July 21st, 2026. We are at the Cape Canaveral City Council workshop meeting located at the City Hall Council Chambers, 100 Pulk Avenue in Cape Canaveral, Florida. I call this meeting to order.
And with that, Council Member Willis, would you please lead us in the pledge? I pledge allegiance to the flag 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. >> City clerk, please call the role. >> Yeah, >> it is. I think my bottom might be >> Did that end Michael? Oh,
>> that's Yeah, >> sorry. I have >> Yeah, I think the the the what do they call it? The not the volume, but there's another word for it. A technical word. Radio.
The pot is too high. >> May Pro 10 Jackson here. Council member King >> here. >> Mayor Morrison >> here. >> Council member Shier >> here. >> And Council Member Willis >> here. [clears throat] Like the record show the whole council is here. Council,
thank you for being here and our city staff and members of the community. This is a workshop meeting. Uh and we have it slated. We have a regular city council meeting at 6:00 p.m. tonight. And so uh we're going to try to work through it.
And uh just want to say again, thank you all for being a part of this. Uh it's a process we do every year and uh we allocated a little bit more time this year so that we can dig in. The uh agenda is in front of us if you'd like a
copy. There should be some out in the forer when you come in. We are on to item number four, which is a discussion 4.1. I'd like to hand it over to our city manager, Keith Touchberry.
>> Thank you, Mayor. Good afternoon, council. Um, I did receive information from our city attorney. He will be here. He's just caught in traffic, just so you know. So, he'll be here. And, uh, good afternoon staff members, uh, Cape Canaveral residents, and to those who
are here, and to those who are also watching online or will watch online later. We have a couple of items on our agenda today. The first being uh 4.1 city manager opening statement. And after the statement that I make, council, I'll go ahead and make an a
brief announcement as well. So, good afternoon, mayor, members of city council, and members of our community. Today marks the beginning of one of the most important responsibilities entrusted to this council, the development and adoption of the city's
budget for fiscal year 2026 2027. The budget is more than a financial document. It is a reflection of our priorities, our values, and our commitment to responsible stewardship of the public's trust and the resources
entrusted us. Before we begin discussing specific budget proposals, I believe it is important that we first establish a clear and honest understanding of the city's current financial condition and how we arrived at this point. The
challenges before us did not emerge during a single budget cycle, nor can they be re resolved within one. They are the result of financial practices and policy decisions that developed over many years. For approximately the past
15 years, annual budgets in which projected expenditures exceeded projected recurring revenues were subsequently approved. And during that period, the city routinely relied upon a term known as cash forward from the
prior fiscal year as a funding source to balance the budget. While the use of cast forge is permissible as a budgetary financing mechanism, it is not a reoccurring source of revenue and does not resolve a structural imbalance
between ongoing revenues and ongoing expenditures. Continued reliance on cash forward to support recurring operating cost contributed to the steady depletion of the city's unassigned fund balance. Moreover, the presentation of cash
forward within the budget process had the effect of obscuring the extent to which the city was relying on accumulated accumulated reserves to finance current operations, making it more difficult to recognize the true
trajectory of the city's financial condition. These practices contributed to the city receiving two consecutive unfavorable annual audit results. this current fiscal year and the one prior. The actually the the two previous years,
pardon me. The audits reflected concerns regarding the city's declining financial position, including the continued erosion of reserves and the absence of sufficient financial capacity to withstand future economic or operational challenges.
Although these conditions developed over multiple budget cycles, clear and comprehensive recommendations to reverse those trends, including red reducing reliance on fund balance, restoring reserves, eliminating recurring structural deficits, and identifying
sustainable recurring revenue sources were not clearly presented to the council as part of the annual budget process. As a result, the structural issues persisted. The city's financial position continued to weaken and the difficult
decisions now before this council became significantly more challenging. In addition to these long-standing structural issues, the city did not comply with its own code in 2025 when the unassigned fund balance fell below the minimum level of 17% of
general fund operating expenditures. The council was not formally notified as required by code, nor was a recovery plan presented to restore the fund balance within the required time frame. Those actions are required by our own
financial policies and did not occur. Today, the city has no meaningful reserve funds available. That means we have little financial capacity to absorb the impacts of a hurricane, a significant economic downturn, unexpected infrastructure failures,
dare say public emergencies, or other unforeseen events without reducing services, increasing revenues, or both. The financial condition before us is further reflected in our audit history. The city has received two consecutive
unfavorable annual audit ratings and is now entering a third audit cycle while facing significant fiscal challenges. A third consecutive unfavorable rating could result in increased oversight by the state of Florida and I should say
will result in increased oversight. reducing local flexibility and requiring greater external monitoring of the city's financial affairs. Against this backdrop, the proposed fiscal year 2026
2027 budget cycle projects expenditures that exceed anticipated revenues by approximately $4 million. This is not simply a budget gap for one fiscal year. It is evidence of a structural imbalance that must now be
addressed directly. Adding to this uncertainty is the potential impact of amendment three, which is expected to appear on Florida's November 2026 general election ballot. If approved by the voters, the amendment could significantly affect the city's
future adarum tax base by expanding property tax exemptions and further limiting the growth of taxable value. Because adalerum taxes constitute the city's primary recurring source of operating revenue, any reduction in
taxable value or future tax collection would further constrain the city's ability to fund essential municipal services, rebuild reserves, and restore long-term financial stability. While the ultimate impact cannot be quantified
until the amendment is decided and implementing legislation is adopted, prudence requires that we acknowledge this uncertainty and incorporate it in our long-term financial planning. This potential change further underscores the
urgency of diversifying the city's recurring revenue sources, reducing our dependence on a single primary revenue stream, and strengthening our financial resilience before additional fiscal constraints are imposed.
Accordingly, this council faces several significant responsibilities during this budget process. We must correct the city's existing code violation by adopting a formal recovery plan to restore the unassigned fund
balance, rebuild financial reserves, and return the city to compliance with its own financial policies. Financial reserves are not simply an accounting metric. They are the foundation of fiscal stability, organizational
resilience, and public confidence. We must adopt a fiscal fiscally responsible budget that begins aligning recurring expenditures with recurring revenues and starts the process of eliminating the city's structural deficit.
Finally, we must recognize that the city's historic dependence on adalum taxes has left us financially vulnerable. While property taxes will continue to serve as a critical component of our revenue structure, they cannot be expected to bear the
everinccreasing share of the cost of providing municipal services. For many years, comparatively little concentrated effort was devoted to developing new recurring revenue streams that could diversify taxpayers.
that must become a priority moving forward. This administration will be bringing forward recommendations to explore lawful, responsible, and sustainable revenue opportunities while continuing to prudently manage the traditional revenue sources upon which
the s the city currently depends. At the same time, financial recovery cannot be achieved through additional revenue alone. It will also require disciplined spending, careful prioritization of essential services, operational
efficiencies, and a commitment to ensuring that recurring expenditures are supported by recurring revenues. These conversations will not always be easy. Some of the decisions before this council may be difficult and some may be
popular. However, postponing difficult decisions only limits future options and increases the burden on future councils, future employees, and future taxpayers. We have reached a point where action is no longer optional. It is essential. Our
responsibility extends beyond balancing a budget for the coming fiscal year. Our responsibility is to restore the city's financial integrity, comply with our own ordinances, rebuild public trust, protect the taxpayers's investment,
preserve local control, and ensure that future generations inherit a financially stable and resilient municipal government. My commitment and the commitment of this administration is to provide complete transparency through this process. You will receive accurate
financial information, realistic projections, objective analysis, and recommendations grounded in sound financial management principles and the long-term interests of this community. My responsibility is not to recommend
the easiest course of action, but the one that best positions this city for long-term financial success. The decisions we make during these budget workshops will shape the city's financial future for many years to come.
Although the challenges before us are significant, they are not insurmountable. by acknowledging the realities of our financial condition, making informed and sometimes difficult decisions, and remaining committed to fiscal discipline and accountability. I
am confident that we can restore this city's financial health, rebuild its reserves, strengthen public confidence, and leave this organization stronger and more resilient than we found it. Now, I look forward to working collaboratively with the council in our community throughout this budget process
and so does our staff. And before I uh make an announcement, uh I do want to reflect on the statement that I just read and for the community in particular. This council has agreed to meet today at 1:00. Thank you for devoting extra time today to get into
what is the first of what will likely be several budget workshops. And that's important for the community to understand because we know we have a public comment period coming up. And I think the community who wants to speak should understand that we're just getting started publicly and that we
have many workshops to go. There will be many things to discuss between now and then. And I don't anticipate this council making any huge decisions during this potentially 4hour period. They know I told them I think they should stop at 5 because they got to be back at six. So
that's a hard stop. mayor, if you will. Um, secondly, we have several uh items on the agenda this evening to deal with some things that I just referenced in this statement. The council is required to by law adopt a millage rate, a
tentative millage rate today. However, they have some housekeeping to deal with on an ordinance that we must clarify first before the council can proceed with establishing a tenative millage rate. And if you plan on attending that meeting this evening, then you will you
will part see that conversation take place. And so those decisions will be made later. Now, I'd like to make a statement into the an announcement into the record. Before we proceed with this budget presentation, I want to inform the
community of an important matter concerning the city's commitment to transparency and accountability. As I discussed, cificate significant concerns have been identified regarding the historical management of the city's finances and the financial practices that contributed to our current fiscal
condition. To ensure those concerns are reviewed objectively and independently, the city has requested the Bvard County Sheriff's Office conduct an investigation into the overall management of the city's finances. The
purpose of this investigation is to determine the facts and to evaluate whether any criminal conduct, employee misconduct, policy violations, failures of internal controls or organizational deficiencies occurred. This is a factf
finding investigation. It is not intended to target any individual and no conclusions have been reached. Because the investigation is active, the city will not comment on its details or speculate regarding its outcome. We will
fully cooperate with investigators, remain committed to transparency to the extent permitted by law, and will take whatever corrective actions are appropriate based on the facts established. Our responsibility is to ensure accountability, protect the
public's trust, and restore confidence in the management of this organization. We owe nothing less to our residents, taxpayers, employees, and to this council. Thank you, council. That concludes my statement and announcement, and whenever
you are ready to proceed, we can go into item 42. I will come down to the podium for that. >> Thank you very much. >> I think the uh following along the agenda makes sense. Uh at 4.2, 2, we
have our presentation, the budget past and present and council. Before, you know, proceeding, I wanted to see uh we're going to, as the city manager said, listen and learn quite a bit today, absorb as much information from our city staff, then give the public a chance to
speak. I agree, and I don't think anyone would disagree. This is the beginning of of several workshops. Uh, and my my comments to our city manager and administration on what we just heard is thank you. That's that's all I have to
say. Thank you very much, council. Any comments or questions before we proceed? I'm appreciative of the lead that our city manager has taken on this. So, thank you. We appreciate you doing that.
Thank you, city manager. >> Thank you. >> Floor is yours. >> Work over here. >> I have one here. >> Apparently yours is a little loud. >> Yeah. >> Is it on? >> Yeah. >> Okay. The light must not be working.
Then if you can uh turn to the first PowerPoint. Um, I don't know who's controlling it either. Okay. Ask the clerk. Thank you. So, as they prepare the PowerPoint presentation, um, and just to make the community
aware, prior to any council meeting, whether it's a budget workshop or a regular scheduled meeting, uh, council members meet one-on-one with the city manager's office to go over the budget. and we did a similar one-on-one meeting um in compliance with Sunshine Laws to
go over the information that we're going to share here. I will tell the council that uh there is additional information in this presentation. So, while you've heard some of it, um there are new new things to go over on that presentation.
And then secondly, when we get into the conversation about fund balance restoration uh options for this council, we have a separate PowerPoint for that and Joey Blacker will take the lead on presenting that uh for the council.
[snorts] While we're getting set up here, city manager, the printout uh that's provided in ahead of our budget titled Cape Canaveral Financial History, is that consistent with what we're going to display? I'm not sure what handout
you received. It doesn't look thick enough to me. I think that might be some some slides that were revised. Um, as we briefed each one of you one-on-one, there were some modifications to the to the presentation and so all of you got what if you know what was changed in
that regard. >> Okay. So, >> I I but I can't say for sure without looking at it. So is do I have control now or can you go full screen >> just I assume we know that the our
monitors are all off as well and if >> yes >> okay yeah I assumed it was So, if you can put the presentation to full screen, we'll be good to go. Thank you for your patience, council and community.
Is this the right presentation, Joey? Okay, let me pull that up. >> That slide is I believe the same one we have. >> You may that may be what you have, but that is not the right presentation. >> Okay, >> sorry about that. We can get back up documents to you. Um
>> as part of the minutes for this meeting, this is If I had a tie on, I'd be loosening it about right now. Right. Roll up some sleeves. Let's Let's get started. I can throw some standup at you, but you
got to be appropriate for public meetings. >> Drop one button. That Miami Vice look, you know. >> Oh, okay. Yeah, that would be requiring no collar on that. [laughter] Yeah. Crockett and Tubs. There's some people in the audience that don't even know who Crockett and Tubs were, though. So my
finance director probably. >> Okay, here we go. So uh it looks like I have control. Uh this is just an orientation slide in the beginning to talk about uh for the community sake. We'll talk about our financial history timeline over the last two years. We'll talk about some city code requirements
that we need to meet. uh we'll talk about the next fiscal year budget and we'll summarize uh as I said in my opening statement this is a 15-year history of our revenues and our expenses and if you look very closely ble blue blue represents revenues and orange
represents expenses and these budgets were adopted over time as I referenced in my initial statement uh this is to just give you a broad overview of our current personnel situation so you see where everyone one
is employed and the total numbers at the bottom of of each column represent the number of employees uh during that fiscal year. And you can see how each department um changed over time from fiscal year 12 to fiscal year 26 and and
this again is relevant to our overall budget process during those years. So another historical slide to just kind of superimpose some information. You can see that the red dotted line across the middle is what our minimum fund balance
reserves are were supposed to be by st ordinance um at 20% historically until last year. The city adopted a lower rate at 16.7%. That's why that red line dips down to the right. The blue number represents our unassigned reserves. And
you can see over history uh the pattern in which the reserves slowly uh came downward. This was our millage rate uh during those times. It just kind of superimposing it on that chart here. You can see it in relation to the overall
picture. Revenues going down, millage rate going down until ultimately um we are where we are fiscal year 26. This is an important two-year timeline. I know the council has seen this, but for the for the community's perspective, this is an important timeline for us
here uh and with staff. Um in when when the city adopted its budget, its fiscal year 20 budget right in September of 24, council
was informed that we had 20.1% in unassigned reserves. The auditors came in as they always do around November and they go through our books and then they deliver a report to the council and in that report um
verbally and we'll just say that 8.4% was the reality of what our unassigned fund balance was. And as I said in my opening statement that number was not made very clear to this council. And this is significant uh time in our financial history that we'll explain in
a little bit. Um we proceed with our budget process last year. Uh all the while we were told that we needed to reduce our expenses and increase our revenues. And last year as we know we did increase some expenses but we also
decreased our ad valerum revenues. And we didn't really didn't do anything to increase other revenue streams. We initiated paid parking conversations. Uh they didn't come to fruition until about a month or two ago and uh those conversations have been put on pause and
will resume during this budget cycle at some point as council wants to take that up. So we go into the audit then for our current for the fiscal 25 uh budget and the auditors uh give their report in
March and they tell us that no we don't have 16.9% in unassigned reserves we have zero and that that was the the red flag for all of us last March and we set upon a course of action to to determine
why is it that we have zero money in our savings account. So to show a different picture of the budgets at that time when we were really at 8.4% of uh in our reserves when we said we were at 20.1 we had budgeted that year
expenses 21 million 21.9 and we projected revenue at 17.9. So that's a structural deficit and we relied on our unassigned um fund balance to make up that difference. And then we entered the next
fiscal year with the same posture budgeting 23 and expenses where we're only bringing in 17.8 8 after ad valerum after the mill rate was adopted structural deficit of about 5 million
approximately six million roughly 5 million so going back to that timeline that we just showed some things should have happened and this is what I mentioned in my opening statement we have a code 2-210 which we can explain at great length
during our fund restoration uh conversation but briefly Now uh our code says that we must have um after an annual audit we must and and prior committed or unassigned fund balance causes the unassigned fund balance to
fall below 17% of general fund operating expenditures. The city manager will so advise city council in order for the necessary action to be taken to restore the unassigned fund
balance to 20% of general fund operating expenditures. This is separate and independent from the 16.7% that we've mentioned briefly a moment ago. I've already said it.
No notification was made to the council that we got below 17% and no fund restoration plan was initiated back in February. No fund restoration plan was mentioned
to me when I was hired in August. And we are today 17 months into a 2-year what should be a two-year fund restoration window. 17 months into that.
So that's what the red line is pointing down to the February 2025. And as you know, we we entered into our fiscal year at the deficit. So, this explains what happened. We did not trigger that that ordinance was not triggered as it should
have been. Council was not presented with that discrepancy. Council was not presented with a fund BL balance restoration plan to be accomplished in two years. We move forward in our budget adoption process
to the current fiscal year where we projected 4.5 million which is what we had and we budgeted 5.2 million. Come March bottom line when we realized this we had to put the brakes on all spending. We had to freeze all
positions. We had to not hire folks. We had to basically not spend about $700,000 or not only would the ship be run into ground further, but we would we would not be able to pay our bills at the end of the fiscal year.
So, we put a freeze on all spending. So, continuing on with this graphic, these are the actions that your staff has taken within the past four months. In March, we recognized that discrepancy. We took immediate steps to not spend
700,000. And today, we've managed to not spend 1.5 million. We have two months left in the fiscal year, and we're going to continue to try to not spend additional revenue. The city is now in the process of
preparing the next budget and we are we projected uh at the beginning of the budget cycle here we projected a 5 million structural defic deficit if council did not elevate
adarum taxes and if we did not bring any alternative revenue streams again taxes just being one form of revenue. So we projected if no additional revenue streams, we would enter into this fiscal year with at with a $5 million in the
hole. We are now July of 26. So this slide talks a little bit about what has to happen this evening. The council is going to have to address ordinance 2-210
where we've dipped below 17% of general fund operating expenditures and we are again we are well into the two-year cycle where we should be in a fund restoration plan. We're not in a fund restoration plan.
And so when we get to the meeting later this evening, the council cannot address the millage rate until it addresses um this ordinance and how you want to proceed with this ordinance. I'll say it now, we could say it again later. Should you choose to proceed with complying with the ordinance, then you will have
to pass a budget that will restore our un our um unassigned fund balance by about $3.3 million in addition to dealing with the 4 million deficit. If you do not amend the ordinance in
some fashion, and that might not be the right word, we can talk with the attorney, but these are these are ordinances passed by council and council can certainly address them as they need to to handle the business of operating the city. That's why it is an agenda item this evening.
[clears throat] So, this is the the challenge that lays before you regarding that. This is just a brief summary uh slide where general fund reserve requirement is at 16.7%
but the unassigned fund balance recovery goal is 20%. Well, we will explain those in greater depth when we get to our fund restoration uh presentation and of course the triggering uh percentage was at 17.
I wanted to go a little bit into what is cash forward because that that figured prominently in my opening statement and how we arrived at our situation today. And and this is I know council is familiar with what cash forward is, but I think the the community should
understand. Cash forward refers to the available cash and fund balance from the prior fiscal year that is appropriated to help finance the next year's budget. It is not current year revenue. So council may remember monthly when you
get your financial uh reports in your packet for each council meeting, it says the very first thing is revenue. And the very first item listed on those reports under revenue was cash forward. And for the public's understanding, cash
forward is not a revenue stream. I I like to think of it as a mechanism. It's unassigned revenue. It's savings and it's money that you deem assignable because you need to balance your budget at the end of the fiscal year. So if you budget to spend 20 million if you if you
project you're going to bring in 8 million and you're going to spend 10 million then you need to cash forward 2 million or you need to take out a loan. It's that simple. You borrow from savings or you figure out some other way to pay down your projected expenses and for 15 years we took from savings
in the form of cash forward. It is not current year revenue. It's the use of accumulated financial resources that already exist. At some point in time, the city put it in the bank. You know, in previous years, it got put in the bank and it was held there.
Mischaracterizing cash forward as reoccurring revenue can create the illusion of a structurally balanced budget when in reality the municipality is spending more each year than it collects. This is the p the picture that councils
were painted each fiscal year for the past at least 15 years. What is cash forward continued? Well, the government finance officer uh association GFOA give us recommendations and they recognize that appropriating
fund balance is a legitimate budgeting tool. It's not like we violated the law. We can do it but only under limited circumstances and it should be done with council's knowledge. There should be an ordinance in place that directs that to be known to council regardless of what
the overall fund balance is. We clearly state to council during the fiscal budget process that if you approve this budget, we're taking X figure X out of our reserves and we're using it as cash forward. So you know what's happening in that fund balance. It never happened.
Cash forward should primarily fund one-time expenditures and these are just some recommendations. major maintenance, onetime projects, emergency repairs, disaster recovery, equipment replacement, capital purchases. As an example, we now use cash forward
to support recurring operating expenses. And there's some examples there. The GFO, whose recommendations that everyone strives to, you know, adhere to, follow, they're not laws, but they're very, you know, they're strong recommendations.
They discourage balancing annual operating budgets by routinely using fund balance to pay for these items, salaries, benefits, operating costs, utilities, and so forth. Doing so creates a structural balance, a structural budget imbalance.
And they also recommend the GFOA that is that the general purpose governments meaning us cities have at least two months approximately 16.7% of regular general fund operating revenues or expenses in unrestricted fund balance as
a as a minimum level for fiscal stability. So we we need that money. It's not just cash laying around. It's money that we just try not to pretend exists in case we need it. So to maintain adequate unrestricted
fund balance just a little busy slide here but you know Florida many Florida municipalities adopt reserve policies that are more conservative commonly 20 to 25% those are conversations for the council later you know for hurricane risk all these things that we've already
talked about is why we need those that money in the bank and we want to use it strategically for those other things we just talked economic downturns etc. And to distinguish reoccurring from
non-reoccurring resources um just as a final point to this [clears throat] portion of the presentation one of GFA GFOA's strongest budgeting principles is that recurring expenditures should be supported by recurring revenues. Recurring revenues
include property taxes, utility charges, finance fees, state revenue sharing, local option taxes. Those all exist here. We would like to add to that list so that we can create alternative revenue streams
and not overly burden our taxpayers through ad valerum taxes. City Cape Canaveral needs alternative revenue streams. Just a little more about distinguishing one from the other. Non-recurring resources include cash forward, asset
sales, settlement proceeds, onetime grants, using non-recurring resources to finance those recurring expenditures. They postpone difficult fiscal decisions. So, it's great. Let's get grants. Let's get appropriations. Let's do what we can to to bring in some money to fund projects and so forth, but they
are not recurring. We can't rely on those sources. The pattern that the city's engaged in is precisely the type of structural imbalance that they c that GFO cautions against. Now, while we can legally adopt a balanced budget, which these councils
did adopted balanced budgets while simultaneously weakening its long-term fiscal condition if it repeatedly relies on appropriated fund balance, meaning cash forward to finance ongoing operating costs rather than one-time needs.
So, yes, these councils did adopt balanced budgets, but they didn't know they were adopting a balanced budget that was continuously drawing down from savings. So that's a little bit of the history. Take a pause here and we're going to
speak now about this current fiscal situation that we're in the current budget. We have projected revenues. If council if we if we as a city either through abilum taxes or other revenue streams, if we do not increase our revenues from what they currently are, then we project
we'll bring in $16.2 million this year. Our projected expenses now are 20,258. Now, I began earlier by saying we had a 5 million deficit. That's true. Staff
has managed to trim potential expenses next fiscal year by $1 million. We can talk about what that is, but this is the situation that we're in right now that this council has to address.
reserve requirements of 16.7% are also hanging in the balance [clears throat] wrong what wrong way there. So let's talk a little bit about the preliminary cuts that we've done and this is not a complete list so that so
the community understands we've already whacked personnel cost by a quarter of a million in those different categories listed. We've listed we've uh eliminated operating expenses by 86,000
almost 87 and we've eliminated just about every capital improvement project from the general fund except for a few which we'll review for the community. This is a busy slide. If you focus on the orange highlighted areas up at the
top you have your fiscal year columns. The very far left is the the CDI the com the number that we assign the project. Next to that is what the project is. To the right of that is fiscal year 2627, the year that we are in the middle of
budgeting for. And all those orange bands represent a capital project that was moved to next fiscal year. What is still listed at the top is municipal impact fee and community development fee study at $90,000.
If our city attorney were here, he would chime in and you can ask him later. We can certainly do an an impact fee study in house. We'd probably pay more than 90,000 in salary and benefits to do it and it won't be as legally defensible should someone challenge it. That's why
we are highly recommended by statute to not required but recommended that we contract that service out. So, we left that cost in. It's up to the council to determine if it stays at this point, but we're at the point where if we want to increase our revenues through impact
fees, we have to do this study. We scroll down a little bit, you'll see uh fire services, they're totaling at 149,000. I have spoken with Chief Quinn and uh they they understand our situation. These were their initial projected
numbers. They already did shave their pencil, if you will, sharpen their pencil on this and they've agreed to go back and look further and at some point when we hear back from them, we can bring some new numbers to the council. So that stands as it is now until we hear from them. And then if you go down
to the Filillmore Avenue streetscape, that is a multi-million dollar project, most of which is being paid for out of enterprise funds, storm water in particular, but $ 160,000 of that coming from the general fund. That's not obviously the sum total of that project.
We've already awarded that contract to a contractor and uh they've met with the residents and we're we're planning on continuing that project. And then we have uh some IT at the very bottom. 7,500 to maintain a backup site
that we that we absolutely need by statute. So that's where we are with our capital improvement and for the community's benefit. We now [clears throat] get into our fixed costs. What we say are fixed. I mean we can we can talk again. They're highlighted in yellow. Protective
services, fire services, legal services, solid waste is more or less a pass through. You know, collecting on behalf of the vendor and passing that money through. the city doesn't really generate any revenue from that. And then of course we have our debt service which Joey can speak to how long that will
take to you know be removed from our budgets entirely. [clears throat] And we have our operating you know personnel services, operating expenditures and capital. Those are the three general fund expense categories that the council should focus on when it
comes to any further uh reduction in in uh cost or I should say expenses this year. We're going to ask that council focus on personnel services, operating expenditures and capital if if you so want to cut capital further.
But you can see the math there and how those things add up. um the revenue anticipated if we do not increase our revenue sources and the difference at just over $4 million. We are still looking at cuts. These are internal
uh but as I've told all of you, you know, we've we've come on we've come down a million. We still have four million to go. And we can as a staff go line by line. we can do zerobased budgeting without this council's direction, without question. But given
um the status of our finances and the time it's taken to get the information presented to you, uh what we've managed to do now, not spend 1.5 million this year and project uh a 1 million
reduction next year. This um your staff has taken care of $2.5 million that had to be accounted for up until this point. and and we feel like uh of course we have a June 30th deadline to present you with the budget and we're
presenting it to you as unbalanced and certainly not something I'm recommending you pass and but we need your assistance moving forward in what further reductions um should you want to make because it will arguably involve
reduction in services appearances in the community um programs other things that are important to our residents, important to the council, important to our employees. It's it's time that we weigh in together as a team. But here
are some additional considerations. I mean, we're um park I'll move to that 20K from Parka and they're they're itemized out to the right. You know, that that's just their continued uh recommendations. They've already made many. Um throwing that up there as a
visual. Um that's a in addition to what they've already cut in from that department. Um we can obviously continue to do operational and personnel expenses, consolidation of positions. We've been doing that and we can consider those things moving forward. Uh
discussion about privatization options to include our facilities, the C5 Cape Center, Nancy Hansen. All of those things are certainly fair game for conversation for this council and I want to prepare the community for those
conversations. No one's saying it's going to happen, but we would be remiss as a government if we didn't discuss all options that are there. And of course, we have some mowing services that we contract out that we
can look at modifying. Here's an overview of our situation primarily from our general fund revenues. Again, this is general fund. We're talking about not talking about enterprise, storm water, sewer, reclaimed water. We're talking about
general fund, which is where it's been the focal point of this conversation. You can see the large blue area is 40% of our revenue comes from adilarum taxes. And I won't break them all down, but you know, you see other financial sources, miscellaneous fines and
forfeitures, charges for services, federal state grants. You know, these are all avenues to pursue if possible, if legally allowed to look at amending so that we can potentially increase those revenue streams,
other potential revenue. The community is very familiar with the paid parking conversation and I would just like to make a statement. We've been looking at paid parking for years as an additional revenue stream to reduce the burden on our taxpayers. We are still considering
that it is not something that we're just now considering because we are in a financial situation. It is something we've always been considering. Tourism res revenue options. We have heard from countless residents. Why
can't we get more revenue from other sources particularly the hotels the port and it's our position that in order to get those that assist the in order to get those things we'll have to go to the legislature for that the way the laws are written
they're listed as options to pursue and of course there's always millage property taxes as a revenue stream other things we're doing is evaluating our utility evaluate wastewater reclaim water storm water rates. We're in the fifth and final year of a study that was
already done and we have a recommendation on what to increase those rates to based on uh that study for council's consideration. Um we have to maintain long-term financial stability in those utility funds moving forward doing more another
rate study when it's due. We have to support our ongoing infrastructure maintenance, regulatory compliance, and future capital improvements. I think it's important to note that we have a lot of infrastructure. People love our beaches and they have wooden crossovers. Those
need to be repaired or replaced at some point in time. Always a consideration. Money doesn't grow on trees. We need to support um reduce resilience on utility reserves by aligning revenues with the actual cost of providing services and consider future rate
adjustments through the formal rate studies and council review. This is going to be a shocking slide for some folks in the community and it's a precursor to a conversation that we will have about our fund restoration.
And if you look on the agenda for tonight's council meeting, you will see that this I have proposed a 9.95 millage rate. And I know that's probably shocking to a lot of folks when our current millage rate is 3.12 and change.
The reason that that rate is so high and I would like to explain the mechanics of the process to the community so they understand why why they may and the councils doesn't mean the council is going to adopt that millage rate. What that means is the council is coming at the highest point possible because we also have a millage rate for the
library. I'm recommending that the council look at the highest rate possible today because they have some determinations to make. First and foremost, they have an ordinance that they have to address that we are currently out of compliance in.
If the council were to com comply with the existing ordinance, then it would have to raise the millage rate to repair our unassigned fund balance this fiscal year. And in order to do that, the millage rate would be somewhere what
8.04. We'll look that at that's what 7.2 million if we're going to do it immediately in compliance with the ordinance. That's what would have to happen and that's why the council is discussing the ordinance
tonight. So, I don't know how many folks will listen to meeting now because I'm really trying to prevent your phones from ringing. It's my fault that the millage rate is as high as it is, I should say, on the agenda as as high as it is because the council the council
has to vote on on what they're going to do to restore their fund balance. But they can't do that until they amend until they address the ordinance. The ordinance is compelling them to fix it within the next few months. And the millage rate that would accompany that
cannot be achieved unless we walk into the meeting tonight at a 9.95 millillage rate. The council will address it at that time. So for those you know who know the value of your property, if you have a $250,000
home or whatever you are valued at, that shows what potential potential increases could be. not set in stone. Now, this is a slide that reflects proposed millage rates of all the communities in Bvard County,
and this was acquired from each community in Bvard County, Cape Canaveral, and I know some council members will want to weigh in on millillage and so forth later. I'm just showing the slide to the community.
We don't have ours is in yellow. That's our current millillage rate. We did not reflect our proposed tonight because if we did it would be the top line, not third from the bottom. But we we want to show the community what all other
communities are doing. Why? Because they're going to ask what's Satellite Beach doing? You know, what's Melbourne Beach doing? What's what's West, you know, West Melbourne doing? It's relevant to some folks, so we thought we'd save you the time of looking it up.
I don't want to spend a whole lot of time on this slide because we're going to go into it in greater depth, but these are just snapshots of what a two, four, or sixyear reserve restoration plan look like. We have to get to our unassigned reserve requirement at 16.7%.
We have our total budget expenses and unassigned reserve requirements. And there's your two-year uh recovery, four-year and sixyear. And again, we'll go into this in greater detail. It will make more sense when we get to that council in that portion of the presentation. And we've broken it down a
lot differently because not only do we have to account for well what we have to account for folks is if amend amendment three passes then what is our projected ad valerum tax taxes that will be available to us versus not. So we have
to present this council with two sets of numbers throughout this budget process. They have to be mindful of amendment three whether it passes or not. So they're going to have two sets of numbers to have to consider. that that's why we're not going to go into this right now.
Other factors to consider in the big picture, impact fees, waste water, storm water, reclaim water, all those things, what you know, can we can we increase those? Um, we still say unknown health insurance costs, but we're projected to experience an
increase of 45%. And that's not just us, it's everywhere. And we're negotiating or getting some plan options right now, council. We're getting some plan options and and uh we have formed a uh working group uh within
the city of employees who span all different types of health needs and so forth and they are working on what would be the best plan for us based on users and so forth that we can propose. And again the big unknown which we've talked
about is the amendment three there 20% of pota uh potentially it's about 20 21% of c canal homes could be exempt from those you know property taxes. This is a little bit about the homestead
exemption impact that we'll just show. Again we'll get into this a little deeper later but these numbers come from the property appraisers. We also have some numbers to show you later that came from the state. They're close but different. All right. I mean, those are the sources we're getting these numbers
from. The property appraiser in the state of Florida. These in particular are from the property appraiser. We are looking at it if if amendment three passes moving forward. A year from now, a year from now, we will be talking about a 736,000
um you know deficit in abilum taxes. And then year two increase that number to 927 an additional 190,000 as the slide says. So I want to pause now because I see where
this is going. Um this is a potential uh for consideration. Obviously no decision uh we can uh pursue this option. We are now talking about how we can help with our our situation by borrowing
money from ourselves. So, we've we've talked about the history. We've talked about the present and now we're going to talk about the future. Some options to consider. Should the council direct and it bears some review and studying and another reason why we're going to have more
workshops. One option is an enterp enter enterprise interfund loan where basically we borrow from the storm water fund and infuse that money into our general fund. Um we haven't come up with an exact number yet. We think it's going
to be it could be over a million definitely a million. It could be over a little over a million. and then we would pay ourselves back uh in a payment plan that we vote on and and make sure it's legally sound um at a very low interest rate. So, it's not like we're going to
be eaten up in interest and fees and whatnot. We're borrowing from ourselves. This is a lawful legal um option. Cities and counties have done it in the past and it is something that this council can consider. If our numbers are accurate, you could potentially reduce
the three the four million that we need to reduce our expenses by by another million potentially. We'll have to dig into that. We want to talk a little bit about our situation with state oversight. I can
tell you come March when we realized that our situation was what it was, we immediately called the state of Florida and said, "You know what? We've we've we swung at two balls and missed and we're getting ready to strike out with our third un unfavorable rating. We are
going to get an unfavorable rating because they're going to be assessing this fiscal year, not next year. We can bring in all the money in the world right now to restore our our our um reserves, you know, by the end of this once we collect revenue if you choose to
do that. And that's we know that's tough. It doesn't matter because we're going to still get our third unfavorable late rating that triggers the JLAC audit process. It's triggered after three consecutive unfavorable audits. And it's basically the focus of this is
on corrective actions, financial recovery, and demonstrated progress that we make to restoring our fund balance to what it needs to be. In our case, 16.7% currently. Um there's a financial emergency process
and it's it's a severe finan where basically the separate process talks about severe financial distress sincere financial distress and and the state provides oversight and recovery assistance. It's an automatic state not an automatic state takeover. There are
applicable Florida statutes that govern this. And I can tell, like I said, we called the state of Florida and we explained to them our situation and they understood. They said we're not the only city to do this. That doesn't mean we're okay. It means we we're in the boat with
other cities and counties that have done this perhaps and they have a plan for us and they want to see progress and they commended us for reaching out and telling them in advance. That was that was definitely commendable. And and so there's our summary and and
I'll just I'll I'm not going to read from the slide. I'll just, you know, reiterate this to you. We we have the challenges that we have before us right now is we have to continue to not spend in the remaining two months and preserve
preserve what we've not spent thus far so we can apply that to next fiscal year. That's job one. And I can tell you, your finance director and the rest of our staff are dedicated to making sure that we not spend as much as
possible between now and September 30th. That's thing one. Thing two is during this budget process, we have to achieve well, we have to figure out what what we're going to do. We have to balance a budget. We have $4 million that we have to cut, for lack of a better term. We
have to do what we can to increase revenues. Again, that doesn't necessarily mean taxes, property taxes. We have to increase revenues. And we we have to achieve what we're going to call equilibrium. How much are we going to reduce what what we are going what we're
projected to spending versus how much do we believe we can increase revenues and where are we going to meet? And when we achieve that equilibrium, we're going to have to look at the city and say, is this the kind of city that we want to be? What kind of city do we want to be? What kind of services do we want to
offer? What kind of facilities do we want to have? What kind of programs do we want to have? And these are tough decisions that this council has to make. And I'll be honest with you, I've come to to know you all and I don't envy you. I don't
Not only do you need to balance the budget, you need to come up with a fund restoration plan. How many years are we going to take to rebuild our reserves to get to 16.7%. Bearing in mind that we have the potential for amendment three on the
horizon and that we have impact fee reduction other statutes that we can share with you that are out there and bearing in mind that we do and I'm not trying to be a fearmonger but we do live in a hurricane state and I don't want to have to and for what any other other reason that we may have to tap into our
new savings for reserves we you know we we we make a put a bunch in the bank and then something happens and now we don't have what we wanted in the bank. Those are the considerations that we have to take into account. So, so that's the summary. I can pause.
Joey has the next slide presentation uh to talk about fund restoration plans with amendment three, without amendment three. I don't know, mayor, if you want to if you want to take a recess, if I know we're going to have public comment
when the presentation is over. Uh if you want, we'll just transition into this. It's your call. >> Thank you very much. I'm following along on 4.2. We So that concludes the 15-year overview and current fiscal. >> Okay. So I don't have my agenda in front of me.
>> That's okay. And then I think the next one 4.2 that was 4.2A. 4.2B says expenditure reduction measures to date capital improvement projects. Was that >> we did that in the slide presentation? [snorts]
>> Uh 4.2 2C says fiscal year 2627 challenges. >> I believe yes that was a part of the presentation. >> Yeah, I think I can help you here and we can skip down to 44. >> Okay, so we've completed all of 4.2 A through C and all of 4.3 A, B, and C
>> and we're now going to 4.4 fiscal year 2627 revenue opportunities. >> Yes, I'll be brief with this. I'll come back up there. I don't have any slides for this. the clerk can put something up for us when we get to it and I'll and I'll cue her up on that.
>> Let Let's uh if we could pause here. >> Sure. >> Just take at least 5 minutes. When we're all back, if we can, we'll circle back and and uh we'll pick up right here. >> Sounds good. >> Mr. Mayor, >> yes, Mayor Pro Tim. >> Before we pause, do we have the
presentation that Joey is about to give >> physically the document? It's on the screen. I believe the city clerk is working. I don't think we have a print out of it. >> The the the reserve restoration presentation you do not have it will be on your screen. It's a PowerPoint and
then of course we can get that to you like this other one and it'll all be incorporated in the minutes. >> Okay. >> But you'll see it on your screen. >> Well, I know but I'm a notetaker. So >> that's right. You want me to get you a pen? >> I'll take pictures of it. [laughter]
Thank you. >> Well, if we're going to take a recess, maybe we can print some up. No, >> that's fine. >> Okay, >> we'll go in recess and when we're all back, we'll reconvene. Thank you. >> Was that I didn't know what it was. >> Oh gosh. Hopefully everything's okay.
Yeah. >> Yes, sir. after breathing. I know. How are you? [clears throat] Yeah. Yeah. >> He knows. He knows. I was already. All right. So,
There's some questions. I said PS. >> I just like to talk. Okay. Just the consequence of disagreement there. There's something that's clearly Does that No,
actually because I'm not touching the body. So that's nothing special. >> Thank you. So there really is come in with the actual plan versus a conceptual plan. So on the
conceptual everything is see How are you consider? >> Oh god. There must Yeah. This is the best. [laughter] I'm here.
All right. I think there's nothing Mr. Wills, how are you doing, sir? I know just That's my motto. We're going to get started in just a little bit. Maybe a few more minutes
here. Uh just letting everyone know and uh soon as Mayor Pro Tim Jackson gets back, if that's okay with the council, we'll reconvene. Everything okay? >> Usually that doesn't go off unless I'm cooking. >> I I took mine out of the kitchen a
couple times cuz I'm like I use a simply safe and they're so good. You know, if it goes off, they'll call is everything okay? And if not, if they don't hear back, they'll notify the fire department.
But one day I was searing of the steak and it and I got the whole first floor Christina's coffin. I'm like open a window. >> I think it'd be interesting to know if people think too how many people are
watching. They can if they're using that go to webinar it'll usually say who that would be. >> Yeah. And it'll give a report at the end of the times the users logged in, logged on, total time, how many total. Um,
remember we we looked at that when we were looking back on it. Um, but yeah, it would be What is that? It's a little warm for me. >> I know. You go one of the bathrooms, the
sink is broke. You're like, jeez. >> I'll ask him. See if maybe he can turn me. Yeah. Good job. She finds it that I have to rewrite it. It would be expired.
>> I finally ventured to Maryland. >> Only took how many nights? >> All right. [snorts] >> He's checking on the AC. >> AC thought maybe it was just me. A little warm. >> My mom was warm, too, but it's only like 73.
>> I know. It feels good, though. I brought a sweater just in case. >> That battle has been going on for years. >> Yeah. >> Okay. We're ready to go. >> All right. Hey, good afternoon. Call the meeting
back to order. It is 2:22 p.m. We are in the uh section 4.4 of the uh workshop here. received uh presentations from our city manager and staff. And uh the
this item uh is titled fiscal year 2627 revenue opportunities and uh city manager, I'll give the floor back to you. Thank you, council. I I don't know that this is really the time to discuss in depth. Um I just this is
more for you know your benefit. As you know, we've talked about these things, but also for the community's bet benefit to understand those things that we are considering. Uh paid parking for one is something that despite um there's been
some vocal opposition to the concept. We understand that and we also understand that it's an it's a lawful means of collecting revenue. Um, we understand that as we progress in conversations about that, should the council want to entertain that topic that we could, you
know, be met with that, but I must tell you that we we do believe the vast majority of residents would be in favor of paid parking. So, we'll it's listed here as an option for consideration. Uh, as is local option fuel tax. We can get into into that in depth later at some
other point, but this is something that we get from the county and of course we would have to, you know, get them to agree to get some more our way um increase it however that's done. So that's an option for us to consider. We also mentioned briefly about legislative
measures and uh this is something that doesn't happen overnight. Um there are some statutes out there that we can look at to see if that as how they could apply to us both at the state and federal level. Can't make any promises on what kind of progress we'll make. We
certainly need the support of our legislators to make those types of things happen. Um and we've always talked about having conversations with the port. Uh I know that's nothing new. And so we will um certainly reach out to them and have meaningful conversations
about our relationship. It doesn't just have to deal with revenue, but you know, how can we help the port in in marketing what they do and be a you know, a satellite city to that? How can we help them and how can they help us? So those types of conversations need to be had.
Um and then um proposed solid waste contingency fee ordinance. I have a a document that we can put up for the council to look at. And again, for the public's benefit, no one's saying this is going to happen because it would result in an increase in a fee to the
consumer, but by law, we can tack on an additional fee for the purpose of creating a solid waste contingency fund. And this would be separate and independent from what's already charged consumers. This revenue would go into a
special fund for specific and per specific purposes. And if you scroll down, there are some examples. Removal of illegally dumped debris. Extraordinary Well, you're going too fast there. Extraordinary yard waste collection. Uh following tropical storms. I'll just hit a few of them.
Extraordinary landfill tipping fees. Emergency debris collection. Other unforeseen things. So this is um not uncommon and uh it uh it is something for this council's consideration. Funds would not be transferred to the general
fund or used for unrelated governmental purposes. They would be used for the specific purpose and intent in which the fund was created should the council choose to entertain this as a way to increase revenue for our residents. Um,
I'm sure you'll get comments from the public at some point and and that that really completes I mean then then of course you have item number E. Well, let me thank you. There was a page two. Um, go ahead. I'm sorry. Go ahead and bring that back up just for the council's
benefit and the public. My apologies. Um, so to promote transparency and fiscal accountability, the ordinance require these types of things. And of course, we'll get our city attorney to weigh in on these measures, creation of a restricted solid waste fund, annual
review, uh use of funds solely for specific authorized purposes, there will be annual reporting to this council, and of course periodic reviews, the benefit, uh to stabilize the city sanitation enterprise, um and then have additional revenue to handle those things we talked
about, and of course reduce reliance on general fund revenues for those matters that we would have to deal with because our current agreement with our solid waste provider has us having to pay extra already for those things that we might need above and beyond the regular
service agreement. And so that currently comes out of our general fund. And so we can certainly look at if you know I can't we can't project what that would be every year. Uh I can't even tell you what we've had to pay extra in the past fiscal years. But that is a term of our
contract. uh so we can explore those um issues if you will moving forward. So thank you for putting that back up ladies and then the last thing on the agenda of course is the millage rate and you know that's just another revenue opportunity for you to discuss.
So it's also a good segue into the next portion of our presentation which is the fund balance restoration um plans that uh that we have for your consideration. And before I turn the microphone over to Joey Blackard, our
finance director, um you're going to see numbers that reflect both amendment three if it passes and if it doesn't pass. Um and again, just for the for the public, again, we have to have this conversation because it ties directly into an ordinance issue that you'll deal
with tonight and of course ultimately whatever tenative military you adopt this evening. So, having said that, I will turn the microphone over to Joey. Okay. So, we're going to dive into the presentation specifically of the millillage rates depending on the
various scenarios that can happen going forward. Um, next. So, we're going to talk about the uh the mill rate um options or rates that are necessary to be in compliance with the city's code. The city has two
codes which we'll go over through the rest of this presentation. Um, for each of those codes, we'll be we'll be providing the scenario of if amendment 3 passes because the city will lose
taxable um the city will lose its ability to to tax a certain amount of property. So, that will affect the city's revenue moving forward and we will dive more into that going forward. Additionally, um staff is looking for
council direction on how to approach this budget and moving forward and potentially um if if council can direct the city manager to prepare an alternative fund balance restoration plan for council consideration. And we
will dive into all of these uh throughout the rest of this presentation. Okay. So as I mentioned the city has two codes that relate to its reserve pol or its uh amount of reserves the city has to have. It has one code um we'll call
it code uh 2208 and it has another code called code 2210. This is important to remember because each code um each code uh requires a different amount of
reserves for the city. Specifically, code 2208 requires 16.7% of the adopted budget and code 2210 requires well
will in our account in our situation will require 20% of operating expenditures. So that is a key um a key difference that we'll hone in on. So we have two codes requiring two different levels of reserves in the city
and specifically the code related to our operating expenses. Um for our internal analysis we've been using operating expenses as our operating category in the city's budget. Um we have gone ahead and used that definition since the
definition is not uh clarified in the city code of ordinances or the charter. So comparing the two city codes we have, one is more restrictive than the other. In other words, one calls for a higher amount of reserves than the other. So
therefore, if we're in compliance with one of the codes, we are in compliance with both of the codes. That is the idea we want to get across here. So specifically code 2208 is more restrictive
than 2210. So the calculation of code 2208 is based on the total adopted budget. The preliminary adopted budget is $20 million. 16.7%
of that amount is $3.3 million. That is one of the reserve levels the city has to be in compliance with if the city wants to be in compliance with their own um reservation requirements. The other code 2210
requires the city to be to have 20% of annual operating expenses. And in the preliminary budget we've provided the operating expenses are $13.8 million. Therefore, 20% of that is 2.7 million.
And I will summarize this here. So, the point we're trying to get across is the city has two codes that require different amount of reserves. One code requires more. One code requires 3 nearly $3.4 million in reserves. The
other code requires nearly $2.8 million in reserves. So, now that we've we've gone over what the city needs in reserves to be in compliance with the city's own code, we will we will show some calculations of millage rates that
can get the city to be in compliance with their own reserves while taking into account if amendment three, the homestead exemption bill, passes. So this slide shows um the effect of
amendment three on the city of Cape Canaveral. So the first fiscal year we see here, the first of the three going from fiscal year 2027 all the way to fiscal year 2029, the city currently has the ability to
tax on $2.1 billion. With this homestead exemption, the city will lose the ability to tax on um property within the city. Therefore, the city will lose revenues.
Uh this projection has been given to us from the Bvard County Property Appraisers Office. Um they are projecting that the city of Cape Canaveral after the first year of amendment three the city of Cape
Canaveral will lose around $736,000 in revenue and the year after that we'll lose an additional $190,000 for a total loss over two years of
$927,000. So again, the point we're making here is if amendment three passes, the city will be able to generate less revenue based on taxes. And we're taking into account some of those projections.
Are there any questions as of now? >> Yes, Mayor Prom. >> Sorry, little question here. >> You know, I can't go a few minutes without a question. Um okay on the slide
that is blue prior to this one. Okay so it discusses the and the prior slide to that it discusses that we have the two different code sections. We have code 208 which says equal to at least
16.7 of the adopted budget. So that'd be the entire budget. >> Mhm. And then we had 210 that is based only on the operating expenses. So um when I look at this slide that
we're looking at here, which code supersedes the other and why would we have two is so this is probably for our city attorney just to give you a heads up there. City attorney, why would we have two codes with a different diff
different definition? >> That's a good question. City attorney, would you like to answer this? >> Oh, I I don't have an answer to why that was written in there the way it has been, but it does me it does measure two um baselines, right? Um as as the
finance director indicated. So, you end up with two different results. Why, you know, there's two different um you know, sections measuring two different baselines. >> I I can't answer that question. Is this something that we should possibly put on
our radar to clean up later because that if for someone new >> the previous >> that could cause confusion. >> I can weigh in. I think we might have all been with the exception of council member Shoryak and King. I agree with
you and I think it u the intentions were to reduce it from the 20% and the GFOA recommendation said 16.7 I believe and I believe it was
genuinely overs over oversight because the intent I think is met with the existing code without changing anything 20% of operating expenditures threshold and then there's a section that talks
about what happens if you fall below 17% which I believe was just a little bit over that recommendation and so uh that's my comments uh if they are conflicting or not useful they certainly I think create confusion but it I think
I can add a little bit more >> yes >> um >> my take on these two reserve levels is is one the um and I'll go to them. The the section 208 is the 16.7% compared to
the total the adopted budget. That one all it states is that you have to have 16.7% of your adopted budget. There's no timeline related to it. Whereas the the the code 2210
says if you fall below 17% of your um of your reserves compared to your operating expenditures then you have 2 years to get above 20% of your unassigned reserves compared to your um
uh operating expenditures. So the sec the code 2210 gives a sense of urgency to if you find yourself below your reserves, it gives 2 years to get back into compliance. Although it's not complete compliance compared to 208
um which 208 doesn't mention anything if you're below it. you have to be back into compliance with a certain within a certain amount of time. Whereas section or code 2210 does if that there's a little context to it.
>> So it looks to me like um 208 literally defines the lowest that we can be right and then uh 210 is literally saying
you can normally you'd have 20% If you drop below that, you've got two years to. So, it may there may be reasons for having them both, but maybe we need to clean up the language a little as we move forward. I don't know. I just wanted to check on that.
>> Yeah, if I may, I don't know how historic these ordinances are and how far we'd have to go back to check agenda items and minutes. But I can say that if you're in compliance with 208, you're in compliance with 210 from a dollar standpoint, percentage standpoint. But if you fall below in 210, then that
triggers uh the two-year requirement to restore the fund balance. Uh so when you're seeking compliance with our code from a percentage standpoint, you need to focus on the higher amount, not the lower amount per existing codes, if that
makes sense. The 16.7% which is the 3.3 whatever million. That's the number we have to reach in whatever fund balance um you know restoration plan that you implement.
>> I traced back to the 2008 council meetings when the auditors changed and that 2-20 uh 210 was in place. I didn't go back any further but obviously 2-208 was a year or two ago.
>> Yeah. And I want I want to say well you reduced it I mean the code existed but you reduced it from 20 to 16.7%. And um but it did exist. I I think in all fairness the existence of these two ordinances there's there must be some reason and I think we should probably
dive you know to your point Mayor Potm we can dive into why they exist as they both pertain to different facets of our budget. >> Well we don't ever want to be here again that's for certain. However, I think having clear definitions for who might
be on counsel in the future may help. Okay, that's that was my only question so far. Thank you. >> Any other questions for team at this time? >> Thank you. Okay, so we just the the last slide
we're going over was um the impacts of amendment three, the homestead tax exemption um on the city's um revenues. So this slide will compare we'll will
we'll will'll go over code 2208 and the millage rates uh mathematically necessary to be back into compliance with um city code. So how to read this slide is um the first column on the left the restoration
period. Um, this means in the upcoming fiscal year, if we need to make up $3.3 million in our reserves, we need to add that amount of money to the reserves plus balance our budget of nearly $4 million.
So, therefore, we need an additional revenue of 7.4 million. How do we get $7.4 million in additional revenue? that would require a millage uh of 8.1692. >> And if I can interject, if we don't
increase other revenue streams, 8.1 is the millage rate. And and this is on here because if council council has you're in the final phase of your two-year window to comply with the code, and that's why this item is on the
agenda tonight. You have to determine how to proceed with the code that you must comply with unless you address it in some other fashion tonight. If you decide you're going to comply with the code, then this pretty much determines your millage rate right here. That's why
this FY2627 number is there. And this is why we came in at 9.95 for this discussion. Just to reiterate, we don't know what you're going to do with the ordinance before you set the millage rate.
>> Are there any questions on this slide? How to read this slide? >> No, not not for me at least at this time and we can come back to these if we and I'm sure we will. So, >> okay. >> Thank you. >> Okay. So, this was the millillage necessary to reach the reserve
requirement of the $3.3 million. Now, this is the millage required to meet the reserve requirement of $2.7 million. Um, and it's the same idea as the slide we just looked at.
And if I could just qualify this, this isn't happening independent. You follow 208, these numbers will follow. You know, this is just showing you what our ordinance says in relation to the other ordinance. And you see the amounts are different for a reason. Uh, but the code
you need to comply with immediately is 208. That's what's on the agenda. I'm sorry, 210 is on the agenda. But if you meet 208 numbers, because that's what the ordinance says, you know, at 16.7, then you will meet these numbers.
Okay, I'll move on to the next slide. Again, we can come back and talk about these numbers, these slides in the future if council wishes. So this slide shows um uh other impacts, other projections of if amendment three,
the homestead tax exemption takes places. So, we went over those previous calculations based on U. Bard County's projections, but there were there's another projections that have been done by um there was a conference held where
people looked into projecting this exactly type of thing where they see um revenue loss u well the city of Cape Canaveral will have will lose more revenue than Bard County. Um they're they're similar on the first year saying
Bard uh city of Cape Canaveral would lose around $730,000 in the first year but after that they start to um differ and that's because people are projecting things taking different things into account. We don't
truly know what's going to happen but people are trying to make projections. Um there's a high level summary of it and just the point is we're just showing two different projections. We went with the Bvard County ones on the left which are lower than other estimates being
made currently. I'll go to the next slide. Um so this is a summary of everything we just went over. um as in how how soon would council like to
be um in compliance with the reserves that the city code um states? Um and we went over the millage rates required to do that. Um we took into account amendment three, the homestead exemption.
And to summarize all of that, staff is looking for council direction to the city manager to propose alternative fund balance restoration plans. And that is the end of this presentation. >> Thank you.
>> So council, for the for this council and for the the public, we just went through item 40 4.2D. We skipped it so that we can save this for the end. Uh, and that's what that was on your agenda 4.2D.
And that is essentially our presentation to you to kick off this workshop. And I turn the microphone over to you, mayor. >> Thank you very much. Thanks to all who has uh helped get us
here and understand the understanding the realities of today. I think um the first thing I I want to say that I'm as we're kind of taking this in and observing is this is going to take us some time. And
one of the things historically and just the nature of uh elected office and and somewhat of the older culture was these workshops would be like 30 minutes
prior. I mean this council has not ever had 30 minutes and it was minimal and that's there's nothing wrong with that but it was sort of here it is. you really didn't uh have any concerns from the council at
the time and over the years we've seen it evolve and I think from what we've learned and understand today that's the first big observation is while it didn't happen overnight or quickly well it it
the one regret that I think I would have is first I believe wholeheartedly this council um and our city staff, we're going to we're going to get this on the right track. I believe in us. I believe in this city and
but I don't think we're going to be able to do it if we're pressed for time. We have to act swiftly and as we can and I think we do have the time to do it right. And I know that that takes resources from our staff, but one of the
communication gaps is, you know, we don't really meet together. And I think we are going to have to obviously lean on our staff to get this far as we did today and then really uh give every council member and our city staff the
the time each one of us feels to understand it and to move forward. And so at some point whether we have a hard stop at five or not, one of the things that I'm thinking of is thinking ahead and saying, you know, between now and the budget agenda, this is one workshop,
we usually have two two if not three. We've obviously got two readings and there are some immediate deadlines with the proposed or tenative millage rate. We'll we'll address those. Um, and so that that that's what I wanted to to
comment on and maybe we can find some some time um over the coming weeks that we can allocate to to give this what it deserves. So um the the second thing which we've led
with today and I greatly appreciate and some of the questions from Mayor Pro Tim and we've got more is in that time just really starting with the code and understanding the code and something I think that would really help us now is the time is like a code compliance
checklist every year as a part of the budget. If you took the code, it can be confusing and things, but this is an administrative function that the council could look at and go, you know, section
210, you know, check and go down. And then we're making sure things don't fall through the cracks. I think if that's something uh that this council and city staff would consider. Um, and
we've done strategic planning in the past, big picture stuff, you know, uh, things. And I think the restoration plan that city staff is asking is sort of this year's strategic plan. And I think when when I talk about time, you know,
maybe we can find like today three, four, even 5 hour window that we can really come in, be able to roll up the sleeves and figure it out. And so if that's something the council will consider, I would like to give us a little time before we end, we don't have
to do it now, is to try and identify at least a date or two. And uh I think it would be wise to to keep this code. we've already started with the code in front of us and we can go down the list and feel good and
confident about what we're doing here and at that point we can, you know, get into priorities and spending and all the different ideas we've had. And so, um, again, thank you all so much. Uh, I believe in us and I know, uh, the
community, uh, supports us and we will get through it. So, >> our people, >> council, we heard a lot. we can go back to anything. If there's any uh initial comments or questions, I think for staff or clarifying uh that now would be a good time. But
before we really get into it, we do have I believe some public at least one card here. Um and also received uh an email from some public comments that I definitely want to recognize it and make sure they're on the record.
Are there any questions before we go to the public this time? Okay. So, the card uh Mr. Michael Corman, are you here with us today? If you're willing and able, you're uh take
your time. Come on up. And uh thank you so much for being here. >> We got three minutes. I think you've done this before. And >> yeah, I'm Michael Corrian. I lived in the Bermuda House. I'm the uh condominium president. Uh it's a small
10-unit uh condominium. Um I'm about a block and a half from the beach. Um this system that you're talking about charging parking uh to me is abhored.
Um, we have good neighbors here in Florida, in other cities, and we're taking our problems and putting it on them. They didn't cause it. The city caused it. We caused it. We caused it because we didn't show up for
the meetings. I have to opt out in a little bit. Um, I've had two knee surgeries and open heart surgery over the last uh three years, so I haven't shown up here. and I just retired last year and last week I turned 80.
So, um I'm still going to be involved now in in the city and show up more. But when you look at this parking, there's a lot of things that go into it. How are you going to do it? Who's going to administrate it? Who's going to who's going to give the ticket the the
certificates out to park? Are we going to have local residents um that don't have to pay for parking? yet it's our city that caused the problem. Uh using CR codes at a lot of these parking lots. I don't go to cities and I don't go to
shopping areas that have parking that paid paid parking, especially with the CR codes. It's it's it's still a little daunting to me. I'm fairly computer literate, but it's becoming a real pain to do all this stuff. So, I shy away from it. How many
people are we shoppers and people coming to to the city to do business uh are going to shy away from things like that? How many people are going to not maybe come to uh the hotels here to go to the beach uh because uh of the parking fees
out there? I think it's counterproductive. I think in the long run you end up with not as much money as you think you're going to get and a lot of ill will. The city of Titusville has just put in um cameras at the school zones for
ticketing. It is a nightmare. They are not in compliance with state statutes. They don't know when the schools day starts with each school or stops. They've got um half their cameras don't
work. They've got they got school zones in the wrong place. Titusville High School. They pick up and drop off on Highway One, the school zones on the back of of the property, which is delivery delivery gates.
So, because the Department of Transportation has said, well, would they consider that the school zone? It's not. So, the whole thing is a mess. I hope you reconsider the parking fees
at the beach. I think they're wrong. Thank you very much for your time. >> Thank you, Mr. Corgan. And you said it was Bermuda PL Bermuda House. >> The Bermuda House. >> Circle Drive. >> Circle Drive. >> Just right down the street from uh McDonald's. >> Thank you very much. And thank you again
for being here and participating. Were there any other uh That's the only comment card I have. Is there anyone else who intended to speak? If so, we would ask you can come on forward and maybe we ask you do fill out a card. How are you doing? >> Hi, how are you?
>> Good, thank you. >> Thank you. >> Hi, >> Gwindelan. Um, my name is Gwendel and Lisa Hagar. at 509 Washington. And um I guess today is like the first in a many series of
budget meetings and I wanted to find out how um citizens can contribute uh recommendations or alternatives for um revenue opportunities in the city who we
would provide those to. Thank you. >> Thank you. just to give some immediate feedback on that. I think uh if the council desires, we are we have an existing schedule, we'll make sure that uh it's in our
budgets on I forget the exact page whether or not the council adds more dates to it. I think it's a good idea. I think our city staff will will make sure um that various channels that people and
specifically you asking know when and how to participate and thank you so much uh for your willingness to do so. >> And mayor, we'll always take email input from residents. >> Thank you. Okay.
And we are live streaming. Just want to confirm. >> Yes. Is there any indication of how many people are with us right now? Just curious. >> Okay. That's great. Well, that concludes. I'll ask one more
time. Anyone else who intends to speak, please come forward or would like to. Seeing none, we'll go ahead and close public participation. And I don't think we're doing the live stream digitally. We haven't done I didn't want to offer
something. Okay. Thank you. All right. Council, we've gotten through city staff presentations, asked a few questions, clarified. We've heard from our our community, Mr. Corgan and Miss Hagar, and
I believe at this time at 2:59, [clears throat] at 3 p.m., the hope is to have a hard stop at 5. Um, it's a workshop. No particular order. Council member Shoryak,
>> do we have the paid the comment the typed up one? >> Oh my gosh. Uh, >> Mr. Campbell, >> you're exactly right. Yes. Thank you. The uh we received a uh an email public comment from Mr. Patrick Campbell who lives on uh as noted in
here 307 Surf Drive. I believe council we all received that uh to to unless this council opposes. I think we've uh let the record show we've all received it and read it and I think our appropriate city staff has been aware.
Um I don't plan on reading this completely through uh but just to acknowledge and respond some of the questions largely are well entirely are around the paid parking program like we heard today Mr. Oregon
um noted and the organization of the email listed some specific questions that uh I know our city manager has been made aware of and also some that would pertain to
potentially our city attorney and uh the ultimate sentiment is the opposition to paid beach parking uh with some of the reasoning. Thank you again, Mr. Campbell. Um I do want to just respond to the revenue paid parking um comments
and and say I know that this council is working through it. I think a lot of the questions around the cost and the benefit uh I think we would all want to know and clearly understand before going forward especially after the first
attempt and I have full confidence that uh no nothing is going to change without this council fully understanding and being aligned with the community on those cost questions and uh some of the the concerns really around the culture
and what Cape Canaveral was maintained for many years. No, no paid parking. And so, uh, that's one piece of, uh, potential solution, uh, that I think we're going to have to to weigh in and,
uh, beyond what we've heard today and received via email, additional social media, direct emails. We've got a lot of great feedback to weigh in. And my thought is simple. If we can't overcome anything this council think is valid, I
don't see why we would do it. But I do think some of those we should pursue and and and try to overcome. And I think many of them we we can and will, but it won't happen without open discussion. So that is Thank you, Council Member Shorak. Um that is all I have for for
public comments. I don't think we received any other by email. So that is in the record. We'll go ahead and now officially close public participation. >> Mayor Pro Tim, >> um I just had a comment on the public
parking thing and this of course would not be immediately. Um, but if we do elect to leave public parking without charges, we need to really look at not for this
fiscal year or even during the years that we're restoring the budget, but we really need to start looking at facilities at the end of some of these streets because we have one restroom at Sherry Down. There's restrooms at Jetty
Park and all the way to the pier. And when we have a lot of people coming to the beach and they don't have the facilities they need, we have people utilizing the dunes for things that we may not want. So we may want to look at a CIP
that covers constructing restrooms because we would be the one beach in our county and all the way to North Valuchia um that doesn't have paid parking. So, we're going to have to look at how we accommodate the public with that as we
move forward. >> Thank you. >> All right, council. Chime in as you will. We'll try to stay out of each other's way and talk. >> Mr. Mayor. >> Yes. Council member Willis, >> before we get to a hard stop, let's go ahead and look at the calendar.
>> Thank you. I think that's a good idea. I think um if um Joey can remind us what is on the schedule and then let's see what what we can add to it
>> because I I really like your idea of more opportunity to sit and talk. We there's a lot of options here. >> I think is it page 11? I think that's uh in the budget book.
Yes, it is page 11 in the budget. >> Okay. And so I guess the legal deadlines are really important out of those. Potentially all of them maybe at some point are legally required, but like the DR420 that's a really important one for
the property appraiser. So what is the next I guess legal deadline tonight? We'll be considering in the agenda. I saw it there's tenative millage rate and then it was stricken and I think there was proposed which one is it that we're
tonight is the proposed millage >> proposed and then we will have first reading of a tenative and then a second reading of a final okay is that the next step in I guess state
law is to is the the proposed has a deadline line. >> The >> the proposed would have a deadline on August 4th because on August 4th, we have to submit our proposed millillage to um the county property appraiser and
from that day, August 4th, when we submit it, it is important because the city cannot go higher in their tax rate, but they can go lower. So DR420 is whatever we decide whether it's tonight or throughout will give our
city the ability to submit that proposed rate with those conditions. I do want to just kind of address that can't go higher. Um, I know that I think we brought this up in the past is I
thought there was technically a way that in the event a city adopted a rate and then found out they needed to go higher, city attorney, it might come with extra costs or maybe reming trim notices. I don't know. But is there a path?
>> Uh, yes. Your recollection is correct. Um once this once the first once the notice goes out in the mail um with the proposed millillage the city council could not exceed the proposed millage in the initial um notice that went to the
property owners. If the council during the budget process decided that well we want to go above the proposed millillage then the city would have to renotice the property owners with the with the higher
uh proposed millillage and uh that would be at the city's expense rather than the tax collector's expense. >> Okay. And probably 6,000 properties or whatever. So, it comes with a a cost.
>> Thank you. I I like the approach of uh we'd rather not have to do that, but I guess it is a good to know. Um so, August 4th is the date, the next legal deadline that we
need to make a decision on that. And that's one reading as early as tonight. And uh maybe that's the the only opportunity. But then the next one is the is it the
>> Yeah, that September 8. Oh yeah. Well, there's a workshop on the 18th and all the publication and legal requirements around that. But the first
reading uh I guess the tenative would be the next. So we'd adopt proposed then we would vote. Oh that's helpful. Thank you. Now this is just our regular schedule that we adopted back in November. So the tenative would need what do we
have that I guess when is that due >> um to the property appraiser >> the the tenative u millage rate is technically not due to the property property appraiser. >> Okay. >> Um the only thing that would be due um
is the final adopted. Okay. >> Millage rate would have to be transmitted so the tax roles can be properly um created. >> So September 18th. >> Okay. So we would adopt a proposed that
would go in as the DR420 to the appraiser by August 4th. We would have a tenative uh internally when we have a second reading on the final. then we would have to have that second reading done prior
to the 18th and it looks like we've scheduled 3 days prior September 15th if I know I'm kind of working backwards here but council I think that seeing these deadlines are important if there's any opportunities
uh that we could work or extend the times of that's the other thing we could do is potentially give ourselves more time I see workshops around 5 or 6:30. Um, so that's it. What do What do we think? >> I I think if we could possibly on the
18th meet several hours earlier >> on August >> 18th. >> So, there's a budget workshop at 5:30. >> Well, on our on our calendar, it says 5, but in here it says 5:30, but on the
calendar it says 5. And it says the 18th here. And that says the 19th. >> Oh, >> 8:18. >> Oh, I was reading it wrong. Yes, I see it does say days. So, that's correct. But if we could meet it maybe two or
three, get some extra time to discuss it or take it a week earlier in an afternoon. Yeah, I think uh we're obviously on the 21st. We met at 1 today. The next scheduled meeting on August 18th is at 6 on the schedule that we adopted in the
book. It's printed 5:30. I think we irrelevant. We want to be I agree. I think we should meet earlier. Um I'm airing even towards maybe a little earlier even than that. Um, so what do we think?
Because we do have a council meeting that night, don't we? >> Mhm. >> Yeah. >> I think at at least 2:00. >> Okay. because we more than likely won't be getting presentations necessarily, just uh discussing options
that we >> you'll no doubt um make requests of staff. You'll want to see new information. We'll probably be putting it all together for you in some fashion. >> No doubt. >> I'm I I would I absolutely agree. Uh
meeting earlier in the day at 2:00 p.m. is better than this. And I I think the only thing uh well, let's just assume that's that's what we did. The next hearing is a couple weeks later, and
that's a standalone hearing on September 3rd. That's our first that's uh publicly noticed, so it's important. So really, we have workshop today and that 18th is the second workshop.
What I was leaning towards, while I agree with 2 PM on that day, is is there just a standalone day if needed? We It looks like we would have time between the 18th and the 3rd. Maybe we see how we're doing on the 18th. If we get out of there and feel great about it, we
wait till the the third first hearing. If we feel like we need more time, we I think have a couple weeks to to try and work that in. So, Mayor Pro Tim I just think we should go ahead and schedule the time. Um, since we're
really going to be going over details on that next one, >> schedule it like we've done today where we here at 1 and give ourselves a time because if we got through early, that just gives us a little bit more of a break, you know, before council meeting.
Um, and as far as having any additional time, we'll just have to work that in after that meeting because I know when we start looking at the actual details, and I don't know what you plan on doing today, whether that's something that we
should start doing is looking at the actual details that we've been provided. Um, you know, when when you get to that point in the process, that's where it starts taking some time. when you start identifying and and exploring the
options that we have to look at. >> So I just think that having it the same amount of time, you know, is >> 100 p.m. >> Mhm. >> Okay. Yes. City manager. Uh so two things just a reminder that you do have
an optional council date always on your schedules every month and August 4th is listed as you know your optional council day if that's something that you want to consider for a workshop. And then secondly, to Mayor Prom's point about whatever you're going to speak today,
given the fact that you have to address the ordinance tonight and the millillage tonight, um I would suggest you spend time discussing those two items in advance of the council meeting um so that you are better focused and ready to
decide this evening on those two issues. I did recommend to all of you at some point that um you look at re um changing the order of two items on the agenda so that you can deal with the ordinance first and then the mill rate second
which you need to do before you can talk millillage. But just a recommendation for your conversation this afternoon is prepare for that tonight maybe. [snorts] Council member Shoryette, I >> I think a good idea maybe we could have something well I think 1 to 5 before the
next council meeting is great idea on the 18th but maybe either on the 4th or maybe 11th or one other night thing have something for a couple hours in the evening so people who work can come out >> and make comments because we're going to have all kinds of suggestions and changes. I think 1 to 5 kind of limits
people and if we have something starting 6 or 7 we maybe we do a couple hours I think that will be helpful to us and also the citizens who want to give some input. I guess my immediate concern I agree with that 100% is we definitely
want to have some evening time availability and and if we are going to pick a date for that um I'm looking at this 4th we to our city manager's point that if that reserve date on the 4th that's the same
day the trim is due or the DR420 is due. So, uh, I guess tonight's vote, which comes with a potential cost, is a really big one. And, uh,
my thought would be to have an opportunity to meet whether it be Monday the 3 standalone. That would be potentially a good evening one >> and then that would be at least 24 hours
before it's due. But so I think let's take them one at a time. How about we have the workshop on the 18th? Coun council member Willis who recommended 2 p.m. Mayor Pro Tim said 1
p.m. Is anything you've said council member Shorak are you okay with at least having that earlier in the day? >> Sure. Yeah. >> Okay. I I just wanted to give have something in the evening so people who work can come out and if they have an opinion on it they could express it
because you know paid parking is a big thing and if that comes up people are going to want to comment on it and I think we need to give them the opportunity not just during the day. Council member King any comments? Just trying to take them one at a time. We're
talking about the 18th scheduled at 5:30 or 6. Would there be any concern with meeting at 1 or 2 p.m.? Either way, earlier than what we have. >> No, I can accommodate my schedule for that. >> Okay. >> Council member Willis, do you have any concern with 1 p.m.?
>> No. No. >> Okay. Let's try to tackle that one and let's make a motion and to change the schedule. I'll make a motion to adopt uh to alter our budget workshop on August 18th
from 5:00 p.m. to 1:00 p.m. Second. >> Got a motion by council member Willis and a second by council member Shoryak. Any other discussion on the item? Seeing none, city clerk. >> Mayor Proim Jackson,
>> four. >> Council member King, >> four. >> Mayor Morrison, >> four. Council member Shyak >> four. >> And Council Member Willis >> four. >> Let the record show the time was changed as stated in the motion. Now, let's go back up. We've got this what we're
voting on tonight is due on August 4th. Could I mean, we don't have any other meetings tonight. Uh so that pressure to get it done emphasized, right? would we want to have another out and and maybe we can decide that later in the meeting
if we're not getting the progress we [clears throat] need. Um, so and that one to council member Shoryak's potentially could be in the evening, Monday the 3rd in the evening. Is that at least a time? And if we get through it tonight, we don't have to have that
meeting or that discussion. But >> what are our thoughts on that? >> Um, mayor, I think it's difficult without having discussed um all of the items that we've been
provided by staff >> Mhm. >> to go in and make a determination um on setting that millage rate. I think we also need to talk about um how long of a recovery recovery plan
we want to take a look at and how that will impact the city. Um, without discussing that, >> it's hard to discuss the percentage of, you know, the military percentage unless we just choose to go with the highest
amount and modify that later. But that that's you know I hate doing that that way because citizens that are not keeping up with what we're doing or what is we our meetings today could that could cause
some concerns for them. So, I think that discussing um some of these details and determining what we want to do may benefit us. And >> may I may I may I speak? Yeah, please.
Um though I I agree in theory with what Mayor Prom is saying, I think that the more people we can come to get out to these meetings, whether it's because our rate about a parking uh
paid parking or whatever suggestion or whatever concern they have is to all of our benefit. I want to see this room packed. I want to see the people here voicing their concerns and hearing our explanations as to why their concerns
are either valid or not doable. That's how I see it. And the more the more available we make it to the people, as Councilman Shoryak says, and the more discussion that's emanating out there as
a result of this, I think is to our benefit. And I think that by voting on the the the high end of the millillage that doesn't lock us in, that just gets people's attention and they'll come out
and they'll give us their I want to see more than four people in here. And I think that that's what's going to do it. We've got we've got to get their attention. We've got to so that we can explain to them just as our city manager has done this morning what we are up against, what we are dealing with, what
we and the input that we invite from them to help us resolve this problem. That's my two cents >> and I I I think that yes, uh public input is going to only help our confidence. So I agree with everything
>> and our transparency. >> Yes. And I think uh time of day has an impact on that. Um but I think what Mayor Pro Tim's uh totally separate point is we we're in this every year. We're trying to set a budget rate based
on a budget that we're not full, you know, comfortable with. And I know that the out I guess is well this is just a proposed rate. You can uh you can always go lower. Um, I think >> in response to getting the residents
attention, I have uh full confidence that we could fill the room without um unless this council believes sending a really high millage rate out because that's a room that if we did not want I think there will be no
problem uh making sure and I I will help and I know if we all help we can have the this room full. I know that. I believe that. But and I don't want to I agree with you if if that was printed and went out. I I'm care more about uh
just having the the as much information as we can to set it at the rate that we feel good about. Um and and I guess tonight we are trying to make that decision
which will roll into it being I assume electronically submitted by the on the 4th and I'm I'm my thought would be >> 5 p.m. >> we don't have any input or we don't have the input we want prior to doing that.
So, if it's due on the 4th, could is it even possible if we voted on it in the evening of the 3, would that be enough time to Yes. >> submit the DR420? >> I was going to suggest you can certainly talk about it this evening and you can table a decision since you want to do
another workshop. You already have you're talking about the third, but you already have the fourth as a place marker date already as long as it gets into where it needs to go by 5:00 p.m. on the 4th. I know it would be a daytime meeting on the 4th. If you want to do an evening meeting on the 3 and then you
determine what it is then, then Joey can get it by the deadline the next day. But I don't want you to feel pressured that tonight is the military since you have a lot to discuss. It's on the agenda because it's the the regularly scheduled meeting in advance of the due date. But
you can have any other meetings between tonight and then and do it then. and it'll free up some time on your agenda this evening too because you have a lot of items to discuss. >> I think if we bring it out to the attention to Council Member King's point and we let them know this is the number
that we came to, it will absolutely get their attention and it would give us time for residents to to give us immediate feedback. We come in much more informed and uh I think we would have an excellent turnout on the third. >> Um so, Council Member Kings. Yeah, I I
just wanted to give us enough latitude to be able to I mean I'm not recommending that we go all the way to the top with this millillage, but I don't want us to set a millage rate that then we can't we don't have any maneuverability if it turns out that the
budget is bumping up against that millage rate that we have voluntarily set as a as a limit. At least that's my understanding. city manager. Am I am I correct in that assumption that whatever we decide on a millillage at least not
solid millillage but something to to discuss um under which we have that latitude. Um is that out of out of line? >> Well, no. I mean your duty bound has set a tenative mill rate and it always wakes the community up because the notice goes
out, right? And um and then you have discussions from there to the mayor's question earlier. You know, if you decide you want to go higher, then that could cost the city money to readvertise. Uh so, uh my guidance to you was we know high doesn't look good
when the notice goes out to the public, but you have a lot of unanswered questions and I feel that you must start high if you're going to set tonight because again, we have to first deal with the ordinance compliance number one. And then number two, you haven't
had any conversation about fund restoration plans and how many years that you want to restore the fund. And the millage you set now will automatically put a chunk of money into the bank to start year one of fund reserve balance. And that's why your
millage this that you set now is critical. Not to mention the fact that we still have a $4 million deficit. So, you need time to talk about what your fund restoration balance should be. And you and if you're going to decide tonight, then that number definitely
needs to be at least 8 point Well, yeah, it has to be high. >> It just does. >> Thank you for clarifying. That was my point. Thank you. >> Yeah. I think the story could go like this. We all heard about it today at 1 p.m. Not ideal.
>> Here's the rate, 10. It's nothing mailed to their homes, but we want to hear from you on this date because it's, you know, we need to vote and we can educate the public on, hey, this is a proposed rate. Well, there'll be potentially another
workshop more u two two public hearings and I think it can really help. The question is is could we we've heard that even if we met on the the 4th, city staff would have enough time, but it's due by 5:00 pm. So, I
think that that would conflict, which is why I think the third is potentially a good date or, you know, the more time to get the word out uh and and also get feedback, the better. Um, I guess if if that's not a good date or even
reasonable, that Friday prior, which is the 31st of July, do and I think tonight we can continue to talk about it. I mean, it's on the agenda. We can at least take advantage of this time together and work
through it. But what are your thoughts on having that as a standalone meeting with the goal of having the public be a part of it prior to submitting Mr. >> Anyone open question? Yes, >> I think August 3rd at 6:00 p.m. would be
beneficial time. >> Okay. Any other thoughts on that? >> It'll be do or die time. [laughter] >> I think that date works well. Um, I'm not sure I agree with setting a proposed
millillage tonight. Okay. I I do agree that we'd need to do it during that meeting. It's already being publicized out in the real estate world and all of that that we're going with the 10% milit rate like it's
already decided because it was on our agenda. and that gives a false impression to their our public. So for me, I think that um setting the rate tonight is premature. I know that in the past budgets, we've gone through and set
what objectives we want to see as far as how we're going to handle and this is an extraordinary circumstance. So we we really have to identify how long of a recovery period do we want. If we want to recover in one year, then stay at
that 10% and the citizens may like that. And you know what? I'm fine with that if they're fine with it. Um, you know, and that would be the fastest recovery we would have. Um, but some of them may not be fine with it. So, I think the 6 p.m.
on the 3 is very important because we have to get the feedback. >> Agreed. And any other uh do we want to make are there any other comments before maybe making a motion here on 6 p.m. August
3rd proposed standalone evening? Could it be a work? Should it be a workshop? If we'd be voting city attorney, would that need to be a special meeting? >> Special meeting. >> Okay. So, if we do want to do this, I
think we'll want to make the motion properly stating uh a special meeting at that date and time. I'll make a motion that we have a special meeting at 6 p.m. on August 3rd to further the
budget discussions and make a decision on the proposed military. >> Second. >> Okay, got a motion by Mayor for Tim Jackson, a second by council member Shoryak. That was August 3rd, 6:00 p.m. >> Okay.
>> And it's really the title of this agenda item, right? That's so it's all properly um [clears throat] >> May I say something, Mayor? >> Yes. Any discussion, Council Member King? >> Yeah. On the I like the first part of it, but to set the U millage rate on
that date, I think we're really pushing ourselves against the wall. I think that if we can do something tonight that gives us the flexibility that we need to, it doesn't have to be 10%. It doesn't have to be 10, it can be eight, it can be seven, whatever it is that we
decide on, it gives us some wiggle room. We're really pushing it to go to that late date, the night before it's due to the county appraiser. I I I would rather have the the like I said earlier the latitude to the the room to be able to
discuss it and get feedback from the people and have and and with no with no assurance that it's going to be an 8% millage increase. Why why aren't we giving ourselves that that latitude of to to discuss it
instead of pushing it out? You know what's going to happen? We're going to be here on the 3 and it's going to go right up to the wire. When I said do or die, that's what I meant. That it's going to go right up to the wire. And do we want to pressure ourselves that way?
I mean, we have a full budget book here with all kinds of information that staff has put together. I know I've not been through this before, but just common sense dictates that. Let's give ourselves some room to think. I think the city manager's
suggestion is valid and is sensible and and I have to say that I if I have to vote on a motion that sets that that that millage rate date when we talk about it the night before we send it to the county property appraiser, I'm going
to vote against it in all good conscience. That's but I may I may be I'll vote it too. So that's okay as well. I'll live with that as well. Thank you. >> All right, >> Mr. Mayor. >> Yes, Council Member Willis.
>> Uh, wouldn't we be discussing it still tonight anyway? >> We absolutely can. In fact, a motion could be made tonight to adopt it. I think what I agree with mayor pro Tim and the motion on the floor if you will uh was
that this would give another opportunity and uh to the concern on pushing it up against the wall if it's due by 5:00 p.m. on the fourth. Out of all the things in financial reporting, this one isn't one of the more difficult ones. I don't want to undermine. It's a DR is a
onepage type. >> Yeah. It's um just submitting a a document with a number. Yeah. >> Okay. So, my understanding was it wasn't u staff would have adequate time if we we finished that. Even if it was a late meeting ended at 10:00 p.m., they'd have
the entire next day, I think, to electronically submit. But um we are saying I think yes to tonight but also giving ourselves another opportunity which I'd like to get more public comment um prior. So that is correct. I
think the council could make a motion. I wouldn't unless we're getting in a very different spot from that conversation. I wouldn't feel good about it at this point. But um the motion's on the floor to schedule a meeting whether it's needed or not. And I think that was the
>> Well, my point is that we can discuss it. >> Absolutely. >> And bring up a lot of different ideas on this. >> No, >> we're adding another meeting. >> Are there any other discussion on the
motion to schedule a special meeting on August 3rd at 6 p.m.? Mr. Mayor, let me rephrase my motion so that we don't have any confusion if that's okay. >> I think if you maybe just want to don't
make it yet, let me know. Let us know what you want to change and then we'll see if it's needed to >> Okay. I had um worded it to select a proposed millage rate. >> Mhm. >> Um and we can just take that out.
I see. That's a good point. >> Um because we don't have to have that in there. Um as Council Member Willis said, we're going to discuss this tonight. Um we found out last year that we didn't
have to set it, you know, at this high rate that we had done before because we can modify it. So, it's not the end of discussions, but maybe we need to rephrase that um that motion to say um I
propose we have a meeting on Monday, August 3rd at 6:00 p.m. for feedback for residents and any pending decisions regarding the uh abalorum tax rate
>> before second or formally uh getting us ourselves tangled up here. Um, city attorney, I think if you've heard what we're trying to do here, do it's Mayor Pro Tim. Do you have any recommendations? Uh, we've established it needs to be a
special meeting as far as the title of the meeting and what it pertains to. Um, how important is that? Um >> if if you're going to change uh well if there's a possibility that the city council would adopt a proposed millage
rate in a on August 3rd then it needs to stay a special meeting. If the council were to say adopt the proposed millage rate this evening then there would I'm just it's hypothetical then you know the the uh August 3rd meeting could be a
workshop but but then if we wanted if we decided after going through the details of the budget that staff's provided to us to change that mill rate it would have to be a special meeting on the third anyway correct
>> may I jump in here I'm not suggesting we set a millage rate tonight at all. I and if that was what the impression I was giving, that's not what I intended. All I'm saying is that following the suggestion of our city manager that we set a millillage a potential
ceiling so that it gives us the latitude to determine what the millage rate is going to be as we move forward through these budget deliberations. That's all I'm saying. put a ceiling on it so that we can't, you know, if we put a low ceiling on it or if we don't put a
ceiling on it at all, we're all over the place. I would just assume no that, okay, we can tell the people we're not going to go above a 8.9 or we're not going to go above this. Um, based on the city manager and staff's recommendations at this point, at least it gives us a
little bit of room to breathe. >> So, that's helpful clarification. And I think what you're talking about is your view on what we would set. And what we're saying is coming to that what yes would give us room, >> but we wanted to have another date
because making that decision tonight without more public input. And while we could and have the latitude and maybe some of the benefits uh with is is higher turnout, um the the the idea is
to continue with the agenda item tonight. And in the event when we go into it tonight, we know we have another date if needed. And so the motion I think Mayor Pim is trying to get >> I'll just resend my motion and y'all figure out what we need to do.
>> Well, I think the motion that you said was a special meeting. the original one it was at 6:00 p.m. It was on August 3rd >> and you know it >> and it would finalize and it would finalize any proposed millage rate. So I don't know why we're going here but I
can resend it and somebody else can reward it. >> Mr. Mayor, >> no I'm trying to help. I understand. >> I I think we may still get a full house tonight [laughter] >> because it's already out there that we're considering. So if we want for the
sake of time, we're in a workshop here to [clears throat] know that we have at least established that that time and date works. Uh if we want, we can move forward and then uh in the meeting tonight during the public hearing, we won't have to go back through this. If
we feel like we're not ready to go, >> we can make >> I think the correct motion at that time >> except for that we're in a workshop now. So can we make this motion in the first place? >> Yeah. In terms of scheduling a meeting, I I don't have any issues with the council.
>> Okay. >> Having a vote on scheduling. >> Okay. Thank you. >> Yeah. Or if we want to just go ahead and schedule it now, we can be done with that and then at the end of the meeting, we can can't strike, you know, vote to
so there is a motion on the floor for that date and time to discuss that. We've had our discussion. Council, do we want to move forward with a roll call or >> Yes. and then we can obviously cancel it if we want. >> Okay, >> does that sound good? Any further
discussion? Any clarity on the motion? City clerk's office, are we good? >> Can you clarify it, please? >> Yes. The motion was uh for August 3rd at 6:00 p.m. >> Right. >> Uh to have a special meeting,
>> special budget meeting. >> A special meeting, >> right? >> On the >> uh Yeah. August 3rd, 6:00 p.m. special meeting to trying to find the exact agenda item we have here. We're going to
have an additional meeting to discuss whatever the title and name is of that which is >> okay. >> Resolution 20 item 9.7. >> Okay. >> And uh we are maintaining in the
discussion. We are going to keep it here tonight. We just wanted to at least have another date if needed. And if we actually do adopt it tonight, we'll obviously not have any reason to go to for that spe special meeting. >> Thank you. >> So I don't want to try to word it when
it I don't think it's necessary. It's already written out here. >> That's okay. >> But Mayor Prodim did say that tenative proposed millage rate. Is that good? >> That's fine. Thank you. Okay. City clerk, please call the role.
>> May prot Jackson, >> four. >> Council member King, >> four. Mayor Morrison, >> four. >> Council member Shiaak, >> four. >> And Council Member Willis, >> four. >> Okay. Thank you, council. We've got that. I think that definitely changes
the uh I think we're going to pursue it with the best of intentions tonight. We're not striking and and let's see where it goes. And having that, I think, is going to help us. So we have now established we extended the
existing date on the the uh 8 the August 18th and we've also now added a standalone day earlier uh on Monday August 3rd and I think That's
that is excellent. We we don't need to keep adding dates. We can kind of chart our course from there as we work through it. And so with that, thank you. Uh something else that I think I said and just checking in. We're at 3:43 p.m. Um
we've talked a lot about the code. Uh and I think we'll get into it tonight. We want to take this meeting up and and at least get an understanding. Council member King has has shared kind of her thoughts on the latitude with the the millage rate. I think we've heard about,
you know, so many unknowns with the budget. Um, city manager, what do you need us to maybe get a little bit further down the road on in the big discussion of the budget? So, I think
it's one of two things or both depending on how how you proceed. I really feel that tonight's conversation that you're going to have is important to start now. >> You have a very full agenda and you have
important issues on that agenda that are going to require your attention. Um, the people that they impact, the staff will be here for you to answer those questions. Um, so the important issues ahead of you are the ordinance. we can focus on that here tonight or this
afternoon so you understand that and discuss um not only in whatever word you you choose on the ordinance says that you're supposed to restore your reserve fund balance to 20% within two years
that two-year clock from your staff's perspective began February of 25 so we are very close to the end of that two-year period and there is no fund restoration plan in place. So you you understand that if you don't want to
elevate have a high millage rate uh for next fiscal year, then you're you're going to want to discuss the word either suspend that that caveat of that of that ordinance or however you want to phrase that to where you are not
obligated to comply with the two-year window. And um we can look at revising that ordinance in the future. Um we don't have to have a time limit. I I don't know what past councils were thinking when they put in a two-year uh window there. Um so you we can amend
that ordinance later, but you can discuss now what you want to do. Decide, you know, if get a consensus or how you want to proceed on how you're going to determine it later. Are you going to suspend that or you going to stick to it? if they can deliberate that and and
then that way you'll know when you get to it. Well, we've already kind of got a consensus. We're going to suspend it. Um and then you can start talking about your fund restoration and we can have fund restoration conversation. Now, if you like, we have the millage rates
tenative um on the chart. Um we have the what would look like if amendment three passes versus not. And you can start conceptualizing, if you will, what a fund restoration plan would look and feel like from a millillage perspective for two years at the four year or six
year. And you can even talk about, well, what would it like if you know we did a one year or I'm sorry, a three year or five year. Do the odd numbers and we can calculate those things for you. I don't know if Joey can do it on the fly or we can come back at a future workshop to do that. But I think make use of time now
so you don't have to spend so much time this evening. That's great. Thank you for refreshing. So, the city manager is referring. We are in workshop now, but we'll be taking up the first item for discussion is 10.1 uh titled fund balance uh policy
ordinance 1820 discussion. And so, can we make a little headway in this meeting? Council, do you want to uh briefly talk about that? >> I have council member Willis. >> I have a question for the city manager, >> please. Restoration point. >> Yes, sir. um in your dis when you
notified the state. >> Yes. >> What was their what what was your impression of how they would feel about us moving in a maybe a two-year period to restore?
>> They gave no real um they didn't weigh in on a time limit. They basically said that you have to have a plan. You have to determine what your plan is and you have to stick to that plan. And they mentioned cities that formulated a plan
and didn't stick to their plan and how they are with the state now. Um we have to show progress and the state is understanding when it comes to setbacks beyond the city's control.
>> As long as we account for if there is a setback, we account for that. And every year when it comes to the the budget, we revisit our restoration plan when it comes to the millillage and that will determine, you know, that will gauge
when we'll restore it. So if that answers your question. >> Yes. I'm just more or less >> what I'm talking about >> thinking of if we took two years to restore, >> right? >> How would that be received? >> That would be wellreceived. I mean that we would get out of their hair and out
of their rate. I prefer not to have state oversight in our business and and so um yeah that would get us off their books >> trying to balance if you will between getting the state off our back or out of our hair >> yes
>> what little we some of us have left >> but uh also the impact on our citizens >> yes >> so just to reach that equilibrium if you will >> yeah they they don't impose a time limit for you to restore they impose um a
plan. You have to have a plan and you have to stick to your plan and you have to report your progress. >> Well, historically we've been third lowest millage and to suddenly go the other way >> Mhm. >> significantly. Um I think we're showing
that we're willing to bite the bullet, if you will. >> Absolutely. >> That's all up. when I hit there's no issues with the state other than there's a plan what we which is great question I think the the
the our own policy from the 2012 ordinance that we'll get to in tonight when we discuss talks about upon uh noticing uh 2-210 it it says that uh unassigned fund
balance okay uh the city manager okay right here if after the annual audit. So the annual audit as the presentation showed happened this February, right? Uh prior committed or assigned fund balance causes the unassigned fund balance to
fall below 17%. We learned that happened uh of the general fund operating expenditures. The city manager will so advise city council in order for necessary action to be taken. We've been advised um and I think we we're deciding what
that necessary action is to restore the restoration plan. We are in August um and he is looking for our direction on what that plan would be. My thought would be and it says the city shall take
action necessary to restore the unassigned fund balance to acceptable levels within 2 years. assuming acceptable levels is what the code says. I think we all agree with that. Um, as far as saying we're 18 months in and we
have five months to go, uh, the thought I had was the intent of that was well, we have two years that it's happened should have been last February on the 20th >> to fill that. >> One way to look at it is we have four to
five months. The other way to look at it is well we we just found out uh if and at minimum I think knowing the state this is our code once it done in two years and it's 2
years worth uh so it's almost like well should do we have four years to restore two years of uh for whatever reason my thought would be instead of uh you know suspending or striking just an idea is that we would essentially
start the clock. I think the earliest I would go would be February of this year because that's when we I think it was really brought to our attention and then go two years from that at an absolute minimum which would be February of 28.
>> Yeah. So to your >> and the plan could state this or four years or six years, you know, and I think I'd be more comfortable with changing the years. Um, but you know, going in and changing the code, I really don't want to do that.
Uh, it's requires two readings potentially. Should we just have a plan that honors and respects the code acknowledging here's the plan, here's when we found out about it because it says once noticed.
And to me, we could have a plan that we adopt that I think aligns with the spirit of this. Those are my thoughts on on it. And I think if we had that plan completed
in the next I don't know when are we when would be a realistic time to have a plan complete by the end of the with we would approve the budget with the plan simultaneously. Is that what we're thinking? >> We would >> okay so September or yeah September we'd
kind of work parallel with it. The plan would be going along with the budget. As we're talking through numbers, we'd adopt the budget and this budget has an accompanying plan to get us restored to acceptable levels,
trying to establish a deadline for ourselves, right? So, if we can go back to some of the things you're saying, if you're starting the two-year clock now, um then and and you're going to maintain that
provision of the ordinance because I I'm not proposing rewriting any ordinance at this moment. I'm proposing that in the attorney can give the language, but you look at the existing language. If, let's say, you don't want a 2-year plan,
whether you're going to backdate the two years to February 25 or you're going to start the 2-year clock now, let's say you don't want a two-year plan, then in and in your deliber deliberations, you'll still be in a position where you're going to have to adjust the
two-year requirement. And that's why I've used the word suspend that provision. as as uh you well know councils pass your or your rules that you follow in your codes and you can amend them as necessary. Um and again temporarily suspended is the term I come
up with whatever language works for the council. It's something that you have to vote on but what regardless of when you start your clock if you're not satisfied with the two-year plan then you're going to have to address that provision of the ordinance.
Okay. And I know some of this is interpretation. The other way to look at it would be if we adopt the budget September, right? That's the last day. >> Mhm. >> You know, it's it's
2 years would be technically September of of 28. to the 20 I guess or you know because it's not specific within two years of what of notice of when it happened of after the audit after the
the plan is adopted and so the other thought that came to mind is after the plan's adopted that plan starts on a date and you got two years to restore it I could it because it's vague I think the more conservative would say February
and Mhm. [clears throat] >> I think that makes sense. I'm going to ask a tough question. I think what happens if we because this is our code. What would happen if we do not follow it? We get past the even the most stringent
two-year just say in four years uh or four months, I'm sorry. And and it's viewed that no, that was when the two-year time clock started. Uh I guess what are some of the legal risks with that city attorney? >> Well, there's no penalties specifically
provided in the section. So, it's an internal it's in really an internal financial policy of the city. So, you know, there are no penalties specifically enumerated in in the code, you know. So, it is a it is a policy. So
I would look at it like as a policy and you know what happens if you know you don't follow you know a policy right I'm certainly one you could be criticized for not following your own policy you know two you know people could say that
you that city's not conducting business in accordance with its own responsibilities that it established for itself but there's no specific penalties outlined in here and and And and if I could, I I agree it is this section is
subject to interpretation. There's kind of different ways you can read and look at it. Um you know, but if the council wanted to clarify in an abundance of caution this provision of the code, then you you would need to provide a little bit more
clarity um on on when or when the time period actually starts and how long. um it may not be a specific hard and fast um time period to come into
compliance. It may just be in accordance with the plan approved by this by the city council. Right? If the code read that way, you know, then it would be up to the council under whatever circumstances um are presented to pres to adopt the plan accordingly
um rather than hold yourself to a a specific time period. I mean that's >> I would feel comfortable with when we adopt the budget this year. It comes with an accompanying plan and the time frame in there I think should respect a
2-year period. In fairness to ourselves, the the if we're in violation of past the two years, well, that hasn't happened yet. If a miracle was pulled off, we able to do it. But what has happened is it's fell below the threshold. So, we are already in violation. and the fact that upon
notice, which I think we all read that we we've got the plan coming in, we're in compliance with that. We we we're not we did not receive a plan historically. So, that's a second violation. So, I think from the time we've noticed in our
city administration staff in response, we can put a plan together that is adopted and it actually doesn't even say that. I think I appreciate you know that the council well maybe yeah it does. We
approved the plan and we set the time limit um to two years um cuz I think that was the intent is to not go longer than two years but to
backdate it or to do it from actually when it happened despite none of us knowing. I don't think that was ever the intent and fairness to us. And if if Go ahead. >> I was going to say >> I generally agree with that. I think
maybe one additional word would have clarified. I mean, the way it it's presented, the manager has to prepare and submit a plan, right? Submit it to whom? Submit it to the city council. What are some of the options? They're all budget and appropriation options,
right? To bring the fund balance back to its um, you know, established level. Mhm. >> And then the last sentence says the city shall take action necessary to restore the unassigned fund balance to acceptable levels within 2 years. >> Had that just said the city council shall take action necessary, it would
have been more clear that that two years starts after the plan is presented by the city manager, considered by the city council, and then the council takes action to restore within two years is one reasonable reading. And I think that's what you're alluding to. the
budget >> this year will kind of start the clock because the council's being going to be presented with a plan. The manager has already put the wheels in motion and through this through this meeting and through all the materials that you've been provided to lay out all the facts
so you can finalize a plan. >> Can I a point of clarification? Does that does that imply that the that the uh the reserves need to be restored within that 2 years or that a plan has to be in place that indicates that it
will be restored and then the council determines within two or four or six or eight years? Where where where are we with that? I'm confused. the I can give you my view and finance, you know, feel free to chime in, but the code says take
action necessary to restore the unassigned fund balance >> to acceptable levels within two years. >> So that would force a millage rate if we decided to do that. >> Well, bring you'd have to bring the unus
possibly. I mean the code contemplates ex uh reduction in expenditures increase revenues in a variety of fashions can those are types of steps that you can do to help restore. I just want to point out too that the code that we're talking about talks about
unassigned fund balance which is which is a defined term when the city adopted ordinance 18-202 it was for purposes of implementing the Gatsby 54 rules >> right
>> so that created that that those rules and I'm not an accountant and I don't want to pretend to be one but establish a whole new reclassification of how you descri cribe accounts, right? So, this section is talking about restoring the unassigned fund balance and that's a
that's a term of art, right, Joey? Under Gatsby and under the code, and that's that's a 210 issue, not a 208. >> Well, well, both use the unassigned fund terms, but they just compare it to a
different denominator. One compares it to the adopted budget and one compares it to the operating expenditures. >> Well, that may I would suggest to you that 210 does not use does I don't think uses the
term unassigned fund balance. So, but I digress. >> Well, it does in that last paragraph like you said a minute ago to restore the unassigned fund balance to acceptable levels. >> No, I'm talking about I may have misspoke. 208 does not talk about
>> unassigned fund balance. Talks about a reservation of fund balance. >> So which one do we want to adhere to? We have we have a plethora of ordinances it seems. >> If if I may. So the 2-year ordinance is what we're f we have to 208 is what you
need to get to to get to the 16.7. If you achieve 16.7 which would be at our estimated um um revenue about 3.3 million right you have to do that if you achieve that you will achieve 210
because that is a lesser amount but if I could go back to you know the mayor's point and something Anthony went over is in 210 sub paragraph E it talks about the general fund and it says if after the annual audit prior committed or
assigned fund balance causes the unassigned fund balance to fall below 17% of general fund operating expenditures. The city manager will so advise city council in order for the necessary action to restore it to 20%. So we are after that audit or several
months after that audit >> but we're after that audit. I presented it in a manner that you should have been told February of 2025 but that was after that annual audit, >> not this annual audit. It was not my duty or responsibility. I wasn't here.
>> Mhm. >> It was it was the duty to notify you after that annual audit. So I think because you've had an annual audit since then, you were bound to that annual audit which starts your twoyear clock.
That's my perspective. >> In February of this year >> of 25 >> of 25. Okay. >> Yes. >> Now so I've got >> I'm sorry. So we're well into that window now. Mhm. >> Okay. So, within that window, are we
supposed to resolve the problem by making sure we have restored the the uh the amount that we're talking about or or do can we lengthen that? That that's just the window to to say we okay, we've got a plan, we're going to do something
about it >> or do we have to resolve it at within that window as well. So if you take that interpretation, but we are still after that audit. The the prior leadership did not notify you. So technically I'm notifying you after that
audit, >> right? >> And if you want to interpret it as you've been so notified and we are presenting plans now as a part of your current budget process, right? >> Then you can stay within the ordinance that says two years. >> Okay?
>> And your two-year clock would start now. >> Okay? If you want to restore the fund balance within two years, that's where you'll have to have a conversation about the the ordinance itself. If you want to follow the ordinance, then we have the millage rates that you will need,
>> right, >> for that one of those. So this year would be we would say is your first year of your two-year and then the next year millage rate would be um may or may not be impacted by amendment three and we
have those numbers if you choose to stick with the ordinance and have a two-year fund restoration plan >> which would drive the millage rate skyward. Well, so remember it's like the attorney said, we have a combination of
reducing expenses, increasing revenue, and revenue is not just property tax, but to your point, it is 40% of our revenue stream. So yes, it will involve like could likely involve a millage increase. >> Okay.
>> If you cannot reduce expenses. >> Okay. Thank you. Mhm. >> Yes. Mayor Protown. >> Okay. In the presentation that um our finance director gave us on the millage rate
scenarios, I wanted to get a clarification on code 2208 because it says 16.7% unassigned of adopted budget and GFOA says 16.7%
assigned plus unassigned >> with an aster. So, what are we doing here as far as the the numbers there? >> So, we'll get that other PowerPoint up for you. And this is a point that was brought to the council's attention during the last audit. You the GFOA, our
our requirements are more stringent than the GFOA. The GFOA is saying you're combining your assigned and unassigned, and you have to have a 16.7% minimum of assigned and unassigned. >> Okay. Our 16.7
is for unassigned only. And and so if we were to combine the two, then we're basing it on a higher number, >> right? >> If we go with unassigned, then we're basing it on a lower number. >> But and that was a discrepancy in each
audit because that's where you bring in your cash forward. Your cash forward was being counted as assigned and unassigned, but we were spending it forward. So, as we just had the discussion about um what we might want to look at as far
as the time period for us to restore that, we're looking strictly at unassigned. We're not having to look at unassigned and assigned. >> And if we were to do it within our own code, we could determine, do we rip the
band-aid off for the first year and have it done? I mean, seriously. Or do we um go a more conservative route and give ourselves more time overtime and that can even be in excess of two years.
>> So, to your point, there is a slide on the screen that would show a tenative millage rate for a 2-year restoration plan, annual reserve contribution of 1.6. But again, additional revenue is needed
because we have a a $4 million deficit that we need to address. Yeah. And I think it's really important because those questions I just want to go in to answer that I think it's really
important. I am looking at the actual I think it's clearly we may not be able to say we all agree or anyone reasonably would agree on the interpretation but we can agree on some some
clear items from the section 2 210E minimum level of assigned fund balance that we've been working through to answer the question Tim two years and some of the things council member King
there's like four major events that I'm bringing out of this and our city attorney I think was talking about he can help me get on track but the first thing is the annual audit well that happened right we undeniable we all
agree we know who did that and then it says the threshold we've done the measurements we've done that then it tells us who it doesn't say city council it says the city manager will advise. And so it's after the audit. It doesn't say before anything.
It's after the audit. When were we notified? So it's really after two audits we were first notified. We can't control that. That's that's where we are. It's been after two audits we were notified. I think we can say as
a council together in the public eye that happened today and the statement was read into the record. >> I think that's Yes. And I think that that's the the the cleanest and most transparent way cuz we all now can understand it and we've been presented
with records. We in full transparency obviously um some signals were given to us. Looking back, we can see some information from the audit, but today we are notified.
So, the WHO city manager has officially and formally and publicly where we're all in the same room noticed us today. We all agree it should have been at that February meeting, but it did not happen. So, today we've been noticed and it is
after the audit. Then it says he will advise the city council. We've He's done that. That's us. if he advised you individually, that wasn't the council. He advised us together in a meeting. So, I think when I'm reading every word of that,
uh those people and entities have been in compliance. I don't think any of us likes it because we want it to be sooner than it did, but it is after. and the city manager will so advise the council in order for the necessary
action to be taken to restore the unassigned fund balance 20%. So he isn't that isn't giving a PL plan. He's just we've seen today this is if you want to do it aggressively to your point one way to do it is
increase taxes to this rate and you can restore it. But it further defines in the next sentence what exactly the city manager is to do. And it says the city manager will prepare and submit a plan. That has not happened yet. He has advised us today. The advice has
happened and it says to answer some of the other questions committed and are assigned fund balance reduction as city manager and city attorney said they tell us how to do it. Expenditure reduction is the first thing that the plan should
include. So the what who city manager what is a plan? Expenditure reduction is one and or as we've discussed revenue increases. We've seen some of those scenarios. And then a whole new
sentence. The city shall take action necessary to restore the unassigned fund balance in two acceptable levels. And then it tells us how long we have within two years. That 2-year clock, in my opinion, cannot happen. This is sequential
until after we the plan has been submitted. Today we've been advised the plan needs to be submitted. I think it needs to be timely before maybe the next workshop and then we need to take action
which I think would require adopting the plan and two years would would start in my opinion after we adopt the plan. That's one
interpretation. or I could certainly understand to go no it needs to be in two years despite when you were advised uh despite when when the audit came out despite when it happened I think we
should reasonably because it's two years of misses that at minimum we would give ourselves two years to restore the first one. Here's another
interpretation. It went down in 2024 a certain amount. So, we give ourselves two years for that and then you could argue you stagger it and then you got another two years to do it. I'm not going to get wrapped around the axle on that part of it. But I just want to
really emphasize that I do not think I can see how that we when we read this in sequential order why we would not start the clock. We've been advised today. We can acknowledge that we need to now receive a plan. The city manager is
trying to get and our finance director what the plan would include. We I think it should have expenditure reductions. I think it should have revenue proposals. We need to adopt that as timely as possible. And that plan needs to be um
to respect the two-year time limit. So, if we adopted it in, it's August here shortly. If we adopted it August and September, then it would be August or September of 2028, uh, which is just before that year's budget.
>> So, Mayor, if I can just I'm sorry. Go ahead, >> Mr. Mayor. This is why I was trying to, you know, I got wrapped around the the, you know, being able to communicate at that moment, but this is why I'm trying to get to. We haven't even looked at the
details of the budget with and clearly everything has said you have to look at expense reductions. There's new legislation before we can even give an increase of a certain percentage. There's new state legislation that says we have to go through a budget cutting
exercise. we haven't done these things and we're looking at setting the millage rate proposed >> um when we haven't gotten those steps finalized either. So this is why earlier I was saying we need to do that after we
do some of these things because we haven't gotten the process with our own ordinance done and we also have new legislation at the state level that requires it if we're going to go up. So the next step instead of selecting
you know a millage rate at this point we've got to go through these expenses. We've got to have the hard discussions and we have to do that around based around what time frame we're looking at and whether we're going to go by the code or suspend it. And I I agree with
you that if we were just now noticed, then we should go from this point for the period of two years, you know, because >> it doesn't put a time limit. It just says after on this, you know, the city manager, I'm not disagreeing. I think,
>> right? Well, it speaks to a specific audit is is the point of contention. It speaks to the audit that was conducted on the fiscal 24 budget that was presented to the council February of 25. If after the audit the fund balance went
below 20% and it did then council shall be notified and the manager shall implement a plan that will be achieved accomplished within two years. So I mean literally interpreted it was that audit but you're not getting noticed until now.
>> Correct. And so you're either way you have a code interpretation and you're gonna make a decision on how you're going to move forward with your code. If you're going to go, it was February 25, the attorney can help with understanding
how you can not have to comply with that provision and move forward with your conversations. If you are going to say no, two-year clock starts now and then you start deliberating on what's a two-year
restoration plan look like and what's that going to be from a millage standpoint and you hear from the community what that would do and you decide, well, we can't do it in two years. You've locked yourself into two-year commitment by saying, "No, the two-year clock starts now." And so therefore,
either way, you're in a position where you you you you have to deal with the two-year thing. Suspend it and and direct me and we'll provide a two-year, three year, four year, fiveyear options. We'll provide that to you. Or or you get into the conversation and realize, well,
we're locking ourselves in the two years, but now we've talked about it and what that would look like, and we don't know that we like that. So now you're going to be in a position where you're going to have to suspend your requirement. then you know so I think ultimately um you know we have the item
on the agenda this evening uh to determine how you're going to proceed um perhaps you just suspend compliance with the ordinance at all until it's revised and presented back the attorney can weigh in on this and then you take two years off the table whether it started
February of last year or you start it now you just take two years off the table until you're able to discuss reasonably the time what a restoration plan would look like and [snorts] and then you vote on that. >> I think I would rather as understood some of the what happens because it's
our own there is potential scrutiny. I would feel better susp if we're going to suspend it suspend it later try to pursue complying. I would rather raise my hand and say we are out of comp if that is the the we are we recognize that
we are out of compliance. Our intentions are to pursue two years. I do think because it was for one year's failures. It is interesting to go should it be four years. You're going to try to tackle the 2025 or the 2024 year. That's what we're
really talking about. >> In two years, it gives you two years, but you we're going we're dealing with two years of misses. And so, you know, and then put a plan. And if that plan can be interpreted to not follow the code, I'd rather I don't mind taking
that on. I think that what we're doing is the right thing. And I I would agree. And to your point, >> no, today we checked the box of that first part that we were advised as a council and that part that says the city shall take action. I think the clock
should start right when we step one is to accept the plan because if you put a plan forward and we don't like the I mean it's undeniable that we would have to accept the plan. That's the first action.
>> Well, we have the authority to set the budget. A plan could only go as [clears throat] far as as the council could. So, >> understood. Well, and and you've heard me say this before. It's these things have happened. We are out of compliance with our code. Yep. What matters now is what you do now that you found out about
it. And I think you publicly deliberated this issue. The public can see it. And your actions now are what are you doing once you found it out? And I think that demonstrates responsibility and you know being conscientious of of the situation.
>> Rough estimate. What was the the 2024? Was it 1.2 million roughly? uh the estimate for what >> total dollars >> of uh unassigned reserves >> period of two years that took it it went
down to 10% if I recall the auditors yes the unassigned reserved in the 24 >> um I can look it up >> roughly because this raises an interesting issue it's a moving number 20% of a million dollar is $200,000
so what are you actually restoring and I think well No, you're restoring the percentage. It has No, that's silly. I get it. So, the percentage uh whatever it is, which is another mean when you reduce expenditures,
>> your 20%, you don't need that same amount of dollars. >> Um you don't need as much pressure. City attorney, are you I think want to weigh in on if it starts action, if we acknowledge that we received it today, we publicly
deliberated it. we adopt a plan and we start that clock in two years or we say we want four years to res what I was going to say was the first two years would be to restore the 2024 amount and then the next two years would be to restore the 2025 amount however that's a
little tricky I or 10% in two years and 10% in the next >> I just want to talk generally about I think what what you're alluding to mayor about the importance of the council establishing and adopting a
plan. You know, once the council adopts that plan, we we can cross the bridge on the two years, whether you know it's the plan is going to be a two-year plan or whether or not you didn't meet the two-year. That that's irrelevant. What's
important at this point is the adoption of a plan to restore unassigned fund balance. And the manager is correct in that when it was first noted in the audit 2 years
ago that triggered that time period for the city to take action and the manager to duly advise the city council. >> Um unfortunately that did not occur. Um, but what's important now is what I think you're alluding to is plan first and
then we'll deal with the >> any, you know, if there's a conflict or inconsistency with the plan and the code time period. >> That's the first point. The other point I want to address is
this plan has to restore unassigned fund balance and I think the council needs to be clear on what that unassigned fund balance target is in terms of a number and as you alluded to mayor you know
when you reduce operating expenditures the section 210 is 17% of operating expenditure Right? So the lower the expenditures, right, the lower the unassigned fund balance has to be from a mathematical
standpoint. Lastly, in order to determine the target, I don't not so sure the target even though it's a code provision is 208 of the code. Um, when you look at what's in the agenda package from the audit,
Joey, what was the auditor talking about when when the auditing comment was made? Because the auditor was talking about not complying with the target at that time the audit was taken. And I think the what the auditor was alluding to was
not complying with the target in section 210 of the city code which is 20% of total operating expenditures. >> Right. H >> and that and that number is is I think
from your presentation Joey um I'm not sure I think 210 is 2.76 million is what we're the city's trying to restore >> the that would yes the the number related to the 210 is the the
other number not the 3.3 >> right >> and 2.76 million. >> This is the most recent audit that's in the backup. >> Y >> yes. And and I'm currently looking for the uh the auditor's comment um
>> in the well-prepared agenda item. I mean, you provided that as back. >> It's highlighted in yellow. What's >> highlighted in yellow? I don't like 108. >> Well, it's 108 of the report. And while he's looking for that, it's just I just think it's important that if
the council's when it goes through this budget process is to identif identify what that target is to restore unassigned fund balance. >> That's but see that's different. >> That's why I'm saying what it
is the same. >> Yeah. All about [clears throat] unsigned. That's not even correct. >> And that's the year prior. >> This is what you're looking at here.
>> That's about minimum 20% of total, >> right? That's why I'm asking because the >> 12 I think of the audience. >> Yeah, it's not in the >> I I would my comment on the 16.7. I'm not sure. I know that aligns with that
section of the code. But we we have 16 point >> I thought that was the same number we used, but I'm not saying that he's necessarily talking about our code. He could be referring to the GFOA. >> 16.7 is a GFOA recommendation, right? Correct. And it's what the the council
reduced uh it to pro last year during the budget process could be from 20%. coincidental. Not I'm not saying because he doesn't cite that section of our code >> that >> he says or your internal code actually does. Okay.
>> Well, so we do we want to establish a plan. Is that what we're saying? >> Well, so I have a question. >> Yeah, I have a question for you. So, if we could, if you're going to stick with the two years beginning now, then can you tenatively adopt the two-year
restoration plan this evening to be in compliance with the code as you're presenting it? And then uh subject to the budget workshops that we have and once you get into the restoration side
of it and how much we're we're able to reduce expenses and what how we can increase revenues and then come back and revisit the two-year plan at that point and say we prefer a three or we prefer something different because of what the
mill rate is looking like. And that's a question for the attorney. Can we adopt a tentative fund restoration plan now at two years so you're in keeping with the code as you're interpreting it this evening? The clock starts now.
>> I was a little bit looser. I think that we've been advised now we're going to give you feedback and then we would adopt the plan in the next 30 to 60 days and inside that plan we would give ourselves I think it only makes sense to respect it would be at the end of a
fiscal year two years from so we adopt it by the end of this budget to be two years >> beginning October 1st >> 28 >> well that would that would be the end of it correct >> that I that's what I'm leaning towards Yeah, >> I think.
>> Okay. >> And so, city attorney, as far as a plan, you were saying that what's important, we can go back and, you know, if we even want to make that long or whatnot, but establishing that we want a plan is the
priority and acknowledging that, um, could we I think we all wish we could give more feedback on what goes into the plan. I think these vote we will have some time tonight during the discussion to actually get into the which would be good because that'd be public. Well, I
think we should do this and that and use some of those ideas. But if if we're in we've got just say that next August workshop um before the budget we adopt a plan or we
it's hard to it's hard to approve a plan without coming to agreement on the budget. >> I I mean it's it's like so can we do those co- terminus together or whatever? >> Yes. >> Okay. Okay. So we don't need to adopt a
plan. Our task this year is two things. We need to adopt a budget and unlike most councils unfortunately we need to adopt a restoration plan as and we could literally I assume incorporate it as a part of the budget. I mean that's really
transparent to go. We acknowledge in here management's notes that this please see the attached uh plan >> and that'll be the driver. Okay. >> And if there's any scrutiny on that, I mean, well, we'll just have to face
that. And I think uh >> the best of intentions here. So >> is that >> that's that's clear guidance. I mean, we you need a framework to structure your conversations and that framework is two years. >> We don't need any motion here. I don't
think we're just in the workshop. But maybe if we want the discussion to give clear direction, we could choose to do that. >> You just have to think about how you're going to approach this on the agenda tonight because we had the millillage item as well as the ordinance item.
>> Previous guidance was to switch those two on the agenda. You can approach that tonight at 6. >> Do you think we still should move it up 9.6? >> Yeah, I think so. I I think there was a couple of items in there that one you can we can put off to another month you
can substitute and then there's another one I that you might just want to move to the consent agenda and that's the handbook. Y >> if you if you all I not making you vote now, but if if you get consensus to just put that under consent, we'll be done with the handbook and maybe move the the
um ordinance item down to that number and that will precede then the millillage conversation. That's great. We'll do that at the beginning if the council chooses approval as agenda as written. I hope we get into the we take that item up and we start feeding giving
input on what we believe the millillage should be and then when we get into the fund restoration I hope that we talk through like the actual nuts and bolts of how we what we believe after we've learned this is there and >> that would give city staff I don't you
know a lot more clarity between now and our next meeting and maybe a a very rough draft plan can start coming forward I think it would just accompany the budget. It'd be kind of in the back of the budget and we would approve it all together.
>> So then we'll have a figure to work with. >> Yeah. >> I right now it's kind of high in the sky where it's ephemeral I guess is the word. This will give us something something tangible >> for me. the budget we passed pass needs
to meet this plan that we want to do as we're okay and it would be good to change that code sometime in the future but not while we're under it I don't feel it's good because it is not >> clear
okay well we're at 434 u what do we want to do I I could use a quick break uh or >> we want to adjourn We've had enough. >> City man. Anyone opposed to adjourning? >> Good breaking point >> for the for the evening.
>> Yeah. >> I give this an hour and 25 minutes to get ready. >> Absolutely. >> City attorney, anything? No, sir. >> Okay. Well, with that, we'll go ahead.