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Minutes 07-17-12 Budget (PM) Afternoon Session MINUTES OF THE SPECIAL CITY COMMISSION MEETING HELD IN THE LIBRARY PROGRAM ROOM, 208 S. SEACREST BOULEVARD, BOYNTON BEACH, FLORIDA, AT 9:00 A.M., ON JULY 17, 2012 AFTERNOON SESSION PRESENT: Woodrow L. Hay, Mayor Lori LaVerriere, Interim City Manager Mack McCray, Vice Mayor James Cherof, City Attorney Steven Holzman, Commissioner Janet Prainito, City Clerk Marlene Ross, Commissioner (Meeting reconvened at 12:59 p.m.) Mayor Hay indicated he hoped to be able to complete the meetings today, if possible. Ms. LaVerriere advised 70% of the budget had been completed. There was consensus to complete the meeting this date. Mayor Hay inquired if the calculation for the 7.8 millage rate included the items on the wish list. Mr. Atwood responded the net figures included the wish list items. Legal James Cherof, City Attorney, pointed out the Legal budget was flat and remains lower than it was two years ago. The law firm has 11 attorneys, all of whom practice local government law. There are two paralegals and five additional staff members. The only member of the department who is a City employee is the paralegal, Lynn Swanson. One line item under books and publications should be zero. The firm absorbs the cost of all the books and publication. There remains a large litigation line item that has mostly grown due to foreclosures over the last few years. There is very little return on investment with foreclosures. The City may be listed as a defendant for a Code lien, a minimal defense is asserted. If there may be money in the property, more work may be done to recoup the costs, but it only occurs one in 20 cases. A program and policy is being developed that the City would essentially roll over on some small foreclosure cases and not assert any defense. Attorney Cherof would be submitting to the Commission a cut off point proposal on the issue. An extraordinary amount of time and effort goes into foreclosures that have no return for the City. 1 Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 Commissioner Holzman inquired if it should be cut off at a certain number or on a case - by -case basis in terms of the priority of the property and the situation. It could be a small amount, but it may be a problem property for the City over a period of time. Commissioner Holzman did not want a policy based solely on the amount of the lien. Attorney Cherof clarified a couple factors would be reviewed to make a determination. The first consideration is what the true value of the property may be and the claims assessed. If there is money, the City should go after the money owed. It then becomes an assessment if there is any true value to proceed with ligation. The rest of the budget is beyond the City Attorney's control. Rarely does the City initiate a law suit. The labor related issues are on a case -by -case basis. Ms. Oldbury had done a nice job and has taken control over some of those issues to avoid Legal's involvement. There will be some future savings on those items. Mayor Hay asked if each department had a line item for Legal or was it one lump sum. Ms. LaVerriere advised it all was in the Legal Department budget. Attorney Cherof had proposed treating each department as its own business with legal expenses, but for now it is all under one Legal budget. City Clerk Janet Prainito, City Clerk, reported election costs had increased the budget by $92,605. In addition, there is money budgeted for a referendum election and if the questions on the percentage for run off passes, there could also be a run off election. Most line items have remained the same with the exception of pension and health insurance. Business meetings increased for classes to maintain the certifications for the City Clerk and Deputy City Clerk. The court costs were reduced by $1,000. Commissioner Holzman asked about the cost for a run off election. Ms. Prainito explained it would depend on whether it would be City -wide or a district run off. A district run off would cost approximately $25,000, but City -wide could be as much as $60,000. She stressed the money needed to be budgeted if a run off election were to be necessary Commissioner Ross noted the Commission has control over the situation at this point. Attorney Cherof advised a percentage of votes were needed to be elected and if that percentage was not achieved a run off election is required. It is one of the Charter provisions discussed for reform. The referendum question would be whether or not the provision of the Charter that provides for 35% should be changed. It would be the voters who would decide. Commission Holzman noted the referendum question did not have to be submitted. The referendum and questions would be returned to the Commission for a decision in August. Ms. Prainito indicated it would eliminate $25,000 2 Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 per district from the budget or $60,000 City -wide. Commissioner Holzman suggested the $25,000 be placed on the wish list for possible exclusion from the budget. Mayor Hay inquired about the status of replacing the Easy Agenda program. Ms. Prainito advised the vendor had recently contacted the City and been helpful providing support. No monies were included in the budget for replacement of the software. It was $60,000 to provide an entire new program. Support was the issue and at this time it appeared to be resolved. The vendor is a sole proprietor. There is an annual maintenance agreement and service agreement. Ms. Prainito explained we had been unable to reach the vendor for seven to eight months due to personal and business issues. Attorney Cherof explained it was a proprietary piece of software and no claim had been made for the period of no communication. During the vendor's absence no major problems were encountered The maintenance agreement is $5,500 a year. Commissioner Holzman wanted to be assured a review had been done of other products. Ms. Prainito advised five different packages had been investigated. The one selected that would be more user friendly was $75,000. Commissioner Holzman asserted contact should be maintained with all the vendors in case other issues arise and a new product becomes necessary. Commissioner Ross asked if other bigger municipalities or entities use the same vendor. Ms. Prainito indicated other municipalities do use the vendor. It appeared the company collapsed for a short time, but he had been responsive to our recent contacts. The software package is satisfactory and the preference would be not to change and train everyone on a new software. Mayor Hay stressed we have to keep our options open if anything happens again Vice Mayor McCray recalled the Clerk's office brought in $300,000 and their total budget is $493,000. It is appreciated. Finance Tim Howard, Deputy Finance Director, reported general operating expenses went down by $4,500. Personnel stayed the same. A couple positions were eliminated this year and the work was redistributed. The budget was flat. Pension went up $61,000 and health care went up $17,000. Warehouse — Special Fund Barry Atwood, Finance Director, advised the current year was reduced by eliminating a position. The total budget for the current year is $272,000 and the proposed budget is up about $14,000. The warehouse distributes those costs out to the operating departments based on usage. It is a zero fund. There is a minor fund balance for variations since the actual costs are uncertain. Mr. Atwood commended Mike Dauta for his work because the Warehouse is the best he has encountered. The Warehouse keeps a stock of goods bought in bulk to save money. He maintains all the records and 3 Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 distributes material for the departments including mail delivery. He is involved in ordering and writing bid specifications and review. Human Resources Julie Oldbury, Director of Human Resources, had assessed the Human Resources Department and had embarked on a re- organization. The staff was very specialized with very specific tasks. It has been moved to more generalists to provide additional service to internal customers. It required eliminating the recruitment employment coordinator and adding an HR Generalist. Additionally, steps were being taken to upgrade the Department so everyone had their certifications to advance the profession. The Department was taking advantage of using automation and technology to help meet the green initiatives and make things run better. Health care issues would be addressed as well as work on implementing the brand promise program to the employees. Another goal of the Department was to embark on a supervisory/management training program. It is critical to have the supervisors and managers engaged and enhance the experience. Continuing to work with the six union contracts and revisions to the personnel policy manual have to be reviewed broadly. The budget had decreased by 4.95 %. Vice Mayor McCray wanted more information on the career development item budgeted for $20,000. Ms. Oldbury advised the monies were for the supervisory/management training program. Staff would do the work internally. There would be materials to generate and classes held. A foundation course may require the use of a consultant to do one fundamental training program. Vice Mayor McCray asked what other contractual services would encompass. Ms. Oldbury explained they were the COBRA costs for continuation of health care, flexible spending accounts, administration, background checks, benefits consultant fees and $5,000 set aside if a third -party investigation would be required. Vice Mayor McCray sought clarification on the need for physician exams. Ms. Oldbury indicated they were pre - employment exams and drug testing for the general employees. Mayor Hay thought the $15,000 for software maintenance was high. Ms. Oldbury had brought the new software purchase to the Commission earlier and she pointed out the recurring amount would decrease to $8,990. Commissioner Ross asked if the Comprehensive Gateway Volunteer and Internship Programs could be launched soon. Ms. Oldbury noted the program was being built and a couple of interns had participated. The program was being formalized and marketing was being done to reach out to the local universities. It was hoped to engage people into the concept that public service is a great career opportunity. The interns generally 4 Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 have fresh perspectives. Supervision of the interns is essential and staff works closely with the interns and departments to organize the system with universities and vocational type training. The primary focus is colleges at this point. Commissioner Holzman asked about the scope of Ms. Oldbury's responsibilities. She handled the Human Resources issues for the City with the exception of police when they were registered as internal affairs issues. ITS John McNally, ITS Manager, proposed a flat budget with an actual decrease of $2,745. Personnel costs rose that were balanced with reduced operational expenses to show a slight budget decrease. Services would not be cut for the upcoming year. The goal was to do more with the same resources. This year over 13 PCs had failed after their warranty had expired. Staff creatively reused the PCs by finding replacement mother boards for an investment of $100 per unit and repurposed those PCs to some of the users who have PCs older than the ones that have failed. They made efficient use of the older technology. Some team members had worked on upgrades of the infrastructure. They implemented some upgrades to the SQL database engine allowing the Fire Department to deploy some enhanced software upgrades and gain efficiencies. There have been network security enhancements and tightening of the policies at no cost. Cross training has been ongoing to allow for the learning of new skills and providing better resources for the rest of the enterprise. For the upcoming year, some of the GIS software would be upgraded for better services to customers. They were working with the Historic Preservation Planner on a grant that would promote the City with a historic walking, driving type tour. The web team is working to revitalize the web site and take advantage of the branding promise to give it a more user - friendly look and feel An organizational structure change is underway due to a departing senior member. Some business services could not be provided with the existing structure. The vacant position would be re- classified to create a branch in the IT Department that would focus on some business centric processes. The GIS department, Web Master and Application Programmer would be underneath this division and focus on providing some services to other departments to study various functionalities. It could generate collection of revenue through delinquencies and better focus on providing the business centric aspect and work flow analysis that has not been able to be provided. Commissioner Holzman questioned if efficiencies could be gained by combining the IT staff for the City with the IT staff from the Police Department and have one ITS department. It would combine different skill sets to help each other and provide a greater level of support to the City. Mr. McNally noted the same topic had been discussed last year relating to the two ITS divisions. It was determined the Police ITS 5 Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 personnel do a distinct, different type of work than the City ITS Department. They have specific skills and the opportunity to see a cost savings was not apparent. Commissioner Holzman asked if the benefit packages were the same. Attorney Cherof interjected the IT personnel in the Police Department are not covered by the PBA (Police Benevolent Association) contract. The City ITS Department personnel all fall under the Personnel Policy Manual. Commissioner Holzman maintained that the existing computer support specialists be cross trained for greater efficiencies with three rather than four. There were also two ITS managers that could be combined and have one director and an assistant director and save monies with different classifications and salary structures. Reorganization would be the key and using generalists to save money for the City. Ms. LaVerriere interjected the concept of blending the IT responsibilities had been visited. Mr. McNally's skills set is on the technical side and the police IT focus on software maintenance specific to police work. Work load would not permit reducing the level of staffing. Commissioner Holzman maintained ITS should be consolidated under one person's purview and have a true organizational chart rather than three charts with the same jobs. Ms. LaVerriere indicated she had studied the possibility of having either Mr. McNally or Mr. Solomon elevated to the director position and have a manager. She did not want to pay more money and save the director salary. Mr. McNally has assumed the responsibilities as the IT Director for the City and retains aspects of the job he had done before. There was a significant savings. Now there are two managers who are longer term employees. There could be some economies to assist with the telephone systems and that has occurred on occasion in areas where more expertise is needed. Ms. LaVerriere advised it would be very difficult to eliminate positions with the current workload and future projects. Significant funding is being set aside for IT infrastructure in the City that has been neglected for the past few years. The phone system is ready to fail and cannot be covered under maintenance as it is past end of life. The City is currently operating under 2003 operating systems that would involve a $1 million project to upgrade. There are other areas that need drastic improvement before serious failures arise. There have been email problems and server issues that require training and installation for the entire system to be improved. Chief Immler added the IT departments do two different types of work and answer to different bosses. The Police Department has a heavy forensic and regulatory component that the City does not have. Commissioner Ross asked if other municipalities attempt to centralize IT services. Mr. McNally replied they are set up either way. There is no right or wrong. The Police Department technical division supports over 200 devices. The City IT Department supports 400 devices. The Police Department has squad cars and radios and do other things. 6 Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 Commissioner Holzman argued it would be easier to manage workflow if it was all under one leadership role. Mayor Hay had experience in an IT Department for 45 years and working under one director may not work all the time. It would be comparing apples and oranges. He emphasized the technology changes on a weekly basis and would be more than one person could handle for two departments. There would not be enough time in the day to perform their duties effectively. Ms. LaVerriere admitted there was some success achieved in combining with the Utilities Department. They did operate alone for years with the plant. Their software is very different too with the automation of the plants. All of the employees ultimately report to Mr. McNally. The employees do rotate between the departments. The network administrators in Utilities do rotate back to City Hall to become more familiar with other parts of the system. There is more commonality in the systems The Police Department are totally separate and firewall protected on another network. Mayor Hay asked if the servers in Fire Station #5 were being utilized to eliminate some servers. Mr. McNally confirmed Fire Station #5 data center is the primary data center. Some virtualization technology has been utilized to move all major infrastructures to that data center. It reduces some duplication and provides better disaster recovery since the building is hardened. Vice Mayor McCray commented since he had served previously it appeared a thorough analysis had been done and an excellent job consolidating or grouping where possible. He saw a difference and appreciated the efforts. The Commission is the policy makers and he was satisfied with the current organization. Ms. LaVerriere opined the department heads and staff is looking for better ways to provide service at more efficient cost. Mr. McNally added ways to increase revenue have been pursued. GIS services have been provided to local communities to inform their residents more of the data than could be provided in the past. It was done at a charge and provided revenue for the City. It may be an opportunity to use some skills and resources and look for other opportunities to sell services. Commissioner Ross suggested that idea be brought to the attention of the Chamber of Commerce and the homeowners' associations. Ms. LaVerriere mentioned some mapping features can be marketed more in the community to even help local businesses. Mayor Hay had viewed the application and was very impressed with its capabilities. The innovations are being fueled by the creativity of the employees. Capital Improvements — General Fund Mr. Livergood explained the capital program is expenditure of the revenues the City has through projects. There is a capital team with someone representing every division within the City. The money is spent for the community and not necessarily a particular Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 department. It was hoped everyone could see the needs of the community balanced against the available funding. There were bond funds that had to be spent. The Seacrest Border Design Development is $110,000 in the current budget that would be going into a future year. New projects for 2012/13 included $25,000 for Quantum Park. The Recreation and Parks Board had done a prioritization of new projects and Quantum Park was on the top of the list. There are some stormwater issues with the site plan and issues with the Quantum Park Overlay Dependent District related to park construction. The money was set aside for design development. Commissioner Holzman was vehemently opposed to another park in the northwest quadrant of the City. The greatest area of need is beautification of the downtown and the Seacrest corridor from Boynton Beach Boulevard south to Woolbright. The $110,000 would not make a dent in the cost of beautification of Seacrest to the south to make it comparable to the north section of Seacrest. The $25,000 could be added with a little more each year for five years to accomplish something that needs to be done along Seacrest rather than another park that would most likely not be built. Commissioner Ross questioned if the park priority list had been brought before the Commission. Mr. Livergood responded the priorities had not been presented to the Commission. Staff was reacting to the board's decision. The draft budget is the Commission's avenue to approve or disapprove projects and their timeline. The monies budgeted would provide a study with a consultant to do a conceptual site plan for future expenses to be allocated over several years. Commissioner Ross questioned if the adjacent residents to the park understood the need for improvement in other areas of the City. Commissioner Holzman characterized the park as a "nice -to- have ", but there are issues that could make a difference now for $25,000 rather than spend the money for a plan for a park in the future. The money to actually create a park is not available. Mayor Hay agreed with Commissioner Holzman. The money could be put to a better use. Mayor Hay needed more information on the location where the $110,000 and the $25,000 would be spent. Mr. Livergood responded the $110,000 was for street lighting on the west side of the north project that had been re- allocated to the south end of Seacrest Boulevard. The preference of the residents was to apply the money to an overall larger project than just lighting and the City committed to do that. As long as the monies stay in the fund balance they would be available. Mayor Hay supported the $110,000 allocation but not the $25,000 for the park design. Commissioner Holzman wanted to hold the $25,000 in the fund balance to grow. Mr. Atwood interjected that the money would be transferred to another project because several were funded by bonds so the 304 monies have to be spent. Commissioner Holzman suggested the $25,000 be used for landscaping from Boynton Beach 8 Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 Boulevard south to Woolbright along Seacrest Boulevard. It was decided to add the $25,000 to the $25,000 already allocated for landscaping to do an even better job of improving the area. There was consensus. Mr. Livergood moved on to the next item that would replace the condensing unit on the south Library for $100,000. The ADA compliance from HUD uses the 304 monies in 2013 to complete the work. The fund balances of the primary capital project for the next five years were reviewed. It varies from $61,000 ending in 2012/13 to a fund balance of $418,000 in five years. The goal is to assure the capital projects are funded for five years. It has been difficult to maintain a positive fund balance. The revenue sources show a transfer in 2012/13 of $110,000 from the General Fund and in 2013/14 there is a transfer of $620,000 from the General Fund. In essence, the capital project fund is broke and transfers from the General Fund will be needed along with transfer of dollars from the Public Service Debt Fund. Mr. Livergood pointed out in prior years street maintenance projects have been done in the range of $550,000 per year. There are no street projects in the next five years. The microsurfacing has been highly successful in the past. Commissioner Holzman inquired about the ongoing street project south of Boynton Beach Boulevard along the Seacrest area. Mr. Livergood explained it should be completed in the next two years and most of the project has been done with utility funds. The FDOT delivers a list of bridge maintenance issues that have to be done and FCC sends bills for crossing repairs on the railroad. The miscellaneous infrastructure upgrades include projects that are not extravagant projects but $25,000 had been budgeted because the projects that arise are unknown at this time. Commissioner Holzman pointed out there is $250,000 budgeted to move Communications to Fire Station #5. Mr. Livergood continued that compliance with ADA regulations is budgeted for $50,000 per year. Other than HUD improvements, there are improvements throughout the organization. Building infrastructure upgrades and maintenance includes an air conditioning system, plumbing or pumps on a chiller that cannot be covered under an operating budget. There is miscellaneous interior and exterior projects that would cover walls, doors or carpeting type items. The $150,000 is for contractual maintenance of the projects for the entire City. The best is being done with the available funds. In the recreation and parks projects there is $50,000 to dredge the canal coming out of Boat Club Park that is done every couple years. There is an interlocal agreement with Palm Beach County pending for them to do the project. There are some small scale projects moving forward for $40,000 for landscape areas or things that arise. There was a project for $100,000 for parking meters and a system for Oceanfront Park. A number of systems were evaluated. Mr. Livergood felt the money could be spent better elsewhere until the philosophy for parking has been defined. Prior year projects are being closed out. 9 Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 Mr. McNally presented the project for City -wide replacement of aging network infrastructure over 10 years old. There have been failures and it is past the end of life and not supported. Commissioner Holzman stated his concerns relating to the move of Communications to Fire Station #5 and the associated costs. Mr. McNally replied the PBX system is also past the end of life. An RFP was done and the vendors were not fully able to support the existing equipment. They are providing maintenance on a best effort type of service agreement. Many of the parts are not being manufactured and the equipment being used is not supported. There are three PBX systems and part of the goal is to collapse some services to have a centralized PBX. There was a Microsoft Enterprise license agreement initiated in 2002 which expired in 2005. It was not renewed. Office XP is the current operating system and 2003 Office Suite. There is conversion available for documents created in 2010 Office Suite that are used. A large investment will be needed to upgrade to 2010. An email archiving solution is another item that has arose due to public record requests for emails. The solution used is manual and the new solution would be more electronic and greatly shorten the turn around time for records from weeks to hours in many instances. Commissioner Holzman inquired of Chief Immler on the status of the Communication move. Chief Immler responded consolidation with Boca Raton and Delray has been reviewed by a consultant. Their study would outline a three City consortium with a combined dispatch center. The goal would be to save money with less personnel. A separate entity would be created to run the center. There is nothing to present to the Commission yet. The problem the City faces is the system Boynton Beach uses is different from the other two cities. Before an agreement can be made, the City would have to convert to the same system as Boca Raton and Delray utilize. The cost would be approximately $1 million. The secondary possibility would be to move Communications to Fire Station #5. Dispatch cannot remain at the current location. The leaking roof is an issue that shorts out the expensive equipment. The request was to assign monies to the capital improvement budget to establish a link between Fire Station #5 and the tower in Rolling Green and then be able to move all the radio equipment as it is now from City Hall to Fire Station #5. The consultant has not completed their analysis other than to determine a consolidation can be done. There would be a start-up expense of approximately $2 million. Further information has not been received from the consultant. Commissioner Holzman asked if the move to Fire Station #5 would enable the City to maintain a high level of communication services to the officers or negate the efficiencies of consolidating with Boca and Delray. Chief Immler felt it could be maintained now and the consolidation would be years in the future before it would be completed. Mr. Livergood added the move of Communications would open space in City Hall. 10 Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 Utility Fund — Capital Improvement Kofi Boateng, Utilities Director, reported the goal of Utilities was to provide sufficient revenue to provide operating services to customers as well as other burdens. Some money has to be set aside to maintain and repair the infrastructure and bring the system to the 21 century. There are five major project areas: neighborhood, water supply, regional force main, reuse water plan and remote metering. The total budget is about $71 million. The neighborhood projects are comprised of the central Seacrest corridor for stormwater improvements for about $13 million. The Lake Boynton Estate project is $1.3 million. The water supply projects include the raw water interconnect, section B, raw water interconnect section C and completion of a water pretreatment program at the West Plant. The central Seacrest project is in a design phase and would be bid later in the year and start construction. It will have at least two different phases and take approximately three years. The Lake Boynton Estates would be a one year project and be bid later this year. The delays have been attributed to the ethical concerns. The wastewater issues have been completed for both projects. There will be a significant number of main replacements because of the poor water quality experienced. Some of the old lines would be moved into the streets with pavement work. Vice Mayor McCray asked if the money was available for both projects and Mr. Boateng confirmed the money was available. Mr. Boateng continued with the raw water interconnect project for sections B and C and the iron exchange and pump station program at the West Plant. There is the East Plant rehabilitation and ground rule. The original force main needs an additional valve to support running of the pipeline. There are several pipeline rehabilitations that need to be addressed. The water reuse plan distribution system is about $10 million over the next several years. Remote meter reading will cost approximately $3 million between finance and utilities to bring the program to the 21 century. The neighborhood project includes the water mains and stormwater management for the central Seacrest corridor. They were in the process of completing some design modification that should be completed by the end of the year. There are two phases with a three -year timeline. Lake Boynton Estates is mainly water mains and final adjustments to design were being made. The water supply plan is based on the west well field having a surplus of water and East Plant having spare capacity. The East Plant is cheaper to run because the cost of electricity is higher at the west plant and the population growth is likely to occur in the east. There are three projects which must be completed by 2013. The first part is the 11 Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 pipeline connecting the two plants and operating the East Plant to accept upgrading and ion exchange resin pretreatment. The ion exchange program will be at the West Plant. It is needed because the chemistry of the water from the west wells is different from the chemistry of the east wells. All the pollutants have to be removed. The key project of the reuse water supply show the existing customers; Hunters Run Country Club, Quail Ridge, Pine Tree and Delray Dune that the City of Boynton Beach provided services. The future potential customers were outlined. The procurement and delivery is important because projects are clustered in groups and considered true delivery approaches. One is design build which is the standard and the other is progressive design build. The standard approach being used is the City enters into a contract with an engineer to design the project and provide 100% of design documents. It is then sent out to bid, a contractor is chosen and the building begins after a contract is signed. The designer- engineer and builder are different entities. A sequence has to be followed. It is a linear process. The progressive design build allows flexibility and enables the City to save time and cost during construction. It allows the City to simultaneously find a contractor and designer who work together with the City. The benefits are scale economies, cost savings and time savings. One group is the central Seacrest improvements and Lake Boynton Estates, Pense Park and Congress Avenue valves. The delivery method would be the standard design build. One construction manager would be used to save money. The second group of projects is the raw water interconnection, sections B and C. The third group is made up of different projects from the East Plant and the West Plant. They are organic and using the progressive design build approach would allow for prioritizing the key projects. It will save time and money. The progressive design build will minimize claims and be more transparent for better public accountability. It is preferred by the Inspector General's office. It is a more prevalent approach. Utility — Operating Fund Mr. Boateng advised the budget came in 13.2 % over a flat budget due to the $5 million transfer from Utility to the General Fund. They are also required by the bond coverage to transfer $4.4 million into a reserve fund. Commissioner Holzman did not understand how a transfer of money the City already has could be an increase or decrease in the budget. Mr. Atwood explained there was total revenue coming in and then it has to be appropriated plus transfers to other funds is an additional part of the appropriations to come out of the total source of funds. Mr. Boateng added the fund balance is approximately $4.4 million. After all the transfers, the balance would be $40 million. Mr. Atwood explained the coverage ratio for the debt services are excess of revenues that needs to be a certain percentage over the debt service. A minimum of 110% is needed. The better the coverage ratio, the better interest rate applies. The amount is $2.77 million that has been projected with the $5 million deducted for next year. 12 Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 Mr. Boateng added the Utilities program is heavily regulated. There are 10 divisions for a total budget of $37 million. On a day -to -day basis all equipment and facilities and the entire operation is managed and run according to regulations. The employees have to provide the necessary skills to be able to maintain the operations. Commissioner Holzman noted the personnel budget would go up 5% and asked the source of the increase. Mr. Boateng advised it was pension and health care costs. The operating expenses increased because of equipment purchases and $140,000 expense for electricity alone. Commissioner Holzman saw the capital operating budget increased by 57 %. Mr. Boateng contended the budget was small and any spike would have been computer related upgrades. The non - operating budget increased another 50% for debt service changes. Mr. Atwood stressed additional bonds were issued for $20 million and lowered the interest rate on two older issues by refinancing. Ms. LaVerriere projected a $2 million savings over 20 years. Vice Mayor McCray asked about the traffic signs line item for $1,500. The signs would be used during emergency operations for a sewer or water line break. The signs are rented. Commissioner Ross questioned if the $2 million savings was in reference to the $20 million additional bonds that were issued. Ms. LaVerriere clarified there were two bonds issued years ago and they were refinanced with a better interest rate and the debt service reduced. The savings would be over the remaining term of the bonds. Risk Pam Webb, Claims Administrator, reported the budget had gone down $10,957 by lowering operating costs by $35,000. The only increases were health and some of the insurance premiums. Some insurance rates were lowered, but at an increased risk to the City. The self- insurance retentions or deductibles had to be raised to either decrease or keep them at the same level. Vice Mayor McCray inquired why $200,000 was paid for legal fees and costs if the City has its own attorney. Ms. Webb explained the past year had quite a few litigated claims that went to Court. One case alone has cost $250,000 over the last two years in attorney fees. Another case cost approximately $100,000. Some monies would be reimbursed through insurance. The claims have to be completely closed first and the reimbursements would be returned to the self- insurance fund. Golf Course Dan Hager, Manager of Golf Operations, announced the course would be awarded a 4 1 /2 star rating from Golf Digest which was consistent since 2003. It is an enterprise operation and no taxpayer monies have been used. Mr. Atwood interceded it was a rarity in municipal government. City services amount to $200,000 each year including 13 Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 the $45,000 contribution to the General Fund. The fund is debt free and posed to support the brand promise like no other department. There are 70,000 rounds of golf played a year with many affluent visitors. It was hoped the golf course could be used in the economic development plan to bring businesses to the City. The gap surveys were positive. The permit base has expanded as part of the continuing business plan. There has been a cost of $120,000 in mandated expenses from FDEP (Federal Department of Environmental Protection) and ADA (Americans with Disabilities Act) that requires a handicap golf cart to be provided. Creative scheduling was initiated by letting the employees do the scheduling to meet their 40 -hour work week. Commissioner Ross brought up the Audubon certification. Mr. Hagar indicated it is offered and brings attention to nature, saving money in lake bank maintenance amounting to $30,000 per year. The Commission commended Mr. Hager and his staff for a job well done. Public Art Debby Coles - Dobay, Public Art Administrator, advised the department costs are part of the public art impact fee set at 1% for development and redevelopment dollars that come into the City. The costs would be covered for this year and projected the same for next year. The budget is covered by 30% of the 1% fee. The budget is flat. She manages $300,000 of public art projects in development and redevelopment. It includes art programs such as Avenue of the Arts and the International Kinetic Art Symposium that would be a huge driver in the economic development plan. Swing space is another program that uses vacant shopping plazas to have art exhibits and artist exposure. In all City facilities, pubic art is exhibited and rotated every six months. Ms. Coles -Dobay is part of the brand marketing team and web team utilizing marketing skills for other City projects and initiatives. Public art is an important tool in economic development when relocation for businesses and employees are involved. It showcases the City facilities and amenities. Commissioner Ross thanked Ms. Coles -Dobay for the media coverage on the specimen tree project to attract visitors to Ocean Avenue. All the art events bring positive press to the City. Public Comment Herb Suss, 1711 Woodfern Drive, remarked the presentations highlighted the staff was very capable and for others to nitpick could cost the City in the future. Hopefully the Commission would listen to staffs recommendation. Mr. Suss reiterated the millage rate should be set at 8 mils to build a cushion. Capital projects will arise and unforeseen disasters including hurricanes would need funds that should be set aside at this time. 14 Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 In the Library budget Mr. Suss wanted to see books restored for $120,000. He also wanted to see the Education Commissioner work to solicit more volunteers for Galaxy Elementary and for other public schools. He complimented all the departments on their presentations and again urged the Commission to raise the millage rate to 8 mills to build an equity fund. He totally agreed with Kofi Boateng's presentation on the water system. No one else coming forward, Mayor Hay closed the public comment. Adoption of Resolution R12 -067 — Fire Assessment Attorney Cherof advised the residential fire assessment rate was $88, the commercial rate was established at $20 a square foot, industrial warehouse at 5 cents a square foot, institutional 22 cents a square foot and nursing home at 22 cents a square foot. There would be no change from last year. Mayor Hay agreed with the current rate structure. Vice Mayor McCray wanted assurance there was a hardship procedure in place to accommodate the citizens. Ms. LaVerriere confirmed it was posted on the web site. There is a window of time in early November. The information is disseminated as much as possible. More individuals have filed for the waiver. Commissioner Holzman felt it should be kept at the same rate. He did recognize that in the beginning it was set up to sunset. It was instituted to help upgrade facilities. It is now being used in the General Fund and ways to lower it should be considered in the future. Vice Mayor McCray noted if the millage rate was set at 8 mills perhaps some flexibility with the fire assessment rates could be found. Attorney Cherof advised the rate is set annually. The resolution was the preliminary announcement of the fire assessment and not the final adoption. Commissioner Ross favored the fire assessment remaining the same. Ms. LaVerriere reminded the Commission that 30% of the properties pay less than $200 in property taxes. To recapture the $5 million in revenue from the fire assessment, would necessitate a rate of over 10 mills. One of the philosophies of the assessment was to capture all property owners to contribute toward the cost of fire protection. 15 Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 Motion Commissioner Holzman moved to approve Resolution No. R12 -067. Commissioner Ross seconded the motion. Vote The motion passed 4 -0. Adoption of Proposed Resolution R12 -068 — Mil laqe Rate and Rollback Rate Attorney Cherof read Resolution No. R12 -068 by title only. Mr. Atwood indicated the millage rate is currently 7.1941 and the roll back is 7.3237. Mayor Hay stressed the number set now could be decreased before adoption, but not increased. He supported setting the rate at 7.8. The roll back rate would result in a loss of $1 2 million. The 7.8 rate would generate a $620,000 surplus without the wish list items. The median maintenance and books were $191,000. Discussion was needed on the Mae Volen funds, election, and legal books that remain in the budget. The raises for the Fire Department are in the budget. Commissioner Holzman surmised there remained ways to cut expenses such as the potential closing of Fire Station #1 saving $500,000 and other things that could be done. He understood why a little higher rate may be needed but he could not go as high as 7.8. It puts a huge onus on some homeowners who do pay taxes. Commissioner Ross recalled the capital improvement fund expenses were very high. Ms. LaVerriere stressed the rates being discussed would not impact the capital improvement funds. Mr. Atwood added there is not enough money in the fund for City Hall improvements and closing Fire Station #1 to put police in that facility and stop the leaky roof. Ms. LaVerriere suggested those could be discussed in a workshop sometime in October. The impact on a $100,000 homeowner, if the rate was set at 7.6 mills and there was a 2.5% decline in value, would result in a tax increase of $1.30 a year. At 7.8 mills it would be a $10 increase for the same homeowner. Commissioner Holzman emphasized many homeowners had homes with values greater than $100,000 and some assessments have gone up. He argued the 7.8 miles was too high. It affects not only residential, but also commercial owners. 16 Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 Vice Mayor McCray advised all over America taxes are going up and for the City of Boynton Beach he thought the citizens were being done a good service. He agreed with Mr. Suss it should be set at 8 mills. It can be decreased before final adoption. There are people not paying any taxes at all. A cushion is needed and funds to operate the City even if there is an emergency. A $1.30 increase would be well worth the services that are provided. He would be willing to accept 7.8 mills. Mr. Atwood advised 10 years ago the rate was 8.2 mills. Commissioner Ross was comfortable with 7.8. Mayor Hay declared there was consensus at 7.8 mills. Motion Commissioner Ross moved to adopt Resolution R12 -068 with the inclusion of the 7.8 millage rate. Vice Mayor McCray seconded the motion. Vote The motion passed 3 -1 (Commissioner Holzman dissenting). Mr. Atwood noted the roll back rate would be 7.3237 mills. Mayor Hay announced there would be no meeting tomorrow and adjourned the meeting at 3:46 p.m. There would be a closed -door session with the Commission at noon the next day. (Continued on next page) 17 Meeting Minutes Special City Commission Boynton Beach, FL July 17, 2012 CITY OF BOYNTON BEACH (,) //' Woodrow L. H - Ar gay, ice Mayo_ r Commissioner Ste olz , Co issioner '27/ ATTEST: Ma ene Ross, Commissioner • 4V . • • et M. Prainito, MMC y Clerk J dith A. Pyle, CMC ►! puty City Clerk 18