions, then she's over budget.

But budget's only one year.

Right, but once you cut the funding for that position the first time, you don't get to keep cutting it every time. It's a one-time cut. But the budget is one year.

Next year, you budget whatever you need.

I would just ask that if the council wants to... Adopt that philosophy that we don't budget that we only budget for filled positions if that's a philosophy of the council and that's the direction of the council we will do that and you will see substantial cuts in the budget, but I Don't necessarily think that's a sound strategy in the long term and I haven't directed the staff to do that.

I Think it's an easy way to come up with savings And it should not involve anything on trying to recruit people. So it depends upon what, you run the operations, I don't, we don't here on the city council. You make the decisions. I'm just saying, from a private business point of view, it was a very easy way to come up with savings. And it only lasted 12 months. Then the next 12 months justify why you need more money. But nonetheless, I don't want to get into running your operation. So, end of questions. Oh no, I have, Why are we budgeting Racquet Club when we have a private group of people saying they're going to fund the Racquet Club?

They're saying that they want to fund renovations to the Racquet Center. They're not saying that they want to fund the overhead of the Racquet Center.

They're not going to cover any – no? Okay, I misunderstood their presentation.

I think that was more on us, Vice Chair. We're going to give direction on that one as to how we want to work with this entity and what they're willing to do, what we're willing to accept, and what we can make work within that. That's still a conversation in place.

Because as I understood it, and I may have misunderstood, they were going to end up with a surplus based on the fees they were going to charge, and those would be available to the Racket Center for maintenance, for things of that nature. IS THAT NO LONGER PART OF THE DEAL? OF COURSE WE DON'T KNOW WHAT THE DEAL IS BECAUSE THERE IS NO DEAL.

I WAS GOING TO ASK THAT QUESTION. THESE ARE PROPOSALS. NOTHING HAS BEEN SET IN STONE. THAT'S FAIR.

WE CAN'T BUDGET ON WHAT MIGHT HAPPEN IF WE HAVEN'T MADE A DECISION ON WHAT'S GOING TO HAPPEN.

YOU'RE RIGHT.

BUT I LIKE THE ATTEMPT.

I'M JUST TRYING TO SAVE MONEY.

COUNCILOR SCHWAN, YOU'RE UP NEXT.

Yeah, I'm good.

Councilor Schwan.

I have one quick question, but Samantha, it's great things to you and your staff for all your tireless work that you do. You all do an excellent job, so thank you very much. My question is about the Racket Center. And you mentioned about there might be a possibility of opening up the waiting list. And is that through some of the software that you have that that would be done to manage it more that it would give more people opportunities to play in our community by limiting the time that one individual could play in a day? Is that kind of the route that would be going?

Yes, so currently we are, we just started with a new recreation system called ActiveNet. We are going to effective September 29th, we're going to go live with ActiveNet instead of Civic+. The rates are very comparable. It's not much more at all for ActiveNet than Civic Plus. And ActiveNet gives us a lot more than what Civic Plus had. And ActiveNet does have a scheduling system. Now, we did look into Dr. Lucius had gone to Pelican Bay to take a look at pod play that they had. And so myself and Danielle, we went there, we took a look, we talked to them. Long story short, after doing a demo, some of the other staff attended the demo. Pod play, it doesn't seem like they're going to be able to do more than what we can already get from active net, which we're already paying for. So that's the good news. Additional funds may in the long run be needed for gate access so that will be an additional cost but what the staff is doing right now is Mike actually from the rocket Center he is contacting other parks and recreations that have pickle play pickleball play and he's asking them about if are they using schedule a system how is that working for them? So he's making those phone calls just to kind of compare. ActiveNet goes live on the 29th of September. We're asking to have a little time to get implemented, learn the system, learn the scheduling, and then we'll come back with staff recommendations on what we think that we could do.

Thank you very much for all that research and what Mike is doing too.

Just one other thing I do want to add because it does affect the operational budget another that staff is evaluating a change to the Racket Center operation hours Right now we currently are Monday through Friday from 8 a.m. to 8 p.m. and weekends 8 a.m. to 1 p.m. We're looking and considering changing the hours from 8 a.m. to 6 p.m. Monday through Friday and still remain with the 8 a.m. to 1 p.m. on Saturday and Sunday. And this change will provide two benefits. One it will reduce the evening noise for the neighbors and number two it will allow us to better align staffing during our busiest periods. It will improve customer service and facility oversight while remaining within our existing budget and avoiding the need for additional hours for staff.

Thanks Samantha for coming in with those new ideas too.

Samantha, I just have one quick question on what you said. I'm presuming 6 p.m. to 8 p.m. is a more quiet time where you're not as active with the center?

So we do have some groups that like to have more play during that time, league play. But one of the considerations is just move them to 4 p.m. to 6 p.m. so they can continue to do their play. It would just be earlier.

And I'm sure this is a yes, but this keeps us in compliance with our deed restrictions. The restrictions would call your county themselves a free play in place.

Yes, we're still going to include free play.

Thank you so much. Thank you for the presentation. No other light signs? Thank you. Casey?

Thank you. Okay, next up is Dan Smith again with the building department. And actually, the building department's budget is pretty straightforward. You'll see the first page is their revenue estimated or projected to be $4.2 million, which is an increase of 4.7%. And then I believe they're projecting a budget of $3.9 million, which is a slight reduction of about 1%.

Dan Smith. And just to remind the board, this is an enterprise fund, so everything that we bring in is through fees, and we did a fee increase so we could continue on with our services. So this budget reflects that.

I don't know. You're probably on the general. Is this not on the general budget ledger?

This is a separate attachment on your agenda. So we got through all the general fund accounts, and we move to the next attachment, which is building services.

So I'm on the last to next attachment, Vice Chair Champagne? That's correct. All right. Very good. All right. Looking at that now, we have one light sign. We'll start with you, Councilor Gray.

Thank you. My only question is I thought I heard in a prior meeting somewhere, somehow, if you do encounter a budget shortfall, you have a fund reserve that could accommodate that?

That's correct.

And what is the size of that fund reserve and how do you manage that?

I believe it was a little bit over $3 million. That's what I thought. And what that is is that's because you can't anticipate the building permits that come in and the construction. Every year I hear that this. Restaurants going to be get built. I've heard that three, you know, I'm talking about three or four years now Yeah, and so we have to be able to handle those swings and so that's what that reserve fund is is for to make sure that During those swings that we're still fully funded that we don't have to lay anybody off So that was an excellent build of that reserve.

I'm so ecstatic at that management Do you collect the interest income off of that three million?

That would be a finance question on how that's handled

The answer would be yes, we collect the interest, but it goes back into the building fund.

Good. So that adds to your reserve. That's correct. So you break even, your reserve's going to keep growing. Hopefully that's the case. That's poetry to my ears. Thank you.

Thank you, Council. Councilor Henry.

Quick question on, once again, on overtime. And I'm guessing, as it was alluded to, the overtime, would that be more so towards if we have hurricanes and such, like when you look at the past numbers?

Normally it would be something on that scale, or because we're an enterprise fund, we can only keep as many people there, so we might have people that are sick. We might get more than one or two sick, and that can bring up the slack. But just so you know, we've put an effort forward to have multi-licensed programs employees, we're making a big push for that because we're really struggling with our private providers, bringing them in because if we have someone who just has an electrical inspector, as you probably know, it's really hard to, someone who just has a plumbing inspector can't do that inspection. So we're really bringing people in with a lot of certifications. So we don't have to either have overtime or we don't have to hire these temp companies. Perfect.

Okay. That's all I have.

Dan, you know, not to get on the AI kicker, just our online portal app, and I like it. I've used it. I find it efficient. I'm okay with technology. I'm not a dinosaur, but I'm not perfect, but it seems pretty user-friendly. Is there anything in this budget we're cutting you short on? Is there any technologies that would make the permitting and the building processes even better?

Well, we actually moved forward in this current budget where we're adding some AI technology through our permitting system. It's more or less a flow chart for people. If you have this question and you're going to be doing this, then you're going to go to this direction. We're implementing that right now. And some of the programming that we have right now will have that AI function, we believe, starting next year. And to answer your question with AI, one of the issues with AI is especially for a private company or a government, you have to program it for a closed system, which means it's not pulling stuff from the internet, it's not pulling stuff from these other areas. And that's where the big cost comes in is you have to bring a consultant in here to close all this down so it's only just pulling from Marco Island records. Or it's pulling from Collier County assessing records. Or because we still have a lot of Collier County records we use, it has to be able to pull from them. So we have to have these...

partnerships with some of these other government agencies to pull this thing off and it takes some time well once we get done training the world you know in my generation and up like live person representative but if you take a few minutes and walk through a lot of the AI technology will bring you exactly where you need to go or who you need to end up with

And you remember when geographical informationals came in, everybody thought it was going to use less people, less staffing. It just became the opposite, because everybody wanted all that information right at their fingertips, and we had to hire people to give it to them. Double-edged sword.

I see no other light signs. Dan, thank you. Okay.

Thank you.

Casey? Okay. We made it to the last fund, which is our Water and Sewer Enterprise Fund. And the Water and Sewer Department is run by General Manager Jeff Poteet. Hopefully he's still here. Good. Jeff's still here. You'll see on the – I guess it's the second page of this attachment. This is the last attachment in your agenda packet – It will show the revenue totals and projected revenues for FY27 are about $39 million, which is up 14%. And then the following pages, the water and sewer department is divided into eight or nine different departments, and each one has its own budget. And you will see some increases in these budgets, which Jeff can explain why that is the case, but he is here to answer any questions. And while, if I could, because I know that when you're done with this, you're going to want to adjourn really quick. I just want to make one correction, if I could. Sorry, Jeff. Just going back to what I said about the fire pension. Actually, Chief Byrne was correct. The contribution to the fire pension is 26.17% of payroll. So I just wanted to make sure that that was corrected. Thank you.

Thank you. And before we turn it over to Jeff, Jim, how many people signed up for public? Any citizens' comments at the end of this?

We have two registered speakers.

Very good, thank you. Jeff, I see no luck. Guys, any light signs for? Good afternoon, Council.

Go ahead and start, and then I can answer all your questions, hopefully. And thank you, Councilor Gray, for your opening statement regarding staffing, because I do want to bring up an issue there. So the proposed FY27 water and sewer operating budget is balanced based on existing water and sewer rates. And I'd like to begin with a brief overview of the major changes included in the proposed budget before discussing one new position that I believe is a strategic investment in the future of our utility. Although this position is not included in the proposed FY27 budget request, it can be funded now and incorporated in the FY27 budget without any impact to water and sewer rates. So the budgetary adjustments include a $3.2 million transfer to the Water and Sewer Capital Improvement Program, and that is for capital projects such as the water and sewer main replacement associated with the Caxambas Bridge replacement and the design of the advanced wastewater treatment improvements. We also have approximately $350,000 increase in chemical costs and that's across all of our treatment facilities. A $400,000 increase in electrical costs that is primarily at our south water treatment plant and that is 100% demand driven. Another $250,000 in employee labor and benefit costs. We also have a reduction of more than $620,000 in debt service. These adjustments will allow us to continue to maintain our infrastructure, meet regulatory requirements, and provide reliable, high-quality water and sewer services. In addition, I am requesting funding for one new senior technical position, a utility compliance and special projects manager with an estimated annual salary of approximately $135,000. As our utility continues to grow in complexity, so do the demands on our staff. All of our treatment facilities rely on highly technical treatment processes. Those demands will only increase with the implementation of new PFAS regulations on both the water and sewer side, major capital projects such as the advanced wastewater treatment improvements, expanded grant opportunities, and increasing complex state and federal regulatory requirements. At the same time, several of our most experienced employees are approaching retirement, making succession planning and the transfer of institutional knowledge more critical than ever. This position would provide senior level technical expertise to support regulatory compliance and special projects engineering coordination Grant administration and staff development. It is a strategic investment That will strengthen So we're running

You're confident we're going to be running around that rate to the end of this?

Yeah, not just am I confident, but the way our contract was written was based on capturing more water flow so our revenues would go up. And that's the contract with Jacobs, or not Jacobs, but with Johnson Controls. And so we are confident that those revenues will capture, we'll be capturing more revenues as water sales are increasing.

So the $500,000 is run rate for this fiscal year.

Yes, and that's only for a portion. So we started installing really in any meaningful amount in January, and we're now at about 90% of all the meters installed. So over time, some proration of that $500,000 would be attributed to that.

And do you have an estimate of what kind of contribution it will make in the budgeted new fiscal year?

We estimate it about $2 million.

Beautiful. Okay.

Thank you. Councilor Doan.

Jeff, I've got a broad question for you. Where do we get our water from?

Well, we have four major sources for our water. We have the primary drinking water source is a freshwater source about nine miles north of Marco, and that is primarily a stormwater runoff, and then that's treated at our north water treatment plant using lime softening. The remainder of our potable water comes from the the South water treatment plant a groundwater brackish water treated by reverse osmosis then we have didn't mention this but our ASR project is another source of water where we're able to capture water at the storm water when it's plentiful and push push it down on the ground and pull it back up when we need it and our final source of water is reclaimed water and that's strictly for irrigation

Now, with this increase of usage, are we in any danger in the next 15, 20 years of becoming Cape Coral, where they're having water shortages every year?

Well, we're actually a lot different than Cape Cora, where they rely primarily on wells that are sufficient, wells that affect the more use, you affect the aquifer. All of our water sources are considered alternative water sources. And so while we do have some future needs that need to be met, I don't think we'll ever be in that same category.

Okay, thanks.

Jeff, I had a couple, but I'm going to say, I'll talk to you one-on-one about how AWT might affect the budget and if IELTS, Capri, and Goodland ever tied in. They're bigger, long-term questions. In the interest of time here, I just want to thank you and your whole staff and all the department heads and the staff that work underneath them. This was an excellent workshop and excellent information. I have no further questions, but thank you on that. Casey, before I get to public comment, anything on... This was the last one, right?

Yes, this was the last one. And if I could, I just want to kind of summarize three points for today. First of all, thank you for taking all the time and asking good questions, listening to our staff on all of the issues. What I heard today, and correct me if I'm wrong, but generally the council agreed to the capital strategy. We talked about moving some funding around to support the capital transfer. You agreed to the budget at millage neutral and agreed to the department's operating budgets with the exception of making some modifications to the legal budget.

You summed it up pretty well. There's no final decisions made of course counsel. These are just the direction going forward You have time to ask additional questions change any of your thoughts and direction, but that's the way I was hearing I think you great notes appreciate it Public comment, please.

Yes, sir. We have two registered speakers our first register speakers.

Mr. James Burke followed by mr Dennis Bartolucci What worked as city of Monaco Police Department Could you just state your name please? James Burke. Thank you, sir. If we lose the city of Macau Police Department and they get the Collier County Sheriff's Department, we're going to lose really good officers. And we need a Macau Police Department to stay. And we don't need a counselor like Bernita Swan to get rid of them. Because if the public has a chance to vote on keeping the police department, We're going to all vote on keeping the police department and look at the jobs that the police officers would lose. And I would have to blame the police officers for losing their jobs. Thank you.

Thank you. We appreciate your support of the police. Counselor Schwan, you were named on that. Did you want to make any comments? Okay, very good. Thank you, sir. We appreciate you. Next speaker, please.

Our next and final registered speaker is Mr. Dennis Bartolucci.

Dennis Bartolucci, Marco Island. Keeping you from dinner, I'll be quick. Okay. Just a few facts to kind of round out the discussion. We talked about the, you talked about the spending cap. The spending cap, from what I could tell of the city's history, is the reason we're a city. In other words, there were a number of votes to become a municipality, all of which were rejected, and then a spending cap was instituted, and then by a very small majority, we became a city. That's one. Two, the spending cap allows the city inflation, full inflation, plus 3%, inflation plus 3%. That's not a stranglehold on anything. Now, what's happened in the past has happened. But the fact is that the spending cap is not the villain in the story. Third thing, population over the last 10 years, pretty much flat. I've looked at the financial statements over that period. That's what they say, population pretty flat. I've also looked at the revenue, particularly the property tax and the operating expenses. over 10 years, 10 years ago, today. So what has happened? The property tax revenue has gone up from 0.1 to 0.2, 30.5%. The expenses have gone up 55%. So you say, how do you get to where you are now? You don't have enough nickels to do whatever. OK, that is something to think about. Now, those are the facts. The rest is opinion, which I am not going to express today. Do we not have enough expenses? Should we have more expenses? Should we have charged the residents more taxes? Keep in mind that when we talk property taxes, we're talking the residents paying the property taxes. They pay 96% of the property taxes. You all know that. That's not in dispute. So that's it. Just a few facts to consider. But thank you, and thank you for the discussion today.

Thank you, Dennis. Councilors, any other thoughts? All right. We are adjourned. See you back at 530.

That's one way to look at it.