Special City Council/CRA Budget Workshop

IMASTER City of Dunnellon Special City Council/ CRA Budget Workshop Meeting Minutes Date: June 12, 2024 Time: 3: 00 p. m. Place: City Hall, 20750 River Dr., Dunnellon, FL, 34431 Call to Order and Pledge of Allegiance Mayor Green called the meeting to order at approximately 3: 04 p. m. and led the Council in the Pledge of Allegiance. Opening Prayer/ Moment of Silence Mayor Green invited any citizen wishing to volunteer to open with prayer. No one stepped forward and he invited those in attendance to keep the loss of Kenny Watts in their thoughts as they shared in a moment of silence. Roll Call Walter Green, Mayor, Seat 1 Vacant, Councilperson, Seat 2 Tim Inskeep, Vice- Mayor, Seat 3 Rex Lehmann, Councilman, Seat 4 Valerie Hanchar, Councilwoman, Seat 5 Staff Present Mandy Odom, City Clerk Jan Smith, Finance Officer Chad Ward, Public Works Manager Chief Chris Scaglione, Police Department Captain Ron Bray, Police Department Kelly Wyen, Community Development Supervisor Stacey Leonetti, Finance Clerk Julie Danowski, Records Clerk Legal Counsel Andrew Hand, Shepard, Smith, Kohlmyer& Hand, P. A. - Absent Proof of Publication The agenda was posted on the City' s website and City Hall bulletin board on Wednesday, June 05, 2024. Pg. 1

Special CounciUCRA Budget Workshop June 12, 2024 Page 2 of 5 1) FY2024- 2025 Proposed Budgets General Fund Mrs. Smith stated the budget is unbalanced because there are certain revenues and property tax information she doesn' t have at this time. She briefly pointed out the missing General Fund revenues and stated she added Short Term Rental Revenue. She said she calculated interest earnings using a 3. 3% return on investment for the total revenue amount of $ 264, 000. She commented this makes up for the 1 cent sales tax revenue which we may not receive. She stated she did not include rent for OpticalTel and Rainbow Springs Art, because of Council discussions about selling the building. She spoke about the notable differences in expenses and said the increases are in general property and liability, auto insurance, and health insurance. She said there will be an increase in internet costs, also, but those numbers have not been provided yet. Mrs. Smith shared details about the individual departments which include a merit increase, Council contingency, legal expenses, the addition of unsafe structures demolition, and Finance salary changes due to hiring a new Finance Officer. She also spoke about the new police officer positions, the sanitation contract, and roads and streets. Councilman Lehmann asked questions regarding Council contingency and grant writers. Mrs. Smith replied there will be funds added later for Council contingency, and she explained why there is$ 20, 000 in the budget for grant application assistance. Mrs. Smith explained Mr. Ward submitted a million dollars for road repairs and maintenance. She suggested not adding it to the budget for now because it will reduce the reserves. However, if Council prefers it to be added she can always amend the budget at a later date. TIFD ( CRA) Mrs. Smith moved on to explain the current information regarding the CRA budget. She spoke about taxes stating she did not have tax information at this time. She said the interest income is calculated at 3. 3% which brings the fund to about$ 33, 000 at this time, but it will likely be a little more. She added the transfer- in from reserve is the same as last year until she receives the ad valorem tax revenue. She spoke about expenses which included road projects, demolition of unsafe structures, and the 12, 000 for the Blue Run Park restroom project. She advised the restroom project will stay in the budget until there is a final determination to remove funding for the project. Mrs. Odom explained the $ 12, 000 is there because it is officially still a part of the CRA plan and once it is removed from the plan, the funds can be removed from the budget. Vice- Mayor

Special CounciUCRA Budget Workshop June 12, 2024 Page 3 of 5 Inskeep asked what is preventing staff from removing it from the plan immediately. Mrs. Odom replied staff is currently working with Attorney Hand to prepare the documents to amend the CRA Plan. She further commented until it is officially removed from the Plan, she didn' t feel the funds should be excluded from the budget. Vice- Mayor Inskeep said the verbiage in the Management Plan states Dunnellon agrees to do certain things per the availability of funds. He suggested removing the money from the budget because showing an availability of funds exposes the City to the possibility of financial demands being made. Mrs. Odom stated she will check with Attorney Hand to see if this is ok to be removed from the budget at this time. Mrs. Smith asked if the County chose to go forward with the restroom, would we still be committed to providing the $ 12, 000 because it is the balance of the original commitment. She stated because there are other projects unbudgeted in the CRA Plan, she could take it out and add it back in later if necessary. Councilwoman Hanchar suggested it is better to leave it for now and have Mrs. Odom and Mrs. Smith review it with Attorney Hand. She said if he authorizes the removal, Council can agree to take it out at the next meeting. Mrs. Smith replied when the CRA Plan is amended it will come out anyway and should be done well before the new budget goes into effect. After further discussion Council agreed to leave it in the budget at this time and wait for the CRA Plan to be amended. Councilman Lehmann asked for clarification regarding the Comprehensive Plan and demolition of buildings showing in two different places in the spreadsheet. Mrs. Smith replied it' s because one is CRA, and one is General Fund, and they must be kept separate. Councilman Lehmann asked for clarification on the road projects. Mrs. Smith replied these are projects identified by Vice- Mayor Inskeep and Mr. Ward, but there is no firm commitment for any of these projects. She said it is simply there to allocate funds where they are needed in the event Council agrees to utilize them. Mrs. Smith moved to the Capital Plan and said she would like to know what Council would like her to do with the million dollars requested for the road projects. She explained anything is easy to change as we move forward. Mrs. Smith stated she did receive the Ad Valorem revenue amount and if she uses the current millage rate, it will equal roughly a 6% tax increase to the taxpayers and provide the budget 74, 000 additional funding.

Special CounciUCRA Budget Workshop June 12, 2024 Page 4of5 She explained during the July meeting Council will be required to set the tentative millage rate and once it is set, they can always lower it, but they cannot raise it. She stated typically it is set at 7 mills to allow for any surprises and recommended Council do the same for this year. Council agreed to set the millage at 7 mills. Vice- Mayor Inskeep asked to see the roll back rate to understand the exposure. He said he would like to meet with the individual departments as he did last year. Mrs. Smith asked Council to review page 1 of the presented Line- Item detail. She spoke about ad valorem taxes and stated this is our current millage rate give or take a few thousand dollars. She said if we go to the roll back rate, we collect the same amount of revenue as last year and the General Fund is netting 1. 1 million dollars. Councilwoman Hanchar pointed out we must find a way to pay for upgrading roads because this is what the citizens want. Mrs. Smith replied the two options are to either lower expenses or increase millage. Vice- Mayor Inskeep stated all the FY2024- 2025 road projects are CRA projects. Mrs. Smith stated Mr. Ward has asked for additional money for road projects, which have not been identified yet. Mrs. Smith asked Council if there is consensus to start at the rollback rate of 5. 37%. Mayor Green suggested starting with the rate we have now rather than the rollback rate. Mrs. Smith replied the same amount of revenue this year equates to a lower millage rate. Council agreed to start at the rollback rate. Mrs. Smith reviewed capital needs by department and read through each line item. Mrs. Smith then reviewed the reserves and stated these are currently only estimates. She said each year we receive a little bit of revenue from the sale of the utility, and she has been depositing this revenue into the General Fund Capital Replacement Reserve. Mrs. Smith spoke about the various reserves and explained where the funds come from. She provided details about what has been received and what has been spent from the 5th cent gas tax and the 1 cent sales tax. Council members asked various questions to which Mrs. Smith provided acceptable answers. Mrs. Smith shared the quarterly reserves spreadsheet and stated it provides details for where the funds are designated and how they are restricted.

Special CounciUCRA Budget Workshop June 12, 2024 Page 5 of 5 She stated she needs Council direction regarding the million- dollar road fund Mr. Ward stated he needs. She suggested again to keep this road fund out of the budget for various reasons, which included the need for possible grant match. Councilwoman Hanchar stated we have two requests for grant writers, and she would rather see, over the next two years, setting aside $ 300, 000 for roads to start working our way up to 1. 5 million dollars. Mrs. Smith replied the 511 cent gas tax income has been going into the road reserve this year simply because we haven' t had a need for it elsewhere, but nothing else goes into a road reserve currently. Vice- Mayor Inskeep stated we have the capital roads listed for FY2024- 2025 and FY2025- 2026, but the whole road budget may change and asked to have a conversation with Mrs. Smith tomorrow about it. Mrs. Smith replied she won' t make any changes until she hears from Mr. Ward. Mayor Green commented the Council understands the million- dollar road fund is making her nervous. Mrs. Smith stated she will prepare the certification of taxable value form and will try to provide a complete version of their budget by the July 11t budget meeting. Council had no further questions. 2) Council Comments There were no Council comments. 3) Public Comment There were no public comments. Adjournment The meeting was adjourned at approximately 4: 14 p. m. G k 4 A?... Penned signature of: Walter L. Green, Mayor Attest S ii, I d.!Ixm4yv—Penned signature of: Amanda Odom, CMC, City Clerk