The Board of County Commissioners of Brevard County, Florida, met in special session on March 21, 1996, at 1:35 p.m. in the Government Center Florida Room, Building C, 2725 St. Johns Street, Melbourne, Florida. Present were: Chairman Mark Cook, Commissioners Truman Scarborough, Randy O?Brien, Nancy Higgs, and Scott Ellis, County Manager Tom Jenkins, and County Attorney Scott Knox.

PERMISSION TO SCHEDULE EXECUTIVE SESSION, RE: MIORELLI LITIGATION

County Manager Tom Jenkins stated staff has tentatively scheduled and is requesting confirmation of an executive session on March 26, 1996 at 4:00 p.m. to discuss the Miorelli Litigation.

Commissioner Ellis suggested the executive session be held at 12 noon on such date.

Motion by Commissioner Scarborough, seconded by Commissioner Ellis, to schedule an Executive Session on March 26, 1996 at 12:00 noon to discuss the Miorelli Litigation. Motion carried and ordered unanimously.

PERMISSION TO SIGN, RE: LOCAL GOVERNMENT FINANCIAL REPORT

Chairman Cook requested permission from the Board to sign the Local Government Financial Report as required by the State Comptroller.

Motion by Commissioner Ellis, seconded by Commissioner Scarborough, to grant permission for the Chairman to sign the Local Government Financial Report required by the State Comptroller. Motion carried and ordered unanimously. (Information available in the official records of the Finance Department.)

REVIEW, RE: CURRENT FY 1995-96 BUDGET

First Quarter Budget Review for FY 1995-96
Budget Director Kathy Wall introduced the Citizens Budget Review Committee members present, including Bob Lynn, Dale Young, and Rickie Wertz. She advised the Committee was organized in May, 1990, and meets every two weeks from January through September reviewing the County?s budget process, meeting with departments and agencies, and reviewing the budget requests of the County. She stated toward the end of the process, the Committee will be issuing a report to the Board prior to adoption of the budget. She noted during staff briefings, Commissioners have requested certain information; and she provided such information in handout form, discussed later on. Ms. Wall stated staff would like to apprise the Board of the County?s current financial conditions; review the County?s economic and demographic information for the proceeding seven fiscal years; discuss the budget requirements and revenue options for development of the County?s 1997 budget; and solicit the Board?s input on funding priorities for the County?s 1997 budget.

EELS Millage
Commissioner Scarborough stated page 4 of the budget booklet deals with environmentally-endangered lands; the County has a millage cap which the voters enacted; and there were some questions on the difference between the operating revenue and the capital account.

Chairman Cook suggested the Board request a response from Property Appraiser Jim Ford.

Motion by Commissioner Higgs, seconded by Commissioner Scarborough, to authorize the Chairman to send a letter to Property Appraiser Jim Ford requesting the Board?s ability to break out the EELS millage into two separate items to reflect changes that may be necessary. Motion carried and ordered unanimously.

Golf Course Operations
Commissioner Scarborough stated on page 5, golf course operations, this fiscal year the County will have a shortfall; this is a recurring event where it substantially underestimated revenue; and the Board needs to take the necessary steps to handle it. Commissioner Ellis stated he thought the Board was going to do it last year.

Chairman Cook inquired why was it underestimated; with County Manager Tom Jenkins responding they have historically operated on the premise that they will spend what they bring in; and if they do not bring the revenues in, they reduce their expenditures. He stated one of the things that was damaging this past year was the amount of rain the County had; and even with the change in numbers, there was still a down in revenue because of the bad weather; and that compounded the problem. He stated staff is aware of the Board?s desire; it is staff?s intent to do that this year; and it is continuing its efforts to try and sell The Savannahs at Sykes Creek Golf Course.

Commissioner Higgs stated the changes that have been made are being very well received by the people who are playing and working with the courses in an advisory capacity; what Gene Burress is doing and the management program both get high marks; perhaps when the budget comes around the County will be in a more favorable position than it is today; and it has made real progress.

Chairman Cook inquired what is the status on selling The Savannahs; with Mr. Jenkins responding staff recently received the financial analysis from Financial Advisor Tom Holley which shows at various sale prices what the break even point would be or what it would take to subsidize any loss the County may incur from the sale. Mr. Jenkins stated at a sale price of $2.75 million, it might be less expensive to sell it; and based on the information from Mr. Holley, staff is going forward, but it remains to be seen what the offers will be and how much the County will get for The Savannahs. Commissioner Higgs noted staff is moving ahead under the premise to sell it, and the County may have to subsidize it for a period of time. Mr. Jenkins stated staff is comparing that subsidy to the cost of subsidizing it today, but the Board will ultimately make that choice; and until the County knows what the sale price is, it is purely speculative as to what the subsidy would be, if any. Commissioner Higgs stated she would be very reluctant to sell it and continue to subsidize it for any period of time; the County is subsidizing it now; but eventually, it will come out ahead.

Cash Forward as of October 1, 1995
Commissioner Scarborough stated there are several different ways to look at funds that remain and are not committed; he and Ms. Wall discussed four different accounts, including General Fund and General Fund Reserve; the one he liked the best was the General Fund Reserve for cash forward; and it is a current account as opposed to a budget account. He noted in the dialogue all four items are discussed in reference to whether or not the County is drawing down on a cash reserve; and at a later time, he would like to talk about it as a separate issue. He stated he did not like the General Fund balance as much because it incorporated other numbers and it was a budget item more than an account balance. Ms. Wall advised a fund balance is what is left at the end of each fiscal year; and it is an accounting of what is remaining at the end of the fiscal year.

First Quarter Capital Improvement Program Review for FY 1995-96
There were no comments made concerning the First Quarter Capital Improvement Program Review for FY 1995-96.

DISCUSSION, RE: BUDGET DEVELOPMENT FOR FY 1996-97

Preliminary Annual Review of Budget and Fiscal Policies
Ms. Wall advised the budget policy requires that the County review such policy annually; staff is recommending changes be made to the policy, changing Housing and Capital Programming Division to ?Growth Management Department? and inserting ?The Budget and Fiscal Policies shall be reviewed annually by the Finance Committee and the Board of County Commissioners? on Page 3; deleting a duplicate sentence on Page 5; and adding ?The Board will only approve financing or refinancing proposals that either economically benefit or improve the health, education and welfare of the citizens in Brevard County? on Page 7.

Motion by Commissioner Scarborough, seconded by Commissioner Higgs, to approve staff recommended changes to the Preliminary Annual Review of Budget and Fiscal Policies. Motion carried and ordered unanimously.

Budget Development Schedule and Process
Ms. Wall explained the budget development schedule and process that the Board is required to follow this fiscal year according to State Statutes; and stated the first milestone will be July 15, 1996 where the County Manager will present the recommended budget for FY 1996-97 to the Board, followed by five Board workshops. She advised July 16, 18 and 24, 1996 will be half day workshops; July 25, 1996 will be a full day workshop; and the balance will be on July 30, 1996. She stated on August 1, 1996, there will be a tentative millage meeting; and September 4 and 18, 1996 will be the budget public hearings.

Other Budget Issues
Commissioner Ellis inquired if the $700,000 in Port St. John water line MSBU is how much money the County needs this year; with Ms. Wall responding next year. Commissioner Ellis stated last year the County put $400,000 into it; and it is looking at an extra $335,000 beyond what was budgeted last year. Mr. Jenkins stated the County used one time revenues this year, so it will have to put the whole $700,000 next year. Commissioner Higgs inquired can it be broken up into any other amortization schedule and can that particular payment of $700,000 be refinanced so that it goes over a longer period of time.

Finance Director Steve Burdett advised the bond itself cannot be refinanced; the bond that financed Port St. John MSBU was financed over a 10-year period which reflects the period that the assessment was levied; and if the Board wants to change the structure of it, it would be extending it beyond the period that the assessment is to be financed.

Commissioner Scarborough stated sometimes the County borrows short term; and inquired what if it financed the joint payment over a period of time so it does not have to take such a big hit at one time. Mr. Burdett stated in order to refinance, the Board would have to pledge a general revenue source because it approved the assessment for a 10-year period.

Road and Bridge
Mr. Jenkins stated the next issue is Road and Bridge; in the last several years when the County switched Road and Bridge from gas tax back to the General Fund, it restructured as a 12-man construction crew which generates buildable project revenues of approximately $1 million in excess of what it cost that unit to operate; and the County has been using those revenues to operate the maintenance side of Road and Bridge. He noted Road and Bridge said to be more realistic, the $2 million revenue needs to be $1.5 million; they would be too stretched to achieve that $2 million every year; and staff is requesting additional funding to offset that loss of buildable project revenue. Mr. Jenkins stated there are several options to fund that, including the gas tax or General Fund; the Board previously discussed the 9th-cent gas tax which generates approximately $2 million a year; the County does not have to share such tax with the cities; those funds could directly be used to offset the shortfall; and in addition, the County could free up some dollars in order to do additional drainage work. He noted the General Fund dollars going toward roads could go to drainage; the County could then substitute that with gas tax dollars; and that is one option the Board has before it. Commissioner Ellis stated the County could implement the gas tax and collect the millage.

Chairman Cook stated the Board has some options; and he does not support extension of the 9th- cent gas tax. Commissioner Ellis stated if the County implemented the 9th-cent, it could cut the general millage. Commissioner Higgs inquired what does that do to the average person. Commissioner Ellis stated the gas tax is equal to about 3% General Fund millage; such tax generates $200,000 or $300,000 more; and a gas tax is more appropriate for roads than property tax. Chairman Cook stated he has a problem instituting a new tax and the 9th-cent; and he understands the rationale for it, but a gas tax is a regressive tax. He requested staff provide a breakdown of gas taxes that are currently paid for federal, state and county.

Fire Control
Commissioner Higgs stated the Board has not discussed Fire Control and the demands in this year?s budget. Mr. Jenkins responded the County is reaching the point where it is going to have to implement the manning of at least three firefighters per truck; there are national standards that dictate unless there are four firefighters on the scene, they should not go into a house or building on fire; the County sends multiple trucks with two individuals per truck; if two firefighters go into the fire and get injured, there would be serious consequences; and if they sit and wait for four firefighters to show up, and the house or building burns down, there will also be serious consequences. He noted County staff has been talking to the cities about automatic aid; he met with the City Manager of Melbourne and its Fire Chief this past week; the first step for the County fire service to get the city fire services to talk to it is for the County to raise its level of staffing to the same level as the cities; and the cities are running three and four individuals per truck.

Commissioner Ellis stated if there are two persons in a rescue pickup truck in a central location, they can immediately respond to multiple locations rather than piecemeal three persons here and three persons there; and the floaters on a vehicle can immediately respond to fire rather than trying to have three persons at all the stations. Commissioner Ellis noted it would be more practical; and the odds of fighting two or three house fires at the same time are slim. Chairman Cook stated Commissioner Ellis makes a good point, and the County needs to investigate it. Commissioner Ellis inquired how does the millage increase fall under the 3% cap; stated he thought it applied individually; some of these millages do not appear on municipal taxes; he lives in the City of Melbourne, so he does not have a Fire MSTU; and he thought the 3% applied to each line item. County Attorney Scott Knox stated he will get that information.

Commissioner Higgs stated the replacement of vehicles for Fire Rescue also needs to be discussed; the County has a Capital Improvement Plan that says it is setting aside a certain amount of money for replacing engines; and it has to be sure it is not getting too far behind on that. She noted when looking at fundamental services that the County has to provide, Fire Rescue is one of those key fundamental services that it needs to be sure is adequately provided. Mr. Jenkins stated depending on what course of action the Board ultimately decides on, a referendum may at some point have to be considered to address that issue in unincorporated Brevard.

Golf Courses
Commissioner Ellis stated on golf course operations, the County is over $500,000 short; with Ms. Wall responding staff has not received the final figures. Mr. Jenkins stated in the last three or four months when the weather has cooperated better, the conditions of the golf courses have improved significantly and the play is up; and $500,000 is a reasonable estimate, but if the courses continue to maintain at the current levels, it might improve a little bit.

Chairman Cook inquired is the County generating more rounds; with Mr. Jenkins responding the past month or two have been very positive. Mr. Jenkins stated the County will have to deal with it to some extent in the mid-year budget supplement, or it may hold off and deal with it in totality at the final budget supplement. Commissioner Ellis noted at the mid-year budget supplement, the County can at least take care of the first six months. He stated when the County did the budget last year, it put a little over $6 million into the reserve and had budgeted $4 million; of that, it committed $623,000 for the Sheriff?s Office step plan; that is still at $1.6 million; and if the County left the millage next year exactly the same as it is this year, there would be an extra $1.6 million in revenue that has not been committed.

Reserve Fund
Chairman Cook stated the County had discussions that part of the reason of maintaining that large of reserve would be so it could actually reduce the millage next year. Commissioner Scarborough stated he asked Ms. Wall if the County did everything and held course, where would it be; she told him probably $4 million; and that is below what the County needs to balance the budget. Chairman Cook inquired is there a breakdown on that. Ms. Wall responded staff projected the revenue growth which is not growing as quickly as the expenditure side of the operations which causes a lopsided problem when trying to balance the budget; when she gave that projection, she did not know what the operating agencies were requesting; and that is if everyone holds the line. Chairman Cook requested staff provide something in writing on how that breaks out.

Commissioner Ellis stated the money from new construction will just about cover employee pay raises. Commissioner Scarborough noted he previously asked Ms. Wall about new construction, and she said she had calculated that in there when she gave him the $4 million; and there was nothing else he could throw in the pot without reducing operations, not giving pay increases, or increasing millage.

Management Services Director Michael Managan stated the revenues are essentially flat; there is a little bit of growth in the new revenues; the sales taxes are generally not going up; the CPI is close to 2.8% and 3%; and that is the pressure on the County?s day-to-day operations. He noted the County has contracts; it has to pay for parts, materials and supplies; the costs are going up while the revenues are flat; and when that happens, it runs into a deficit. He stated Ms. Wall put in some known hits that the County had. Chairman Cook stated he would like to see specifically what that is. Mr. Managan responded it is not a static number; and it may grow or shrink, depending upon what actually happens.

Commissioner Higgs inquired if the County takes the CPI and apply it to the expenses and the revenue as projected, will it be $4 million below next year; with Mr. Managan responding affirmatively. Mr. Managan noted it is a projected number at this point; and as the County goes further into the fiscal year and develops the budget, it will become a better number.

Commissioner Ellis inquired how are things looking for mid-year budget supplement; with Ms. Wall responding staff is recommending unbudgeted cash forward be put in the Reserve for the General Fund, and the other funds look fine.

Chairman Cook requested staff ask the Property Appraiser to provide information on his projection with regard to property values. He stated last year the Board discussed additional reduction in the millage rate; and that is something he wants to review.

Commissioner Higgs stated before the County finalizes the mid-year budget, she would like to hear directly from Road and Bridge what the status of the drainage work and maintenance is, and what the County Manager?s assessment is of where the County is in regard to its needs and preventing flooding. Chairman Cook stated the Board has been proactive with drainage; and if Mr. Jenkins will provide an update on what the County needs, the Board will look at it.

Financial Conditions
Commissioner Scarborough stated the County needs to have the value of all property that is assessed for ad valorem tax purposes, both incorporated and unincorporated, as that is where the County gets its general revenue from; the actual numbers would be beneficial to see what years the assessed values have been increasing and decreasing; and it is critical in understanding the direction the County is going with value. He noted he would like to know what is occurring in property values that they are sinking to the extent there is a roll forward.

Preliminary Revenue Projections for FY 1996-97
Commissioner Scarborough stated the numbers that staff gave the Board today go only up to 1993 in the charts; and inquired if there is any data beyond that. Ms. Wall stated the spread sheet gives the historical data.

Alternative Funding Sources for FY 1996-97
Ms. Wall stated this is staff?s research of different alternative revenues that could be available to the Board next fiscal year. Commissioner Ellis noted the only thing in there that is viable is the 9th-cent gas tax, and the Board will be receiving an analysis on it.

Inventory of Programs and Services
Ms. Wall stated the final section staff provided is the summary of all the Board?s programs, services, and costs associated with those for FY 1995-96, if the service is mandated, and what authority mandates it, along with the funding sources.

Commissioner Ellis stated the County took an overall 3% General Fund millage cut last year. Commissioner Higgs stated the Board?s direction at the workshop last year was for the County Manager to come back with a 5% decrease in expenses; and it might be the Constitutional Officers? opportunity this year to come up with the 5% since the County did it last year. Commissioner Ellis stated since the Board agreed to fund the step plan for the Sheriff?s Office, such plan would be separated; and the 4% and 5% could be looked at from other than the step plan.

Chairman Cook stated the Constitutional Officers need to supply their budgets on the form prescribed by the County, and inquired has that been reinforced. Mr. Jenkins responded affirmatively; and stated the difficulty is that the Property Appraiser and Tax Collector are required to submit their budgets on Department of Revenue forms. Commissioner Higgs noted that does not preclude either of those Constitutional Officers from submitting their budgets to the Board as it has requested. Chairman Cook inquired have the other Constitutional Officers indicated they will comply with sending their budgets in the form the County has requested; with Ms. Wall responding they will cooperate.

Commissioner Ellis stated as a minimum, he would like to not increase the ad valorem tax. Chairman Cook concurred with Commissioner Ellis; stated the Board has requested a lot of information today; he wants to review that additional information; he would like to see a reduction, but as a minimum, he does not want to see an increase; and if justified, he would like to look at a decrease in the millage. Chairman Cook stated he is not convinced that the County can have a reduction in the overall budget, but he wants to review the additional information on it; and the Board can start at the millage and not increase it. Commissioner Ellis noted the County can have a reduction in the overall budget, but there has to be decisions made on the General Fund expenditures by program, where the cuts are going to be made. Mr. Jenkins stated staff continues to look for ways to do things more cost effectively.

Commissioner Higgs inquired has the County received final figures on what it came through the hurricane with from FEMA and the State; with Mr. Jenkins responding staff is still attempting to get payment from most areas. Commissioner Higgs requested an update on it.

Mr. Jenkins stated the County is doing some HRS functions; and one option is to turn back the functions to the State and let it subsidize it, and the County just do septic tanks. Commissioner Higgs stated staff can tell the Board what the options are and it can make those decisions; and if the County is under contract with the State and it is not paying the County to cover the costs of those functions, the Board should look at turning them back to the State.

Commissioner Ellis stated the Board needs projections from the Clerk of the Circuit and County Courts on where he is going with his fees this year; last year there was a problem with fees and the Clerk?s fees were running short; and the County needs to see if the fees have continued to decline or stabilized.

Chairman Cook noted the County decreased its budget last year; and it is reasonable for the Constitutional Officers to have the same discipline. Commissioner Higgs stated there were a couple Constitutional Officers last year that came back to the Board with lower budgets, including the Property Appraiser and Tax Collector. Chairman Cook stated some of the Constitutional Officers were very cooperative last year in cutting their budgets or holding the line; he wants to take a hard look at their budgets; it is an impact on the County?s budget; and if the Board is going to strive to become as efficient as possible and streamline County government, it is not too much to ask the Constitutional Officers to do the same. He noted sometimes it is not an easy decision to make; and the hard part is trying to strike a balance between providing the level of service that the County should provide and also streamlining government and keeping costs in line.

Commissioner Ellis stated the County has been working hard to streamline management through attrition by losing managers and not replacing them; and some of the Constitutional Officers need to look at doing the same thing.

Commissioner Higgs stated the Board requested a comparison in regard to the jail situation, whether the County operated it or the Sheriff; and inquired has staff made any progress on obtaining information on that; with Mr. Jenkins responding staff is working on it and will bring such information back to the Board.

Upon motion and vote, the meeting adjourned at 3:35 p.m.

MARK COOK, CHAIRMAN
BOARD OF COUNTY COMMISSIONERS
BREVARD COUNTY, FLORIDA

ATTEST:
SANDY CRAWFORD, CLERK
(S E A L)