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Minutes 05-12-11MINUTES OF THE JOINT WORKSHOP WITH THE CITY COMMISSION AND FINANCIAL ADVISORY COMMITTEE HELD AT THE INTRACOASTAL CLUBHOUSE, 2240 N. FEDERAL HIGHWAY, BOYNTON BEACH, FLORIDA, ON THURSDAY, MAY 12, 2011 A T 6:30 P.M. Present: City Commission Jose Rodriquez, Mayor William Orlove, Vice Mayor Woodrow Hay, Commissioner Steven Holzman, Commissioner Marlene Ross, Commissioner Financial Advisory Committee Don Scantlan, Chairperson Michael Madalena, Vice Chair George Feldman Terry Lonergan David Madigan Merline Pompalona William Schulman Jeffrey Fisher, Alternate Kurt Bressner, City Manager Shanna Bridgeman, City Attorney 1. Call to Order Barry Atwood, Finance Director Tim Howard, Deputy Finance Director Mayor Rodriguez called the workshop to order at 6:31 p.m. and explained the purpose of the workshop was to hear the recommendations of the Financial Advisory Committee and get consensus to move forward with their recommendations. There would be no motions and no approvals. Some items may be eliminated and some would receive consensus to move forward to the budget hearings in July. Introductions The Recording Secretary called the roll. Attendance is noted. Agenda 2. Presentation of Financial Advisory Committee Recommendation Report with Introduction by Chair of the Financial Advisory Committee A. Joint Meeting of City Commission and Financial Advisory Committee Cell Phones Mr. Schulman advised he made an analysis of the cell phones used by City employees. There were 294 cell phones that were used at an annual cost of $124,829 which represented an average cost of usage for each employee of $849.33, which did not Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 include equipment cost. The cell phones range from a high of $720 per year to a low of $120 per year. As of June 2010, there was a reduction in the annual cost of $80,391. The recommendation was that each employee either be charged 20% of their cell phone cost or $10.00 per month. As an example, in an analysis of the Mayor's usage, his costs would be approximately $189.20 per year. This benefit was offered to employees as a perk during exceptionally high revenues and financially good times. Mayor Rodriguez inquired whether it was necessary to have 294 people with cell phones, assuming that a large part of that was police. Mayor Rodriguez supports the idea of contributing to the cell phone use. He advised that allowances are also given so employees can use their own phones and the City would not give them phones. Vice Mayor Orlove commended the task force for doing their work so quickly and efficiently. He inquired of Mr. Shulman if the phones were purchased on a plan or contract, would most of the cost be usage? Mr. Schulman confirmed the cost would be all usage. If a plan could be contracted through an agency, it would bring the cell phone cost down. He further advised that the cell phones that are used by City employees are used for personal purposes and that is the reason the recommendation was made for a reimbursement. If the employee was charged $10.00 per month, that would add $35,000 in revenue annually. Mayor Rodriquez inquired of Mr. Bressner if the City was currently on a usage plan. Mr. Bressner explained the police department has unlimited usage under the contract. Most of the police department personnel receive allowances. There are few City issued cell phones left. Chair Scantlan pointed out that on the bottom of each recommendation, there is the Committee vote and this one was a close vote. Some of the dissenting opinions were that it was a benefit to the City so some exempt people that had these phones could be contacted any time of the day and night. There have been rulings stating that non- exempt employees answering phones for business purposes are, in fact, doing work and could be subject to overtime. Mr. Bressner pointed out in Utilities, there are phones in a "pool ", so if an employee is on call, they take a phone for the weekend. He further advised there are a number of City issued phones that act as floaters. If an employee was non - exempt, per provisions of the labor contract, and is called, the pay begins under the standby period. Mayor Rodriguez asked the Commissioners for consensus on this issue. Commissioner Holzman was of the opinion that all necessary individuals like police and fire, and City staff at a manager level that are on call 24/7, are provided an allowance and should leave this matter alone. 2 Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 Cornrnissioner Ross agreed with keeping the allowances. Commissioner Hay inquired if someone gets an allowance is that phone subject to be called into court. Mr. Bressner advised if a person receives an allowance and there is a records request for information on the phone, that is a matter of public record. Mr. Bressner further advised that even though he receives no allowance, he is still obligated to provide His phone records if requested. Vice Mayor Orlove advised he was in consensus for either $10.00 per month or an allowance. There was consensus from the Commission to move this item forward. Merge CRA Functions (CRA/BB Dev. Dept) (BB Dev Dept/CRA) Mayor Rodriguez advised the suggestion from the Board was not to take action. He inquired whether the Commissioners wished to override that. The consensus among the Commissioners was to support the position of recommendation. Forestry and Grounds Ms. Pamplona advised after evaluating this department, the recommendation was made for a 15% budget reduction. This was accomplished by the reduction of median maintenance without affecting personnel. The goal and desire of the Committee was to keep personnel, however, there may be times the personnel requirements would have to be reviewed. The recommendation was to cut $232,965 solely on median maintenance, which will affect Congress Avenue and Federal Highway, remove turf and palms, drop weed control from 4x a year to less, minor modification in irrigation, and trash and litter. Mayor Rodriguez inquired whether there would be upfront costs and if not, who would remove the turf and plants. Ms. Pamplona advised all costs are included in the net amount of the $232,965 reduction. This would be a one time reduction. Subsequent years would be less. Mayor Rodriguez commented he would not want to remove turf and plants and support all these reductions if it were going to be a one time savings. He would support a minimum of a five year savings. Mr. Bressner indicated there would be ongoing expenses that could be saved by modifying the maintenance schedule. Savings would come From lowering costs in the department, removing vegetation, providing less service and if you continue year after year, you would continue to save expenses. The question was if it was worth compromising the beautification of the City. Glenda Hall Forestry and Grounds Streets Manager, advised the maintenance on Federal Highway and Congress Avenue is weekly for some types of things and during 3 Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 the winter season, it reduces to bi- weekly. In the process of changing, it was recommended to perform weed and litter control four times a year. Bushes that were high maintenance would be removed and mulch would be put down. Irrigation would have to be retrofitted to irrigate mostly the trees and some bushes or shrubs may only require either no pruning or once a year pruning. The impact would be that there would be a lot of weeds in the rainy season and there would also be minimal litter control which is now done from once a week to twice a month, depending on the time of year. All palm and tree pruning is done once a year, unless it poses a hazard to a building. Vice Chair Orlove advised he would not be in favor of this recommendation as it was presented but rather wanted something put in place that would maintain some beautification in our City. Commissioner Hay, while in agreement with Vice Chair Orlove, suggested possibility using this as an opportunity to institute a community service program where organizations would get service points. The liability issue could pose a problem. Commissioner Ross was not in favor due to the medians being so prominent at the entry point to the City. Ms. Hall advised it is a tough environment with the traffic, the heat, the soil profile and the water restrictions. A grass median costs a lot more to maintain than one with shrubs. South Congress has a high percentage of turf, as well as Gateway and Woolbright. Commissioner Holzman suggested a cost analysis to possibly replace some of the turf areas with mulch, but advised that image was important and the City needs to make sure its image was portrayed in a way that when people come into the City, and especially with the new Walmart, that corner is going to be beautified not only by the new building but also with the plantings. Mayor Rodriguez indicated it appeared there was consensus on some of the discussion but not to the extreme discussed. There may be opportunity but the Commission is hesitant going to this level. Mr. Bressner indicated possibly a happy medium could be achieved by looking at the turf areas and eliminating those which would reduce the numbers, save on irrigation costs and maintenance costs and possibly come up with something that has more balance. Golf Course Mayor Rodriguez advised the Committee was asked for recommendations to support the golf course's current practices and policies. There were no comments from the Commission or the Committee. Hiring Freeze Mayor Rodriguez noted an indication of a savings of $1.4 million. He inquired if it was really a savings if it was already being done. Mr. Bressner indicated it is what had been saved to date. There had been a hiring freeze since Februray, 2007. Each year there is savings that gets passed on, but certainly not the total of $1.4 million. Savings are made through the early retirement program or the savings from people leaving. Mayor E Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 Rodriguez maintained that to get to $1.4 million, people would leave and the position would not be filled, but there are also critical positions that would have to be rehired. Mr. Madigan advised the recommendation clearly suggested that the $1.4 million is not an annual cost savings. The Committee recommendation was that there be a benchmark that the $1.4 rnillion continue into succeeding fiscal years, perhaps even increase it. The consensus of the Commission was to keep the hiring freeze. HOA Contributions Mayor Rodriguez inquired as to what exactly the City would be asking for. Mr. Bressner explained it was a structured giving program from HOAs to help the City pay for programs. Hunter's Run, historically, had contributed to The Children's Museum, to the Fire Department, and had contributed funds for the heat detector equipment the Fire Department uses. This is what is being proposed here, as well as other possibilities and benefits. These items would be helpful for us to have but for whatever reasons had to be cut from the budget. Mr. Schulman explained there are approximately 200 homeowner and condominium associations. The thought was to make these associations part of what the Committee was trying to accomplish. Mr. Schulman explained he went to the head of Police, Fire, Library and Recreation Departments and asked what would they like to have that is reasonable that otherwise could not be purchased based on budgetary constraints. Each gave a list of a few items. Possibly a letter could be sent to the various homeowner associations asking for a contribution so that the department heads could get necessary or emergency equipment that was being restricted due to budget. Mr. Schulman indicated other cities have asked organizations that are exempt from taxes to make similar contributions. Costs to institute the program would be minimal. Vice Mayor Orlove expressed concern due to the recent start up of a Foundation that solicits contributions from the community for educational and cultural programs and projects. He added that since HOAs also pay their condominiums a fee to maintain their property, it may appear we were going after certain developments within the City to ask them to pay more, and it may create a perception that we were asking them to pay more for a service. Possibly a broader program should be investigated. Instead of an HOA or a condominium, possibly go to a neighborhood that is not as organized. He advised he would like to receive more information on the other areas that have used this program. Mr. Madigan agreed with Vice Mayor Orlove's perception and inquired if he would be willing to bring this in front of the Foundation to carry through with it. Vice Mayor Orlove indicated possibly when information on other municipalities was presented, there may 5 Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 be a way to set a program up within the City. The Foundation is specific to a project and not for City support. Commissioner Hay advised all HOAs are not equal. The potential of opening up favoritism in services is the perception. Some HOAs have no money and the expectation would be one they may not be able to meet. He felt this had some merit but would also like more information. Commissioners Ross and Holzman were in consensus and would like more information. Library Ms. Pamplona advised a budget reduction of 15% or $336,491 was achieved in part by the elimination of positions. Currently, there is a vacant librarian position, four full time positions and two part time positions. In addition, a reduction of $14,524 would be achieved by eliminating SEFLIN (Southeast Florida Library Information Network). While accreditation would not be lost, the State -wide delivery service would be lost which saves approximately $2,000 in postage per year in addition to some staff training, online networking and special funding opportunities. An increase in late fees for books would also increase revenue by approximately $10,000. A reduction in operating hours would also be involved in the reduction package. Mayor Rodriguez inquired about peak times when looking at reducing operating hours. Ms. Parnplona indicated the hours would be reduced Monday- Thursday by six hours per week. Vice Mayor Orlove requested to have the librarian speak on this issue and answer some inquiries on this item. Anne Watts Assistant Library Director, was asked how the library system fared during the legislative session. She advised two libraries were restored by the state legislature so that federal aid Could be received. That aid had been restored which means the funding at the federal and state level would remain the same as last year. In regards to the hours of the library, for the public, the library opens at 9:00 a.m. and close at 8:30 p.m. There will be a significant impact. For example, computer use will be affected as people will be impacted for homework help, adult and juvenile programming and teen services population. If the library were to open later in the morning, the senior citizens would be affected. Although the summer hours are the same, traffic is increased due to the kids being out of school. There is concern that with the library closing earlier, services would be affected for working people and children that need to access the library for its services. Consideration should be given more to those who use the services in the evening to keeping the programs the children and teens use. I: Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 Ms. Watts indicated Saturday is an extremely busy day due to families coming to use the services, where Monday and Tuesday are the busiest days of the week. The recommendation is to adjust the weekly hours and leave Saturday hours as they are. Mayor Rodriguez inquired what the savings would be to adjust the morning hours and Ms. Watts indicated she would come back with the numbers. Vice Mayor Orlove inquired about the fines and what the suggestion would be. Ms. Watts advised if there was a 25% increase in fines, it would equate to approximately $.20 a day for a book. Commissioner Hay stated that one of the things the City has is the library and the citizens always have great things to say about it. He inquired of Ms. Watts as to whether there had been an increase in traffic and she advised that the use of the computers with applying for aid, and government agencies that have asked the library to assist people with registrations had contributed to the increase. In addition, most all job applications are done on line. Currently, there are approximately 9,000 sessions at the public computers during the month. People will come at 9:00 in the morning for an application or resume and it takes some of them many hours to complete these tasks. She indicated that it is possible with the change in hours, 1,000 -1,200 sessions and opportunities for people to use computers would be lost. Commissioner Hay advised he is not in favor of the whole package, but would consider it with modifications. Commissioner Ross advised she is not in favor of the recommendation due to the needs of the public for the library. Commissioner Holzman advised he is not in favor of the recommendations and feels there are other places in the budget that could be cut. Mayor Rodriguez felt the consensus was to support small cuts but not at the recommended level. Paoerless Billin Mr. Bressner indicated this recommendation had already been implemented. Mayor Rodriguez inquired as to whether it is known how many "opted out" and are currently receiving paperless statements. Mr. Atwood indicated approximately 15 -20% are expected. The estimated $24,000 would come from approximately 2,000 people projected to elect out of paper bills, which includes postage. The consensus was to continue to publicize and get more people to elect for paperless bills including possibly email notices when they sign up for new services. 7 Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 Parks and Recreation Ms. Parnplona advised in order to achieve a 15% reduction which was more difficult due to the size of the budget, unfortunately included was the elimination of twelve positions and the decrease in the level of maintenance in the parks. Based on the City Budget Survey, 84.8 percent preferred City amenities and based on these results, citizens might be willing to pay a nominal fee for them. There was also the recommendation to either decrease or cut the $20,000 earmarked for the Boynton Beach Little League. Ms. Pamplona further advised the recommendation was to charge fees for programs that are currently not being charged and the ones that are being charged, possibly increase the fees for those minimally. Possibly, letters could be sent to citizens advising them of possible increases in program fees, or reduction of programs or activities to see what the consensus of the citizens would be. Also recommended was an increase in fees for large events. Mayor Rodriguez indicated this item was difficult because it is similar to the Library. These are services that are used regularly and more often when economic situations are what they are today. What will the impact be to our City because our City has one of the better parks in the County and probably the State and a great job is done supporting our residents through the programs we have. Mayor Rodriguez indicated the contract with the Little League is being reduced every year and inquired of Wally Majors, Director of Recreation and Parks to confirm. Mr. Majors advised this year Little League received nothing. It began as a three year agreement. The first year, they were supposed to receive $30,000 but only actually received $15,000 because the agreement was not ratified for well past the six month point of the first initial year. The second year, they received $20,000 and last year they received $10,000. This year, they received nothing. Mayor Rodriguez inquired how that was decided. Mr. Majors advised it was negotiated with them. There is no payment scheduled for this year, so there is no savings as a result. The recommendation was based upon the anticipation that $20,000 would be requested. As far as maintenance, anything outside of the fences, the City maintains and the Little League maintains anything inside the fences. It was confirmed there was nothing budgeted this year for the Little League and if a request was made now, it would be brought before the City Commission. Mr. Majors addressed the impact of the staff reduction and indicated to achieve the 10% reduction, it would be significant as four positions were already lost on the Recreation side. Ultimately, similar to the Library, there are facilities that are very popular and believed that they provide a service the community relies on and expects. Mayor Rodriguez inquired if the four people lost were in the Volunteer Separation Program and what the dollar value was. Mr. Majors confirmed the lost positions were on the Recreation side and the savings was approximately $315,000 and the plan at N Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 this point was not to replace any of the positions. This was just for the Recreation side as Parks and Maintenance is now part of Public Works. Commissioner Holzman inquired why the recommendation was for twelve positions if the four positions lost already saved half of what is recommended. Mr. Majors advised that when the recommendation was made, it was based on the Recreation and Parks Department being together. Currently, the Department has been divided. Of the twelve positions, four were proposed on the Recreation side and the others were in Parks. Mr. Bressner indicated there will be cost savings with the consolidation of the Division and some of that savings could be applied to this recommendation. The merger of the Divisions would bring us close to the recommended amount. There are currently operating efficiencies through there and that happened after the review of the Financial Advisory Committee and their recommendation. There were parallel processes, with looking at the budget and looking at possible reorganization opportunities. This effort should be viewed as being complimentary to what was being proposed and much the same target will be achieved but it will probably be more nested in the consolidation of Public Works, plus the savings in Recreation with the Voluntary Separation Program. Mayor Rodriguez commented that a lot of work had already been done and advised he was not in favor of increasing the fees for the Parks. This would be the wrong time to increase any fees. The Commission had been consistent about not approving increases because it was not the right time to do that for our citizens or the business community. Vice Mayor Orlove would like evaluation of fees in comparable cities for random programs. He agreed he would not want fees increased, but wanted to stay open to see if Little League came forth with a request, he would be open to consideration. Commissioners' Hay, Ross and Holzman all agreed. Mayor Rodriquez commented that currently the City charges for boat launching on the weekends and holidays only. The charge is $10.00 daily or $50.00 for the year. There was a suggestion and a brief discussion on the possibility of parking meters during weekdays. Mr. Majors commented that would alleviate the problem of staff collecting monies and there would be more options. Most parks in the County charge if you have a boat and a trailer. Mr. Majors advised that an automated system, through research, at the low end, would be approximately $400,000 to set up, maintain and train. Mayor Rodriguez asked the Commission if they would want to explore it. The consensus was to come back to the Commission with recommendations to explore fees. 6 Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 Revenue Increases Mr. Shulman advised he came lip with 48 line items on the budget suggesting inceases. He advised he went through the various line items for budgets back to 2004 lip through the 2011 budget. Mr. Schulman advised he had one correction to the packet. Where $759,467 appeared on the recommendation line for Fire assessment increases, it should be $1,127,808, and the total should be $1,584,580. These increases consisted of two major categories. One was revenue increases for fees which were part of the 48 line items and the other was a fire assessment increase. The fire assessment is currently $68.00 per year and it was proposed that it be increased to $88.00 per year, which is a 29.41% increase for residents. The calculation on commercial was similar. The Committee was recommending that most of the other fees should be increased by 10 %. On other items such as alcoholic beverage licenses, fines, and false alarms, increases of 20% were suggested to act as a deterrent. Revenue increases for fees would be approximately $456,000 and revenue increase for fire assessment would be $1,127,880. He added that upon contacting the Building Division, it was his understanding that there have been no increases since 2006. Mayor Rodriguez advised the reason why there have been no increases is that there is a recession and the Commission does not want to increase fees in hard times such as these that would interfere with the development or redevelopment of the City. The City is trying to facilitate development that will ultimately increase the tax base. He advised, however, he supports the deterrent increases noted. Mayor Rodriguez inquired whether the Fire assessment was approved for a three year period. Mr. Bressner advised it is an annual appropriation. The first time was seven years and as it now expired, it would be done on an annual basis. In July, the Commission would adopt a preliminary rate resolution that would simulate the millage rate. It would be adopted at a certain rate and then assuming the term notices were sent out that had the fire assessment information, that is the time a decision would be made. Mayor Rodriguez advised there are mixed feelings about the fire assessment. Originally, it was supposed to be for a date certain, to do certain things like build a new Fire station or buy some equipment, but now it appears the dollars are being used in the balancing of the budget. That is the negative side. The positive side is that it is an equal distribution of the costs to all City residents. The fire assessment allows the City to have every citizen pay an equal share. He advised he would consider adjusting the fire assessment. Vice Mayor Orlove had some questions for the interim Fire Chief with regard to the assessment and considering the budget situation, if the assessment remained the same, would the level of service be compromised? 10 Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 Ray Carter, Interim Fire Chief advised if the fire assessment stayed where it was and the City's projected revenues come through where they are at, if an 8% cut from his budget were requested, he would be closing fire stations without raising the fire assessment. In order to reduce his budget by $1.4 million as the City Manager asked, he would have to close two fire stations and lay off firefighters. Mr. Bressner advised he felt it was a little early to have these discussions as to how much a rate should be increased and the purpose was to decide if discussions should be continued to investigate some type of modification. All were in concurrence that Public Safety was of paramount importance and discussions on the fees will continue. Mayor Rodriguez commented on the police special detail costs. He inquired why it was noted that "diverting Police for special details should be costly to citizens requesting such services." Mr. Schulman advised his understanding was that was a special service the police rendered to the citizens and he felt they ought to pay for it. Mayor Rodriguez noted he did not want to deter the citizens from affording additional police security. Police Chief Immler advised it costs approximately $37.00 per hour which includes an officer and a car. The officer shows up and stays a minimum of three hours and of the $37.00, all but $1.25 - $1.50 goes to the Officer. The Commission set the hourly cost. It does not cover all the costs of soliciting the detail, signing the contract, processing the money and other things. The Commission requested the figure be reviewed and then should be increased to cover all expenses. The consensus of the Commission was that some of the fees were reasonable but others would need to be reviewed and at a minimum ensure all costs are being covered. Sell Surplus City Property (Physical property) Mr. Madigan advised the Commission's recommendation was to continue with the existing internal Boynton Beach procedures, designating property surplus and continue forwarding to Palm Beach County for alternate sale. The Boynton Beach CFO estimated $150,000 plus in annual surplus sales. The recommendation is to continue with the program and perhaps exceed $150,000 annually. Sell Surplus City Property (Real Property) Mr. Madigan advised a number of parcels had been identified ranging from 17 acres to 1 acre or less from a City owned property printout. Mayor Rodriguez advised the information was received because the Commission never definitively decided which properties to sell. He advised there was an exercise they were going through that Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 primarily involved redeveloping the downtown and where the Police Department and City Hall would be located. He thought Mr. Bressner and his staff could give recommendations on properties that are not impacted by the decisions that are still forthcoming by the Commission. Mr. Madigan advised that their recommendation was to form a high level decision making workgroup. The group would review and identify parcels, have the selected parcels appraised, which had already been accomplished, price parcels for sale and advertise or list with a commercial real estate agent or broker. Mayor Rodriguez advised he would like to get a list together for the Commission to approve in order to sell some property. This would be City owned property, not CRA owned property. All Commissioners were in concurrence to move forward on this item. Franchise All Solid Waste Services Mayor Rodriquez inquired of Mr. Feldman as to the note in the Physical Impact section that the $3.4 million future transfer to the General Fund that would be lost. He advised that no one said the revenue stream would be changed. In fact, the only thing changing is the cost. If the fee is not changed, $3.4 million would not be lost. Mr. Feldman advised the fees would change depending on how the bid was put in. Mr. Bressner explained how the franchise fee would be determined and how a benchmark with rates would be established and put out to bid based on that price. Mr. Feldman further commented that this was unchartered territory as far as keeping status quo in the level of service. After Hurricane Wilma, there were rave reviews on how everything was picked up and there would be no guarantee that the next party that had the franchise would give the level of service desired. Who would control that Boynton Beach was serviced first, rather than another community being serviced first? Although Mr. Feldman advised he did not speak to any private franchises, he spoke to people who work for them and know how they operate. He spoke to other municipalities like Boca Raton and Delray Beach and they had private franchises for Waste Management. There were some negative comments about the level of service. Mr. Scantlan advised this item came to the Committee rather late in the process. He supports that this concept be given another review next year and the information was put together rather hastily in order to make a recommendation. Mayor Rodriguez advised he wanted the full scope of the impact and cost. Mr. Feldman further advised he felt there were other revenue streams within Public Works that have not been looked at yet. The roll -off business is where the City gets alot of money. Due to time constraints, he wanted to investigate how to develop the roll -off 12 Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 business as a larger business to offer other communities around us the service. The City of Lake Worth bought some of the roll -off equipment as they saw the opportunity for roll -off business also. Christine Roberts, Assistant Public Works Director advised the total budget for this year was $10,326,484, which included the transfer to the General Fund. The revenue stream does support the budget. Revenue comes from the roll -off business, the commercial dumpster business, and recycling commercial among other things. The roll - off portion was $807,000. There was consensus by the Commission to obtain more research and possibly come back to it next budget year with a view toward bringing in additional revenue. Solid Waste — Residential Recyling Collection Mr. Feldman advised this item would save $475,000 but would eliminate curbside recycling. The alternative would be not to recycle. Grady Johnson, Solid Waste Supervisor advised the residential business barely breaks even. Revenue was generated from the commercial roll -offs, commercial dumpsters, restaurants and the commercial businesses. He suggested the recycling program be kept to meet the 2020 state mandates to try to attain a 75% recycling rate to reduce landfill space. Revenue was generated from the Solid Waste Authority. Although he did not have exact numbers, he advised they pay the City to take recycling to the Solid Waste Authority. Revenue to date was approximately $75,000. Mayor Rodriguez called for a break at 8:41 p.m. Workshop reconvened at 8:50 p.m. City Services Survey Mr. Scantlan advised the Committee was formed and the question came up as to how the data was received for a cost benefit analysis. There is so little benefit data out there that indicated what these particular programs were worth or not worth. This City Services Survey was an attempt to gather some benefit data for doing some of the cost benefit analysis. This was the opinion of the citizens that chose to answer the survey. The summary included 513 citizens who answered the survey. In order to say this was a statistically significant survey, the sample had to be truly random. The two concerns were how many City employees would know more about the survey than the general population, and if they would be more motivated to answer. Of those that did respond, the preponderance of people that answered were from the upper income level when you compared the characteristics of Boynton Beach using census data. Most of the people 13 Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 that answered the income statements stated they were higher income than the general population of Boynton Beach. Therefore, that should be considered in the answers to the survey. Those who are more affluent might be willing to pay more for services than someone who was economically challenged. Mayor Rodriguez stated he felt this was a good exercise. Ultimately, the voters decide when they elect the Commission how issues should be handled and decisions made on their behalf. Take Home Vehicles and Car Allowances Mr. Shulman advised he made an analysis of the number of vehicles, the annual cost, and the annual cost per employee on car allowances and take home vehicles. There are 169 vehicles under this category. Car allowances were comprised of 34 vehicles and take home was comprised of 135 vehicles. The total cost is $536,327. The distribution of take home vehicles is 104 in Police, 12 in Fire, 14 in Utilities, and 5 in Public Works. The type of situations for the take home vehicles include, 133 are based on employment agreements, 114 are based on collective bargaining agreements, 3 are based on past practices and 19 are based on assignments. The recommendation being made was that it is exceedingly difficult to reduce car allowances and take home vehicle costs because most of these situations are tied into some type of employment agreement. It is, however, recommended that a strenuous effort should be made to slowly reduce the amount of take home vehicles. Mayor Rodriguez advised he had always recommended it should be a perk for those that live in the City. Those that do not live in the City should have to pay a fee for that benefit. However, we do have a lot of take home vehicles and agreed that there are a lot of perks here that are not part of the private world. He agreed that something should be done and would recommend the City Manager come back with some additional specifics on the things we should be doing. Vice Mayor Orlove inquired of the Police Chief and Fire Chief regarding the benefit it provided to their staff having a take home vehicle, specifically the positive visibility it provided within the City limits. Chief Immler agreed it provided positive perception in the community. He advised that police cars were a big part of the Police Department The officers that have the take home vehicles use them all day long. Not all the patrol officers have them. There are currently 96 take home vehicles. Of those 96, 54 are either collective bargaining or contract. Additionally, since the take home vehicle program was started, which the Commission instituted in the beginning of 2005, the cost for vehicles and vehicle maintenance has steadily gone down because the cars last a long time. There is much more reasoning that goes into take home vehicles other than an employee benefit. 14 Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 Vice Mayor Orlove inquired what the percentages were of vehicles that stay within the City and vehicles that are outside the City limit. Chief Immler indicated approximately 1/3 stay within the City and the remainder are outside, within 20 miles of the City. Mayor Rodriguez wanted clarification from Chief Immler on the comment of costs going down since fuel prices are so high. Chief Immler stated even though the fuel costs are up, the fuel expenses have gone down because the vehicles are more efficient. Mayor Rodriguez felt the take home vehicle program is a good program and remarked it would be a good idea to try to entice people to stay in the City and maybe charge a premium to those that live outside. Commissioner Holzman felt that officers with take home vehicles should live in the City. The citizens pay their taxes for it and those officers deserve the recognition. Commissioner Hay advised a close look has to be given at the true needs of take home vehicles and come back with a recommendation to the City Manager. Chief Immler stated this was done by collective bargaining agreement, so next year when it is decided what the collective bargaining agreements are going to look like, that will be something to be considered at the time. He also stated that another advantage of the take home car program is that it solved an equipment storage problem. There is so much equipment the officers have in the cars, but there is no place to store it. The armory at the training facility is now classrooms and offices. He also stated that eight vehicles have already been turned in due to pared down operations. When the Commission decided to implement this program, there were 40 openings. The City was in a crunch trying to recruit officers. Every agency had take home vehicles. So in order to fill the recruitment crunch, there had to be incentives. Consensus of the Commission was to have the City Manager come back with recommendations with the things that can be changed and possibly renegotiated in the contract. Voluntary Separation Program Mayor Rodriguez indicated this item did not need discussion as it was already being implemented. Mr. Bressner indicated at least $500,000 was projected to be saved. Thirty -seven employees have entered the program. E- Billing System Mr. Scantlan advised more study had to be completed. Currently, what people see when they pay their bill online is the bottom line cost. There is not a full detailed bill available. That may keep people from signing up for the opt -out program. People want 15 Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 to see that level of detail on the bill. This would be a system that would put a complete and detailed version of the water bill online and possibly include a payment system that may eventually bring revenue in to the City because bills would be paid faster and it would be similar to a credit card payment system. The consensus of the Commission was to look at this recommendation more closely. Schoolhouse Museum Ms. Pamplona advised rather than a 10% reduction in budget, a 9% reduction was achieved. The recommended reductions would have no impact on citizens or City staff. If grants from HUD and County are not restrictive, they could be used to make up the 9 %, if needed. The con of the recommendation was the management agreement. That was the reason Mr. Bressner reviewed it also. Mr. Bressner advised the budget base for the Museum had included these numbers. With next year's budget, they have been advised this had been a reduction in the City's support, services or costs for the Museum. Mayor Rodriguez inquired if there was a transitional time line to wean them off to a certain level. Mr. Bressner indicated there had not been a formal transitional program to have them self - sufficient. There had always been a desire to get there, but like every other non - profit, they have been affected by the economy. With this cut, they will have to come up with additional revenues somehow. Vice Mayor Orlove inquired whether or not they were receiving money from the County Cultural Council and Mr. Bressner indicated that funding problem was not factored into the budget. Vice Mayor Orlove expressed concern that if they are going to lose the grant of $10,000 or $15,000 because of the Cultural Council not giving them the money and then they are being cut another $18,400, what would happen? As a result, he indicated he would not be in favor of this recommendation. Shopper Hopper Ms. Lonergan advised this had never been a fiscally profitable enterprise. Even though the buses cost the City nothing, the people that drive the buses is where the cost lies. For the number of people who use the service, it is not cost effective. There are other ways to get people to the Senior Center and one of them is through Palm Tran. The City of Wellington had also worked with a taxi cab company that brought people anywhere within the City limit for $2.00. Even if Boynton subsidized a taxi company, it would still not be as much as the $200,000 it costs the City for the Shopper Hopper. The recommendation is to discontinue the Shopper Hopper. 16 Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 Mr. Majors advised the City pays the County $10.00 per year for the vehicles, plus the cost of the salaries. The ridership was 15,000 in 2006 and had dropped to 12,000 currently. The net subsidy per trip, every time someone gets on the bus has gone from $15.04 to $20.59 per rider, per trip. This is the cost to the City. Each rider pays $.50. Ms. Lonergan, in her research, found out that if staff could be trained at the Senior Center to help them fill out the application for Palm Tran, that program was either free or costs very little. That was a very viable alternative for the Shopper Hopper program. As long as they had an alternative option for transportation, the accreditation they currently have, as well as any other programs they have, would not be affected. Mayor Rodriguez indicated there was a need to provide some sort of transportation option for the seniors as there was a growing aging population in Boynton Beach. The Commission agreed that this was the time to re- evaluate the Shopper Hopper program and look for alternative transportation options for the senior population. Residential Garbage Collection Mr. Feldman apologized for not having enough time to properly present this recommendation. Solid Waste Authority sent out a survey to 79,000 in Palm Beach County people and out of a 3% response, it was 2 -1 to not reduce garbage collection. "that was not presented to the Committee prior to this recommendation, so it was requested to be tabled until the budget hearings in July. The consensus of the Commission was to have the Committee get more information and reintroduce it at the July budget hearings. Pension Plans Mr. Scantlan advised this particular recommendation was not put together until the past week due to the work Mr. Madalena had been doing with State legislation and State bills that affected this outcome. Mr. Madalena advised this past legislative season in Tallahassee, there was a major focus on pension reforms, not only throughout the State, but also Senate Bill 1128 which focused on municipalities. Currently, the City holds three pension plans, one for General Employees, one for Police and one for Fire. They are underfunded with a liability of greater than $88 million. When compared with plans throughout the Country, it showed there was a need to focus on this issue. There were only two ways to alleviate this situation. One would be on the backs of the employees and ask them to pay more into the system for themselves, or to raise taxes to the general population to bring in more revenues to the City. This was the City's largest expenditure and the pension obligation had only grown year after year. When there was a pension surplus in 2002 of $2.8 million in the General Fund, it had ballooned from that point up to a deficit of 17 Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 greater than $30 million within nine years. Projections are that this will go up and if something is not changed in the model, there will be a point in time in the City where enough revenues would not be collected to support this legacy benefit. The assumptions from the pension consultants shows an 8% growth rate. Regardless of a negative or positive return in the market, there was a fixed cost that the City would be responsible for year after year. With the growth that Boynton Beach had experienced in the last ten years, many Public Safety employees had been added. Those two employment line items, add to the pension obligation, as those two areas of employment have a higher denominator that the City pays in and the employees pay in. There also was a lower years of service for full benefits and generally because they retire early, and their life expectancy, based on recent mortality tables could have them living out longer, that obligation continues to grow. Some recommendations suggested were to reach out to Segal, the Pension Consultant, to have them review all of the pension assumptions they had been using in the plan for the last few years to see if there were changes that could be made to the assumptions and determine whether it was the rate of return for the overall plan, the amount that is being contributed, or the overall performance of funds selected. That could be done through the requested pension review. Mr. Madalena stated recommendations included an increase of 2% across the board to the three employment classes. Another would be the elimination of or an adjustment to the COLA, and eliminate the DROP program immediately effective July 1, 2011. That would eliminate a double pay plan where there was an employee receiving pension benefits and their current salary for up to five years. Mayor Rodriguez inquired if the DROP program was still drawing a pension the employee earned, and if that money is still there would the employee have an opportunity to use it? Mr. Madalena advised if that individual retired today, and they were at their highest level of their earnings, that person could be replaced at a lower rate. In other words, it would not only eliminate the program, but the employee would have to retire and not stay on. Mr. Bressner advised they would be eligible for full retirement, but they would not necessarily have to leave. If they chose not to work beyond their retirement age, the question was whether it would be worthwhile for them to do that. They still could earn more towards their pension if they stayed beyond their retirement but then a certain point is reached where it stops. Mr. Madalena continued if changes to State law permit, possibly using the 175/185 funds that are currently being collected, those funds could be used towards the pension obligations on the employer side for both Police and Fire. It would be a possibility to reach out and do a study to determine the viability of a defined contribution plan, freezing the defined benefit plan and moving towards a defined contribution plan. That was the item that was not added in Senate Bill 1128 but most likely will come back up Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 again in next year's session. If legislation did go through, enactment would have to take place by July 1 st, possibly going out to January. Mayor Rodriquez inquired as to how soon that could be done for new employees. Mr. Bressner stated the pensions would have to change. That would take a Code change, but there would have to be a study to verify the impact it would have. Mr. Madalena advised that just freezing the defined benefit plan inherently has some risks that are involved that need to be explored and determine whether or not fiscally that can be done. Mr. Bressner indicated two studies by Segal were done, one in 2004 and in 2007/2008. There was already some baseline data on all three pension funds. The Commission was asked that those be looked at and at that time, they chose not to move forward with anything. Mr. Madalena stated that it is a mandate that the City had to pay every year to fund and the funding level had not been at the correct level and that is the reason there was the gap that was in place today. When the health of an overall plan is looked at, there is a range to look at. For example, the Florida Retirement System had an 80% funding rate for meeting its obligations. The City's $93 million is only going to get larger. Mr. Madalena stated there was another recommendation for upfront funding of the ARC (annual required contribution) which would be paid at the beginning of the plan year, over the current funding plan that funds it throughout the year and interest was paid for doing that. Mr. Atwood came up with a plan that next year, this expense could save $500,000. Mr. Bressner indicated that two years ago, the City was paying one year in arrears. This past year the City paid on a monthly basis. What is proposed was that next year, it would be paid upfront at the beginning of the year. Mayor Rodriquez stated these are good recommendations. The 3% the Governor suggests would not impact the City this year. Mr. Madalena advised that one item coming out of Senate Bill 1128 was that the State was going to create a Pension Oversight Committee to look at municipalities and how their pensions are being funded and how the returns are, which will be under the office of the Department of Financial Services. Mr. Bressner suggested the Committee do a final review and then set priorities based on their recommendations and come back to the Commission specifically. Questions and Comments Mayor Rodriguez inquired if anyone had any questions. 19 Meeting Minutes Joint City Commission and Financial Advisory Committee Workshop Boynton Beach, Florida May 12, 2011 Conclusion Mayor Rodriguez thanked everyone for attending and commented upon the tremendous amount of input that was provided. He also thanked the Commissioners and the Financial Advisory Committee Board members for their attendance. Adjournment There being no further business, the joint City Commission and Financial Advisory Committee Workshop concluded at 9:57 p.m. City of Boynton Beach Mayor Vice Mayor ATTEST: Commissioner City Clerk Commissioner Transcribed by: Commissioner Recording Secretary 20