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Minutes 07-08-04MINUTES OF THE COMMUNITY REDEVELOPMENT AGENCY BUDGET WORKSHOP MEETING HELD IN THE LIBRARY PROGRAM ROOM, BOYNTON BEACH, FLORIDA, ON THURSDAY, JULY 8, 2004 AT 6:00 P.M. Present Henderson Tillman, Vice Chair Alexander DeMarco Marie Horenburger Steve Myott Doug Hutchinson, CRA Director Susan Vielhauer, Controller Absent Jeanne Heavilin, Chairperson James Barretta Don Fenton I. Call to Order In the absence of the Chairperson, Vice Chair Tillman presided and called the meeting to order at 6:07 p.m. I1. Budget Workshop Doug Hutchinson, CRA Director, reported that this was the third budget he has prepared. The figures contained under the heading "Current Year/Adjusted for Roll Over 2003/2004 (color coded in tan) has backup in the same color in the back of the budget document. This is a roll over budget, which means these are commitments made through the end of this year that will be paid from next year's budget. This budget does not match last year's budget because some of the funds were not spent. The next column in white contains the figures for 2004/2005. Mr. Hutchinson stated that he would be going over some line items that are new or have experienced a sizeable adjustment. 2004/2005 Revenues & Available Funds - $3.5 million This figure is up $1 million from last year Mr. Hutchinson pointed out that only two years ago the entire TIF was $980,000. Other Revenue Income - $120,000 - Trolley Grant Meeting Minutes Community Redevelopment Agency Budget Workshop Boynton Beach, Florida July 8, 2004 Mr. Hutchinson reported that they would find out by July 15th whether they would be receiving this grant. Since this is a pilot program, they would be able to receive additional grant funding in addition to advertising revenues. The Traffic Concurrency Exemption Area Study that enables the CRA to have massive development downtown with concurrency mandates that a trolley system be put in. This will eventually tie into Tri-Rail and Palm Tran. With regard to funds received for payment in lieu of parking, staff is considering using some of these funds to underwrite the funding of the trolleys. Ms. Horenburger inquired why the grant projections for the year 2007/2008 went down and then went back up to the original amount the next fiscal year. Mr. Hutchinson stated that this was only a forecast. Once the CRA is in the MPO system and has an approved trolley system, they would be eligible for other grant sources. Mr. Hutchinson also stated that when staff seeks approval of the budget, the approval would be to allow for adjustment of the previous year's budget, plus the budget in the "white column" entitled "Year 2004/2005." The figures for the years 2005/2006 through 2008/2009 are projections and should be considered a planning tool. Expenditures Personnel Costs - $324,730 Mr. Hutchinson pointed out that the biggest increase in this item is insurance. They are requesting a new staff person to fill a bookkeeping position. Ms. Vielhauer's work responsibilities have increased and a bookkeeper is needed so that Ms Vielhauer can devote her time as the Controller and to free her up from the routine bookkeeping duties. It is anticipated that the starting salary would be around $35,000 mid-point and that Ms. Vielhauer would supervise this person. Mr. Hutchinson reported that the CRA's first audit resulted in no audit exceptions, which is outstanding. Mr. DeMarco recommended that the CRA try to hire a retired CPA who wanted some additional income to fill this position. With this experience, he felt that they would be the most qualified to do the job. Ms. Horenburger inquired if this would be a fulltime position. Mr. Hutchinson noted that cities that have CRAs with this size budget have up to seven staff members and they only have four; this would be a fulltime position. At the next Board meeting, they will be bringing over $100 million in projects He anticipates that by the end of the year they would see another $300 million to $400 million in projects. Lobbying - State & Federal - $60,000 Vice Chair Tillman questioned this item. Mr. Hutchinson reported that $30,000 would be used for State lobbying and $30,000 for Federal. They would be piggybacking with the Meeting Minutes Community Redevelopment Agency Budget Workshop Boynton Beach, Florida July 8, 2004 City contracts. Mr. Hutchinson pointed out that there are several issues that have arisen that could affect the CRA. The City has a lawsuit on building height that might eventually involve the CRA. Vice Chair Tillman did not think that the CRA should be involved in lobbying, and he would like to see these expenses justified. Mr. Hutchinson explained that Boynton Beach Boulevard has an FDOT easement problem that needs to be removed and it is necessary to lobby FDOT to get this accomplished. Vice Chair Tillman felt that this should be the City's responsibility. Mr. Hutchinson explained that the City requested that the CRA assist with lobbying efforts. Ms. Horenburger asked what the City's costs were for lobbying. Mr. Hutchinson stated that the City spends $60,000 at each level. He pointed out that the City requested that the CRA allocate this amount for lobbying in its budget. Ms. Horenburger inquired what the City is paying in relationship to what the CRA is being asked to pay. Mr. Hutchinson said he would find this out and report back to the Board. City Staff - $7,500 Ms. Horenburger inquired what this was attributable to. Mr. Hutchinson pointed out that this is for clerical services provided by the City Clerk's Office that included taking the minutes of meetings and are the only services that they pay for. > Legal - $175,000 Ms. Horenburger inquired why' there was such a great increase in legal services. Mr. Hutchinson responded that there are several potential pending lawsuits. The expected legal costs are $75,000. The CRA has $100,000 in reserve for special projects that may never be used, but if the CRA needs these funds for special legal counsel, they would be available. Mr. Myott inquired if there were legal expenses for eminent domain and Mr. Hutchinson stated that these costs were included in acquisition costs. Contracted Services; $275,000 Mr. Hutchinson noted that there was a big decrease in contracted services because many of the CRA studies have been updated and funds have already been expended. The costs may even go down further as time progresses because a lot of the contracted services dealt with construction projects. Mr. Hutchinson introduced Jonathan Ricketts, who is the CRA's construction management specialist for the Boynton Beach Boulevard Extension. Meeting Minutes Community Redevelopment Agency Budget Workshop Boynton Beach, Florida July 8, 2004 ~ Rent and Mortgage $19,200 Mr. Hutchinson stated that at the next Board Meeting he would be seeking approval to rent a different office in the building that they currently occupy. The new office has a much better set up than the current one. The rent will increase from $1,000 to $1,600 per month. The new office has private conference rooms and is located near the current office. The existing office would be occupied by the Police Department that needs to maintain an office in the downtown area. At the last meeting, the Board encouraged staff to find something to purchase and this expense is anticipated in later years. Association Meetings & Seminars - $11,222 It is anticipated that some staff would be requesting to attend the International Downtown Association Conference and other conferences. Mr. Hutchinson pointed out that even with the increase for an additional employee, lobbying and legal expenses, there is still only a $175,000 increase in this budget from last year's budget. Debt service decreased from 12.6% to 9.2% and operating expenses went down from 44.2% to 37.1%. Mr. Myott inquired about the loan on the books. Mr. Hutchinson explained that the CRA borrowed $3 million to assemble property for a downtown parking structure. It was later determined that the CRA should enter into partnerships with private entities, rather than trying to build a parking structure. Because the loan has a repayment penalty, it would not be feasible to pay the loan off early. The financial expert that the CRA hired is looking into retiring this loan. The funds are invested in the meantime and are being used for other projects. Programs There is not much change for this item from last year. The CRA will have its own Police Force with four fulltime officers; its own equipment; two police cars; four bicycles; and full uniforms with appropriate gear. They will provide extra coverage above and beyond the normal police patrols. The contract for these services will be on the agenda for the next CRA meeting. The CRA will pay for the four Officers, plus 10% for administration. Vice Chair Tillman asked what the actual costs would be for the Police Contract. Mr. Hutchinson stated it would initially cost $250,000 and $350,000 has been allocated in next year's budget. Therefore, the cost of the Police Contract for one year and four months comes to $600,000. Vice Chair Tillman said that originally the figures had been less. Mr. Hutchinson pointed out that the Officers chosen for the CRA are costing more, but this is due to their having extensive experience and expertise in the areas needed. The Officers would be at the next Board meeting to meet the members. Vice Chairman welcomed and introduced Mayor Taylor who joined the meeting. Mayor Taylor requested to address the Board. Meeting Minutes Community Redevelopment Agency Budget Workshop Boynton Beach, Florida July 8, 2004 Mayor Taylor thanked the Board for the wonderful work they are doing, and he is very proud of the CRA. He wanted to address the Board on two items. The first one was "perception" and in that regard he gave a story on how important perception can be in getting things done. He felt it was important for the CRA to obtain new quarters, because the current offices are too small and cramped. It was important that the CRA make a good first impression when developers or other businesspeople visit with them for the first time. Mayor Taylor would like the Board to give serious consideration to finding the necessary funds to build an office that the City could be proud of. Mayor Taylor next expressed his support for the Police Officers that the CRA is hiring. He felt it was important that a safe environment be created before developers come in. He also is encouraging the City to hire more Officers and they will be hiring six regular and two Auxiliary Police Officers. The four Officers hired by the CRA would complement the City's Police Force. Mayor Taylor felt that it was the City's duty to police the City and he anticipates that at some point in the future, the City would take over the CRA's responsibilities. Mayor Taylor was in favor of bringing the four Officers on board as soon as possible. Mr. DeMarco informed Mayor Taylor that the CRA has located new offices and would be moving shortly. Mr. Hutchinson thanked Mayor Taylor for his support. Total Trolley Programs with Grants - $472,000 Mr. Hutchinson pointed out that they anticipate bringing in additional revenues to reduce the costs, but this would require him to go out and find these revenues. He pointed out that he cannot get the revenues if he does not have a trolley. At this time, the budget includes the entire costs for the trolleys. Vice Chair Tillman inquired if staff was actively seeking revenues at this time. Mr, Hutchinson stated they cannot do this until they know if they received the grant from MPO. If the CRA does not receive the grant, Mr. Hutchinson recommended that they acquire one trolley for Ocean Avenue that would cost $150,000, which cost is included in the budget. Vice Chair Tillman had concerns that the cost for the trolley would detract from the CRA's mission and was the trolley an actual priority? He did not want to see funds diverted from other CRA priorities used for a trolley. Even if the grant funds were received, he was in favor of starting with only one trolley as a pilot program. Mr. Hutchinson explained that the Traffic Concurrency Exemption Area that the CRA must follow mandates having the trolley, not internally, but one that would go to the Trio Rail Station and the Mall. He felt they could raise a great deal of money with advertising. Also, they will be receiving funds from the developers because the TCA requires developers to contribute to the program. If they do not receive the MPO grant Meeting Minutes Community Redevelopment Agency Budget Workshop Boynton Beach, Florida July 8, 2004 and they only begin with one small trolley downtown, the CRA would be required to do a study to see what the impact would be of not having the trolley in place. Mr. Hutchinson also pointed out that in order to receive concurrency to build the promenades and the big projects coming on line, they would not receive any building permits at the County level. Ms. Horenburger acknowledged Vice Tillman's concerns. She reported that she serves on the Tri-Rail Board, which is now called the Regional Transportation Authority, and they recently received a huge Federal grant a couple of years ago to double track the Tri-Rail. If the CRA starts too small, she feels that the CRA would not be able to generate the anticipated usage of the trolley. She noted that it is important that the trolley operate all the time and this cannot be done with one trolley. Mr. DeMarco inquired if the costs included insurance. Mr. Hutchinson stated that there would be no insurance costs. The trolley system will piggyback the Town of Jupiter's contract for their trolley system. This is a service-based contract and the CRA is not buying the trolleys. Mr. Hutchinson felt that after the pilot years, the CRA should consider approaching the City to discuss a partnership arrangement. Ms. Horenburger was optimistic that the grant would be approved. Vice Chair Tillman asked that the Board keep in mind that the CRA's primary mission and duties were to fund development in the CRA area. He did not want to see anything taken away from this. Vice Chair Tillman considers the Florida State Statutes as the Agency that sets forth the primary mission for the CRA, which is redevelopment of blighted areas, while increasing the tax base. Ms. Horenburger felt that if the traffic performance issue is related to the CRA being able to redevelop then that is a policy itself. Mr. Hutchinson explained that Vice Chair Tillman and Ms. Horenburger were both correct. In Florida especially, the role of the CRA is emerging where affordable housing is linked to transportation. Mr. Hutchinson explained that the TCA that the City received is among a few received in this area of Florida. The TCA was approved with provisions, and if they were not followed, the CRA would not receive concurrency for their projects. Mr. Hutchinson noted that the State Statutes that originally created Community Redevelopment Agencies had a different vision than the mandates of DCA. Mr. Hutchinson feels that this CRA is more on top of the programs that support development than many other CRAs, but they still should not lose track of their beginnings. Festivals & Events - $42,100 Mr. Hutchinson pointed out that Delray Beach spends approximately $1.4 million for events. He is recommending that the CRA spend $42,100. The money will be used to increase the quality of entertainment and build upon some of the successes that have taken place. This is a modest increase over last year's budgeted amount. Meeting Minutes Community Redevelopment Agency Budget Workshop Boynton Beach, Florida July 8, 2004 Holiday & Events Street Decorations - $15,000 The budgeted amount will cover the costs for street banners and holiday decorations in cooperation with the City. Marketing and Promotions - $2,075 This is a new line item. When items are selected, they would be brought to the Board for approval. Fagade Grants - $175,000 Economic Business Grants - $185,000 Mr. Hutchinson reported that the CRA has received tremendous response to the grant programs. He will be bringing in a new program that will tie in with people who are trying to assemble their neighborhoods, owner-to-owner. In order to do this, they need to get all the properties appraised and have surveys done in order to entertain developer bids. He would like the CRA to match these grants $1 for $1 up to $15,000. If the neighborhood changes its mind, the CRA would require its pro rata share of the grant back. Mr. Hutchinson felt that they already had the funds for this new program. Vice Chair Tillman inquired if the $35,000 rollover was included in the $175,000. Mr. Hutchinson stated that the $35,000 would be paid out prior to October 1st. Vice Chair Tillman inquired where the money for the new grant program would come from. Mr. Hutchinson stated that there are funds available in miscellaneous projects and in the fa~:ade and community grants program. Vice Chair Tillman recommended that the new grant program be a separate line item. Projects CRA Office - $300,000 This sum is a down payment for the CRA to acquire permanent office space. This item is different from the item previouSly discussed where they are changing their current office space, that is temporary quarters. Mr. Hutchinson felt it was important that the CRA have its own space and presence. If it is determined to move forward and build, he will bring this to the Board as a mortgage item to consider for traditional financing. > Boynton Beach/Riverwalk/Promenade Project - $19,686,438 The individual costs have been broken down in the budget and are spread out over three years. Total Heart of Boynton Commercial Land Acquisition - $3,850,000 plus rollover of $350,000 Meeting Minutes Community Redevelopment Agency Budget Workshop Boynton Beach, Florida July 8, 2004 Mr. Hutchinson will be bringing to the Board a concept called Community Land Trust that will secure equity into a living land trust to insure affordable access for future generations. Vice Chair Tillman inquired how a Community Land Trust differed from a housing authority. Mr. Hutchinson explained how the Land Trust would work and that it would own and manage property titles and could partner with the housing authority. Setting up a Community Land Trust would involve setting aside a portion of the CRA funds in a trust to be used for generations. Marina Parking Garage - $750,000 This is the contract that the CRA has for the Marina area, which is a construction draw down based upon performance. Town Square Project Development - $50,000 A study is being done regarding the future redevelopment of Town Square and CRA funds would be used in conjunction with City funds if it moves to the architectural design phase. Savage Creatures Museum - $175,000 An initial feasibility is being done and the report may recommend moving to the next stage. This report will be furnished to the members prior to the budget being approved. Mr. Hutchinson pointed out that none of these line items require bonds for funding. The TIF growth is substantial, and he would like the Board to consider financing these projects using the TIF. He did not think it would be feasible to pass a budget on "what ifs." When decisions have to be made, he will bring them to the Board for consideration. He noted that in two years they would have an additional $2 million in TIF revenue. This amount of money would allow the CRA to seek $20 million in bonding capacity. Vice Chair Tillman pointed out that there is a $4 million deficit in the budget. Mr. Hutchinson confirmed that this was correct, but stated that these are raw numbers. The budget is not based upon forecasting; this is something the financial planner would be doing. Vice Chair Tillman did not want to start the new budget in the red. He would like to look at the budget to see what could be cut to decrease the deficit. Mr. Hutchinson pointed out that when the CRA goes out for bonding, they would be looking to obtain $17 million. If this were the case, Vice Chair Tillman would like to see a budget that would include these additional funds. If these funds were not included, he would like to see $4 million taken out of the budget. Mr. Hutchinson did not feel that having a $17 million debt load would be unrealistic. He pointed out that the Delray Beach CRA carries a larger debt in bonding and receives less TIF funds. Mr. Hutchinson did not feel it would be realistic to cut out funds for any projects because these projects would be bringing in millions of dollars to the CRA tax Meeting Minutes Community Redevelopment Agency Budget Workshop Boynton Beach, Florida July 8, 2004 base. It is important that these projects move forward and be done right and to do this the Board has to consider to go out for bonds. Mr. DeMarco felt it was important that the budget is positive in order to attract the right kind of development and he would like to move forward with bonding. TIF Projection The County is projecting a 19.7% appreciation in value in TIF funds. Staff was conservative and only projected a 15% appreciation. Also, Mr. Hutchinson pointed out that the CRA has a reserve of 20% or $503,000 in the bank. The debt being discussed is based on last year's revenue of $2.5 million to cover debt service. This equates to not encumbering future dealings to pay their debts. The figures include projects that are committed to coming on the tax rolls next year and these projects are not the multi-million dollar projects that will be coming on the tax rolls in three or four years. Mr. Hutchinson was confident that the CRA could handle any future projects that may arise and his figures are very conservative. Ms. Horenburger inquired when the financial advisor would be coming to the Board to discuss financing. Ms. Horenburger inquired if the CRA was receiving interest on the money in the bank and was informed that it did earn interest. Mr. Hutchinson pointed out that they earned $23,625 in interest. He noted that the financial advisor would be present at the next workshop to discuss funding. After that workshop, the budget could be finalized at the September meeting. Mr. Hutchinson recommended that the budget workshop scheduled for Thursday, July 22nd be cancelled. He requested that the budget workshop tentatively scheduled for Thursday, July 29th remain on the calendar in the event the financial advisor would have her recommendations by that date. III. Adjourn There being no further business, the meeting properly adjourned at 7:25 p.m. Respectfully submitted, Barbara M. Madden Recording Secretary (July 9, 2004)