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Minutes 07-14-09 MINUTES OF THE CITY COMMISSION BUDGET WORKSHOP MEETING HELD IN THE LIBRARY PROGRAM ROOM, LIBRARY, BOYNTON BEACH, FLORIDA, At 1:00 P.M., ON TUESDAY JULY 14,2009 Present: Jerry Taylor, Mayor Woodrow L. Hay, Vice Mayor Ron Weiland, Commissioner Jose Rodriguez, Commissioner Marlene Ross, Commissioner Kurt Bressner, City Manager James Cherof, City Attorney Janet Prainito, City Clerk Mayor Taylor called the workshop to order at 12:56 p.m. Vice Mayor Hay gave the invocation and Mayor Taylor led the Pledge of Allegiance to the flag. 1. Review Proposed Budget for Fiscal Year 2009/10 Commissioner Weiland commented the next few days could be contentious and feelings could be hurt. The budget had to be balanced and it was the ultimate decision of the Commission. Remarks made should not be taken personally by anyone. Mr. Bressner noted it was the second year of a four-year down cycle and next year's budget would also be difficult. Nationally the economy was struggling and Florida's recovery was lagging behind the average, especially southeast Florida. For government, it takes 18 months for any economic improvements to increase revenue streams. The taxable value of Boynton Beach went down 18% with the majority on residential properties. Commercial property values would decrease the next year. Four models were created by staff that were balanced budgets, utilizing reserves from the General Fund as well as project deferrals. They included a 7% reduction in the utility rates. The model recommended by Mr. Bressner did not include any personnel layoffs, but did require a salary freeze and an increase in the millage rate to 7.3. Another option included keeping the millage rate the same and imposing a 2% salary reduction, staff layoffs and program <:uts. A third option set the millage rate between the current rate and roll back rate. The roll back rate would be 7.9 which is a mathematical calculation of dividing the total revenues last year into the new taxable value creating the new tax rate. Commissioner Weiland requested clarification on the reference to the reserves for the future. Mr. Bressner explained both the short term and long term condition of the City was examined and it was recognized it would not be advisable to draw down the reserves significantly this fiscal year. The budgets utilize $3.5 million from the reserve this year and next year. Mayor Taylor recailed at last year's budget workshops there was a reserve of $24 million and $6 million had been used, leaving $18 million in the reserve that .includes the emergency reserve of $7 million. This would leave approximately $11 million in the reserve. Commissioner Rodriguez questioned if the rate for reserve would continue at 10 percent and Mr. Bressner responded it would. It '!lias calculated that even taking $3.5 million for the next two years 1 Meeting Minutes Commission Budget Workshop Boynton Beach, FL July 14, 2009 would not impact the emergency reserve funds. Commissioner Rodriguez noted if you continue to re-allocate for the emergency reserve, it would not go below the $7 million. Barry Atwood, Director of Finance, cautioned the reserve was set at 10 percent of the expenditures each year and would fluctuate with the expenditures. Commissioner Weiland summarized that the reserve was funded when the economy was strong and the use of any reserve monies was not required. Vice Mayor Hay noted the policy had been set years prior and Mr. Bressner concurred it was a good practice. Commissioner Ross inquired how the audit would affect the reserve fund and Mr. Atwood ,replied the operation was at a slight deficit. Mr. Bressner recalled the Commission had set seven goals that were to be considered iN staff during the budget preparation. They were as follows: o Keep the millage at 2008 rate o Explore use of unobligated fund balances o Cut no essential services o Preserve public safety o Avoid layoff of City employees, use job sharing and attrition of existing positions o Continue the fire assessment into 2009 o Evaluate expenditures in the Utility Fund to reduce the rate for consumers Mr. Bressner reported all the goals had been accomplished in three of the four models presented, except keeping the millage rate the same. It was necessary to maintain a $1.2 million surplus in the General Fund to retain 15 police officers, if a grant for $1.2 million to cover the expense was not received. This would preserve public safety. Three of the four models did not include the Boundless Playground project. The project may not be possible unless other funding sources are found. Commissioner Weiland requested clarification of the roll back rate and increasing ad valorem taxes. Mr. Bressner replied the roll back rate is the mathematical number that would generate the same dollars in prior years. In prior years the roll back rate resulted in a tax reduction. It is now a reverse situation. Last year gross tax revenue was $35 million. The 2009 g~oss tax revenue will be $29 million. The roll back rate to achieve $35 million again would be 7.9 mills. To set a rate beyond the roll back rate would require an extraordinary vote of the Commission. The roll back rate can be approved by a simple majority vote. Commissioner Rodriguez clarified that the roll back rate would be an increase in the millage rate that would produce more tax revenue. He suggested the models be reviewed line by line since the total figures were somewhat misleading without a clear understanding of the line items. Commissioner Weiland understood the grant for the police officers had already been approved. Chief Immler offered his opinion that at least some portion of the amount would be approved. Commissioner Weiland speculated it could be resolved before September. Mr. Bressner agreed and noted that was his premise for suggesting the 7.3 millage rate. Commissioner Rodriguez inquired if the number of employees to be laid off in model 3 included active employees. Mr. Bressner noted it did include active positions with the exception of the 2 Meeting Minutes Commission Budget Workshop Boynton Beach, FL July 14, 2009 Children's Museum Director position that was now vacant. There were 49 open positions that Mr. Bressner was not authorizing with 23 of those positions not being included. in the 2009/2010 budget.' Commissioner Rodriguez suggested an evaluation of the 26 vacant positions to determine if a realignment of responsibilities could be done with the 21 active employees designated for layoffs. Mr. Bressner advised there was a figure of $500,000 set aside for positions lost through attrition. Commissioner Weiland did not feel there would be attrition during the economic instability. Mr. Bressner had reduced the amount from $1.2 million in prior years. Commissioner Rodriguez was suggesting that the 21 employees slated for layoff be evaluated to fill the vacant positions reducing the overall impact to active employees. Mr. Bressner advised there were positions that were being transferred into the Utility Fund. Commissioner Ross indicated she would not agree to layoff any employees until there was consensus of the Commission on all open positions. She noted there are discretionary programs such as the Citizens On Patrol program that budgets $100,000 that would be at least two, if not three, of the employee salaries under Animal Care and Control that could be maintained. Chief Immler advised the $100,000 was for two officers who were the program. Mr. Bressner cautioned no matter what programs are cut, people will have to be cut. Preliminary discussions have been ongoing to retain the possible layoffs in the vacant positions. Commissioner Weiland suggested the program cuts, if any, be determined before the issue of moving employees 'or any layoffs are undertaken. Mayor Taylor agreed with Commissioner Weiland. Mr. Bressner emphasized the 49 positions were a snapshot in time only. It was determined that 23 vacant positions could be cut from the budget. The 26 remaining positions would be necessary and already included in the budget. Commissioner Rodriguez reiterated that there be a blending of what we do not need and what we do need. Mayor Taylor speculated only four or five of the current employees would have the necessary qualifications for the vacant positions. The decision on the 22 employee layoffs had not been decided. Mr. Bressner noted the blending had been done in the past. It was pointed out that a 2% pay cut, across the board, would result in a savings of $775,000. Commissioner Weiland speculated that a 2% pay cut for a worker making $30,000 annually would be more difficult than the workers making $80,000. He suggested a pay cut be layered with 0-$40,000 receive a 2.5% pay cut, $40,001 to $80,000 a 5% pay cut and anythin~l above $80,000 a 7.5% pay cut. It was an option he felt should be considered because a 2% cut across the board was not fair at all. Commissioner Rodriguez agreed with having the .:malvsis done, but proposed the 2.5% decrease for those making less than $30;000 should perhaps be zero pay cut Commissioner Weiland contended everyone should take a pay cut. Mr. Bressner explained the rationale for the 2% across the board was to avoid the internal struggle that would occur with any breaking point. A tiered reduction was explored. Vice Mayor Hay added the 2% cut would be shared by all staff and the alternative would be not to have a job in tough economic times. He felt the 2% was fair. Commissioner Ross mentioned the unions would have to agree with any pay changes. Mr. Bressner agreed it would have to be negotiated. 3 Meeting Minutes Commission Budget Workshop Boynton Beach, FL July 14, 2009 .~ Commissioner Rodriguez noted the elimination of the longevity program. Mr. Bress,ner explained the class of 2010 would save $117,000 with $72,000 being from the General Fund. The number would change each year depending on hiring dates. It would have to be eliminated on an ongoing basis. The only change in the management package would be the buyout of the four vacation days saving $172,000. Commissioner Rodriguez considered the four days a bonus for management.. Commissioner Weiland contended management mi'lY work 30 hours one week and 50 hours the next week. Mr. Bressner did not agree and contended management works more than 40 hours every week. Commissioner Rodriguez sugge~ted the entire program be eliminated. Mr. Bressner reported to eliminate the entire management package would be a savings $663,000. It would have to be negotiated with the collective bargaining units because each union has different packages. There are eight personnel systems within the City; exempt personnel, PPM personnel, civil service employees and the four unions. Commissioner Weiland inquired if the management package included expense accounts for department heads. Mr. Bressner advised department heads did not have expense accounts. Some did have car aliowances. The City Manager budget cuts had already been deducted from each department with less monies for car allowances or cell phone charges or business meetings. There was an overtime reduction of 15%, car allowances reduced by 25%, cell phones reduced by 30% identified in the line items for each department for a reduction to a $71.9 million budget. Comm":ssioner Rodriguez requested a break down of the total expense for cell phones. Mr. Bressner indicated each department head would have to determine the cuts necessary to achieve the reduced budget figure. Program cuts proposed were the public affairs program, building department reductions based on volume and custodial service outsourced. Commissioner Rodriguez noted several ern-;tils had been received from employees in the departments on how to cut costs. Jeff Livergood, Director of Public Works and Engineering, pointed out analysis of the custodial services and the building employees was ongoing. Commissioner Ross had received many messages relating to the custodial services and individual employees. Commissioner Weiland reiterated his request for a comprehensive span of control study to be done by an outside firm. Vice Mayor Hay questioned why a span a control study was necessary. Commissioner Weiland replied staff had suggested cuts were needed in that area. He had other ideas where further cuts could be made. Mayor Taylor interjected that department heads and staff had already made many cuts and were now presenting possible models. Vice Mayor Hay noted a decision had not yet been made on the model to be followed. Commissioner Ross added the selected model could be a hybrid of what was being presented. Commissioner Rodriguez opined the millage rate could remain the same and reduce the taxes for the citizens by making only a few decisions to eliminate a small number of programs or projects. Mr. Bressner added suspending the police facility alone would save $1.8 million the first year. Applying the suspension of the police facility to model one, and assuming a salary cut goes forward, only $160,000 would be needed to balance the budget and no one would be 4 Meeting Minutes Commission Budget Workshop Boynton Beach, FL July 14, 2009 laid off. Further direction from the Commission relating to the police facility was needed to address the issue of the millage rate. Commissioner Weiland questioned what monies would be saved through retirements. Mr. Bressner responded only those individuals in the DROP program provided any concrete data on retirement dates. Commissioner Rodriguez revealed at the conclusion of the workshop he would be presenting his own proposed budget. The police facility was not off the table and many of the police officers have advised it is not a priority in the current economic situation. Commissioner Ross stressed she was anxiously awaiting the opening of the RFP for tile police facility and City Hall. Mayor Taylor agreed he was interested in the proposals. Commissioner Rodriguez indicated the project was not funded. He was also curious about proposals, but hesitant if it was the right time and place, with the necessary resources. The credibility of the City with developers and architects was an issue and a decision needed to be made sooner rather than later according to Mr. Bressner. Commissioner Rodriguez surmised it was a huge decision to spend a great deal of money in a bad economy and was not that important at this time. He felt it should go out to referendum and let the citizens decide. Mr. Bressner suggested perhaps the RFP should be cancelled. Mayor Taylor disagreed. A new police facility had been needed for years. Five and six people were now working out of a closet and evidence was stored in hallways. Money would have to be borrowed whenever a new facility is built and the longer it takes, the more expensive the project will become. Mayor Taylor supported moving forward with the model three proposed budget. No employees would be laid off, the police department is funded and the millage rate would increase, but people were willing to pay for improved public safety. All the citizens depend on the police and fire. Commissioner Weiland interjected increased publiC safety was why Fire Station 1t4 was opened and a substation was put in Renaissance Commons for the police. He did not feel it was the right time to build a new police facility. Public opinion did not support borrowing funds to build a new facility. Commissioner Rodriguez encouraged the Commission to speak to the officers and union representatives who were willing to forego the new fi;lCility at this time. Mr. Bressner commended staff for their understanding of the budget issues and their willinQness to make concessions. Vice Mayor Hay advised he was considering model one and three. Based on the discus~ions he could support model one and felt further efforts could be made to avoid layoffs or reduced services. Public comment he had received revealed citizens were willing to spread the burden and pay more in taxes for better services. Cross training the employees to fill other positions was a viable option. Mr. Bressner did not want to give false hope that i;he 22 individua:s could be retrained for other positions. The skill se~ vary greatly and no guarantee could be made that all employees could be reassigned. Mayor Taylor offered an increase in millage rdte with lower property values would not equate to a substantial increase in taxes. Mr. Bressner alleged if a property was bought after 2004. property taxes would decrease with the millage set at 7.3. Properties bought before 2004 would realize a slight increase in taxes at 7.3. The window of homesteaded properties, of approximately 7,000 parcels, would have an increase in their taxes at 7.3 mills. 5 Meeting Minutes Commission Budget Workshop Boynton Beach, FL July 14, 2009 Commissioner Rodriguez cautioned the increase in the City millage would be in addition to the County tax increase of 16%, and an increase in water rates by 33%. He encouraged the Commission to be different and not raise the millage rate and help the citizens by redudng the taxes. Commissioner Weiland compared homeowners who pay less than $1,000 in r;roperty taxes to those that pay over $10,000 and questioned if both wanted to pay more taxes. Commissioner Weiland pointed out transportation with the Shopper Hopper and after school transportation have five employees who answer to one supervisor. He suggested the supervisor position should be eliminated and similar situations exist throughout the City. There are instances of supervisors supervising supervisors. There is too much staff. Mr. Bressner offered to show how Boynton Beach staffing compares with other communities. Commissioner Weiland was not willing to make the comparison. He asserted the City maintains the same number of employees whether or not there are trends in development. A discussion ensued on the increase in the water rate and the proposal to decrease the rate by 7% until October 1, 2009. This funding would change the Utility Fund revenues. There had not been an increase in water rates since 1994. The four models were reviewed and the differences in each model were clarified. Mayor Taylor suggested they agree on a millage rate of 7.3 and if the police grant was awarded the rate could then be lowered. Commissioner Ross. requested further explanation on the Boundless PI~yground. Mr. Bressner explained the monies are surrender dollars and the cancellation savings would be $1.9;million. Mr. Atwood added the remaining cost is $2.4 million and they were spreading the cost over two years. Commissioner Ross recalled the advisory board had ranked the project number two of a possible nine. The funding was only included in the fourth model with a 7.9 tax millage. Commissioner Rodriguez assumed none of the recreation and parks projects listed would affect the General Fund. The Boundless Playground was in danger. Commissioner Weiland did not feel it was necessary at this time. Vice Mayor Hay agreed with Commissioner Weiland regarding the Boundless Playground Commissioner Rodriguez indicated it was a struggle in the best economic times to get grants for the playground. Mr. Bressner cautioned the window of opportunity for state funding was ciosing, but there was always the opportunity for non-profit funding over a period of time. A list of projects that were deleted from the budget included the BBTV upgrade, fire alarm upgrade, Congress Middle School landscaping, Old High School demolition, greenway and bikeway, Hester Center landscaping, way-finding signage, and Boat Club renovations. The Hester Center landscaping was in the CIP budget, but it did present a potential opportunity for transferring $50,000 to the Generai Fund. Wally Majors, Recreation and Parks Director, advised the Boat Club Park renovations were 100% funded by the County with the City was responsible for only the design expense. 6 Meeting Minutes Commission Budget Workshop Boynton Beach, FL July 14, 2009 Mr. Livergood reported the parks projects were viewed in conjunction with the park impact fees and spreading the savings over two years resulting in $3.1 million in cuts. The maintenance of existing parks uses general fund dollars. Impact fees are generally used for new construction. There were no opportunities for additional funding into the General Fund. A report was given on the Oceanfront Park improvements that permitting should be completed with construction starting in October. Mayor Taylor advised at least 20 cities in the area franchise out their sanitation services. The sanitation department now has 49 employees and a stipulation of the sale could be that the existing employees are hired by the vendor for one to two years. They would also havf.' to pay the City a franchise fee equal to the current contribution into the General Fund from the sanitation fees. All the equipment presently owned by the City could be sold. It would eliminate the maintenance costs, payroll and pension contributions. Mayor Taylor suggested investigating the possibility. Commissioner Weiland speculated the vendor would have to raise the rates to cover the cost of the franchise fee. Mr. Bressnp.f indicated the franchise agreement would include a rate regulation process and it would become a service level and mathematical exercise. The increase in revenue may have to be offset by increased rates for customers. The City should be allowed to bid on the deal; it has the lowest rates in the area. The dep'lrtment had operated under budget for the last four years. There is an incentive offered to employees who get their work done early to go home. The work is being done with eight or nine employees less than ten years ago that has included grovvth in the service level loads. The operation is seasonal since in January and February every house is full, while in July there are not as many residents. Commissioner Weiland thought the speed of the vehicles needed to be addressed. Mayor Taylor continued that the solid waste operation is $8 million and a franchise arrangement may have an impact on the overall budget. Commissioner Weiland and Commissioner Ross were willing to review the figures. Funding the pensions of all employees that are vested would have a negative impact on the budget. Overall service levels would have to be reviewed and response after hurricanes would have to be evaluated. Commissioner Weiland felt the ,day,to- day service was superb. Mayor Taylor declared a recess at 3:06 p.m. Mayor Taylor reconvened the meeting at 3:21 p.m. Mayor Taylor opened the meeting for public comment. Charles Kanter, 2905 S. Greenleat Circle, President of the Parkside Homeowners AssSlciation comprising 271 families within the Quantum development, spoke. The school system has cancelled part of the maintenance agreement with the City and Quantum wanted $100..000 for the expense plus another $100,000 to sue the City to get the money back. He wanted to know why the school was able to cancel the contract without notification and why the residents had to pic~, up the cost of maintenance of the roadway. 7 Meeting Minutes Commission Budget Workshop Boynton Beach, FL July 14, 2009 Nancy Hogan, 37 Hibiscus Way, Ocean Ridge, was present as an observer for the Realtor Association of the Palm Beaches. She hoped to forge a partnership with the City to get the community going and create a good living for all the citizens. Herb Suss, 1711 Woodfern Drive, did not want to pay higher taxes, but recognized that the millage rate should be raised to 7.3 mills. If the water had been raised yearly the large increase would not have been necessary. A roll back of $3 a month would be regressive. He suggested that a special assessment be implemented. All the nit-picki(1g would make the City uninhabitable with all the cutbacks. He urged the Commission to use the roll back rate and raise the millage to 7.3 and not rule out a one-time assessment option. No one else coming forward, Mayor Taylor closed the public audience. Commissioner Weiland returned to the issue of possible retirements and the impact on the budget. Chief Bingham reported as of June 1, 2009 there would be 52 employees eligible for full retirement on October 1st, Over 2010 the number rises to 62, in 2011 there would be 96 and in 2012. there would 116 eligible retirees. Thp. figures did not include the 33 DROP participants. The various pension plans establish various criteria for full retirement. Mr. Bressner speculated approximately 20% of staff would be eligible for retirement over the next four years. Vice Mayor Hay inquired if a severance package for early retirement had been considered. Mr. Bressner responded there had been some work done for a cash payout versus pension changes and more work needed to be done. Vice Mayor Hay was surprised only three people commented. He did want to see the outsourcing of the sanitation department move forward. Getting rid of the facility presently in District II would be beneficial. Mr. Bressner advised the appropriate action would be to authorize staff to prepare RFPs for the solid waste removal. He reiterate.d that City staff should be given the opportunity to bid as well. Commissioner Rodriguez recalled it was determined that the outsourcing would not impact the General Fund. The question was, would the land then be available for sale? Maintenance for parks and recreation remains at the site. About one-third of the 5 acre lot was used by solid waste hardware and facilities. It would be less activity in the area and the remaining facility could be relocated easier. The proceeds from any sale would go to the General Fund. Commissioner Weiland cautioned the item should be listed as fact finding so as not to alarm the citizens. Commissioner Rodriguez clarified. the savings to eliminate the additional management package would be $663,000. Mr. Bressner noted the buyback of the four vacation days w.)uld be $172,000 in just the General Fund. Commissioner Rodriguez requested a listing of the management benefits and the associated cost of those perks. Mr. Bressner continued with a review of model two that did not include layoffs or a 2% pay cut and model three wa.s the same. Model four added the Boundless Playground. Commissioner Rodriguez commented the 7.3 rate was used in 2005. Vice Mayor Hay stressed the rat.;! of 7.3 mills could be adjusted down. A millage rate of 7.9 would generate the same revenue as the previous year. 8 Meeting Minutes Commission Budget Workshop Boynton Beach, FL July 14, 2009 Starting with the Ci~ Commission the cell phone allowance was reduced and the salaries were frozen. The expense allowance was controlled by a provision in the Code to increase each year. State and federal lobbyists were cut and the functions would be undertaken b.t staff. Membership and training remained the same. The total for membership was $39,000. The various memberships were reviewed and the benefits of each were discussed. There was consensus to eliminate the Business Development membership of $1,000. With regard to Community Investment funds, Attorney Cherof advised it is problematic because it gives the appearahce there are special programs that come up very quickly on the agenda. The trend has been to move away from discretionary funds and do an annual appropriation to those applying in advance and making selections from a pool of applicants. A recent grand jury determination was to recommend discontinuing the previous practice. Commissioner Weiland wanted to support specific causes because it helped the community and shows youth the City supports their efforts. Vice Mayor Hay concurred, if the money is available. Mr. Bressner suggested two funding windows be opened a year and the various organizations can compete for funding. Mayor Taylor and Commissioner Ross favored taking the discretionary funds out of the budget and revisit the issue just before the budget is finalized. Commissioner Rodriguez contended it was contrary to the concept of all the cuts being made and he favored eliminating the funding. Mayor Taylor declared there was consensus to leave the funding out of the budget. The annexation project was discussed regarding the use of a consultant or staff. Mr. Bressner recommended the consultant be utilized. Commissioner Weiland emphatically indica~ed the annexation project would never happen and it should be taken out of the budget. Commissioner Ross recalled a vote had already been taken to move forward with the program. Mayor Taylor and Vice Mayor Hay felt it was important to continue. Commissioner Ross agreed, constituting consensus, to leave the funding in the budget. In the City Manager's budget the cell phone and car allowances were reduced. The Administrative Secretary position would be a shared position with another department and represent a savings of $17,000. Commissioner Weiland opined the $450 a month for a car allowance was excessive. Mr. Atwood added the taxes were 20% and Mr. Bressner pay~ for his own gas and insurance, driving approximately 16,000 miles a year on City business. Commissioners Ross and Rodriguez were interested in receiving a report on all car allowances. Mr. Atwood interjected the squad cars were being recycled for administrative users or building inspectors rather than using their personal vehicles. The car allowances were reduced from $160,000 to $120,000. In City Hall, Genera! Administration budget, electric and water were reduced with the four-day work week and the board dinner was eliminated. Commissioner Rodriguez requested the base line for the proposed savings of closing and a four-day work week. Mr. Atwood explained the audit fee is allocated across all funds. The paperless agenda was discussed to go live in November, 2009. There would be a savings on the number of copies being made. A contract had been entered into and Vice Mayor Hay felt it would be counterproductive to now halt the 9 Meeting Minutes Commission Budget Workshop Boynton Beach, FL July 14, 2009 progress. Commissioner Ross felt it should move forward. Mr. Bressner indicated ther~ was a contractual obligation and it may not be cost effective to break the contract. Attorney Cherof advised he would review the contract and termination provisions. Lori LaVerriere, Assist.:Jnt City Manager, added a tremendous amount of staff time had been invested in the project. There was consensus to move forward with the Easy Agenda project. The use of e-billing was discussed as a means of eliminating some postage. It was noted the newsletters and informational items were included in the paper billings. There was consensus to furlough.the advisory board dinner. Mayor Taylor adjourned the meeting at 4:49 p.m. CITY OF BOYNTON BEACH ~ Ronald Weiland, Commissioner w~~~~ ~1 -' -'/ //c/Z~-"--~' #;">, ~ '~/ .,e:- Marlene Ross, Commissioner ATTES-:-: et M. Prainito, crlle Clerk zI?~ ith A. Pyle, CMr-- eputy City Clerk 10