Loading...
Minutes 06-21-90MINUTES OF CITY COMMISSION BUDGET WORKSHOP MEETING HELD IN COMMISSION CHAMBERS, CITY HALL, BOYNTON BEACH, FLORIDA, THURSDAY, JUNE 21, 1990 AT 8:00 A. M. PRESENT Gene Moore, Mayor Lee Wische, Vice Mayor Lillian Artis, Commissioner Robert Olenik, Jr., Commissioner Arline Weiner, Commissioner J. Scott Miller, City Manager Mayor Moore called the meeting to order at 8:00 A. M. Sales Tax Mayor Moore called attention to what he considered to be a very important issue on the Sales Tax Division Plan at the meeting of the Municipal League. Commissioner Weiner explained that she and others representing their cities had no time to bring the proposal back to their Commissions. Therefore, a motion was made to table the issue. Commissioner Weiner abstained from voting. Discussion ensued about the vote. Mayor Moore pointed out that the City was entitled to get 40%, and they tried to cut the City down to 33%. He questioned why the City should get less than what the provision in the law provides for. Commissioner Olenik informed Vice Mayor Wische that the issue will be brought up at the next meeting of the Municipal League on July 18th. There was discussion about what the County would do. Mayor Moore thought the Commission should be advised when important issues come up. When the Commission gets the agendas for the meetings, Commissioner Weiner asked that they give their input. There was further discussion about the vote. Change of Votes At the next City Commission meeting, Mayor Moore intends to change his votes. He had no involvement in the Inlet Harbor matter so will change his abstention to a "Yes" vote. On the Haberman matter, he will change his vote from an abstention to "No". Hearing re Commissioner Robert Olenik, Jr. scheduled for June 28, 1990 Mayor Moore stated Commissioner Olenik made the charge that he (Moore) had a vested interest in a sail shop, which was - 1 - MINUTES - CITY COMMISSION BUDGET WORKSHOP MEETING BOYNTON BEACH, FLORIDA JUNE 21, 1990 incorrect, and Commissioner Olenik apologized. Commissioner Olenik had also referred to Commissioners Weiner and Artis * as being stooges. Commissioner Olenik did not want to address the charges then. Mayor Moore was instrumental in bringing the charges, and the majority of the Commission felt they wanted the hearing. He stated a meeting was called improperly by Commissioner Olenik. It should have been coordinated with Commissioner Olenik's fellow Commissioners. The meeting was conducted in an improper manner, and Mayor Moore wanted an acknowledgment from Commissioner Olenik that it would not be done again. If that could be worked out, Mayor Moore said he would be will- ing to support a motion to rescind the Resolution and avoid a hearing. They were just looking at more Attorneys' fees. If they cannot do it direct, they can either call a Special Meeting or work through the City Manager. Vice Mayor Wische was not too concerned about the alleged names and was not looking for the word "apology". He stated he would be satisfied to drop everything. Vice Mayor Wische added that maybe he (Wische) acted hastily. Mayor Moore did not feel that way. When somebody says he has a vested interest, which is obviously a conflict of interest in a legal action on his part, and later admits that is not true, and also states he exerted undue influence in the Polymer matter and states in the paper he could not find any evidence to that effect, Mayor Moore thought an apology should be in order. If Commissioner Olenik wished to contact the City Manager and see if some middle ground could be worked out short of a hearing, Mayor Moore said he would be willing to entertain that. Budget Vice Mayor Wische wanted to meet with City Manager Miller so he could point out some things that had not been changed on the revised book. Estimated Fund Balance as of 9/30/89 Other than overcoming the Tradewinds situation of $893,000 per year debt service, City Manager Miller stated he was not the bearer of good news. He informed Mayor Moore there are no physical dollars in any of the reserve funds. Mayor - 2 - *Should be %lice ~,~ayor Wische and Commissioner Artis. (Corrected in 7/3/90 Minutes. ) MINUTES - CITY COMMISSION BUDGET WORKSHOP MEETING BOYNTON BEACH, FLORIDA JUNE 21, 1990 Moore asked whether there would be any adverse impact on this year's budget. City Manager Miller answered, ~No". To understand where the City is now, City Manager Miller said they would have to go back to 1½ years ago because the prior year's balances are those dollars left over the reve- nue's expenditures at the end of the year. The City has been carrying deficits for the past several years, and it has to overcome those deficits. The budget the City is working on at this time cannot be developed further without taking the deficits into consideration. City Manager Miller explained the sheets entitled "City of Boynton BAach Estimated Fund Balance as of 9/30/90" and "1990-91", which had been passed out to the Commission and the press. (See Addendum A attached to the original copy of these minutes in the Office of the City Clerk.) Grady Swann, Finance Director, explained to Commissioner Weiner that a previous Commission, by Resolution, set aside $1,000,000 for emergencies. There was not enough money to cover the $1,000,000. Mr. Swann told Vice Mayor Wische it was anticipated income. Discussion ensued about the reserves. Reference was made to the emergency fund. Mayor Moore asked whether it was a hard figure or a soft figure. Mr. Swarm replied it was anticipated to be a carry over. When they got the hard figure, the Resolution was amended from $1,000,000 to $436,868. If they take the fund balance of $663,973 on 9/30/89 and apply the total reserves, City Manager Miller said the City is looking at an undesignated fund balance of $195,796 in the red. As of 6/19/90 (eight months into the fiscal year), Mr. Miller felt the City will only collect 425,271.06. That is $1,685,904 that the City will not collect. That came from the short-fall in the fund balance. Mr. Miller outlined the amounts the City anticipated collecting from total fran- chise taxes and utility taxes. Mayor Moore asked whether the projected figures were based on historic figures. City Manager Miller thought they were based on historic figures, but they were also taking into consideration the growth factor, which never materialized to the effect it should have. He expounded on building permit fees and also mentioned investment income. If you take those major areas, City Manager Miller said it comes out to $1,685,904 in the red. - 3 - MINUTES - CITY COMMISSION BUDGET WORKSHOP MEETING BOYNTON BEACH, FLORIDA JUNE 21, 1990 Commissioner Olenik asked how much the City will receive in property taxes. City Manager Miller answered, "$11,019,440." He named the areas where there will be shortages and further explained the sheets. City Manager Miller complimented the department heads and said the $847,935 was a result of them "paring down". He informed the press the City is not laying off people, but at this time there are approximately 53 vacant positions in the City organization in the General Operating Fund. Some of the positions will be filled because of a need to fill them. The majority of them will not be filled between now and the end of this fiscal year for the reason that if they are filled, he will not have the $847,935. City Manager Miller informed Vice Mayor Wisehe the City has been operating the past seven or eight months with approximately 22 positions which have not been filled. The Firefighter positions that are in the budget but which have not been filled were included in that figure. City Manager Miller stated the City is planning to fill the Firefighter positions. He agreed with Mayor Moore that the City backed up the vacancies in those positions by getting outside Consultants at a much reduced cost. City Manager Miller added other positions will become vacant due to retirements coming up in the next several months. The City plans not to fill those positions in this budget year. In some instances, the City will not be filling the positions in the next budget year. If the City does not have the dollars now to deal with its deficit, City Manager Miller asked what made them think they will have a windfall of dollars next year to fill all of the positions. He pro- posed that they deal with the financial situation now so they will not have to deal with it next year. City Manager Miller explained. If they take the expenditures against the revenue, City Manager Miller told the Commission the City will end up with $837,969 in the red relative to this year's operating budget. If they add the undesignated fund balance of $195,796 in the red, it will leave the City owing $1,033,765. Carrie Parker, Assistant City Manager, explained to Commissioner Olenik how they arrived at the figures shown on the sheets. Ms. Parker said the City was recommending that the Commission release the emergency reserve from $436,868 down to zero, which will reduce the $1,000,000 down to $596,897 in the red. - 4 - MINUTES - CITY COMMISSION BUDGET WORKSHOP MEETING BOYNTON BEACH, FLORIDA JUNE 21, 1990 She explained it was a paper deficit because the City did not fund the reserves. Ms. Parker further explained. For the record, Mayor Moore stated that City Manager Miller did not come on board until January, 1990 and had no responsibility whatsoever for the situation the City Commission was finding itself in. City Manager Miller stressed how hard the department heads had worked with 53 less positions. Commissioner Weiner determined the City's deficit at the end of this year will be $596,897. City Manager Miller pointed out it could be a surplus if they wished to apply the $700,000 balance they had from the $1,000,000 insurance check. Mayor Moore felt the $700,000 should be strictly relegated to getting the City out of the Tradewinds situa- tion. Commissioner Weiner asked if Mayor Moore was suggest- ing they let the $700,000 earn interest for the next ten years. Mayor Moore answered affirmatively and added it should not be spent for any purpose other than the purpose from which it emanated. If they invested the $700,000, City Manager Miller suggested they would probably be looking at $55,000 to $56,000 a year in interest, which could be applied against the debt service° 1990-91 Budget Mr. Swann informed Commissioner Weiner that the 6.7443 mill- age rate shown on this sheet was for the General Fund alone. City Manager Miller emphasized the figures were estimated figures because the City will not get the assessed valuations from the Property Appraiser's Office until July 1st. With reference to the estimated expenditures for the 1990-91 budget, City Manager Miller said the figure of $28,575,293 was cutting it real slim. Of the 53 positions, at least 25 are not continued into next year's operating budget from various departments. Other types of programs and services have been cut down to the bare bone. City Manager Miller explained the second sheet and said the City will have to come up with $2,245,906 to balance the budget. When they get into the budget workshops, they will have to make a decision of whether to cut services. Right now, the services are at a point where they cannot cut any more and still provide the same levels of service. City Manager Miller gave the community service program at Hester - 5 MINUTES - CITY COMMISSION BUDGET WORKSHOP MEETING BOYI~TON BEACH, FLORIDA JUNE 21, 1990 Park that is coming on line. If the Commission decides to have this, it will have to be added. He further mentioned the staffing of the N. W. fire station with 25 Firefighters and questioned whether the City could do with less. City Manager Miller felt the City could try to do with less. Mayor Moore wondered what the cost of manning Hester Park would be. He did not think they could have a brand new park sitting vacant. City Manager Miller did not think the park would have to be manned in the next fiscal year because the City will not go out to bid on the park until August or September, and it will take one year to construct the park. City Manager Miller said these are expenses the City will be looking at in the following year. They will also be looking at increases in recreational programming and parks mainten- ance. Some of those services can be looked at as being contracted out. Commissioner Artis entered the meeting at 8:48 A. M. City Manager Miller was trying to give the Commission an update on the City's financial position. He wanted the Commission to find out what the figures were from him, not from the papers or others. Commissioner Olenik thought the City Staff should furnish to the Commission what it feels will be necessary to accomplish the current Commission policies. The Commission can then decide whether it wants to continue those projects. City Manager Miller wanted an overall direction on the service level. If the Commission wanted to retain the municipal services, it would make his job easier to know which option to go with. If the Commission did not want to see a one mill tax increase, City Manager Miller knew he would have to go back to the City Staff and drop $1,737,000 from the budget. City Manager Miller proposed: (1) an increase of one mill in the millage rate; (2) to cut staffing for the new fire station from 25 to 16 Firefighters; and (3) to implement an interim service fee. With reference to the interim service fee, City Manager Miller explained to Mayor Moore that when commercial or residential property receives a certificate of occupancy, it does not go on the tax rolls until the following January. That means between now and January, they are receiving services from the City. City Manager Miller was proposing - 6 MINUTES - CITY COMMISSION BUDGET WORKSHOP MEETING BOYNTON BEACH, FLORIDA JUNE 21, 1990 that the City implement an interim service fee Ordinance. Discussion ensued. City Manager Miller wanted to obtain a proposal from the Joint Institute of Governments to develop an interim service fee. He stated he had been in Court on this in 1985, and he lost because he did not have a study by an outside firm that specialized in it with Economists and Attorneys. He also lost because it was based on value and not on a service fee. There was discussion about user fees. City Manager Miller apprised the Commission that the Fire Inspectors do inspec- tions without a charge. There should be a fee. Other areas the City is looking at are in the Engineering and Planning Departments. Commissioner Weiner did not want to see a one mill increase this year. If the Commission would not look at an increase in millage, City Manager Miller emphasized they would definitely be looking at a decrease in the service area. He reminded Commissioner Weiner the City has a deficit it has to deal with. Commissioner Weiner wanted the City Manager to come back with a 1/2 mill increase, so the Commission could look at those figures. City Manager Miller replied that a budget will be in the hands of the Commission on July 13th. The Commission will have 1½ weeks to review it, and then they will go into budget workshops and hearings. Vice Mayor Wische felt the same as Commissioner Weiner, that they could probably drop it to 1/2 mill or less. He felt there may be a way of dropping what they have without raising taxes. After discussion, Commissioner Olenik determined the $28,575,293 estimated to operate the City in 1990-1991 did not include Tradewinds. He noted there was a 2.5 million dollar increase in the operating costs of the City and stated they may need to raise taxes because of Tradewinds. Commissioner Olenik wanted the press to understand that. Commissioner Olenik asked why there was an increase in the cost of running the City. City Manager Miller replied the Fire DePartment was ~1. Mayor Moore asked how big an item the automatic cost of living increase would be. City Manager Miller answered it would be about $700,000. Mayor Moore thought the Commission could consider a moratorium on that. City Manager Miller replied, "except for the Unions." - 7 - MINUTES - CITY COMMISSION BUDGET WORKSHOP MEETING BOYI~TON BEACH, FLORIDA JUNE 21, 1990 Mayor Moore responded it would be either that or they should cut back on personnel. In response to a question from Vice Mayor Wische, City Manager Miller stated he would let the City Commission make the determination of what specific projects and activities they may be able to cut down. Commissioner Olenik wanted any service deviations from the current budget year listed on the budget City Manager Miller would be submitting to the Commission. Mayor Moore was not in favor of a 1/2 mill increase ~nd stated City Manager Miller was being given direction to further cut the budget. City Manager Miller replied he would do his best not to hit the one mill, but he was not going to propose a budget with a major reduction in services because he felt that was the Commission's responsibility. One mill would be the maximum increase. Mayor Moore asked Mr. Swann what a one mill increase in taxes would be for someone who has a $100,000 house. Mr. Swann replied it would be $75 a year for a home valued at $100,000 minus $25,000 for homestead exemption. City Manager Miller reminded the Commission that an aerial platform which cost $424,000 is being delivered to the City. At this time, there is no money in the budget to pay for it. The City will have to borrow the money, which will mean an increase in the expenditure side. The truck will be ready for the Fire Chief's Convention the end of July and will be on board in August. Mr. Swann suggested the City could get a bid for a lease. He stated he would get proposals and alternatives the Commission can look at. Commissioner Weiner agreed with Mayor Moore that the City should not use the funds from the $1,000,000 check to cover the deficit of $596,897. She guessed City Manager Miller would have to be prepared to swallow the $596,897 deficit in the budget to keep the millage rate down. Commissioner Olenik requested a listing of the major projects, and he wanted the departments to look at it. There was further discussion about the deficit and recycling. - 8 - MINUTES - CITY COMMISSION BUDGET WORKSHOP MEETING BOYNTON BEACH, FLORIDA JUNE 21, 1990 ADJOURNMENT The meeting properly adjourned at 8:10 A. M. ATTEST: City Clerk (Two Tapes) Vice Mayor · · ) Com~i% ~'ione r Commissioner - 9 - CITY OF BOYNTON BEACH ESTIMATED FUND BALANCE AS OF 09/30/90 FUND BALANCE 9/30/89 RESERVE - PREPAID EXPENSE RESERVE - ENCUMBRANCES RESERVE - SPECIAL PROJECTS RESERVE - EMERGENCY TOTAL RESERVES* * - RESERVE REQUIRED BY AUDIT & PREVIOUS COMMISSION ACTION SUBTOTAL: UNDESIGNATED FUND BALANCE 1989-90 BUDGET INFORMATION BUDGET - REVENUE ESTIMATED REVENUE BUDGET - EXPENDITURES ESTIMATED EXPENDITURES SUBTOTAL: REVENUE/EXPENDITURES 89/90 TOTAL ADJUSTED TOTAL** ** - RECOMMEND COMMISSION TO RELEASE EMERGENCY RESERVE 663,973 50,000 45,000 327,901 436,868 859,769 (195,796) 26,956,990 25,271,086 (1,685,904) 26,956,990 26,109,055 847,935 (837,969) 1,033,765) (596,897) Page 1 of Addendum A OPTION 1 1990-91 BUDGET (CALCULATED AT ROLL-BACK RATE - 6.6437) ESTIMATED REVENUE ESTIMATED EXPENDITURES 26,154,163 28,575,293 (2,421,130) OPTION 2 (CALCULATED AT CURRENT MILLAGE - 6.7443) ESTIMATED REVENUE ESTIMATED EXPENDITURES 26,329,387 28,575,293 (2,245,906 ADDITIONAL OPTIONS TO INCREASE REVENUE: INCREASE MILLAGE RATE TO 7.7443 (1 MILL INCREASE) CUT STAFFING FOR NEW FIRE STATION FROM 25 TO 16 FIREFIGHTERS 3. IMPLEMENT INTERIM SERVICE FEE TOTAL 1,737,000 243,000 300,000 2,280,000 Page 2 of Addendum A