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Minutes 10-14-99 MI'NUTES OF THE PUBLI'C FORUM ON CTTY FTNANCES HELD I'N THE LTBRARY PROGRAM ROOM, BOYNTON BEACH, FLORZDA ON THURSDAY, OCTOBER 14, 1999 @ 6:30 P.M. PRESENT Gerald Broening, Mayor Henderson Tillman, Vice Mayor William Sherman, Mayor Pro Tem Nellie Denahan, Commissioner R6nald Weiland, Commissioner Dale Sugerman, Assistant City Manager Nicholas Igwe, Assistant City Attorney Sue Kruse, City Clerk T. i Tntroduction Dale Sugerman, Assistant City Manager, called the Public Forum to order at 6:30 p.m., and thanked all fo~ their attendance. He acknowledged that the majority of the audience consisted of City staff and he re( uested that each person present introduce himself/herself. Mr Sugerman announced that he prepared packets of back-up information. He directed everyone to the foLirth bullet on Page 4 of the back-up material. He corrected that bulleted item to read, "Department Heads have authority to purchase items up to $4,999 in value without further approval from any SUl)ervisor.' Zt' Explanation of Purpose of Meetinq Sugerman reported that there have been discussions among the City Commissioners about the ~cept of conducting an internal audit at the City to take an overall look at all of the finances that lude the budgeting process, fund accounting and financial controls. Before the ultimate decision was de to move forward with an internal audit, Commissioner Weiland and Mr. Sugerman met and decided hold a public forum. The forum would focus on the City's budgeting process, fund accounting and ~ncial controls. It was believed that with background in those areas and an opportunity for the public ask any questions regarding the budget, it might be enough to satisfy the urge for an internal audit. Hr COl inc m~ to fin~ to jvir suJ on ne~ res Sugerman said he would make a brief presentation and then field any question that is asked on any ~ject regarding the budget. (A copy of the presentation is attached to the original set of these minutes file in the City Clerk's Office.) Key staff members were present in the audience and would assist if :essary. If a question could not be answered because research was necessary, Mr. Sugerman would )ond at a later date either directly to the individual or at a second public forum. City Finances A. The Budqet Process Mr~ Sugerman began the presentation by directing everyone to the middle line on Page 2 that represents FisCal Year 1999/2000. The City's budget year begins on October 1st and ends on September 30th, As we go through the budget year, we sometimes readjust the budget at mid-year (April 1st). Staff does that by PreSenting the City Commission with a mid-year adjustment. Wh inc mi( out auc rec lie the current fiscal year is ongoing, the previous budget year continues to go on because bills Jrred in August and September are still being received. The City does not close its books until the Idle or end of November. An independent, third-party audit begins on the budget that is being closed . That audit closeout takes place on December 30th and the audit is delivered around April 1st. The litors present to the City Commissioners a synopsis of their accounting findings and operating )mmendations. MEETING MINUTES PUBLIC FORUM ON CITY FINANCES BOYNTON BEACH, FLOI~DA OCTOBER 14, 1999 In addition, as we move through the current fiscal year, we begin to kick-off the next budget year on approximately April ist. Budget workshops are held in July and August and the next budget year begins oni October ist. Therefore, there are budget years beginning, ending and overlapping each other all the time. The budget process is an infinite process that is constantly moving. · What Exactly is the City Budget? Thie questions were: Is the City budget an exact spending document? Ts the City budget a reasonable spending plan? Ts the City budget a bunch of "made-up" numbers with little or no control? IVlr Sugerman suggested that everyone think of the City budget as a checking account with a series of sp~;nding guidelines and controls tied to it. · How Does the City Budget Work? Th..· City Commission appropriates money in departmental line items. Once an appropriation is made, exl)enses can be paid out of that line item. Each budget line item is a "not to exceed" amount that alk~ws a department to purchase any item or service that falls under that category of the identified line in a (lepartmental budget. Mr. Sugerman provided the following example. Account Number 44-30 covers "E(luipment Rental". Some departments have large equipment line items. Utilities may have $20,000 or $3t),000 in its "Equipment Rental" line item because they rent a great deal of equipment. The aPl)ropriation of $20,000 is not a directive from the Commission on how to spend money toward renting ec ~ipment. Tt is an allocation of money in the line item that will let the department rent equipment up to a eiling of $20,000. Another department such as TTS.may have only a $100 "Equipment Rental" budget all ~cation. That provides authority for 1TS to spend up to $100. · What are the Budget Controls? On'ce the City Commission allocates the money in the "checkbook, how do we keep controls on that spending? The following is a list of budget controls: ;1. State Statutes - State Statute explains the spending limits and the types of things money can and cannot be spent on. The most common concept is that money can be spent if it serves a public purpose. Mr, spt go~ pul ant Sta Thc reg Sugerman explained that many cities have wrestled with the question of whether or not they can nd money on coffee and donuts to serve at public meetings. The State Statute says that if the local 'erning authority determines that a function serves a public purpose, money may be spent for that )ose. IVlany communities have had a Resolution before their City Commission that says serving coffee donuts serves a public purpose. That eliminates the question of whether that expenditure meets :e Statute requirements. 2. Purchasing Policy Manual City of Boynton Beach has a manual that deals with purchasing. This manual serves as our rules, ulations and guidelines. The manual is a public record and is available upon request. 3. Spending limits imposed by the City Commission ' MEETZNG MTNUTES PUBLZC FORUM ON CZTY FTNANCES BOYNTON BEACH, FLOREDA OCTOBER 14, 1999 The spending limits relate to a local statute that dictates how much we can spend without some kind of control. Department heads have authority to purchase items up to $4,999 in value without further apiProval from any supervisor. M~ SUgerman reminded everyone present of the earlier example of $20,000 in the Utilities Department "E~uipment Rental" line item. The Utilities Director can spend $4,999 on equipment rental without geeing approval from anyone else. The :[TS Director only has $100 in the "Equipment Rental" line item. Thlerefore, even though he has the authority to spend up to $4,999 as a department head, he can't spend that money because he doesn't have enough money in the line item. The City Manager has the authority to purchase items up to $9,999 in value without further approval frOm any supervisor. 4. Budget transfer rules and tracking forms ]:f We want to transfer money between line items within a department's budget, we have a tracking form that calls for justification and signature from three City officials. 5. Bid requirements This control comes from State Statute and City Commission rules. All items exceeding $10,000 must be obtained by competitive bid (unless they are a sole source item or are available on a piggyback purchase from another governmental entity). Sole source purchases and piggyback purchases exceeding $10,000 must still be approved by a vote of the City Commission. ~ All professional services (exceeding certain State Statute limits) must be obtained by a request for proposals. All contracts for services exceeding the professional services State Statute limits must be approved by a vote of the City Commission. Th~ City budget is nothing more than a constantly evolving plan that changes and is modified on a regular and routine basis in the course of doing business. A City's budget is different from the City's fund accounting. i B. Fund Accounting Fu~d accounting allows the public, State of Florida, City Commission and City staff to track the flow of public money. While the budget is a constantly evolving plan for spending money, fund accounting m~ndates the separate tracking of different accounts of money based upon a uniform standard of acc'0unting principles. There are five basic types of funds in the City. They are: General Operating Fund Proprietary Fund (Enterprise) Special Revenue Fund Debt Service Fund Trust Fund EaCh of these funds has five general types of activities that happen within the fund: ' MEETZNG MZNUTES PUBLTC FORUM ON CZTY FZNANCES BOYNTON BEACH, FLOI~DA OCTOBER 14f 1999 2. 3. 4. 5. Collect revenues Expend budgeted funds Transfer money in and out They have reserve revenue funds in excess of their expenditure. They maintain a fund balance. The most significant type of activity in all of the funds is the collection of revenues. · General Operating Fund Th!e revenues in the General Operating Fund are from a variety of sources. These sources are: property taxes, franchise taxes, licenses, permits, intergovernmental revenues, charges for services, investment in(~ome, fines and forfeitures, miscellaneous income and transfers in. The expenditures are for typical government services such as Police, Fire, Finance, City Commission, Human Resources, Library, Planning & Zoning, Streets, Public Works, Building, Engineering, City Manager, Recreation and Parks. · Proprietary Funds (Enterprise) PrOprietary funds do not have the taxes. They have charges for services such as golf, water and sewer, trash collection. The revenues come from charges for services, investment income, miscellaneous inqome and transfers in. The expenditures are for Utilities, Golf Course, Sanitation, Fleet Operations, Wfirehouse, Bus Service and Insurance. i' · Special Revenue Funds (single purpose) Revenue for these funds is unique revenue that is earmarked, allocated or designated for a specific purpose. The Local Option Gas Tax that we collect is dedicated to the Street Resurfacing Program. Otller revenue comes from investment income, miscellaneous income and transfers in. Examples of Sp.;cial Revenue Funds include the CRA/Community Improvement Fund, Community Redevelopment and Re,:reation Programming. · Debt Service Funds (bonds) There are three types of Debt Service Funds. 1. General Obligation Bonds - These bonds are similar to a home mortgage. Tn the City's case, it is a mortgage on the full faith and credit of the City of Boynton Beach. These bonds are supported by a vote of the public to increase taxes. Public Service Tax Bonds - These bonds are supported by a vote of the City Commission to approve the use of Utility Tax revenues. Revenue Bonds - These bonds are supported, voted upon and approved by the City Commission and supported through the use of Utility charges from ratepayers. Present Outstandinq General Obliqation Bonds: Revenue: Expend itu res: The revenue is the Debt Service component of the property tax bill. We are spending money for two General Obligation functions: Bond issue for rebuilding City Hall; and 2, Bond issue for the acquisition of the 10-acre parcel of land MEETING M:[NUTES PUBLIC FORUM ON CZTY FZNANCES BOYNTON BEACH, FLOI~DA OCTOBER 14, 1999 · :o Present Outstandinq Public Service Tax Bonds: Revenue: Expenditures: The revenue is the Utility taxes (FPL, Bell South, cellular phones, etc.) and interest income. Tradewinds settlement amount; and Recreation bonds (Hester Center) Present Outstandinq Public Service Bonds: Revenue: Expe nd itu res: The revenue comes from rates paid by water and sewer customers and interest income. Water Plant (East and West) construction Sewer system construction (regional facility); and Stormwater system construction C. Financial Controls The City controls the budget and fund accounting in the following ways: State Statutes Purchasing Policy Manual Spending limits imposed by the City Commission Budget transfer rules and tracking forms Bid requirements Comprehensive Annual Financial Statement (annual audit) TV. Questions and Answers Brian Edwards asked Mr. Sugerman to elaborate on the outcome of the last three years' audits. IVlr. Sugerman explained that each of the last three years' audits have shown that the City had balanced books, no money was missing, the general operations were good and the City has been awarded a Certificate of Conformance by the Government Finance Officers' Association. This Certificate says our budget and audit were in line. We have received that award for the last 18 consecutive years. coimmissioner Ron Weiland pointed out that there were several comments made in the audit regarding, changes that should be made. How can one be assured that the changes were made? Mr. su~ It i: cor mo co~ rec Sugerman reported that when changes have been made, the auditors acknowledge those changes in sequent audits. However, there is no accountability for us not doing what the auditors recommend. ; not the City's practice to respond to every recommendation. As an example, the auditors expressed cern about the City resolving the Y2K problems. Their recommendation was to spend a great deal of ~ey to comply by June of 1999. Although we wanted to do that, we were not physically able to ]ply, nor were we in a financial position to comply. The auditors provide management comments and )mmendations and we try to follow their lead. However, we may not be able to follow their lead ex ..ctly as they state it. Brian Edwards asked how the Finance Director and City Manager handle a budget problem that is brd~Jght to their attention by staff. · MEETZNG MTNUTES PUBLtC FORUM ON CtTY FTNANCES BOYNTON BEACH, FLORIDA OCTOBER 14, 1999 Mr. Sugerman said top management tries very hard to make the departments responsible for their own budgets. If the Commission allocates money, the department heads are expected to spend that money wisely the way they see fit. They are expected to bring their solutions to the Finance Department and Cib/Manager's Office. They are permitted to move money around if they can figure out how to do it. If they have a problem of such magnitude that they can't figure out what to do, the Finance Department and City Manager's Office will come up with a solution. Brian Edwards inquired whether or not an investigation ever had to be instituted for misappropriation oflfunds by a department. M~, Sugerman said he has not had such an experience in the six years he has been employed by the City of!Boynton Beach. However, he pointed out that the City began a credit card program last year that wc uld allow employees to make purchases without having to delay a job while waiting for approval of a pu'chase requisition. Eighty-eight employees were issued credit cards with spending limits of $200 for so, ne of those people. What was discovered was that if an employee went to purchase a part that was m(,re expensive than $200, the merchant would run the card through twice. The Deputy Finance Director, through a nasty letter to the violators, addressed this situation. The City realized that the sp:nding limits were too Iow and might consider addressing the bigger issue by increasing the spending A qentleman in the audience referred to the bid requirements for professional services. He asked what process he would have to take to initiate a development proposal and who would he work with in this process. MrI Sugerman advised that Lana Koester is the Purchasing Agent for the City. She could provide ail of the information required. He further advised that a great deal of the information is posted on the City's wqbsite. He was also provided with Nancy Byrne's business card since she is the Acting Director of De~velopment. Mr enl Co pre $3( OU! the Sugerman said the City can hire engineering firms to do design work, but if the amount of the lineering contract would exceed $50,000 or the amount of the actual construction would exceed ;0,000, it would be necessary to put out a Request for Proposals. · tmissioner Ron Weiland referred to the Architecture for Excellence training program. He said that gram was not to exceed $300,000 in the 1998/99 fiscal year. As of August 31St, the City had spent I1,000 and there were 24 training sessions scheduled for September. Commissioner Weiland pointed that staff was aware that the $300,000 figure had been exceeded and therefore, the invoices for se sessions would have been paid from the 1999/2000 fiscal year budget. From Commissioner iland's understanding, this is illegal. Mr He We tha Mr. WOI thn Exc bell Sugerman asked Commissioner Weiland where the concept of "not to exceed $300,000" came from. asked if there was a formal decision by the City Commission not to exceed $300,000. Commissioner iland said there might not have been a formal mandate by the Commission, but there was discussion t the cost would not exceed $300,000 for the fiscal year. Sugerman explained that there was a public discussiOn that the total amount of the expenditures lid not exceed $300,000. That discussion was probably held before we reached the $300,000 ;shold. At the end of the fiscal year, the City Commission decided to eliminate the Architecture for ellence. However, Lhere were still outstanding bills that needed to be paid. Mr. Sugerman did not eve this was a legal or ethical matter. It is an accounting dilemma. He explained that staff was left witJ~ the following options: 1) go back to the City Commission to explain that we spent more than · MEE'rZNG MINUTES PUBLIC FORUM ON CITY FINANCES BOYNTON BEACH, FLORIDA OCTOBER 14, 1999 $300,000; 2) refuse to pay the bills; 3) investigate carrying them over into the next budget year; or 4) transfer funds within an existing budget. Staff put together all of the bills that exceeded $300,000. There will be a bill on the upcoming City Commission agenda for approval to pay the outstanding amount of $3:1,000. Mr. Sugerman is confident that the auditors would agree that nothing illegal was done. COmmissioner Weiland pointed out that management allowed this to happen and ethics comes into play. He explained that it would be possible to take the money out of the department budgets to cover the Architecture for Excellence program, but that would eliminate all other training. Mayor Broening recalled a figure of $368,000 as the total cost for the Architecture for Excellence training. The figure of $300,000 was a broad-brush figure of the amount that would be spent in 1998/99. Mr, Sugerman said he was not sure that he ever heard a figure of $300,000 in any formal way. He felt, however, that the lesson he learned is that when commitments and decisions are made in a public m~eting, they must be done formally and become part of the record. MaYor Pro Tem Sherman referred to the words "broad-brush" as being a very appropriate description. He pointed out that the initial figure associated with the Architecture for Excellence was $30,000. Mayor PrO Tem Sherman agreed with Commissioner Weiland that this was an improper management technique. Mr mE sta the OC¢ exl bu~ res fail Sugerman advised that he was in the room when the $30,000 figure was discussed at a public eting. The City Manager made a commitment that the Architecture for Excellence training for senior ff would not exceed $30,000. When the senior staff took the training and decided the remainder of staff should go through the program, everyone knew it could not be done for $30,000. The mistake :urred when the City Manager felt uncomfortable going back to the City Commission for approval to )end the amount of money that was needed to train the remainder of staff. A decision was made to y the expense in all of the departments' training line items. Mr. Sugerman accepted some of the ponsibility for not saying this was not the proper way to handle this situation. Mr. Sugerman said he ed the organization and the community by not taking that stance. Ma ~or Pro Tem Sherman addressed some issues regarding the Library Museum. He read a letter dated August 3rd from a constituent into the record. (A copy of the letter is attached to the original set of these minutes on file in the City Clerk's Office.) The letter refers to the inclusion of the museum expenses in th~ Library budget. The constituent expressed concern about the fact that Library funds are being used fori other purposes. The letter stated that "museum expenses have taken an increasing amount of Libirary funds for items such as supplies, equipment, printing and postage, travel and phone expenses, office space, salaries of the Museum Director and a Library Relief Clerk to assist her. Bookkeeping, correspondence, mailing and other clerical work are done by Library employees. The museum office has ne~ computers and peripherals while Library patrons and those who serve them work with used equipment. Book and media repairs are done by volunteers. When the museum volunteer morphed into Library Special Services Director, both the job and the division were created for her; she was the first no~-Iibrarian to become part of Library management and she was given the salary and resources that wele needed to move books and audio-visual materials out of boxes in the back room and onto the shelVes.'' The letter continues, "this year, as in past years, only special materials are being ordered during the last quarter of the fiscal year. Tn the fall, new orders will start to pile up and some of them wc ~'t reach the public area for several months." Mayor Pro Tem Sherman asked for more information on thi~ issue. Mr. Sugerman said this letter is a classic letter of a citizen questioning a policy decision of the City. The Cit~' does not have infinite resources. Decisions are made on a regular and routine basis at the Corlmission level and staff level on how we will spend those resources. Approximately 21/2 years ago, ' MEETING M'rNUTES PUBLTC FORUM ON CTTY FZNANCES BOYNTON BEACH, FLORTDA OCTOBER 14, 1999 the City Commission made a decision, supported by staff, to move forward with a Children's Museum and we would convert the 1913 Schoolhouse to that Children's Museum. Because of our limited resources, prior City Commissions decided to move some of the Library resources over to the Museum. The City Commission made this policy decision and it was supported by recommendations of staff. Citizens have the right to question these types of decisions and staff is used to getting these kinds of letters. Mr. Sugerman said this is a balancing act that the Commission has responsibility for. Staff is carrying out the mandate of the City Commission to put together a Children's Museum. When Mayor Broening asked if the Library operations have been adversely affected by the Museum operations. Mr. A. D. Henehan responded negatively and explained that if there had not been a Museum, the monies would not have been allocated. Tn response to Commissioner Denahan about funding for library books, Mr. Henehan said that the City Commission has appropriated $125,000, $150,000 and $125,000 over the last three fiscal years for the purchase of books. Mayor Broening asked if the City Library leases high-volume books. Mr. Henehan said the Library leases high-demand and best-selling books in addition to audiotapes. The leasing plan has been ongoing for years. Mgyor Pro Tem Sherman requested a personal response from staff with respect to the issue of new computers mentioned in the letter. Mr. Henehan said he would provide that response. Mayor Pro Tem Sherman reported that there are several residents seeking golf permits and they have been told they are not available. However, they were also told that a decision would be made in October with respect to permits and there might be some permits available at that time. Co th~ be~ fo, ch~ ~ Sciortino, Golf Course Director, explained that the policy of starting to sell permits again is a City ~mission policy that is discussed during the budget process. He pointed out that he wrote a letter to City Commission, through the City Manager, explaining that there was no good business reason to ]in selling permits at the Golf Course. However, he pointed out that there might be a political reason doing so that he was unaware of. In the letter, he stated that he would have been happy to discuss ~nging the policy during the budget discussions if that was the desire of the City Commission. During Ma¸ the 80( res ent wh, wel hol~ ina the WOI the two budget hearings and two budget approval processes, there was no discussion about permits. It wa; Mr. Sciortino's assumption that the City Commission accepted his recommendation to nOt issue new pe~. mits again. When Mayor Pro Tern Sherman assumed that since the budget had been approved, no new permits could be issued, Mr. Sciortino explained that was true unleSs the City Commission decided to change the policy. /or Pro Tern Sherman asked Mr. Sciortino how many permits could be issued without overburdening permit total. Mr. Sciortino reported that during the first few years of existence of the Golf Course, ~ annual permits were sold. The County told the City that it could take 60% of the permits for City dents and 40% for County residents. However, if any entity did not take its fair share, the other ity could. During the initial years of the Golf Course, the most we ever had was 187 City residents ) purchased permits. That number decreased every year. There were a lot of City residents who 'e paying daily fees. In order to pay for the difference in the amount that we received from permit :lers, fees were increased yearly. (One-year permits were increased and the next year daily fees were 'eased.) In 1992, a decision was made to reduce the number of permits through attrition and look at ~ on an annual basis until such time as a determination could be made regarding whether or not this JId work. Since 1992/93, there has been more revenue with fewer rounds every year. i · MEETTNG M'rNUTES PUBLTC FORUM ON CI'TY FTNANCES BOYNTON BEACH~ FLOR.I:DA OCTOBER 14~ 1999 Mr. Sciortino pointed out that the policy decision would be "do you want to serve 50 or 60 citizens of Boynton Beach extremely well, or 50,000 to 100,000 people in the larger community of Boynton Beach eXtremely well. Three hundred permits for $3,000 each could be sold and the rates could be cut. Mr. sdiortino said he was instructed as the manager of the Golf Course to make a business decision. This year, 4,000 less rounds were played and the Golf Course did $50,000 more in revenue over the previous year. ThiS is good business sense. Mr. Sciortino said that throughout the time the City sold permits, City residents had a "full week jump" on the sale of permits ahead of County residents. There are 331 permit renewals and 52 of those renewals were for City residents. Mr. Sciortino said there are many City residents who are very happy to play for $5 for the Executive Course for the six months of the summer and the $19.50 rate for the six months of thc summer on the Championship Course without a permit. When a request was opened in the City newsletter, we had 43 names. Mayor Pro Tern Sherman recommended that we go back to 168. Mr. Sciortino explained that if we offer new permits, and the City residents do not take them, the County residents would. M~+ Sugerman requested that Mr. Sciortino prepare an agenda item on this issue for a future City cdmmission meeting. When Mayor Pro Tem Sherman asked if it would be possible to deduct the utility bill amount from a re,~ident's checking account, Mr. Sugerman responded affirmatively and said it could probably be ac~:omplished within the next 90 to 120 days. However, this would be a serious expense because it wculd be necessary to buy all new equipment (server, dedicated phone lines). The other option would be to wait until "a window opens up" that would allow us to do it on the present server and phone lines. At the present time, the higher priority is making sure that all internal accounting, Emergency 911 Dispatch, and radio systems are taken care of. Mr. Sugerman said that if the Commission wants this do?e immediately, we would have to purchase all stand-alone equipment at a massive expense. Ms. Reese said a notice was placed on the Utility bills explaining the City's plans to be able to provide this service as of January 1~t. M~Yor Pro Tern Sherman said there are many peoPle who go up north for the summer. If they fail to pay their utility bills, the water is shut off and they must pay a reconnection fee. Mr. Sugerman reported that if ihese people contact the Customer Service Office, the City would calculate their average monthly bill fo~the entire time they will be up north. They will be given credit on their account if they prepay. Mri Bob Kenyon explained that 800-900 shut-offs are done each month. If this figure could be cut in half, the City will have accomplished saving money while making people happy. A member of the audience asked if there is direct deposit for pension checks. Ms. Reese advised that at the employee's request, Barbara LaDue mails checks directly to the bank. Those checks are mailed two days before they are due. Commissioner Weiland said a Library employee contacted him two months prior to the budget process requesting that the Commission consider appropriating more money for Library books. Mr. Sugerman exl~lained that the Library never feels there is enough money for books and computers. Mr. Henehan agreed. Mr.i Sugerman explained that the City provide more and more services every year with a budget that is flatij Commissioner Denahan pointed out that it is important to broaden our tax base. MEETZNG MZNUTES PUBI_I:C FORUM ON CTTY FZNANCES BOYNTON BEACH, FLOR2DA OCTOBER 14, 1999 Diane Reese, Finance Director, said she received an inquiry regarding CRA money that was spent on public housing. Ms. Reese reported that the CRA has spent money for rehabs and Paint-Up/Fix-Up, but the houses were in the CRA District. Approximately $800,000 has been spent since :[990, but the General Fund transferred $700,000 into the CRA. Another inquiry was, "Ts the City currently cOntributing General Fund dollars to the CRA?" IVls. Reese said nC~ funds from the General Fund are being contributed to the CRA. COmmissoner Weiland is concerned about the lack of maintenance in the City's median strips along Federal, Highway. Commissioner Weiland feels the City spends some money that is totally unnecessary. If ,We held contractors to their responsibilities, we would not have to expend these funds. There are weeds in the strips that will eventually choke out the plants. These are the main entrances to the City thSt should be perfectly maintained. Commissioner Weiland said he asked the Interim City Manager about the contract specifications with respect to who has responsibility for this maintenance. The response he received was that we only received three bids for this work. Two of the bids were ov~rwhe m ng so we chose the Iow bidder and we are not going to hold the contractor's feet to the fire. Th!is response is not satisfactory. Mri; Sugerman said he would provide an answer to Commissioner Weiland's questions. John Wildner, Pa~ks Superintendent, said he would work with Mr. Sugerman on this issue. Co~missioner Denahan gave Mr. Sugerman a letter to read that she received. He read the letter into the record as follows: "To WhomTtMayConcern: We're concerned citizens that would like the City Commissioners to find out where the $20,000 for the Boynton Beach Childcare Center Aftercare Program is going. Tarnell is the person in charge of the program at the center and is using the Center employees for the after program but pays for family members as if they are the ones attending the kids in the program. The purpose of this letter is to express our concern of the fact that it is not fair for the employees at the Boynton Beach Childcare Center to be required to work after normal working hours for the same weekly pay - no overtime for this funded program. We Would appreciate someone looking into this matter as soon as possible because as taxpayers, we would like our money earned - not given away. Sincerely, Anonymous." Commissioner Weiland believed that each of the Commissioners received this letter. He discussed it with Mri Hawkins who stated that $25,000 is funded by the City. Commissioner Weiland questioned how the City could respond to the letter when a name was not included. Mr.i Sugerman said his practice has always been not to respond to anonymous letters. However, at the sa~e time, an interesting question has been raised that is worth investigating. When Mayor Broemng recommended throwing away anonymous, letters, Mr. Sugerman explained that it is a public record This le~er does not have to be answered since it is anonymous. However, Mr. Sugerman said he wou d investigate this complaint. V. Settinq a date for the follow-up meetinq IVlr. Sugerman asked whether or not there was a need to set up a follow-up meeting. When he asked if the!e were any additiona questions, there was no response from the audience. He offered his address, l0 MEETTNG M'rNUTES PUBL1'C FORUM ON Ct'TY FTNANCES BOYNTON BEACH, FLOR'rDA OCTOBER 14, :1999 telephone number, e-mail address and FAX number if anyone was uncomfortable raising an issue during the meeting. COmmissioner Weiland stated that since he was the person who raised this issue, he was content with wl~at transpired this evening. He pointed out that the people who encouraged him to raise this issue , were not present for this meeting. He did not speak on their behalf because they did not show up. He spoke for himself and this is now a dead issue for him. COmmissioner Denahan explained that the City Commission takes a policy stand year after year to fund programs such as the Aftercare Program at the Boynton Beach Childcare Center. The allegations mentioned in the anonymous letter point a finger at the City Commission. Commissioner Denahan re~luested that Mr. Sugerman's findings become an addendum to the minutes of this meeting. Mri, Sugerman advised that under the law, the minutes could only contain what happened during that meeting. Nothing can be added that did not occur at the meeting. Mr. Sugerman advised that an answer would be provided at a public meeting. MrS. Broening advised that the HeadStart Program is not a City-funded program. Tt is a County-funded prggram. Mr. Sugerman explained that although it is a County-funded program, the City makes a contributiOn. Ma VI, ,or Broening thanked staff and everyone who attended the meeting. Adjournment ;re being no further business, the Public Forum adjourned at 8:15 p.m. A~E~: ~(q'hree Tapes) CITY OF BOYNTON BEACH Mayor Pro Tem Commissioner Commissioner 11 LLi WHAT ARE THE BUDGET CONTROLS? · State statutes. Purchasing Policy Manual. Spending limits imposed by the City Commission. · Department Heads have authority to purchase items up to $~'b~ 00.00 in value without further approval from supervisor. any · The City Manager has authority to purchase items up to $9,999.00 in value without further approval from any supervisor. Budget transfer rules and tracking forms. Bid requirements. All items exceeding $10,000 must be obtained by competitive bid (unless they are a sole source item or are available on a "piggy- back" purchase from another governmental entity). Sole source purchases and piggy-back purchases exceeding $10,000 must still be approved by a vote of the City Commission All professional services (exceeding certain state statute limits) must be obtained by a request for proposals. All contracts for services exceeding the professional services state statute limits must be approved by a vote of the City Commission. The City budqet is nothing more than a constantly evolving PLAN that changes and is modified on a regular and routine basis in the course of doing business. A City's budget is different than the City's fund accounting! 4 WHAT EXACTLY IS THE CITY BUDGET? Is it an exact spending document? · Is it a reasonable spending plan? · Is it just a bunch of "made-up" numbers with little or no control? Think of the city budget as a checking account with a series of spending guidelines and controls tied to it. HOW DOES THE CITY BUDGET WORK? 1) The City Commission "appropriates" money in departmental line items. 2) Once an appropriation is made, expenses can be paid out of that line item. 3) Each budget line item is a "not-to-exceed" amount, allowing a department to purchase any item or service that falls under the category of the identified line in a departmental budget. EXAMPLES: Account No. 44-30 Equipment Rental Account No. 47-10 Printing FUND ACCOUNTING Fund accounting allows the public, the State of Florida, the City Commission and the city staff to track the flow of public money. While the budget is a constantly evolVinq plan for spending money, fund accounting mandates the separate tracking of different accounts of money, based upon a uniform standard of accounting principles. We have 5 basic types of funds in the City: General Operating Fund Proprietary Fund (Enterprise) Special Revenue Fund Debt Service Fund Trust Fund Each of these funds has 5 general types of activities happening within the fund: · Collection of revenues,* · Expenditure of budgeted funds,* Transferring of money in and out, Reserving revenue funds in excess of expenditures. Maintaining a fund balance. * Far and away the two most significant types of activities in all of the funds. 5 GENERAL OPERATING FUND REVENUES Property taxes Franchise taxes Licenses Permits Intergovernmental revenues Charges for services Investment income Fines and forfeitures Miscellaneous income Transfers in EXPENDITURES Police Finance Human Resources Planning & Zoning Public Works Engineering Recreation Fire City Comm. Library Streets Building City Mgr. Parks PROPRIETARY FUNDS (Enterprise) REVENUES Charges for service Investment income Miscellaneous income Transfers in EXPENDITURES Utilities Sanitation Warehouse Insurance Golf Course Fleet operations Bus service SPECIAL REVENUE FUNDS (single I~urDose) REVENUES EXPENDITURES Unique revenue for that fund only ~ Street resurfacing program (e.g. Local Option Gas Tax)J Investment income CRA/Community Improve, Miscellaneous income Community redevelopment Transfers in Recreation programming 6 DEBT SERVICE FUNDS (bonds) Three types: * General Obligation Bonds * Public Service Tax Bonds * Revenue Bonds Supported by publicly voted taxes. Supported by Commission approved use of Utility Tax revenues. Supported by Commission approved use of utility charges from ratepayers Present Outstandinq General Obliqation Bonds: Revenue- Debt Service component of property tax bill. Expenditures- Bond issue for rebuilding City Hall Bond issue for the acquisition of 10-acre parcel. Present Outstandinq Public Service Tax Bonds: Revenue- Utility taxes (F.P.&L, Bell South, cellular phones, etc.) Interest income. Expenditures- Tradewinds settlement amount. Recreation bonds (Hester Center) Present Outstandinq Revenue Bonds: Revenue- Rates paid by water and sewer customers. Interest income. Expenditures- Water plant (East and West) construction. Sewer system construction (regional facility). Stormwater system construction. 7 FINANCIAL CONTROLS State statute. Purchasing Policy Manual. Spending limits imposed by the City Commission. Budget transfer rules and tracking forms. Bid requirements (see Purchasing Policy Manual above). Comprehensive Annual Financial Statement (annual audit). 8 ill August 3, 1999 CommissionerW_iiJiam A. Sherman 904 SW 24th Street B°ynton Beach, FL 33426 Dear Commissioner Sherman' Thank you for raising the question of including museum expenses in the library budget. Virginia's response at the budget workshop was evasive and defensive. She told you that the State museum and State library are in the same biuilding, as if she expected you to believe that they have a common budget, olr that the State library serves the same function as a city public library. (The museum will open early next year. !f Virginia thought budgets should be shared by government units that are located in the same building she WOuld not have budgeted the museum for a full year, especially the salaries, utilities, software, memberships, travel expenses, pagers, workshops and training in addition to AFE, and more.) ! Public libraries often have small exhibits, but they are not museums. EVen major museums do not have the broad user base of a municipal public library that serves a diverse community with a variety of materials. ~ ! have spent a lot of time in libraries--doing research, working as a professional in a university research library, and as a patron of I~blic libraries. When ! moved to Leisureville to be near my family, ! went to work a~t the circulation desk of our public library. ! have a strong interest in our library as a resident, a library patron, and a volunteer, serving on the Library Aldvisory Board and in the Friends of the Library, a group that donates re°ney, material, and services to the library. Through the Friends ! have established an endowment to purchase books for th~ library, and 1~ am upset tO see library funds being used for other purposes. , f4useum expenses have taken an increasing amount of library funds-- sUpplies, equipment, Printing and postage, travel and phone expenses, office space, salaries of the museum director and a. "library relief clerk" to assist h~er, etc. Bookkeeping, correspondence, mailing and other clerical work done by library employees. The museum office has new computers and p,~ripherals while library patrons and those who serve them work with used e,~uipment. Book an~!~r a' aM done by e~ ~ ~:~.: volunteers. When the museum volunteer morphed into Library Special Services Director, both the.job and the division were created for her; she was the first non-librarian to become part of library management, and she was given the salary and resources that were needed to to move books and audio-visual materials out of boxes in the back, room and onto the shelves. (This is not a criticism of a person but of budgeting and manipulating.) This year, as in past years, only "special" materials are being ordered during the last quarter of the fiscal year. ]:n the fall, new orders will start to pile up, and some of them won't reach the public area for several months. An outside auditor has been mentioned. That and some reorganization sound like good ideas. Sincerely,__ Alice Otis otisa@bellsouth, net 203 SW 13th Street Boynton Beach, FL 33426