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Minutes 11-10-98 MINUTES OF THE CEMETERY BOARD MEETING HELD IN CONFERENCE ROOM “A”, CITY HALL, BOYNTON BEACH, FLORIDA ON TUESDAY, NOVEMBER 10, 1998 AT 7:00 P.M. PRESENT Tim Hensley, Chairman John Wildner, Parks Superintendent Sue Kruse, Secretary Joan Kuehn Candace Smith Oris Walker ABSENT Tereesa Padgett, Vice Chairwoman I. CALL TO ORDER Chairman Hensley called the meeting to order at 7:00 p.m. II. ATTENDANCE Secretary Kruse noted that all members were present with the exception of Vice Chairwoman Padgett, who was out of town. Secretary Kruse acknowledged the presence of Mr. Wildner, Parks Superintendent, and Messrs. Kevin Blaser and Steve Sirop of Shay Financial Services, Inc. III. AGENDA APPROVAL Motion Ms. Smith moved to accept the agenda. Mr. Walker seconded the motion that carried unanimously. IV. APPROVAL OF MINUTES - OCTOBER 13, 1998 Motion Mr. Walker moved that the minutes of the October 13, 1998 meeting be approved as presented with necessary corrections if needed. Ms. Smith seconded the motion that carried unanimously. V. RECEIPT OF BALANCE SHEETS - OCTOBER, 1998 Secretary Kruse reported that the Balance Sheets were not ready for presentation at this meeting. This item will be tabled to the next meeting. 1 MEETING MINUTES CEMETERY BOARD BOYNTON BEACH, FLORIDA NOVEMBER 10, 1998 A. Review of Boynton Beach Cemetery Fund as Presented by Shay Financial Services, Inc. Mr. Sirop explained that the report that was presented to the members gave a brief overview of the firm. (A copy of the presentation is attached to the original set of minutes on file in the City Clerk’s Office.) This process began when Diane Reese, Finance Director, expressed some concern about making sure the fund continues to have money for maintenance of the Cemetery once all sales are complete. After reviewing the Balance Sheets and using figures from investments that were made in the past, Shay Financial Services was able to provide rough assumptions of what is happening now as compared to what Shay Financial Services might be able to do with the fund. When Mr. Blaser stated that the expenses will always be the same, Mr. Wildner explained that the expenses may diminish somewhat because the cost of operating the Cemetery without funerals will be less. Mr. Blaser pointed out that he used an inflation figure of 3%. This provides a cushion if inflation stays below 3%. He created four scenarios using different rates of return. Through 2005, there would be $105,000 generated through sales. In the year 2006, if the fund were realizing a 4.75% rate of return on investments, the fund would begin to lose $13,000 per year. To avoid this situation, investment should be in something other than money market accounts. By capturing a 5.75% rate of return, the fund would gain $40,000 per year. Mr. Sirop reported that if investments remain in the money market accounts, the fund will begin to lose money and the fund balance will erode. By being slightly more aggressive in the investments, the fund will not erode the balance in 2006. If the fund were able to capture a 6% rate of return, the fund would gain $50,000 per year. Mr. Sirop explained that these investments are all “AAA” investment credits. These are the types of investments that all of the cities throughout Florida invest in all of the time. What Shay Financial Services means by “being more aggressive” is that they move out the duration of the portfolio. This adds interest income without risking the principal. This would allow the expenses of the fund to be paid. Mr. Sirop explained that it would also be possible to figure out a way to keep some of the money invested in the money market and move some into longer- term investments. In order to get a 6% return as depicted in Scenario #4, it would be necessary to invest in longer-term mortgages. These investments are pooled into a fund that has a duration that is longer than the money market accounts the fund is currently investing in. Mr. Sirop confirmed for the members that all of the investments are still “AAA” rated. The less aggressive one has duration of about 2.2 years and the Shay Financial Services treasury fund, which is the most liquid, has duration of 1.9 years. The money would remain in the fund over a long period of time. None of the returns are guaranteed. However, a professional manager is always looking for the best returns for the fund while keeping a constant volatility. 2 MEETING MINUTES CEMETERY BOARD BOYNTON BEACH, FLORIDA NOVEMBER 10, 1998 All of the funds are either four-star or five-star rated by Morningstar. They are all excellent performers. Mr. Sirop pointed out that Shay Financial Services works with institutions and for that reason, they are conservative. These scenarios are presented for the board’s review. The members must feel comfortable with the decision. Mr. Sirop feels the current situation is easily resolved. He urged the members never to be passive or reactive. However, he explained that it is necessary to be proactive. Chairman Hensley was pleased with the presentation and explained that the board would like to take some time to review the information and make a decision in January or February. Chairman Hensley requested that this item be included on the January meeting agenda. He further requested that Diane Reese be invited to attend that meeting. When Ms. Kuehn questioned whether or not the board would be considering a presentation from Merrill Lynch or Fidelity Federal, Chairman Hensley was not opposed, but expressed his confidence in this firm because it is conservative and was recommended by Diane Reese. He is not willing to invest too heavily in the stock market. B. Brady Osborne 1. Mausoleum Construction Mr. Osborne was present to address the board’s concern about the completion of construction of the Mausoleum. He explained that the columns and fascias have been set. The only thing holding up construction at this time is the arrival of the granite. The granite was ordered and is being shipped from either Spain or Portugal. The contractor has done everything he can do up to this point and it is anticipated that the Mausoleum construction will be completed by the end of January, 1999. Mr. Walker confirmed that he spoke with the contractor who claimed the granite was ordered, is in transport, and construction will be completed by February 1. Mr. Walker said the appearance of the work site has improved and people have stopped asking so many questions about when the Mausoleum will be ready. He pointed out that as long as people see progress, there would be fewer complaints. Mr. Osborne said that if this were a private mausoleum, he would begin making entombments within the next 30 days. Entombments can be made before the granite is put on. He said he approached the board with this issue in the past, but it is the City’s policy that a CO is required prior to any entombments. 2. Memorialization at the Mausoleum Mr. Osborne also stated that he has given a great deal of thought to memorialization on the fronts of the crypts. Because of vandalism of letters, a great deal of damage can be done very quickly and the City is liable. Therefore, in Boca Raton, the crypts are being incised and this has worked out very well. The people are very happy and the lettering is permanent. Mr. Osborne explained that the Cemetery workers would have to remove the crypt front and he 3 MEETING MINUTES CEMETERY BOARD BOYNTON BEACH, FLORIDA NOVEMBER 10, 1998 would engage a firm to take it off site for the incising. The workers would then have to put the front on the crypt when it returns. This is a process that is done at the time of entombment. He pointed out, however, that if a person decided to sell the crypt, there would be a cost of several hundred dollars because a new crypt front would be involved. Mr. Wildner advised that the City has a monument at Heritage Park that is granite. Lake Worth Monument incised it. That monument looks very attractive. Periodically, when a name is added, Lake Worth Monument brings their portable device to the site for the incising. Chairman Hensley realized there are two negatives involved with this - one would involve the problem of people who sell their crypts and the other would be keeping in tune with the remainder of the Cemetery. Mr. Osborne said everyone would have to agree to go to the incising on this building and the next new building. Even though incising is more expensive, he believes the people will choose incising over the bronze lettering. 3. Maintenance of Mausoleum Mr. Osborne requested that a board member check the Mausoleum weekly to ensure that it is maintained properly. He mentioned webs, mud daubers, and mildew. He feels the Mausoleum should be pressured cleaned more often. He pointed out that the Chapel is maintained very well and the Mausoleum should have the same attention. Ms. Smith agreed that this work should be done every three months and the Mausoleum should look nice at all times. Mr. Wildner will bring this to the attention of Facilities Management and request that they set up a regular maintenance program for the Mausoleum as well as the Chapel. Mr. Wildner requested that Mr. DeBeck be invited to the next meeting of the Cemetery Board. VI. RECEIPT OF SALES REPORT - OCTOBER, 1998 Motion Mr. Walker moved to accept the Sales Report. Ms. Smith seconded the motion that carried unanimously. VII. UNFINISHED BUSINESS A. Parks Department Report Mr. Wildner announced that the mowing of the Cemetery was completed this week and line trimming began. There was a flood at the Mausoleum during the recent storm. The water came off the road that enters the Little League field, flooded the interior of the Chapel and soaked the rugs. The rugs were removed and are being cleaned. They should be back in the Chapel by the end of the week. Mr. Wildner reported that he sent a report to Risk Management about this situation. 4 MEETING MINUTES CEMETERY BOARD BOYNTON BEACH, FLORIDA NOVEMBER 10, 1998 Ms. Kuehn questioned why there were orange cones in place in the Cemetery over the past weekend. Mr. Wildner said the workers were working in the area and put up the cones to avoid people who cut through the Cemetery. Mr. Wildner announced that the Cemetery crew was requested to get estimates for repairs to the portable chapel. This chapel was purchased in 1983. The welding company recommended that we do not attempt to make any additional repairs to this equipment. With that recommendation in mind, Mr. Wildner began seeking estimates on a replacement chapel. In 1983, we purchased the chapel for $3,500. Today, a new chapel would cost $5,200. As an alternative to purchasing a manufacturers’ model, the welder suggested that for $4,800, he could construct an aluminum frame with Fiberglas wheels. Mr. Wildner is not certain the aluminum would hold up as well as the steel manufacturers’ model. Consensus After brief discussion, there was consensus of the board to authorize Mr. Wildner to seek two additional bids and consider purchasing an aluminum structure. B. Reports on Cemetery Areas Assigned to Members Mr. Walker referred to his earlier discussion of the Mausoleum and stated ? that his other area is in good shape. Ms. Smith did not have an opportunity to inspect her areas. ? Ms. Kuehn viewed her area from the roadway and felt it looked good. ? Chairman Hensley remarked that the entire Cemetery looks good. ? VIII. NEW BUSINESS A. Refund Request from Robert J. Fish for Lot 232A, Block N, in the amount of $140 Chairman Hensley expressed some concern about the fact that Mr. Fish did not have the deed. Secretary Kruse reported that the City does not have copies of all of the deeds from so many years ago. For future reference, the City Clerk’s Office has noted that the deed was in Mr. Fish’s mother’s name, but she was cremated. Chairman Hensley was willing to support this request since there is no one interred and Mr. Fish’s brother lives in Texas. 5 MEETING MINUTES CEMETERY BOARD BOYNTON BEACH, FLORIDA NOVEMBER 10, 1998 Motion Mr. Walker moved to approve the request. Ms. Smith seconded the motion that carried unanimously. IX. OTHER Secretary Kruse announced that the Annual Board Dinner would be held on January 14, 1999 at Benvenuto’s Restaurant. Chairman Hensley recalled that the Cemetery Board historically eliminates the December meeting because of the holidays. The only concern that was expressed regarding eliminating the meeting was in the case of the necessity to approve a disinterment. Therefore, Mr. Walker recommended eliminating the December meeting and making it an “on call” meeting if there is a disinterment request to come before the board. first At the board’s request, the regular meeting for January, 1999 will be held on the Thursday of January at 6:30 p.m. X. ADJOURNMENT There being no further business to come before the Cemetery Board, Ms. Kuehn moved to adjourn the meeting. Ms. Smith seconded the motion that carried unanimously. The meeting properly adjourned at 8:12 p.m. Janet M. Prainito Deputy City Clerk (Two Tapes) 6