City Commission - workshop

We'll call to order the City Commission Workshop for Property Tax Reform and Budgetary Impact Discussion. City Clerk, can we get a roll call, please?

Yes, Mr. Mayor. Commissioner Davis. Here. Commissioner Dollison. Here. Commissioner Birdsong. Here. Mayor Pro Tem Mercer. Here. And Mayor Yates.

Here. Appreciate everybody coming on a Thursday afternoon for this meeting. I know this is a little bit out of the ordinary, but I just kind of felt like with all of the news and media that's out there and not knowing which direction the voters may go in November, We need to be prepared, and we need to have discussions now on what our budget could look like and what changes we may need to implement. And so I think the sooner we start to have those discussions, the better. I also think that in November, if the voters do not move this forward, these will not be wasted discussions. We can circle back to these discussions and make potential changes to future budgets and make sure that the city of Werner Haven continues to operate fiscally and responsible to the taxpayers' funds. With that, I'll let the city manager take over. Well, I'll add one more thing. I'll just say, for those in the audience, so we probably won't make any votes or actions tonight. We may have some consensus on direction, but there won't be any actions tonight, and therefore we won't have any opportunity for public comment. But, however, I appreciate you coming and being part of this discussion. So, with that, City Manager.

Thank you, Mr. Mayor, and thank you to the Commission and certainly the staff that have joined us this evening. I do think you're very appropriate in wanting to have a conversation on this because whether it's property tax reform or other matters that may come about through decisions stemming from the state legislature, there's always the potential for impacts to local government, whether that's in the form of a a new mandate that we have to absorb into our existing expenses or into other reductions in revenue streams that certainly have come about in recent legislative sessions. So in trying to help the commission have dialogue and conversation. And this is, again, it's in a public forum. This is the only time you all as five can share your thoughts and concerns and concepts for how to manage these things is in this type of forum. So what I was hoping to do this evening, if it aligns with the commission's desires, is to approach this through four kind of topics. First, starting off with What is the potential impact to the city of Winter Haven should property tax reform be supported by the voters and we have a constitutional amendment, a change? And then the second topic being, if that were to happen, what are your options for replacement revenue? Which are somewhat limited, but certainly want to put some things out there that are viable options. along that same theme what are some things that you may be interested in looking at from organizational or operational changes ie if you had to look at not doing things you're doing today where do we start looking at those the concept of doing less with less and then the fourth topic And I'm going to ask the city attorney to really kind of guide us in this conversation is there is specific legislation that has been passed that puts guardrails around what we as an organization, not just Winter Haven, but any municipal government and you as elected officials, what you can and cannot do in speaking on the matter of a ballot issue. So we want to make sure that we are doing what is permitted by law and not doing what is prohibited by law. So that's kind of the approach, and if that's in step with your desires, I'll get us underway. So in terms of the impact to Winter Haven, and we've provided copies of this in case you want to make notes for future reference, but it's also what's within the slides. Property tax, what is being proposed is an increase in the homestead exemption initially to $150,000 in the first year and then to $250,000 in the second year for homesteaded properties. So what you have on the screen, and as I said, you also have a copy of this, is a report that was provided to us and the other administrations throughout the county by Polk County property appraiser Neil Comby and his staff that identified what we would be looking at in that impact. And I've taken the liberty of highlighting a couple things here. So Winter Haven, this is year one. were at the very bottom there and we would stand to see a reduction in our revenues of seven point six nine one million dollars I've also pointed out a few other ones because we don't live in a vacuum. Certainly Polk County does a lot of work in and around Winter Haven, whether that's on roads or some of the regional parks that are in the area. They have been an interlocal partner with us on a number of projects. You can see what he's forecasting their revenue loss to be at $98 million. They have a system of MSTUs that aren't highlighted, but you see them listed at the top there. The library MSTU, if you're not familiar with this, Polk County does not provide libraries in terms of the structures and the services. Many years ago, Polk County established the Polk County Library Cooperative, whereby the county provides through a funding formula certain dollars back to those cities that have libraries in exchange for us providing library services to unincorporated residents. Their revenues for that come from that MSTU, so MSTUs are also impacted, so that could potentially have a reduction in the county's contribution back to our library operations. Certainly, we know the Lake Region Lakes Management District. That is the canal commission. They are a special district that has taxing authority. That is who maintains canals and works closely with us in a lot of our boat ramp facilities. So an impact to them certainly has an indirect impact back to us and to our residents. The Southwest Florida Water Management District. we do a lot of work with swift mud in terms of cooperative funding grants and those would potentially be impacted uh... the partnerships that we have with them on various programs and then as we mentioned during our last presentation uh... with citrus connection lakeland mass transit Also stands to be impacted how that might affect us. I'm not real clear just yet But certainly that's somebody that is a partner of ours that could could feel that pinch So in year one again direct impact to Winter Haven seven point six nine one million dollars AJ if you advance to year two for me So it looks basically the same, except the numbers have changed. And you can see that at the full implementation of a $250,000 homestead exemption, Winter Haven would stand to see a revenue reduction of $10,320,308. significant amount in in the grand scheme of things and you can see those other entities highlighted again and what their potential impacts are as well as all of the other cities within polk county and i think this is a really good report i'm grateful to property appraiser combi for for providing this out to all of us The homestead parcel count, I think, is an important piece in there as well, at 12,879 homesteaded parcels in Winter Haven. That's a pretty significant amount. When we looked at this, and I'm just going to look to our CFO, Chris Reeder, for a nod of verification, but when we looked at this, the percent of properties in Winter Haven that would be completely exempted from paying a city ad valorem property tax, under this exemption is around 92% of our homesteaded properties. That means about 8% of the homesteaded properties would continue to pay something. 92% would pay nothing.

Outside of the normal school board. School board, yeah.

I'm just talking about when I say pay nothing, I mean in terms of City of Winter Haven ad valorem property taxes. I've had the pleasure of doing some budgetary briefings with each of the commissioners independently this week. And I share this same information with you. This is looking ahead to our fiscal year 27 proposed revenues. And this is just within the general fund. So our projected ad valorem tax revenues for next fiscal year are $33,176,102. You can see from the pie chart that that represents the biggest section of your general fund revenues. If you think about a loss of, and let's just talk in year two, a loss of $10.3 million equates to about 31% of your total ad valorem revenues. So about a third of your revenues from ad valorem would go away. In terms of the overall budget of all revenues within the general fund, It's about a little over 12%, about 12.15% is what the potential loss would be on this proposed, let's just call it $85 million budget. So I'll pause there if there's any questions. I think you've all seen this. You've spent time with me this week as we look at what next year's revenues look like. Moving forward, our proposed expenditures and i'd highlight the word proposed because we've not approved a budget as of yet but when we look at our budget for next year and you think about the departments that we have so police fire all the way down through our public affairs there's that eighty five million dollar budget the challenge becomes if you don't replace the revenue or supplement with something other Where within that do you cut $10.4 million? And of course, police and fire in code or safe neighborhoods, I define those as the three legs of the stool of public safety. That is critically essential things that we do in a community. That is what we have to do first and foremost. You have to have a safe community. People want quality of life. They want parks and recreation. They want quality roads. But all that comes after the fact of being safe. In considering what we spend on public safety and what's anticipated for next year, Those three units, police, fire, and safe neighborhoods, total out around $38.8 million in cost. Ad valorem revenue presently is projected at $33.1 million. There's already a delta there. of 5.6 million dollars that we make up through other means, through our state shared revenues, our franchise fees, our utility service tax receipts that we gain. But if you take that 10.4 million now, it becomes even harder to do that. So that's just to give you kind of what the playing field looks like. Here's what your revenues are today or are proposed to be. here's what that potential loss in revenue would be, and here's where you'd have to find that if you're not able to identify an alternative revenue source. So let me pause there and see if there's any questions or thoughts from the commission on that piece.

So I have a comment about that. I've heard our CFO and others speak towards us local commissioners elected officials about how we would use public safety as a straw man argument, you know, if this happens we're going to cut all of our public safety and how dare we do that to the voters. And I don't believe anyone up here is going to allow that to happen. However, as someone who fully supports our law enforcement, our first responders, our code enforcement, all of our public safety employees, I don't believe they are paid what they deserve. And I just wonder, you know, what would this mean for us to be able to offer them better pay better benefits to truly recognize and also to retain them because uh... we can continue to fund them at the status quo but we're going to you know we're going to lose employees possibly as they move on to better opportunities uh... and we'll be really hard for us to maintain an experienced and trained workforce willing to serve our community. That's, I think, my biggest concern here. We wouldn't be cutting what we have already, but we would be setting us basically a ceiling that we wouldn't be able to go beyond to provide extra to support these people.

I think that's a good point. The language within the bill is a little different from what was considered in some of the bills that went through session. in that, yes, you're not going to cut those, but your ability to increase them becomes significantly hindered. If you don't have the dollars to increase pay, to increase workforce size, that's problematic because you're going to continue to grow as a community. This is kind of an op-ed for me, but I'm a strong believer, and I've said this for the 30-plus years I've been in local government, coming from a recreation standpoint, and I would say that Chief Monroe and members of the law enforcement community would agree. every dollar you take away from a parks and recreation budget be prepared to add that to a police budget because the opportunities that those services provide to uh... take young minds and put them into positive environments when you don't have that There's other things that can come about. But the problem becomes if you continue to grow and you don't have an ad valorem base going along with that, how do you fund expansion? How do you grow that? And that becomes a challenge for us. I mean, I'm not saying it's insurmountable because I don't know what that challenge truly looks like, but it does become somewhat difficult.

I think one potential discussion to be had is, in looking at potential replacements for this, we are one of the very few municipalities in Polk County, and I believe even probably across the state of Florida, that does not implement a fire service fee. So is that something that, in my thought process, we would not implement that as the sole answer. But perhaps we can account for a portion of that $10.5 million by making cuts throughout the budget. Another piece of the puzzle could be a fire service fee. Another piece of the puzzle could be you know, potentially a small millage rate increase. And I think if you take a multitude of things, you can get to the final equation so that we can continue to offer the services to our residents that they're accustomed to receiving. Is that feasible? What are your thoughts on that?

It's a good segue into topic two of what are your replacement revenue options. Let me start with millage. City of Winter Haven's millage, 6.59 mills. That has not changed since 2022. It actually came down two-tenths of a mill in 2022. The way that we fund things, the revenues that come in off of your ad valorem today, that millage is applied to homesteaded properties, non-homesteaded residential properties, commercial properties, industrial properties, the gamut. You could look at, and there will probably be some cities and perhaps counties that say if we have a smaller pool from which to receive ad valorem revenues, then the multiplier, the millage, should increase to cover that. The downside to that, in my opinion, is that you are charging some users of your services less and forcing others to pay more. And so some people are basically footing the bill for other folks. Kind of the regressive aspect of that, in my opinion, if you think about those that are renting properties, your multi-families, apartment complexes. That's a lot of your workforce. That is people that are trying to save money today. They can't afford to purchase a home and make it a homesteaded property. So they are renting a property until they can get to that financial stability to do so. It pushes that further out. because if you increase a millage rate on, you know, the ABC apartment complex, fictitious property, that is going to get passed along to renters. If you do that on your commercial properties, the small businesses that can't afford to own their own bricks and mortar facility and are leasing that space from somebody else, they're likely to see an increase in that as well. that ultimately comes back to all of your consumers because they're going to turn around and, if I have to pay more, then I've got to charge more. And so the landowner has to pay more, they charge more in rent. The renter has to, the small business has to pay more in a lease payment each month, a rental payment. I've got to turn around and pass that on to the consumer. So it's just moving the shells around, really. But I think the biggest problem I see with it in a millage increase is that you're putting on the backs of a portion of your population the cost for services that are received by others who are not paying into that.

Yeah, and I think that's where a millage rate increase to me whether it be very small or regardless of size, that's your last resort. That's because you just don't have any other options, okay? And we're gonna obviously explore what all options are on the table as we progress here from today on forward through November when the voters decide. But when it comes to a fire service fee, you've got a lot of organizations who are nonprofit, not paying any property taxes now, but they're utilizing a large portion of our fire services. So, for example, hospitals, nursing homes, potentially churches. And if they're utilizing the services, and this has been kind of the argument that I've heard all along in this property tax debate is, it's kind of, if you use it, you should pay for it. Everyone wants the fire department to show up at their house in the event of emergency. And so if everyone contributes to making that happen, then we can kind of fill some gaps just on that basis alone.

Before I jump to fire services, let me just see if anybody has any questions on the millage piece that I put out.

No, I don't have a question, but I have a comment. to cut $10 million out of the budget. How do I want to phrase this? Unfortunately, it's going to cause some things that we're going to have to do that perhaps we would not have wanted to do. And so, The way I look at it is based on what I've been seeing and going through the fiscal 27 potential budget, I think we've got to look at all potential aspects for raising revenues. And so, I mean, and at the end of the day, we will look at it, if it's necessary, and make a decision. And unfortunately, the decision that we're going to have to make, if we have to make that decision, and to a certain extent, has already been made for us if that boat I mean, this isn't something that the five of us up here want to do, cut $10 million out the budget, but that's not a decision that we will make. And so there are going to be some real circumstances and some shifting and some things that we're going to have to do. Because the one thing we can't do, the one thing that we can't do, and that one thing is we cannot let our city and our residents regressed ten years ago or fifteen years ago or twenty years ago. We are where we are, so we can't go back. So we've got to do all we can to try to maintain a level. Unfortunately, it's not going to be easy, but I think all revenue, potential revenue streams that we can attack needs to be researched, looked at going forward. And I just remember from, we've looked at a fire assessment fee before, and I know that that, if we were going to even do that, we would have to start working on that yesterday, so to speak. I'm just throwing that out there, because I've been here long enough that we have actually went through the entire process of that fee. And you have to hire your consultants, and they have to do the study. And I mean, it's a process. So it's not like we could say, OK, we're going to implement a fire assessment fee in November.

doesn't work like that i mean it's more of a process so i'm just throwing that out there yeah about a year to get it on the tax roll too yeah yeah i think and i think that's what i'm hoping for out of this discussion tonight is maybe we we do come to a consensus that staff bring us back a a proposal to move forward with the study on that you don't have to order a study we're not going to vote on that tonight but if we can give that direction tonight if that's the consensus one of the consensuses or only one we can go that direction and get things in motion and you know ultimately again if it doesn't pass then it certainly doesn't need to be implemented but we need to have an understanding of the direction we need to proceed as a city

Let me grab him, let me grab him. Okay. Regarding the millage, I just want to put it out there, my opinion on that. I would not be in support of raising millage if this were to go through. The folks that are still paying the taxes are still paying the taxes, and putting the millage out there, that's just putting extra burden on their backs to make up the difference for everyone else, and I could not in good conscience do that. I would be open to entertaining a fire assessment, and I would offer my support if we're looking for consensus on doing a study on that.

I had a question, I guess, to Commissioner Burson, because we have the advantage that you have been here, and you obviously were involved in those conversations at the time that you all were considering that. And I was curious as to what circumstances prompted your looking into that at the time, and why it was not... any action taken on that. Obviously, there was a reason or a rational reasoning for it. Something had caused at least you all to consider that. And as much as we know that other cities have, in fact, or do have the fire service fee or fees for that. So how is it that we pretty much kind of walked away from that?

I think when we looked at it, we were looking at generating additional revenue and what it would do. And when it was brought back and the cost and what we would do, I think we decided that We wouldn't do it.

Was the study done at the time? Yes. Yes.

There was a study. The study was done. It was brought to us. And we looked at it and considered it.

I believe the ordinance actually passed, though, didn't it? It just didn't get implemented.

We never implemented it. So let me add a little context to that. The city looked at a fire assessment fee in 2015. Okay. And the catalyst for that, the impetus for it, was really where we were in terms of the overall economy. Remember, we went through a pretty significant boom, followed by a great recession, and Winter Haven was a little late in getting to the table to look at fire assessments. Some of the other jurisdictions were looking at those in 2012, 2013, when times were really strained financially, the Commission did pass an ordinance and it is codified that gives kind of the framework for what would have to happen if you want to do a fire assessment. And we can do, this is just kind of transitioning into that as the next discussion in this topic of alternative revenues. So within our code, there is a section that speaks to the process for doing a fire assessment and it's rather lengthy and I need to myself review that in greater detail than I'm prepared to discuss tonight. But following that piece, then there is the actual assessment ordinances that go with it. And the commission never got to that point of actually considering an action to implement an assessment. The policy or the code was updated to reflect the process for how you get there and we had begun the efforts to bring back a first reading on a fee and it just didn't move forward even to that point. Um, I'm going to ask, uh, chief new brand. I asked him a few weeks ago to begin doing a little digging is our resident expert on all things fire to help me with this portion of the discussion. But I'll tell you the, there are to the best of my knowledge, and I think this is accurate. There are four entities within Polk County that presently have a fire fee. City of Bartow, City of Haines City, City of Lake Wales. And then Polk County also has a fire fee. None of you pay that Polk County fire fee. It is only on the unincorporated area because fire services here in Winter Haven are provided by the City of Winter Haven. Drew, if you wouldn't mind just giving a high-level overview of what a fire service fee can do and your understanding of it, please, sir.

Certainly. Good evening, Mayor and Commissioners. Fire assessment fee. The real purpose of why fire assessment fees put into place really is to preserve the property value. So it needs to be placed on real property to reduce fire loss, lower insurance risks, and improve quality of life for individuals. It provides a good opportunity to bring in the revenue that funds personnel, equipment, stations, utility, all the ancillary costs to operate the fire department that provides the real value to the properties on there, whether they're vacant or whether they have tangible, valuable properties on top of it. The things that it will not cover, which is a good element, is the advanced life support services that we offer. So the major ALS portions of it we don't cover with it. Specifically to Winter Haven, we can reproduce greater than 90% of our budget is refundable through a fire assessment fee. So the way that looks at us is we're not able to pay for the paramedic incentive pays that we provide all of our paramedics online. We cannot pay for the administrative personnel that are designated strictly for emergency medical services. And we're also unable to pay for the continuing education training classes specific to advanced life support procedures. Everything else we have the ability within the state statutes to use the fire assessment fees towards. So that would be the remainder of all the personnel costs and services, the regular training operations, the administrative personnel and services, fire apparatus, fire stations, keeping them maintained, capital depletions, all of the additional revenues that we go through there. And looking towards the budget that was shown for potentially for 27 in there, out of that $18.1 million in there, we have the ability to reproduce upwards and over $17 million in it. So less than a million dollars of our budget goes strictly towards advanced life support procedures due to our arrangement with the county. From that, you're correct. There are four entities within Polk County that have it. Bartow, Lake Wales, Haines City, and then Polk County as a whole that have it. All of those entities use a different methodology approach on how they get to their end number, on what property is assessed, what value on it. So it's up to the study and what we need to be able to do to move forward to find out what that looks like directly here in Winter Haven.

Thank you, Drew. when we looked at the fire study twenty fifteen grant twenty fifteen eleven years ago winter havens a very different place populations probably little more than half of what it was it is today operational expenses within the fire department we at that time had two permanent stations one trailer we were operating out of it today we have five stations that were running very appropriately staffed and equipped operations of the costs are higher than they were then twenty fifteen The study with guidance from the administration at that time contemplated about a 25% cost, 25% of what was available through a fire assessment. And I think it was estimated to generate about a million and a half dollars. Now we weren't looking at property tax reform at that point. This was just to supplement the operational expenses of we need to expand facilities and we need to acquire equipment. How do we bolster that to some degree? is the chief said you know you we estimate and this is us looking at it not the study experts but our belief is that you realistically could recover legitimately about seventeen million dollars of expense through a fire fee i wouldn't recommend that to you in any way shape or form because that far exceeds what you stand to lose But I think that that's the guidance that we would have to put into a study to figure that out. One of the unique things about a fire assessment is that it does apply to all of those properties. So you have properties today that are exempt from paying property taxes. You mentioned it, Mr. Mayor. You have not-for-profit major facilities, hospitals per se here in Winter Haven, that they don't become exempt from a fire fee unless you choose to make them exempt from that. Religious properties, you choose to do that if you so want to. Other not-for-profit entities and the like. So that's stuff that has to be kind of worked out within a study. I would say that you're spot on in that this exercise, while it does cost something to produce that study, it is not wasted. That is, I think, very good information to have and to understand because whether or not property tax reform is approved or fails under the November ballot, it at least lets you know what your options are for other things that may come about through future legislatures. It does give you a good baseline either to move on now or to build off for later. Um, if, if that is something that the commission has an interest in my recommendation to you, and it's just, there's a recommendation. I don't get to make this decision. You all do. I would strongly recommend that you work towards doing that sooner than later. We are one of 17 municipalities in Polk County. Four of those 17 have fire fees. If the others are planning to consider something similar, there's not a whole lot of people that do fire fee studies out there. And when you have 411 municipalities and 67 counties across the state, I think the line, the queue to get those done could form pretty quickly. And that not only could increase the cost of those studies, but also delay the delivery time of them and put you up against a wall. So if that is something that the commission is interested in doing, I would suggest advancing that sooner than later. We can't.

vote, but could we be by consensus?

You could give consensus for me to bring something back to you to consider. That could be at the next commission meeting, you think? I can't have it to you for the next commission meeting. But if there's a consensus that you want to look at having a study done, we can begin the process to reach out to those individuals that are capable of doing it.

I think what we've heard thus far, I think that consensus exists. So one more nod.

One question is that the study is not probably going to be cheap. What do you estimate that probably, just guesstimating what that might be, based on what we're seeing with the rate studies this is not to dissimilar from utility rate study in principle i would guesstimate this is probably somewhere around a hundred thousand dollars who spent a hundred thousand dollars and then at the end of that so if it doesn't pass you know the property tax doesn't pass we'll just have a nice study and pay a hundred thousand dollars for it basically to move on is that what you're saying

For the most part, yes, but that's also a study that if you have other issues that you have to overcome from a financial standpoint, you've got that data to move forward as those come about.

May I add a comment? To your point, Commissioner Dollison, I think as the city manager noted, if you have that study that is current and looks at our data, you know, current localized data, that is valuable information because it allows this commission under its current ordinance scheme or code provisions to by resolution introduce or adopt after the appropriate advertising and public hearing and all of that, a fire assessment. You may only decide depending on what happens in November that you want to very, very incrementally introduce a fire assessment, notwithstanding what happens in November. Yeah, that's kind of where I'm... You make, because as the city manager knows, keep in mind there are other potential revenue deficits that could occur.

Right.

You could be prohibited from making a transfer from the utility fund to the general fund. That could happen legislatively. There could be other legislative things that happen that you don't know about yet, but that could... you might want to have another revenue source of recurring revenue potentially available to you. Doing this would allow for you to have that information for further review.

Another hypothetical would be it's all about getting the information. You've got to have the information so you can then have different thoughts and presented and ideas so that we can have the discussions. But let's say the voters vote no. It doesn't pass at 60% of the vote. then we've got this information now. We can circle back and say, well, look, we've done the practices, we've looked at our budget, we can make these cuts within our budget now, we can implement this fire fee in place, and we could actually reduce the overall millage rate in the city. I mean, you've got different possibilities, but if you don't have the information, you're not able to even have those discussions.

That I agree with. I'm just simply saying that I think perhaps it may be prudent to, as you stated, John, that some form of it would be moved forward and to do what you just shared as well, that it could be a win-win all the way around. I just don't think it's a great idea to spend that kind of money and not do something.

And I think the mayor's point there is interesting because If you have a fire fee, if the property tax reform didn't pass and everything's kind of status quo, that fire fee does give you a little latitude to potentially affect a millage decrease by, if you could implement it, let's just say to generate $2 million. That means that's $2 million less that you need off of ad valorem, and that $2 million is spread across more properties than what the ad valorem is. So some that are getting a service today actually begin paying for it, and some that are paying for it today may see a slight decrease. So there is a scenario where that could happen.

And these are the ideas that could have been thought of within Tallahassee in 2027 had they let the normal practice just taken its course and had the committees convene at that point in time. But this is where we are today, and that's okay. We're going to move forward and work with it.

Yes? On some of the other types of revenues, like... Do we have much room for city easements or anything like that to increase those rates?

I don't know that I can give you a solid answer on that. I think that any fee structure that we have is subject to being evaluated. Can we increase those? I can't speak to fiber optics. That's going to be more so within your communication service taxes. But your franchise fees are negotiated fees with your electric providers and the gas company. Things that you do have options to look at, and one of the things we're exploring right now, parks and recreation fees. Our parks and recreation fees are pretty low and probably need to increase. But at the end of the day, that's a revenue stream. AJ, can you back this up one for me, please? If you look at your parks and recreation fees, it's about $1.4 million that comes in. you know you can't solve that problem you can't crack that not by in that area or in your planning division fees you can maybe eke out a little bit but it's not going to be significant at the end of the day i think that any place that we have a fee or a charge and this is kind of the downside of it is that we become a very fee oriented form of government that you're charging for every single little thing that's out there at the maximum price And one of the things you have to keep in mind, particularly in the area of parks and recreation fees, there's a delicate balance between what you charge and the desire for people to have that service. If you take it too high, then participation drops and you didn't really gain anything. You actually end up losing, in my opinion. But I think that's kind of the third tranche that you look at is all of your fees and charges.

I want to, if I can jump ahead for just a moment, I think... Well, can we hit maybe just... Are we good, at least from a consensus standpoint, to move forward to at least... We're not voting on this tonight. We're just asking staff to put together a proposal to bring back to us to actually vote on. Do we have that consensus for us? Yes. I think we're good. We're there.

Okay. Very good. The other side of the coin... And Mayor, you mentioned it's probably a variety of approaches to addressing or mitigating the loss of revenue. There is what additional revenue can you generate through other means? There's also where can you tighten the belt? Now, I think, I mean, speaking from this seat, and I've used this analogy, Making up $10.4 million through cuts in our organization is not tightening the belt. It is taking the belt and making it a watch band. You're just not going to do things that people depend on every day. but i think we also have to present to you opportunities where you as a commission can make decisions on what do we not want to do in the future various programs that are out there that you fund to your non-profit grant made your community partners those types of things maybe those don't have the same dollars too i don't know what that looks like uh... i think that It's realistic. Could we find a small amount of savings by not doing certain things? Certainly. It's a question of do you as a commission not want to do those things? And this is not an opportunity for me to provide you a list of what those would be. But as we're going through the 27 budget, in my briefings with you all, I kind of shared, it's kind of a unique situation. We're trying to finalize the fiscal year 27 budget and predict what's going to happen in 28 at the exact same time. And as we develop your 27 budget, I've told each one of you, I have to look at that and my leadership team who's here tonight, our finance team, we cannot make decisions on investing recurring expenses in the 27 budget without knowing what's going to happen in 28. You know, when you talk about adding positions and expanding services, it'd be foolish for any government to say, yeah, we're going to go forward and do that only to have to claw it back. But once we know what happens with property tax reform in the will of the voters, then we come back to you and say, okay, here's where we think if you have to make cuts, where you have some opportunities to do that. That could be, as I mentioned, those things. That could be looking at different facilities that are operated, and are those reduced in hours? And of course, that's not your public safety, that's your recreation centers, your libraries that you may have to look at, you know, how do we do that differently? I don't know what that is today and that would be a very lengthy exercise for all of us to go through. But I do believe it's a combination where the biggest approach is how do you find new revenue up to a point and where can you cut some things and have some savings to make up the difference.

A little piece of everything. Yes.

Probably a big piece of one and a little piece of another approach.

I think it's chipping around the edges. However, I think you still need to look at those things and I think just from that standpoint we do provide some very... significant services in our community, I think that perhaps maybe people may take that for granted. And I think that this is going to wake up to the reality that in order to maintain that, at least at this level, and the fact that know some services can be impacted or if we didn't have the option say we may be like some of the other cities who already have the fire assessment like haynes city for example i think you mentioned that they already have that so we have that option to go to but if we didn't you know then what you know money's got to come from somewhere obviously and so it's going to have some impact and i think looking at all things and i think i think you will do the proven thing of course and that is to look at all areas as you have just mentioned to consider you know uh i know you mentioned grant aid for an example you know again that's to me that those are That's money that we give to the community to try to help improve the life and quality of life for the citizens, and I think many deem that very important to do, as well as other services that are provided. But everything would have to be certainly looked at and considered, I think, under these circumstances and under these conditions that we're actually facing now.

Yeah, I think, Commissioner Dollison, that's a good point that You know, the things that we do, I don't think a lot of people understand that we do those things. So our partnership with Polk County Public Schools, we have a cooperative agreement that we provide the athletic venues for a lot of their sports. If you don't have those venues to provide, then those students suffer. We provide funding to organizations like the Neighborhood Service Center or Meals on Wheels. Well, we may see a savings if we don't do that, but then they see a financial impact at their end. It's like throwing a pebble into a pond that those ripples go out and other people will feel them eventually. And so I think we have to be very prudent in how we look at that. particularly as it pertains to youth and seniors and those that are dependent upon those organizations that we help keep afloat because we don't provide those services ourselves. So again, I think that that's a conversation for another day once we know more. But our budget for next year, we do have those services in there. These are impacts that would be felt the year after. the uh... if we're so what we've got consensus to to go and pursue uh... scope of work for a fire assessment study do that i can't give you a time frame for uh... when we bring that back but i can assure you we will expedite that as much as we can to make that quick to get back to you so that if you want to go with that study we can get underway The final thing I wanted to have discussion on this evening is we are a responsible government. We play by the rules. We adhere to the state statutes. And I think it's important that we all understand what we can and cannot do when it comes to this matter. city attorney to give somewhat of an overview on what various state statutes say regarding advocacy now that it is a ballot issue. And we've also provided, I believe at the dais for you, a report that was provided by The Florida League of Cities have frequently asked questions, some guidance they give to all municipal elected folks. Of course, the caveat with all of their guidance is first speak with your city attorney. So without further ado, I'll hand off to John Murphy.

Thank you very much. I appreciate the opportunity to be here tonight as we celebrate our almost 250 year celebration on Saturday for the country. I think the city manager has provided to you a copy of two statutes, and they are in the elections code in Florida's statutes. The first one that I wanted to point out, and it is mentioned and discussed in this frequently asked questions document that the Florida League of Cities produced. I think this was produced a few months back. This was produced prior to the ballot measure becoming a ballot measure, so it talks about before and after. But the statute in question is titled, it's identified or codified at 106.113. Its title is Expenditures by Local Governments. And I wanted to kind of break it down, if I can, to provide at least some guidelines or some degree of help as it relates to what you can and can't do or shouldn't and shouldn't do. And as I've looked at this, You know, this is something that affects every single local government in Florida. So it's all the cities, all the counties, all the districts. And so there's no, you know, there isn't a lot of case law that interprets these particular statutes. There is some division of elections guidance, but the statute was recently amended in 2022. So there isn't really much out there. So we're traveling down a road that, and we have guardrails on the road, but we don't know how wide that road is. It could be a 40-foot road. It could be a 60-foot road. It could be an 80-foot road. I don't know. So we're going to try to provide you some high-level guidance as we move forward. And what the statute talks about is define certain things. And it talks about a local government and what that is. We are a local government. And it talks about the expenditure of public funds. That's the title of the statute. And it defines what those are. That's, as you might expect, all monies that are under the jurisdiction or control of the city. And there are some prohibitions on the expenditure of those public funds that are contained within the statute. The first prohibition, there's three essential prohibitions. The city may not expend or authorize the expenditure of these public funds for a political advertisement, which is something that is defined, and it is advocacy for or against the proposition, or any other communication, which is new. That was added in 2022. That can be a factual thing. where it's not advocating one way or the other, that is sent to electors concerning an issue or referendum or amendment. Well, that's the amendment in question. So there's a prohibition where we may not spend public dollars or a political advertisement or a communication sent directly to electors, what does that mean? Is that something that you would mail? Yes. Is that something that you might put on social media and that's boosted or optimized to get to voters? Yes. Is that something that you put on your website and you try to enhance it? so that it has more of a circulation? Yes, all of those things. So working in conjunction with Ms. Hill and her wonderful group of folks and the city manager, et cetera, we are being very careful on the types of things that we are communicating and the types of issues that we're putting out there to the general public. So that's the first prohibition. The city may not do those things. The second prohibition is the city may not hire someone to act on your behalf. So you can't get a consultant. You can't have a PAC. You can't have some other entity do that. Oh, well, you can't do indirectly what you can't do directly. So it's the same prohibition. We can't do it. We can't pay someone to do it. So we have to be very careful with that. And then the third prohibition is that you may not accept public funds, a personal group, for a political advertisement or any other communications that are sent to electors. So those are the three that I would highlight. And I think that the Florida League of Cities did give a very good recitation on a readable one that I think is a quality publication. It does, of course, very appropriately say this is not legal advice and you should seek legal advice from your lawyer. But it is something that I think is well done. I think there are some exceptions that we need to take note of on what the subsection does not preclude us from doing. And it does not preclude the local government from reporting on official actions of our local government in an accurate, fair and impartial manner. That would seem to be logical. And I think we do a pretty good job of making sure that our government actions that your official actions are appropriately published or appropriately posted so that the local constituency is aware. And we, I think, report pretty well on official actions of our city. It also does not preclude the city from posting factual information on a government website or in printed materials, but I want to footnote that and say that we've got to be careful even though we are permitted to put factual information on our government website or in printed materials, it cannot be designed with the intent to be sent directly to the voters or to the citizens. So you've got to be very careful on that. What does that mean? Well, can you use – I mean, I'm granular on this. Can you get down to the level where are we using the public copiers? Are we using public staff and time to generate a document that is being sent to voters? We have to be mindful of that because they're not really supposed to do that under the statute. But you can do other things. You may also host and provide information at a public forum. This is a public forum. We can certainly provide information. You can provide factual information in response to an inquiry. Someone asks something, we can answer it. And you can provide information as otherwise required or authorized by law. Public records request comes in, you've got to provide it. The second exception that is worth noting is that it does not preclude a person acting on behalf of our local government from doing those same things. So it's the same dichotomy as I mentioned in the first two prohibitions. And then the third exception which is pertinent to you all as elected officials, and I'll read it because it's short. It says, with the exception for the three prohibitions specified in subsection two, this section does not preclude an elected official of the local government from expressing an opinion on any issue at any time. So I think you all have a much greater degree of latitude to express your viewpoints. I would say, again, I tend to give conservative advice because I think that's appropriate. And I don't know what size road we're traveling down yet. So I think that other than to say that you as elected officials, and certainly in this forum, when you're convened as a governing body, whether it's in workshop session or regular session or special session, I think you probably have a great deal of latitude of what you verbally say and what you orally tell folks. I think that we have the business of government that has to be conducted and so you have to do it. And I think that's a responsible way to address this issue is a meeting like tonight where you are convened in a duly noticed workshop discussing these matters and having a dialogue with staff about issues that are important, that have budgetary impact and that matter. So I think those are the kind of things, but I will suffice to say that as an elected official, you have a little bit more flexibility than, say, an appointed official that may or may not have that same degree of First Amendment, if you will, or the ability to speak. on an issue. In fact, people vote and elect you so that you do do that. I mean, that's part of the essence of your position. Someone would say, well, I get a salary. I get paid as a city commissioner. You do. You get paid when you're acting collegially, when you are acting as a city commission. And so I think if you go to individually and speak or talk to your constituents, I think you have a little bit more flexibility. I'm not suggesting that you go out and campaign or that you engage necessarily in electioneering efforts, but just be mindful this law does exist and there are penalties that apply if you violate this or are found to have violated this. And they can be financial. The Elections Commission is the division of elections, is generally the one that is the arbiter for this particular statute. And it can be, as the Florida League of Cities noted, they did a pretty good job of describing what those financial penalties are. They can result in fines of up to $2,500 per count. of what is alleged to have, you know, what ultimately may be found to be violative of the statute. There's another statute that the city manager noted as well that I wanted to bring to your attention, and that's also in the Elections Code, and it's 104.31, and that statute directly addresses political activities of state, county, and municipal officers and employees. I will not go through that in granular detail tonight, read it to the extent that you wish to do so. But I will tell you that this statute says that it is a criminal act if you violate the elections code with some degree of intent. And so that line has not really been firmly established yet in terms of judicial precedent that I'm aware of. So just be mindful that in addition to the financial penalties that can accrue administratively. There are also criminal penalties that could apply, just like Sunshine Law. These are important, and you need to be mindful of it. I am going next week, Thursday, Friday, Saturday, to the annual Florida Municipal Attorney's Seminar that is held every year. And I plan to, and one of the topics that I'll be presenting on with my colleagues and lawyers throughout the state, obviously is this. So I hope, along with other members of my firm, to bring back some more definitive guidance as we continue to travel down the road. Certainly if you have questions, I'm open and happy to answer any that you might have specifically as it relates to things that you might want to say or do. I've already engaged in dialogue with city management as to those kinds of things. And we'll continue to do so. So that's the thumbnail sketch of make sure you're aware that there are laws out there that are contained within the elections code that prohibit us from spending public money and from engaging in communications sent to the voters that are even factual in nature, not just advocacy. And that there are certain exceptions that apply. And as elected officials, you enjoy probably among the more broader latitude. on those matters, but you still can't expend public funds on electioneering and or communications that would be considered advocacy or information factual to the voters directly.

Do you have an update, and you may not, and it's totally out of right field, I know, but do you have any update as to the legal challenge that's being presented on the ballot language? And then, you know, I find it interesting that, you know, the governor started this and now he's not, you know, really supporting this particular measure. So any updates on what the legality of the ballot language could be?

I do not yet. Mayor and I will find that out. As you noted and you all know, an action is pending in the circuit court for the second circuit court in Leon County up in Tallahassee. And I'll see what I can find out and report back to you on that issue. But I'm not aware yet. Ultimately, the remedy that's being sought is the ballot title that is being challenged as being misleading, as being... beyond the parameters of neutral presentation. And we'll see what the court says. I believe that one of the remedies that is provided in that matter is that the attorney general, Florida Attorney General, is then directed to redraft the title so that it meets with judicial or legal requirements.

And so I don't... And that's where I'm just wondering, since now the governor doesn't support this particular measure, and the attorney general works very closely with the governor, how that language might actually get drafted and presented.

That's a good point. Obviously the attorney general would answer to the court. It would be the nature, if the court were to decline to do that, in the nature of a judicial order, that would have to be adhered to. But, yeah, I'll find out what I can about that. Thank you.

So those are the four topics that I wanted to hit with you based upon the guidance that you all gave to me. I think I have my marching orders. I can tell you that you've heard from me individually where we're looking to finalize our budget for next year. And we'll have a budget workshop coming up in July, later this month, at which time you set your tentative millage and your budget hearings. It is, it's kind of like a, it's unprecedented time to think of what we're dealing with because while we dealt with recession economics and certainly when commissioner birdsong was on the commission and we had to to make some hard choices of how are we gonna get through those hard economic times there was a light at the end of that tunnel this being a constitutional amendment piece it's it's one of those forever things so it's a little different it is very unprecedented and to be doing that at the same time that we're trying to to present to you a a balanced budget for next year is unique. But we know the direction you've given us to seek out a scope of work for a study to determine what a fire assessment might look like for the city of Winter Haven, and we will endeavor to get that to you. Beyond that, those were the items that I was prepared to speak on this evening, and I'll certainly stand for any questions beyond that.

Leave it for the commission now if you've got any final questions or comments on the topic.

So we'll go to Commissioner Davis first. All right. So now seems to be the time for me as an elected official of the government to express my opinion on any issue at any time. And I want to caveat this by saying, you know, as a conservative, I voted for this governor twice. I'm friends with quite a few folks in his administration. I have a lot of respect for what they do. And I have no worries that we are going to weather this as a city just fine. We'll do what we have to do. But ultimately, I'm frustrated. I heard the governor speak today at a press conference. He said his typical talking points, and they really offended me because I think that they are insulting to the voters. They simplify something that is very complicated. And so I put together my thoughts in writing, so I wanted to make sure I expressed all of my points and in the tone that I intended. So first I want to begin with something that's not controversial, which is everyone likes lower taxes. I do. You all do. Most people in this room do. The question before the voters, however, is not whether lower taxes sound good. Of course they do. The question is whether the arguments being made in support of this proposal are actually complete, accurate, and honest. Because when you get past the slogans, that's where the real discussion begins. We've heard the claim that property taxes are like paying rent to the government forever on a home you've already paid off. That's a clever sound bite, but ignores a fundamental reality. Florida does not have a state income tax, and local governments must still provide roads, water systems, parks, police protection, fire services, infrastructure, and a host of other services that residents expect every single day. Those services are not free, and somebody has to pay for them. The issue isn't whether government services cost money. The issue is who pays the bill. If this amendment passes, the cost of government doesn't magically disappear. Asphalt doesn't become free. Utility infrastructure doesn't become free. Public safety doesn't become free. The only question is whether the burden gets shifted somewhere else, onto renters, businesses, homeowners above the exemption threshold, or through new assessments and fees, and that's the conversation Floridians deserve to have. We've also been told that local government budgets have exploded in recent years. Well, yes, many budgets have grown. Florida has also experienced tremendous growth, especially here in East Polk County. Infrastructure demands and utility systems have also grown. In many municipalities, including Winter Haven, significant portions of budget growth are tied to utility revenues and utility operations rather than simply increases in property tax collections. Budget growth by itself proves very little without context. And I will tell you after I'm meeting today to discuss the budget, it is a very complicated budget. You can't just look at the numbers and think you understand it. You have to dig in. And I don't think most voters are going to be able to do that. And this brings me to a point I feel very strongly about. I reject the premise that local governments as a general matter are spending irresponsibly. Now is it possible that some local governments somewhere are wasting money? Of course it is. Human beings are involved, and wherever human beings are involved, mistakes and mismanagement are possible. In those instances, there should be accountability, and laws are already in place to deal with such situations. But I do not accept, as a self-evident truth, the notion that municipalities across Florida are bloated, irresponsible, and riddled with waste, fraud, and abuse. That is an assertion. It is not evidence. And state officials are not qualified to sit in judgment of municipalities, nor do they do so with clean hands. The bottom line is this, facts matter. And what has been remarkably absent from this debate is facts. I ask our state officials, if there are municipalities engaged in fraud, identify them. If there are local governments wasting taxpayer dollars, show us where. If there are examples of abuse, put them on the table. But broad accusations directed at every city, every county, and every local elected official in Florida are not facts. They are talking points. And voters deserve better than talking points. They deserve evidence. What concerns me most is that the public is being encouraged to believe there is a cost-free solution here, and there isn't. Government services will continue to exist. Growth will continue. Infrastructure demands will continue. In many cases, local governments are required to accommodate growth because state law preempts local authority to stop it. Yet when the roads need widening, when utilities need expansion, and when public safety services need enhancement, local residents understandably expect their local government to meet those needs. You cannot simultaneously require local governments to address the consequences of growth and then pretend there is no cost associated with doing so. That's not fiscal policy, that's fantasy. Ultimately, this debate should not be driven by emotion. It should be driven by facts. Voters should absolutely scrutinize their local governments. They should demand accountability. They should insist that every tax dollar be spent wisely. I welcome that scrutiny, and I've engaged in that scrutiny myself since joining this commission. But voters should also understand what is actually being proposed. They should understand who may ultimately bear the financial burden if this amendment passes. And they should understand that eliminating one source of revenue does not eliminate the underlying costs that revenue currently supports. My hope is that Floridians approach this amendment with healthy skepticism, thoughtful analysis, and a commitment to understanding the full picture, not just the bumper sticker version of it. Because on issues this important, our citizens deserve facts, not slogans, substance, not theater, and honest debate, not political caricatures. Thank you.

All right. Commissioner Donaldson? Really? If you'd like. I mean, do you have anything prepared or...

Really? Beat that. I think we can go home. I don't know what y'all are up to. Enough said. Sorry, I'm a little shy. Well, I think the meeting was necessary, and I appreciate the opportunity to have a discussion tonight, I think, on a very important issue and matter that I think many people are concerned about. And many people, like you have stated very eloquently, that they're not quite... have all the facts and information. There's a lot of information that's out there and more even to come. And I think we'll probably even make it even more challenging for people to really make an informed decision. But I think we have a way forward. I think that we are being responsible as a commission and as a city government to do what is right on behalf of the citizens of Winter Haven. So tonight, I'm happy to be here and thankful for the opportunity to be able to share in an open debate discussing this very important issue.

Well, there's much more for me to say. But I'm confident that no matter what the voters do, we are going to be responsive And we're going to continue to move this city forward. So I'm very, very concerned, but I'm also confident that this is not going to derail the city of Winter Haven. So we will survive. And not just survive, we will thrive. That's the way I feel about it. I've seen some times where we have overcome some tremendous budgetary shortfalls. And I'm not going to just say shortfalls. The Great Recession has been identified. We had some real, real challenges. And not only did we meet those challenges, we didn't raise taxes. and we continue to provide the services. So, hey, Commissioner Davis, I couldn't have said it better myself. But you said it. So, we're going to move forward, and this is what we need to do, and this is what we're doing, and we will be in front as opposed to behind the eight ball. We're good to go.

Mayor Furtun?

I agree with what everybody said, and thank you for the speech. It was very good. It covered a lot of things. But these times, I guess, are going to require significant actions, and looking at these will require greater detail. Some of these items may not be what we do, may not be the desires of the Commission, but we will do what's right for Winter Haven.

Again, I just want to thank everybody for coming this evening. I know we don't normally have meetings on Thursdays, but this, I felt, was needed. In working and talking with other municipalities across the state, it's evident many have just kind of dug their heels in the sand and this is horrible and we don't want to do this. I get all that. But at the end of the day, in November, the voter gets to make a choice. And they're going to make a choice one way or the other. And where Winter Haven is different from others is I think we like a collaborative effort. We like to talk these things out. We like to be prepared so that we can make the best decision for our citizens moving forward. This will not be the last session. I would encourage us to potentially have another one, you know, September, October, because I think things are going to continue to evolve and change between now and November. And I think the more information, the more education that we can get amongst ourselves and also out there to the citizens. everyone can make an informed decision in november and if that decision is they want to uh... uh... homestead exemption of two hundred fifty thousand dollars that's fine will will get to work will will make it happen and will try to do that without impacting the services that our citizens have become accustomed to. And there's a lot more that goes into that. So again, appreciate everyone's efforts for being here tonight. Thank you for the audience members out here. And with that, we will adjourn.