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Minutes 07-15-03 CITY COMMISSION BUDGET WORKSHOP MEETING HELD IN THE LIBRARY PROGRAM ROOM, BOYNTON BEACH, FLORIDA ON TUESDAY, 3ULY 15~ 2003 AT 3:00 P.M. Present Gerald Broening, Mayor Broening Kurt Bressner, City Manager Mike Ferguson, Vice Mayor .lanet Prainito, City Clerk Ron Weiland, Commissioner Mack McCray, Commissioner Carl McKoy, Commissioner Call to Order Mayor Broening opened the workshop at 3:03 p.m. and turned the meeting over to the City Manager, Kurt Bressner. REVIEW OF PROPOSED CITY OPERATING BUDGET FOR FISCAL 2003-04 AND FINANCIAL OPERATING PLAN FOR FISCAL 2003-2007 Mr. Bressner asked the Commissioners if they wished to have a presentation by department, but the Commissioners agreed on a review by exception only. The Commissioners congratulated the department heads for doing an exceptional job in bringing them a balanced budget that did not cut essential services to the City's residents and was almost fiat at only 0.31% over the previous year's budget. Mr. Bressner also expressed his appreciation for the fine job done by all the operating departments who brought in expenses that were below the budgeted amount. He felt that this expressed the epitome of stewardship in the management of public funds. Mr. Bressner noted that they were reviewing the proposed operating budget for fiscal 2003-04. Also included in the agenda packets was a Financial Operating Plan for Fiscal 2003-2007. The projections in this Plan should be used as planning tools and not as spending authorizations. Mr. Bressner forecasted that the next two and a half years would be tight in terms of revenues and expenses, but that the picture should improve when the City began to realize the benefits of some of the redevelopment that is starting to occur. The proposed budget assumes that the property tax rate will stay the same as the previous year. Mr. Bressner did not recommend a rollback in the property tax rates. Mr. Bressner reviewed the following Funds: Meeting Minutes City Commission Budget Workshop Boynton Beach, Florida July 15, 2003 General Fund Budget Mr. Bressner stated that the General Fund had been a difficult one to manage due to the cost of pensions, cost of risk management, and normal inflationary costs associated with personnel, contractual obligations, commodities, and so forth. However, staff was able to bring expenses down to $1.4M under budget and was able to keep the financial fund balance surplus above the Commission's stated standard of 10% of the operating expenses. This reserve reflects 1.2 months of operating expenses, a thin margin but one that has been honored and kept. The General Fund was affected by increases of $1.7M due to investment losses in the Pension Funds (reflective of the national financial downturn after 9/11) and $1M in the Risk Management Fund to correct a deficit pointed out by audit. To pay for these costs, Mr. Bressner recommended that a portion of the unobligated General Fund Balance amounting to $1,794,347 be used. Operating budget cuts made up the rest of the deficit. Overall, the General Fund expenditures are expected to be 1.85% higher than the current fiscal year budget. This is inclusive of the above-mentioned pension and Risk Management expenses. Without these costs, the 2003-04 budget would be 2.7% lower than the current budget. Commissioner Weiland asked if the $1M for the Risk Management Fund could be "smoothed" over the next couple of years. Mr. Bressner stated that this could be done but the auditor did not recommend it. The user departments have underfunded the risk management operation and the reserve has gone down to the point that the auditors are concerned. In response to a question from Commissioner McKoy, Mr. Magazine stated that claims in excess of $1M in Worker's Compensation and liability were paid in 2002. Mr. Bressner recommended that while funded in the draft budget, the Neighborhood Grant and Improvement program should be reconsidered. In the past, one person handled neighborhood meetings and now multiple departments are attending them, under the direction of the City Manager's office. Also, in reference to the Woman's Club, Mr. Bressner stated that the program was a desirable, but not essential, program. An architectural review is pending and with increased insurance costs, the estimated cost of the Woman's Club Program will be close to$170K. If the Commissioners so desire, the item could be included in next year's budget, and it is possible that the Mizner Foundation will wish to share the cost of the program. Commissioner McCray inquired about the cost of the architectural review and Mr. Majors advised that it was between $20K and $30K. Mayor Broening stated that this was a project in which the CRA might wish to participate since they were in a financial position to do so, especially in light of the preservation aspects of the program. Meeting Minutes City Commission Budget Workshop Boynton Beach, Florida July 15, 2003 The Police Department sworn staff needs to be increased but Mr. Bressner stated that this could not be accomplished within the current revenue stream of the General Fund. A proposal given to the CRA by the Police Chief for additional staffing in the CBD and Heart of Boynton areas might help to meet this need. The Fire Assessment Fund is meeting the need for increased staffing in the Fire Department. Commissioner Weiland favored providing more police officers, feeling that they were spread too thin to insure the public safety at the present levels. He did not believe that having more officers in the CBD or Heart of Boynton areas was a necessity at this time, even though many people might wish to see more police presence in these areas. Mr. Bressner indicated that the cost of each new officer for the Police Department is $82K including salary, benefits, and equipment and that in order to obtain more police officers, revenues must increase. Commissioner Weiland felt that other City Departments would have to cut their budgets even more in order to achieve this increased staffing level. Mr. Bressner believes that all City departments shared the burden and cut their budgets as far as they could be cut. IVlayor Broening expressed the belief that this was a short-term issue and had to be handled that way. He applauded the Police Department for sharing the burden with the other City departments. He felt that revenues were continuing to grow, incrementally, and that the Police and Fire departments would continue to "do more with less" through operational efficiencies. He noted that the City's operational departments had managed to return almost $1.5M from last year's budget through operating in an efficient manner. He did not feel uncovered by the Police or the Fire Departments and trusted the professionals to let the Commission know if there were a problem. Water and Sewer Utility Fund The expenditures projected for 2003-04 are expected to be 3.24% above the current fiscal year budget. This Fund was also impacted by the Risk Management transfer and the increased Pension costs. There were no rate increases planned for next year. Golf Course Fund This fund is balanced at $2.6M. On an operating basis, the Golf Fund expenditures represent a 13.1% increase, much of which is attributable to the Risk Management transfer ($80K) and the establishment of a Renewal & Replacement Account ($100K). Mr. Bressner stated that due to a decline in patronage at the course, the expenditures should be closely monitored. The renewal and replacement account is necessary because the course is 20 years old and needs to renew in order to stay competitive. .loe Sciortino, Golf Course Manager, stated that they were having success by rewarding their patrons through the Link Card Loyalty Program. In response to a query from 3 Meeting Minutes City Commission Budget Workshop Boynton Beach, Florida July 15, 2003 Commissioner McCray about the surrounding residents and what was being done to attract them, Mr. Sciortino stated that they had found that it was more profitable to reward their loyal players than to attract the occasional players from the surrounding communities. They had increased their daily fees slightly so that the tourists would provide a more equitable share of the revenues. Mr. Bressner congratulated the Golf Course management and staff on their excellent strategic management of the Course. Solid Waste Fund Mr. Bressner praised the Public Works administrative staff for the excellent job they had done to improve productivity by modifying procedures. They were providing services at a very high level of quality. Overall, the expenditures for the Solid Waste Fund are projected to increase 5.26% over the current budget for Fiscal 2003-04. The cost increases are reflective of operating, pension, and risk management charges. Staff will be proposing a rate modification for multi-family accounts, but no rate increase for residential service is proposed. Mr. Bressner expressed appreciation for the efforts of the Commissioners to beat back legislative attempts by private industry to impact the City's rolloff business. The rolloff business contributes $1.:LM in revenues and is the reason the City can keep its level of service up and its rates down. Mass Transit Fund This Fund is subsidized by the Local Option Gas Tax and a transfer from the fund balance ($50K.) Projected expenses of $243,690 will be met by only $22,550 in operating revenue, bringing the viability of this Fund into sharp focus. This Fund returns only :LO cents on every dollar spent. Mr. Bressner realized that this was a popular program and that there would be many who might feel that any change, reduction, or elimination of the bus service would be very detrimental. Palm Tran could probably pick up part of the gap. A Regional Transit Authority is in the works but not created yet. Mayor Broening believed that the County planned to increase the Local Option Gas Tax. Taxicabs with a voucher system would be another alternative. The Commission will look at this more closely. Fleet f4aintenance Fund This Fund will essentially operate at status quo for this fiscal year with no new rolling stock. Mr. Bressner praised staff for being willing to exercise good stewardship by holding off on the replacement of equipment for a year. The only exceptions are six squad cars for the Police Department and two Fire Rescue medic units. Even though the 4 Meeting Minutes City Commission Budget Workshop Boynton Beach, Florida July 15, 2003 Fire Department and Police Departments are getting these vehicles, they are paying for them through their operational expenses. Risk Management Fund (Self-Insurance) This Fund has a current deficit of $2.9M, inclusive of projected insurance losses (claims) of $2.5M. This is a reserve fund for future and ongoing claims. Mr. Bressner noted that people were wearing their seat belts on company business now and that this was a good thing. He praised Chuck Nagazine for doing a great job in driving the costs of this Fund down. The projected expenses for the Fund are down by 4.75% over the prior budget. Recreation Program Fund The Tennis Center operation is being transferred to this Fund to allow staff to better determine rates sufficient to fund the program and set-aside a reserve for future capital improvements to the Tennis Center. ~[n two years, it will be evaluated with an eye towards identifying it as an Enterprise Fund that will pay for itself. Fire Assessment Fund This Fund projects expenses of $8.6M, which includes the completion of the southeast fire station and commencement of construction on the southwest fire station. Staff has told Mr. Bressner that the southwest fire station will not be completed in the next fiscal year. He hoped to be able to deliver that and will work with the architect and staff to try to bring this about. The budget includes money for the acquisition of property for the northeast fire station next fiscal year with construction the year after. The purpose of the northeast fire station is to assure equity of services throughout the community and provide a four-minute response time to all sections of the community. He apologized publicly for the delay. The City was having a hard time acquiring the property. Commissioner Weiland inquired whether Briny Breezes and Ocean Ridge were included and IVlr. Bressner stated that they were not included this year but might be the following fiscal year when their Interlocal Agreement expires. Commissioner McCray emphasized that it was important to continue whatever efforts had to take place to get a Fire Station for the northeast quadrant, the only quadrant of the City that did not currently have a fire station. He felt that all citizens should benefit equally from the money they had given towards the Fire Assessment. He also did not wish to see any reduction in the quality of the northeast station, in light of the changes in plans for the additions that were to be made to this station. Fire Chief Bingham assured him that the quality of the station would not suffer at all. 5 Meeting Minutes City Commission Budget Workshop Boynton Beach, Florida July 15, 2003 Commissioner Weiland asked when they could expect to see the southeast station in place. Mr. Bressner stated that the tenant had to be out by August 29, 2003 at the latest. The design is being developed at the staff level. Commissioner McCray asked that the Commission be kept in the communication loop on this issue. Commissioner Weiland spoke of the seven-year sunset clause in the Fire Assessment program and whether enough money would be collected to accommodate the changes in plan for the fire stations. Mr. Bressner stated that an analysis had been presented at a City Commission meeting the previous month and that he would get updated figures for the Commissioners. Mr. Bressner stated that the original plan had been to have a northeast headquarters fire station but they shifted to the southeast station because that property became available first. Fire Chief Bingham stated that the estimates for the northeast station would be reduced since the additional office space would be put at the southeast station instead. Commissioner McCray reiterated his hope that the quality of the northeast fire station would not be reduced and Fire Chief Bingham assured him that the only reduction would be in size, not quality. The pending fire assessment litigation was touched upon, including the effects of a negative finding against the City, if so rendered. Citywide Program Assessment Mr. Bressner reported that at the instigation of the City Commission, staff had undertaken an effort to identify and quantify the programs of each department in the City. This produced a list of some 622 separate programs with associated annual costs. Kurt Bressner, Wilfred Hawkins, Dale Sugerman, and Patricia Spoerri have begun an evaluation of each of the programs to determine whether the resources should stay the same, be reduced, be enhanced, be moved to other departments, be outsourced, or be eliminated, in an effort to maximize productivity and allocate resources wisely. The evaluation and recommendations should be completed in about a month. The desirability of having an interdepartmental team participate in this evaluation and recommendation phase of the project was discussed. Commissioner Ferguson stated that the most important step would be to determine which, and how many, of the 622 programs were deemed essential to the City's operation. Overlapping programs will also be addressed in the ongoing evaluation. Mr. Bressner praised staff on the act of faith it took to present an honest portrayal of costs and programs, trusting that the information would be fairly evaluated. This concluded Mr. Bressner's summary of the proposed 2003-04 budget. Mayor Broening asked for questions on budget items. 6 Meeting Minutes City Commission Budget Workshop Boynton Beach, Florida July 15, 2003 Commissioner McCray asked about the size of the reduction in shared revenues from the State after 9/11 and how that had impacted the City of Boynton Beach. Ms. Diane Reese, Finance Director, stated that the estimates she had received so far from the State on the sales and communication taxes had indicated a status quo condition from the previous year. There were no increases in State aid in any area. Mayor Broening stated that State assistance had declined, as a percentage of the General Fund, for the last five or six years. Ms. Reese stated that the Communications Service Tax that the City had hoped would increase had not and was status quo. Mr. Bressner elaborated on this, saying that this was based on a 1999 revenue base. On the Internet-based revenues like broadband service, cable modems, and business lines, the franchise taxes now go directly to the State. Commissioner McCray questioned whether the money for a potential pay increase for the Commissioners would have to be appropriated in the current budget and Ms. Reese answered in the affirmative; however, the budget did not have to be finally approved until early September. A tentative total figure for this option was stated as $29K. Mayor Broening noted that on page 20, there was only a very modest increase in the four-year projection for ad valorem taxes and asked on what the figure was based. Ms. Reese stated that the projection had been based on the experience of prior years. Mr. Bressner commented that there was an 18-month lag time between when a project was permitted and when that revenue began appearing in the City's revenues. Mr. Bressner stated that the Commission might wish to work with the League of Cities and others to see if this cycle could be improved upon to positively impact all governmental units. Commissioner McKoy wondered whether more stringent enforcement of the occupational license requirements would generate more revenue. Ms. Nancy Byrne replied that the City was contracted to do discovery in this area and that there was actually a very small percentage of businesses that were unlicensed. Vice Mayor Ferguson praised staff on producing a good budget. He said that they were stuck with $2.7M in unexpected costs and that this would happen almost every year. He thought that they started to bring the ad valorem tax rate down the previous year and that they could bring it down from 7.6% to 7.5% this next year. He said that the money could be found from one of four places: 1) The reserves; 2) Less conservative revenue estimates; 3) A smaller replacement to the Risk Management Fund; and 4) The $260K from the FPL franchise contract. Vice Mayor Ferguson wanted to see some kind of shared cost arrangement with the Woman's Club, perhaps with the help of the Mizner Foundation and the CRA. Ms. Reese stated that a reduction in the tax rate of from 7.6% to 7.5% would equate to $323,500. 7 Meeting Minutes City Commission Budget Workshop Boynton Beach, Florida .luly 15, 2003 Commissioner Weiland also wanted to see the tax rate reduced to 7.5%, as a minimum. He also favored funding only a portion of the Risk Management Fund deficit this year. IVls. Reese indicated that the Risk Management Fund had to be brought up to the requested level or the City would have an audit comment. The City will experience a one-time gain of $260K this year when the FPL franchise contract is signed. Mr. Bressner pointed out a concern that costs of right-of-way management to Public Works and Utilities might absorb this amount and that staff was still considering this issue. Mayor Broening also wished to see the millage rate go down, but did not believe that it had to be done right now. It had come down, marginally, over the last several years, without too much damage to either the operating budget or to people's pocketbooks. The budget could be left as is and if there were any windfalls between this workshop and the public hearings in September, when the rate is actually set, adjustments could be made then. Mayor Broening appreciated the honest and tough effort on the part of staff to present a lean, fiscally sound budget. Mr. Bressner displayed his family's property tax bill for the last three years, explaining how last year's decrease in the millage rate had cost him $12-14 less in property taxes, in spite of an increase in assessed value. ]~f the rate were to be kept at 7.6%, he would pay less in real dollars again. Commissioner McCray wanted to see the budget kept as it was presented. He was pleased with it and did not want to see further cuts. The meeting was duly adjourned at 5:38 p.m. ~'yor Br.oe~ing ATTEST: Vice SR~Scao rnd iCnOgl I 'sneSc reta ry (o716o3) Commissioner The Cit o Bo nton Beach "OFFICE OF THE CITY MANAGER 1 O0 E. Boynton Beach Boulevard P.O. Box 310 Boynton Beach, Florida 334250310 City Manager's Office: {561) 7426010 FAX: {$61] 742-6011 e-mail: city.managert~Ci, boyntortbeach.fl, us www. cl. boyntor~beach.fl, us To: City Commission From: Kurt Bressner, City Manager' "~ Date: July 8, 2003 Subject: Budget Addendum Sheets Attached please find a packet of materials printed on colored paper as follows: 1. Budget Transmittal Memo - several corrections and additions are in the memo. Most notably is a typo on page 2 of the memo concerning the property tax roll back. I do not recommend a roll back for this fiscal year. 2. Property Assessment Data- This is a useful sheet that shows the historic property assessment levels for the past nine years. Please note the increase in the assessed value in the CRA and the decrease in the tax rate for the City. 3. Summary of Revenues and Expenses - This is a helpful summary that should go in your budget fight after the budget memo. 4. Revisions to personnel schedule - This revision includes the 12 new fire personnel being hired in the Fire Assessment budget. 5. Copies of Articles on the Budget from the Post and Sun-Sentinel. With respect to the Post article, please see also an e-mail that I sent to Gariot Louima requesting a correction on the property tax comments. I don't know where the Post got the assessed value going up 8.8% as the number wa~s 11.7% He may have factored out the increase in the CRA value which did jump from $11SM to $219M in one year. Our total increase was $339M. Please insert these revision sheets in your budget. Thanks. Cc: CMLT The Cit o Bo nton Beach · OFFICE OF THE CITY MANAGER 1 O0 E. Boynton Beach Boulevard P.O. Box 310 Boynton Beach, Florida 334250310 City Manager's Office: (561) 7426010 FAX: ($61) 742-6011 e-mail: city. manager~ci, boyntor~beach,fl. us www. ci. boyntor~bea cb.fl, us To: City Commission From: Kurt Bressner, City Manager Date: July 7, 2003 (Revised July 8, 2003) Subject: Presentation of City Operating Budget for Fiscal 2003-04 and Financial Operating Plan for Fiscal 2003-2007 I am pleased to transmit the proposed Operating Budget for Fiscal 2003-04 and a Financial Operating Plan for Fiscal 2003-2007. The Capital Improvement Budget reflects the recent City Commission decision on bond issues. Exclusive of construction projects, the total proposed operating budget of the City for 2003-04 is increased by 0.31% over the current fiscal year budget. Given payroll and benefit obligations in the range of 8% (larger due to pension cost increases), supply cost increases averaging 4 % and contract services price increases averaging 3%, this is an austere budget. The Budget Portion of this document is the statutory spending plan that the City Commission must approve following review and revision, as appropriate. The Financial Plan portion of the document is an advisory financial snapshot into the future designed to give the Commission and staff a longer-range perspective and to assist in fiscal and program planning. General Fund Budget Pursuant to Commission policy of retaining 10% of General Fund operating expenditures as a reserve, the budget as presented is balanced. The General Fund, as presented will end this fiscal year with revenues below estimates by approximately $30,000. The estimated expenditures this fiscal year will be approximately $1.4 M under the budgeted amounts. This allows the opening balances in the General Fund to remain above the City's financial reserve policy of 10% of operating expenses. This amount currently is $4.8 M. This reflects about a 1.2 month expenditure reserve. It should be noted that the approved 2002-03 Budget authorized use of $3.8M of the un-obligated General Fund reserves (this is the amount over and above the 10% set- aside.) With the 2002-03 expenditures running $1.4 M less than budgeted, the amount actually used was $2.4M. With respect to property tax revenues, the proposed budget assumes that the City Commission would wish keep the tax rate the same as last year. Last year, the Commission rolled back the property tax rate to help compensate for the Fire Assessment revenues being received. The rate was rolled back to 7.6000% plus .3950% for debt service for a total of 7.995%. The projected tax rate for 2003-04, inclusive of debt service is slightly lower at 7.984%. In the event the City Commission wishes to roll back the tax rate, the new base rate would be 6.987%. Including the debt service rate of .304%, the final adjusted property tax rate would be 7.3674%. In order to compensate for this revenue reduction, the General Fund would need to be cut another $1.9M or the like amount transferred in from the un-obligated General Fund reserve. I am recommending that the City Commission not roll back the property tax again this year. Looking to next fiscal year, the General Fund is projected to receive $48.4 M in revenues. The budget for the General Fund as originally proposed by departments showed a projected deficit of $5.0 M over revenues. In reviewing the budget, I was required to cut back a number of new personnel requests, adjust operating programs and defer several expenses. The resulting budget is still $1.8 M over operating revenues. These cost include the following items: Increase in Pension Contributions by General Fund: General Employees Pension: $ 502,674 Fire Pension $ 352,873 Police Pension $ 875,595 Total Pension Increases $1,731,142 (This is a statutory obligation) Risk Management Fund Deficit $1,000,000 (This is recommended to eliminate deficit in this fund per Audit) Total Pension and Risk Mgt. Costs $2,731,142 To pay for these costs, it is recommended that a portion un-obligated General Fund Balance amounting to $1,794,347 be used. This amount covered the above two major costs. The additional $936,795 of additional pension and Risk Management costs was obtained in the form of operating budget cuts. While funded in the draft budget, the neighborhood grant and improvement program needs re- focus, in my view. The City Commission has embarked on a different process for neighborhood meetings. You have requested multiple departments to be present at meetings. The old model of one staff member being responsible for these activities is being changed to a team approach coordinated by the City Manager's Office. The Woman's Club program is a desirable, but not essential activity. We proposed the program in response to a concern expressed over the continued maintenance of a historic structure. If the Mizner Foundation were to take on this responsibility, the same goal would be met via the private sector. The City could offer expertise and assistance on a case-by-case basis, especially in the area of assisting the Mizner Foundation in obtaining grants, joint purchasing and renting the facility for public events. We are in the process of obtaining an architectural analysis of the building to evaluate its condition. We are doing so to make sure there are no major rehabilitation costs, in the event the Commission wishes to re-authorize the program in next year's budget. With increased insurance costs, the 2 America's Gateway to the Gulfstream estimated cost of the Woman's Club Program will be in the vicinity of $170,000. In addition to these, there is a long-term need to increase the size of the Police Department sworn staff. This cannot be accomplished within the current revenue stream of the General Fund. However, the Police Chief has developed an innovative program that has been presented to the CRA, whereby that agency will provide funding for increased presence in the CBD and Heart of Boynton areas. This concept was discussed at an earlier City Commission and CRA workshop. This program will help moderate the increase in calls for service in the CBD and Heart of Boynton areas. The increase in the staffing levels for the Fire Department has been accommodated in the Fire Assessment Fund. It should be noted that in three years, the expense base for the 24 new personnel hired under the Fire Assessment, would need to be paid out of the General Fund. In terms of other personnel in the General Fund, the proposed 2003-04 budget projects a reduction of 9.13 positions. The decimal points reflect changes in part-time positions. There are no lay-offs of positions in the General Fund. The changes reflect either shifts in personnel from one position to another or non-replacement of vacant positions. Overall, the General Fund expenditures are expected to be 2.85% higher than the current fiscal year budget. This is inclusive of the above-mentioned pension and Risk Management expenses. Without those costs, the proposed 2003-04 General Fund budget would 2.7% lower than the current budget. Review of Other Funds Water and Sewer Utility Fund The revenues and expenditures for this the operating portion of this fund are balanced at $28.4 M. Four staff positions are proposed for next year. These are CADD personnel transferred from the Building and Engineering Departments. The City is consolidating data entry and correction for the computer aided design system and our records management system. No rate increase for water or sewer service is projected for 2003-04. Overall, the expenditures projected for 2003-04 in this fund is expected to be 3.24% above the current fiscal year budget. As with the General Fund, the impact of pension costs and the Risk Management transfer was the reason for the budget increase. Without these costs, the Utility Fund Budget would be 1.3% lower. Golf Course Fund This fund is balanced at 2.6M. No personnel changes are planned for Fiscal 2003-04. The proposed 2003-04 Budget represents a reduction of 10.4% over the current fiscal year budget. However, this reduction includes the end of debt service payments, which ended this fiscal year. On an operating basis, the Golf Fund expenditures represent a 13.1% increase. Much of the increase in the Golf Course Fund is attributable to increased cost of Risk Management ($80,000) and the establishment of a Renewal and Replacement Account ($100,000). Because of a decline in patronage at the course, these expenditures need careful monitoring. There has been a general 3 America's Gateway to the Gulfstream decline in golf-based activity in South Florida. Solid Waste Fund This fund is balanced with revenues and expenses of $6.6M. The staff will be proposing a rate modification for multi-family accounts. A comparison of private sector service fees indicates that a rate modification is appropriate. No rate increase for residential service is proposed. We will continue to monitor legislative attempts to eliminate our market share for the roll-off business. This revenue accounts for approximately $1. ! M a year in revenue that is used to keep the residential rates stable. In addition, the City staff will be exploring the expansion of the cart system into residential areas not currently served by this program. Overall, the expenditures for the Solid Waste Fund are projected to increase 5.26% over the current budget for Fiscal 2003-04. This fund has enjoyed cost efficiencies over the past three years due to better utilization of equipment and personnel. The cost increases this year are reflective of operating, pension and Risk Management charges. Mass Transit Fund This fund substantially is funded by a subsidy of the Local Option Gas Tax. Total expenses of $243,690, as recommended for the 2003-04 budget will be met by only $22,550 in operating revenue. The balance of the expenses is met from a transfer from the fund balance ($50,000) and the Local Option Gas Tax ($170,140). The viability of this program needs to be discussed in Fiscal 2003-04. Fleet Maintenance Fund The Fleet Maintenance Fund is responsible for the maintenance and replacement of the City's vehicle and equipment fleet. Due to budget constraints in the General Fund, the Fleet Maintenance fund will essentially operate in a "status-quo" basis for next fiscal year. All vehicles except for six squad cars and two fire-rescue units will be held for an additional year. As a result, the expenditure requests for this fund are down 29.8% over the prior fiscal year budget. The fund has a fund balance of approximately $5 M. Therefore, the one-year suspension of funding and replacement will not have an adverse impact Self-Insurance Fund. As noted in discussion of the General Fund, the Self-Insurance Fund has a current deficit of $2.9M. This is inclusive of a projection of insurance losses (claims) of $2,500,000. These are not actual losses but an estimate of possible losses based on an analysis of outstanding lawsuits and claims history. Each year, the amount is reviewed as a set-aside and adjusted. Next year, the set-aside remains at $2.5M. This does not mean that we spend this amount; it is a reserve fund for future and ongoing claims. The projected expenses for the fund are down by 4.76% over the prior budget. 4 America's Gateway to the Gulfstream Recreation Program Fund The cost of the Tennis Center operations budget is being transferred to the Recreation Program Fund to allow staff to better determine rates sufficient to fund the program and to set-aside a reserve for future capital improvements to the Tennis Center. Because of this transfer, the budget for the Recreation Program Fund increased by 14.61%. Fire Assessment Fund - Next fiscal year projects expenses of $8.6M including completion of the Southeast Fire Station and construction on the Southwest Fire Station. Fire Department staff projects that the Southwest Station (Woolbright) will not be completed until the first quarter of 2004-05. The projected Fire Assessment need for 2003-04 is $2.6 M, the same as the current Fiscal Year. The rate then begins to drop in 2004-05 to $1.2M then ends the remaining three years at under $1 .OM. Construction on the Northeast station is not projected to start until 2004-05. Land acquisition for the Northeast station is scheduled for next fiscal year however. The Fire Assessment Fund budget also anticipates hiring 12 additional personnel to complete the staffing for the SE Fire Station. The first 12 personnel were hired this fiscal year. In addition, the City purchased a new fire engine that will go into the new station. This vehicle was delivered and placed into service last month. The current fund balance of $5.2M will be exhausted next fiscal year, based on this construction schedule. A special thanks goes to the Budget Review Team of Diane Reese, Dale Sugerman, Mary Munro, Wilfred Hawkins, and JeffLivergood for their hard work on the document. Special thanks goes also to the department heads that went back into their budgets to make additional cuts that I requested. Cc: Department Heads 5 America's Gateway to the Gulfstream zz ~0 ~ , , ~.~:.~ ~ ._ ~8~ o oo o ~mo 008 ~.~'~.. ~ - o o Io oo ~ o o o ........ ~ ~ 0 ~ 0 ·  ~ m ~.-m_~ 0 0 0 ~._ ~ 0 _ _ · =~ ~ ~ ~ ._ ~ ~ ~ o~ ~ o ~ o Boynton property tax rates unchanged Page 1 of 2 Pah-nBeach P(×st.com PRINTTHIS Tuesday, July 8 ~ Boynton property tax rates unchanged Roommate.corn By Gariot Louima, Palm Beach Post Staff Writer Tuesday, July 8, 2003 BOYNTON BEACH -- With a $1.5 million surplus from the current budget and an 8 percent increase in the city's overall value, City Manager Kurt Bressner recommends the city commission keep property tax rates where they are. But the average homeowner can expect to pay 8.8 percent more in taxes next year based on the increase in property values over the year. Under the proposed budget, the city's tax rate would remain at $8 per $1,000 of taxable property value. The owner of a home assessed at $150,000 and covered by the $25,000 homestead exemption, for example, would pay $1,000 in taxes next year. Bressner said Monday the $48 million spending plan for the budget year beginning Oct. 1 simply maintains services the city already provides. Spending will increase by less than 1 percent, and most of that is going to pay salary raises and employee pensions. Nine staff positions will be dissolved, but no employees will lose their jobs, he said. Also, the city is not expecting to pay for any new programs or hire any new people. The city's community redevelopment agency -- which maintains a separate budget -- might pay for extra police patrols in the downtown business district and the Heart of Boynton redevelopment area. The city budget also assumes the commission will continue to collect the special fire assessment, which will cover the cost of two new fire stations and about a dozen new firefighters. http://pa~mbeachp~st.printthis.c~ickabi~ity.c~rn/pt/cpt?acti~n=cpt&expire=&ur~~D=684~ 995... 7/8/2003 Boynton property tax rates unchanged Page 2 of 2 Vice Mayor Mike Ferguson said he will vote against the assessment when the time comes. "They have enough money to do what they want to do without getting any more money," he said. The city will also issue $8.4 million in bonds to pay for a slate of construction projects. That amount will be repaid with an existing public service tax. For an additional $10.6 million in construction projects -- including the $6 million renovation of the city library -- voters will have to approve a 6.25 percent tax hike in November. gariot_l oui m a~pbpos.t.~com Back to 'Fop Find this article at: http://www, pa~mbea~hp~st~c~m/~~ca~news~~~nten~Jaut~~epaper/editi~ns~tue~day/s~uth-~~unty-f3a~321 fl 68bfO9eOOa6.html r- Check the box to include the list of links referenced in the article. ~ ::~::: ..... http ://palmbeachpost.printthis.clickability.com/pt/cpt?action=cpt&expire=&urllD=6841995... 7/8/2003 Boynton's proposed property tax rate drops a penny Page 1 of 2 Sponsored by Sun-Sentinel ' :om c ir rbuilfler HOHE NEWS SPORTS ENTERTAINHENT CLASSIFIED BUSINESS WEATHER SHOPPING http://wwwv.sun~sentine~.c~-m-/news/~ca~/pa~mbeach/~pb~ynt~n~8ju~8~74~48~9 stoo,?coll=sfla- news-palm Boynton's proposed property tax rate drops a penny By Beth P. Kranc Staff Writer July 8, 2003 Boynton Beach residents may see the slightest of property tax savings in the coming year, a preliminary city budget released Monday shows. The owner of a house assessed at $150,000 with a homestead exemption would pay $997.55. That means a yearly savings of $1.83. However, the small tax break won't help homeowners whose property values rose during the past year. Overall, Boynton Beach's taxable property values jumped 12 percent this year, said Mary Munro, city budget coordinator. As proposed, the city's tax rate would fall one penny -- from $7.99 to $7.98 per $1,000 of taxable property value -- because the city's debt payments have decreased. City Manager Kurt Bressner said Monday the city needs to keep extra property tax revenue this year and use $1.8 million of its $14.5 million savings to maintain current services. The budget for the cOming year is particularly tight because of expected insurance expenses and $1.7 million in additional pension costs, he said. The proposed $102.1 million budget keeps overall spending nearly flat, with a .31 percent increase. The proposed $50.2 million general fund, which covers day-to- day operations, shows spending up 2.9 percent. Vice Mayor Mike Ferguson said Monday he would like the tax rate lower. He thinks the city could give residents a bigger break if it cut jobs as employees retire. While the proposed budget eliminates five vacant positions, Ferguson said, the city could function with up to 50 fewer positions, careerbuilder ,- Bressner said he asked department heads to cut back requests for more staff and to The smaa~ way keep their budgets close to current amounts, t0 lind a bette, job. One exception is the Fire Department, which could get 12 new firefighters for a ' ' new southeast-side station. They would be paid from the fire assessment fund, which has an estimated $8.4 million expenses for the coming year. That includes construction of a http://www.sun-sentine~.c~m/temp~ates/misc/printst~ry.jsp?s~ug=s~-pb~ynt~n~8ju~~8&secti... 7/8/2003 Boynton's proposed property tax rate drops a penny Page 2 of 2 station for the city's southwest side. Residents shouldn't see an increase in water and sewer fees or the fire assessment, according to the proposed budget. Public workshops on the budget are scheduled for 3 p.m. July 15, 16 and 17 at City Hall, 100 E. Boynton Beach Blvd. The commission is to adopt the final 2003-04 budget in September. Beth P. Krane can be reached at bpkrane@sun-sentinel.com or 561-243-6631. Copyright © 2003, Sou?h Florid~a Su_n-~'entinel http://www.sun-sentinel.com/templates/misc/printstory.j sp?slug=sfl-pboynton08jul08&secti... 7/8/2003 Bressner, Kurt From: Bressner, Kurt ~ent: Tuesday, July 08, 2003 11:40 AM o: 'gariot_louima@pbpost.com' Cc: Munro, Mary; Segal, Wayne; Reese, Diane; Hawkins, Wilfred Subject: Budget Article in Today's Paper Gariot, Minor correction needed in the article... BOYNTON BEACH -- With a $1.5 million surplus from the current budget and an 8 percent increase in the city's overall value, City Manager Kurt Bressner recommends the city commission keep property tax rates where they are. But the average homeowner can expect to pay 8. 8 percent more in taxes next year based on the increase in property values over the year. Under the proposed budget, the city's tax rate would remain at $8 per $1,000 of taxable property value. The owner of a home assessed at $150,000 and covered by the $25,000 homestead exemption, for example, would pay $1,000 in taxes next year. Specifically, the average property owner will not pay 8.8% more in taxes to the City. Here's why... Go to this web page: http://sun6.dms.state.fl.us/dor/property/limitations.html The Department of Revenue publishes caps on assessed values for homes subject to the "Save our Homes" amendment and for disabled and elderly. The cap on the three types of residential property is: S~ve our Ho-me~ 2.40% - T°~a~ ~nd P~r~an~n~ Disability _-1.60% _- Addl I--Iomgstead: Age over6~ __1_._6_0~/o ._ This means that while Boynton's total assessed value increased 8.8% an individual homeowner would have their property assessment increase by a range of 2.4% down to 1.6% depending on if the owner was disabled, elderly or not. Just for example, I took my home and applied the past two years and the proposed tax rate to my property. Since we own the home, receive the $25,000 homestead exemption, we qualify for the 2.4% increase cap. If you look at the past two years you will see the impact of the Save our Homes on prior assessments. We paid less in property tax to the City in 2002 and are projected to pay less again in 2003. Generally, persons who own residential property as their principal place of residence (with the homestead exemption) will see a decrease in the actual taxes paid to the City. Here is the data: ~!tY ~of.Bo~yn_tonB~a~h_p__roperty Tax Information 7-Jul-03 Based on Ana~sis of Propert3(~O~_n.e_d__by Kurt and Diane Bressner_ 28 Lawrence Lake Dr. B~ynton Beach, FL 33436 '?roPerty ic~ontr0]"#- .... ,2001 !2001 .2001 iValue Exemption Tax Value i0874~ 45 i8 13 0-0~ ~280 - £$ 181,107 ~$ 25,000 ~__$_ 1~5_6_,_107 - M_i!~_e- i _-Faxes :2001 Paid 2001 City of Boynton Beach - _-7.8160' 7 $ 1,220.13 ~i.ty of Boynton Beach Debt __0.4113 _ _ $ 64.21. Total - 8.2273 $ 1,284.34 PropertyControl#- -~0~2 ..... ~_-2002 ~2_002 % Value - __ Value Exemption Tax Value Increase 08 43 4518130000280 $ 184,005 .$ 25,000 _$ 159,005 1.86% iMiilage ~ .Taxes _ . 2002 Paid 2002 City of Boy_nton_ B_e_ach ~7_.6__0_00 _ '- $1,208.44 City of Boynton Beach Debt .0.3950 _ _$ . _62-_81 _ Total .7._9_950 _ _$ 1,271.24 Estimated Estimated Estimated Estimated _Property Control # ' - 2003_ 2003 '2~0~-- % Value Value Exemption __Tax. _v_ .a l _u e__ _ Increase .084345_1_81_.30000_280. _ _ $188,237 $ 25,000 $ 163,237 ~2:_6_6% Estimated Estimated ........ Millage Taxes 2003 Paid 2003 Cit~y~ of Boynton Beach 7.6000 $ 1,208.44 ~!~of Boyn_ton Beach Debt 0.3040 $ 48.34 Se~._FIo_ridaDepartment of Reyen_ue --- Fl_o~'!.da_PEop_e_rt~y_Tax V~! .u._.a_t!_0~.a_nd Income Tax Limitation Rat~s_ httD://sun6.dms.state.fl.us/dor/prop__erty/limitations.html The maximum amount of assessed value increase for homes covered under "Save our Homes" amendment is as follows: Save our Homes 2.40% Total andPerman_e__r~ Disa_bi!i_t.y- 1.60% Addl Homestead-Age over_65 _ _1.60% City of Boynton Beach Property Tax Information 7-Jul-03 Based on Analysis of Property Owned by Kurt and Diane Bressner 28 Lawrence Lake Dr. , Boynton Beach, FL 33436 Property Control Cf 2001 2001 2001 Value Exemption Tax Value 08 43 45 18 130000280 $ 181,107 $ 25,000 $ 156,107 Millage ,Taxes .,_ i 2001 Paid 2001 City of Boynton Beach 7.8160! $ 1,220.13 City of Boynton Beach Debt 0.41131 $ 64.21 Total 8.2273 $ 1,284.34 Property Control # 2002 2002 2002 % Value Value Exemption ~ Tax Value Increase 08 43 4518130000280 $ 184,005 $ 25,000 $ 159,005 1.86% Millage . Taxes 2002 ';Paid 2002 City of Boynton Beach 7.6000 $ 1,208.44 City of Boynton Beach Debt 0.3950 . $ 62.81 Total 7.9950 $ 1,271.24 Estimated Estimated Estimated Estimated Property Control cf 2003 2003 2003 % Value Value Exemption Tax Value Increase 08 43 4518130000280 $ 188,237 $ 25,000 $ 163,237 2.66% Estimated ~Estimated Millage ;Taxes 2003 Paid 2003 City of Boynton Beach 7.6000' $ 1,208.44 City of Boynton Beach Debt 0.3040 $ 48.34 . Total 7.9040 $ 1,256.78 See Florida Department of Revenue -- Florida Property Tax Valuation and Income Tax Limitation Rates http://sun6.dms.state.fl.us/dor/property/limitations.html The maximum amount of assessed value increase for homes covered under "Save our Homes" amendment is as follows: Save our Homes 2.40% [_T_otal and Permanent Disability 1.60% IAddl Homestead - Age over 65 1.60% CITY OF BOYNTON BEACH PROGRAM EVALUATION CODES Performance Measurement Program CATEGORIZE: Select a code from the list below: ES: Essential Service Functions that address the safety, survival, and health of the citizens/employees and is essential to the department's purpose. SS: Social Service Functions that address the social welfare of the citizens/employees and serves the department's purpose. DS Discretionary Service Functions that contribute to the well being, convenience, and quality of life of the citizen/employee and serves the department's purpose. PE: Program Enhancements Functions that enhance the department, division, or city's primary purpose and services. RANK the program/project using the following criteria: 10 Mandated by Law 8 Necessary to meet the department's essential purpose 6 Essential to support other service(s) or functions in the city - (explain) 4 Contributes > 50% value to the department's purpose 2 Has limited Value i.e. contributes 20%-49% value to the department's purpose 0 Nice to have, but contributes < 19% value to the program's purpose Note: The numbers 1,3,5,7 and 9 are left undefined to allow for gradations. Review Codes: 1. Retain in current state 2. Reduce cost 3. Increase revenue 4. Outsource internal 5. Outsource external 6. Improve process/service 7. Privatize 8. Sell 9. Terminate Florida Property Tax Valuation and Income Limitation Rates Page 1 oi'2 State of Florida Departme nt of Revenue '~~ Property> Florida Property Tax Valuation and ]:ncome Limitation Rates Florida Property Tax Valuation and ]:ncome Limitation Rates !Save Our Homes As provided in Section 193.155(:t), F.S., beginning in 1995, or the year after the property receives homestead exemption, an annual increase in assessment shall not exceed the Save Our Homes Annual Increase lower of the following: Year ' CPI Change Cap a. Three percent of the assessed value of the 2003 2.40% 2.40% property for the prior year; or 2002 1.60% 1.60% b. The percentage change in the Consumer 2001 3.40% 3.00% Price Index (CPI) for all urban consumers, 2000 2.70% 2.70% U.S. city average, all items :[967 = 100 or successor reports* for the preceding 1999 1.60% 1.60% calendar year as initially reported by the 1998 1.70% 1.70% U.S. Department of Labor, Bureau of Labor 1997 3.30% 3.00% Statistics. 1996 2.50% 2.50% 1995 2.70% 2.70% *The current successor report is the 1982 - 84 = 100 current series. The CPI change amounts given in the chart at right are from the year prior to the year listed. Total and Permanent Disability Income Limitations Total and Permanent Disability :Income Year % Change Cap Limitations 2003 1.60% $21,055.00 2002 2.80% $20,723.00 This represents the maximum income limitation for the total and permanent disability exemption 2001 3.40% $20,159.00 granted under the provisions of section 196.101 2000 2.20% $19,496.00 (4)(b), F.S. The limitation is adjusted annually 1999 1.60% $19,076.00 by the percentage change in the average cost- 1998 2.30% $18,776.00 of-living index during the immediate prior year. 1997 3.00% $18,354.00 1996 2.80% $17,819.00 1995 2.60% $17,334.00 Cost of Living Adjustments % Adjusted Income Year Change Limitation Single Person Couples Cost of Living Adjustments http ://sun6. dms. state, fl. us/dor/property/limitations.html 7/15/2003 ?onc'a ?ropert,.v Tax VaJuation and. This represents the maximum incorne limitation 2003 1.60% $23,874.00 $26,80300 for exemptions gran~ted urder the provisions of 2002 2.80% $23,498.00 $26,381.00 section 196.1975(4), F.S. The limitation is 2001 3.40% $22,858.00 $25,662.00 adjusted annually by the F,ercentage char~ge in 2000 2.20% $22,106.00 $24,818.00 the annual cost-of-living inclex during the immediate prior year. 1999 1.60% $21,630.00 $24,284.00 1998 2.30% $21,289.00 $23,902.00 1997 3.00% $20,810.00 $23,365.00 1996 2.80% $20,204.00 $22,684.00 1995 2.60% $19,654.00 $22,066.00 Additional Homestead Exemption for Persons 65 and Older As provided in Section 196.075, F.S., in accordance with s. 6(f), Art. V!! of the State Constitution, the board of county commissioners Senior Homestead Exemption of any county or the governing authority of any municipality may adopt an ordinance to allow' Adjusted Income an additional homestead exemption of up to Year % Change Limitation $25,000 for any person who has the legal or equitable title to real estate and maintains 2003 1.60% $21,599.00 thereon the permanent residence of the owner', who has attained age 65, and whose household 2002 2.80% $21,2§9.00 income does not exceed the current adjusted 2001 3.40% $20,680.00 income limitation in the chart to the right. This exemption applies only to tax millage levied by the county or city that enacts the exemption, and does not apply to millage of school districts or other taxing authorities. FAQs i C_9_mm~e_o_t_s/Su_ggestjo_n__s_? t Technical Problems? ] C9_n_t_a_c.t_Us_ Haint:ained by Florida Depar'~rnent of Revenue _D.j_scJaimer~Security State_m_ent, Privacy Statement and Conditions of Use http ://sun6.dms. state, fl.us/dor/prop erty/limitations.html 7/15/2003 Florida Property Tax Valuation and Income Limitation Rates Page 2 of 2 This represents the maximum income limitation 2003 1.60% $23,874.00 $26,803.00 for exemptions granted under the provisions of 2002 2.80% $23,498.00 $26,381.00 section 196.1975(4), F.S. The limitation is 2001 3.40% $22,858.00 $25,662.00 adjusted annually by the percentage change in the annual cost-of-living index during the 2000 2.20% $22,106.00 $24,818.00 immediate prior year. 1999 1.60% $21,630.00 $24,284.00 1998 2.30% $21,289.00 $23,902.00 1997 3.00% $20,810.00 $23,365.00 1996 2.80% $20,204.00 $22,684.00 1995 2.60% $19,654.00 $22,066.00 Additional Homestead Exemption for Persons 65 and Older As provided in Section 196.075, F.$., in accordance with s. 6(0, Art. VII of the State Constitution, the board of county commissioners Senior Homestead Exemption of any county or the governing authority of any municipality may adopt an ordinance to allow Adjusted Income an additional homestead exemption of up to Year % Change Limitation $25,000 for any person who has the legal or equitable title to real estate and maintains 2003 1.60% $21,599.00 thereon the permanent residence of the owner, who has attained age 65, and whose household 2002 2.80% $21,259.00 income does not exceed the current adjusted 2001 3.40% $20,680.00 .. income limitation in the chart to the right. This exemption applies only to tax millage levied by the county or city that enacts the exemption, and does not apply to millage of school districts or other taxing authorities. F~AQs_ I Comments/Sugges_tions? I Technical Problems? 1 Contact Us Flaint:ained by Florida Department of Revenue Disclaimer, Se_cu_rity_Statement, Privacy Statement and Conditions of Use http ://sun6. dms. state, fl. us/dor/property/limitations.html 7/15/2003 Florida Property Tax Valuation and Income Limitation Rates Page 1 o~ 2 State of Florida _ Department of evenue ~/ k)IHOmelBusir~essesiChitd Support , ormsiGovernmentlLaw Property ~f Property> Florida Property Tax Valuation and Income Limitation Rates Florida Property Tax Valuation and Income Limitation Rates Save Our Homes As provided in Section 193.155(1), F.S., beginning in 1995, or the year after the property receives homestead exemption, an annual increase in assessment shall not exceed the Save Our Homes Annual Increase lower of the following: Year ' CPI Change Cap a. Three percent of the assessed value of the 2003 2.40% 2.40% property for the prior year; or 2002 1.60% 1.60% b. The percentage change in the Consumer 2001 3.40% 3.00% Price fndex (CP!) for all urban consumers, 2000 2.70% 2.70% U.S. city average, all items 1967 = 100 or successor reports* for the preceding 1999 1.60% 1.60% calendar year as initially reported by the 1998 1.70% 1.70% U.S. Department of Labor, Bureau of Labor 1997 3.30% 3.00% Statistics. 1996 2.50% 2.50% 1995 2.70% 2.70% *The current successor report is the 1982 - 84 = 100 current series. The CP! change amounts given in the chart at right are from the year prior to the year listed. Total and Permanent Disability Income Limitations Year % Change Cap Total and Permanent Disability Income Limitations 2003 1.60% $21 055.00 2002 2.80% $20 723.00 This represents the maximum income limitation for the total and permanent disability exemption 2001 3.40% $20 159.00 granted under the provisions of section 196.101 2000 2.20% $19 496.00 (4)(b), F.S. The limitation is adjusted annually 1999 1.60% $19 076.00 by the percentage change in the average cost- 1998 2.30% $18 776.00 of-living index during the immediate prior year. 1997 3.00% $18 354.00 1996 2.80% $17,819.00 1995 2.60% $17,334.00 Cost of Living Adjustments % Adjusted Income Year Change Limitation Single Person Couples Cost of Living Adjustments http://sun6, dms.state.fl.us/dor/property/limitations.html 7/15/2005 CITY OF BOYNTON BEACH, FLORIDA The Cit o Bo nton Beach 'OFFICE OF THE CITY MANAGER 1 O0 E. Boynton Beach Bouleuard P.O. Box310 Boynton Beach, Florida 334250310 City Manager's Office: (.551) 7425010 FAX: (551} 742-5011 e-mail: city. manager~ci, boyntor~each..fl, us www. ci. boynto r~beach.fl, us To: City Commission From: Kurt Bressner, City Manager~~I/~' Date: July 7, 2003 Subject: Presentation of City Operating Budget for Fiscal 2003-04 and Financial Operating Plan for Fiscal 2003-2007 I am pleased to transmit the proposed Operating Budget for Fiscal 2003-04 and a Financial Operating Plan for Fiscal 2003-2007. The Capital Improvement Budget reflects the recent City Commission decision on bond issues. Exclusive of construction projects, the total proposed operating budget of the City for 2003-04 is increased by 0.31% over the current fiscal year budget. Given payroll and benefit obligations in the range of 8% (larger due to pension cost increases), supply cost increases averaging 4 % and contract services price increases averaging 3%, this is an austere budget. The Budget Portion of this document is the statutory spending plan that the City Commission must approve following review and revision, as appropriate. The Financial Plan portion of the document is an advisory financial snapshot into the future designed to give the Commission and staff a longer-range perspective and to assist in fiscal and program planning. General Fund Budget Pursuant to Commission policy of retaining 10% of General Fund operating expenditures as a reserve, the budget as presented is balanced. The General Fund, as presented will end this fiscal year with revenues below estimates by approximately $30,000. The estimated expenditures this fiscal year will be approximately $1.5 M under the budgeted amounts. This allows the opening balances in the General Fund to remain above the City's financial reserve policy of 10% of operating expenses. This amount currently is $4.8 M. This reflects about a 1.2 month expenditure reserve. It should be noted that the approved 2002-03 Budget authorized use of $3.8M of the un-obligated General Fund reserves (this is the amount over and above the 10% set- aside.) With the 2002-03 expenditures running $1.5 M less than budgeted, the amount actually used was $2.4M. With respect to property tax revenues, the proposed budget assumes that the City Commission would wish keep the tax rate the same as last year. Last year, the Commission rolled back the property tax rate to help compensate for the Fire Assessment revenues being received. The rate was rolled back to 7.6000% plus .3950% for debt service for a total of 7.995%. The projected tax rate for 2003-04, inclusive of debt service is slightly lower at 7.984%. In the event the City Commission wishes to roll back the tax rate, the new base rate would be 6.987%. Including the debt service rate of .304%, the final adjusted property tax rate would be 7.3674%. In order to compensate for this revenue reduction, the General Fund would need to be cut another $1.9M or the like amount transferred in from the un-obligated General Fund reserve. I am recommending that the City Commission roll back the property tax again this year. Looking to next fiscal year, the General Fund is projected to receive $48.4 M in revenues. The budget for the General Fund as originally proposed by departments showed a projected deficit of $5.0 M over revenues. In reviewing the budget, I was required to cut back a number of new personnel requests, adjust operating programs and defer several expenses. The resulting budget is still $1.8 M over operating revenues. These cost include the following items: Increase in Pension Contributions by General Fund: General Employees Pension: $ 502,674 Fire Pension $ 352,873 Police Pension $ 875,595 Total Pension Increases $1,731,142 (This is a statutory obligation) Risk Management Fund Deficit $1,000,000 (This is recommended to eliminate deficit in this fund per Audit) Total Pension and Risk Mgt. Costs $2,731,142 To pay for these costs, it is recommended that a portion un-obligated General Fund Balance amounting to $1,794,347 be used. This amount covered the above two major costs. The additional $936,795 of additional pension and Risk Management costs was obtained in the form of operating budget cuts. While funded in the draft budget, the neighborhood grant and improvement program needs re- focus, in my view. The City Commission has embarked on a different process for neighborhood meetings. You have requested multiple departments to be present at meetings. The old model of one staff member being responsible for these activities is being changed to a team approach coordinated by the City Manager's Office. The Woman's Club program is a desirable, but not essential activity. We proposed the program in response to a concern expressed over the continued maintenance of a historic structure. If the Mizner Foundation were to take on this responsibility, the same goal would be met via the private sector. The City could offer expertise and assistance on a case-by-case basis, especially in the area of assisting the Mizner Foundation in obtaining grants, joint purchasing and renting the facility for public events. We are in the process of obtaining an architectural analysis of the building to evaluate its condition. We are doing so to make sure there are no major rehabilitation costs, in the event the Commission wishes to re-authorize the program in next year's budget. With increased insurance costs, the 2 America's Gateway to the Gulfstream estimated cost of the Woman's Club Program will be in the vicinity of $170,000. In addition to these, there is a long-term need to increase the size of the Police Department sworn staff. This cannot be accomplished within the current revenue stream of the General Fund. However, the Police Chief has developed an innovative program that has been presented to the CRA, whereby that agency will provide funding for increased presence in the CBD and Heart of Boynton areas. This concept was discussed at an earlier City Commission and CRA workshop. This program will help moderate the increase in calls for service in the CBD and Heart of Boynton areas. The increase in the staffing levels for the Fire Department has been accommodated in the Fire Assessment Fund. It should be noted that in three years, the expense base for the 24 new personnel hired under the Fire Assessment, would need to be paid out of the General Fund. In terms of other personnel in the General Fund, the proposed 2003-04 budget projects a reduction of 9.13 positions. The decimal points reflect changes in part-time positions. There are no lay-offs of positions in the General Fund. The changes reflect either shifts in personnel from one position to another or non-replacement of vacant positions. Overall, the General Fund expenditures are expected to be 2.85% higher than the current fiscal year budget. This is inclusive of the above-mentioned pension and Risk Management expenses. Without those costs, the proposed 2003-04 General Fund budget would 2.7% lower than the current budget. Review of Other Funds Water and Sewer Utility Fund The revenues and expenditures for this the operating portion of this fund are balanced at $28.4 M. Four staff positions are proposed for next year. These are CADD personnel transferred from the Building and Engineering Departments. The City is consolidating data entry and correction for the computer aided design system and our records management system. No rate increase for water or sewer service is projected for 2003-04. Overall, the expenditures projected for 2003-04 in this fund is expected to be 3.24% above the current fiscal year budget. As with the General Fund, the impact of pension costs and the Risk Management transfer was the reason for the budget increase. Without these costs, the Utility Fund Budget would be 1.3% lower. Golf Course Fund This fund is balanced at 2.6M. No personnel changes are planned for Fiscal 2003-04. The proposed 2003-04 Budget represents a reduction of 10.4% over the current fiscal year budget. However, this reduction includes the end of debt service payments, which ended this fiscal year. On an operating basis, the Golf Fund expenditures represent a 13.1% increase. Because of a decline in patronage at the course, these expenditures need careful monitoring. There has been a general decline in golf-based activity in South Flor/da. 3 America's Gateway to the Gulfstream Solid Waste Fund This fund is balanced with revenues and expenses of $6.6M. The staffwill be proposing a rate modification for multi-family accounts. A comparison of private sector service fees indicates that a rate modification is appropriate. No rate increase for residential service is proposed. We will continue to monitor legislative attempts to eliminate our market share for the roll-off business. This revenue accounts for approximately $1.1M a year in revenue that is used to keep the residential rates stable. In addition, the City staffwill be exploring the expansion of the cart system into residential areas not currently served by this program. Overall, the expenditures for the Solid Waste Fund are projected to increase 5.26% over the current budget for Fiscal 2003-04. This fund has enjoyed cost efficiencies over the past three years due to better utilization of equipment and personnel. The cost increases this year are reflective of operating, pension and Risk Management charges. Mass Transit Fund This fund substantially is funded by a subsidy of the Local Option Gas Tax. Total expenses of $243,690, as recommended for the 2003-04 budget will be met by only $22,550 in operating revenue. The balance of the expenses is met from a transfer from the fund balance ($50,000) and the Local Option Gas Tax ($170,140). The viability of this program needs to be discussed in Fiscal 2003-04. Fleet Maintenance Fund The Fleet Maintenance Fund is responsible for the maintenance and replacement of the City's vehicle and equipment fleet. Due to budget constraints in the General Fund, the Fleet Maintenance fund will essentially operate in a "status-quo" basis for next fiscal year. All vehicles except for six squad cars and two fire-rescue units will be held for an additional year. As a result, the expenditure requests for this fund are down 29.8% over the prior fiscal year budget. The fund has a fund balance of approximately $5 M. Therefore, the one-year suspension of funding and replacement will not have an adverse impact Self-Insurance Fund. As noted in discussion of the General Fund, the Self-Insurance Fund has a current deficit of $2.9M. This is inclusive of a projection of insurance losses (claims) of $2,500,000. These are not actual losses but an estimate of possible losses based on an analysis of outstanding lawsuits and claims history. Each year, the amount is reviewed as a set-aside and adjusted. Next year, the set-aside remains at $2.5M. This does not mean that we spend this amount; it is a reserve fund for future and ongoing claims. The projected expenses for the fund are down by 4.76% over the prior budget. 4 America's Gateway to the Gulfstream Recreation Program Fund The cost of the Tennis Center operations budget is being transferred to the Recreation Program Fund to allow staff to better determine rates sufficient to fund the program and to set-aside a reserve for future capital improvements to the Tennis Center. Because of this transfer, the budget for the Recreation Program Fund increased by 14.61%. Fire Assessment Fund - Next fiscal year projects expenses of $8.6M including completion of the Southeast Fire Station and construction on the Southwest Fire Station. Fire Department staff projects that the Southwest Station (Woolbright) will not be completed until the first quarter of 2004-05. The projected Fire Assessment need for 2003-04 is $2.6 M, the same as the current Fiscal Year. The rate then begins to drop in 2004-05 to $1.2M then ends the remaining three years at under $1 .OM. Construction on the Northeast station is not projected to start until 2004-05. Land acquisition for the Northeast station is scheduled for next fiscal year however. The current fund balance of $5.2M will be exhausted next fiscal year, based on this construction schedule. A special thanks goes to the Budget Review Team of Diane Reese, Dale Sugerman, Mary Munro, Wilfred Hawkins, and Jeff Livergood for their hard work on the document. Special thanks goes also to the department heads that went back into their budgets to make additional cuts that I requested. 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