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Minutes 08-30-10 MINUTES OF THE FINANCIAL ADVISORY COMMITTEE MEETING HELD IN CONFERENCE ROOM A, AT THE LIBRARY, 208 S. SEACREST BLVD. BOYNTON BEACH, FLORIDA, AT 6:30 P.M., ON MONDAY, AUGUST 30, 2010 PRESENT : Don Scantlan, Chair Barry Atwood, Director of Finance Michael Madalena, Vice Chair Kurt Bressner, City Manager George Feldman Dave Madigan Merline Pamplona Victoria Castello, Alternate Terry Lonergan, Alternate Absent: Glenn Jergensen William Shulman I. Roll Call Chair Scantlan called the meeting to order at 6:31 p.m. Roll call was done by self introductions. Motion Mr. Madigan moved that the two alternates be moved up to permanent members for this meeting. Mr. Madalena seconded the motion. The motion passed. II. Development of Mission Statement Copies of the suggested mission statements were distributed. Each of the contributors read their proposed mission statement. None of the proposed mission statements were accepted in their entirety. Discussion ensued. Mr. Feldman felt it should be a unanimous decision and Chair Scantlan disagreed indicating only a majority was needed. Motion Ms. Lonergan moved to accept her proposed mission statement in its entirety. The motion failed for lack of a second. 1 Meeting Minutes Financial Advisory Committee Boynton Beach, FL August 23, 2010 _____________________________________________________________________ Motion Ms. Pamplona moved to accept her mission statement as written. The motion failed for lack of second. There was consensus that the mission statement should be composed of one or two sentences. Ms. Lonergan noted the Delray mission statement was only one sentence. Mr. Feldman thought the statement should mention the committee was composed of volunteers, dates were not necessary nor was the reporting structure. Chair Scantlan expressed his feeling that the inclusion of dates would limit the Committee’s goals and it was an ongoing concern that should survive. Emphasis should be put on the beginning words according to Mr. Feldman. Mr. Bressner liked the mention of the well-being of the community. It is an important frame of reference that should be included. He also liked the concise wording of both Ms. Pamplona and Ms. Lonergan’s statements. The elements of the goals of the Committee were addressed. Various versions were discussed and there was consensus that the mission statement would be as follows: “With the well-being of Boynton Beach as the overall intent, the mission of the Financial Advisory Committee is to research, reflect, recommend and report to the City Commission on existing or proposed legislative and administrative decisions on the City’s budget, revenue sources, operational and capital expenditures, to favorably impact the City’s budget and overall financial condition.” Motion Mr. Madalena moved to adopt the statement as read into the record as our mission statement. Mr. Madigan seconded the motion. The motion passed unanimously. III. Review of Committee Areas of Interest A composite of the areas of interest submitted by the members was distributed. Mr. Madalena requested some background on the history of the CRA. Mr. Bressner reported the CRA had been established in the mid-1980s and in the late-1990s the area was expanded to the north to the C-16 canal and part on Federal Highway north of Gateway. The south Federal Highway was extended and Industrial Drive added. In 2008 a few pockets annexed into the City were also included making it one of the largest CRA districts in Florida, covering almost a third of the City. Any taxable value that increased in the core area from 1985 would be income for the CRA. Properties added in 1999 would generate income for the CRA from that date forward. The tax increment they receive has to be used for their redevelopment mission and 2 Meeting Minutes Financial Advisory Committee Boynton Beach, FL August 23, 2010 _____________________________________________________________________ responsibilities. The governing structure of the CRA contains three options. One is an independent, seven-member board appointed by the Commission, another a bifurcated board being the five members of the Commission and two citizen members and a third option of the City Commission serving as the CRA Board. The City has tried all three options with the City Commission currently acting as the CRA Board. The direction is to st appoint a seven-member independent board to be seated by October 1. Mr. Madalena inquired if there had been any discussion of reigning in the boundaries. Mr. Bressner responded the area could be reduced and taxable value would be released back to the City and to the County because 40% of the revenues to the CRA come from the County. The general governmental tax millage rate that the County charges citizens of Boynton Beach would go back to the County. Any ongoing financial obligations that the CRA may have would have to be assumed by the City and payment of the debt. The CRA has over $20 million of debt in development agreements and some bonds. Mr. Bressner cautioned if the CRA is compressed there would be less tax increment financing to cover the debt service. It would proportionately increase the debt service. It becomes a complex process. The operational budget of the CRA would fall outside the purview of the Financial Advisory Committee. The City Commission has reserved the right to approve their budget. They have two involvements with the CRA; the appointment or replacing of the members to the Board and approval of the budget. Mr. Madalena inquired if staff had analyzed the consequences of taking back a portion of the CRA area and its financial impact. The demand for City services would continue in the CRA area so those not living in the CRA district are covering the cost of some basic services. It is buffered in the Fire Department by the Fire Assessment that is a non ad valorem fee that covers all property in the entire City and the same amount is paid by all. There is no authority to enact a similar fee for police services. Properties valued at less than $25,000 pay no taxes at all. There has been a significant decrease in taxable value for all homes and particularly for commercial properties. Ms. Pamplona inquired why the CRA was formed. Mr. Bressner replied the Statute allows that if there is to be redevelopment in an area it can be funded from the proceeds. The concept is if there is growth in the CRA area, that adds to the economy and the monies are brought back into the area for more redevelopment. Also, if there is an area that is difficult to redevelop, monies can be taken from areas that are successful to facilitate that redevelopment such as the Heart of Boynton. Mr. Madalena asked if there were any tax incentives for Renaissance Commons and Mr. Bressner replied there had been none. Mixed-use zoning was applied to the property as well as the Target complex to create a combination of live and work areas with commercial and residential together as a unique zoning classification. The City agreed as long as the buffering was set and enhanced setbacks were included. In fact, the widening of Old Boynton Road and creation of Renaissance Boulevard were part of the development requirements. 3 Meeting Minutes Financial Advisory Committee Boynton Beach, FL August 23, 2010 _____________________________________________________________________ Mr. Feldman developed that grants were available within the CRA area and Mr. Bressner added the City’s grant team works with the CRA staff also. Mr. Atwood noted in some instances the City has to be the recipient of the grants that would be passed through to the CRA. Chair Scantlan directed the members digest the list of ideas and the Item remain on the agenda for the next meeting. IV. Review of Staff Recommendation for Priority Review Areas Mr. Bressner commended the budget team for developing the list of ideas for review and he recommended this list also be digested and remain on the agenda for further review and consideration. There are commonalities between the Committee’s interests and the staff recommendations. Many are long-term projects that may require regulatory changes too. Mr. Madalena inquired about the consultant for the pension funds and Mr. Atwood informed it was Segal Company who are paid a fee for services. Mr. Bressner explained they provide overall recommendations regarding the pension funds, but any changes in the fund submitted by the individual fund actuaries, Segal Company would verify the impact. Mr. Feldman was curious about the fee paid last year. Mr. Atwood did not believe any fee was charged last year. They are the expert for the City. Mr. Bressner described Segal Company as a very good resource for the details of any changes to the pension programs. A study done on transitioning from a defined benefit to a defined contribution revealed minimal savings unless the defined benefit program would be terminated. Mr. Bressner pointed out the fiscal disparity of monies paid by the City residents to the County for services that were not provided may be moot because the City of Boca Raton had sued the County and lost on the issue of providing dispatch services. There are other activities though that should be reviewed such as roadway maintenance and street lighting that the residents pay the County for and receive no service. Mr. Feldman contended merging the parks with the County would be a big project. Mr. Bressner indicated the question was level of services and it would apply to the Library becoming part of the County system. Mr. Atwood cautioned the budget could not be balanced by cutting paper and pencils. Mr. Bressner would send the documents to the members in a PDF format, especially for the benefit of the two members not present. Chair Scantlan reminded the members there would three weeks until the next meeting to review the data. Mr. Madalena suggested the top five priorities be identified to focus the efforts of the Committee on the items that would make the biggest difference to the City. Mr. Madigan indicated the 4 Meeting Minutes Financial Advisory Committee Boynton Beach, FL August 23, 2010 _____________________________________________________________________ members should overlay their interests on the 20 areas submitted and prioritize the list. He suggested another item be added to discover the total amount of indebtedness. Mr. Atwood clarified some of the debt is for Utilities and some for the General Fund. V. Draft 3-Month Work Agenda Mr. Feldman opined until the list submitted by Mr. Bressner was scrutinized, a three- month agenda would be impossible to establish. Mr. Madalena pointed out the goal is to make recommendations by Thanksgiving and that would constitute the three-month agenda. Establishing the goals and parameters would be paramount. Mr. Atwood advised, in the short term, figuring out how to absorb a $15 million drop in revenue would be the first step. Mr. Bressner was hopeful next year would have only an 8% drop in tax revenue. Mr. Atwood noted it would require a major cut in services. Mr. Madalena thought the objective was clear to find funding to fill the gap of $15 million. Mr. Feldman suggested in September, the Committee identify the five major categories to address including Fire, Police, Parks and Recreation, and Utilities indirectly Mr. Madalena stressed that Fire and Police have the constraint of collective bargaining contracts. It is the largest expenditure, but it is almost a fixed expense. Mr. Bressner pointed out there are efficiencies that can be done that are not affected by labor contracts such as a reduction of service loads or increased response times in terms of the impact on services to the citizens. In a pure dollar fiscal analysis, a calculation of the cost savings can be computed for an increase in response time from four minutes to eight minutes. The human impact may mean the quality of cardiac care, stroke treatment and all other dimensions have to be considered and calculated. It would be possible that consolidation of services be considered or Boca, Delray and Boynton working together for core functions such as evidence management. The three Police Chiefs and City Managers are beginning to discuss those possibilities. Mr. Madalena inquired if there was any policy relating to double dipping or bringing back someone who has already been paid out and being employed again. Mr. Bressner reported as a rule it was not allowed. There was only one instance some years ago, resulting from an early-out buy out and then hiring the individual back. Mr. Feldman asked about the practice of working on vacation days. There is no minimum vacation requirement. Policy allows accumulation of two years. Mr. Bressner suggested those items could be looked at in terms of leave management. One of the areas for review was a Paid Time Off program. It would involve uni-leave each year that must be taken or lost without designation as sick or vacation. Kelly Days are a scheduling issue and would not cost the City any monies. Mr. Madalena remarked the Committee needed to look at where cuts can be made, but also what could be done to bring in additional revenue. Mr. Feldman was interested in consolidation of departments as a possible area for review. Chair Scantlan contended 5 Meeting Minutes Financial Advisory Committee Boynton Beach, FL August 23, 2010 _____________________________________________________________________ September would be devoted to looking for ideas and then October would be preparing recommendations. Mr. Feldman suggested the Committee meet with Department Heads in October to verify data. Chair Scantlan announced the City Services Institute would be commencing soon and urged the members to take part. Mr. Bressner commented it basically was a walking orientation of the City operations. The meetings are on Monday nights and there is a cost of $25. Mr. Madalena proposed the City-wide survey should be added to the three-month agenda. There was consensus that the survey should be commenced and hopefully completed by November. Mr. Feldman had heard the theory that money should be spent because once spending stopped it would not be started again. Balancing the budget requires a combination of controlling revenues and expenses. The taxes cannot be raised high enough to accommodate the $15 million shortfall and Mr. Atwood pointed out it was only an estimate and could be even higher. Mr. Madalena thought all the money could be found, but it goes to quality of life issues and service level. Chair Scantlan said the recommendations may have to be for the Commission to make very unpopular decisions. Mr. Bressner cautioned the services cannot be cut or outsourced without reducing the taxes. Chair Scantlan advised data requests of staff needed to be completed to make the necessary analysis and eventual recommendations. Much of the information needed could be found in the proposed budget documentation. Mr. Feldman wanted to identify all the departments and determine what percentage each department represents within the $15 million shortfall. Ms. Pamplona contended a list should be compiled of all the information that would be needed and then a value can be placed on any recommendations. Chair Scantlan reiterated the importance of reading the budget impact comments included in the proposed budget. It was decided that the survey be done in September, the department heads be interviewed in October and recommendations made in November. It was agreed there was more than enough time to complete the survey. A month would be needed for the survey to reach every citizen if the water bill was utilized. Chair Scantlan reviewed the ideas of the members and the timelines established for each project. September would include categorizing Police, Fire, Parks and Recreation and Utility priorities, compile data requests for staff, look for revenue ideas, departmental consolidations and a survey. In October meetings with Department Heads would be scheduled and the overall objective would be to close a $17.4 million gap in November. 6 Meeting Minutes Financial Advisory Committee Boynton Beach, FL August 23, 2010 _____________________________________________________________________ VI. Early Discussion of City Survey Ideas Ms. Pamplona distributed a sample postcard-type survey and other types of surveys she had experience conducting. Ms. Lonergan had attempted to do a survey in her community and found half the residents did not read the survey, some read the questions incorrectly and voted foolishly. The number of responses was minimal. The proposed survey should be clear if the residents do not vote they should not complain because services will be cut. Mr. Feldman paraphrased that shock value was required and a mailer plus the internet may reach more citizens. He wanted the Committee to have its own web page to reach out to the community. Mr. Bressner agreed it could be part of the City web page and include the mission statement, work plan, suggestions and minutes could be made available. Chair Scantlan agreed with a water bill mailer and a web site approach. He would be impressed if a 2% response rate would be achieved. The questions would need to be carefully worded so the responses would have value. A two-week response time would be more than sufficient. However, it would still be beyond the proposed timeline for the recommendations to be made. A reward for responding may also be appropriate to garner more participation even if it was an auto response. Ms. Pamplona supported the idea of having a notice that a survey would be forthcoming in the September mailing. Chair Scantlan reiterated the mailer in the water bill would make the survey behind the decision cycle established. Mr. Bressner was not confident the questions could be accurately framed to get the response needed in the prioritized areas. Ms. Castello commented it needed to get their attention and keep the survey going. Mr. Bressner recalled the City had in the past conducted surveys. Realistically, Mr. Feldman did not feel the survey could be effectively accomplished. Mr. Bressner proposed it could be a December project to back up the recommendations for the next budget cycle. Ms. Castello stressed as few words as necessary should be used. Mr. Madigan requested clarification on Item 20 of the staff’s recommended areas of study and the meaning of unfunded County, State and Federal mandates. Mr. Bressner replied mandates include stair rails or crossing areas for children that are required by County, State or Federal regulations that the City has to pay to install for compliance without any funding source. An analysis in 2007 revealed there was about $8 million per year and probably higher now, that are unfunded mandates. Some are good programs, such as the victim’s advocacy program that has no funding source, but it does provide a good service for seniors to deal with fraud, scams or elder abuse. Mr. Feldman requested permission to also speak with the Boca Raton Financial Advisory Committee. Chair Scantlan agreed that would be useful and suggested Wellington may also be a source of information. It would part of research that any Board member could undertake and would not require any motion. 7 Meeting Minutes Financial Advisory Committee Boynton Beach, FL August 23, 2010 Chair Scantlan reverted back to discussion of the survey and the conclusion that a written survey could not be completed with the decision cycle. He sought input on the possibility of an electronic survey. It was decided the issue of a survey should be tabled until after November. Mr. Bressner conceded the Thanksgiving deadline may be aggressive and it should be moved to February. Chair Scantlan challenged if the target was moved out to February, would a survey be plausible. Mr. Bressner confirmed it would be helpful. Mr. Feldman suggested a survey on the web site that would be continually available may be viable. Mr. Bressner had offered the Thanksgiving deadline before the scope of the Board's duties had been reviewed. The issues discussed will require extensive research and the February 15th deadline may be more appropriate. Chair Scantlan requested the next agenda include proposed questions for generating a written and electronic survey. Mr. Madigan interjected that in phone surveys, the questions are posed to elicit the desired response. Chair Scantlan recommended Survey Monkey, an internet site that could be utilized, be viewed by the Board members to see the possible options. The alternatives would be further discussed at the next meeting. VII. Future Agenda Items Chair Scantlan asked Items 1, 3, 4 and 5 be carried forward on the next agenda for September 20th. Ms. Pamplona thought the survey questions should be moved to the first meeting in October and Mr. Feldman agreed. Chair Scantlan saw the survey questions being discussed if time permitted and it would be one of several discussions before the survey would be finalized. Mr. Feldman would endeavor to gather information from other cities that might have used surveys and how they did it. VIII. Adjournment Motion Mr. Feldman moved to adjourn the meeting. Ms. Castello seconded the motion. The motion passed. The meeting adjourned at 8:24 p.m. ;J~,ti3~' it -' udith A. Pyle MC Deputy City rk. 8