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Minutes 10-18-10 MINUTES OF THE FINANCIAL ADVISORY COMMITTEE MEETING HELD ON MONDAY, OCTOBER 18, 2010 AT 6:30 P.M. AT THE LIBRARY, 208 S. SEACREST BLVD., BOYNTON BEACH, FLORIDA PRESENT Don Scantlan, Chair Michael Madalena, Vice Chair Victoria Castello George Feldman David Madigan Merline Pamplona William Shulman Terry Lonergan, Alternate Barry Atwood, Finance Director ABSENT Glenn Jergensen 1. Approval of Minutes The meeting was called to order at 6:00 p.m. The recording secretary called the roll. A quorum was present. Motion Mr. Feldman moved to approve the minutes of October 11, 2010. The motion was duly seconded and unanimously passed. It was noted the minutes of the October 4 meeting were needed. There was conversation pertaining to the Police Department that occurred at that meeting which would be helpful for the next meeting. 2. Half Hour Presentation Plus Questions of Departmental Operations and Budget Review for: · Development Department Quintus Greene, Development Director and Nancy Byrne, Assistant Director of Development, presented the Department's mission statement which was to offer" . . . services that provide for a safe and sustainable physical environment and promote the economic development of the City. To this end, the Development Department plays a vital part in the life cycle of land use and building in the City." 1 Meeting Minutes Financial Advisory Committee Boynton Beach, FL October 18, 2010 A Powerpoint presentation, which is included with the meeting materials, was viewed. Mr. Greene explained the State requires they maintain a Comprehensive Plan. They must update it per State law through an Evaluation and Appraisal Report (EAR) process and amend the official land use and zoning map of the City. Planning and Zoning performs development reviews and meets with developers. Staff created a Development Atlas, and the next issue will be distributed in the spring of next year after the Census information is released. The document contains all the information needed to develop in Boynton Beach and it is widely used by realtors, developers and others. The Department performs special studies regarding annexations, development regulations, and they provide redevelopment assistance to the CRA and other entities. They also manage the interim Historic Preservation Committee. They are responsible for complying with State mandates such as the Local Comprehensive Planning Act, Florida Statute 163, and Rule 9J-5 of the Florida Administrative Code. Business Tax regulates about 5,300 fixed, mobile and home-based businesses and verifies compliance with City regulations. Mr. Greene noted the Business Inspector position was let go due to budget constraints last year. Building is part of public health, safety and welfare. The department ensures construction meets State wind-load standards and plumbing, electrical and all Codes are implemented. They ensure the contractor is licensed. Staff reviews the plans, calculates the fees and inspects the construction. The effort goes through the permitting process, intake and plan review and ends with the issuance of a Certificate of Occupancy. The Community Improvement Department handles the State Housing Initiative Partnership (SHIP) program, funded by documentary stamps. With the slowed economy, funds for this program have decreased. The SHIP program offers first-time homebuyer assistance. The Community Development Block Grant (CDBG) is ongoing. Boynton Beach is an entitlement community and receives approximately $500,000 per year. Funds from this grant are used to provide support to various non-profit organizations and assists with housing rehabilitation. The City received Neighborhood Stabilization Program funds totaling $2.9 M and had to obligate the funds by September 30th. Of those funds, $400,000 was obligated to the Ocean Breeze project in the Heart of Boynton. The funds must be spent by March 2013 and the City was notified they would receive an additional $1 M from the Neighborhood Stabilization Program. Staff was waiting for the guidelines to determine how to use it. A Budget Impact Statement was also distributed and reviewed. Boca Raton's taxable value is five times that of Boynton Beach. Delray Beach had a similar population to 2 Meeting Minutes Financial Advisory Committee Boynton Beach, FL October 18, 2010 Boynton Beach and has two times the taxable value yet Boynton Beach offers the same services and programs as the other cities. Mr. Greene advised Boynton Beach already does more with less. One problem; however, is the citizens expect the City to do even more with even less. When discussing the department budget, Mr. Greene wanted the members to review the pie chart. The City Manager has requested the departments prepare for a 15% reduction in the 2011/2012 budget. They already took a 6+% reduction for the current year, which resulted in the loss of three staff members as well as all vacant positions. Over the past three or four years the department was reduced from approximately 50 to 33 employees, mostly through attrition but also with a few layoffs this past year. When reviewing the Department he requested the members understand what they do and recognize it will have an impact on the citizens and the services they expect. Ninety-five percent of their budget is personnel costs. Further reductions could only come from staff reductions. The Department's 2010/2011 budget is approximately $3.1 M and supports a staff of 33. A 15% reduction means $495,000 which equates to eight positions and a revised staff of 25. If they reduce that amount in Administration and Building they would lose receptionists, two application technicians, plan reviewers and two field inspectors. If they reduce in Planning and Zoning, it will mean they will lose two planners and a Business Tax Receipt Associate. The impact of those reductions, in terms of application time, were outlined on the handout. Permit issuance time and field inspection times would be increased. Planning operates on a bare bones level. Mr. Greene commented they would have to send the special events process back to the Recreation and Parks Department. Special projects would not be undertaken and they would have a delay in meeting the deadline. Mr. Greene reviewed other items on the handout showing the impact on services, specifically the inability to timely react to sudden and unanticipated land use issues, ie. pain clinics and adult entertainment establishments. The Development Atlas may be delayed. Currently, they have an Interlocal Agreement with the City of Lake Worth where they provide planning staff services to Lake Worth. It is a revenue generator for the City and they will have to discontinue the service. They already stopped providing Building services to Lake Worth. Ms. Byrne distributed a personnel summary for the past five years. She explained they contracted services, so when peak times occurred they could maintain Building staff. Another handout addressed revenue and expenses. Ms. Byrne explained a provision in the Florida Statutes allowed them to deposit building fees into its own account, and not into the general fund. They reviewed communities with that type of fund setup and the had established a reserve account for slim years. Had that methodology been instituted from 2000 to 2010 and the Department contributed 20% to the General Fund for human resource, payroll and other services, the amount would total $3 M and they would have accumulated $14 M in the reserve account. The City kept all their monies in the General 3 Meeting Minutes Financial Advisory Committee Boynton Beach, FL October 18, 2010 Fund. Ms. Byrne advised the Building Department has been a revenue generator for a long time. The application and permit activity dipped slightly in the last month and there were 24 major Community Redevelopment Agency and City projects coming in the next month. Their projections for the next year were underestimated. This past year they collected double the projected revenue although it was not enough to cover their expenses. Recently, the City Commission met with the Sustainability Team. A 15% cut equated to eight employees and they likely could not carry through the Climate Action Plan initiatives the Commission approved. They directed staff to move forward with it, If the City starts its sustainability programs to save energy, it would put staff back to work permanently. It decreased the impact on the City's water plants, had a significant trickle- down effect, but it is a labor-intensive endeavor. Many laws and ordinances would have to be changed to write the program and if the budget is further cut, staff would be hampered in their efforts to do so. An informational sheet that speaks to the Florida Statute unfunded mandates was distributed. Taxpayers are funding the mandates and the City cannot opt out. A handout listing City owned properties reflected many of the properties were right-of- ways, lift stations, parks, etc. There is a lot of vacant property that could be used for renewable energy and leased to the agricultural community. A recent article depicted industrial areas where growing plants and gardens and "Urban Farms" could generate revenue for the City. The program produced renewal products on urban infilllots. It was noted the Climate Action Plan was promulgated on a very tight budget. One question at the last meeting pertained to grants. Mr. Feldman explained Debbie Majors, Grants Coordinator, commented every department has a participant on the team and he inquired if she could attend the next meeting. Mr. Atwood responded she could and grants vary by year. One caveat with grants was that most grants were matching grants requiring the City to match the funds. Ms. Byrne expressed they could evolve and grow the program. Mr. Feldman was aware of a fee that would require a permit be obtained to put in a source for hot tubs. The requirement was from the Florida Health Department and it was $15K. Ms. Bryne responded they were considering just an additional fee on the permit. Mr. Feldman inquired if staff researched the smaller fees. Ms. Byrne explained she was only directed to address one issue which was to raise the fees. Discussion followed that pursuant to State Statute, the City could only raise the fee for a Business Tax receipt no more than 5% every two years. The last time the issue surfaced, the City Commission voted it down due to one realtor appearing in opposition to it. Discussion also ensued about the discontinuance of providing building services to the City of Lake Worth. The service provided revenue to the City. Mr. Greene explained the fee did not necessarily cover the cost. Boynton Beach was making internal adjustments to its building permit and inspection services. A building official provided the services to 4 Meeting Minutes Financial Advisory Committee Boynton Beach, FL October 18, 2010 Lake Worth. The contract expired at the end of September and the City was not in a position to renew the contract because of the budget crunch Boynton Beach faced. They did agree to continue to provide the planning services but if they had to cut back on planning staff, they would have to discontinue that service as well. It was a reaction to the layoffs that occurred. Field inspectors are now conducting business inspections and community improvement foreclosure rehabs because a community improvement inspector took an early buy-out. Code Enforcement also needed assistance in the M-1 District. Lake Worth kept increasing the scope of services in their contract and issued a formal bid for the service. Boynton Beach did not respond. The City of Boynton Beach was built-out approximately 80+%. Of the ongoing projects, there were four Community Redevelopment Agency projects and two City projects along with the energy service performance contract. Staff was actively pursuing consolidating with the Engineering Division and other divisions as the services overlap. They were moving towards a construction services department. Mr. Greene explained development was a cycle. Much development occurred on the Congress Avenue corridor; however, there was also much redevelopment east of 1-95. Much of the vacant land was used but redevelopment was occurring. He referenced Las Ventanas which was a lumber yard. The pending WalMart was formerly a strip center with an adult entertainment establishment. It would take a lot of redevelopment in east Boynton to generate the fees that were formerly received. Mr. Greene also explained monies were received as a result of the hurricanes. In response to an inquiry of whether the Community Redevelopment Agency could take on more of the expenses with their development, they were faced also with declining revenues. In response to an inquiry of whether the Finance Office could collect the Business Tax monies, Mr. Atwood responded when he worked in Gainesville, Finance invoiced and collected those fees. Building had to okay the request and Finance would handle it from that point on. The Development Department could propose an increase in Business Tax fees, franchise fees and others which could also be endorsed by the Financial Advisory Committee. Mr. Greene reiterated the Department was not opposed to increasing the fees; however, two years ago the request was turned down. He anticipated they would request the increase again. Changing the fees would require approval by the State Legislature. A study may be required and funds must be available to pay for them. There was no other method to change the fees other than raising them by 5% every two years. It was suggested the Department recommend they increase the fees. It was noted the City's fees were on the low side within Palm Beach County. Over the years, a significant accomplishment was to change the land use and zoning in the historic downtown area. The economy had an adverse impact on many initiatives such as the Marina, Promenade, and Las Ventanas. The projects were important as it pertained to the taxable value. The City wanted to increase the density in the redevelopment area to assist in attracting new residents having disposable income. 5 Meeting Minutes Financial Advisory Committee Boynton Beach, FL October 18, 2010 Planning was responsible for development along Congress through creation of a Suburban Mixed-Use zoning classification, which accommodated Renaissance Commons. Discussion returned to providing services to Lake Worth. The fees paid to the City covered the cost of the planners, but what Lake Worth required of staff in terms of time and energy was no longer feasible and given Boynton Beach's needs, they did not have enough inspectors to do both. As to the Planning services, the City was covering those costs, but if they lose two planners they have to cut costs too. When an RFP is issued, respondents reply to cover the costs and make a profit. It is a different sector perspective. Mr. Greene explained they operate within a budget and they cannot hire an inspector. Mr. Atwood explained they would need a budget amendment, advertise for the position and it would be a fairly lengthy process. An inquiry was made what Planning and Zoning does with the Census information. Mr. Greene explained staff was the liaison with the Census Bureau and they provide them with information about Boynton Beach on a fairly ongoing reporting basis. Code Compliance was not under the purview of Development. An inquiry was made how to get the Platinum Gold sign covered. Mr. Karageorge spoke, as a member of the Code Compliance Board, and explained the Board certified the liens after the criminal charges were incurred. The City currently has a moratorium on the use and the Development Department was crafting language to address the issue that was legally enforceable. The eight individuals that could be impacted by budget cuts were governed by the Personal Policy Manual. Planners were salaried but not the others. Ms. Byrne explained rather than laying off individuals, they preferred furloughs. If necessary, staff hours could be reduced from 40 hours per week to 36 hours per week. Development would conduct an analysis on the Business Tax Increase and deliver it to Mr. Atwood. Mr. Atwood explained the reserves were going to the General Fund and by State Statute it should not have been. There are outstanding legal issues associated with it. A question was posed whether Code Compliance could assume the Business Tax Inspector duties, but it was suggested Code Compliance did not have the manpower. Mr. Greene explained the Business Inspector was inspecting for zoning. Presently, an electrical inspector is sent. Mr. Karageorge explained Code Compliance enforces Business Tax Receipts and has collected on them. He thought it would be easier if one individual was doing the whole thing. · Utilities Department 6 Meeting Minutes Financial Advisory Committee Boynton Beach, FL October 18, 2010 Kofi Boateng, Utilities Director, Michael Low, Deputy Director, Operations and Barbara Conboy were present. Two informational packets were presented. The first contained a detailed version of the budget and the other was the presentation. Mr. Boateng presented an overview. The Utilities Department was an Enterprise Fund, and they do not rely on Ad Valorem taxes. They rely on user fees to fund the operations, Capital Improvement Program and repair and replacement of the infrastructure. The department is not part of the General Fund; however, they provide about $4 million to the General Fund a year. The Department's Mission, Goals and Objectives were to provide water, wastewater, and stormwater services. The department is driven by industry standards having strict regulations to protect the public health and safety. They strive for excellence while maintaining a reasonable cost to the public. The Department has one Director and two Deputy Directors in five functional areas. Divisions within the department include Customer Services, Engineering, Water Quality, Treatment, Field Operations, Finance and Administration. The service area is larger than the City, servicing about 100,000 residents within the City of Boynton, the Town of Ocean Ridge, the Village of Hypoluxo, the Town of Briny Breezes and unincorporated areas of the County. Mr. Boateng reviewed their budget from the years 2008 forward, which reflected a decline for each year in the areas of revenue, retained earnings, total revenue and expenditures. The largest portion of the budget was personnel services, followed by supplies and services. The capital budget comprised about 19% of the budget. The Division has $260 million in assets, encompassing an elaborate underground piping system with related technologies. The infrastructure included 30 raw wells and 2 Aquifer Storage and Recovery (ASR) wells which allowed them to put water in the ground during wet months and then withdraw it during dry season from two treatment plants - the East and West Treatment Plants. The location of the wells, interconnection lines and Treatment plants were reviewed. The West Water Treatment Plant uses nanofiltration technology. Powerful pumps exist in the Plant to force water through membranes which eliminates residue and contaminants. The Department has a distribution and sewerage system comprising hundreds of miles of pipelines, hundreds of fire hydrants and about 175 lift stations. All of the equipment needs to be maintained on a routine basis. Each pump station has pumps, motors, instrumentation and equipment. The Utilities Department has an advanced control system which permits staff to monitor all the systems in the Pump and Lift Stations, which are helpful during emergencies such as hurricanes. The Department uses fiberoptic operations. 7 Meeting Minutes Financial Advisory Committee Boynton Beach, FL October 18, 2010 Over the last 10 years, personnel declined from 162 to 133 employees. They also reduced their overtime from $652,000 to $235,000 as of July - a total reduction of 62.4% from 2002 to the present. The workforce has 10 divisions which are: ~ Water Distribution maintains the water distribution system. ~ Public Water Treatment runs the pump stations. They spend a lot of money to run the plant and treat the water through the use of chemicals. ~ Meter Reading Services. ~ Wastewater Collection. ~ Wastewater Pump Station maintains all the lift stations. If they go down, there would be a backup of seawater. Since they are so heavily regulated, the Department must stay on top of those issues. ~ Sewer treatment was discussed. The City of Boynton Beach and City of Delray Beach co-own the original Wastewater Treatment Plant, which is located in Delray Beach. Although the cost is shared with Delray Beach, they do not have as much control over their budget and the costs come to them as pass through costs. ~ Water Quality. This division goes to the home, collects water and analyzes it on a daily basis to ensure the quality is within the industry standards. ~ Utilities/Engineering initiates various improvements and programs in the system. ~ Stormwater Maintenance. Utility Administration was different than General Administration which is the account used for funds transferred to the General Fund. It also pays for the debt service on the bonds used to fund the Capital Improvement Programs. There was a question about the difference in the 2008/2009 budget reflecting an Administration Budget of $13M and the 2010/2011 budget of $5M. It was explained as the budget closed out, the depreciation is reflected which was helpful when developing the next budget. 8 Meeting Minutes Financial Advisory Committee Boynton Beach, FL October 18, 2010 Mr. Boateng reviewed the cuts the department incurred. In summary, the Department had $965,000 in cost reductions this fiscal year. It included elimination of three vacancies and terminated three employees. There were cuts in services, supplies and electricity, parts, the TV truck and equipment. Cuts would hamper their operations, potentially hampering public health and compromising the Department's ability to meet the industry standards. There is opportunity to leverage technology, but they must act smart, invest and automate. Michael Low, Deputy Director of Operations, gave a live demonstration of the control system. The Department uses technology to reduce operating and personnel costs. They are a 24/7 -based operation. They can directly interact with all equipment in the field and direct the teams to problem areas. They are starting to implement this in the water plants as well. They have a secure operational service and the City was divided into four quadrants. The smaller stations pump to the larger master stations to the regional plant and the equipment stores data at the station. They have automatic power standby systems with a generator. When a power outage occurs, they have a monitoring station which alerts staff. Mr. Boateng reiterated they are using nanotechnology. In the future, staff plans to use a low pressure reverse osmosis system. The plan was to use the low pressure system which would have enabled staff to drill to the Floridan Aquifer, but because the aquifer is so salty, they had to use the current system. They were able to save about $39M through the water interconnections from the West and East Water Treatment Plants. Boynton Beach has an ongoing study to see if any other jurisdictions would be amenable to joining with Boynton Beach. Staff was working with Manalapan and cemented a proposal to them. They were waiting for a response. There was discussion there were government funds available for desalinization. Mr. Boateng responded there were, but it was cost prohibitive. The costs have dropped dramatically, but is not feasible. The power to run a desalinization plant was enormous and the discharge was heavy. Mr. Low pointed out with membrane technology, it was also expensive due to the electric. The East Water Treatment Plant used lime softening. The cost to convert to newer technology was too high. Meanwhile, the Plant was solid. They were trying to expand the capacity to 24M gpd, but they were restricted in how much they could draw from the east well because of its salt content and closer location to the ocean. The two Plants draw from the same aquifer. The South Florida Water Management District (SFWMD) also placed a cap on how much could be drawn from the well. Discussion followed about how far the aquifer was drawn down. Mr. Boateng explained they were confined to the surficial aquifer. Drilling deeper would reach the Floridan Aquifer which was too salty and they would have to use a different technology which 9 Meeting Minutes Financial Advisory Committee Boynton Beach, FL October 18, 2010 would cost a lot of money. The SFWMD has models depicting how much could be drawn and had restrictions. Vice Chair Madalena inquired whether Customer Service deals with utility deposits and if so, why the Department would refund the deposit back to the customer after a certain amount of time. Barbara Conboy explained they are governed by Ordinance. The funds sit in a non-interest bearing account and if a customer was in good standing, they received it back. There was about $2M in customer deposits. The calculated interest earnings offset bank service charges. Discussion followed about how many accounts were currently delinquent, past due or in collections. Mr. Boateng did not know but thought it would be a six figure number. Utilities would provide the numbers and noted they were rising. The City has a program in place that allows the City to shut water service down. After a period of time, they engage an outside source to collect the monies owed. There was a 7% reduction initiated by the City Commission in 2009. Vice Chair Madalena inquired if there was a timeline on it for it to stay at that level. Compared to data from other cities, Boynton was the lowest He thought there was some room to raise the rates to those outside the City and still charge less than other municipalities providing the same service. Ms. Conboy explained they completed a rate study using the old rates, structured on the commodity and usage, the base rate and fixed costs. On October 1, 2010, there was a rate adjustment built into the rates. The issue was included in the meeting materials. There was a major restructuring on how the City billed for water. After it was passed there was a reduction. As to comparisons with other municipalities, Chair Scantlan noted the cities watch one another. When one changes their rates, another adjusts its rates as well. There was also a misnomer about charges for Utilities. Utility service did not encompass only water. It included sewerage, garbage collection, and stormwater fees. Last year one of the members had an increase that doubled the amount and accordingly, it was suggested an increase would not go over well. Mr. Atwood explained water service has two components which were fixed costs versus usage. There were six meter readers. When an account is delinquent, a meter reader turns off the water. The meter readings were computerized allowing for staff to drive down a street in a van which picks up the meter readings. Water service turn on and off, and repairs are done manually. The staff works on a five-day workweek. The Department hoped in the future to utilize a radio-based tower method, which would eliminate the van. Other utilities such as electric and phone use the radio based system. This would enable staff to manage the meters from the office remotely. 10 Meeting Minutes Financial Advisory Committee Boynton Beach, FL October 18,2010 The Department uses television cameras to clean the sewer lines and digitize the work. There was about 700,000 feet of pipe that was viewed over the last few years. The technology assisted staff to find breaks before they occurred. They also have technologies to reline the pipe without having to dig. The TV trucks house the cameras and go from manhole to manhole. The second TV truck was tied to development. This was necessary because staff did not have the right technology nor could they clean the lines fast enough. The Department just checked the gravity mains made from clay pipe and was trying to use other innovative ways to check and monitor conditions of infrastructure to stay ahead. A question was posed about paying for the upgrades in technology. Mr. Boateng responded the new technology would cut the number of personnel. It was funded in the Capital Improvement Fund through net revenues with a portion set aside for emergencies. The Capital Improvement Fund was funded from growth and capital facility charges. Renewals and replacements were part of it. As to restrictions and bonds, Mr. Atwood explained the net revenue would be 1.25% of the annual debt service. Chair Scantlan noted in the budget overview, there was a transfer of $5M and the transfer was an annual transfer. There were also other agencies such as the Lake Worth Drainage District and the South Florida Water Management District. The City had its own canals. Mr. Lowe explained the City adopted a few canals, but does not have its own infrastructure of canals. They have a stormwater system. Chair Scantlan pays his bill online but the City still sends a paper bill. He inquired if they could have an e-bill system. Mr. Boateng explained they were moving in that direction, but they had to get the infrastructure in place. The Committee recessed for a short break at 8:15 p.m. The meeting reconvened at 8:22 p.m. 3. Continued Discussion of the Community/Citizen Survey · Survey questions submitted this past week (Attached) The members reviewed the survey. No comments were made. 4. Outstanding requests for Information from the City (Handed out at the meeting) · Listing of City Owned Property The list of City owned property was distributed. . Historical Summary of Pension Plan costs for the City's three Pension Plans 11 Meeting Minutes Financial Advisory Committee Boynton Beach, FL October 18, 2010 Mr. Atwood provided this information. Discussion followed on the two items listed in agenda item 4. It was thought it would be helpful to see what the appraised value of the city-owned land was, what land was sellable as opposed to being a pump station or a right of way and what the market value of the available property was. Mr. Atwood agreed to provide the dollar value of the property on an at-cost basis. As to the pension, there was a question about the unfunded liability over the last five years. The cost skyrocketed and the inquiry was whether it had to do with the pension assumptions used or if it was the increasing costs of salaries. Mr. Atwood commented it was a combination of things. He opined some of the sharp increases could have been retroactive benefits or new benefits applied to past service. Mr. Atwood was unsure if that was the case. The police and fire had one of the largest expenses tied to it through collective bargaining because of the State 175 ad 185 monies. The City was waiting to see what would happen on the State level. Any time there was an increase, the participating members were to contribute an additional percent of pay. Mr. Atwood commented one of the funds did so and paid it into a separate account so they received a direct benefit. The Statute does not say if they increase the police pensions by 8% or 10% it had to only be used to increase benefits but that was the way it was interpreted. The City was waiting to see what action the State would take. The $5.367M listed on the handout was the total interest cost the City paid for making late payments into the plan. The reason they did so was because a former Finance Director wanted to hold onto the money because the City could earn more money during the year on the funds than what the pension plan would earn. The director left the City and the practice remained. Instead of making the payment upfront, Mr. Atwood was paying it biweekly. The $88M for ex-service liability was discussed. A question was posed if the City was supposed to contribute $20M and the plan would be fully funded that year, and the City contributed $10M, how much of the $88M would be less than the maximum they should have paid? Mr. Atwood explained the City contributed 100% of the annual required contribution, but there were other factors that affected the investment rate versus the assumed rate of return. That differential was used in the actuarial computation and amortized over 30 years and the difference is added to the past service. They do not pay it in one year. Most municipalities have to deal with STEP increases and other factors which add to the unfunded liability, especially when special risk is added. The factor used in the pension calculation for special risk is usually double a rank and file employee. The more police and fire personnel a city has, the more it increases the pension liability amount. The average payout, the draw down and the vesting schedules all playa part. Chair Scantlan suggested having an agenda item specifically to address pensions. Mr. Atwood agreed with Vice Chair Madalena the City did not have a lot of control over it. He referenced the Town of Palm Beach was not letting employees go into a defined 12 Meeting Minutes Financial Advisory Committee Boynton Beach, FL October 18, 2010 benefit plan as opposed to a defined contribution. The danger was there were less individuals paying into the system to pay the $88M over time. Mr. Atwood provided his thoughts on ways to control costs and agreed to forward the actuarial studies and reports to Vice Chair Madalena for his review. Vice Chair Madalena agreed to provide a report by January. 5. Future agenda and schedule The next meeting would be held in City Commission Chambers, followed by a tour of the Police facilities on November 1, 2010 at 6 p.m. 6. Adjournment There being no further business to discuss, the meeting properly adjourned at 8:51 p.m. d CltitUJ./RL ~ j~tl[ Catherine Cherry ~ Recording Secretary 102110 13