Agenda 10-17-11
The City of Boynton Beach
.
FINANCIAL ADVISORY COMMITTEE MEETING
MONDAY, OCTOBER 17,2011 @6:00 P.M.
LIBRARY CONFERENCE ROOM
BOYNTON BEACH, FLORIDA 33435
PRELIMINARY AGENDA
1. Call to Order
2. Welcome Dennis Dougherty appointed by the City Commission on September 20 as a regular member
filling the unexpired term of Mike Madalena.
3. Approval of Minutes (Copy attached)
. September19,2011
4. Discuss data collection perspectives forthe studies, e.g.; Citizens, Staff, others.
5. Consider input for questions for use in next Citizen Survey. Changing existing questions and adding more. In
light of different (and concluded) study topics, do we need to remove some of the questions?
6. Discuss techniques for collecting Citizen Survey responses.
. Can we use water bills this year to target some responses?
. Can we use water account numbers to avoid duplication and census characteristic strategy?
. How can we remove the weakness in last year's survey (namely that certain populations may not have
been represented)?
7. Continue reviewing selected assignments for next year.
8. Establish dates and time of future meetings beyond set meeting of October 17.
9. Adjournment
10. Participate in watching the mandatory Ethics Training DVD followed by completion of the certifications
which will be collected and turned over to the City Clerk's Office for tracking purposes.
Future meeting dates:
. November 14
. December 12
Finance Advisory Committee Issues for Study and Assignment Areas
Department Assignment By FAC as ofl0/17/11
#
Issue
Allocation anlys
Analysis Resdnl v Cme! taxes
Bsns tax comptv anlys
Bsns tax/fee assmnts
Tax/fee struct anlys
City land asset anlys
Capital Improvement anlys
City services survey
Merge CRA Functions
Partnerships (Chmbr'Cmrc)
Revenue streams generated by other munis
Sell of city assets
Dpt Head presentns
Local sales tax
Franchise Solid Waste
Fee for Service other city svcs
Public safety fund
Public Safety Comm hub
Police Pension Plan
Fire Pension Plan
Fire Dpt services
parks/Rec (Cost/Benefit)
City park usage anlys
Compensation Package anlys
Other Staff benefits (non comp)
Overtime Pay policies
Salaries
PIC Insurance costs
Employee leave benefit anlys
Unpaid furlough system
Public Works services
Utilities services &sale/xfr to Cnty
Development Services
County/Muni services redundancies
Close/consolidate city facilities
Make/buy other city services
Municipal election costs
Paperless billing
Contracts without expiration dates
School House Museum (Cost/Benefit)
Unfunded Mandate Review
Finance
Finance
Finance
Finance
Finance
City Mgr
Finance
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
Police Cf
Fire Cf
Fire Cf
City Mgr
P/R
Finance
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
Merline Pamplona
Merline Pamplona
Merline Pamplona
David Madigan
David Madigan
Don Scantlan
David Madigan
David Madigan
George Feldman
David Madigan
Jeff Fisher
Don Scantlan
Jeff Fisher
William Schulman
Merline Pamplona
Terry Lonergan
William Schulman
William Schulman
William Schulman
Don Scantlan
David Madigan
Don Scantlan
Terry Lonergan
Don Scantlan
Terry Lonergan
Merline Pamplona
Terry Lonergan
7 Regulars - 2 Alternates
Three-year terms for Regulars
One-year terms for Alternates
Established per Ordinance No.1 0-009
MEMBER EXPIRES PHONE PROFESSION
DOUGHERTY, Dennis J. 06/12 561-706-1552 Owner Interior
703 Sunset Rd. Appt'd 9/20/11 didouQh@bellsouth.net Scaping Co.
(33435)
FELDMAN, George 06/12 561-239-5141 Owner Petra Direct
9778 Nickels Blvd 505 Appt'd 6/1/10 qeorqefeld man30@hotmail.com Construction
(33436) Consultant
LONERGAN, Terry 06/13 641-4725 Retired Bank Teller
45 Rutland Lane Appt'd 8/3/10 terrvI33436@yahoo.com
(33436)
MADIGAN, David 06/14 732-1638 Retired
215 B South Blvd Reappt'd 6/21/11 dmad7117@netscape.com
(33435)
PAMPLONA, Merline 06/14 968-2798 Financial & Tax
3941 Newport Ave Reappt'd 6/21/11 MPAMPLONA T AX@HOTMAIL.COM Service Company
(33436)
SCANTLAN, Don, Chair 06/13 433-5711 Director of Programs
13 Cedar Circle Appt'd 6/1/10 dscan1 @aol.com Workforce Alliance
(33436)
SHULMAN, William 06/13 737-3402 CPA
21 Bristol Lane Appt'd 6/1/10 WShul0806@aol.com
(33436)
ALTERNATES:
FISHER, Jeffrey 06/12 703-1167 Sales Mngr.
17 Colonial Club Dr. #203 Appt'd 4/27/11 ipfisher100@yahoo.com
(33435)
OPEN 06/11
CITY EMPLOYEE REPRESENTATIVE:
Barry Atwood, Finance Director
Tim Howard, Deputy Finance Director
Lori LaVerriere, Interim City Manager
742-6310
742-6312
742-6013
Updated: 09-21-11
S:\CC\WP\BOARDS\L1STS\2011 Board List\FINANCIAL ADVISORY COMMITTEE.doc
City of Dclray Beach
Financial Review Board
July 23,2010
Ilonorable t\layor l\tcDuftie & City Commissioners:
Attm:heu. please linel the Financial RC'view Board's budget balancing options following the City
J\1anager's format. \Ve are in agrcelllC'llt \\ith a number of the options prC'scnted by the City
t\1unager. Howevcr. due to the fa~t that some of the options \\'ill require collective bargaining or
negotiation, there is uncertainty whether the projectcd reductions can be achieved, Accordingly,
we hav'c pro\'ided additional or altemative recommendations. We are in disagreement with some
of the options as they arc inherently temporary measures and thus do not serve to reduce the
spcnding base for future years or otherwise We believc there are other or bettcr ways to reduce
spending. Lastly, we have provided additional opportunities for increasing revenucs and I or
further reduce spending. \Vc will be happy to discuss our recommendations if you so desire.
Sincerelv.
/.-~
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W. Howard Ellingsworth
Chairman. Financial Review Board
I
/
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elt} of Delra)1 Beaer,
f:lnanclai ReVIE!'N Boa'ej
SPECIFIC GAP CLOSING RECOMMENDATIONS
Departmental expenditure requests
CM individual hne Item reductions i 1
Current net total expense
Revenue estimate at the current millage of 7.19
Total Revenue I Expense Budget Gap
eM July 13 recommendations
Reduce the transfer for Capital Improvements (21
_ __._.._~._.... _ ,'__._"_'_"'_'_~~'__'H_' ____'._, ___"__
12 unpaid furlough days for all employees ($ 2,080,000) (3)
Eliminate City contribution to Retiree Health Trust (VEBA)
Pension Plan changes
Reallocate Engineering Division costs away from General Fund
Reduce Fire Department Minimum Manning by two ( $ 500,000) (4)
-~--.._.- --_._...._----,..,_.~.-.-
Additional line item adjustments ($ 43,504) (5)
I Total Reven-~e I Expense Budget G-';p after FRBdeletions
----_..'- -
FRS July 20 recommendations
Reduce Fire Department Spending (4 i
Reduce vehicle rental fees from GF to Garage Fund (6;
DDA administration fee ;7!
DDA! eRA i private source funding for CommiSSion external spending (8)
Eliminate Assistant City Manager position (9)
Reduce by 50 % General Fund spendlllg for Grants and Aids from F\'
2010 level of $ 1,85 million f 10,
Additional permanent department<ll spendlnq reductIOns to he df>(lderi b.
'--,?i r lif':,'d:--in~t..d,' t-f;:d(~
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q~H~'< :d" ,~Pt:." t::;r;J~ r.,';t-<I"
Tota' Revenue.' Expense Budget Gap
$100,092,050
b72.79(>
$ 98,419.260
$91.146,290
$ 7,272,970
i 500,000
703,800
,~,OOO.OOO
445.666
$2.623.504
SOD,OOU
181.000
HI' OOu
127 100
~ 35.836
:.'JOO ooe'
sr
City of Delray Beach
Financial Review Board
Discussion
Details of this spending reduction not available, resulting in possible double counting,
2. The Board agrees with the use of reserve funds for capital improvements, with two
cautions: (1) avoid capital projects that impose additional spending requirements on future
years (e.g.. for maintenance or additional staffing): (2) recognize that this is a one - time item
that does not reduce future spending needs,
3. There are several disadvantages to this approach, By its nature it is temporary and so
does not establish a reduced spending base for subsequent years, It is across the board rather
than being based on any functional prioritization and therefore risks a reduction in essential
services to residents and businesses. Temporary staffing reductions temporarily shift existing
work from one employee to another rather than driving any long term productivity or efficiency
gains. Operationally. the often random nature of furlough requests makes staff planning more
difficult. It misses opportunities to reduce non - staff spending.
The Board believes that these disadvantages are dispositive, and recommends against this
item.
4. In responding to a resident's inquiry about what appears to be a similar staffing strategy
in effect since late 2009 at Station 2, Chief James said,
"Station 2 is the only Delray Beach fire station staffed using the "peak hour"
strategy described previously, I believe the current staffing strategy that included
upgrading the fire truck to Advanced Life Support (Paramedic/EMS Medical
Rescue) capability does provide adequate temporary protection to residents and
visitors. Is the protection equal to our other response areas? No,.
"We are requesting the return of full time staffing of Rescue 2 in our FY '10 -'11
budget."
The Board believes that to the extent that this item could result in an expansion of the Station 2
situation, it would not be optimal. Even if this risk is not present, the item is temporary and
would not induce productivity or efficiency gains, The Board recommends against it.
The Board believes that there are other, better, opportunities to reduce the Fire budget from the
level requested by the department For example, the Atlantic High School Fire Academy is a
non - essential service; line items in the budget appear to be overstated, and there is spending
but no revenue from increased collections for the EMT services. Rather than specifying specific
operational changes, the Board recommends that a $ 500.000 saving be achieved by speCific
Cuts seiected by the Chief and IllS senior staff ThJs wouki !if; approXimately' 2 perce,l! (if
'equesled Fire Department spendins
5 The Board recommends the revenue,' expense gap be closed completeiy now b'l
exp!Jclt!y identified cuts. This unallocated amount has been Included in item 11
6 The requested vehicle rental fees of $ 1.81 million would result in a year end project
reserve.? of S 224.300 The Board recommends a one time tel' percent reduction In rental fee~ of
.,lL. _:ar_ -..' '-.:'s'\l;~;\-:":.cn:lnf:'!)C~t:I_~l::::',(); ~~~~ ~i_i" F:
",11,; :2, ; f
1~~lty of Delray Beacr
~illCl'lCla! Review Board
S i 81.000 wtllch would fully cover expected Gara~w I::-KpenSes while resulting !n a iower hLr
positive reserve
-, The DDA v.-'as established as a special taxing dlstnct to 1971 Trle onglnal CIty
resolution (Resolution No. 9.71) stated the primary purpose of the special taxing district was tu
address the lack of parking in the downtown area. The resolution provided ad valorern taxing
powers of up to one mill. The DDA has assessed the full one mill since inception. That
resolution along with the related House Bill was modified In 2003 to broaden the purpose and
powers of the DDA to include promotion and marketing responsibilitles for the downtown area
The DDA district was expanded and now includes the area from A 1 A to 1.95 and approximately
2 blocks north and south of Atlantic Avenue. The DDA's annual ad valorem tax revenue has
been in excess of $500,000, For the fiscal year 2010/2011. the DDA's ad valorem tax revenue
is expected to be approximately $435.000.
The DDA has done an exemplary Job at putting on events and bringing people to the downtown
and has been a valuable resource for the downtown businesses. The DDA has been Involved
with a number of initiatives which have contributed to the success of the downtown area
including the "Clean and Safe" program, downtown banners and decorative lighting on AtlantIC
Avenue. However the costs for these programs are primarily, if not entirely, funded by the City
and the CRA Additionally, parking In the downtown area is still a concern and with the addition
of the Old School Square parking garage has become a significant financial burden to the City
Adequate and convenient parking is a critical component for the long-tenn success of the
downtown. The original purpose of the DDA was to address parking in the downtown areE
Based on the above it is appropriate and equItable that the DDA contribute towards these costs
as this is directly within its mission and purpose. Its contribution could be in the form of a eitv
administrative fee for events and parking. The administrative fee could be based as a
percentage of the DDA's revenue. In view of the significant investment and costs the City anc
CRA, and thus taxpayers, contribute towards the above mentioned programs and facilities, we
suggest that the assessment be 20% of DDA revenue, For thIS fee, the City could consider
providing additional administrative services and perhaps office space to DDA This would
generate approximately $87,000 in additional revenues for the City
B. The functions and amounts are
Contractual Function: National Citizen Survey ($11 K), Goal Setting facilitator ($12,
Langton & Associates ($60K), ECIVIS grant programs ($18K)
Special Events Function: Sister Cities Committee ($1.8K), AVDA ($1 K), MLK
Celebration ($O.5K), and DMC Christmas Tree ($22.5K)
The Board suggests that these functions be evaluated and if deemed essential that fundlna he
<:'OUgtlt frn!T~ prl\/(lte SOUfCl~S and fro'1'1 D[;A. <"1C (~ CRt
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assistance k ,'Ie City Manager hJ ~uf.JP(,r' anc parll(lpal("" tilE:' L 11\' :;, "la!t; am! 'l"file! d
.It-i~Jy,r~,:~ f- f~, -~., ';1 prO\,j~le r;ToqrtSS rer'cll-1~;i U':t-- ,I I~~~IC! ;.,~...r~et' Hi"
8Searl. ,., prvgr;:1:1 i !~I serve ur"': the POhCt 1(.1 F- ':' 8'~,a' " T""j:.,~t;'V~' :.) :,f2! d~ .i~ t....C' ,:,
Coordinator for ttle City and to attend meetings ; he position also oversees the Clerks (1flll"f
,ind revlp'W~ and monitors C!tv r.()mmISSlnn aqpn<Ja Itp'ns rlr' !l€hAlf 1'1 trlP (:'1", ~,1;;Jr;l(F'
City of Delray Beach
Financial Review Board
The conceptual basis for the ACM position is to perform highly visible functions that otherwise
would fall to the City Manager, to provide cross departmental coordination when required, and
to provide management continuity and to fulfill an informal"succession planning" requirement.
We believe that each of these roles is important: but, that taken together then do not justify this
position. We recommend that the ACM position be eliminated and that the City Clerk report
directly to the City Manager, with the Public Information Office reporting to the City Clerk.
Neither the incumbent ACM nor the City Manager agrees with this recommendation.
10. This information is not yet available for FY 2011. The items and funding levels shown
below are based on the current year's budget:
Economic Environment: Economic Development $22,500, Joint Venture $38,000,
American legion $25,000. Evaluate and replace if deemed essential with funds from
CRA and private sources.
Human Services: American Legion $25,000, Mae Volen Senior Center $12.000,
Community Child Care Center $23.750, Boys and Girls Club $28,500. Evaluate and
replace if deemed essential with funds from CRA and private sources.
Culture Recreation: Expanding and Preserving Our Cultural Heritage $33,250, Friends of
Sandoway House $22,800. Evaluate and replace if deemed essential with funds from
CRA and private sources.
Old School $Quare $194.750: From 2000 through 2009 the City provided $ 2 million to
OSS. In its FY 2008 (most recent year for which information is publicly available) ass
reported an operating loss, but at September 2008 had cash and publicly traded
securities of approximately $3.3 million. Eliminate GF funding.
Library $1.453.500: From 2000 through 2009 the City provided $12.6 million to the
library. The library ended its FY 2008 (September 2008) with approximately $1.8 million
in cash and publicly traded securities (most recent year for which information Is publicly
available). If this strong financial position has continued. this cash cushion should
provide sufficient time for the Library Association Board to develop a plan to achieve self
funding status or to transfer control of the library to the City or another entity such as Old
School Square. Reduce GF funding by $ 1/2 million. The decision on this item should
be made after review of the Library's most recent financial statements.
11. Gap closing by its nature involves time - constrained, arbitrary, decisions with the
objective of minimizing harm rather than maximizing benefit. Nevertheless. to the extent
possible sound budgeting practices should be employed. To close the final approximately
$700000 spending gap we are recommending a two step process (1) City Manager establishes
departmental spending targets (2) department heads and their management teams make the
final line item deCISions to reach their departmer>tai targets This supports the Cil}1 Mananer's
strategic role while Insuring that the most knowledgeable, ground level members cf
management make the Implementation deciSions
The simplest approach to departmental target setting is to apply an additlonal across the Doard
percentage reduction to departmental budget totals that results from all preceding steps. For
example, total available spending for FY 2011 IS $ 75 million ($ 926 million less approximately
S 17 ~ mlli/or') In variOus transfer payments i The final unailocated spending gap of $ 692 f168 ;~
dnproxlrna,eiv u 92 percent which can De 3opi!ed €'!8ni)' 10 eacii depar1rpen( As 2li-' e>.an'pic"
F Rf\, C::;;..q .~,~ ;::,.: ,~HE:'l ..J!':';~n{.'r~(~<lk....~n~/.I:' :}~" ~ ~": ;.~ ,)''':
~ 6\.l~ 4 ,'J\ fi
City of Delray Beact
1=l!lancial Review Boarn
the Fire Department has requested a total of S 20.9 million (net of Highland Beach). less the
reduction of S 0.5 million specified in 11em 4 Applying the final gap closing percentage o~
0.92% would require an additional reduction of $ 188 000
A more complicated but more beneficial to the City approach involves the percentage reduction
in spending to be set in inverse proportIon to the department's ranking on the "essenti8l
services" scale. Implementation can be by rule of thumb or by application of a simple formula
The result IS that a relatively smaller responsibiilty for the final, most arbitrary, portion of the 9a;::
IS borne by the "most essential" departments: and a relatively greater responsibility is borne bv
departments that are at the "non - essential" end of the ranking table
As an example of the process, the most recent document available to the Board (City Staff 2009
function ranking criteria 20090818144858614 pdf, received In January. 2010) established four
priority categories
A Core business "no choice'
2. B Core business "choice"
3 C Quality of life
4 0 Community "add on's'
Again using the FY 2010 preliminary budget as an example, and assigning a sImple A;:; 1 B:::
2. C::: 3, D ::: 4, convention and applying inverse ratio distribution formula yields:
Function
FY 2010 spending less
transfers
Percentage ot
spending to be
reduced
A Core business "no
choice"
8 Core business
"choice"
C Quality of life
o Community "add on's"
$ 6.9 million
0.7572 %
$ 49.7 million
S 19.6 million
$ 6 9 million
1,5144 %
22715 %
3.0287 %
In our FY 2011 Fire Department example, we would apply the final gap closing percentage of
0.7572 % resulting in an additional reduction of S 155.000. Remember that these are
examples Actual percentages can be calculated once all FY 2011 information is available
Additional opportunities to be considered by department heads Include:
a increase CRA contnbution 10 Internatlonnl TenniS Tournamen1 tv ~. ~"',,' nor
[-)l:.plc)re C:R./Io, 3CqlJl~:t!lY !j1' 1\ ;.L:dfi'::~_;~
1\ '"~8(agf:' '-J~ir~S~i.1f-'" t::~r "!f P;, ,-..~! ..-
~eas~.: ~.';,-{rki:(I." ~;;.,.. :
~';:~:iO;:~,,-, .!i--"r'lP~;~j .~' 0..:,1..;1 "'1,
The Board believes that the impliCit "no - layoffs" policy causes pervaSlvt2 lIlequltlel> l'
pay and benefits with resulting negative effects on staff morale. and impedes
management's ability to meet City service requirements economically and efficiently
Staff reductions must be considered among other cost reduction options
City of Delray Beach
Financial Review Board
NEXT STEPS
City Commission:
1. Confirm "no millage increase" objective
2. Confirm gap closing recommendations as presented or modified
City Manager:
1. Set overall schedule to comply with City statutes.
2. Resolve contingent recommendations (e.g., pension savings)
3. Establish procedure for functional prioritization including assignment of weights.
Calculate total final gap and pre - final gap $ amounts and percentage reductions to be
applied in each priority category.
4. Implement
Department Heads and Teams:
1. Review I revise I refine operational plans to accomplish mission with reduced funding
; ~:~DC'a~J\..., i,$.' C;f~~~?C("'i;n'f.:n'T;~!Jvr;S~j? ..."".<j ...
:;'''i'' Ii ,'6
#
Issue
Finance Advisory Committee Issues for Study and Assignment Areas
Department Assignment By FAC as oflO/17/11
Allocation anlys
Analysis Resdnl v Cmcl taxes
Bsns tax comptv anlys
Bsns tax/fee assmnts
Tax/fee struct anlys
City land asset anlys
Capital Improvement anlys
City services su rvey
Merge CRA Functions
Partnerships (Chmbr'Cmrc)
Revenue streams generated by other munis
Sell of city assets
Dpt Head presentns
Local sales tax
Franchise Solid Waste
Fee for Service other city svcs
Public safety fund
Public Safety Comm hub
Police Pension Plan
Fire Pension Plan
Fire Dpt services
Parks/Rec (Cost/Benefit)
City park usage anlys
Compensation Package anlys
Other Staff benefits (non comp)
Overtime Pay policies
Salaries
PIC Insurance costs
Employee leave benefit anlys
Unpaid furlough system
Public Works services
Utilities services &sale/xfr to Cnty
Development Services
County/Muni services redundancies
Close/consolidate city facilities
Make/buy other city services
Municipal election costs
Paperless billing
Contracts without expiration dates
School House Museum (Cost/Benefit)
Unfunded Mandate Review
Finance
Finance
Finance
Finance
Finance
City Mgr
Finance
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
Police Cf
Fire Cf
Fire Cf
City Mgr
P/R
Finance
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
City Mgr
Merline Pamplona
Merline Pamplona
Merline Pamplona
David Madigan
David Madigan
Don Scantlan
David Madigan
David Madigan
George Feldman
David Madigan
Jeff Fisher
Don Scantlan
Jeff Fisher
William Schulman
Merline Pamplona
Terry Lonergan
William Schulman
William Schulman
William Schulman
Don Scantlan
David Madigan
Don Scantlan
Terry Lonergan
Don Scantlan
Terry Lonergan
Merline Pamplona
Terry Lonergan
2011
NOVEMBER
2011
6:30 City Commission
(Chambers)
6
7
8
CITY HALL CLOSED 11
12
3:00 Senior Advisory Bd.
(Senior Center)
VETERANS DAY
6:30 Community Redevelopment
Agency Bd. (Chambers)
11m~
~. .
~
....... .~1iII .'il!<,"" ...
II1II IIlIII8. iIII II IiII
13
14
17
18
19
CITY HALL CLOSED
6:00 Charter Review Committee
(Library Conf. Rm. A)
6:30 Historic Resources Preserv.
Bd. (Chambers)
20
21
26
6:00 Financial Advisory Comm
(Library Conf. Rm. A.)
6:30 Code Compliance Lien
Reductions (Chambers)
27
1:30 General Employees'
Pension Bd. (Cham
6:30 Recreation & Parks B .
(Chambers)
jmp
*Denotes change on this date since last calendar
A - First floor, City Hall
B - Second Floor, City Hall
10/6/2011
2011
DECEMBER
2011
jmp
*Denotes change on this date since last calendar
A - First floor, City Hall
B - Second Floor, City Hall
10/6/20 II