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Agenda 01-24-11 The City of Boynton Beach FINANCIAL ADVISORY COMMITTEE MONDAY, JANUARY 24, 2011 @ 6:00 P.M. LIBRARY CONFERENCE ROOM “A” BOYNTON BEACH, FLORIDA 33435 AGENDA 1. Approval of Minutes – (Copies attached)  December 13, 2010  January 10, 2011 2. Review and discussion of initial responses to Citizen Survey 3. Discussion of paperless utility billing webinar by Best Practice / Fi-Serv Check Free 4. Report from Town Hall Meeting RE: “Defined Benefit Public Pension Forum” - Mike Madalena 5. Progress update on assigned projects by each Member 6. Confirmation of next meeting dates  February 7  February 21  March 7  March 21  April 11  April 25 7. Other Business 8. Adjournment The City of Boynton Beach . FINANCIAL ADVISORY COMMITTEE MONDAY, JANUARY 24,2011 @6:00 P.M. LIBRARY CONFERENCE ROOM "A" BOYNTON BEACH, FLORIDA 33435 AGENDA 1. Approval of Minutes - (Copies attached) · December 13, 2010 · January 10, 2011 2. Review and discussion of initial responses to Citizen Survey 3. Discussion of paperless utility billing webinar by Best Practice / Fi-Serv Check Free 4. Report from Town Hall Meeting RE: "Defined Benefit Public Pension Forum" - Mike Madalena 5. Progress update on assigned projects by each Member 6. Confirmation of next meeting dates · February 7 · February 21 · March 7 · March 21 · April 11 · April 25 7. Other Business 8. Adjournment MINUTES OF THE FINANCIAL ADVISORY COMMITTEE MEETING HELD ON MONDAY, DECEMBER 13, 2010 AT 6:00 P.M. AT THE LIBRARY ROOM "A," BOYNTON BEACH, FLORIDA PRESENT Don Scantlan, Chair Michael Madalena, Vice Chair George Feldman David Madigan William Shulman Terry Lonergan, Alternate (arrived 6:07 p.rn.) Kurt Bressner, City Manager Barry Atwood, Finance Director Wayne Segal, Public Affairs Director ABSENT: Glenn Jergensen Merline Pamplona Victoria Castello, Alternate Chair Scantlan called the meeting to Order at 6:02 p.m. The Recording Secretary called the roll. A quorum was present. Motion Vice Chair Madalena moved to approve the agenda as presented. Mr. Shulman seconded the motion that unanimously passed. Mr. Feldman inquired if there would be an Open Forum Item at the end of every meeting and after brief discussion there was consensus it would be added to future agendas. 1. Approval of Minutes - N/A The minutes were not available. 2. Review of Financial Advisory Committee Checklist - Status of Member Research (See attached "FAC Work Area Matrix") The November 13, 2010 matrix was the most recent matrix used. There was one change to it which was the addition of Mr. Jergensen's assignment from the November 9, 2010 list. 1 Meeting Minutes Financial Advisory Committee Boynton Beach, FL December 13, 2010 Mr. Shulman had submitted information to the Committee pertaining to a letter going to HOAs for equipment. Mr. Madigan and Mr. Feldman also had information for the Committee. Mr. Feldman had been working with the Golf Course and staff was already trying to develop ways to increase revenues or create initiatives. Mr. Feldman was working on long-term suggestions. Mr. Bressner suggested when there was something significant to report, one paragraph would suffice. Chair Scantlan summarized if there was a finding or a significant milestone, the members should submit it. Mr. Bressner or Mr. Atwood would put it on the agenda. There was discussion when department heads are interviewed, they often want to know what kind of an impact the information they provide would have. Mr. Feldman asked for a rule of thumb in formulating a response. Mr. Bressner explained the members were gathering information and would be providing specific recommendations to the City Manager. If a department head wanted to know what was provided to the Committee, periodic reports would be on the agenda, as would the minutes which are public record. Motion Mr. Feldman made a motion to move Ms. Lonergan to a regular member for the meeting. The motion was duly seconded and unanimously passed. Chair Scantlan received a response regarding utility bills and paper billing and he did not know if the Committee was still pursuing it. He commented 14% signed up for automatic bank drafting and they will target that group to stop sending the paper bill. Chair Scantlan commented he wanted to opt out of receiving the water bills and he goes on line to make his payments. He thought the hang-up with the online service was when he paid his bill online, he did not see the actual usage. There was no way to send out the usage information electronically. Barry Atwood, Finance Director, commented there was a method and he was working on it. The Department can send an e-notification that will have all the components of the water bill, which should include the usage. The information did not look like a water bill. Discussion followed there should be a link on the general website and a printed note on the water bill advising of the e-notification. The City should also allow the consumer to enter their credit card information once, have their information stored and then automatically pay each month with the card. If done, the City would incur a fee, but it was noted the City would incur a fee regardless of either having the consumer enter the information each month or the City auto debiting the account. Electronic wallet technology would store the credit card information, and the easier the site was to use, the more people would use it. After discussion, there was agreement an update on this item would be included on the next agenda. Mr. Madigan discussed Item 32 of the matrix, Selling of City Assets. A sheet identifying the assets was provided, but the members needed a value. Mr. Madigan requested he 2 Meeting Minutes Financial Advisory Committee Boynton Beach, FL December 13, 2010 be directed to the correct individual to ascertain the information. Mr. Bressner explained the City does not have a real estate manager. Mr. Atwood agreed to contact the individual. Chair Scantlan suggested removing the items on the list that had City facilities situated on it. Although those properties did not have movable assets and currently did not have value, they could potentially have value. Mr. Bressner noted there were some parks that were vacant pieced of property. The comprehensive plan has an element that contained a recommended percentage of Recreation and Open Space land, which the City followed. This was also State law. Every five years the City has to recertify the plan and the City selects the percentage of land to use. Regarding the City-owned land, Mr. Bressner explained sometimes parcels or portions of them can be used as a joint venture to benefit a developer and the City. A Map from the City Clerk's Office reflected the usable properties. Mr. Bressner would work through a GIS map. Mr. Madigan explained he was looking for the taxable value. Mr. Feldman inquired if the land for beach parking was on the list. Mr. Bressner responded it was and he explained the City owns the land but it has restrictions on it for perpetual use as open space. Whether it was a buildable lot was unknown. It would be subject to Ocean Ridge's Codes. The next step would be to review the list to see if there was any revenue that could be generated from it's sale. Mr. Feldman inquired about the concessionaire at the beach. Mr. Bressner responded the vendor was limited by Ocean Ridge's Code. For years, the vendor was limited to reheated sandwiches. Item 10 was Revenue Sources Other. Mr. Bressner explained the food operation was not a big revenue generator and it was not an enterprise operator. Item 14 Department Head presentations. This item was completed. Vice Chair Madalena inquired if they could obtain a breakdown of what could occur at the beach. Mr. Bressner requested the members exercise caution and communicate with him if any contact would be made with Ocean Ridge. The beach property could not be annexed because the property was not contiguous to the City. Mr. Bressner indicated they could sell solid waste services. They already provided Fire services. Until this year, they were providing Police services to Briny Breezes, but Ocean Ridge outbid them. The City provides building services to Lake Worth. Mr. Bressner responded in order to provide services, they had to ensure there was adequate staff to perform the work in Boynton Beach first. Mr. Shulman inquired about the letter to HOAs and if he would be able to receive assistance with typing the letter. Mr. Bressner responded staff would assist. The proposed letter was very good and he thought the letter was ready to go. The Police Department, Fire Department, Library and Recreation Department were approached about what they needed. Mr. Bressner would circulate the letter to the members and the 3 Meeting Minutes Financial Advisory Committee Boynton Beach, FL December 13, 2010 item would be put on the agenda for approval in January. The committee could approve it and get a final packet out based on the draft submitted for the next agenda. Ms. Lonergan had met with Wally Majors and staff regarding the Shopper Hopper and was unsure how to proceed. She noted no one pays anything for the Shopper Hopper and she did not know if there was a set route. Mr. Bressner explained a profile of the program services and how it operates and a short synopsis could be provided. There was an impact analysis in the budget and the ridership data was already completed. Financially speaking, the service did not pay for itself, but from a program services perspective, it was great. The staff expert on the Shopper Hopper was Mr. Majors. Ms. Lonergan would send Mr. Bressner an email and he would set up a meeting with staff. She noted West Palm Beach obtained a grant for their trolley. Delray Beach has a trolley and it was thought the Shopper Hopper could be turned into a trolley. It was questioned if the trolley in downtown West Palm Beach was for the Community Redevelopment Agency area there. Mr. Bressner inquired if it was viable to continue discretionary programs that were not core essential activities in the City and in this economy, if they are continued how they would be funded. Currently, the service is heavily subsidized. It was funded by the Gas Tax, and it was a reduced transfer to the general fund that had an indirect impact on the budget because it reduced the general fund dollars for other activities such as street maintenance. 3. Discuss and finalize questions for Survey Monkey and their distribution and timing - copies of all draft questions included along with report on Survey Monkey included with agenda e-mail. Mr. Bressner explained Wayne Segal, Public Affairs Officer, has been working with other jurisdictions and Survey Monkey. Wayne Segal, Public Affairs Director, explained he was not an expert on surveys. A brief PowerPoint presentation was given. There are open-ended and closed questions and both have their pros and cons which he reviewed and which are contained in the meeting materials. Survey Monkey has a mechanism that would prevent a person from taking the survey 10 times. Chair Scantlan thought the survey should be very focused which would assist the Committee in shaping the deliverables regarding the budget. The survey was another data point to be used to make budget decisions. Mr. Segal explained the multiple choice, Likert Scale and numerical approaches to the closed-ended questions as contained in the meeting materials. The first survey should target what programs or services should or should not be supported in the budget this year. Discussion followed that the members had to consider how long to keep the survey open. He added one group of questions regarding core services that were contained in the Mayor's State of the City report last spring and requested the members consider adding those questions as it would help the Committee gather information about what should be offered. It could identify the public opinion, what they feel the residents and businesses are paying too 4 Meeting Minutes Financial Advisory Committee Boynton Beach, FL December 13,2010 much or too little for and what should be supported in the budget. There was agreement to close the survey towards the end of February. The FAC has to get the questions out there so the FAC would have a quantified data point. Vice Chair Madalena thought the sample survey was excellent. It added a section about demographics and he thought the survey, as presented by Mr. Segal, captured the committee's thoughts. Discussion followed that renters, indirectly, could take the survey. That information could be cross-tabulated and they could see a renter had one view that was very different from that of a business owner. Mr. Segal pointed out any question noted with an asterisk was mandatory to be filled out. Vice Chair Madalena inquired if the survey was too long or if there were too many questions and discussion followed. A test group would determine if the survey covered those issues. The privacy policy is that the City would not sell the information but it is pointed out the information was a matter of public record. The respondents would have to agree to the terms of the privacy policy or they could not take the survey. Discussion turned to public accountability and identifying information. Mr. Feldman thought 40% to 50% of residents in Homeowners Associations did not have a computer. The survey would not ask for the personal information, but would ask how long they were in the community or if they owned or rented, but they would not ask for an address. Mr. Feldman left at 6:59 p.m. The program could lock in an individual's IP address which would prevent them from taking the survey twice. Zip codes would be included but no other personal information. Staff would research Survey Monkey's ability to prevent multiple responses. Mr. Feldman returned at 7:04 p.m. It was suggested a question be added to Question 5 to obtain a response about the school system. It was also suggested adding Recreation and Parks to the same question. This question would be numerically ranked. Chair Scantlan inquired if they should have the same question for business owners for Number 7. This would be what factors affected their decision to move to Boynton Beach, i.e. tax rate, office space, business fees. Mr. Segal agreed to contact the Business Development Board regarding the stock questions they would use. Mr. Segal agreed to look into using a larger font size. A suggestion was made to add tennis and golf to sample question 7 regarding user fees. 5 Meeting Minutes Financial Advisory Committee Boynton Beach, FL December 13, 2010 Mr. Shulman suggested Item 1 of sample question 7 should just say franchise fee. Discussion also followed franchise fees cannot be increased more than 10%. There was agreement on sample question 8, Item 2, the second button should be changed to add the word "increase" as follows: "Reduce coverage/increase response time" Item 3, the second button would read, "Not increase the Fire Assessment and see a possible increase docrease in response time and/or capabilities." Motion Vice Chair Madalena moved the survey in its present form be put out to the sample group. It was suggested the survey be sent to City employees. Mr. Segal advised he was setting up a closed blog and could send the link. It was also suggested the entire Financial Advisory Committee take the survey and Mr. Segal agreed to forward them the link. Mr. Feldman also agreed to get less than 20 people to take the survey. Vote Mr. Madigan seconded the motion that unanimously passed. 4. Review of Revenue Projections for all Funds (See attached Revenue Summary All Funds FY 2008-09 to 2014-2015) Mr. Atwood provided highlights of the totals of all the funds. Page 2 reflected the General Fund under two assumptions; one that the assessed valuation would not decrease; and the second, if the assessed valuation would decrease 8%. The impact on the General Fund with an 8% decrease was reflected and reviewed. There was a deficit of $11.2 million going into the Fund for fiscal year 2011/2012 with no increases or expenditures. Mr. Atwood explained property taxes, in total, were $22.1 million. The total budget for police and fire were twice the property taxes and the deficit, in round numbers, was $11 million. Departmental expenses and revenues were presented. The operating expenses were 11.5 million. If the City increased to 10 mils it would solve the deficit. Vice Chair Madalena revisited the budget and discussion followed as to whether they increased the responsibility of the CRA to pay for the police coverage in their area. He inquired if that was a viable option. Mr. Bressner explained a recent opinion from the Attorney General's Office which may cast doubt on whether CRAs will be able to allocate funding for the services. There had to be a rationale between the services and development. Police services were used for special events. The City Commission was concerned about that with the trolley. Whether police services were integral enough to a redevelopment program was questionable. Lack of public safety can serve as an 6 Meeting Minutes Financial Advisory Committee Boynton Beach, FL December 13,2010 obstacle to redevelopment but the question was how much of the burden could be borne by the CRA. The impact of the CRA being dissolved was discussed. Mr. Bressner explained any bond or indebtedness incurred by the Community Redevelopment Agency still had to be met. Vice Chair Madalena inquired if the obligation was met whether it would still help the City. Mr. Bressner responded that would have to be analyzed. The other activity that occurs for the CRA funding is supposed to be temporary and good. The model the City used for the CRA when it was created had value to the work they are doing because it is economic development. Now it benefits the programs, services and taxes in the Community Redevelopment Agency. The residents outside the CRA area pay the same taxes as the CRA residents. CRA residents; however, pay taxes based on a 1986 rate for programs and activities and that rate cannot be reset. Everyone on the outside of the district was paying more but there was no way around it statutorily. It would help if police services could be funded to a greater extent by the CRA. Fire services were different and were moderated by the Fire Assessment Fee. The assessment was the equalizer because it was a non ad valorem fee. When the City was legally challenged about the fee and won, the City testified that the Fire Department expenses, including operating and capital construction expenditures during the first seven years, totalled 16%. The City was allowed to expend 55%. That same legislation cannot exist for Police services. Police services must be included in the General Fund. The County has an equivalent of the Fire Services called the Municipal Servicing Taxing Unit, (MSTU). There was discussion about the eligible portions of fire rescue, they could triple the assessment rate. Boca Raton, Boynton beach and West Palm Beach have the assessment. There was discussion about letting residents pick an amount of increment that they want to increase. On a $150,000 house, the resident would be taxed on $100,000 due to exemptions, and the cost would be $333. Boynton Beach was one of the few municipalities that did not raise its millage rate. The rollback rate was 8%, which would have held revenues constant. Public opinion was there was no support for going to the rollback rate even though the tax bill would go down. The City is now funding more personnel costs from the fire assessment. Discussion followed about the budget process. The Financial Advisory Committee would make a recommendation to the City Commission regarding what they see to be the big picture issue and what areas they save money or raise revenues. Mr. Feldman suggested setting a couple of meetings aside for Mr. Bressner to put together the information. Chair Scantlan explained each member had areas of study and the initial deliverable would be in March or April. Chair Scantlan would put together a timeline and recommended the members review what Mr. Bressner put together last year. The 7 Meeting Minutes Financial Advisory Committee Boynton Beach, FL December 13,2010 committee would recommend what areas should be reviewed. The members had to research their assignments Mr. Bressner responded to an earlier question about the Community Redevelopment Agency. If they eliminated the Community Redevelopment Agency, the County increment would also be eliminated which would be about $4 million to $5 million. Vice Chair Madelana thought there was a lot of opportunity to revise the CRA by the size and scope of the property they managed. The redevelopment district was large. There must be some areas that can be reclaimed or the lines redrawn. Mr. Bressner commented there was an analysis done about two years ago to compress the area and the fiscal impact showed there was some monies coming back into the City. Vice Chair Madalena also suggested if there was an area in the Community Redevelopment Agency that initiates a higher percentage of calls for police occurred, Police services should be paid for, and if that study reflected that analysis, it would not be out of line for them to pay for it. Mr. Bressner clarified the question was what is the rationale nexus of providing a level of police services to facilitate the redevelopment. As long as there is a direct relationship between enhanced police services to help the Community Redevelopment Agency fulfill its mission, the expenditure would probably would be acceptable. Chair Scantlan clarified the Community Redevelopment Agency pays for five officers and other services. They would have the same distribution of police coverage. Five officers are dedicated and the redevelopment area does not consume more than two districts. Mr. Shulman suggested changing the fire assessment fee to $87 as opposed to the listed amount of $77 on the survey. Currently the fee was $68. Mr. Shulman inquired about increases reflected from 2011 to 2014 and how the projects were created. Mr. Atwood responded it was based on historical data and the five-year plan. It did not include or reflect any specific increases in fees. 5. Discuss methods of increasing revenues Mr. Shulman inquired if there were any suggestions to increase revenue. Suggestions received were to review the boat slips, Boat Club Park, water management services to Ocean Ridge, and development services to Briny Breezes and Ocean Ridge. Mr. Shulman would send his list to Mr. Bressner who would circulate it to the members. Mr. Shulman advised Boca Raton and Delray Beach had been contacted. 8 Meeting Minutes Financial Advisory Committee Boynton Beach, FL December 13,2010 6. Discuss the "Review of the City's Defined Benefit Retirement Plans" by the Segal Company (Distributed at November 29, 2010 Meeting) - Additional electronic copy included with agenda e-mail Vice Chair Madalena had reviewed the Segal Report and advised there were some items that could be adjusted. Some items could not be adjusted due to contractual obligations. The City's contribution to fund the legacy programs will be too much Other municipalities are making changes to their program now. There are also legislative changes anticipated to occur. In an effort to address pensions in the private sector, Kellogg's did a bond offering for $1 billion and used $500 million to pay for their pension expenses. It was a 10-year bond. Most economists feel the low interest rate environment will not remain that way over the next 10 years and the interest rates will increase greatly over 4%. There is a limited amount of good corporate debt. Vice Chair Madalena inquired if the City could go to the bond market to pay for the unfunded liability. Pembrook Pines tried floating the bonds two or three years ago, but it was not very popular. Vice Chair Madalena explained the fixed-investment environment does not exist at this time. Mr. Atwood explained they would need to conduct an actuarial valuation of the impact of unfunded past service liability. The impact to the current charge to the City and employees compared to the 4.5% bond obligation has not been successful in the past. Mr. Bressner expressed he thought it was already a smoothing on a smoothing. The bond issue could further stabilize it over time. Each plan has their own actuary, which was GRS. Segal is the City's independent actuary. The historical rates have bonds tied to U.S. Treasuries. The 10-year reassure note was less than 3%. Money market rates were less than a quarter of a basis point. He commented investors would line up to obtain 3.5%, tax free over 10 years. Municipalities are not required to pay a high yield. The purpose would be to pay the unfunded liability costs, which as of last year, were $88 million. The $88 million would cost the City about 7%, which the City would try to reduce to 4%. Mr. Atwood explained the City would incur the 7% because of the past obligations to fixed retirees which exceeded the total rate of return and the City's and employees' obligations. Another option was to do an offering for the entire unfunded liability, freeze the traditional pension plan and convert to a defined contribution plan. The City would then try to fund what is owed in the plan and then can move forward on a reduced cost, year by year. The Town of Palm Beach was considering freezing a defined benefit and moving to a lesser cost defined benefit program. Ultimately the service costs and unfunded accrued liability still had to be covered. The bond issue would end that, the plan would then be fully funded, and the City could start funding another program under different auspices. There would be some associated costs 9 Meeting Minutes Financial Advisory Committee Boynton Beach, FL December 13, 2010 7. Other Business Mr. Madigan recalled on August 30th, the City Manager presented 20 items the members would conduct comprehensive reviews on and present their recommendations and options. This item would be put on the next agenda. It was noted the discussion of Item 6 would continue at the next meeting on January 10, 2011. Chair Scantlan advised he attended the Police Pension Board and he suggested each member review their areas of study. He recommended each of the members look at the Advisory Board schedules and attempt to attend a meeting. His thoughts were this would improve the process. 8. Adjournment Mr. Feldman moved to adjourn. Mr. Shulman seconded the motion that unanimously passed. The meeting adjourned at 8:30 p.m. Q~~ Recording Secretary 10 MINUTES OF THE FINANCIAL ADVISORY COMMITTEE MEETING HELD ON MONDAY, JANUARY 10, 2011 AT 6:00 P.M. AT THE LIBRARY ROOM "A," BOYNTON BEACH, FLORIDA PRESENT Don Scantlan, Chair Michael Madalena, Vice Chair George Feldman David Madigan (arrived at 6:07 p.m.) Merline Pamplona William Shulman Terry Lonergan, Alternate Kurt Bressner, City Manager Barry Atwood, Finance Director Wayne Segal, Public Affairs Director Chair Scantlan called the meeting to Order at 5:59 p.m. The Recording Secretary called the roll. Motion Mr. Shulman made a motion to move Ms. Lonergan to full member status for this meeting. Mr. Feldman seconded the motion that unanimously passed. It was requested a discussion on membership openings be added to the agenda following approval of the minutes. Motion Vice Chair Madalena moved to approve the agenda as amended for tonight's meeting. Ms. Lonergan seconded the motion that unanimously passed. 1. Approval of Minutes: . October 4, 2010 . November 15, 2010 . November 29, 2010 Motion Vice Chair Madalena moved to approve all three meetings. Mr. Shulman seconded the motion that passed unanimously. 1 Meeting Minutes Financial Advisory Committee Boynton Beach, Florida January 10, 2011 2 Membership Openings (added item) The ordinance establishing the Financial Advisory Committee provided that members be removed without the action of the City Commission for missing more than four meetings per year for any reason. It was noted Mr. Jergensen and Ms. Castello had resigned from the Committee after missing four meetings, thereby creating vacancies for a regular and an alternate member. Chair Scantlan felt the ordinance would be appropriate if the Committee met monthly. However, since the Committee had been meeting twice a month, he suggested a recommendation be made to review the appropriate portion of the ordinance. As the recommendation pertained to a policy issue for the Commission to consider, Mr. Bressner advised he would request staff prepare a report to the Commission to include language proposed by the Committee. Discussion ensued and the Committee agreed the appropriate number of absences to remove a member would be three consecutive absences, or a total of six in a calendar year. (Mr. Madigan arrived at 6:07 p.m.) Motion Ms. Lonergan moved to direct staff to put before the Commission a request to revise the Code to address three consecutive absences, or a total of six in any given calendar year. Vice Chair Madalena seconded the motion that passed unanimously. Kurt Bressner, City Manager, advised an agenda cover sheet would be prepared for the first meeting in February. As there remained a great deal of work to be accomplished by the Committee, Chair Scantlan believed the Committee should continue to meet twice a month, and requested a consensus, if the Committee concurred. Ms. Pamplona agreed, but felt the meetings should be limited to a two-hour maximum. There were no objections to continuing the meetings twice a month or to the two-hour limitation. The issue of the vacancies was discussed. Mr. Bressner noted the vacancies would be filled by Commission appointments and would also be targeted for the first meeting in February. Individuals interested in applying could access the application forms on the City's website. It was suggested individuals known to the Committee members who might be interested in serving be encouraged to apply as soon as possible. It was noted Ms. Lonergan, currently an alternate, would not automatically be moved up to regular member status, as this would be the responsibility of the appointing Commissioner. 2 Meeting Minutes Financial Advisory Committee Boynton Beach, Florida January 10, 2011 (Mr. Madigan left the meeting at 6:12 p.m.) 2, Review, discuss and approve final draft questions for Citizen Survey along with distribution and timing. Mr. Shulman commented on the term "cookies" in the Introduction section. He felt this term might deter individuals from filling out the survey. It was noted the language would not be seen by persons completing the survey. Chair Scantlan understood a Beta Test had previously been provided to the public and inquired whether any results or recommendations had been received. Mr. Bressner advised while comments had been received, the Beta Test was provided more for content to ensure the proper flow of the questionnaire. With regard to question 10, sub-question 5, an increase in the Fire Assessment from $68 to $88 resulted in an increase of approximately $1.67 per month. Mr. Shulman felt the increase would be agreeable to residents. The fee for non-residential buildings was calculated on a square-footage basis and would increase approximately 30%. Mr. Shulman felt the 30% might serve as a deterrence and believed reference should be made only to the $1.67. Mr. Bressner explained the $1.67 amount would not be accurate because, as noted above, non-residential properties were assessed on a square-footage basis. It was suggested an example be included explaining what the increase would be for a 1,000 square foot, non-residential building. The members concurred. With regard to question 8, sub-question 1, Vice Chair Madalena commented the millage rate shown was for Boynton Beach only. He inquired as to the manner in which the City's millage rate would be affected if the County's variables were taken into account. Mr. Bressner explained Boynton Beach had maintained its millage rate, while the County had increased its rate for the last three years. Mr. Bressner would not wish to include a variable over which the City had no control. His recommendation would be to focus on the City's overall tax rate, as the survey pertained to City programs, services and costs. (Mr. Madigan returned at 6:35 p.m.) It was noted subcategories and numbering within the subcategories could be confusing to participants. As such, Wayne Segal, Public Affairs Director, agreed to "tweak" these areas. Question 11, sub-question 2, asked the participants how much he or she agreed or disagreed that the taxes and/or user fees described should be raised to the extent the City was able to maintain the high level of services. Mr. Shulman felt someone might 3 Meeting Minutes Financial Advisory Committee Boynton Beach, Florida January 10, 2011 agree strongly with franchise fees if the fees were believed to be reasonable. If participants they felt the figure was too high, they would strongly disagree. The question should be more specific as to the quantity of the rates. It would be difficult to make a judgment if had been agreed the fees were very significant rather than reasonable. Chair Scantlan believed if one strongly agreed, one would allow a greater quantity change. Ms. Lonergan felt the Committee was giving too much credence to the general homeowner who would be filling out the survey. As a means of capturing the data, Chair Scantlan suggested the question could be asked in the manner currently set forth, followed by a question asking whether the participant would be in favor of a franchise fee increase in the amounts described. Mr. Bressner believed franchise fees should be stricken from the survey. The City did not have the discretion to raise franchise fees and, if anything, might be required to lower them. The City had no direct control over franchise fees, as they were based upon agreements entered into with the utility/cable companies. Mr. Segal explained he had not thought of a specific fee amount at the time he designed the question, but rather was attempting to capture the frame of mind of the participant. If the homeowner were amenable, an exact amount could be provided at a later date. Mr. Bressner indicated business owners would be completing the survey as well as homeowners and could be tracked back to user classes. Homeowners responding to the survey might not object to an increase in a Business Tax Receipt, but could object to increases in user fees and rentals. Chair Scantlan believed it would be possible to include both a qualitative question and a quantitative question. If a participant agreed to an increase in user fees, a fOllow-up question would request an amount to which the participant would be amenable. Mr. Segal reiterated the purpose of the question was to gauge the frame of the survey respondent, and not to crunch the numbers at this time. The members concurred the survey should be straightforward and simple. The survey referred to an Adopt-a-Park program and asked to what extent the participant would be interested in the program as a way to help maintain the City's parks without increasing taxes. A number of activities were included. Mr. Shulman questioned "graffiti and vandalism reporting," as he did not feel citizens should be reporting vandalism caused by other citizens. He inquired whether this could be modified to report the results of vandalism and graffiti. Mr. Bressner suggested, II... report vandalism that has occurred." The members concurred. For those completing the survey, contact information was optional. It was again emphasized, the intent of the survey was to gauge the mind of the participant. 4 Meeting Minutes Financial Advisory Committee Boynton Beach, Florida January 10, 2011 Chair Scantlan commented on the question which asked why the respondent moved to Boynton Beach. He preferred to see examples under City amenities to include a City recreation box. The members agreed to include "City amenities such as recreation," an open text box to capture narrative comments, specifically in questions 6 and 8, and an "other" option box that could include family. This would pertain to question 3 relating to businesses as well. Mr. Madigan suggested the members consider engaging a professional who was proficient in creating surveys. While the members had offered sound ideas, Mr. Madigan did not believe the thoughts were being assembled properly. Mr. Bressner disagreed. Chair Scantlan felt the survey was good and believed the process should move forward. Mr. Madigan demonstrated support for the Chair and offered the following motion. Motion Mr. Madigan moved that the Committee accept and adopt the survey questionnaire as presented with the recommended changes that went around the table today. Mr. Shulman seconded the motion that passed unanimously. Chair Scantlan did not believe Board action was required for the City to determine the manner in which the survey would be printed, provided the content of the questions and answers were those approved by the Committee. He also did not believe Board action was necessary for the City's use of Survey Monkey as the online solution or the manner in which the City chose to make the survey available offline. The members concurred. The Committee thanked Mr. Segal for his input. 3. Presentation and status of member research on their selected projects (10-20 minutes) Members . George Feldman - #11- Golf Course Revenue Options Mr. Feldman had approached Dan Hager, Golf Course Manager, to discuss various marketing avenues. Mr. Hager had developed an online golfing program that provided revenues generated and the number of people on the golf course at a given time. Revenue updates could be provided every half hour. 5 Meeting Minutes Financial Advisory Committee Boynton Beach, Florida January 10, 2011 Messrs. Hager and Feldman had developed a marketing campaign targeted for Wednesday, December 22, 2010, offering 15 free golf balls to the public. Wednesday had been selected, as historically it was known to be a slow day in the industry. The event appeared to be successful, as 115 18-hole rounds had been played that day, netting an additional $900 in revenues. It was anticipated the promotion would be offered again in January, a typical post-holiday time of the year. Mr. Feldman pointed out that while the Golf Course had enjoyed profits of $200,000, Mr. Hager had been asked to cut 15% from the budget. Mr. Bressner remarked that if Mr. Hager did realize a return on his investment which could be substantiated, he might not have to make the targeted 15% cut. This could be a recommendation put forward by Mr. Feldman. Other marketing strategies suggested by Mr. Hager included a separate tee-off for women, as 50% or more of all golfers were women. Mr. Bressner noted Mr. Hager worked with charities including Susan G. Komen for the Cure and the Heart Association. It was remarked Mr. Hager had not engaged in scramble golf tournaments. Mr. Feldman would follow up with Mr. Hager to determine whether tournaments would be considered. A report would be provided to Mr. Bressner for distribution to the Committee. . Michael Madalena - #25 and #26 - City Pension Costs Vice Chair Madalena distributed a handout which included a report from Florida Tax Watch, a consortium of industry leaders in the State that would be making recommendations for government costs savings for 2011. The Florida Pension Retirement System would be the organization's top priority. Recommendations included eliminating or reducing the defined benefit plan and increasing the use of defined contribution plans. The State of Florida currently utilized both plans. It was anticipated participants would be moved to a defined contribution plan with a freeze of the current plan benefit. Another possibility was the implementation of a hybrid of both plans. Participants would be moved to a defined contribution plan for future years. Another recommendation called for participants to contribute more to the plan. Vice Chair Madalena would be attending a Town Hall meeting on January 20th, in downtown Palm Beach and would review the issues discussed at the next Financial Advisory Committee meeting. The handout also included articles from the Palm Beach Post and Bloomberg Report pertaining to various city, county and state municipalities around the country and what they were facing. As a result of the current economic climate, it was anticipated benefits would be eliminated, taxes would be raised or both would occur. The market had gone through 10 years of a flat-to-negative period during which most cities were 6 Meeting Minutes Financial Advisory Committee Boynton Beach, Florida January 10, 2011 ramping up their costs and expanding their services. For the City of Boynton Beach, this has resulted in a $90 million unfunded liability shortfall for the City's three pensions. In order to control the City's pension obligations, it is recommended changes to the plans be made sooner rather than later. The longer the City delayed, the more the general revenue would have to be used to pay for this benefit which could result in reduced services or increased taxes. Some townships were going into receivership or their pensions were being taken over by the State. The City of Boynton Beach must establish a tax schedule for a millage rate for all the residents, or the City would be mandated to do so by a higher authority. Although the report was written for the Florida Retirement System (FRS), Vice Chair Madalena could acknowledge that the recommendations contained in the report were his. References to the Florida Retirement System (FRS) could be stricken, with the City of Boynton Beach being inserted in lieu thereof, as the City currently provided a traditional defined benefit plan that was too expensive to maintain. Mr. Bressner noted the City had engaged the services of Segal Pension Consultants and had reviewed a number of the issues at the local level. The Segal Report had been presented at a previous meeting. If structural changes were to be made to the local pension system, it would still be necessary to fund those pension benefits and meet the investment targets. Officials from the Town of Palm Beach were reviewing this issue carefully and considering options to blend their pension system. Some communities funded the cost of their pension system from bond proceeds. However, the debt service would still have to be satisfied and sufficient earnings would be required to meet service and pension obligations. It was believed the bond market would be facing a slippery slope for the next year or so. Mr. Bressner noted City staff had spoken with the City's financial advisor with regard to alternatives. Vice Chair Madalena pointed out that pension plans were wonderful tools to attract and retain employees, and if Boynton Beach was one of the first cities to dismantle its defined benefit program, a large exodus by staff could ensue. Vice Chair Madalena felt he was well within reach of providing a deliverable for the City Commission relating to City pension costs. · David Madigan - #33 - Merge CRA Functions; #32-Selling of City Assets; #31-Hiring Freeze; #40-Voluntary Separation Program and Early Out 7 Meeting Minutes Financial Advisory Committee Boynton Beach, Florida January 10, 2011 Mr. Madigan note he had been in contact with Messrs. Bressner and Atwood pertaining to all four areas. With regard to merging the Community Redevelopment Agency (CRA) functions, Mr. Madigan felt it was best "politically" to leave the CRA alone at this time. He believed a window of opportunity could be available on February 1st or after the March election of the City Commissioners. With regard to selling City assets, Mr. Madison had requested the financials on the property, but had not yet received them. Mr. Bressner advised no master document existed that provided values on all of the properties. He could provide a list containing the square footage, a map and exhibit evidencing the City's inventory, and insurance appraisals. These would assist Mr. Madigan in making a qualitative evaluation on the property. Mr. Bressner noted an appraisal of City Hall had been obtained approximately three years ago before the market dropped. The hiring freeze was already in progress. Mr. Bressner noted a soft hiring freeze had been in effect since 2007. Mr. Madigan hoped the Voluntary Separation Program and Early Out could be reinstated for fiscal year 2010/2011. Mr. Bressner noted a Commission resolution had been adopted in Mayor June 2010 authorizing the program which provided employees with a window of opportunity in which to participate. Mr. Bressner believed the program was under active consideration by the Budget Committee for this coming fiscal year. Mr. Bressner would provide Mr. Madigan with copies of the program documents, and Mr. Madigan could make recommendations if he felt they were necessary. Mr. Bressner suggested Mr. Madigan contact Sharyn Goebelt, Human Resources Director, on this item. . Don Scantlan - #24-Paperless Billing; #52-City Service Survey Chair Scantlan noted the City Services survey had been completed. The information provided to Chair Scantlan relating to paperless billing appeared promising and was being further pursued. Mr. Atwood was in the process of working with a company regarding electronic payment of Boynton Beach water bills. Progress had been made, and Chair Scantlan would be notified of a demonstration date. . William Shulman - #39-HOA Contributions to Programs; #10-Increases in City Revenues With regard to Item 39, Mr. Shulman noted the purpose of the project was to solicit donations, either in kind or by monetary contributions, from the Homeowner Associations (HOAs) in the City to purchase equipment for City departments. The 8 Meeting Minutes Financial Advisory Committee Boynton Beach, Florida January 10, 2011 departments could not afford to pay for the needed equipment as a result of the budget crunch. The methodology would include obtaining a list of the names and addresses of all Homeowners Associations (HOAs), Chairpersons and Boards of Governance. It would be necessary to ascertain the equipment needed by the Library, Police, Fire and Recreation and Parks Departments. A letter would be prepared and mailed requesting the various HOAs: . Make a donation to purchase a specific piece of equipment described in the letter; . Make a donation which would go into a pool with other Homeowner Association (HOA) contributions; or . Make a donation to be placed in a general fund to be turned over to the specific departments based upon need as determined by the City Manager. A letter of appreciation would be prepared and sent to those Homeowners Associations (HOAs) that responded and contributed to the program. The City Manager's Office had agreed to provide typing assistance. Mr. Shulman was in possession of a list of 200 Homeowners Associations (HOAs). He felt 100/0 of the envelopes would be returned for incorrect addresses, but he anticipated responses from 50% or 60% of the Associations. With regard to Item 10, Increases in City Revenues, Mr. Shulman was in possession of a list of 21 areas in which revenue increases were possible. A sampling of the areas included fines and forfeitures, rents, Marina boat slips, beach parking permits, Tennis Center and Golf Course revenues, pool fees, other recreational facilities, fire assessment, Library room rentals and internet usage. Mr. Shulman would determine the annual estimated revenues received, if applicable, the method of increasing the revenues, and the anticipated additional revenues. He believed he would be able to provide this information by the next meeting. . Merline Pamplona-#18-Forestry/Grounds (Cost/Benefit); #17- Parks/Recreation (Cost/Benefit) With regard Item #18, Forestry/Grounds, Ms. Pamplona suggested a possible revenue increase, requests for grants, if possible, and solicitation of volunteers. With regard to cost reductions, she suggested personnel be decreased, noting the departments that had reduced services would likely result in fewer employees. Other areas to be explored would include irrigation and urban forestry. She also suggested consideration 9 Meeting Minutes Financial Advisory Committee Boynton Beach, Florida January 10, 2011 be given to the reduction of operating and non-operating expenses, including maintenance for the medians. The current budget provided up to $550,000, and she suggested this be reduced 50%, resulting in a savings of $275,000. Mr. Bressner noted staff had already cut back on maintenance, which included trimming palms in the medians, from twice to once a year. Water service had been cut back for some of the medians, as the department had exhausted its funds for water service and utilities. Mr. Bressner pointed out the cutbacks in maintenance had adversely impacted the appearance of the areas affected. Ms. Pamplona suggested that prior to the sale of vacant properties, mowing be cut back to reduce costs. She would explore this further. Chair Scantlan suggested levels of detail be furnished when suggesting the 50% cut. He also suggested Ms. Pamplona prepare a list of questions for the departments to determine in what areas monies could be saved. The questions would be submitted to Mr. Bressner, and he would begin contacting the departments. Ms. Pamplona would contact Forestry to determine budget amounts for ground maintenance, a breakdown of non-operating expenses and possible reductions, net savings resulting from a reduced work schedule relating to median ground mowing, irrigation and urban forestry and a possible reduction in personnel. For Recreation and Parks, Ms. Pamplona suggested a possible revenue increase, pursuing additional grants, soliciting volunteers, increasing fees, adopting a park and increasing rentals for City facilities. With regard to cost reduction, she suggested staffing needs would decrease for those departments having reduced services. Ms. Pamplona also suggested program fees be increased by $10 or programs/activities be cut. Ms. Pamplona suggested the elimination of the Transportation Division, which would include the Shopper Hopper and transportation for seniors and students. This would result in savings of approximately $240,000. These services could be funded by grants or supplemented by the implementation of a nominal fee for services that are currently provided free of charge. Other services could be eliminated. Reduced services at the Denson Pool and other facilities would result in reduced personnel and a decrease in the level of maintenance. Ms. Pamplona also suggested the elimination of non-revenue-generated programs, such as self-improvement, social activities, life skills and mentoring, as well as the elimination or reduction of minimal revenue-generated programs. Chair Scantlan encouraged Ms. Pamplona to review the budgets for the departments referred to above and to be prepared to make a recommendation regarding the 15% cuts within the next few weeks. 10 Meeting Minutes Financial Advisory Committee Boynton Beach, Florida January 10, 2011 Alternate . Terry Lonergan - #27-Shopper Hopper (Cost/Benefit) Mr. Lonergan advised she had attended this afternoon's Senior Advisory Board meeting, as the members were directly involved with the Shopper Hopper. Currently, riders are charged 50 cents per trip. Ms. Lonergan had inquired of Denise Chamberlain, Senior Advisory Board Chair, whether an increase in the fare to $1 or $2 per trip would impact the ridership. Chair Chamberlain felt the riders would eventually agree to the charge. Ms. Lonergan was advised by Chair Chamberlain that the elimination of the Shopper Hopper for the Senior Center would result in the Center's loss of accreditation. No information had been provided by Chair Chamberlain as to the perquisites provided by accreditation. The Shopper Hopper transported people from their homes to the Senior Center, and it was believed one had to be independently mobile in order to utilize this service. It was not known whether the Shopper Hopper made any stops to or from nursing homes. Accreditation attracted visitors to the Center, as it was generally known accredited facilities were overseen by a national organization and provided legitimate programs. Mr. Bressner was not aware that the elimination of the Shopper Hopper for the Senior Center would result in the Center's loss of accreditation and he requested this be verified. It was suggested the implementation of a bus pass could provide a possible source of revenue. Ms. Lonergan explained the Senior Center had charged nominal fees for some refreshments and many events were free of charge. Other than the 50-cent fare, no revenues were received for the Shopper Hopper. Ms. Lonergan noted previous conversations with Wally Majors, Director of Recreation and Parks, in which Mr. Majors suggested corporate entities such as Walgreen's, CYS, Simon Properties and Publix be approached for significant contributions, as they benefited directly from the Shopper Hopper's ridership. Ms. Lonergan advised that the Village of Wellington had contracted with one or more taxicab companies to transport anyone within village limits at a cost of $2 per ride. The fare was subsidized by the Village. Mr. Bressner added the taxicab subsidy program provided a certain level of service for transportation which he believed was limited to four trips per customer per month. In addition, the Village was also going to set aside funding for a trial para-transit system. The Village had contracted with Palm Tran to provide handicap transportation and a parallel program to be subsidized by the Village. The cost for these programs was well under $200,000, the cost for the Shopper Hopper program. Mr. Bressner would provide detailed information on the programs. 11 Meeting Minutes Financial Advisory Committee Boynton Beach, Florida January 10, 2011 4. Discussion of fiscal year 2011-2012 Budget Schedule for the City and timing of the Financial Advisory Committee Recommendations Mr. Bressner advised the Budget Committee would be meeting January 11, 2010 and would appreciate the first draft of the Financial Advisory Committee's recommendations by mid-March, if possible. The recommendations should include the items addressed at this meeting including consideration of tournaments for the Golf Course, a mechanism for developing a revenue stream for donations, large-target items, implication of the 15% cuts required by City departments and the citizen survey as a work product. Staff had already reviewed a number of these items as well. Property tax values were expected to drop further this year, and preliminary and final figures would be available by June 1st and July 1st, respectively. Budget workshops would commence in July, and the first hearing for the millage rate would be set by the end of July. Staff looked forward to specific recommendations from the Financial Advisory Committee to continue from mid-March all the way through the July workshops. 5. Other Business Vice Chair Madalena disclosed that one of the Vice Presidents of VALlC Financial Advisors, Inc., the firm with which Vice Chair Madalena is associated, had contacted the City of Boynton Beach requesting to be added to the City's vendor list relating to Deferred Compensation. The next meeting would be held on January 24, 2011, 6:00 p.m. at the Library. Adjournment Motion Mr. Madigan moved to adjourn. Mr. Shulman seconded the motion that passed unanimously. The meeting adjourned at 8:05 p.n. ~O- Steph~nie D. 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CD III III 5" ~ CD o -< 0- .. III Dr .. III o .... .en .... lD III n ;r ~ III '< Ul CD :I 0" .. III m N III :I 0. o < CD .. .J>. ;:u o CD o III c: "0 :I 0 - ~ lD 7 Regulars - 2 Alternates Staggered one, two or three year Terms for Regular Members Their successors shall be appointed for 3 years One-year terms for Alternates Established per Ordinance NO.1 0-009 , ,Jl/- II 2011 FINANCIAL ADVISORY COMMITTEE MEMBER EXPIRES PHONE PROFESSION () FELDMAN, George 06/12 561-239-5141 Owner Petra Direct 9778 Nickels Blvd 505 Appt'd 6/1/10 Qeorqefeldman30@hotmail.com Construction (33436) Consultant OPEN 06/13 f MADALENA, Michael, Vice Chair 06/12 740-2919 Assoc. District 4355 Key Lime Blvd Appt'd 6/1/10 mimadalena@yahoo.com Manager (33436) f MADIGAN, David 06/11 732-1638 Retired 215 B South Blvd Appt'd 6/1/10 dmad7117@netscape.com f) (33435) I PAMPLONA, Merline 06/11 968-2798 Financial & Tax 3941 Newport Ave Appt'd 6/15/10 MPAM PLONA T AX@HOTMAIL.COM Service Company (33436) f SCANTLAN, Don, Chair 06/13 433-5711 Director of Programs 13 Cedar Lane Appt'd 6/1/10 dscan1@aol.com Workforce Alliance (33436) p SHULMAN, William 06/13 737 -3402 CPA 21 Bristol Lane Appt'd 6/1/10 WShuI0806@aol.com (33436) ALTERNATES: OPEN 06/11 A LONERGAN, Terry 06/11 641-4725 Retired Bank Teller I \ 45 Rutland Lane Appt'd 8/3/10 terrvI33436@yahoo.com (33436) CITY EMPLOYEE REPRESENTATIVE: Barry Atwood, Finance Director Kurt Bressner, City Manager (back-up) 742-6310 742-6013 Updated: 12-08-10 S:ICCIWPIBOARDSILlSTS\2011 Board ListlFINANCIAL ADVISORY COMMITTEE.doc