City Council - Regular Meeting

Alright. Good afternoon, everybody. Welcome to our Monday, May 18, 1PM city council revenue workshop. If you could, if you have a phone on a ring, please silence it. And let's not forget that our rules of decorum are always in effect for counselors, attendees, and staff. Jim, would you call the roll, please? Councilor Henry. Here. Councilor Gohler.

Here.

Vice Chair Champagne.

Here. Councilor Schwann. Here. Councilor Gray.

It was a trick question. Here. Cheerful Humble.

Yes. Here. Now for item number three, vice chair Champagne, who is here, is going to lead us in the pledge of allegiance. If you if you can, if you could please stand. Pledge allegiance to the of The United States Of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Thank you, counselor. Alright. Item four, the business of the workshop, revenue workshop. We're gonna turn that over for introductions to city manager, Casey Lucius. Casey, if you would, please.

Yes. Good afternoon, council and members of the public. This is actually the first time the city has done a revenue workshop. In the past, we've dedicated this time to what's been called a budget policies workshop. And quite honestly, I didn't find those to be very productive or fruitful.

So this year, I wanted to change it to focus specifically on revenue. So you all understand and the public understands what our main sources of revenue are and what our revenue projections are as we move into building the budget for FY '27. So I'd like to introduce Melissa Hinton is our budget manager, and she has been working on these projections. And she's going to share her findings with you this afternoon. And then we will move into some specific proposals from our department heads.

Melissa welcome

thank you good afternoon council Melissa Hinton budget manager thank you to the public for attending what I'd like to go through with you today is again, like Casey specified, this is the first time we've ever done a revenue workshop. So this is something that's very different for us, but it's also something that's very necessary. So what I'd like to do is I want to go through the presentation with you slide by slide and give you some highlights of each item here. So what we're going to do today and let me know if you can't hear me. Also, too, I'm on joke all jokes aside, it's not a joke.

But if you can't understand me because of my accent, ask me to repeat it, that's fine. I don't care. I get asked all the time. My accent sometimes gets in the way. But as of today, we're going to go over on the agenda.

We're going to look at the budget calendar. Going to look at the general fund revenue overview. We're going to look at some millage history, projected 27 revenue for general fund, as well as water sewer and building funds. We're also going to look at some additional revenue sources and then line item by line item for the general fund projections and then at the end any questions or anything like we might have so first thing up on the board is our budget calendar for '27. In this we have highlighted in red some very key points that we need to really focus on.

Today starting out with our revenue workshop June 15 coming up with our city capital budget workshop, and also July 20 is our operating budget workshop. Big key points in September are the September 8, the first reading of the budget, and this final with that big star beside number 10 is the big is the big hearing was the final for doing the millage in the budget. So, I'd like to keep that in mind so whenever we're moving through this budget season, we've got these dates in play so that we know what we have to focus on when we need to focus on it. So here we go with what we've come up with for the general fund revenue overview. Last year, projected or actually, we budgeted for $34,103,844 This year, a total projected general fund revenue is 34,596,191, an increase of 492,347, a 1.44% increase.

What is driving this is we are our top drivers are our ad valorem taxes that we've decided to base our numbers on, we're bringing in $1,132,000 at a millage neutral rate of 1.267, meaning that's the same tax rate that we charged for last year, that we adopted for last year. The other drivers to overall picture for the general fund is we've got a slight increase in our casualty premium insurances based on a three year trending average. But the big driver here is our decrease in interest revenue. The past couple years have been budgeted a little high at $1,800,000 And we've actually, to date, as of March 31, have only received let me just make sure I got my notes we've got only received up to 23% of our budgeted revenue for interest income through this year so what's happened there is we've actually seen a decrease in rates since the first since the beginning of our budget year last year at 4.1% down to 3.68%. Our earnings have, you know, constantly all been on the decrease.

So that number is based on year to date actuals, the 523,000 that we've only collected so far through March 31. So there's a big impact to our bottom line as far as our revenues go. The other thing that is driving some of the decrease also and let me point you to also, in your packets, you're going to have a page in the very back that shows it's page 16. It's in the packet that you guys have. It won't be displayed here on the screen.

But that'll give you the detail of revenue each line that makes up the total. This shows you what makes up the $493,000 for overall increase. The other points to note is our intergovernmental revenue, mainly the $0.5 sales tax revenue and the state sharing revenue. We've also budgeted a decrease there, and that's based on a three year trending average. So we're reducing that by about $200,000 as opposed to what we've been seeing in the past years.

Also to note in this presentation that I know everybody's excited and heard about the JW being sold as far as, you know, assessed values for that. That has not been included in this presentation. As of Friday, when I took a look at the county records, that sale has not been posted yet. So I don't have the values for that as far as what kind of impact that'll have on the total assessed values that we'll be charging up alarm taxes for. Also to note in this presentation, I understand with the revenue bond, if it passes in August, there'll be a requirement of a point one millage rate to be included in that to help offset the debt service cost there that also has not been built into this because we don't know yet if that's going to pass okay So moving right along here.

Does anybody have any questions at this time? Or do we want to hold the questions until the end?

Why don't we try to hold them until the end? If something's real important, jump in. But if not, we'll

help Sounds you get through it good. All right. So next is just a is your pie chart that shows your adopted 'twenty six budget and our proposed 'twenty seven budget. As you can see here, ad valorem taxes for last year was made up about 66%. And for 'twenty seven, ad valorem taxes is proposed to bring in 69 percent of your revenue here.

Now, for the next two slides, this is going to be a little overview of building services revenue. And if Dan or anybody from building services would like to speak to that, we can. If not, we can move right along. And also here with Water Sewer Fund, this is what the director, Jeff Boteet, has projected for Water Sewer Fund FY 'twenty seven revenue. Here, on the next slide is your projected revenues and expenses, an overview.

First line showing what our total projected revenue is for the year. And down below that is our we known what we call as our headwinds or what we are known expenditures. We know we have to pay, you know, the wages for the bargaining units, the fire and police. We have to pay the retirement. Our health and dental is sitting at an 8.2 increase, and that's likely to come down, but we can't make that promise at this point.

What we do know right now is that it's targeted at an 8.2% increase. Property and liability insurance is projected to go up about 10%. And there's also a police pension liability out there that we're still getting the numbers worked up for that. So as you can see here, our projected revenue is $493,000 but yet in total, just for the things we know of, we have a 1,100,000 expense leaving us with a little bit of a deficit of $647,000 so that's basically what I have for this presentation and if you'd like to point in the council say in the back of your packets counselors you have more detail that's provided in the back for your reference if you need anything. Any questions at this time?

So thank you for that presentation and for the work yourself and staff has done to bring this to us. Counselors, light signs for questions. If not, I'll start off. We got Counselor Grace first. Stephen, please.

Thank you. Looking at the year to date revenues, the ad valorem was running about 1.5 behind forecast and I do understand there's some seasonality. Do we expect any problem collecting the balance of that?

That I'd have to get back to you on. I'm not sure. At this point, would think we would have collected the majority of what we have.

There was another line item I didn't entirely understand for premiums of 618,808 and year to date there hadn't been any recognized revenue?

That's because they come in between August and September.

Okay. So, the best so, we're looking at this year's revenue line, identifying the interest carry is dropping. Do we usually get our interest paid monthly? Is it quarterly?

It's monthly.

So it is monthly.

Do

you happen to know what our run rate interest receipts are ballpark now? That's all right.

No, I'm just thinking of it. I would think it would be somewhere around the ballpark of 3.5% maybe? Are talking about dollars or percentage?

Well, was looking at the we had a budget of $1.8 we're at about 5 and change. Through six months, that suggests we're we are collecting maybe 85,000 or $90,000 a month.

I'm projecting to have 1,100,000 in by the end of the year.

Okay. Intergovernmental category, the revised budget year to date showed $4,000,000 opposed to year to date receipts of about $1.6 I'm just there might be an easier way to ask the questions. To the best of our knowledge, interest expense or interest income aside, do we believe the majority of our revenue line items are going to come in as expected for

Yes, sir.

Okay. I'll defer for now.

Vice Chair Champine?

Yes, I have a question regarding building services. It looks like they're trailing expectations. Is reason there why that's occurring?

I'm going to defer that question to the Building Services.

I can answer that. Usually what happens is at the very beginning of the year, the first six months, we are trailing. As people leave, building permits increase because the condominiums and some of these associations, they're not allowed to do any renovations until this time. So, you'll see it. I've already got some good numbers that I'm I've already talked to the building official, and he says it's already increasing already. So, that's just a trend that's always happened here.

Do you do you believe that we'll catch up?

Yes.

If if that's the case, then why don't we budget that way?

I guess I'll just ask, what do you mean? Because we budget for the entire fiscal year.

We know we're running below expectations every six months, first six months of every year. Why the heck don't we just change the way we budget so it's more timely? Why chase our tail unnecessarily?

I would say we are required by state statute to submit an annual budget by end of September. And that has to reflect our intentions for the future fiscal year. So I'm not sure if what you mean is just budget low the first six months and budget high the second six months, budget annually.

As has indicated, we're running behind on Building Services revenue, okay? And that seems to be, according to Dan, a very common occurrence. Then change the budget. You don't budget all that revenue upfront in the first six months, you budget it in the second six months. So that timing matches with reality. Am I not being clear here?

Seasonality. You're just saying to try and reflect the seasonality of the business.

Exactly. Why wouldn't we do that?

Well, I'm not going to answer for them. I think they're trying to spread things out. They take the annual budget divided by 12 has been the prior answer. And you're talking about a more refined set of insights into your business. And I think under our staffing level and the demands, that's a hard thing for them to try and forecast at this point is my guess. I do not want to put words in your mouth.

However, in all honesty, we know this occurs every first six months of every year. It can't be that hard then to change how you budget, to fit reality with expectations. Anyway, I don't want to make this

Mr. Berger, Carol, if I may did you want to you look like you might want to say something. Do want to add something in there, please?

No, I definitely hear what Vice Chair Champagne is saying, that there are a lot of line items where you would reflect seasonality. The perfect is the casualty insurance premium revenue that we receive that benefits the pension funds. That's a Q4 item. So one of the things we're trying to do to overcome the way things are budgeted this time is if you look at the financial presentation that will be out tonight, is we're saying how do we track in that same revenue line, same period last year. And you can see building services did underrun the full year budget at that point in time. We're still lagging a little bit behind where we were at the same time last year. So I'm heartened to hear that things are picking up. But that's what we have for an indicator right now. I do hear what you're saying about seasonality. I've surveyed some other municipalities.

Doesn't mean this is the right answer, but everybody budgets on a full year basis. And so that would require some changes for us from a system perspective. I don't know what it would take that we could enter the stuff on a monthly basis, look at the seasonality. And then I would think you could put a formula that says blow the budget the next year's numbers through. You know what the growth rate is going to be, follow that seasonality. That's generally standard operating procedure in a lot of other organizations. It's not common in municipalities right now. But I do hear what you're saying. So it does make analysis hard when you're only six months into the year. It makes it very hard to do projections for the next year, too.

That's exactly the problem.

But that's where we are right now. And I will echo what Counselor Gray said, is that until we get the team, get the bodies in, which we are we might have some people listening in today, the new finance director as well as the new finance manager, it's something worth looking into. But we still have a lot we have to fix before we can even address seasonality in the budget.

Okay. Good. Thank you. Vice Chair,

do have anything else while you go around? Okay. I'm gonna take one and before I turn it back over to councilor Gray. Carol or Martin, could somebody put up page eight of that presentation we just saw? It's the water and sewer department, I believe.

Water sewer fund. This might be for Jeffrey. I just had a quick question. I wanna understand this. Budget, FY '25 North Market Utilities, $37.04 69. Budget, twenty six thirty six four. So we're projecting basically a million dollar difference in budget. Would that be accurate? Or a million dollar decrease, excuse me, from '25 to '26. Was that a am I under understanding that properly?

Yeah. So when we purchased North Market Utilities, we added one point I think $1,500,000 to the revised budget of that year. And so it kind of skewed the revenue for that year. So our revenues have to match our expenses. So in order to do that, you added the $1,500,000 in the revised FY.

So it wasn't a hard cost, Jeff? Like an accounting ledger? Would that be a more better way to it wasn't a hard cost then? That was basically ledgered?

Yeah. Well, it's showing as a revenue here because you have to have your revenues match your expenses.

Very good. Okay. Thank you. That's what I

If I can piggyback on the Is question real

that why you have the question mark next to it? That was one thing I was wondering.

Yeah. That that was probably supposed to be deleted. Okay. Because that that was my question to to

So I saw the question mark, and I was like, oh, are we not sure? Okay. Yeah. Thank you.

Very good.

But that's what it was.

A couple other things. This could be for any of the staff. How does our bond referendum, if it passes, how does that affect the budget numbers and the spending cap? Casey, is that something we're prepared to answer today? Do you need time on that?

No. I think that will be pretty straightforward. It will require an increase. Our estimate is an increase of 0.1 mills. And that will be incorporated into the budget. But that additional revenue will go directly toward debt service to pay the debt service on the bond. And because it's voter approved, it will not impact the spending cap. But it will be an additional millage that is added to the property tax bill, specifically for the bond.

And I remember there was some conversation on it freeing up some of our budget possibly or an overlap. Would that be correct? Did I remember that correctly?

Yes. If it passes, we'll be able to make some adjustments in our capital budget, specifically in the public works capital budget.

Do we have any idea how much that was, rough idea?

No, I don't

know off

the top of my head.

No problem. That's positive. Last thing I had, Carol, do you have any guesstimate? We know the JW Marriott is going be reassessed. And we that Hilton is going to come before us and ask for some level of expansion or remodel. And that's probably going to trigger a recess and also maybe a higher taxation. I'll take the Hilton off for the moment. That's an uncertain quantity right now. Do we have any idea what the JW Marriott what numbers are looking at or what we're looking at additional taxation revenue? Does anybody know yet or is that too premature?

It's way too premature. I checked on Friday and they had not been published yet.

Okay, well we just know it's going to be a positive.

It's going to be a positive number, absolutely.

All right, that's absolutely true. Okay, and I do appreciate that. Thank you. Counselor Gray, going turn it back to you.

Thank you. Just a couple of add on questions. We know my state statute knowledge is still challenged. I think there's a state statute on listing impact fees as a separate line item. I don't know if that's true. We are not showing impact fees. I do know that with the YMCA, I think at some point, there's an impact fee of a significant amount that will come in with that project. I'm just trying to understand, also in light of the LOS and everything else, is there any reason to not consider budgeting for impact fees as we go forward?

Impact fees are not a part of the general fund. They are actually accounted for in a separate fund by themselves. So they are actually separately stated in the ACFR as far as the fund balances of those at the end of the year. As far as how to my knowledge, in the past, they have never been budgeted for. But I can go back and take a look at No,

thank you. It was more I'm just trying to find revenue opportunities that we might be able to recognize for our benefit. Now, here's a mind bender. I'll warn you both, because it may be completely out of line. Marco Island has fire inspectors. I'm not sure how many. Maybe up to five FTEs, I'm not sure. Might I be correct if we move those FTEs to the general fund, which I understand we have some challenges with, that that would actually free up space under the spending cap?

They are already currently budgeted in the general fund.

Okay. They're not I'm sorry, in the building fund. In the building enterprise?

I believe there's only I'm going to defer this to Dan, but I believe there's only a half FTE building fire inspector?

Want to answer?

Yes, Councilor Gray, you are correct. There are five fire inspectors. I was going to go over that in a presentation coming up. But remember, their revenue is general fund revenue. So if you considered moving them to the building services, you would also be losing that revenue to the general fund. Just another part of that to consider.

Yeah, I'm not smart enough to handle all the accounting. I was trying to see if there was a way to correctly account for everyone responsibly and the revenues and create some flexibility under the spending cap by moving them to the building enterprise fund was really the question. So you can leave that to contemplate. I didn't really it wasn't meant as a trick question. Thank you.

Vice Chair Champine, you're up next.

Yes, I've begun to think about the spending cap and what it would be. And I'm going to ask some questions around it. Spending cap is based on 3% over prior year's expenses plus the then in play inflation rate, whatever that happens to be. I think the one that would be pertinent to us is 2.9%. If I'm correct, that means the spending cap would allow an increase of up to 5.9%.

But whatever it happens to be, if I'm wrong, what is the spending cap for 'twenty seven? And to go along with that, we would need to know what the assessed value of the island is. Currently, it's almost $18,200,000,000 I'm assuming it would go up at least 4% or 5%. If so, that would help on the millage rate.

Okay. If I can refer you, I can answer that question. If I could refer you to page 14 of your packet.

Page 14. Okay.

And I'll put this on the overhead. Okay. Here's a ten year history of our taxable values starting with tax year 2016, fiscal year 'seventeen, all the way through what I have projected for FY 'twenty seven. Now, the previous nine years to 'twenty six, 'twenty seven are actual numbers that come from the TRIM notices from the Doctor four twenty that we filed with the state. So you can see between new construction and gross taxable values what our increases year over year are running.

This year, I projected to do for an increase of 5%. That is based on the revenue estimating conference that was conducted by the state of Florida January '26. Okay? So they compiled statewide data, and then they also break it down by accounting. They break it down further by your fair market value, your assessed value, your changes from prior year, and new construction.

They take all of this into account. So what I did is I took a calculation for the county, state county of Collier County, and I based their information. I took their information and did the calculation, and it actually came out to be 5.12% that they project our county values will increase. So I took a, you know, a little bit low, more conservative approach and took 5% as an increase over last year. So then I applied what we would call millage neutral tax rate, and that's how I had determined the ad valorem tax for this coming year.

Very good. How about the inflation rate that would be used for the spending cap? Do you have any data on what the inflation rate would be? I found numbers 2.5% to 2.9%

My research came it was a range. They haven't finalized or made a definite number. I found anywhere from 2.8 to 3.1. So I went conservative and took 2.8. So that gives me the 3% general fund increase allowed by the charter and then the 2.8% COLA increase.

When would we be able to confirm what that inflation rate is?

Ironically, I saw an article today that came out. I don't know you might have seen the same one that came out and said that they're even actually looking at 3.3 for this coming year. I don't know. They didn't give any kind of timeline as to when they would have that final. I found

one that said even 4%.

I haven't seen that one. I'd love for you to share with me that and where you found in that information.

Well, it's at 3.8% right now, so it's not hard to believe it could be higher. But anyway

It was ironic that news article showed up today as 3.3%.

Is there an absolute date by which a number is chosen?

That I'm not sure about. I can look to it and find And

how about the assessed value? When does that become fact?

When it becomes fact. Going back to the budget calendar, let me go back to that for you. We actually get, let me go back again, let me go back the other way. Here we go. June 1, we'll get our preliminary values from the, and sometimes, you know, we'll get a couple days sooner, but their deadline is June 1, that we'll see what they're projecting to be assessed values.

Okay. Well, we're going to know soon.

We'll know soon.

Yeah.

Yeah. But now, keep in mind, the JW may not be in that, or it may. I don't know. Depends on how quickly they process that sale paperwork.

Very good. Okay. No more questions.

I'm going to follow-up, Vice Chair. I had something on inflation was on my mind, And I was looking it up just prior to you speaking. 2.8 to 3.8, It really just depends on how you look at it, but I could even use the lower number for the moment. Doesn't make a huge difference. I did have a question if you use, like, core inflation. 1.44% increase, $34,000,000 roughly $500,000 of the budget. You had said it was 1.44% increase at millage neutral.

Correct.

So I just want to understand this. This is going to be the fourth time I'm looking at this, it's really starting to become clear now. It takes a little it does take a little time to understand. When we look at inflation, 2.8, 3.8, look at our 1.44% increase, but also within our budget, there's things we've already accounted for. Correct?

That's correct.

Police, fire, salaries. So not that our part of our budget is not inflation proof, but it's already been factored into the numbers.

That's correct.

Is there a way to scrub that out and say, what part of the budget are we subject to the 2.8 or 3.8? What percentage of it we're we're vulnerable in that area where we haven't accounted for it already? It's a broad question.

I'm not sure, but I'm

just trying to best understand it. And really, where I'm going with the question is, are we bringing enough in to meet our daily needs based on inflation? That's what I'm really trying to decipher in my mind. So rather than try to answer that, let me ask another question. Do we have any calculations if we go above millage neutral, what additional money we're bringing in? Or did anybody do that

prior

to

the meeting?

I have something prepared for that, but if you'd like, I can

put it

on there.

I'd like to see it. I'm not saying I could or could not support it, but I'd like to see what it is. Okay. Everything's on the table.

And also too, in the back of your packet, there is a sensitivity chart. Where did my thing go to?

Counsel, while Melissa's putting that chart up, I will just say, of the presentation that she's presented so far, you see additional revenue at around $500,000 projected, additional expenses at around $1,100,000 projected. So the way we are proposing to balance that out is through budget cuts. I've asked every department to go through their operating budget and at least plan for a 5% cut. It doesn't mean that's where we'll end up, but I'm asking them to do the work to see where we end up with a 5% cut because we know we already have these built in expenses. And we also know we have significant capital needs.

So any funds that are saved through an operating cut, I anticipate either covering these expenses or being transferred to capital to help meet our capital needs.

And guys, I appreciate that greatly. I don't want to cut just for the sake of cutting. If there's something that I don't want to call it a little fat, we could trim it, but great. But if we're cutting just trying to save ourselves to prosperity, it's not going to be the way it's going to work. So I'd love to see those numbers if you have them.

They're on your overhead.

Okay. There we go.

And they're on page 13 in So your

1.2 so what was the rollback? What was the millage neutral? I'm sorry. Was the

millage Millage neutral is 1.26, two six That's

where we're starting

with.

That's where we're starting. In this chart, it shows you for every mill that you add to your millage rate, it tells you in the column in the far right the additional revenue that it'll bring in.

Casey, this might be a little sensitive. Are you staff is your department, but I would like to know what's being cut or if anything being cut is considered a necessity before I vote that. That that's a tough question. We have an obligation to the citizens, but we also had obligation to fund this community and make sure safety first. Is that something you're to bring to us, or are we just going to see the overall number? I'm not sure how you planned on addressing that.

We'll address that at your operating workshop, which is scheduled in July. However, at this workshop today, we want you to see what our projections are for FY 'twenty seven. Again, this is very preliminary because it's only May. And we don't even know the property value numbers yet. We don't even know the social security COLA yet.

But we're working with the numbers that we have, recognizing that with the expenses that are already projected, even if we do nothing, we're going to see an increase of $1,100,000 And we have to address that. You all know this because you've heard me say it before. We don't have a lot of fat to trim. We have a fairly small staff. Our operating budget is not particularly robust.

Nevertheless, there are cuts that can be made. And if they are essential cuts, obviously, I won't bring essential cuts to you. And if we do have to make essential cuts, then we will let you know what services will be impacted if those cuts are approved.

Very good. Thank you. That's what I have for now. I'm going to turn it over. Vice Chair Champagne, you're up next.

I just would like to add a little bit more to the discussion, and it doesn't deal with what you did. But it's important for the council to keep in mind and for the community that there's all sorts of inflation indexes that we need to become familiar with. Right now, at this moment, the producer price index is running at 6% inflation. The construction inflation index is running between 6% to 8%. I point those out because whatever we come up with as a budget, you have to keep these numbers in mind because it eats our purchasing power.

So we either lose 6% if it's a producer price index inflation or construction inflation of six to 8%. We're starting 6% to 8% behind even though we have an approved budget. So hopefully, it will give us some thought about what we need to do from a budget point of view, hopefully coming closer to the spending cap than not. But nonetheless, I just throw those out and not important to your presentation, but they will be important in reality. And I stop there.

There's gonna be plenty more conversations on this. Right? We just I've only just begun. Counselor Gray, you're up next.

I love what we're thinking. When you showed that revenue neutral in the September, that'd be the increase ad valorem taxes for next year at the assumptions.

Correct.

Is that in the June shortfall? Or was would that be additive? Because I saw the 1,000,000.4 and then I saw the revenue change of $4.92, which was year over year. Mhmm. But I'm not sure that factored in that other $9.41. I was just trying to understand if I'm hoping for some good news.

I believe you're correct. It is factored in.

It is factored in. It is. So that's that $9.41, if the baseline is factored into the shortfall

That $9.41 is factored in, yes, sir.

Thank you. Just a couple of general revenue questions, if I can. I'm going so do we have a false alarm commission? If people trigger false alarms, fire or police, do we charge them for that?

Yes. We have a false alarm fee schedule in our fire prevention Okay.

Good. I just wanted to make sure. I was looking for places we might generate some fair revenue. That's all. Bear with me one second. I can't get off of grants. We have about $6,000,000 in the grant balance sheet. Is there any chance to harvest any of that money and direct that back into the budget?

That has to stay accounted for in the grants fund.

Okay. So that could never if we collect the money, there's no interest or anything, we can bring back to the general fund.

I would need to get back to you on that one.

I'm just trying to think about where we can find some money in this. If we collected if we drawn down any of our grant receivables in the last twelve months?

Yes, and we will give you a separate report on that. We're not prepared to speak to that today. Fine.

I'll stop for now. I'm sure I'll come up with something else. Thank you, Chairman.

Absolutely. We're making great time. Casey, do you want to

GREGORY Yes. I just wanted to let you know we do have several other presentations for you this afternoon. Because while we are not proposing a millage increase right now, there are some other revenue options we would like to present to the council and just get your sentiment on whether or not you would like to pursue those other revenue options. So if you're finished with your questions with Melissa, we'll move on to the other revenue options.

I

see where the light sign seems like a great time to move on. Thank you.

And I just want to take a moment and thank Melissa because this is her first time presenting to counsel. And she did a great job putting all of this together. Thank you, Melissa.

Thank you, Melissa.

Thank you, counselors.

Okay, so I'm going to ask we do have one slide on FY 'twenty seven revenue options, and this is something I'm just going to briefly go through. I'll ask Martin to put that up. And this is in relation to on March 16, I presented a Department of Revenue report. You may remember it was a very lengthy report with a lot of different revenue options. I presented five options to the council.

And two of them you were interested in learning more about. So the two of them are on this screen. The first is the communication services tax. This is a tax that is already charged on any telecommunications. So you see a communication service tax on your cable bill, on your cell phone bill.

And right now, the city charges 2.1%. The state allows you to charge 5.1%. And if you would like to increase this communication services tax and by the way, the city used to charge the total, the 5%. And just over time, it was decreased by previous city councils. But if you would like to charge the 5.1%, that would generate an additional $500,000 in revenue.

And one of the things Melissa mentioned to you on future expenses for FY 'twenty seven is she mentioned a pension liability. And we have learned in recent weeks that our police pension fund is currently funded at 90%. Our fire pension fund is actually overfunded, which is great news. But we have an ordinance that requires that both pension funds be funded at 100%. And we're at 90%.

Now 90% is great for a pension fund, but we're still short. And it totals about $2,500,000 We do not have to make a one time lump sum payment to catch up. But we do need to start contributing more, and we need to start chipping away at that. And there are a couple of ways that we can do that. Carol has been talking to our actuary. She's been researching this. And we do have some options for how we can contribute more. As an example, we have a four zero one that we offer to our employees. The city contributes 6.5% of salary. If an employee leaves before they're vested, it's five years vesting.

If they leave before they're vested, the city gets those funds back. Every couple of years, we sweep that account. And right now, we have about $200,000 in that account. And that would free up funds in the general fund to contribute to the police pension. Having said that, that's a one time payment.

We're not going to have $200,000 in there every year. So what I really want the council to think about is what would be a consistent revenue source that we could dedicate, at least over the next several years, to the police pension. I believe this communication service tax could be that consistent revenue. So that's one thing I would like you to consider as we build the budget. You don't have to make any decisions today.

But this could be an additional revenue. And if we don't dedicate a specific revenue to that police pension fund, we just have to dedicate funds from our general fund revenue. And you have a look at what you know now what that looks like. The second item that you said you were interested in is the local business tax. And having done a little bit of research on this, state law requires that the council appoint members to what's called an equity study commission.

It would basically be like an advisory committee. And they must be business owners in the community. And then that body would do research and recommend categories of commercial businesses and rate structures for a local business tax. Then that commission would make a recommendation to the council. And if the council adopts it, then you would put in place, we'd go through all the paperwork through the state, and we would put in place a local business tax.

That process will take some time. And so that revenue, if you chose to start the commission, do the study there's no charge to that study, by the way. It's all done internally by local business owners. But if you choose to do that and choose to implement the local business tax, that would create new revenue for FY 'twenty eight. So that's not an FY 'twenty seven revenue.

But it's something that if you're interested in doing, we would want to start that in FY 'twenty '7 so that we could implement it for FY 'twenty eight. So those are the two options you had indicated you were interested in. And I wanted to bring back some additional information for your consideration. And if there's anything you want us to move forward on, again, as we move through the budget season, please provide that feedback to our staff.

Very good. Thank you, Casey. I see some light signs on. Counselor Schwann.

Thank you, Casey.

I do

have a

question about the communications services tax. So it was before, as you stated, at the 5.1. Was this recent councils that decreased this down? Or can you give us a little more history on that?

Yes. It was decreased over I remember from 2020 through, I think, 2020 either 2020 to 2023 or 2021 to 2024, it was decreased like 1% a year by previous councils.

Okay. About one. Thank you.

Vice Yes. Chair Champine.

Yeah, I'd like to know, with regard to local business tax, what are we talking about as a possibility for raising funds? A group of businessmen would come together, start talking about taxing themselves, and what would we expect them to say?

I had that same question.

Yeah. Well, actually, there is a state statute regarding local business tax. And in that state statute, it provides an option that if there is a regional body that already implements a local business tax, a municipality can easily adopt that same structure. So for example, Collier County already has a local business tax. They already have a rate structure. The council could adopt that. Nevertheless, you're still required to have this equity commission to have the business owners review that rate structure. So my recommendation would be we use Collier County as a starting point, and we say to your group of business owners, use us as a starting point. Do you think this is fair? Would you like to move these numbers up, move them down?

Would you like to look at other municipalities and see what rate structures they use? So would be the they wouldn't just be starting with a blank slate and asking, Okay, what do you want to do? We would start with what our neighbors are doing.

And who would select this group of business?

Each council member would appoint one. Each council member would appoint one person.

Oh, I see. Okay. With regard to the communication service tax, would that full implementation to 5.1% be done in one year?

It could be. It's up to the council. You could choose to increase it to 3% in one year and then go up to 4% and then go up to 5%. If that was more suitable for the council and for the public, you could choose to go from two to five. It's completely up to the council.

That's it for me. Thank you. Councilor Gray.

Yeah, a couple of quick comments and a couple of quick questions. Being bored the other day, I did look at my twenty four Foster and Foster Police Pension Fund. We were at about $2,500,000 and 90% back in 'twenty four. So this has been out here. I absolutely agree we've to close the gap. This is the honorable thing to do. So but this has been sitting out here. I agree. Anything we can do to start closing that gap responsibly is a priority obligation for us. I will I have to weigh in.

I took enough beatings from enough of the voters on the island. Communication service taxes are not tax deductible. Real estate taxes are. And the communication tax mostly hits our residents. So I just struggle with that one.

I'll leave that over there. Interlocal agreements, I know you were starting a dance with Collier County on maybe one of them. And so I was hopeful that maybe there might be some pickup we could get from the interlocal agreements with Collier County. I'm just looking for hopes and prayers on the revenue side. And then the other one we discussed, and it's early on, and I know a lot of work has to be done, was this muni bond restructuring on the septic tanks, and that that might actually free up some capital. My immediate reaction in bringing those up is I'd love to see that money, if it's freed up directed to solving the police pension shortfall. So I just thought I'd try and come up some solutions. That's it, sorry.

If I could just comment on each of those, because, yes, we are looking at a refunding of our water and sewer bonds, but any savings from that will go back into the water and sewer enterprise fund and can't be used outside of the water and sewer enterprise fund.

Similarly,

the interlocal agreement we have with Collier County for impact fees is under negotiation. Unfortunately, there's not a huge windfall there. Currently, receive about $200,000 and I've been trying to increase that significantly without much progress. But nevertheless, impact fees also have strict requirements on how they can be used. So they have to be used for example, road impact fees have to be used on roads and usually to enhance infrastructure for greater capacity.

So adding a lane, for example, for greater capacity, not just paving, for example. But again, it wouldn't be something that you could use toward a pension cost.

Thank

you. Counselor Henry.

Ellen, in regards to the business tax, in the research that I did, correct me if I'm wrong, I believe it is a Florida state law. I know you and I had talked about what I had used to do in Pennsylvania. But I believe it's a Florida state law that the business tax cannot be based on your gross sales. It's basically just a fee structure. If it's this type of business, Collier County, it's $100 $200 So I know I had gone to Doctor. Lucius kind of showing how, because in Pennsylvania, I paid off my gross sales. We had a local municipal tax, and you paid a percentage of what your gross sales. But that is not I was optimistic. But in the state of Florida, you can't do that. It's basically a fee schedule.

And I guess I would be curious, and obviously a committee would determine this, how much we would get out of it? Because the fees in Collier, it's not as though it's a windfall. It's $100 $200 $300 So it's not as though you're going to be getting thousands of dollars from each business. You're going to be getting minimal dollars. I was optimistic.

But in doing the research, it's found money, but it's not a grand windfall that I think would even be a huge burden on different businesses. But I look forward to pursuing that type of thing. And as for the tax on internet and all that fun stuff, that to me, I agree. It's not tax deductible. And also, that, to me, that hits us home.

It's the people that live here, that buy their cell phones here. I don't love that for the reason that in trying to share, it's just another burden on folks. Whereas when you look at the huge number of people that this is a second home for them, they're not contributing to that at all. And that is a challenge for me. Thank you.

I'll start with the communication tax. That's the word. Counselors, you can't have it both ways. You voted to use reserve funds on a boardwalk, and now you're saying I fear that somebody's gonna spend a few bucks more to communication tax. A has to equal b. And I think we've proven to the citizens that we functioned off a pretty tight budget for years. So at some point, money has to come from somewhere. Casey, do we have any clue as to what the average cost would be to the citizen if we raise this from the current rate of the five point was it 1%, you said, or 5%?

Yes. It's really hard to say what it would mean for an individual because it really depends on what telecommunications services you have. Depending on your Comcast bill, depending on your AT and T or Verizon bill. So I have three people on my cell phone bill. My cell phone bill is around 150 and 2% is $3 5% is $7.5

So four times 12, dollars 30 a year or more or something to that All effect for right. Guys, I think it's not in the cost of what we're going to possibly raise it. It's in the values of citizens will give us $30 a year or more, but they won't give us $30 and $30 and $30 and $30. They won't let it that's the core value of the island is where does it stop? Gas tax. So somewhere along the line, though, the money has to come from somewhere. It has to it has to equal out. So I'm gonna keep that one in the back of my mind. Steve and I agree with you. We charge them in millage rate.

We charge them in communications. We charge them in electricity. I mean, somewhere, we charge them 1% sales tax with the county, some percent, whatever percentage. Somewhere along the line, it is a tax. But I wanna shift gears for a second. I was gonna I wasn't gonna use this in a defensive matter. I love mister Bartolucci, but he writes a opinion piece in the editorial of the coastal breeze, it says

chair

this is at the previous meeting regarding what's called the Golden Boardwalk. Chairman Palumbo said at the meeting that the council doesn't have the time or interest in reading these fairly short reports, instead he said they only need to trust the city staff. Well, that might be a little bit out of context. Yes. We cannot go through every single piece of paperwork this city provides. Our job is to set policy. Our job is to take direction from staff and believe in what we're saying. So this one's a little sensitive. Casey, how do we find ourselves you and me, we were both here for this. I was a counselor. How do we find ourselves $2,500,000 short in a pension? Was this on previous financial managers? Do you know the pathway to this? How do we sit here and find out this information?

I can't really answer that. As counselor Gray indicated, it was in the, I believe, the FY24 annual financial report. And obviously, the previous finance director was aware of that. We make a contribution as a percent of payroll every pay period. And that percentage needs to be increased. And I can't explain why it was not increased in the past.

That's not on you. You weren't the financial director at that time, right? And what I do want to do, we break any rules with this? Are we within our guidelines this catch up period? This is going be on social media. They're going be talking about it. We're going to hear about how we're incompetent. So can I'm you trying to avoid that. Can you give us a little background?

Yeah. I would say nobody's incompetent. And what I'm presenting to you are potential solutions. So once I learned of this, which, as you know, Carol is extremely transparent. So she told me when she learned, I shared it with each of you.

But the other thing we did was sit down and try to find solutions. So one thing that we're looking into is can we reduce the contribution we're making to the FIRE pension since they're overfunded? Those funds would then go back to the general fund and free up some funds in the general fund that could be directed to the police pension fund. Another is, as I mentioned, the forfeiture fees from our employee retirements account. Again, which there are rules around that.

We can't just use those funds toward the pension because those funds are specifically devoted to the four zero one. However, by not having to contribute to the four zero one, we free up funds in the general fund. And then, of course, I do believe that at a certain point, you're going to have to raise a new revenue in order to properly fund our police department and our police pension fund. And it may not be this year, but if you want to consistently address the problem, we're going to have to have a consistent revenue source. And further, there was another question in there, and I lost it. Sorry.

Once it came out, I lost it too. Just thinking.

You're welcome.

While you're thinking of that, let me just say, I appreciate you bringing this to us as soon as you found out. I appreciate this is not you. This is, in my opinion, past administration. And and some could argue I should have known to read these financial ledgers down to the level of pick this up, but I'm gonna be honest. That's not my specialty. So let's just how we got here is irrelevant. How we move forward, I appreciate the solutions.

Mister chair, may I chime in just one second? Absolutely. Are we in violation of ordinance right now?

Yes. Thank you. That was the question. We have a 2019 ordinance. It's a it's your city policy, a 2019 that says the funds must be 100%. The pension funds must be 100% funded.

Mr. Chairman, can I ask a follow on question?

Yeah, your light sign's up next, so please.

I'm just I'm on the same theme. There's a pension board. I'm just out of curiosity in terms of roles and responsibilities. Because I had sat in back in 'twenty four, and I have to admit, I saw the shortfall. I don't know if anybody else did, but I don't know that I was on counsel at that time, so I'll use that. But wouldn't the pension board be responsible for identifying to the counsel that there was a shortfall and a need that we had to address? I'm just trying to understand sometimes we aren't notified correctly. And it is painful to read all documents. So I just what is their role in this?

The pension board's role is to make investment decisions for the pension fund. The pension board does not report to the council. So it's my understanding that the pension board did identify this shortfall and informed the finance director, both previous finance director and our current finance director, who informed me. But yes, and we also have an actuary. And the pension board has advisors in terms of their investment.

We've actually been talking to the actuary and are going to meet virtually with that person next week, again, to figure out what the projections are, how did we get here, is this a portfolio issue where the market's not performing as they had anticipated and now we're short, or was this just not paying attention in terms of the city contribution? We're trying to figure that out right now.

The best perspective I can give this is you guys are welcome to have this, the 24 report. Our actuaries provided really quality guidance on where the right metrics and where to dial in, which is how they came to a $2,500,000 They did suggest that we were being a little optimistic in the 7% run rate return on investments. And I think that maybe our inflation was a little lower. So if you're assuming higher investment returns and your inflation's lower, then and you don't hit those numbers, you get a shortfall. But I do believe, however we got here, there was a set of quality recommendations by our actuaries.

So I'm glad you're having the conversation with them. And most of the thinking I saw in this report was extremely well grounded. So thank you.

I will close this. Anything else to add to this? Well, thank you for doing your job. Thank you for finding this out. Thank you for bringing it to us. This is the type of information we need. I appreciate it. I speak for myself. Hopefully, the counselors feel this way. And you didn't create it, but you immediately brought it to us and have solutions in place. And we're looking forward to working further with you to make sure we rectify this as soon as possible. Thank you.

Thank you. And if there are other questions on these two revenue options, that's great. Otherwise, we'll move on to code enforcement recommendation.

Casey, do you need any I mean, this is just the first workshop. Communications, are you looking for some type of direction or just planting that seed for us? Was there any expectation for that?

I think at this point, it's just planting the seeds. If there's something that's an absolute no, let me know that now. But otherwise, as it'll all come together more, I think as we have our capital workshop and our operating workshop, you'll start to see the full picture. And then it might become an obvious, we have to do this. Or it might be an obvious, we can wait on this. So right now, it's really just letting you know what your options are.

And before we move on, I just want to make one more comment on the business possible tax, or review. We had a couple business owners in the audience here. Everybody could run to try to get them on there as they're appointee. I was in favor of looking into this. I didn't know what type of time, energy, effort it would be on the staff. Also, you have to put things in perspective. You know, you hear the whispers, business don't pay their fair share. Right now, on Collier Boulevard, the old Berkshire Hathaway building's for sale. Right next to the Esplanade, of course, from the McDonald's, you guys all know it, that big orange roof, beautiful Key West style building. $6,500,000 premium location on Collier Boulevard.

You'd think that'd be gone in a day. Yet a house just on an inland canal gets $6,500,000 at times. They're not equally valued. You can't just look at the numbers and all of a sudden, somehow, businesses we pay different taxes, many different ones. So I will defend the business to a degree, but I'll also be open minded to look and say if we're not paying our fair share. And one of the things that pops in my mind is the reassessment being triggered triggered by these sales. Well, do the rest of the businesses need to be looked at as far as assessments? And that's just a fair question. So I would lean towards moving forward still with that, and I'll remain open minded on communication tax. That's how I'll close that part out. I see no other light signs. So, Casey, what's next on the

I'll ask captain John Wallace to come up, and he's going to present to you a potential fee increase regarding the magistrate hearing.

And Wallace, welcome.

Good afternoon, counsel. We did an assessment of the administrative fees that we charge for the magistrate hearings. We looked at the other jurisdictions and we came up with the different we have a proposal for a new cost if you would consider it. Right now we're charging $50 per case when they come in for a magistrate hearing. Each case costs us approximately $144 to put together.

So right there we're at a $94 deficit which translates to about $24,000 a year deficit towards the magistrate. Other jurisdictions charge between $120 to $250 per case, which is 140% to 400% more. We are recommending that the magistrate fee be at $175 The last time this was looked at was in 2014. So there hasn't been an increase since then.

Very good. Thank you. Anything to add or open up for questions? All right. Councilor Gray, you're up first.

I'll second that motion.

We don't make motions and workshops, I but

love the recommendation. I think it's entirely correct. I actually read all of these reports. I thought all the fee schedules that were presented were very responsible, very thoughtful. Thank you for the work you've done. And I thought it was a very responsible recommendation. I have J. No questions.

Counselor Henry.

I agree. Thank you very much. It's, I guess, in some ways a little I don't want to say disappointing, but I think these are the proactive things we need to be doing, is looking at some of these things that have gone by the wave side. Because exactly, dollars 50 is a deal. And it should be you did something wrong, so you pay the piper. So thank you guys, the police force, for putting this together. I, too, agree with it completely, because why should we be trying to stick to the law at a loss? That's not fair. So thank you very much.

Thank you, Counselor Hernie. Counselor Schwann?

Yes, thank you. I absolutely agree with this. And we have to keep up with those court costs. So thank you for bringing it forward.

You're welcome. Vice Chair Champagne?

Yeah, I also absolutely agree with the recommendation. Good job. And secondly, I guess I would like to advise all of us to make it an annual review at budget time in which that particular recommendation increases by no less than the inflation rate of the year so that we're always staying current with the cost structure.

Excellent

suggestion. I see no other light signs. I'll offer my I think this is probably an easy consensus, although we're not giving consensus today. But we'll be at one point for the council. Don't do something wrong. Don't suffer the consequences. This is just being passed on. I jotted down Della Park Place. And I wrote verse Surfside. You guys were there and the counselors, some of you were there. Had to do with noise, pool filter, plainly audible. I'm not we're not gonna debate that here. We'll talk about noise ordinance in another meeting. But I do have to suspect there was a considerable amount of money on the taxpayers spent on that for the magistrate. Alan, your firm, we have Joe, I forget his last name, our attorney that does the hearings.

Actually, Casey, is there a way to get a number for that or to understand what literally

$3,500 was the city expenses.

Sorry. Go ahead, sir.

No. It it was just I saw the bill from one of the legal fees where we spent at least $3,500

On our attorney, but don't we also pay

the magistrate? Our side defending that.

Don't we have additional costs for the magistrate when they go into that level of all right, so call it go ahead, Alan. Sorry.

Yes, the magistrate actually wrote an official opinion, which was outside of what he typically would do for this case. So there was an actual cost for that, additional cost. I don't know the number offhand.

So we're north of $3,500 plus whatever the magistrate 5,006 thousand dollars I don't know what his cost is per hour. Here's my point. What was the fine, if I remember correctly? $50, a couple $100? Or they waive it? I don't even

It was an immediate $50 fine because that's what we typically do, and then whatever the daily fine might have been. But they came in compliance, I believe, within the time frame that the order required, if I recall.

So I use this as an example. I don't mean that these condominium or this association should have bore the brunt of the entire system. There's a system in place, and sometimes it costs money. I'm just saying if we incrementally bring this up for everybody a small amount, it helps absorb that. Mean, sometimes things have to be defended. Magistrates have to work, and it's gonna cost thousands of dollars to defend our ordinances. That happens. And I don't want that reflected. I wanna be very clear if you're listening. I don't want that reflected under any one property owner. But by spreading this out, it seems to make tonal sense. And for my co counsel, everybody seems to see the heads nodding. So I appreciate this. I'd like to even look into it a little deeper and make sure that we're charging enough as long as it's fair. But thank you for the presentation. Any other questions, counselors? Case, anything to add?

Yes. Counsel, I'll just let you know for any fee increases which will be proposed today, the council approves fees by resolution. So since you've given us the Okay on this one, we will bring back a resolution. It's something that can be on consent agenda. And knowing that our intent is well, I think, if your intent is to implement it either immediately or implement it October 1 for FY 'twenty seven. Do you have a preference on implementation date?

Why are we waiting?

Okay. Then we will get it on a future agenda for your approval and implement immediately.

Before we move on, Councilor Gray's light is on. Steven, please.

Is this additive revenue? If we just approve this or we're going to put the ordinance through, will this help lift our revenue collection for next year? So this isn't in the budget, these proposed increases.

That's correct. It is not in the budget.

Okay. We got a little pickup, folks. Thank you.

Very good. You. And thank you so much again. Casey, I'll turn it back to you.

Okay. Next up is our fire chief who is going to present fire prevention fee increases and possible fire assessment fee.

Council, good afternoon. Chris Byrne, fire chief. Martin Holdoff on that presentation. Let me start with an update to our fire prevention fees. The current fee schedule was last updated in 2017 by resolution, as the city manager said.

The fire fees include fire plan review and fire inspections for permitted work, as well as annual fire inspections and false alarm fees, as was discussed earlier. For FY 2025, the total revenue collected was $852,000 Since 2017, there's been significant increases in personnel costs to provide the fire prevention services as well as equipment and technology increases. There's been changes to the fire code and to state statute of of items that are not yet existing in our fee schedule, Those need to be added. Staff recommends aligning our fee schedule with that of Collier County and the local fire districts to bring consistency to the industry and prevent confusion. Our proposed changes result in a more precise, simplified fee structure, although it is complex.

You look at it, it's very lengthy. And there is a side by side comparison for you attached to the agenda. With your direction, we'll prepare a fire prevention resolution and bring that back to you for adoption. And I'm available for questions. We anticipate using that fee schedule about a 10% increase in our revenue.

Thank you, Chief Byrne. I do see some questions. Councilor Schwann.

Yes. I just wanted to agree with you, Chris Byrne, that if you could drop that resolution, if the rest of the council agrees with that, and to do that immediately, so that could be brought back in alignment with Collier County, too.

We can do that.

Thank you, Councilor Schwan. Councilor Gray?

It's just a quickie. I agree with what's just been said. Somewhere in this document, I saw a reference to illegal fires. Is there a fine for illegal fires? I I was just curious about that one in collecting. I know every now and then, there's backyard fire pits, etcetera. Just do we get a do we fine them for that?

I believe in the new fee schedule, there is a fee for that. However, the instances are very, very low.

No, I understand they're low, so feel free to raise the fee for that.

This Thank would be an increase, because our minimum fee is very, very low compared to Collier County's fee for that.

Thank you for all you do.

Thank you very much.

Councilor Henry.

I just had a

quick question, because it is quite an extensive list. Is there a simplification? For example, I mean, how often do you guys do fire inspections on

pools? Fire inspections on what?

On pools?

On pools. Have the fire marshal here.

Extensive. And I totally agree with the price increasing of things. But I guess I look like in anything kind of similar to some of the reports we've received recently on percentages. It's kind of you might have something here that it's a $200 fee, and it only happens twice a year. There ways that you're kind of like, Okay, well, that's a real pain in the neck. Let's up the charge because it only happens a couple times a year? I didn't know if there was a way to other than just taking Collier's numbers, maybe looking at things more specifically.

Yes, there is. And between now and the time that we bring a resolution forward, the fire prevention team is running some scenarios just to make sure that this schedule properly fits our business community. And all I want to really quickly say, regarding pools, that's not residential pools. It would be a commercial occupancy.

And there's the clarification of that because, I mean, I know there's enough people just trying for permits and inspections. I know I have a condo in Collier County, and I didn't even think that the fire inspector had to come and inspect the shower. Things people don't so you see pool, and if you're trying to be a responsible citizen and you're going through of what I'm going to be responsible for, you're going to see this and go, Okay, what else do I have to be prepared for? So I just looked at it that we'll call PETA projects, that if it's only one or two a year, STEINER: up the charge for the problem or the challenge of having to do particular things rather than just adopting someone else's. Overall, what we're trying to do with the

fees is make sure it covers the effort that it takes to Absolutely.

No, very well done and very clear and concise with a whole lot of data. But thank you.

Thank you.

So I totally support this.

Okay. Thank you.

Counselor Gohler. Chief, thank you for all you do. And you guys are very expensive.

Yes. We are.

We know that.

Yes. We are not gonna get an argument out there.

We appreciate you very much, but you guys are draining us. Yeah. So now now this

It's my next item.

Now can I ask you the question? You said that you're gonna bring 10% revenue if you bring this resolution, and you will be utilizing that operating your own department. Is this what it is?

So the the revenue generated by the fire prevention division goes into general fund revenue.

Okay.

It goes into the cities. We're not an enterprise fund like like building or water and sewer is.

So you're gonna bring us the money?

It goes to the general fund. Correct.

Okay. The 10% of how much we're talking about?

Well, last year was 852,000.

Okay. So 10%.

It's a conservative estimate.

Okay. Thank you, chief.

Thank you.

Good job.

Thank you.

I think, councilor Guller, last meeting, you called yourself a junior councilor, which I understood, a newer councilor. And I've said that for years. Counselor Golar has a way of telling you how much she loves you and then saying spend less money. It's a good quality. I agree with this also. I did did have one question just from Councilor Gray. We're making great time. I don't want to bog us down illegal fires. Not illegal. Where do you draw the line between my electric conduits were old, I didn't realize they going catch on fire versus what do we deem a chargeable offense? I moved the s'mores pit in the garage because it was raining and burnt the house down. How do I understand where we charge people for causing their own fires versus life just happens? Is there a guideline

for that? We don't charge them for an an incident of fire in in their home or or or business. We do not charge for that.

That's what I want to understand. Okay. Very good. I appreciate it.

Light a match.

I appreciate the clarification on that. I support this. Reverend has to come from somewhere. Appreciate what you do. Vice Chair Champagne, one how about this last one? Then we'll

Thank you for the presentation. It all makes sense to me. Have a broader question. Should we consider, as a city, converting the fire rescue department into an enterprise fund?

Well, I would say if you could just wait until we finish with this item, that question is probably more appropriate with the next revenue item I'm going to discuss with you.

I just had a little less. ESP, that's all.

Certainly a good conversation, correct? It's going to be the same cost of the citizens, whether you do it outside of the budget, in the budget. I mean, it's going to all nets out probably. Is there any tax savings to that if we went that direction?

Why don't I go ahead and get started then on this revenue presentation? Martin, if you could put the presentation up. This is titled the Fire Services Assessment Program. Do you have it on your screens? Okay. So the purpose of this program is to present a non ad valorem funding strategy for fire rescue services. Okay? You know ad valorem is based on value. Non ad valorem is not based on value. It is basically a fee.

This will ensure we the fire rescue department can maintain its high quality of service to meet our expectations of the community. It will protect us from a potential reduction in revenue from property tax reform and fluctuation in property values, which typically occurs during recessions. It'll reduce the pressure on the general fund by moving the fire rescue department's budget out of the general fund. And it'll improve your diversification of city revenue streams, which is something you've been spending a lot of time discussing. So a little bit about the background.

Florida statute one seventy does authorize fire service special assessments. It allows municipalities to fund fire protection services through non ad valorem assessments as long as they meet the statute's two pronged test, which is one, that the services provide a special benefit to the proper to the assessed property and whether the assessed assessment for services is properly apportioned. You have a current in 2008, city council adopted a fire rescue assessment ordinance. The ordinance established the legal framework and implementation process for a fire service assessment. So the ordinance currently already exists.

However, at the time, city council, after a lot of study, a a full consultant study and presentation, council at that time decided to not adopt a rate resolution, keeping the ordinance in place for future implementation. So what's the funding structure look like? As I said, it's a non ad valorem assessment. It's a fixed rate methodology. The cost of fire service are allocated proportionally based on the type of property and the demand for service to that property type.

In 2008, the assessment methodology that was presented by the consultant had a residential home flat rate per dwelling unit, flat rate fee, a commercial your

you had a

a residential home fee and a commercial fee condominium fee. I'm sorry. And then your commercial rate was based on square footage, and the assess assessment is shown as a separate item on the annual property tax bill. These this is just a brief list of all the communities in Florida that currently fund their fire rescue services through an assessment program. As you see, locally, Cape Coral and Fort Myers, And really, they're all over the state of Florida, as well as several very large counties.

And currently, the town of Jupiter and Key West are also working on their development of their assessment program. It's a very popular funding methodology. So what are the advantages? It secures fire service funding for the future. It supports operational and capital funding needs.

And as was already pointed out, we're expensive and we're getting more expensive. All the as you know, when we talk in our capital workshops, the cost of fire apparatus has doubled since 2018. All of our other large items are have have greatly increased everything from breathing apparatus apparatus to cardiac monitors, as well as our medications, repair of equipment, parts for that repair, and then as well as our personnel costs to stay competitive. So as I said, it moves the fire rescue rescue costs out of the general fund. In 2008, they recommended 90% of the fire rescue's budget be moved to an assessment, 10% remaining in the general fund, and that is because cost of EMS services cannot be part of the assessment because it doesn't directly benefit property.

This will this would create a long term revenue predictability and it ensures fairness. And this is one of the most important parts of a fire serve program. A residential home pays a flat fee regardless of its assessed value. So you have two homes, the exact same square footage size, but one's on the water and one's not. They're getting assessed different values, but the cost of fire protection is the same.

So it does bring a a a level of of fairness to to the property owners. So what I'm asking what we're asking for council direction is just for you to direct us to continue exploring a fire service assessment program. And in the f y twenty seven budget proposal, bring you the the cost and and scope of services of a consultant to provide the analysis as well as an implementation plan. This is what that looks like and this is what it looked like in the past. The consultant develops the cost of service calculations.

They create the assessment methodology. They would recommend assessment rates to you, and they would ensure that this met statutory compliance. The consultant study is approximately $65,000. $50,000 of that is the actual study and then $15,000 of that is implementation. It's broken up into two phases.

We would recommend a timeline of initiating the study at the beginning of the fiscal year. Present those findings to you in the in the spring as we go through the the budget process. Final adoption, if you chose to approve this methodology, would be in July. And then implementation would be alongside the millage rate process for fiscal '28. And I'm available for questions. And I also believe the city attorney worked on this with, yes, also in 2008.

I believe we have some questions. And thank you for the presentation.

Thank you.

Vice chair Champagne, you're up first.

First of all, I subscribe to your recommendation completely. I think this is the direction in which we should go. I was pleased to hear that you have a consultant that's going to be on because I suspect the ordinance needs to be updated with numbers. And the timeline looks excellent as far as I'm concerned. So I'm an advocate of what you're proposing, and I can't wait to see it happen, to be honest with you.

Councillor Boehler?

Casey, thank you. We had a great conversation about this project, so she kinda brought me up to speed. So I'm kinda I'm prepared about that. I think it's a it's a great idea that because you guys take a lot of lot of funds from the general fund and it just literally kills funds for us to do other projects. But here is my concern though.

So we are talking about adding additional additional tax. This will be the tax. Even that it will not be included in the millage proposal in 2028, there will be additional tax, not quatern, millage. But so we have to talk about I am never proposing rollback, but we have to talk about what you are proposing to our residents, what would be the adjustment has to be made so they somewhat be on the flat rate. Chris, you know what I'm saying?

Yeah. And let me explain. The the when the amount is removed of of fire service to the general fund, that brings the overall general fund down. So it's it's taking, essentially, the funding out of out of one pocket and putting it in the other. It it by statute, it can't be double.

So okay.

So So your concern would be yeah.

Yeah. Okay. So I I needed the answer. But other than that, I I think it's a good idea, and we need to find you guys. Obviously, you are expensive, but we need you more than you need us.

Thank you. Need you quite a bit

today and tonight.

Thank you, sir.

Thank

you. Councilor Gray. House size. There's some lovely two bedroom houses on the island. There's some lovely five bedroom houses on the island. They would all get the same charge for a single family DUNLAP: under this concept?

So Counselor Gray, that's an excellent question. In 2008, when they did the study, there was just one fee for residential homes. But we didn't have then what we have now. And you're absolutely right. I suspect, from looking at the assessment schedules in other cities, the consultant would come back with a different tiers for square footage sizes of residential homes because the cost to provide service is different between a 2,000 square foot home and a 7,500 square foot home. So I would expect the consultant to bring that.

Just want to make sure we're mindful, because obviously people know the points. You own a smaller house, they've got a smaller budget, etcetera, etcetera. This analysis, a lot of people have waited. It's a great concept. I'm really grateful you're bringing it forward. Who's raised what cons? So not every municipalities approve this. Some people wrestle with it. Our council declined it previously. What drives the concerns?

I think I would say what counselor Golder said. And that is the pushback might be it's just another tax.

It is. I could also counter that with, as we said, there's one thing that's clear. Your services are always going to go up. The cost of services, just that's the world we live in. So this would actually break out the line item so the residents would understand this part of it separate from the rest of the budget, so they'd have a clearer understanding of exactly what it costs for our fire service support.

Brings you're absolutely right. It brings significant transparency to our costs. Absolutely.

Thank you for your

Thank you.

Presentation. Councilor Henry.

I'm going to look over this way with my questions. Thank you, Chris, for doing all this. So the budget, dollars $2,830,000,000. Now there'll be a line item to fund the enterprise fund. Would we then lower our millage so we wouldn't need to collect as much money? Or would we try to maintain that and take advantage of having that extra money? Just asking questions.

Okay. First, just to be clear, and the chief outlined the timeline here, this is something that would have to be adopted later on next year and then would go into effect if you adopt it for FY '28. So no change for FY '20 No, I'm

not inferring for this year. I'm looking at it as a tax basis for the future.

Right. So for the future, my recommendation would be that you decrease your millage rate so that there's not a perception of an additional tax. Now, how much you decrease your millage rate will be up for debate, right? And at that time, we'll have the same discussion we're having today. Here are our revenues.

Here are our expenses. So the fire department would be treated like the building department or water sewer department, where they're collecting their own fees. They're essentially an independent fund. But at the same time, as all of you know from going through this now a couple times, our demand for park services are increasing. Our demand for maintenance, capital, all those things are increasing.

But they are getting squeezed out by our public safety services because those are the most expensive. And state statute doesn't allow you to do this for police, but it does for fire. So at least this does give us room in the general fund to make space for some of those other demands. Although I do think there's also space to reduce the millage to help residents cover the cost of fire services.

I just wanted to see how all the mines are spinning. No, this is great. I totally support it. So thank you very much.

Thank you. You. Counselor Schwann.

Chris, thank you for your presentation. I fully support this for transparency and look forward to it coming back to us.

Excellent. Thank you.

All right. I see no other lights on. I'm the last one. Respectfully, I'm gonna be a little skeptical, not that I don't support it. What's our fire budget ballpark total number, do know?

9.3.

So if we just take 9,300,000 out of millage and put 9,300,000 to where you wanna go and it's apples to apples, why bother doing it? I feel like this could be construed as we're raising taxes here, taking it for the fire. No more problems. No more arguing. No more fiscal accountability. And so if we're gonna do it apples to apples, why bother? If we're gonna do it where there's an increase and we freed up a budget, we're gonna be told we raised taxes in a roundabout way. So and whether I'll let you go first. I'm sorry. Hylock, or you want to comment on that?

Oh, I was just gonna say the the advantage is this brings a stable revenue source to fund the fire rescue services that can be that can would not be subject to property tax reform or the changes in property values during, say, recessions, and which is exactly what happened in 2008. And and when those things happened, one thing to remind you of, the 4,000 emergency calls don't change based on property values, but funding decreases would impact services. And the calls are gonna happen. The trucks are gonna be responding, and any reduction to us just shifts that burden to the district over the bridge.

And, chief, that part, I could agree. The 14 municipalities and two that are in or 16 plus two, are these the only 18 municipalities in Florida currently doing this, or just give us some local?

No. That that's that's the a list I was able to to compile, but it's there's far more than that. And there's many others. Because of property tax reform, there's many other fire chiefs that are making the same presentation to their

elected body. I would be in favor of looking at this, by all means. I'm also and we haven't got a chance yet to get together. That's due to me. I'd also wanna be in favor of looking at how many calls we have the way we have calls, getting you some ambulance service EMS on the South End of the island, but versus possible mitigation of less fire calls here. We'll we'll we'll talk about that another time. Yep. I think it's a bigger picture overall, but the bottom line is we need you. We have to fund you. There's no question about it.

When you counselors, when you say transparency, we just have to make sure it's not looked at as it's not apples to apples. We increased the big amount of funding to the fire over here and didn't unilaterally reduce it in the millage where the taxpayers now have a much bigger nut, and that's how we circumvented it. And that cannot be the way this looks. I'm not saying you're doing it. I'm just saying that's gonna be the questions.

Again, all I'm asking you for your direction is to direct us to continue to study it, take a look at some of the questions you brought up today, and to bring forward that consultant cost in the FY 2017 I

appreciate that. Even though I'm pushing back a little with just questions, I'm supportive of looking at this. I'm supportive of what we could do to best take care of our first responders. Counsel, any other questions on this? Casey, it looks like you have don't see any nos, so I think you're good on that.

Thank you. Yes. Thank you, chief. Next, I'm going to bring up Dan Smith. And he is going to present new fee structure in growth management and building services.

Excellent. Dan, before you get started, Casey, it looks like we have, what, one, two, three, four, five, six more items, I think, if I'm looking at here?

I think Dan is covering one, two, three, four items. And then we have public works last. We're

making great time.

We are.

Dan, please. Actually, there are two items. But the resolution along with the backup are both the same thing. And what I appreciate Chief Byrne kind of started this whole thing on fees and the times that it takes us to provide this service. The first one is growth management. And all I'm actually doing is we haven't made really a change till 2017. We've added fees as we've seen them moving on. But as far as any kind of really big change, 2017 was the last time we changed the fees. And we're talking about variances, site plan approvals, administrative variances, which take up a lot of time. And then and just so you know, we're not talking about a lot of money.

Our budget is around 900,000. This is only gonna cover about 250,000 as far as fees are concerned. So we provide a service. We're like Parks and Recreation. We're not trying to balance it with the fees with the what it costs. We're here to provide a service. You wouldn't believe how many people want to meet with me on certain issues on how to run a business or how to open a business, or they're confused with what a conditional use is. We had that one today. That was just kind of a joke. But we we get those all the time, and and we look at this as providing a service to the community.

So we're not looking at breaking even and everything. And and what we do is we compare our fees with Collier County. Collier County, every three years, I believe, does a study, and we just piggyback on it. So the growth management is not really increasing a lot of revenue, but it it is some changes that were needed moving forward. And then, I'll I'll if there's any questions regarding growth management, I can answer that. Then I'll go into building services, which is an enterprise fund, which the fees reflect the cost of doing business on the island. So I'll first ask any questions regarding growth management.

Have Dan, thank you for the presentation. We have one from Councilor Gray to start.

It's my ongoing obsession with impact fees. I don't know where that fits into this, but I do believe isn't there a pending impact fee? I don't want to pick on the YMCA, but from their development. Do I remember waiving or deferring an impact fee to that?

Yes, we did. That was not waiving a fee.

It was deferring.

It was deferring it until CO.

Right. So the question is, where do those flow through the budget or not when we do collect those? And the other one, just second question, on the enterprise fund, if we have a case of the short, so that the revenues come in below the expenses, does that shortfall come out of our general fund to meet that obligation?

I'll have our finance director answer the question regarding impact fees.

No, the general fund can't fund a shortfall in an enterprise fund.

So if there's a shortfall, which right now they're running a shortfall

It would come out of their own reserves.

We have reserves for that.

You got plenty?

JAMES For this year, yes.

For this year, yes. Well crafted answer. Thank you very much.

JAMES Thank you, counselor. Counselor Schwann, please.

Thanks for your I am shocked again that we haven't done anything about this since 2017. I fully support what you're wanting to do. And I think we need to start looking at this more regularly. So help us do that. Thank you.

Well, I appreciate those comments. And, counselor Champagne, you were I was we're out ready to make that statement. We should be doing these every year. Mhmm. When I would bring these up at certain time at with counsel previously, it was almost like I was robbing a bank. And it was like, these are things that needed we needed to make those changes because the cost of living, the cost of service is all going up, and we're staying static the way we are. So we're behind the eight ball every year. So I'm glad we're finally talking about this.

Dennis, you know, the light signs. I sat in on some of those meetings, and I felt your pain. Counselor Gorel, I would have called myself the junior counselor back then. And as much as I'm bold, sometimes I didn't open my mouth on those things because you fell in line with the new system you're sitting in. I think this makes sense. This is nothing more than just increasing them to accommodate inflation or to accommodate the cost of doing business on the island.

That's correct.

It's very simple. Very good. Appreciate it. Thank you. You want to move on to the next one?

Yes. The next one is building fees. We have not changed our fees since 2022. We had a fee study. It's been four years based on inflation rate. I've heard these numbers thrown around. The numbers that I were getting around 3%, which we anticipate a 12% increase. This is much needed. We're talking about additional $400,000 that will go into our fee structure. And as you know, that provides services.

It also provides for our building. If anybody has seen the Building Services Building, it's quite need of repair. I call it the dungeon. Luckily, the city council and the and the system may city managers allowed three or four of our staff to work from home because we wouldn't have enough room. We also wouldn't be able to retain some of the services that we have.

We are having trouble training or bringing people in who are going to take over for the future. We have an older force. They may be going within the next three or four years. We have to have some legacy left over to continue on with our building services three or four years from now. So this is really important that we get this fee structure increased.

I don't see any light signs. I have a question. And I think I borrowed this. Tony Oliverio was sitting in the audience. He might have talked about this with me over coffee one day or mentioned it too. If I sell a property in the condominium association, very often, there's a one time capital assessment fee. The association says, we've kept this place running for you. We've kept it beautiful. Now you're coming in. Take that to vacant lots. We've kept the water facilities. We kept everything waiting for you to tie in to be part of the community. Now we call them impact fees. Right? Is there any other type of legal onetime capital assessment?

Any other type of fee that we could even I'm not saying we do it, but we could consider for those who are coming to the community, put it on every house closing, something that mitigates mitigates the cost of the community we've kept in place when when we're coming in.

I think you might be discussing maybe some sort of a real estate stamp of some kind.

I was just curious. And that might be out of my league here. That might be a broad question. I'm just asking for the

That would be something that I have to look into. And I will look into that.

I looked into it.

Okay. I was going say, would you be Okay with looking into this?

Yes. Actually, astute counselor asked me to look into that some time ago, and I did.

Raise your hand.

It is a revenue

no, Stephen. There you go. I don't want to steal your thunder.

I'm here for the team. I try and take credit. I just want to see us execute at a high level.

What were your findings, if I might miss it?

It a real estate transfer tax collected by the county under state statute. Municipalities cannot collect that tax.

And I'm not saying I would have been 100% in favor, but I would like to know where we stand and have all options on the table. Very good. Dan, I do see one of the light signs since maybe I opened Pandora's box. Councillor Henry.

Thank you very In much doing looking at these prices and what you're saying the increased costs are, did you raise them enough?

That's 15 a

to 18%, and I'm doing basic math here, and I'm looking at 5% to 7%.

That's a question. I've heard some numbers that have been floated around. The whole idea behind the enterprise is I have to make sure those revenues and the fees match up. So this is kind of a one time thing. This has been a long time since we've done that. I'll have a better handle on it this year moving forward and then moving forward.

Yeah, because I just look at it as kind of when you look at somebody's hourly rate. If you hire a plumber and a plumber comes to your house and he's there for an hour, it's going to cost you $75 $100 $125 you're charging 54

Correct. So these are things we're going to be now that I kind of got some direction from the city council, I think that's helping out tremendously on how I'm going to handle the next year's budget.

Okay. That's all I observed was, I used to say this to my guys when I installed them, installers, and I'd ask how much it cost. And they'd be like, oh, just give me 100 And I'm like, Okay, give me your wallet, because you're just giving me money. So, you know, you charge what you're worth and what your expenses are.

Correct. Dan, before we move on, and I get this question often, I know the answer, but why don't we just throw a $100 more on a hot water fee? Why don't we just throw a couple bucks more on every permit fee? Why don't we just do it and nobody will notice it?

Well, that's not the way I operate. I have to make sure that what the service that we're providing is a service that you've paid for. And it's it's just important that we keep that honesty between each other. And and and that's what it comes down to.

We also have some regulations in this here too. We can't just arbitrarily make up numbers and just decide to tax our citizens in the form of permitting fees. We we are bound by certain numbers and guidelines that best serves them well. Correct?

That's correct. And and I think it it's important. I just wanna throw this out. We have to keep pstaycom overcompetitive. Everybody wants talks about competitive. For a worker to come down here, he's gotta he's gotta drive by Naples, Collier County, Sanibel, Fort Myers to get here. So for someone to say that we're competitive with the other, we gotta be better than that. We have to provide us we have to provide a a salary, benefit retirement plan to keep the people here. Because right now, I'm training these really good people, and they're leaving for these other communities. And and it's really bothersome.

I think my exact words when we voted for a raise for the staff was, I'm tired of training people to go elsewhere.

That's correct.

I agree with you. Counselor Gray, one last one before we move on.

No. Just building off of that conversation. First, I loved your answer. I'm dead serious. Honesty and fair dealing is what should be driving all of our decision making. And the objective should always be that we could look any of our constituents in the eye and say, we're trying to treat them as fairly and as respectfully as we can. So I loved your answer. Thank you. The retention issue, my god, you can haunt yourself with that. Obviously, you're thinking about what you need to do to try and build retention. It's a challenging job. I really appreciate the fact that you're being that mindful of it. Thank you.

Thank you. You got one more? Or was that it? That was it. I'm sorry. Missed one. Great job. Thank you.

Thank you. Appreciate it.

Counsel, before we move on to Justin Martin for Public Works, I just want to confirm with you, it sounds like for so all of these fees are approved by resolution. And it sounds like you would like to implement the fee increases sooner rather than later, correct? So we'll bring back it'll take us a little time to work Alan on updating the resolutions, but we'll bring those back on future agendas and then implement immediately. And I also just briefly want to say to the staff, because everyone worked really diligently workshop. And as I mentioned at the beginning, this is the first time we've done a revenue workshop.

And I ask all the department heads to think about new revenues, think about their fees, think about any revenue source they have. And if it hasn't been updated in a while, propose an update. And I think we probably still have work to do, and we need to be looking at this every year. And I'm glad you all have been receptive to that. And then finally, I also just want to say we had a very productive builders roundtable last week.

Dan took the lead on that. But this entire room was full. Every single chair was full with contractors. And I will say there were a couple comments in terms of things we could do differently or areas of improvement. But 90 of the feedback we got was really positive toward our building department and our growth management staff. So I just want to mention Dan and thank him for the work he did on that.

Kasey, can I follow-up on one thing with what you said? None of our citizens are going to complain if we raise a fee after nine years. They're going to complain if they weren't made aware of it. Stephen, you're correct. The reason I asked those questions was honesty, integrity. We don't just put arbitrary numbers. We look at x plus, you know, a plus b, and it equals c. The work you've done, what you're setting up, these workshops, the the change in the way we address the citizens and the way we look at the budget, the amount of workshops we've agreed to, that's what gives us the right to raise these fees. That's where the citizens say, it's Okay. Dollars 50 more is Okay. Money is Okay. You've done your job. You've proven to me you know what you're doing, and you've proven to me this is a worthy request. So I appreciate it, and thank you to you and the entire staff. All right.

All right. Justin Martin, Public Works.

Good afternoon, counsel. Again, Justin Martin from Public Works. So Public Works doesn't have a whole lot of review and permit fees that we administer. But we do have a couple. And I'll go over those. So first and foremost is the right of way permit fee. And speaking of not raising fees in nine years, this hasn't been raised in twelve years. So since 2014, the fees have not changed. Public Works is funded by the general fund. It's not an enterprise fund.

And Public Works reviews and inspects the right of way permits and certain development permits. That'll be covered on the following slides. And right of way permit fees are established by resolution. So as the city manager mentioned, we will come back with a draft of a resolution addressing those fees, if that's the direction from council. The current residential right of way permit fee is $200 So for that $200 you get a right of way permit reviewer and inspector.

He reviews in the morning. I'm sorry. He does inspections in the morning, and then he does permit reviews in the afternoon. And that's all he does. So that this was pretty easy to figure out. The the The fees should cover the services that he provides. And we know what his FTE wages are, so that's what the fee should cover, and the amount of permits that are issued each year. So right of way permits are needed for driveways, sidewalks, swales, landscaping, sod, irrigation, drainage, anything within the public right of way adjacent to a property, whether it be residential or commercial.

Let's see. Okay.

So right now, as I mentioned, the residential permit fee is $200 and we're recommending to raise that to $365 based on what I just discussed here, based on the wages of that permit reviewer and inspector, and the amount of permits that he does in a year. So these costs will cover the permit application review, construction inspections, any compliance activities. And as I mentioned, it will go up from $200 to $365 So it's $165 increase. And as I mentioned, it hasn't been increased since 2014. So that's right of way permits.

Now, Public Works also does development review permits. And this falls under the things that growth management department reviews that Dan just spoke about. And these are seawalls, which are part of a building permit, which gets submitted to the building department. And the reason that public works reviews the seawall permits is that there are seawalls that have city outfalls, drainage outfalls. So the pipes that go from the street to the canals go in between the lots, and they go through a seawall.

What happened in the past is nobody had reviewed these, And you would have contractors that would end up putting a vinyl seawall in front of another seawall that was there and cover up the city's outfall pipe. We wouldn't find out about it until years later when streets are flooded. You have some issues with settling between the homes. And so that's why we get involved with those seawall permits. And what we do there is we see if there is an outfall.

And if there isn't one, then we write NA on the permit. But for those that are, we do an inspection, and then we require details of the connection the pipe connection to the new seawall. And then we inspect that. We also do SDP reviews, so site development plans that come in for, let's say, a commercial property, a new restaurant, or a new real estate office. It has storm water, it has traffic.

And that's what we review it for. So we look to see how much traffic is going to be generated by that development, whether a turn lane is required, look at the traffic impact statements. And we also look at the stormwater, how they're going to be outfalling to the city's stormwater system. Commercial building permit reviews, same thing. Storm water traffic site improvements, variance petitions.

The reason that public works reviews these is, as I mentioned earlier, when somebody wants to either combine two lots and make one lot out of it, every single side lot line has a public utility easement on it. And on some of those, have storm water outfall pipes. So we need to review that to make sure that when when the a variance or a a vacation is submitted, that it's not going to affect the city's infrastructure. So at the bottom of this slide, we have the proposed fee increases to cover the other person in the public works that does the reviews of these development type permits. So it'd be $100 for SEP reviews, dollars 50 for variance petitions, dollars 100 for seawall reviews, and $100 for commercial building permit related reviews.

Currently, these are not in there. So although we have a full time staff person that does this, we're not getting any revenue to offset that. And as I mentioned, this would be covering the permit review, construction inspections, compliance activities, and it would cover half of the cost of that one FTE assigned to development related reviews. And this would reduce the general fund subsidy of the development related services or the enterprise portion there. And so this would be the development reviews would be a revision to what Dan had presented, which is the growth management resolution for their fees.

So these fees that were on this previous slide, at the bottom here, will be incorporated into, for instance, an SDP fee, which has a base of $5,000 So in that case, it would be $5,100 So that would have to be incorporated into that. I wouldn't suggest this be a separate resolution, because then you're going to convolute things. So I'm happy to answer any questions.

Yeah. Before I turn it over for questions, Casey, are we treating this as one presentation? Do you need some pieces? As Justin said, don't make it a separate resolution?

It's completely up to the counsel. I think his suggestion is on the fees that he's listed here at the bottom, those would be part of the resolution that Dan already has that already exists.

Very good.

There'll be an update.

Thank you for the clarity. Counselor Schwann, you're up first.

Yes. Thank you, Justin, for the presentation. I know I fully support you drafting this resolution to take place immediately for these increases that you've presented.

Thank you. Counselor Schwann, great job to get right to the point. Nailing it home, saving us time. Counselor Gohle, you're up next.

Thank you, Justin, for the presentation. I have one question. What are the revenue we are looking at? What's the number that you're looking at bringing in by raising this?

Well, for the right of way permit fees, we already have some revenue coming in since it's two hundred dollars that's charged. So what we're doing is increasing it to cover the cost of that one f

How much t revenue you're bringing right now is $200? I

don't have that number here. It's on my computer in

an

Excel

sheet. The total

You're almost doubling, so obviously it's a pretty

good number.

Almost, but not quite. The total that needs to be covered is about $112,000 And that includes the city's overhead and fringe benefit costs and all that.

Got it. Thanks, Justin.