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DRAFT 2021-07-27 Workshop Minutes DRAFT JULY 27, 2021, CITY COUNCIL WORKSHOP MINUTES, PAGE 1 OF 3 CITY OF OKEECHOBEE, FLORIDA JULY 27, 2021, CITY COUNCIL WORKSHOP DRAFT SUMMARY OF DISCUSSION I. CALL TO ORDER Mayor Watford called the Workshop of the City Council for the City of Okeechobee to order on Tuesday, July 27, 2021, at 5:00 P.M. in the City Council Chambers, located at 55 Southeast 3rd Avenue, Room 200, Okeechobee, Florida. II. ATTENDANCE Roll was taken by City Clerk Lane Gamiotea to establish a quorum. Members present: Mayor Dowling R. Watford, Jr., Council Members Noel Chandler, Monica Clark, and Bobby Keefe. Council Member Bob Jarriel was absent. III. AGENDA A. The City Council scheduled a workshop session for Finance Director India Riedel to explain the basics of the City’s budget. She accomplished this extremely detailed presentation with the assistance of 39 PowerPoint slides. Beginning with revenues she reviewed where the source of each comes from and any that have restrictions as to where they can be expended. Specifically, revenues for General Fund include ad valorem (property) taxes; Other fees encompass the utility taxes for electric, natural gas, and propane, with the 10 percent paid to the City, the maximum amount Florida Statutes (F.S.) allows municipalities to charge is adopted by City ordinance; Business tax receipts is a tax adopted by ordinance as allowed by F.S. and is paid by individuals operating a business within the City; Public service fee is another tax that is charged by City ordinance and is a one- time fee paid only when a structure is built on vacant property with a daily pro- rated formulated fee that helps to off-set the cost of services the first year the building is finalized but has not yet had its ad valorem assessment reflect the new structure; Fire insurance premium tax is implemented by F.S. 175.131. The City receives this tax from the State and its use is restricted specifically to offset the City’s amount required to pay into the Firefighters’ Pension Fund. The same applies to the Casualty insurance premium tax implemented by F.S. 185.11, only its restricted use is to offset the City’s required amount to pay into the Police Officers’ Pension Fund. Next are intergovernmental fees, identified as municipal revenue sharing, which is 1.3653 percent of net sales and use of tax collections based on population of Okeechobee (City and County), all municipalities, with a percentage being restricted for transportation related expenses. Mobile home licenses are collected at the Tax Collector’s Office. However, these can be purchased on a two-year basis therefore some years the amounts will be higher than the next. Alcohol beverage licenses is a tax of which 38 percent is paid to the City from the State. The half-cent sales tax is provided by F.S. 212 and is a percentage of net sales tax proceeds that fluctuates based on ratios of population for the City and County, the current year was 13 percent. The one-cent sales tax is also provided by F.S. 212, collected by the County, and then provides the City with its portion. State and local communication service tax is for telecommunications, satellite, and mobile communications of which the City receives a small portion. Public Safety is from the Okeechobee County School Board as their portion for the School Resource Officers (SRO). The County business license tax fees are also included in this Fund. She then moved into the area of charges for services. These include the building and inspection fees collected when permits are issued by General Services. Exception and zoning fees are collected in General Services based on applications and petitions by individuals that need to have their property rezoned or future land use changed, requests that the City amend the comprehensive plan or land development regulations, or obtain a special exception or variance (the list is not inclusive). Franchise fees are paid to the City for electric, natural gas and solid waste, and are collected by ordinance allowing these companies exclusivity to operate within the City. DRAFT JULY 27, 2021, CITY COUNCIL WORKSHOP MINUTES, PAGE 2 OF 3 III. AGENDA CONTINUED A. CONTINUED: Plan review fees are paid when individuals are scheduled before the Technical Review Committee for site plan review. Alley closings/map sales. Public safety SRO private entity is for Okeechobee Christian Academy. Residential solid waste collection fees are split with 10 percent in the franchise fee line item and the remaining 90 percent within this category. Fines, forfeitures, and penalties revenues encompass court fines, radio communication fees, law enforcement education, and investigation cost reimbursements of which a portion is paid to the City from the Clerk of Court. The F.S. spells out the percentage of fees for the City. A small portion of the revenues are restricted to be expended only on law enforcement education. The ordinance violation revenues in this section are not code enforcement violation but from infractions that the Police Officers can enforce that the City Council has adopted by resolution. Uses of money and property revenues are from interest earnings and when surplus property is sold, which is shifted to the Capital Improvement Projects Fund (CIPF). Other revenues include the public safety grant, special purpose grants, and Florida Department of Transportation (FDOT) highway maintenance that is paid to the City via agreement for highway landscaping and traffic signal maintenance. This agreement with FDOT does not cover the entire cost of maintenance but assists in off-setting costs. Lastly are the code enforcement fines and police accident reports. The changes in revenue trends were then reviewed to show when revenues are at the correct percentage, less is required to be transferred from the CIPF (where the reserves are held similar to a savings account). The Public Facilities Improvement Fund (PFIF) revenues were reviewed and include the local option gas tax, which is five-cents per gallon on motor fuel with local alternate fuel tax being six-cents per gallon, both allowed by F.S. 206.41(1)(e). The City’s portion of the eight-cent fuel tax is one-cent per lane mile. The City’s portion of the ninth-cent fuel tax is one-cent per gallon (or 19.34 percent) as allowed by an Interlocal Agreement with the County. Fuel tax rebate, Small Counties Outreach Program (SCOP) grants, and interest earnings are also included in this Fund. Using the current 2020-21 Fiscal Year (FY) revenues, the percentage breakdown of revenues are as follows: 35 percent from ad valorem, 10 percent from other fees, 21 percent from intergovernmental, 15 percent from charges for services, 2 percent from other revenues, 5 percent from local option gas tax, 3 percent from the local alternative fuel tax, 1 percent from the eight-cent fuel tax, 1 percent from the ninth-cent fuel tax, and 8 percent from SCOP funding. Operating expenses within the General Fund for the eight departments include personnel costs, contractual services (a list of the current years contracts was provided), and other operating expenses. PFIF expenses cover mostly transportation related items such as contractual maintenance, streetlights, utilities, repair and maintenance of equipment, road and materials. CIPF expenditures are for improvements and replacements of equipment, can be project specific, and each of the eight departments has an expenditure line item to submit annual request during the budget process. However, expenditures cannot be transportation related items. There are other items that are considered operating expenses that could be within any of the above three Funds and include but are not limited to expenditures related to citizen boards, specific legal representation, community requests (such as the Economic Development Corporation), landscape architects, planning services over and above the current contract scope, and other contractual services needed such as a grant writer that will be discussed in the 2021-22 FY budget. Utilizing the current 2020-21 FY expenditures, excluding Grant Funds, the percentage breakdown are as follows: Legislative 2 percent, Executive 3 percent, City Clerk 3 percent, Financial Services 4 percent, Legal Council 2 percent, General Services 6 percent, Law Enforcement 34 percent, Fire Protection 19 percent, Public Works 14 percent, Public Facility Operating 3 percent, Public Facility Improvements 7 percent, Capital Operating 1 percent, and Capital Projects/Improvements 2 percent. MAYOR WATFORD CALLED A RECESS AT 5:59 P.M. AND RECONVENED THE WORKSHOP AT 6:04 P.M. DRAFT JULY 27, 2021, CITY COUNCIL WORKSHOP MINUTES, PAGE 3 OF 3 III. AGENDA CONTINUED B. Fund Distributions and Expenditures were also explained. The Collective Balance is the excess revenues over expenses throughout time and the sale of assets . The 2012 Government Accounting Standards Board required all entities to use the following five categories: Non-Spendable (inventory, unearned revenue); Restricted (constrained by their providers such as legislators, grants, or bondholders); Committed (constrained for a specific purpose, the City has not historically used this category); Assigned (amount intended for a specific purpose such as grant funds, projects that will be reimbursed, can be multiple years expenditures, the five-year capital improvements plan and replenishment of depreciated assets would fall in this category); and Unassigned (remainder of General Fund including the capital vehicles. These are use of reserves for operating expenses and can also include multiple years expenditures, the five - year capital improvements plan, and replenishment of depreciated assets). To further clarify, the Fund Balances are currently categorized as follows: Unassigned-General Fund and non-budgeted capital vehicle fund; Assigned- budgeted capital vehicle fund projects and subsequent years expenditures; Restricted-non-spendable inventory, Law Enforcement Special Fund, and PFIF. At the end of each budget year an audit is performed. The audited fund balances are actual amounts that were received and expended compared to the budget estimates. The final slide provided the 2020-21 FY revenues receipted to date to cover all budgeted expenses, and the difference which is the projected amount needed to be used from reserves. The revenues are almost 80 percent. The 2020-21 FY End is projected to be better than what was estimated during the budget planning process. Finance Director Riedel also noted that a budget amendment is forthcoming based on the significant changes with rev enues being higher than the State estimates, the change in personnel, the substantial increase in costs of expenditures, and additional legal expense to address the Code Enforcement back logged foreclosures and pending liens. The Mayor and Council offered their appreciation for the informative presentation. The PowerPoint slides have been incorporated into the minute file. IV. ADJOURN: Mayor Watford adjourned the Workshop at 6:34 P.M. Submitted By: Lane Gamiotea, CMC, City Clerk Please take notice and be advised that when a person decides to appeal any decision made by the City Council with respect to any matter considered at this meeting, s/he may need to ensure that a verbatim record of the proceeding is made, which record includes the testimony and evidence upon which the appeal is to be based. 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