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Agenda 11-12-13 Aft The City ofBomton Beach FINANCIAL ADVISORY COMMITTEE MISSION STATEMENT THE FINANCIAL ADVISORY COMMITTEE'S GENERAL RESPONSIBILITY IS REVIEWING THE IMPACT OF EXISTING OR PROPOSED LEGISLATIVE AND ADMINISTRATIVE DECISIONS ON THE CITY'S BUDGET, REVENUE SOURCES, AND OPERATIONAL EXPENDITURES THE COMMITTEE IS RESPONSIBLE TO MAKE RECOMMENDATIONS THAT MAY FAVORABLY IMPACT THE CITY'S BUDGET AND OVERALL FINANCIAL CONDITION OF THE CITY MEETING OF TUESDAY, NOVEMBER 12, 2013 @ 6:00 — 8 :00 P.M. LIBRARY PROGRAM ROOM THE COMMITTEE MAY ONLY CONDUCT PUBLIC BUSINESS AFTER A QUORUM HAS BEEN ESTABLISHED IF NO QUORUM IS ESTABLISHED WITHIN TWENTY (20) MINUTES OF THE NOTICED START TIME OF THE MEETING, THE CITY CLERK OR DESIGNEE WILL SO NOTE THE FAILURE TO ESTABLISH A QUORUM AND THE MEETING SHALL BE CONCLUDED COMMITTEE MEMBERS MAY NOT PARTICIPATE FURTHER EVEN WHEN PURPORTEDLY ACTING IN AN INFORMAL CAPACITY AGENDA • Call to Order — Steven Grant, Committee Vice -Chair • Should any members not be able to make the meeting; contact Tim Howard ( HowardT(a W1 us ) or (561) 742 -6311 by 1 pm Tuesday as the meeting may be cancelled for lack of a quorum • Election of Committee Chair • Approval of June 10, 2013 Minutes (Copy attached) — Kindly review in advance of meeting • Other Business • Adjournment Currently scheduled future meeting dates - Targeted for 2n and 4 th Monday of each month: • Monday, November 25, 2013 — 6 00 PM S \Finance \Financial Advisory Commlttee\Agenda \Agenda - 11- 12- 13.doc MINUTES OF THE FINANCIAL ADVISORY COMMITTEE MEETING HELD O MONDAY, JUNE 10, 2013, AT 6:00 P.., IN THE CITY LIBRARY, ROOM 208 S. SEACEST BLVD., BOY BEACH, FLORIDA PRESENT: Don Scantlan, Chair Tim Howard, Finance Director Gary Dunmyer Fakhry "Ed" Boulos Jeffrey Grady ABSENT: Steven Grant, Vice Chair Dolores Schlesselman 1. Call to Order Chair Scantlan called the meeting to order at 6:00 p.m. Roll call followed. A quorum was present. There was one change made to the agenda, which was to add an Item on Risk Management. Motion Mr. Boulos moved to approve the agenda as amended. Mr. Grady seconded the motion that unanimously passed. 2. Approval of May 13, 2013 Minutes Mr. Boulos thought the minutes were excellent. Chair Scantlan requested the Call to Order time reflect 6:00 p.m. Motion Mr. Dunmyer moved to approve the minutes. Mr. Grady seconded the motion that unanimously passed. 3. Committee Member recommendations • Jeff Grady • Steven Grant 1 Meeting Minutes Financial Advisory Committee Boynton Beach, FL June 10, 2013 This information was discussed at the last meeting and was included for information only. 4. Review, Discuss and Vote on Committee Member Study Topic Recommendations for FY 2013 -2014 • Fakhry (Ed) Boulos Mr. Boulos reviewed his item which was Development Fees, Comparison to Other Cities. He prefaced his comments that when gathering the information, he dealt extensively with Boca Raton, Delray Beach and the Boynton Beach staff is outstanding. They are knowledgeable and responsive. In collecting his data, Mr. Boulos reviewed online references, spoke with citizens and obtained a great deal of public information about fees of all kinds. The City's Development Department fees were geared for variances, extensions, changes and others. The fees he reviewed were primary and anything less than $100 was not included. The information did not reflect rehabilitations or remodels. It was only for newly constructed homes and commercial buildings. He tried to find a directional number rather than an exact number. After the information was gathered, Mr. Boulos discussed that in general, impact fees affected the cost of a building by 24 cents per dollar and no one city has the same fee structure. Additionally, the fees presented were not all inclusive. As an example, Delray Beach has a building permit fee, but has a different fee structure for subcontractors. The permit fee was lower than Boynton Beach's, but not in total number because Boynton Beach does not have a permit fee for subcontractors. Boca Raton had high impact fees; about 2.35% of the total value of the permit, but the water and sewer impact fees related to the size of the pipe and they have no fire impact fee. It was confusing to him to the extent he had to pretend to be a customer, because once staff found he was not a customer, they questioned or were non - responsive to him. Mr. Boulos explained the City's fees are designed to cover costs. They cannot make a profit as it is not an Enterprise Fund. As to the impact the fees may have on the budget, it only covered the costs of hiring new employees, raises and maybe a few other items. A comparison of development fees on a typical $85,000 new, single - family home reflected Boynton Beach charged around $7,000. Delray Beach charged around $8,000, and Boca Raton charged between $15,000 and $18,000. Mr. Boulos pointed out the Boynton Beach fee was the actual cost. The only discrepancy was the inspection fee was based on a formula of about 30% of the total cost minus the cost of supplies and the value of the plumbing, water, and electric. The impact on citizens for a house reflected the City's fees were less than half of the total fees for a house and about 6% of the total cost. The State charged more than the City did. The total County fees were also more than those charged in Boynton Beach. 2 Meeting Minutes Financial Advisory Committee Boynton Beach, FL June 10, 2013 The total fee for a commercial building was less than 3% of the total structure. Mr. Boulos clarified he included the land costs. Boynton charged $45K. The County charged $24K, and the Delray Beach and Boca Raton charges were higher. Mr. Boulos believed there was room to increase development costs and the citizens would not be tremendously affected. His recommendation was to raise fees. Vote The members voted unanimously to approve the recommendation. • Don Scantlan c Budget Survey results — had 156 response Chair Scantlan discussed the budget survey. He looked at the confidence level and confidence interval and, using the 2010 Census, compared the number of respondents with the number of citizens in Boynton Beach over the age of 18. He thought even at 156 responses, the survey still provided valid community input, especially in parts of the survey with significant spreads between answers. The recommendation provides Commissioners and the City Manager with another data point to consider when making decisions. Last year was the first time the Committee used narrative questions and the response comments were off the chart. This year, they again used narrative questions, but the responses seemed to be more thoughtful and there were a few good recommendations. Chair Scantlan explained he made suggestions for some of next year's questions. Chair Scantlan provided an executive summary of each question and noted not every respondent answered every question. The most respondents that answered a question were 155. He also pointed out that when looking at household income this year, if the figures were a true depiction, there is an inordinate amount of upper income individuals responding. The average household income is much lower than the average of the survey respondents. Vote The members voted unanimously to approve the recommendation. Chair Scantlan explained his other task pertained to Risk Management and he made three recommendations. He commented there are opportunities to develop a Risk Management Strategy for the City, which previously was left up to staff. The strategy should include a review of whether the City would self- insure or buy excess coverage. He suggested it be part of the annual workshop or an hour be set aside to discuss it. 3 Meeting Minutes Financial Advisory Committee Boynton Beach, FL June 10, 2013 Chair Scantlan explained, in conducting his research, he met with three staff members, conducted an internet survey, and spoke with the Risk Manager for Delray Beach. As an example, if the City paid $300K for a policy that was never used and was asked if it was a smart decision, the answer is one would not know. An accident could occur the next day. That kind of circumstance should be assessed for every line item in the Risk Management budget. The City Commission could agree with the way it was done and opt not to make changes, but it should be reviewed each year. The concept of Risk Management was more than just property and casualty insurance. Although the City Commission buys insurance and has insurance on its fleet, there are many complex topics the Commission may not be aware of. It is not which broker is used. It is if they want to set the excess limit, should it be at $2 or $3 million? Should the City self- insure? What exposure level is wanted? This was Chair Scantlan's third budget workshop, and he commented there has never been discussion about this in his first two workshops. He thought the City could do better as it is a significant issue for a City of this size and budget. The Commission can decide what they are spending money for, what they are getting for it and if the levels of protection for the City are appropriate. Currently, these issues are evaluated through discussions with Risk Management staff and the City Manager. It was noted the City has a broker and uses the RFP process; however, the last vendor the City retained for different types of insurance was not able to obtain quotes from the League of Cities and that was not included as a requirement in the RFP. Chair Scantlan felt there should be a requirement in the RFP that respondents obtain quotes from the League of Cities. Their programs are set up for municipalities and governmental entities even if they may or may not have the appropriate service needed for Boynton Beach. Lastly, Chair Scantlan recognized Pam Webb as a special asset, and he commented he was impressed with her knowledge. She is the Risk Administrator and she could make great recommendations to the City Manager and City Commission if given the opportunity to speak. Chair Scantlan clarified his recommendation was the City develop a Risk Management Strategy, the strategy be reviewed by the City Commission each year and the RFP include a requirement to obtain quotes from the League of Cities. It was a package recommendation. Vote The members voted to approve the recommendation. The vote was 3 -1 (Mr. Boulos dissenting). 4 Meeting Minutes Financial Advisory Committee Boynton Beach, FL June 10, 2013 5. Discuss City's Budget Workshop (Library Program Room) a. Monday, July 22, 2013 @ 3:00 p.m. b. Tuesday, July 23, 2013 @ 10:00 a.m. c. Wednesday, July 24, 2013 @ 3:00 p.m. Chair Scantlan reviewed the above workshop dates and explained all three workshops would cover different topics in the budget. Often, the last workshop is dropped if all the business is concluded in the first two days. The members were urged to attend as many meetings as possible. He noted the workshop times were different than last year. The Public Notice will list the start date and time and an agenda will be posted, but it is generic in nature. The time in the afternoon is to allow the working public to attend the meetings, usually on issues concerning property taxes. 6. Other Business a. Distribution of Budget Survey Summary to participants per question #20. The members discussed distributing the survey summary to the survey respondents that wanted to receive it. Mr. Howard agreed to do so. An inquiry was made if the email addresses will be visible when the summary is sent. Chair Scantlan suggested redacting pages 19 through 26. Brief discussion also ensued that a 10% response rate was the industry standard, so 35 email addresses out of 156 responses was good. Motion Chair Scantlan moved to redact the respondent's names and address on pages 19 through 28 of the survey. Mr. Dunmyer seconded the recommendation that unanimously passed. Currently scheduled future meeting dates - Targeted for 2 nd and 4 th Monday of each month: • Monday, June 24 — 6:00 PM Chair Scantlan explained since the Committee's tasks were finished, there was no reason to meet again before the budget, and he requested a motion to cancel the June 24th meeting. Motion Mr. Dunmyer so moved. Mr. Grady seconded the motion that unanimously passed. Chair Scantlan explained his term as Chair and member of the Committee will expire at end of June, and he will not serve as he was pursuing other activities. He commented 5 Meeting Minutes Financial Advisory Committee Boynton Beach, FL June 10, 2013 the work of the Committee is important to the City and Vice Chair Grant would coordinate the meetings after July. Mr. Boulos recalled the Committee would not reconvene until later in the year. Mr. Howard explained the Committee's recommendations would be shared with the City Commission, and if they wanted more data on the recommendations, the Committee could meet. The first year of the Committee's existence, the Committee had 30 or 40 items and the City Commission had questions. They held a workshop with the City Commission and explained their recommendations. The second year, a summary was given at the workshop, and this year, if the City Commission requests they meet, the Committee can reconvene. Mr. Howard agreed to put the agenda item together and notify the members when it would be heard by the City Commission. He would also email the members the item and the backup that would be presented. 7. Adjournment Mr. Grady moved to adjourn. Mr. Dunmyer seconded the motion that unanimously passed. The members thanked Chair Scantlan for his guidance and leadership and the meeting was adjourned at 6:43 p.m. Catherine Cherry Minutes Specialist 069113 6 7 Regulars - 2 Alternates Established per Ordinance No. 10-009 Three-year terms for Regulars One-year terms for Alternates 2013 FINANCIAL ADVISORY COMMITTEE MEMBER EXPIRES PHONE PROFESSION BOULOS (8) , Fakhry 06/15 509-6257 Gen. Mngr. 1809 Coastal Bay Blvd. Appt’d 2/19/13 boulos1809@gmail.com ( 33435) (8) DUNMYER, Gary 06/16 649-8938 Civil Engineer 84 Maple Lane Appt’d 4/16/13 gdunmyer@bellsouth.net (33436) (11) GRADY, Jeffrey R. 06/14275-8140Mktg & Dev Mngr 720 N. Broughton Cir Appt’d 10/2/12 jeff@leadmemedia.com (33436) (7) GRANT, Steven, Vice Chair 06/15 561-880-5529 Attorney rd 136 NE 3 Avenue Appt’d 6/19/12 grantlegalfl@gmail.com (33435) OPEN 06/14 OPEN 06/13 (9) SCHLESSELMAN, Dolores 06/16 699-3275 Banker th 710 SW 27 Terrace Appt’d 4/16/13 lorisletterbox@yahoo.com (33435) ALTERNATES: (12) OPEN 06/13 (12) OPEN 06/13 CITY EMPLOYEE REPRESENTATIVE: Tim Howard, Finance Director 742-6310 Lori LaVerriere, City Manager 742-6013 (Back-up) At Least 5 regular members shall have one of the following qualifications: 1) Certified Public Accountant 2) Accounting Professional 3) Auditing 4) Certified Financial Planner 5) Investment Advisor 6) Insurance Professional (property/casualty or health) 7) Business Owner/Manager 8) MBA or MPA degree (with high levels of accountability/responsibilities with budget and organization oversight) 9) Banking 10) Pension Plan Management 11) Financial Planning & Management 12) Remaining four members may be at large Updated: 11-7-13 S:\CC\WP\BOARDS\LISTS\2012 Board Lists\FINANCIAL ADVISORY COMMITTEE.doc