Minutes 07-14-04SPECZAL CTrY COMMISS1~ON BUDGET MEETI~NG
HELD IN THE LZBRARY PROGRAM ROOMf
BOYNTON BEACHf FLORZDA
ON TUESDAY~ 3ULY 14~ 2004 AT 3:00 P.M.
Present
Jerry Taylor, Mayor
Mike Ferguson, Vice Mayor
Bob Ensler, Commissioner
Mack McCray, Commissioner
Carl McKoy, Commissioner
Kurt Bressner, City Manager
Jim Cherof, City Attorney
Janet Prainito, City Clerk
REVIEW OF PROPOSED CITY OPERATING BUDGET FOR FISCAL
2004/2005 AND FTNANCZAL OPERATING PLAN FOR FISCAL 2003-2008
Mayor Taylor opened the budget meeting at 3:00 p.m. and turned the meeting
over to the City Manager, Kurt Bressner.
Mr. Bressner provided a letter to the Commissioners detailing potential changes
to the budget that had arisen from the discussion at the first budget meeting.
The budget recommendation that the Commission received at the first workshop
was to adjust the millage rate from 7.5% to 7.6%. ]:n terms of available dollars,
if the Commission wanted to leave the tax rate at 7.5%, it would have to take
out $349,792 from the General Fund.
The proposed public service tax on water bills of 4% would have a net impact on
the General Fund of $326,660, if not approved. On the positive side, the Finance
Department advised that the site plan review fees could be increased by $70K.
Also, Ms. Reese found, when looking at the State projections for sales tax, that it
would be possible to add an additional $170K in additional sales tax revenue.
The Commission had to consider if the tax rate were left at 7.5% and the 4%
water tax were not imposed, what would it take to get the budget in balance.
Staff restored the holiday bonus for employees, with a total of $91K but $61,665
would come from the General Fund.
Meeting Minutes
City Commission Budget Workshop #2
Boynton Beach, Florida
July 14, 2004
They would be considering a deficit of about $213K in the General Fund if they
made the proposed changes. That did not include providing any funding or
adding back in an item for the Woman's Club, about $170K, or $130K
considering some $40K in estimated revenues.
Vice Mayor Ferguson inquired about the $100K savings from the Golf Carts. Mr.
Bressner stated that this was in another Fund, not the General Fund.
Mr. Bressner recommended that the millage rate be restored to 7.6%. When all
the various projects mentioned earlier were added and subtracted, a projected
surplus of $104K would result.
Mr. Bressner used his personal property taxes to exemplify the impact of
adjusting the millage rate from 7.5% to 7.6%. Based on those calculations, he
would be paying $16.34 more in property taxes to the City of Boynton Beach if
there were a millage rate of 7.6%.
If the Commission decided not to adjust the property tax rate but to proceed
with the water tax instead, there would be a surplus of about $113K.
If the Commission decided not to raise the millage rate to 7.6% or assess the
4% water tax, the unobligated fund balance transfer would go from the
$1,460,130 mentioned at the first workshop to $1,673,000, and this would
balance the budget to zero.
Increasing the millage rate to 7.6% or instituting the 4% water bill tax would
provide more money, so that other projects that came up during the budget year
could be handled without going into the unobligated fund balance. If the
Commission chose to change the millage rate to 7.6% and do the water bill tax
but wanted to reduce the use of the unobligated fund balance, it could probably
be driven down to about $1M.
Mr. Bressner recommended increasing the millage rate to 7.6%. Ms. Reese
advised Mr. Bressner that there might be some room in the debt service portion
of the total levy. The original budget document had .3804 or 3/8 or a 10th of a
percent for debt service because the total levy at 7.6% would be the sum of
7.6% plus the .3804, or about 7.9%. That would still be under $8.00. Ms. Reese
advised that .3804 was last year's figure and that it should be .2838. The total
comes out to 7.7838. That is what it is now. But, Ms. Reese advised that the
actual debt service rate would be .1800. If the decision were to go to 7.6%, the
sum of that would be 7.7800. The net increase to the taxpayer would be .0038
by reducing the debt service slightly.
Meeting Minutes
City Commission Budget Workshop #2
Boynton Beach, Florida
~luly 14, 2004
Ms. Reese stated that if this were done, it would reduce it from the current year
millage rate of 7.8804 to 7.7800.
Discussion
Commissioner Ensler: To keep the total of the millage rate and the debt
service at the same total as it was last year, what would the millage rate be for
this year?
Mr. Bressner:
7.6% approximately
Commissioner Ensler:
At that point, we would not affect the taxes.
Mr. Bmssner: That would not be true because the value of property
goes up anyway, even though it is capped. The rate would stay the same, but
the taxes actually paid go up between 1.9% and 2.2% if homesteaded.
Commissioner Ensler: It would help us then to reduce the surplus that must
be used to balance the budget.
Hr. Bressner:
It would.
Commissioner Ensler:
to be used?
By how much would that reduce the surplus that has
Hr. Bressner:
If 1% equals $365K, it would be about $120K.
Commissioner Ensler: Didn't you say them was a surplus of $581K?
Mr. Bressner: That was debt service. The reason we can knock this
back from the .2838 to the .1800 is that there is a surplus in the debt service
fund that we can use to pay the debt off so we do not have to levy taxes for it
for this one year.
Commissioner Ensler: Could it jump up next year?
Ms. Reese:
No. The debt service will continue to go down.
Commissioner Ensler: Mr. Bressner pointed out that by providing both the
recommended millage and water public service taxes, the unobligated fund
balance transfer could be reduced to $1,039,244. How much would the debt
service reduce that?
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Meeting Minutes
City Commission Budget Workshop #2
Boynton Beach, Florida
.luly 14, 2004
Mr. Bressner: Another $120K. If Commissioner Ensler's suggestion
were implemented to take .0038 and add it in, the figure would end up being
.7638.
Commissioner Ensler: If the City started out by using the entire $1.8M of
surplus, taking this route, it would save $900K of surplus for possible use in the
following year. At least all of the salaries of the employees would be protected
and there would be enough revenue plus enough operating expenses to run the
City for this year and the year after that.
Mr. Bressner: Mr. Bressner asked if his philosophy would be that
any use of the unobligated fund balance that was actually performed during this
next fiscal year would be for capital outlay?
Commissioner Ensler: Yes. It would be easy to pick out $900K of capital
items and that would mean that the salaries were protected and there would be
sufficient expense money to continue the following year.
Mr. Bressner: If the City did that, it would mean keeping the tax
rate the same as it was last year.
Commissioner Ensler: Yes.
Mayor Taylor: If $1,673,400 were transferred from the unobligated
fund, what would that leave there?
Ms. Reese:
Around $13M.
Mr. Bressner:
Less the $5.5M mandated set-aside
Mayor Taylor: It would leave around $7M in the unobligated fund
account without raising anyone's taxes or having a water service tax.
Mr. Bressner: The definition of the unobligated fund balance is the
reserve cash that the general fund has over and above the 10% mandated set-
aside by the Commission as money that is not touched unless there were a
major catastrophe.
Mayor Taylor: We've talked about the capital projects we want to
accomplish and we went out and did a bond, so any other capital project would
be beyond that. If you have a capital project that's $70K, for example, that
would not be a big number compared to $7M.
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Meeting Minutes
City Commission Budget Workshop #2
Boynton Beach, Florida
July 14., 2004.
Commissioner Ensler: That is not the money ! am talking about. My
primary thrust is to protect job security for the people in the city for the future.
He thought that Mayor Taylor preferred not to have the additional water service
tax, and Mayor Taylor responded that was correct. Commissioner Ensler said that
instead of having a $900K surplus, there would be a $700K surplus. Mayor Taylor
would agree to that.
Mayor Taylor: If we leave the millage rate at 7.5% and transfer
$1.6M out of the unobligated fund balance and balance the budget, there would
still be $7M in it, keeping the 10% required for operating intact and not raising
anyone's taxes.
Commissioner Ensler: ! would not want to use the entire amount of the
surplus. Some should be saved for potential problems in the following year,
knowing what those risks are.
Commissioner McCray: If we raise the millage rate .1%, it would not be that
much of a burden for the citizens, but a 4% tax on water services would. He was
comfortable with going to 7.6% because they still had a surplus.
Vice Mayor Ferguson: I would like to see it rolled back to 7.5% and put the
water service tax in there. He also wanted to see funding for the Woman's Club
and the employee bonus. His calculations showed a $25K surplus by doing that.
Mr. Bressner: The Commission could set the millage rate at 7.6%
now and bring it down to 7.5% later, before publishing the final rate, to give
time for more information on certain matters. Also, considering the debt service
issue, the overall tax rate of 7.6% was still going to be less than last year's.
Attorney.limCherof: The millage rate could be decreased but not
increased, after announcement.
Commissioner Ensler: Then ! would ask that we do not set it at 7.6% but at
7.638%, which would keep the total tax the same, and allow more time to see
what was going to happen. !f the Commission wished to make it 7.6% when it
set it finally, they could.
Mr. Bressner: Some people want it set at 7.5%. !f 7.5% was
chosen, and if there were no additional expenses added to the budget, the
unobligated fund balance transfer would have to be adjusted from $1,461,130 to
$1,673,400.
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Meeting Minutes
City Commission Budget Workshop #2
Boynton Beach, Florida
.luly ~.4, 2004
Mayor Taylor: Instead of $1,673,400, why not make it $1,800,000,
then if they decided to do the Woman's Club, they could.
Mr. Bressner: If you take out $5.5M and allocate $1.6M, you would
still have around $7M over and above that. If you go to $1.8M, at the end of the
next fiscal year you would still have a total of about $12M, of which about $6-7M
would still be classified as unobligated fund balance.
Ms. Reese: Three years ago we determined that there was $3.5M
of the City's surplus that could be applied towards the budget and still have a
safe fund balance otherwise. They were using up that $3.5M. This was still part
of the original $3.5M because we did not use it all up the first year. We continue
to draw down on it.
Commissioner Ensler: In last year's performance a budget included the
$1.8M of a little over $50M and we expended a little over $50M so we actually
drew down on that surplus.
Ms. Reese: Yes, in the amount of $28K. They used $28K of the
$1.8M. We might end the year without spending it.
Mr. Bressner:
It is a projection.
Vote on Different Alternatives
Water Pub/leS err/ce Tax: The vote was 4-1 against this tax, Vice Mayor
Ferguson in favor.
Woman's Club: The consensus was to put this item on hold, pending
the results of the lawsuit against the City.
Vice Mayor Ferguson felt that the City was honor-bound to proceed with the
agreement with the Woman's Club and have a lease for at least a three-year
period. Mr. Bressner stated that this could be revisited later and if the
Commission wanted to move ahead on it, they could make an appropriation from
the unobligated fund balance.
N#/age Rate:
The consensus was to have a millage rate of 7.5%.
Resolution
Attorney Cherof explained that this Resolution would not establish a tentative
budget or set the millage rate, but would simply advise the Property Appraiser of
6
Meeting Minutes
City Commission Budget Workshop #2
Boynton Beach, Florida
.luly 14, 200~
the numbers the City Commission was setting as targets and announced the first
public hearing.
Attorney Cherof read the title of a Proposed Resolution of the City of Boynton
Beach, Florida adopting a proposed municipal millage rate of 7.5% for general
operating budget purposes for Fiscal Year 2004-05, assuming a rollback rate of
6.7663 and setting forth a day, place and time of the first public hearing, and
providing severability, conflicts and an effective date. The body of the resolution
announces that the City Commission sets September 7, 2004 at 6:30 p.m. at the
City of Boynton Beach City Hall, 100 E. Boynton Beach Boulevard to consider the
proposed millage rate and the tentative budget.
Motion
Vice Mayor Ferguson moved to approve the proposed Resolution in reference to
the millage rate and the date of the first public meeting on it. Commissioner
McCray seconded the motion that carried unanimously.
Mr. Bressner expressed appreciation for all of staff's hard work to bring in a
balanced budget. He realized that it got tougher each year, and staff had come
through again.
Since there was no further business before the Commission, the meeting was
duly adjourned at 3:50 p.m.
A~E~:
~.~P~a, n ,to,~ ~~--~.~City Clerk
Susan Collins
Recording Secretary
(071904)
7
The Cit o Bo nton Beach
OFFICE OF THE CITY MANAGER
100 E. Boynton Beach Boulevard
P.O. Box 310
Boynton Beach, Florida 33425-0310
City Manager's Office: {561) 742-6010
FAX: {561) 742-6011
e-mail: city. rnanager(~ci, boynton-beac]~ fl. us
www. cfi bo ynWn-beach, fl. us
To.'
Mayor Taylor
Vice-Mayor Ferguson
Commissioner McCray
Commissioner McKoy
Commissioner Ensler
From:
Kurt Bressner, City Manager
Date:
July 14, 2004 (Bastille Day)
Subject:
Final Budget Information
Based on revised revenue numbers and our discussion yesterday, the following facts emerge:
1. If the City Commission wishes to retain the millage rate at 7.5%, the revenue reduction is
$349,792.
2. If the City Commission opts to not proceed with the Water Public Service Tax, the revenue
reduction is $326,660.
3. The staffhas increased the revenue for site plan review fees by $70,000. As we discussed
yesterday, I am reluctant to increase the plan review fees further.
4. The staffhas increased the revenue projection for state revenue sharing by another $170,000
based on a review of state projection.
5. The staff has restored the holiday bonus for employees; the amount attributable to the
General Fund is $61,665.
Using the same $1,460,130 unobligated fund balance transfer, discussed yesterday, the total revenues
available, as adjusted would be $55,822,572. The projected expenses in the General fund with the
addition of#5 above would be: $56,035,842. This leaves a deficit of $213,270. I have not included
the cost of the Woman's Club in the budget. This is estimated to be a net cost of $130,000. This
based on the assumption of $170,000 in expenses ($130,000 operating and $40,000 capital less
$40,000 operating revenues).
Recommendation: Restore the millage rate to 7.6°/6, which would yield a budget surplus of
$104,226. This amount would be available to either reduce the unobligated fund balance by this
amount or to fund other projects. I am attaching a worksheet, which shows the impact of adjusting
the millage rate from 7.5% to 7.6% on my home. Under this scenario, I would be paying an
estimated additional $16.34 in property taxes to the City based on a 7.6% millage. If millage rate is
restored to the 7.6% rate there would be an increase in the TIF transfer of $32,296.
An alternative is adding the 4% Public Service Tax on water bills. This would result in a budget
surplus of $113,390.
If the Commission chooses to forgo either or both the millage adjustment or the public service tax on
water, the unobligated fired balance would need to be increased $213,270 or from $1,460,130 to
$1,673,400.
Finally, if the Commission wishes to provide both the millage and the water public service tax, the
unobligated fund balance transfer can be reduced to $1,029,244 (down fi:om $1,460,130, as discussed
yesterday.)
In addition to the above, the staff has eliminated the GPS guided golf carts for a savings of $100,000
in the Golf Course Fund.
Special thanks goes to Diane Reese and Mary Munro for their hard work on crunching the numbers
throughout the budget process and providing us with these options.
Cc:
James Cherof, City Attorney
Wilfred Hawkins, Assistant City Manager
Dale Sugerman, Assistant City Manager
Diane Reese, Finance Director
America's Gatewau to the Gul£stream