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Minutes 07-15-02 (2) CITY COMMISSION BUDGET WORKSHOP MEETING HELD IN THE LIBRARY PROGRAM ROOM, 208 S. SEACREST AVENUE, BOYNTON BEACH, FLORIDA, ON MONDAY, JULY 15, 2002 AT 2:00 P.M. Present Gerald Broening, Mayor Ron Weiland, Vice Mayor Mike Ferguson, Commissioner Charlie Fisher, Commissioner Mack McCray, Commissioner Kurt Bressner, City Manager Jim Cherof, city Attorney Janet Prainito, City Clerk Call to Order Mayor Broening called the meeting to order at 2:05 p.m. and turned the meeting over to City Manager Bressner. 1. Budget Overview Mr. Bressner circulated the agenda, together with a copy of his July 4, 2002 memo to the City Commission that included the Capital Improvement (CIP) schedule. A copy of that memo with attachments is included with the original minutes of the meeting. He reported that the City has embarked on providing a five-year financial plan for both operating and capital expenses that began last year. Some issues have surfaced beginning in 2004/2005 that will have to be addressed. The other funds are in good shape, except for Risk Management, which is an internal service fund, and will require careful watch. The budget for fiscal year beginning October 1,2002 is a balanced budget. The General Fund Budget was balanced by using some non-obligated cash reserves. Hopefully, expenses will remain below revenues. · The overall Operating Budget is approximately $85 million, inclusive of the four Enterprise funds (WatedSewer, Golf Course, Solid Waste and Transportation). · There is a 2.7% anticipated increase in operating costs, including personnel expenses. · The total City Budget, including debt service and internal service funds, is $101 million. · The CIP Budget for next year is approximately $26 million. · It is projected that staffwill be reduced by 14.86 positions. · Twelve new firefighters positions will be added next fiscal year due to the fire station expansion. Therefore, the overall positions reduced would be 2.86 positions. Meeting Minutes City Commission Budget Workshop Boynton Beach, FL July 15, 2002 The property tax rate on the operating side is projected to remain at 7.816%. Debt service is anticipated to be reduced slightly, resulting in a very small tax reduction. General Fund Revenues are anticipated to increase by 2.4%, but adding in the fund appropriation brings it up to 8.2%. The City maintains a Fund Reserve of 10% that is carried forward. This amounts to approximately two months' operating reserve, less expenses. Areas to increase revenue include increased traffic fines. Expenses in the General Fund will increase 8%, 6.2% of which is related to personnel expenses. Operating expenses increased by 7.2%. Non-operating expenses are up 52.7%, which is due largely to the transfer to the Risk Management Fund of $500,000 and the increase in the transfer to the CRA. Under Florida law, the City is required to share revenues with the CRA based on the assessed value within the CRA. This is shown as an expense coming out of the General Fund. This year the transfer to the CRA doubled from $597,000 to over $1.1 million. Discussions have taken place concerning the size of the CRA. The projected expense for maintaining the Woman's Club is $152,000. However, this has not been finalized. The Code Compliance budget will increase because three staff members formerly under the Solid Waste Fund will now be included in the General Fund to provide for better cost accounting for what it actually costs to provide code compliance in the City. There are some changes being proposed for Parks Maintenance, which is currently part of Public Works. Parkway maintenance would remain with Public Works, but parks maintenance will be restored as a division of the Recreation Department. This change does not result in additional costs. Mr. Bressner requested that Ms. Reese give an overview of how the property tax revenues are allocated. Ms. Reese reported as follows: The Police Department receives 30.96% The Fire Department receives 18.73%. This does not include the addition of the new fire personnel. Leisure Services receives 8.39%. Public Works and Engineering receive 11.38% The Development Department receives 5.37% Administration, which includes Finance, City Manager, Human Resources, and ITS, receive 20.69% Ms. Reese reported that when the City received the figures in June, the increase in the assessed value was only 2%, but the final number received on July 1st increased to 4.9%. The gross taxable value is $2.9 billion and if the millage rate 2 Meeting Minutes City Commission Budget Workshop Boynton Beach, FL July 15, 2002 remained the same, this would account for $22,676,971. Mr. Bressner pointed out that approximately $1.1 million of this money would go to the CRA. Mr. Bressner noted out that the millage rates have remained fairly constant for the past ten years ranging from 7.9518 in 1993 to 7.8160 in 2002. Mr. Bressner asked about the debt service and Ms. Reese responded that debt service would continue to decrease, but would not be paid off until 2010. Mr. Bressner reviewed the following Funds: Water and Sewer Fund Revenue is down 4.4% over the current fiscal year. Expenses are also down 4.4%. Risk Management Fund (Self-Insurance Fund) This is an internal service, fund and the General Fund is providing additional funds to assist the Risk Management Fund. If after five years the insurance situation continues to be volatile there will be some issues to be dealt with. The Capital Improvement Fund has $26,569,400 in projects planned for next year. The Commission will be asked today to make a decision whether it wants to move forward with the Library. The State has approved the $500,000 planning grant for the Library that will cover the architectural, engineering and design work. If the City accepts the money, it is a commitment to move forward with the project. Mr. Bressner reviewed the ClP projects that were approved last year. Commissioner Fisher pointed out that these projects are already funded. The Fire Assessment Program includes construction of a new fire station in the southeast quadrant of the City, reconstruction of Station #2 on Congress Avenue, and acquisition of land for relocation of Fire Station #1. The projected costs for these items are $5.1 that is funded through the Fire Assessment Program. Mr. Bressner pointed out that the possibility exists that the City might have to increase the amount of its contributions to the three Pension Funds due to the poor performance of investment earnings. The Funds' actuaries will be furnishing these amounts. 2. Five Year Financial Plan - Major Operating Funds Mr. Bressner distributed and reviewed a handout projecting a Five Year Budget Plan for the major operating funds in the City. 3 Meeting Minutes City Commission Budget Workshop Boynton Beach, FL July 15, 2002 General Fund - Revenues are projected to increase approximately 3.5%, as well as expenses. Based on the practice of requiring a 10% reserve, the City is covered through the next fiscal year. Beginning in 2004, the City will not be able to meet the fund balance required for the General Fund. To continue the 10% reserve, the City is going to have to decrease expenses and increase revenues. By 2006 the City will not have the reserve, or the money to fund the operating portion of the City. Utility Revenue Fund is in good shape and remains at the same level for the next five years. Golf Course Fund will have $202 in five years. Sanitation Fund remains balanced and would have a small surplus at the end of five years, assuming that the City will continue to add commercial accounts and roll off revenue from construction related activities. No rate increase is assumed, but certain factors could impact this Fund. Transportation Fund is funded by other revenue sources, mainly the General Fund and the gasoline tax. The cost for maintaining this service is approximately $250,000 per year and the Commission may want to look at alternatives t~) this program. Fleet Maintenance Fund is in good financial condition, but there are projections for major fund expenses several years out. This Fund will be able to assist with the construction of the new public works facility. Warehouse Fund is an internal service fund. Risk Management Fundi has no projected additional expenses until it can be determined what the insurance r(~quirements will be for the City. Mr. Bressner distributed a matrix illustrating two alternatives for the General Fund that presents two scenarios for the next five years for both revenues and expenses. Scenario #1 - If the City maintained future expenses adjusted to 2%, the City would be in good shape until 2005/2006. To keep future expenses at 2%, it would require some adjustments in operating expenses due to existing staff levels. This does not assume any major changes for the City economically, other than incremental revenue growth of 3 ½% per year. Scenario #2 - If future expenses were adjusted to 1 ¼% per year, the City would be in good condition. Mr. Bressner presented various methods that could be explored to keep expenses down and is recommending that a strategic planning session be held in November to begin looking at the City's programs and activities that are currently being offered. The budget does not assume any westward annexations, except for some squaring off of the boundaries. 4 Meeting Minutes City Commission Budget Workshop Boynton Beach, FL July 15, 2002 Revenue Items - How the City Receives Sales Tax and State Shared Revenue Mr. Bressner noted that the City receives two considerable revenue streams from the State in the form of sales taX and state-shared revenues. This is a political process that is subject to review annually by the Legislature and can be changed. Because of the fluctuation factor, he suggested moving these revenues into the CIP revenues, rather than into operating revenues. Steve Davis, Assistant Finance Director, explained the formula used for distributing the revenue sharing and sales tax funds to the municipalities, which is included in the handout. Palm Beach County receives 9.653% of the net sales !axes collected .countywide. After determining the County's allocation which also ~ncludes a port,on of incorporated areas, the County distributes th~ remaining money to the municipalities based upon population. Using Boynton Beach's population of 61,618 out of the total County population of 1,151,223, Boynton Beach received $4,376,172 in sales tax revenue. The distribution is not based upon point of sale, but upon population distribution. Municipal Revenue Sharing comes from monies collected through sales and use tax and net collections of the one-cent municipal fuel tax. There is an evenly weighted three-factor distribution calculation employed to determine a municipality's share, which Mr. Davis explained in detail. Mr. Davis reported that this year all municipalities would be receiving more money because Dade County was over-funded and these funds will be distributed to other municipalities. 4. Review of Specific Operating Budget Questions of City Commission Mayor Broening thought that a conservative view should be taken when looking at the revenue stream. He would like to find ways to expand the tax base to increase revenues. Mayor Broening felt that this would be a turning point on how the City approaches the budget. He said that a revisit of the CRA boundaries is needed to determine what the boundaries actually need to be. Mayor Broening asked Commissioners for their comments. Commissioner Fisher felt that code enforcement could be a revenue source as opposed to code compliance. He would like to see the fines increased accordingly and that increased fines would be a stimulus for people to bring their property into compliance quickly. Commissioner Fisher pointed out that often times people come before the Code Board when they are selling their property and would be receiving money from the sale of that property. Vice Mayor Weiland felt that the majority of people who receive code violations are people who cannot afford to fix their property and certainly could not pay larger fines, which in effect could displace people from their homes. 5 Meeting Minutes City Commission Budget Workshop Boynton Beach, FL July 15, 2002 Mayor Broening said that the real issue was the tax base and compared to other cities of equal size, Boynton Beach has a poor tax base in comparison to its responsibilities and vision of what it would like to be. By totally reviewing the budget, he felt that they could find ways to increase revenue and save money. Commissioner Ferguson said that the Consumer Price Index would increase 1% next year, the City's total revenues would only be up 2.4%, and the budget forecasts salary increases at 4%. Commissioner Ferguson would like to see the salary increases cut back. He pointed out that 72% of the City's expenses are for personnel and this needs to be cut back. Commissioner McCray said he understands tax base and would like to see the tax base increased. Vice Mayor Weiland did not like to see the City compare its tax base to other cities and that they need to look at ways to decrease some of the services that are currently provided or to reduce some of the personnel. Mayor Broening also agreed that it might be necessary to reduce the salary increases and that they may need to be cut back further in coming years. He did not think that there were many areas that could be cut back in the budget this year. Commissioner McCray did not want to see any services cut. He said that people are complaining about lack of services in certain areas. He pointed out that a recent survey was done by the Recreation Department at a cost to the City and he questioned why studies were done if the results were not followed up. Commissioner McCray did not want to see any employees lose their jobs. He requested that the budget be looked at department by department to determine what could be cut. If there is money in the budget, it does not necessarily have to be spent. Mayor Broening pointed out that there are union agreements and contractual agreements to be honored. He felt that personnel wo~id decrease over the next several years through natural attrition. He did not want to see the City discontinue hiring personnel in critical areas. Mayor Broening would like the City to continue adding housing as a means to increase its tax base. Commissioner McCray referred to Mr. Bressner's memo dated July 15, 2002 in response to suggestions raised by Commissioner Ferguson on how to reduce expenses. Mr. Bressner stated that he had a response to Commissioner Ferguson's memo, which was distributed. Vice Mayor Weiland questioned if the size of the CRA should be revisited. Mr. Bressner thought this was a possibility and noted that the area west of 1-95 should not have been included. The assessed value of this portion of the CRA 6 Meeting Minutes City Commission Budget WOrkshop Boynton Beach, FL July 15, 2002 has increased $212,000, which resulted in the CRA receiving $1,500. Even though this is a small amount, this area is isolated from the remainder of the CRA and should be excluded. Another area to be looked at is that portion of the CRA north of the C-16 Canal. However, there have been no studies done on this area and he felt that this should be discussed further with the CRA. Mr. Bressner presented a brief outline of the purpose of these discussions and reported that Commissioner Ferguson presented a memo to staff with some of his ideas on the budget and the blue handout is in response to Commissioner Ferguson's suggestions. Commissioner Fisher questioned why the Public Works Facility had to be moved this year. Mr. Bressner pointed out that this facility is intrusive in a residential area. Commissioner Fisher inquired if there was a potential buyer. Mr. Hawkins reported that the Facility is located in the Heart of Boynton area, which is a redevelopment area and that a buyer would come forward when the building was vacant. Commissioner Fisher did not think it was necessary to spend $1.9 million this year. Mr. Hawkins noted that Public Works has to be relocated before the Facility could be sold. Vice Mayor Weiland did not think that this project would move forward in the next year and that there were no guarantees that the cost would be $1.9 million. He would like to see the project put off for at least one year. Commissioner Ferguson stated that there were other ways to purchase property and it didn't necessarily have to be in cash. Commissioner McCray inquired if the City was actively looking for land to relocate the Public Works Facility. Mr. Hawkins responded that it is important that the process continue to move on. Mr. Bressner assumed from the discussions, that it was the Commission's desire to hold back on this project for one year. Mayor Broening suggested instead of purchasing property, the City could look into leasing property or other alternative methods to relocate the Facility. By moving this project back one year, the CIP budget would save $1.9 million. Commissioner McCray was against decreasing the money allocated for promotions. He felt that the City was not promoting itself enough. Commissioner Fisher agreed with Commissioner McCray. Vice Mayor Weiland would like to see this area expanded in future years if possible. Mr. Bressner said he was able to save $20,000 by cutting legal contingency from $100,000 to $80,000. Commissioner Fisher inquired if it was necessary to re-core the locks. Vice Mayor Weiland noted that this had been discussed last year and inquired if the work had been done. He was informed that it was deferred. Jeff Livergood, 7 Meeting Minutes City Commission Budget Workshop Boynton Beach, FL July 15, 2002 Public Works Director, pointed out that there are hundreds of keys circulating in the City and there needs to be some uniformity. Commissioner Fisher suggested just re-coring the external doors as a cost-savings measure. Commissioner Fisher inquired why it was necessary to replace so many personal computers. Peter Wallace, ITS Director, responded that the City has to keep up with the new technology with the addition of GIS to the system. He is also looking at a leasing pregram, as opposed to purchasing the equipment. Commissioner FiSher suggested doing a needs assessment by department as opposed to changing PCs every four years. Mr. Wallace explained that heavy users of PCs receive new computers and the older PCs would be given to someone who doesn't use a PC as much. In his memo Commissioner Ferguson suggested cutting $10,000 frem this item. Mayor Broening suggested that instead of reviewing each item that staff come back to the Commission before the September public hearing with further reductions in the budget. Vice Mayor Weiland would like to have an analysis done of all City departments to determine whether the City is over or under staffed. Mr. Bressner said that this could be done by benchmarking to determine what programs and services are valuable and there are specific methodologies to do this. Commissioner Fisher inquired about the costs of having an analysis done and Mr. Bressner said that it could be done as part of the budget review. Mayor Broening felt there was a need to have an analysis done, but he did not want to see the City lose any of its skilled employees. Commissioner Fisher had concerns that employees would get the wreng message that they would be losing their jobs, which is not the case. This is merely a due diligence precess and any job cuts would be done threugh attrition. RECESS WAS DECLARED AT 3:55 P.M. THE MEETING RECONVENED AT 4:10 P.M. 5. Review of Capital Improvement Plan Mr. Bressner referred to the original handout dated July 4, 2002 that also contained the CIP Budget. Ms. Reese reviewed the revenue sources that contribute to the CIP Program. v' 53% of the Public Service Tax goes towards paying the Public Service Tax debt. If more money is collected than is needed to pay the debt, the excess funds go to the CIP Pregrem. ~' A Bond Issue in the amount of $6.2 million is earmarked for 2003/2004 to cover the cost of the Library if that moves forward. v' Grants totaling $2.6 million were received from Parks and Recreation. 8 Meeting Minutes City Commission Budget Workshop Boynton Beach, FL July 15, 2002 v' Money from the Parks and Recreation Trust Fund received from developers. v' Parking fees contributed $7,000. Mr. Sugerman questioned if this was an expense as opposed to revenue. Ms. Reese will check on this. v' Local Option Gas Tax previously discussed. v' Excess from the Recreation Program Revenue Fund. v' Funds from the cell tower lease at Hester Center will fund the pressbox. ,,' This will be the last year of utilizing funds from General Reserves. v' Golf Course Surcharge Fees are used to pay for projects for the Golf Course. v' Utility Reserves pay for utility projects. Mr. Bressner inquired if the Utility Reserves include the Stormwater Fees and Ms. Reese stated that those fees were included. Mr. Bressner noted that the Commission lowered the stormwater fee to $5.00 and thinks that the fee could be reduced to $4.00. This could be done at the September hearing. Commissioner Fisher asked for an update on what other municipalities are charging. Mr. Bressner said that he would do this. Mr. Sugerman suggested including in the analysis what the City is doing with the funds compared to what other cities are not doing. Vice Mayor Weiland supports maintaining the fee so that all the projects could be completed. Municipal Buildings Mr. Bressner reported that the proposal from a consultant has been accepted to perform the city wide space needs study. He recommended that the City move forward with this item. Library Virginia Farace, Library Director, distributed a Grant Award Notification from the State of Florida Library informing the City that it was awarded a $500,000 grant towards the construction of a new Library. The terms and conditions of the Grant are: · The project cannot begin before the grant agreement is executed. · The final plans and specifications must be approved by the State Library before the project is placed out for bid. · A contract for the construction must be awarded within 540 days from the date of the grant award, which is December 23, 2003. Vice Mayor Weiland inquired what the consequences would be if the City did not accept the grant at this time and how long would the City have to wait before it could reapply. Ms. Farace was not sure of the time period on this. Vice Mayor Weiland inquired if the City could afford a new Library. 9 Meeting Minutes City Commission Budget Workshop Boynton Beach, FL July 15, 2002 Commissioner Fisher did not think that it would in the best interests of the City to refuse the money. He pointed out that the Palm Beach Delegation went to bat for the City in obtaining the grant and that the Library plays an important role in the City. Mr. Bressner noted that a bond issue would have to be done for the remainder of the financing. Ms. Reese said this could be done by a bond referendum or by pledging other City revenues. Mr. Bressner pointed out that when the ClP budget was discussed two years, various avenues of funding were discussed and it was determined that the City could borrow $5 million from current revenue streams without going to the voters or pledging any other funds. Ms. Reese said that this option still exists and it would not increase the tax rate. There was a consensus to move forward with the Library. Public Works The purchase of the land ($1.9 million) has been moved back another year. If a suitable property becomes available, the City would move forward. There are some funds available for the construction of the new facility that would come from the Vehicle Service Fund. Commissioner Fisher inquired about the land next to the Golf Course and was informed the City owned this land. He suggested considering this property to relocate the Public Works facility. Mr. Bressner said he would look into this. Parks and Recreation Mr. Bressner reported that the bid for the Intracoastal Park would be on the next Commission agenda. The bids, which came in Iow, will allow some of phase 2 to be completed. The Civic Center will be getting a new floor since the building will remain. Commissioner Fisher thought that the painting of the building should be done at the same time that the floor is replaced. Commissioner Fisher inquired about the $25,000 earmarked for security cameras. Mr. Majors responded that this would be going out to bid. Mr. Bressner pointed out that there might not be enough time to do this. Commissioner Fisher felt it was important that these cameras be installed as soon as possible. Vice Mayor Weiland inquired if $5,000 would be sufficient for sodding the Little League Park. Mr:. Wildner said that there is more money in the current budget for this item and that the entire field would not be sodded. Mr. Bressner felt that the City needed to speak to the Little League organization regarding the operation of the field since they have been using the Park almost exclusively. Mr. Wildner stated that the current lease has been in effect for 11 years. 10 Meeting Minutes City Commission Budget Workshop Boynton Beach, FL July 15, 2002 Vice Mayor Weiland inquired on the status of the Park for the Zill property. Mr. Wildner reported that the City has acquired 3.2 acres out of the 4.9 acres. There is a possibility that Mr. Zill would sell the remainder of his property to the City. Mr. Bressner stated that this should be included as one of the City's requests to the County in its bond issue for funding to purchase this additional land. Mr. Bressner would also like to include the amount necessary to redevelop the entire property. Vice Mayor Weiland would like to see some of the Mango Trees saved or perhaps relocated. Commissioner Fisher inquired about the $50,000 designated for the Meadows/ Nautica Sound Park. Mr. Wildner responded that these funds would be used primarily for planning. Commissioner Fisher requested that this park be included in the City's request to the County Bond Referendum. Mr. Wildner recommended adding a request for County funds for phase 2 of the Senior Center. Mr. Bressner suggested adding the Wilson Center to the request. Commissioner Fisher inquired what the use of $31,000 for the Sara Sims Park was for. Mr. Hawkins said he would get back to Commissioner Fisher on this item. Vice Mayor Weiland noted that it was never determined whether it would be less expensive to remodel the Wilson Center or to tear it down and build a new building. Mr. Bressner said that this was already noted. He will also add this project to the County Bond Referendum. Mr. Bressner referred back to the Senior Center. He pointed out that additional parking space is needed that could be shared with the Woman's Club and there is vacant property immediately south of the Senior Center that could be acquired. Bikeways and Greenways Mr. Bressner felt that this program could be funded through grants. Commissioner Fisher suggested asking the State for funding. Traffic Signals FDOT indicated that they would be paying for any fencing necessary at Gateway and 1-95, which is a savings of $30,000. Sidewalks Commissioner McCray inquired about the route that would be taken for the sidewalks. Mr. Livergood said he was not certain at this time, but that the highest priorities will be where elementary school children have to walk. 11 Meeting Minutes City Commission Budget Workshop Boynton Beach, FL July 15, 2002 Street Improvements Mr. Bressner reported that the median improvements have been pushed back. He reported to the County today that because of the high costs of maintaining the medians and the City's budget constraints, the City could only maintain what is currently in place and not expand any median improvements in the foreseeable future. Vice Mayor Weiland pointed out that SE 23rd is an eyesore, especially between the railroad tracks and Federal Highway. He would like to see a joint effort with the County to improve this area. Mr. Bressner thought that the City could speak to the County regarding upgrading this area since there are discretionary funds available for roadway improvements. Mr. Bressner added that there have been requests from residents to improve landscaping and add some traffic calming along Seacrest Boulevard from Woolbright to Hypoluxo. Golf Course Commissioner Fisher suggested that the City contact the County to determine if they could assist with the renovations to the Golf Course since they are redeveloping this entire area. He would like to have this added to the bond issue as well. Utilities Mr. Bressner stated that very little has been added to the budget for the change to the Floridan Acquifer. This will require a great deal of work to be done with the South Florida Water Management District. This will probably be included in the ClP Program next year. Commissioner Fisher inquired if any conversations have taken place with either the County or Delray Beach in partnering this project. Mr. Bressner stated none have taken place. Mr. Sugerman reported that there are 11 ClP projects in the works. One of the major projects that Utilities will be dealing with is putting in the necessary improvements in the Heart of Boynton Project area. Mr. Bressner pointed out that before new projects begin, staff has been going into the neighborhoods for citizen input. Mr. Bressner commended Mr. Sugerman and his staff for incorporating neighborhood input into their planning. Commissioner Fisher inquired about adding additional piping for new construction for wastewater reuse. Mr. Sugerman responded that there are no funds for this and staff feels this is more of a legislative decision than a staff decision. Mr. Bressner pointed out that the City has two major distribution 12 Meeting Minutes City Commission Budget Workshop Boynton Beach, FL July 15, 2002 pipelines; one existing pipeline that could be expanded and one that does not exist, but could be built. He noted that Delray Beach and the City have been discussing running a line east to the Barrier Island communities so that they could use recycled water for irrigation purposes. Mr. Sugerman reported that the City would: be bottling its own water. At a cost of $150,000, the City will be able to package its water in plastic bottles for use at City meetings and for sale at public functions. Commissioner Fisher said that if this were successful he would like to call the water "Smart Water" and have some of the proceeds go to local education. Summary The Commission would like staff to come back with a review of areas where the operating budget can be reduced. Staff will look at one-time expenses, reoccurring expenses, revenues will be refined, and the Commission will be provided with an outline of a benchmark program. Comparisons will be made to other agencies that offer similar type services to see where the City stands with respect to services, programs and activities. With regard to the capital improvement portion of the budget, staff will identify several projects that they will ask the County for assistance with through their bond referendum. These include - · Senior Center · Nautica Sound ParkArea · The Golf Course · Wilson Center · The Zill Property v' Staff will check with the County to determine if they could assist with some rights-of-way projects. Commissioner McCray inquired if the benchmark program would be done in house. Mr. Bressner was not sure on this and will get back to the Commission. Mr. Bressner felt that this could be done inexpensively. 6. Discussion of Tentative Tax Rate and Date of Public Hearing Mayor Broening pointed out that once the tentative tax rate is set, it could be lowered, but not raised. 13 Meeting Minutes City Commission Budget Workshop Boynton Beach, FL July 15, 2002 Adjourn to Special City Commission Meeting to Formalize Action on #6. There being no further business, the meeting adjourned at 5:25 p.m. to the Special Meeting scheduled for 5:30 p.m. ATTEST: M. Prainito, City Clerk Barbara M. Madden Recording Secretary (three tapes) City of Commissioner Commissioner (July 16, 2002) 14 The Cit o Bo nton Beach OFFICE OF THE CITY MANAGER 1 O0 E. Boyr~on Beach Boulevard P.O. Box310 i3oynton Beach, Florida 33425-0310 City Manager's Office: (561} 742-6010 FAX: ($61) 742~6011 e-mail: city. manageri~ci, boyntor~-beach~fl.us www. ci. boynton-beach,fl, us TO: From: City Commission Kurt Bressner, City Manager Date: July 4, 2002 Subject: Proposed Operating and Capital Improvement Budget/Financial Plan I am pleased to transmit the proposed operating and capital budget, which also includes a five-year financial projection of revenues and expenses. This is the second year the City has had a multi-year operating and capital financial plan. This memorandum highlights the budget document. Overall, the City's 2002-03 Operating Budget is balanced. The total operating budget is $85,440,248 inclusive of the four enterprise funds (Water/Sewer, Golf Course, Solid Waste and Transportation). The revenues available to fund these services are $85,530,248. The overall increase in operating expenses from the current fiscal year is 2.7%. The total City Budget inclusive of operating, service and debt service is $101.4 M, which represents a 3.4% increase over last fiscal year. The revenues for the City Budget inclusive of operating, service and debt service is $101.5 M which represents a 3.6% increase. Staffing Levels The total City staff has been reduced by 14.86 positions. This has been accomplished by attrition in several departments as well as transferring crossing guard personnel to a contractual service arrangement. This is an experimental program planned for next fiscal year. When the 12 new fire personnel are added for Fire Station #4.,..the total of positions reduced is 2.86. Proper~ Tax Rate The proposed property tax rate is reduced slightly. The operating rate is proposed to stay at 7.8160% while the debt service rate is expected to be .3950% for an overall reduction of .0163%. General Fund Revenues General Fund revenues are expected to increase 2.4% based on new revenues and a total of 8.2% when a fund balance appropriation is used. This year we budgeted a $1.3 M fund balance appropriation, which was not needed because expenses were lower than expected. Next year, the amount is $3.9M. If expenses continue to be lower than expected next year, the amount taken from reserves can be reduced. A word of caution here, the current policy of a fund reserve is 10% of the General Fund expenses. This will be $4.8 M. We are projecting to have an additional $3.5 M as an undesignated fund balance for a total of $8.3 M or slightly under two-months operating reserve.: While this is a surplus, it is a reduced cushion over last year. Last year we had slightly more than two-months in cash reserves in the General Fund. The only significant revenue growth is in the area of traffic fines. This is an increase from $306,960 to $61'0,000. The Traffic Unit in the Police Department is being reconfigured to provide increase enforcement. In summary, the revenue stream for the General Fund is stable but not growing. If there are not increases in revenue in future years, expenses will outstrip revenues. General Fund Expenditures The General Fund shows a projected increase in expenses of 8%. This is due in part to increased personnel expenses (6.2%), operating expenses (7.2%) and non- operating expenses (52.7%). The major increase in the non-operating expense from the General Fund is a new cost of $500,000 to the Self-Insurance Fund to keep that fund solvent. In addition, the transfer of property tax proceeds for the CRA is projected to increase from $597,725 to $1,054,670. The City is required to pass this revenue along to the CRA as it represents the Tax Increment revenue growth based on increased property assessment values in the CRA. Historically, we have shown this expense in the General Fund. In the future, as this expense grows, it may be more appropriate to show the activity in a new fund as it does distort the size of the General Fund Budget. The projected cost of operating the Woman's Club is inc_luded in the expenses America's Gatewa!] to the Gulfstream totaling $152,286.- 5h/rile we do not have an agreement with the Woman's Club, we felt it prudent to include the cost of the program. Of this amount, $103,440 represents new costs. If an agreement is not reached, the staff costs for the program ($48,846) will be returned to the Recreation Department, as the staffing is an assignment of existing Recreation personnel, not new staff. The budget shows a substantial increase in the Code Compliance budget due to the transfer of three Code Compliance staff members from the Solid Waste Fund. In the past, the staffing for Code Compliance was spread over two funds. The Solid Waste Fund can no longer pay the cost of the three staff members. This is an expense that can be revisited in several years as we analyze the revenues and expenses in the Solid Waste Fund. The General Fund also shows the restoration ora Parks Maintenance operation. This year, parks and parkway maintenance is shown in the Public Works Department. The staff has proposed that parks maintenance be restored as a division of the Recreation Department to provide better coordination of activities with park use. Conceptually, I supported this move but the transfer will not be authorized until I see a long-range financial and park maintenance plan from Recreation. The Public Works Department will handle the parkway maintenance, canal maintenance and cemetery maintenance. Water a nd Sewer Fund The overall revenue picture is down 4.4% over the current fiscal year's budget. We are being very conservative on the revenue projections. On the expense side, the projected expenses are also expected ,to be down by 4.4%. Self-Ins urance Fund This fund bears careful watching over the next few years. The impact of the September 11,2001 attack is now appearing in the cost of insurance coverage. The proposed budget shows a continued use of the fund reserves to meet expenses. In the current fiscal year, $1.0 M needed to be transferred from the cash reserves of the Self- Insurance Fund to pay for expenses of the fund. This year we are proposing allocation of an additional $792,373 from the fund reserves to meet expected operating expenses. The future funding for the Self-Insurance Fund in 2003-04 and beyond will require additional transfers from other City funds. The expense to revenue ratio in 2003-4 is 2.4 to 1 without additional revenues. Since the Self- Insurance Fund is an internal service fund, the revenues to pay for insurance coverage, safety programs and claims comes from the ot_h¢~Ci_ty Funds. As noted America's Gateway to the Gulfstream above, next year, ~l~e General Fund is projected to contribUte $500,000 to help the fund stay solvent for one more year. Next Fiscal year, formula for funding the Self- Insurance program will need to be amended:by increased payments from other funds. We will monitor the insurance market next year in the hope that the market will stabilize. Capital Improvement Program Budget and Plan The proposed capital Improvement Program (CIP) represents $26.5 M of construction activity exclusive of the fire station improvements. This is a healthy mix of proj ects. The breakdown of projects is as follows: Municipal Buildings Recreation and Parks Greenways and Bikeways Traffic Signals Sidewalks Streets Golf Course Water PrOjects Stormwater Projects Wastewater Projects Utilities Multi Projects Utilities Regional Plant $ 3,307,300 $ 3,622,100 $ 55,OO0 $ 30,000 $ 155,000 $ 495,000 $ 860,000 $ 1,753,000 $ 1,908,000 $ 1,753,000 $ 8,740,000 $ 8,740,000 (combined Water, Storm & Sewer) Total $26,569,400 The Fire Assessment Program includes the construction of a new fire station in the southeast quadrant (Station ~4), reconstruction of Station #2 on Congress Avenue and land for the relocated Fire Station #1. The projected cost of these improvements is $5.1 M. Several highlights of the CIP are presented below: Municipal Buildings Land for a relocated Public Works Facility First Phase of Architectural Design for Library (Construction planned in 2003-04 ~ $5 M) $1,900,000 $ 300,000 America's Gateway to the Gulfstream Parks and Recreatic~n Completion of Intracoastal Park Land for Wilson Center Reconfiguration $2,360,000 ($1,900,000 grant) $ 150,000 ($75,000 grant) Bikeways and Greenways include funding for design and engineering. ($55,000) Sidewalks include a new program for installation ($100,000) - 2,000 LF and replacement ($50,000) - 1,000 LF. Roadway Improvements include the resumption of the street maintenance program ($260,000), way finding signage ($70,000) and railroad crossing upgrades ($165,000). The median improvements for North Congress, West Boynton, Lawrence Road and West Hypoluxo are in the "future project" listing at an estimated cost of $1.4 M. This project is contingent on grant funding. Golf Course improvements include the construction of the new executive course ($800,000). Plans are shown as a "future project" for replacement of the Clubhouse ($1,000,000). Water Projects include expansion cf the West Water Treatment Plant over the next three years ($8.0 M). However, this cost does not include the cost of shifting to the Floridian Aquifer. This will be developed next fiscal year and incorporated into the Five-Year Plan beginning in 2003-04. Wastewater Projects consist mainly of refurbishment and repair of lift stations, lining existing sanitary sewer lines. There is a contingent expense in the Wastewater Collection system that will be examined next fiscal year. This cost is attributable to infiltration of storm water into the wastewater collection system in heavy rain events. Stormwater Projects have evolved from stand-alone projects to construction work integrated with other utility projects. However, the second phase of the downtown stormwater program is planned for next year ($1,366,000). Utility Multi Projects were begun in 2001-02 to address the need to coordinate underground improvement work in a particular area. Under this model, all underground utilities in a particular project area are examined and either upgraded, refurbished or protected. This way, the City will not return to the same area for another project. A significant amount of water main replacement ($5,000,000) is planned in combination with swale and sanitary sewer up~ad~es._ .Also, utilities in the America s Gateway to the Gulfstream Golfview Harbour' irea will be refurbished ($1,400,000). Utilities Regional Plant projects include continued work on recycled water expansion ($ ,000,000) ~n cooperation with the City of Delray Beach. Concluding Remarks The proposed budget and financial plan represent a series of programs and services designed to continue improving the quality of life in Boynton Beach. Care is necessary on both operating and capital expenses in the next 24 to 36 months as we continue to assess the. impact ora sluggish economy. This may require another hiring and capital equipment freeze in the early portion of next fiscal year. I am pleased to report that the overall expenditures of the General Fund for the current fiscal year are projected to be $2.3 M under the budget.: In the case of the Utility Fund, expenses were $2.8 M over budget. This is because we were required to include a $4.7 M charge against depreciation per new audit rules. In cash terms, the Utility Fund was $1.9 M under budget expenses. Special thanks for the preparation of the budget and financial plan go to Diane Reese, Finance Director, Mary Munro, Budget Coordinator and Steve Davis, Assistant Finance Director. 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