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Minutes 07-11-06 MINUTES OF THE SPECIAL CITY COMMISSION BUDGET MEETING HELD ON TUESDAY, JULY 11, 2006 AT 1:30 P.M. IN CITY COMMISSION CHAMBERS, BOYNTON BEACH, FLORIDA Present Jerry Taylor, Mayor Carl McKoy, Vice Mayor Bob Ensler, Commissioner Mike Ferguson, Commissioner Mack McCray, Commissioner Kurt Bressner, City Manager James Cherof, City Attorney Janet Prainito, City Clerk REVIEW PROPOSED BUDGET FOR FISCAL YEAR 2006-07 Mayor Taylor called the meeting to order at 1 :30 p.m. He announced the first item to be heard was a presentation by Brown & Caldwell on a water supply strategy. Kofi Boateng, Utilities Director, declared the Utilities Capital Improvement Program (CIP) was going to be presented in two parts with Brown & Caldwell presenting the long-term water strategy and Mr. Boateng discussing an overview of the entire CIP program. A full copy of each presentation is made a part of the minutes of this meeting. Mr. Boateng stated Utilities had worked closely with Brown & Caldwell as part of the Business Case Evaluation (BCE) and task order approved by the Commission in 2005. The goal of the task order was twofold: 1) to essentially restructure the CIP Program and most importantly, 2) to devise a long-term water supply strategy for Boynton Beach. A field of various alternatives and regulatory constraints had been explored in depth and today, presentations would be made of two alternatives and a third option that promised to provide good cost savings. Mr. Boateng introduced a representative from Brown & Caldwell to present a long-term water strategy proposal. Rick Olson, Project Manager with Brown &. Caldwell, West Palm Beach, presented a long-term water strategy. He also introduced Ms. Helen Pickman, the top hydrogeologist for Brown &. Caldwell for the region. Commissioners Ensler and McCray were in favor of asking questions during the presentations. Also, Commissioner McCray was disturbed that he had been presented with information just before the meeting on a topic that required study. Mr. Bressner thought the Brown & Caldwell presentation outline had been distributed to the Commission on the previous Friday, minus the slides and Carisse Lejeune, Assistant to the City Manager, confirmed this. Commissioner Ensler asked for a definition of long-term strategy in regard to what the Commissioners were being asked to approve at this meeting. Mr. Bressner responded it depended on which alternative was selected. The third alternative option would be a 30-year solution, he believed. Commissioner Ensler asked what term was covered by the first two alternatives. Mr. Boateng responded Brown & Caldwell would be presenting that information. Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 Mr. Olson apologized for not getting the presentation to the Commissioners earlier, and encouraged them to ask questions. Mr. Boateng also apologized, saying Utilities would try to present its information in a more timely fashion in the future. Brown & Caldwell's task was to: 1) maintain diversity in source of supply; 2) maximize use of least cost water; 3) use alternative supplies to meet future demands; and 4) maximize return on investment in existing infrastructure. Commissioner Ensler felt it was important to look as far into the future as possible in order to maximize use of the least costly water. The original City Manager's Agenda item was to address replacement alternatives for water currently purchased from Palm Beach County, but that would address only a small segment of the water the City was currently using. Today's presentation would address how to replace that water, but also how to prepare a water system that would proVide Boynton Beach residents with a reliable, low cost water supply for at least the next twenty years. Mr. Olson presented projected population statistics showing growth that required a long-term water strategy. The information was for the entire water service area, not just Boynton Beach. He also presented per capita usage information, a projected deficit, supply and demand, and talked of uncertainty about future growth rates, densities and water consumption patterns. The population estimates derived from Brown & Caldwell's research did not entirely agree with the statistics from the City of Boynton Beach. Florida International University Metropolitan Center was asked to provide an independent population projection for the City and for the water service area. For the City, their analysis was based on housing starts and increases in density in the downtown area. Brown & Caldwell used the agreed upon population statistics in order to project the water demand. The demand was projected to be 177 gallons per capita per day. When the projected population was multiplied by the per capita water usage, the projected demand was obtained. Commissioner Ensler asked where the 177 gallons per capita per day came from, and Mr. Olson responded it was in the permit. Commissioner Ensler felt the 177 figure was based on many single family homeowners watering lawns; however, the construction going on now and in the future appeared to be multi-family, hi-rise types of buildings, and this would lead to a reduced average demand. Mr. Olson responded it was reasonable to consider that and their projection was conservative in that it over-predicted water demand. Utilities staff maintained that in spite of the demographics of the density in current development, new residents would use as much water as some of the existing homes. Their per capita usage was an average and covered people in one-bedroom apartments and those on multi-acre estates. Mr. Bressner inquired whether Brown & Caldwell's planning horizon for the alternatives to be presented included the ultimate population of the 134, 125, and 177 gallons per day, and Mr. Olson said that was true and it remained constant throughout the analysis. Mr. Olson confirmed this would justify increased withdrawal from the aqUifer. Commissioners Ensler and McCray asked for more information about the conservative nature of the demand projections. Mr. Olson responded the demand for Boca Raton was over 200 gallons per capita per day. Another individual responded in Delray Beach, the demand was 215 gallons per capita per day. 2 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 Mr. Olson declared the agreement the City entered into with Palm Beach County was to purchase up to 5 million gallons per day (mgd) of water from the County system. The agreement was for five years and would expire December 31, 2009. In January of 2010, the City ran the risk, on an average day, of having a water deficit. Commissioner McCray asked about the deficit. Mr. Olson responded the deficit was projected forward from 2010. The analysis represented the status quo and assumed nothing was done to the existing water system. Commissioner Ensler believed the higher usage in Delray Beach and Boca Raton might be due to their having seafront communities. He thought usage along the ocean was typically higher, and questioned whether the comparison was an "apples-to-apples" one. Mr. Olson thought in the future, the numbers would begin to come down. The terminology to be used during the presentation was reviewed by Mr. Olson for the benefit of the participants. Raw water is water extracted from an aquifer, untreated. Finished water is drinking or potable water following treatment. The permit was for raw water allocation. The demand would be in finished (treated) water. The surficial aquifer was a geologic formation located below ground surface. The surficial aquifer in Boynton Beach extended from a depth of about 50 feet to 200 feet. All of the City's water supply wells were finished into this zone. The wells in eastern Boynton Beach were finished to a depth of 80 - 150 feet and the wells out west were deeper. Commissioner McCray asked about salt-water intrusion in the eastern wellfield, commenting they were unable to expand the cemetery because of this. He wanted to know if there were any salt-water intrusion into the east wells. Mr. Olson noted the City of Boynton Beach had historically pumped the east wellfield at a much higher rate than they were currently allowed to now. When they were pumping the wellfield at a higher rate, they experienced salt-water migration. It appeared the aquifer and the saltier water was stable. They were not seeing any degradation currently. The surficial aquifer was recharged from rainwater and from the surficial canal system. What they did on ground surface had a direct influence on the surficial aquifer. Considering the problems with Lake Okeechobee, the dams, and the desire to lower the water level of that lake, Commissioner Ensler asked what the effect would be of those factors on the surficial aquifer and salt water intrusion. Mr. Olson responded the groundwater elevations in the surficial aquifer were kept artificially inflated by the regional water system. Basically, water is held in Lake Okeechobee at a higher level, is discharged into the canals, and the canals artificially recharge the groundwater elevation. During the dry period, it would be much drier and conversely. There had been talk of lowering the Lake Okeechobee levels to, 1) repair the dike around the perimeter, 2) provide more water for habitat in the Everglades ecosystem itself, and 3) improve the grass flats in the lake itself. If the lake levels were dropped and nothing was done to supplement the canals, it could potentially lower groundwater elevations in the area. Lowering groundwater elevations could adversely impact the amount of water you could safely withdraw from the surficial aquifer. Commissioner Ensler responded if that happened, at some point in the future, SFWMD may reduce the amount of water Boynton Beach takes from the surficial aquifer. 3 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 Mr. Olson responded that was possible, but he did not believe it would happen. Brown & Caldwell was proposing an opportunity to diversify the City's water resources so it would be getting water from several alternative sources. There were some utilities in the area that relied wholly on the surficial aquifer and had no intention of diversifying their resources. The political pressure to allow the sFWMD to lower Lake Okeechobee levels immediately or rapidly was not going to be too great. It could not happen. The coastal communities in South Florida were dependent upon that aquifer source and they would be putting the fate of 60K people on the south side of the lake over the population of 4M people in the coastal communities. The other alternative was to artificially pump water from the lake into the canals and that was the more likely scenario. Mr. Olson spoke of the Floridan Aquifer, an alternative water source in South Florida. It was a geologic formation, a confined aquifer with no direct communication with ground surface. The depth of it was 900 to 1,200 feet below ground surface and the water it contained was salty. In order to use it, an advanced treatment process was required. Lime softening, a very old, well-proven, inexpensive technology, is the process the City implements at the East Water Treatment Plant (EWTP). Commissioner Ensler inquired if the water pumped at the West Water Treatment Plant (WWTP) was reasonably equivalent to the water pumped from the East Water Treatment Plant (EWTP) and if so, was that difference significant. Mr. Olson responded that geochemically, the waters were very similar and compatible as far as the amounts of dissolved minerals, but there were differences in color and dissolved organic content in the water from the same aquifer. Nano filtration, also known as nano filtration softening, is a treatment technOlogy the City uses at the WWTP that treats the wells exclusively in the western wellfield, west of Military Trail. Water is pumped from the surficial wells in the wellfield across membranes at about 100 pounds per square inch (psi). The water is differentiated into highly mineralized water and potable water. This process is 85% efficient, meaning if you pump 100 gallons through the treatment system, 85 gallons come out as fresh water, and 15 gallons come out as reject, which has to be disposed of in the concentrate disposal well. It was a power-intensive system. Low Pressure Reverse Osmosis, was another treatment process. This was an even more advanced process that would be used on water from the Floridan AqUifer. It was also the process used to treat seawater or very salty water. This water was not that salty, but it was not potable. It had an efficiency of 75%. Of every 100 gallons pumped out of the ground, only 75 gallons of finished water is produced. Commissioner McCray asked if using saltwater from the ocean had been explored. Mr. Olson noted this was part of the BCE that had been submitted in December. Commissioner McCray wanted someone to look into this because he did not know why that was not presented in this report. He needed to know about all the alternatives. Mr. Olson offered to speak about this when talking about the Business Case Evaluation. AqUifer Storage & Recovery (ASR) was a water management technique and the City had two AsR wells at the EWTP currently. These wells represented a "bank account." When a lot of 4 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 water was available (excess capacity), the City pumped water into the AsR wells. During periods of peak demand, the City recovered water out of the AsR wells. About 95% of the water pumped into the wells could be extracted as potable water. Commissioner McCray asked if that was the amount being pumped now. Mr. Olson responded right now, there was one AsR well with a capacity of about 2 million gallons per day (mgd). Commissioner McCray asked if the City was pumping anything into the "bank." Mr. Olson asked a Utility representative, who responded they were just starting to pump it in today. Mr. Olson noted that during the wet season, from May through December in Florida, the AsR wells are usually recharged and during the dry season, January through May in Florida, the water is recovered to meet peak demands. Average Daily Flow (ADF) looked at the entire flow from all the plants, dividing it by 365 to provide an average day. Mr. Olson then addressed the City's existing water supply, saying there were surficial wells in the surficial aquifer at about 100 feet below ground surface. The City had two wellfields and they were completely separate. There were 19 wells located in the east wellfield, east of 1-95, some in Little League field, and some in the school across the street, and the Jarvis wellfield was located next to Lowe's west of 1-95. Commissioner McCray asked how many were located at the cemetery location. Mr. Olson did not think there were any in the cemetery itself. Mr. Mazella confirmed there were five wells in the ball field. Mr. Olson declared there were 11 surficial aquifer wells out west and they fed the WWTP exclusively. There was currently no interconnection between the raw water from the west wellfield to the east wellfield. Raw water piping referred to pipes that came from the wells to the water treatment plants. Water from the west wells only went to the WWTp. Water from the east wells only went to the EWTP. The City operated the WWTP that was built in 1988. It was a nano filtration plant fed by surficial aquifer water. It had a current capacity through the membranes of about 8 mgd but with blending, was able to yield about 10 mgd. The EWTP plant was built in 1962 and had been the workhorse for the City of Boynton Beach. It used lime-softening filtration and had a capacity of about 25 mgd. It was currently operated at less than 8 mgd. Commissioner McCray asked for status on the sand that was coming in through the filters at the EWTP. Mr. Olson responded that was at the WWTP and there were some prefilters that filter the water before it gets to the membranes. He thought there had been a leak in the pump casing or column and that had been repaired. Commissioner Ensler thought there was a problem in the EWTP also where they had to change the height of the well in order to eliminate the sand. Mr. Olson commented that during the saltwater intrusion incident, the City realized the wells had been constructed into the wrong interval. They were doing a process called "upconing" or drawing saltier water from below. Most of the wells had been reconfigured, with 5 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 only four remaining to be done. This was making the wells more efficient and reducing the likelihood of saltwater intrusion. Commissioner Ensler thought if they had a capability of 25 mgd out of the EWTP and were limited by the permit to 8 mgd, they had roughly 17 mgd capability. Commissioner Ensler asked about the condition of the filters in the EWTP. Michael Low of the Utilities Department responded the filters themselves were in reasonable condition. What was actually holding them back was the permit requirements on each of the individual wells as to how many hours per day or per month they were allowed to draw water from them. Commissioner Ensler asked if they rotated through all 25 water filters? Mr. Olson believed they did. Mr. Olson continued, saying there was one AsR well at the EWTP and a second one was nearing completion. He thought this would come into operation next year. There were four interconnections between the City of Boynton Beach with Palm Beach County (capacity to bring in 5 mpd), with Lantana, the Village of Golf, and Delray Beach. These are considered emergency interconnections. If a major pipe break occurred or an excessive demand took place, the interconnections would be opened. Commissioner McCray asked for the timeline on the completion of the second AsR well. Peter Mazella, Deputy Utilities Director, responded the second well was completed. The contractor would be installing temporary piping so they could begin recharge next month. And then, the contractor would finish off the pumps, permit and piping. Commissioner McCray asked about the discrepancy between Mr. Olson's "next year" and Mr. Mazella's "complete now" on the well. Mr. Mazella responded it depended on the definition of completed. It would be fully completed by next year, but it would be operational in August of 2006. Mr. Olson commented the real benefit of an AsR well was when you were able to start recovering water from the well and this would not be done until the dry season in 2007. Mr. Olson indicated the finished water distribution was made up of pipes going from the water treatment plants to the individual consumers. He thought the Commission should be very proud of the Utility the City had established. The City's reputation was of a Utility that was very progressive and forward thinking. The nano filtration plant built in the WWTP in 1988 was one of the first in Florida. The AsR well constructed at the EWTP was one of the first in Palm Beach County. Even the elevated ground storage tank at the EWTP was one of the first of its kind. The City received a lot of visitors to see the facilities in Boynton Beach. The final component of the water system was the permit that governs the operation of the entire water utility and this was issued by the sFWMD. In 2002-03, the City realized there was a projected water shortage coming and started a program or process called East Plant Expansion of EPX. That proposal was to replace the EWTP and install 15 Floridan Aquifer supply wells that would have spanned the length of Boynton Beach from Miner Road to the L-30 Canal. Then, a 20 mgd LPRO system would be installed at the EWTP. The problem with that plan, as developed in 2005, was the capital cost of $96M. The direction staff received was that this was unaffordable, since it would call for a significant increase in the user fee for utilities. Commissioner McCray asked what the projected rate was now, since 2005. Mr. Bressner thought the question was what was $96M in 2005 costs worth today, including construction costs, and Mr. Olson responded, probably about 15-20% more. The plan was ultimately discarded due to its high capital cost and cost to the users. 6 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 Brown & Caldwell was tasked with preparing a Business Case Evaluation to come up with alternatives with a lower life-cycle cost than the EPX program. During the analysis process, they discussed using raw seawater as a raw water supply. Mr. Olson pointed out the least costly alternative of the 11 alternatives explored originally was to expand the West Water Treatment Plant (WWTP) using surficial aquifer water; however, the current regulatory environment was not likely to support that because: 1) It was not likely additional allocation would be granted from the Regional System (surficial aquifer); 2) Lake Okeechobee levels may be lowered; and 3) South Florida Water Management District (sFWMD) was promoting alternative water supply strategies. When built in 1988, the WWTP was designed to handle up to 16 mgd and it was now at 8 mgd plus some blending. Commissioner Ensler stated this was fatally flawed because they were not allowed to take that much out of the surficial aquifer, and Mr. Olson agreed. Commissioner Ensler wondered if the amount of water the City could take from the aquifer could be decreased. Mr. Olson thought it was possible but not likely, as long as the City continued to demonstrate it was a good steward of the environment, was developing alternative water supplies and looking at re-use and conservation. A condition on the water use permit is that if you can demonstrate to the District that it did not impact adjacent users or the environment, they would consider increasing the allocation from the surficial aquifer. Even though that was in the permit, the permitting agency had made it clear that would not be the case and no additional water would be allocated from the surficial aquifer. Commissioner Ensler said they needed to look ten and fifteen years out and to understand where South Florida might be heading. It was not a short-term issue. Mr. Olson agreed, but commented there were unknowns in the interpretation of water use permits being issued by the sFWMD. Right now, they were making declarations on things that they had not completely characterized. Commissioner Ensler commented a mistake in judgment could cost the City $50M. Mr. Bressner stated that was one of the reasons they had trashed the original plan for the EWTP expansion. Mr. Olson said there were no guarantees in water use permitting. New information was always coming about and cyclical conditions and growth changes took place. Impacts made by the Commission could change the way water was used in Boynton Beach. There were no guarantees about what was going to happen in ten years. Commissioner Ensler agreed, so to be conservative was the smart thing to do. Mr. Olson thought conservatively meant to go incrementally, doing piece by piece expansions so no one resource was overexpa nded. In regard to the political pressure to lower the level of Okeechobee, Commissioner Ensler thought there would be no choice but to lower the levels if there were another hurricane. Mr. Olson did not believe this would happen since the population center was not right next to the dike as in New Orleans. The constraints on expanding the WWTP were that: 1) Production must be maintained from both water treatment plants to maintain hydraulic requirements; 2) Limited concentrate disposal capabilities from existing injection well; and 3) The current Water Use Permit with the County: Average Daily Flow from Eastern Wellfield - 8.0 mgd, Wet Season allocation 25.7 mgd, dry season 115.5 mgd. 7 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 Commissioner McCray asked how long the City could go if it had to operate on only one water treatment plant. Mr. Olson said it would depend on the problems, where the break took place and so forth. There were a number of ways to answer that question. Mr. Olson related that the average daily flow from the EWTP wellfield was 8 mgd. Beginning on July 1 of 2008, the sFWMD's seasonal allocation program would further restrict the surficial aquifer. Beginning in the wet season, the allocation from the surficial aquifer would be increased to 25.7 mgd. That represented an increase of about 4 mgd. That would be paid for during the dry season of January in 2009. During the dry season, the surficial aquifer allocation was being reduced to 15.5 mgd. The average daily demand in 2010 was projected to be 18 mgd and the average day from the surficial aquifer beginning in 2009 was only 15.5 mgd. This further exacerbated the problem. Following the initial evaluation Brown & Caldwell did on the BCE, they were tasked with meeting with adjacent utilities, talking to the regulatory agencies, and they developed two different alternatives that satisfied the water supply strategy, met the physical and permitting constraints and could be implemented. In order to implement either of the two alternatives, they felt it was essential to maintain the agreement with Palm Beach County as a "lifeboat," even if they never used it. Commissioner McCray asked if that extension was in place at this time. Mr. Bressner responded they had to make a decision about going on to full term or continuing with the temporary and that decision point had been moved to October 31 of this year. That did not move the term of the contract beyond the original termination date, but did give the City time to go through the issues and make an informed decision. Alternative 1 from the Business Case Evaluation . Extend agreement with Palm Beach County to provide up to 5 mgd of finished water until expansion is complete . Maintain operation of EWTP . Add 10 mgd of LPRO to WWTP of Floridan Aquifer water . Capital Cost - $53.5M/Net Present Value (NPV) - $101.1M Commissioner Ensler asked for a definition of useful life in terms of the EWTP. Did the building have to be knocked down and started over at some point in time, or was it just a matter of replacing filters and so forth? Mr. Olson responded everything had a useful life and on civil engineering projects, much of the structure has a 50-year life. Some pipes may have a useful life of 100 years. Pumps and motors and control panels and items requiring a great deal of maintenance were replaced on a routine basis on a 10 or 15-year life cycle. Certain activities at the EWTP need to occur and they were repair and rehabilitation. This was built into the CIP to be discussed later. The EWTP was built in 1962, was 44 years old, and any alternative chosen by the City had to include the EWTP at least for the next 20 years. They believe the facility would be viable for another 20 to 25 years. If they wanted to make it useful for the next 50 years, Commissioner Ensler asked if there were a problem to do that. Mr. Olson did not think that was a problem, although changing regulatory standards might require changes. Commissioner Ensler responded that this was different from what the Commission had heard two years previously when it was stated the building was approaching the end of its useful life. Now, they were hearing that was not correct and its life could be extended. 8 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 Mr. Bressner declared the basis for the EPX program was that the plant was antiquated and must be replaced. He thought Brown & Caldwell's opinion represented a different and possibly more cost effective approach. Mr. Olson continued, saying in order to feed the WWTP and the LPRO process, they were looking at 7 Floridan Aquifer supply wells, a raw water piping network of 17,000 feet, a new treatment/process building with LPRO, and a second concentrate disposal well. The capital cost, which was the current value of the construction cost to implement this improvement, was about $54M and the life-cycle cost, looking at a 25-year life, was about $101.1M Net Present Value. The second alternative represented a hybrid approach, with elements of the first approach and additions. Alternative 2 from the Business Case Evaluation . Extend agreement with Palm Beach County to provide up to 5 mgd of finished water until expansion is complete . Maintain operation of EWTP . Expand WWTP from a 10 mgd facility to a 15 mgd facility to take advantage of the existing surficial allocation already granted. . Add 5 mgd of LPRO by providing: Four Floridan Aquifer Supply Wells Raw Water Piping (6,000 feet) Concentrate Disposal Backup to Sanitary Sewer . Capital Cost - $54.6M/NPV - $99.9M There was allocation that could not be treated in the east because it could not be sent over there from the west and there was insufficient treatment capacity in the west. This alternative is to build additional treatment capacity at the WWTP for surficial water using nano filtration. Commissioner Ensler asked if Mr. Olson was speaking about an annual yield of 15 mgd. When they increased the number of wells operationally from 7 to 11, one of the reasons given was that the wells needed to be rotated and that 11 wells could not be run continuously. It seemed this 15 mgd would have all of the wells running continuously. Mr. Olson responded the way the water use permit was currently configured, the City could only use the west wellfield at approximately 7 mgd during the dry season. Commissioner Ensler asked if that were the case, why would they want to expand the WWTP from 10 mgd to 15 mgd. Mr. Olson responded that was because during the wet season, they could pump the wellfield at its full capacity. That would give the City additional, cheaper water. During the dry season, they would use the AsR wells, which would be refreshed during the wet season. Also there was a component of adding a new facility with 5 mgd of LPRO facility. Mr. Bressner asked for and received confirmation from Mr. Olson that they would get 6 mgd from the AsR wells during the dry season. Commissioner Ensler asked about the physical space in the WWTP and the addition of 5 mgd from the surficial aquifer and whether that building would have to be expanded. Mr. Olson responded the plan to expand the WWTP was always to add a second building. The current building was 8 mgd, and the second building was going to be 8 mgd. Commissioner Ensler believed to do an additional 5 mgd would require a Floridan plant, and Mr. Olson responded it 9 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 would require a Low-Pressure Reverse Osmosis (LPRO) facility. Commissioner Ensler asked if there were enough room to do that and in the future, expand the Floridan plant for another 5 to 10 mgd. Mr. Olson responded in the affirmative and this was a surprise when they looked at this. When they looked at how they would expand the existing nano filtration plant (WWTP) from 10 to 15 mgd while keeping the facility up and running, their initial feeling was it was not possible. A conservative alternative was to build a brand new building for 15 mgd of nano filtration treatment and retrofit the existing building for LPRO. Commissioner Ensler wanted to know how much space was available at the WWTP and how much water could be processed in a plant there based on its physical space limitations. Mr. Olson responded they could be very creative. There was space available for a sister building that would mirror the existing building. They could go higher than 10 mgd by using larger diameter filters and stacking the filters higher. Commissioner Ensler asked if they could go to 20 mgd and Mr. Olson could not answer that question. It was a matter of cost efficiency as well. Mr. Olson felt this alternative was creative in that it took advantage of the surficial allocation when available, only looked at the Floridan to satisfy growth, and was a cost effective solution. The problem that developed was the way to implement the improvement in their analysis. The analysis was not just adding 5 mgd in the existing building. It was building a new building for the existing process and then retrofitting the existing building. The capital cost of this alternative was very similar to the first alternative. The life-cycle savings was only $2M. Of the two alternatives addressed so far, the second alternative, because of the lower life-cycle cost, would be presented in the Capital Improvement Program budget today. They went back to the water supply strategy and said there was all this water in the west, treatment capacity in the east, and what do we do? They would build a pipeline between them. Proposed (3rd) Alternative . Extend agreement with Palm Beach County to provide up to 5 mgd of finished water until expansion is complete . Convey west surficial wellfield water to the EWTP . Convert WWTP from a nano filtration to an LPRO facility Install new Floridan Aquifer supply wells Install new raw water piping Install new pumps and process equipment within existing building Brown & Caldwell believed this alternative had a lot of merit, was deserving of additional consideration, and satisfied the entire water supply strategy. It might require a booster pump out of the WWTP, a relatively small cost option. They may be able to use existing pressures from the production wells, but they made this assumption. They also assumed they would construct a pipeline using trenchless technologies (micro-tunneling). There were technologies available, because they did not need access to that pipeline, to install the line deeper so it would not interfere with existing utilities or cause traffic problems. Commissioner McCray asked what an estimated price would be for the booster station, and Mr. Olson responded, about $2M, conservatively speaking. 10 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 This alternative would require making modifications to the EWTP to accommodate west surficial wellfield water. They had not done a routing analysis to determine the most efficient way to bring the treatment from one plant to the other. They could follow down the Lake Worth Drainage District E-3 canal, bring it down Golf Road, and connect into a raw water main that was at the Lowe's site right now. This could save about $2M. Commissioner McCray asked if the pipes were in place now, and Mr. Olson responded there were no pipes and no interconnections of raw water between the WWTP and the EWTP. Vice Mayor McKoy asked if the route would dictate the dollar amount and Mr. Olson agreed, saying it was all about linear length, especially with a directional drilling technique. A component of this alternative was to modify the existing WWTP. When the plant was designed in 1988, the Utilities Department had the forethought that they should over-design the plant. As a result, there were stainless steel appurtenances, pipes with a rated capacity of 250 psi, and a lot of facilities that could be directly converted from a nano filtration plant to an LPRO facility. The conversion from the surficial aquifer to the Floridan Aquifer would be relatively simple and relatively quick. They would also need Floridan Aquifer supply wells, a raw water line to bring the water from the wells to the plant, and they believed they could use the existing concentrate disposal well at the WWTP to dispose of the concentrate. Commissioner Ensler asked how long it would take before Brown & Caldwell could assure them, technically, that this could be done and to provide budgetary information. Mr. Olson replied that from a regulatory perspective, no hurdles were identified. They would have to have a meeting with the sFWMD so they could see if this plan was compatible with sFWMD's alternative water supply strategies. Commissioner Ensler noted the clock was running, and Mr. Olson agreed. Commissioner Ensler felt they needed to move forward with a decision. Commissioner Ensler asked if the last alternative were selected, how long it would take Brown & Caldwell to bring the information back to the Commission so it could make a decision. Mr. Olson thought it would take one month. Mr. Olson was not certain Brown & Caldwell was actually tasked with looking into the last alternative, but they were open to doing so. Mr. Olson related there were some uncertainties with the last alternative. The exact locations of Floridan Aquifer wells and raw water piping were unknown. Brown & Caldwell was promoting the idea of expanding the WWTP to a 10 mgd facility, but that did not have to occur at a 10 right now - it could be expanded to 5 now and 5 more later, although they recommended the space for the 7 wells be secured right now. The routing for the conveyance pipeline had not been confirmed. No routing analysis had been done. Commissioner Ensler asked if there were any input from the test wells done recently - one at Congress Community Park and a second on Miner Road. Mr. Mazella noted some samples had been taken from the south well, but none yet from the north well. Commissioner Ensler asked when the Commission could get an answer to the test sample results. Mr. Bressner confirmed this was an inquiry into the quality, not quantity of water. Commissioner Ensler asked if the Commission could get an answer to this question during the budget hearings, and Mr. Mazella responded if the tests had been done, yes. 11 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 Mr. Olson deferred to the hydrogeologist at Brown &. Caldwell, Helen Hickman, on the issue of regional water quality in the Floridan Aquifer. Ms. Hickman responded there was some regional information they could use such as the data from the City's injection well, that could provide guidelines as what to expect in regard to water quality. Commissioner Ensler commented the County was committed to going ahead with a Floridan wellfield plant out in the South Bay area and might have data. Ms. Hickman thought they had data since a couple of the wells Commissioner Ensler spoke of had been completed. They could certainly get the data from that, since they were involved with that project. Commissioner Ensler asked if they could get quality and quantity data, and Ms. Hickman responded in the affirmative. Mr. Bressner added data was also available from Jupiter. Advantages of Alternative Option #3 . Satisfies Water Supply Strategy . Takes full advantage of the surficial aquifer allocation . Fully utilizes EWTP . Diversifies raw water source . Provides operational redundancy · Takes advantage of lower treatment costs at EWTP (#0.22/1,000 gal. Vs $0.41/1,000 gal. Using nano filtration) - $1.0M year · Produces more water from same surficial allocation (1.5 mgd) · Reduces cost to implement LPRO at West Water Treatment Plant · Provides finished water near demand growth (downtown corroder). Takes advantage of an existing finished water distribution network. · Provides a source of low cost treated water near the location of the City's two (2) AsR wells. · Cost sharing with sFWMD (grants) · Significant life-cycle cost savings (approximately 20% less than Alternatives 1 and 2) Mr. Olson summed up, saying this option satisfied the entire water supply strategy. It took advantage of the existing allocation from the surficial aquifer. It also maximized existing capacities at the plants and took advantage of existing infrastructure without having to build anything new. This approach diversified the raw water resources, which is the key to water survivability in the future. In the future, nobody would be able to survive entirely on the Floridan or surficial aquifers. There had to be an integrated water supply strategy that took into account both aquifers, reuse, conservation, and groundwater recharge AsR. This option also provided operational redundancy. Mr. Olson recalled Commissioner Ensler's remarks from a number of years previously, about making sure the pipelines were paralleled and having 12 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 alternate ways to get water from point A to point B. Right now, there was no operational redundancy. If the WWTP went down for some reason, there was no way to get that water to the EWTP. If the EWTP plant went down, there was no way to get that water to the WWTP to be treated. Alternative #3 does that. Commissioner Ensler questioned whether this option could be implemented and at the same time, maintain the water supply to the water district. Mr. Olson said that would absolutely be possible and that was one of the beauties of this alternative. The modifications at the plant are very minor compared to the other two alternatives. Alternative #3 also takes advantage of a lower-cost treatment method. Money is saved on every gallon sent from the WWTP to the EWTP on treatment costs. The treatment costs at the EWTP are $0.22/1,000 gallons, including chemicals and electricity. At the WWTP, using the nano filtration treatment process, the cost is $0.41/1,000 gallons. If the 10 mgd currently being treated at the WWTP were sent to the EWTP, the savings would be over $700K a year, just in operational expenses. If the full cost savings of being able to ship 17 mgd from the WWTP to the EWTP, the savings would be over a million gallonsfyear. Alternative #3 provides a physical payback. Mr. Bressner thought this would provide a seven-year payback for the infrastructure. Right now, if the City pumps 10 million gallons at the WWTP, it only gets to use 8.5 million gallons. Alternative #3 produces a gain of 1.5 million gallons per day. That was enough water for 8,000 people. Alternative #3 reduces the cost to implement LPRO. There was an existing concentrate disposal well and an existing building. The only thing that would have to be done would be to replace the treatment process in the interior of the building. Alternative #3 provides finished water near the demand growth. Most of the growth in Boynton Beach was projected for the downtown corridor. This puts the water supply right where the demand is growing. The EWTP was the cornerstone of the City and it was installed where the population was. There is a distribution network coming out of the EWTP to fuel population in the eastern part of the City, which was not currently being met, so this was a more efficient process. Alternative #3 provides a source of low cost water to feed the AsR wells. Rather than having to use nano filtration water from the WWTP or LPRO water from the WWTP, this would use lime treatment water from the EWTP, the lowest cost water. Alternative #3 had a cost-sharing element with the sFWMD. It had a program of co-funding or helping to pay for alternative water supply projects and the City of Boynton Beach had received several grants, primarily for the AsR wells, but also the Floridan Aquifer Supply Study. It could be anticipated these grants would be in the neighborhood of 20% of the capital cost of these improvements. Alternative #3 provides significant life cycle cost savings of approximately 20% compared to Alternatives # 1 and 2. Commissioner McCray spoke of operational redundancy and asked how many new employees would have to be put on with Alternative #3. Mr. Olson did not believe any new staff would be 13 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 required. The EWTP was fully staffed now and they could handle the additional treatment requirements. Commissioner McCray asked if there were upgrades, where could staff be cut? He was concerned about overstaffing and in a full report, on an item of this magnitude, he wanted to see any potential for a reduction in the number of City employees or other cost savings for the community. Mr. Olson believed some automation might be possible in converting the existing nano filtration WWTP. Mayor Taylor thought it was early to be talking about employees, since it would take a number of years to put this in place. Mr. Olson commented they believed it would happen in three to five years. Mr. Bressner responded to Commissioner McCray that in terms of capital costs, considering the $96M that was for the EWTP expansion and adjusting it for inflation, the cost would have been $109M. If Alternative #1 or #2 were selected ($54.6 or $53.5M respectively), the savings would be $40-50M. Even with adding back in the probable cost of the reverse osmosis 10 mgd plant and the cost of the pipeline and pump station, Alternative #3 would probably have to be in the realm of $60-65M and still provide a savings of about $30M. There would also be operational and maintenance savings with Alternative #3 of close to $lM a year. It would be feasible to expect some grant funding from the sFWMD that would drive that cost down even more. In addition to cost savings, they were looking at some significant operational efficiencies. Mr. Bressner commented he had always been concerned about having two separate water plants, even though the system was hydraulically balanced between the two. There was no direct interconnect now and this alternative would provide that. Having a direct interconnect between the two plants also increased the margin of safety in the event of a catastrophic failure at one of the plants. He felt Alternative #3 really fulfilled his request to the consultant and staff to provide an alternative to the EWTP expansion being considered the previous year. He had wanted to save about $40M and with any of the options, they would be coming close to that but operationally, he thought Alternative #3 offered the most promise. Mr. Olson noted the alternatives were all expansions. They were looking at expanding a utility that could create 18 mgd to an average daily flow of 25-30 mgd in 2025. This was a growing utility. On a cost per thousand gallons, costs would be going down significantly. Commissioner McCray asked what the effect a terrorist attack would have in relation to the connection between the two water plants. Mr. Olson mentioned the emergency interconnects between Boynton and other cities, saying if a problem occurred, the City could tap into water available from adjacent utilities. If the WWTP went down, water could be pumped from west to east, bringing in temporary membranes. At the moment, if the WWTP went down, there was no way to distribute the water or get it back into the network. Commissioner Ensler thought the uncertainties regarding the Floridan Aquifer affected all three options. The last alternative showed the most promise in his mind in terms of significantly reducing the cost to the taxpayers and using facilities now being used to only a small percentage of their capability. If they were going to look at Alternative #3, he wanted to have a date certain when the information could come back to the Commission so it could make a final decision on what they were going to do in the future for water in Boynton Beach. Mr. Bressner indicated the Capital Improvement Budget suggested a figure in the realm of $55M for the water improvements. In order to move forward it would be necessary to: · Meet with sFWMD to verify their attitude towards the proposed improvements 14 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 . Have a final presentation on Alternative #3 at the first Commission meeting in September . Perform an analysis of the different chemical properties in the water from the EWTP and the WWTP to avoid any apparent or hidden incompatibilities. . Obtain a cost for preliminary routing analysis Vice Mayor McKoy wanted to hear about any potential safety concerns involved with interconnecting the two water plants, including worst-case scenarios. Mr. Olson had discussed the interconnection in terms of a net benefit to the City. He was leery of giving anyone ideas of what could be done to disrupt the water distribution system. There could be mechanical failure at existing facilities, breakages of pipelines, and so forth. He thought this would be addressed by the Utility in its operational plan as a contingency by "what- if" scenarios. He knew this type of contingency plan was in effect for the wastewater distribution system, but there was no current communication or redundancy in the City's raw water distribution network. Mr. Bressner believed it could just be the addition of another pump station at the EWTP to direct the water to the WWTP, and that would be another $2M expenditure. This would be a standby pump to pump the water from the east to the west in case of a problem with the Floridan Aquifer pumping station at the WWTP. Mr. Olson did not think they wanted to make the investment to have emergency standby membranes at either plant to cover any catastrophic conditions because they would have the ability to convey the water and if needed, emergency membranes could be brought in to treat it. Commissioner Ferguson spoke of the 177 gpd, asking what the strategy would be if it were reduced to something like 140 gpd from four different sources. He felt if the regulatory body was going to try to cut off the expansion, they could have a steeper pricing mode that would take care of some of the people who were using 287K gallons a month to water their lawns. As Commissioner Ensler had said, the mix of new dwelling units may cut that down some. The Wastewater Board was implementing a strategy to come up with another 12 or 13 mgd of wastewater that would be used for irrigation. Would that change any of Brown & Caldwell's recommendations? Mr. Olson responded that Florida Power & Light gave incentives for using less power. As a Utility, the City would want to promote using less water. If less water were used, the proposed expansions would not be necessary, but there would also be no revenue. Mayor Taylor asked for an estimate of the total cost for Alternative #3. Mr. Olson was uncomfortable with giving a firm number, but it would be in the neighborhood of 80% of the capital costs of the other two alternatives. Mr. Bressner was pleased to hear that this was better than the number he had suggested a few minutes previously. Commissioner Ensler remarked Alternative #3 also had lower operation and maintenance numbers. Commissioner Ferguson thanked Mr. Olson for a very comprehensive presentation. Mr. Bressner and others echoed that thought. Mr. Bressner noted that the Commission would expect a report from Utilities and the Consulting Engineer at the first meeting in September. Progress or interim reports would be gratefully accepted. Commissioner Ensler noted the reports should be in sufficient detail to allow the 15 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 Commission to make a decision. Mr. Olson confirmed this presentation would focus on Alternative #3. FISCAL YEAR 2006 UTILITY CAPITAL IMPROVEMENT PLAN Kofi Boateng, Utilities Director, gave a detailed presentation on this topic, a copy of which is made a part of these minutes. Total CIP Expenditures by year were: 2005-06, $19.6M; 2006- 07, $26.0M; 2007-08, $36.3M; 2008-09, $45.0M; and 2009-10, $28.2M. He then broke those expenditures down by Division. Commissioner McCray asked what year the Utility would run out of money. Mr. Bressner confirmed this was on a cash basis and went on to say there was about $54M of unobligated reserves in the Utility Fund. Mr. Boateng then discussed industry trends in water and wastewater. 1) Utilities Budget modeled after Industry Trends 2) Addressing the needs of aging infrastructures The verdict was that the underground infrastructure was in bad condition, nationwide. There was a stark funding gap due to deferred maintenance. Both were a matter of "out of sight, out of mind." Various agencies including the Congressional Budget Office, the Environmental Protection Agency, and the Water Infrastructure Network had estimated the cost to fix this problem nationwide was from $600B up to $1 T. This is the amount utilities would have to invest in their infrastructures to improve conditions underground. The emphasis was on controlling cost of operations and avoiding expensive system repairs and shutdowns. 3) Succession Planning There was a concern about the exodus of the "baby boomers" and the realization that there were not as many people available to take their places and the ones that were did not have the skills or experience of their predecessors. They needed to invest in a more versatile workforce if they were to address some of the utility's future needs. 4) Leveraging Technology Traditionally, the utilities industry had been reluctant to take advantage of some of the new technology, but the emphasis was now to invest in them, including automation to reduce labor costs. 5) Stringent Regulatory Environment This was a constant in utilities, one of the most regulated environments in the country. They had to heighten their environmental stewardship and grow a skilled workforce that would be able to stay on top of regulatory issues. Regulatory issues were expected to become more stringent. In order for utilities to be successful in the future they had to do three things very well: 16 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida . Operate efficiently . Engage the community . Leverage regional opportunities July 11, 2006 The customers could not be taken for granted. Communication programs would have to be put in place to effectively engage the ratepayers. Down the road, there would probably be a need to raise the rates in order to address major repairs and replacements. Commissioner McCray asked if the Commission would have to tell the citizens the rates would be raised again? Mr. Boateng responded that due to the major repair and replacement issues that were a result of deferred maintenance, they might have to increase their revenue. They would have to ensure there was a philosophical alignment between the utility, the ratepayers, the elected officials, the City Manager, and the workforce. Mayor Taylor asked if the trends spoken of by Mr. Boateng were nationwide, and Mr. Boateng agreed they were. Mayor Taylor did not believe this was specifically a local concern. Some cities might not have done anything about their infrastructure for years and now they were having problems. He felt this City had been proactive in that respect. He knew of a lot of projects where the City had put in infrastructure where there was none. He felt the newcomers to the workforce could be trained to be as effective as the workforce was today. Mayor Taylor did not think the City was taking advantage of its customers. The rates for water in Boynton Beach were in very good shape compared to those of surrounding communities. They had held down the rates, actually. Mr. Boateng agreed. Mr. Boateng iterated the projects necessary to address the City's aging infrastructure. He also identified multi-purpose projects for: seacrest Corridor Phase 1, N.W. 1ih Avenue, s.E. 4th Street & and s.E. Federal Highway. Mr. Boateng outlined the costs associated with the vision of Utilities to leverage technology and institute a succession plan for a versatile workforce. A state-of-the-art telemetry system for $1.2M was mentioned along with a $2.5M asset management program. Commissioner Ensler mentioned he had asked for a motion to reconsider the Commission's decision on stormwater fees at the next Commission meeting. This is because when he was given the backup (that he had not seen previously) before the meeting at which the decision was made, he saw 20 pages listing people who already had their own stormwater system. He thought about what Commissioner Ferguson had suggested at that meeting, which was to provide some sort of reduction for people who were already spending money on their own systems. He did not believe it was fair to charge someone twice for the same thing. He had spoken to the City Attorney about this and he asked City Attorney Cherof to comment. Mr. Cherof responded that under the City's ordinance, there was a procedure allowing a property owner to request an adjustment to the stormwater fee that is imposed on them. The process allows a great deal of flexibility in making that determination. It also provides a route for appeal if the property owner took issue with a result of a review by a board comprised of the Finance Director, the Utilities Director, and one or two others. The process was already available, but he was not sure how often property owners had used it. 17 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 Commissioner Ensler noted that in the case of Quantum Park, if they were to spend $100K a year in stormwater fees to the City but also spend $20K on their own, they would be entitled to ask for a credit of $20K and that would apply to all of those in the City who maintained their own stormwater systems. He stated that could affect the revenue flow. Commissioner Ensler spoke of the proposed new line from the downtown to the sewer plant. He wanted to know how this could be done without disrupting the operation of the downtown. When this item was presented to the Commission, he needed to have answers to these questions. Commissioner McCray spoke of increased water rates. His parents were elderly and their water bill each month was over $100. Senior citizens, he felt, were being milked by the current water rates. Mr. Boateng referred to the asset management program addressed under leveraging technology and if approved, he would be bringing information to the Commission about how they could operate more efficiently, reduce costs, and perhaps even reduce some staffing. Mr. Boateng defined four terms relating to the sources of the money used to make utility improvements. The first of these was total reserves, which represented the sum of all the available funds including encumbrances. The second was cap fees, comprised of facility charge fees, $1,099 per equivalent dwelling unit for new services to recover cost of new capacity in the backbone of the system. The third was the renewal/replacement/improvement (RR) charge required by the Revenue Bond Covenant - 6% of previous year's revenue. The last was operating reserves, which are set by industry standards and Utility policy. It called for six months of operating cost for liquidity. The operating reserves also accumulate excess operating balances. Mayor Taylor asked who paid the cap fees, and Mr. Boateng responded new property owners and those wishing to tie into the City's water system such as developers paid them. Mr. Boateng spoke of the 4-Year CIP Plan, saying the water construction area was a composite of the improvements that were needed in the system and improvements that would add capacity to the system. They could use the cap fees only to fund improvements that would add capacity to the system. Mr. Boateng reviewed the total reserves on hand as of 9/30/05. In regard to cap fee funding for water and wastewater, there was a projected surplus of $19.03M for the 2006-07 fiscal year; $lM for the 2007-08 fiscal year; a deficit of $24.23M for 2008-09; and a deficit of $37M in fiscal year 2009-10. He explained this was not a cash deficit but a funding deficit. Commissioner McCray asked Mr. Boateng how there could be a funding deficit that was not a cash deficit. Mr. Bressner responded there were replacement revenues and additional funds that would be coming in that could be used for capital outlay. Mr. Boateng remarked he had used the 2005 figures and deducted from them without adding in any revenues. There were stormwater fees of up to about $3M a year. The cap fees being paid by developers as new construction projects came in would also be added in. The point Mr. Boateng was making was that in 2008 or 2009, there would be a need to do a bond issue. 18 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 Mr. Boateng reviewed the data in the "Putting It All Together" chart for Water and Wastewater Funding that showed deficits in funding from R & R reserves after expenditures for $7. 7M in 2006-07, $20.2M in 2007-08, $32.7M in 2008-09, and $36.1M in 2009-10. After considering the projected revenues in 2006-07, the operating expenses, and debt service, the available funding was $956,300. They determined which stormwater projects could be started with that level of funding. The Rehab. Storm Water Piping and North & South Road Phase 1 Improvements could be done in 2006-07 but would leave a balance of $556,300. If the sE 4th & Federal Highway project were completed, there would be a deficit of $1,978,700. Otherwise, they would have to wait two years to do that project. Commissioner Ensler thought it was important to keep in mind that some projects were simply "nice" to do and some others "must" be done. The former should be pushed out into the future so they did not keep adding to the debt of the City and the taxpayers. Mr. Boateng responded that during the Business Case Evaluation process, one of the things they did was to identify certain criteria and use them as a standard against which projects were measured. They considered the positive or negative economic impact each project would have on the City. That was the method they used to come up with their current list of ClP projects. Commissioner McCray asked if 2006 construction prices had been used, and Mr. Boateng responded they had been. Mayor Taylor inquired about the cap fee chart that mentioned $1,099 per equivalent dwelling unit. If he built a project and put in 600 dwelling units, he would pay about $6,000. With all the dwelling units going up in Boynton Beach, and considering the chart on cap fees where it showed a reduction for each year, Mayor Taylor took issue with the way the funds were shown to dwindle down into a deficit. He felt this painted an unnecessarily negative picture. Mr. Boateng responded that Mayor Taylor could be correct. They were using information they had in 2005 and not adding anything to it. Mayor Taylor understood what they were trying to show but thought for a balanced picture, they had to show the revenues as well. Commissioner Ferguson asked when an estimate for the current year could be obtained. Mr. Bressner thought a sources and uses chart of some of the revenue streams could be given to the Commissioners early the following week, with Mr. Mummert's assistance. There was consensus this information had to be provided in order to get the true picture of what was needed. Mr. Bressner felt having a bond issue was a matter of when and not if, but he would like to see it delayed as long as possible. The other option would be to look at the overall priorities for the utility projects. They had already spoken earlier today about the water expansion, and he thought that would be a very high priority project to facilitate the continued growth and development of the community. Tightening the sanitary sewer system was important because it helped in terms of providing additional capacity at the wastewater treatment plant and demonstrated to the sFWMD the City was serious. Repair and refurbishment expenses were for normal system maintenance and he thought the Business Case Analysis had done a good job about prioritizing the projects. If those numbers could be refined a little, it would be helpful. Finally, water reuse was an area that had a benefit of providing an alternative water use. This meant that the neighborhood multi projects might have to be pushed out a little, especially if the Commission wanted to preserve capital as long as possible without resorting to a bond issue 19 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 until absolutely necessary. There was aging infrastructure in some neighborhoods that might have to be addressed by doing spot repairs on the water mains or sanitary sewers. Commissioner Ensler addressed Mr. Olson, saying he (Commissioner Ensler) had been quite critical in the past of any plan that provided additional water from the surficial aquifer. He wanted to announce that Alternative #3 was an ingenious one. He complimented Mr. Olson and Brown & Caldwell for conceiving that plan. He thought it was a marvelous approach to solving the water supply issue for the City. He asked Mr. Bressner to show how much money in the various funds could be used for a water system, when the information was returned to the Commission the first week of September. Mr. Bressner responded other than stormwater fees there was quite a lot of flexibility with use of the dollars. He could check with Mr. Mummert more directly. He would be reluctant to co-mingle the stormwater fees, but the other utility fees, operating or construction, would be more flexible. AT 3:45 P.M. A FIVE-MINUTE RECESS WAS DECLARED. The meeting resumed at 3:58 p.m. Mayor Taylor announced the Commission planned to end this meeting at 5:00 p.m. Commissioner McCray reported he had a conflict and would not be able to attend the budget meeting on the following day until 3:00 p.m., if the budget meetings extended into Wednesday. He requested that whatever was done prior to his arrival be provided to him in the form of a transcript (that did not have to be verbatim) by 1:00 p.m. on Thursday. Commissioner Ensler reported he had to be in Court in West Palm Beach on Thursday at 3:00 p.m. He would have to leave the budget meeting, if it was extended until then, no later than 2:00 p.m. City Manager Bressner was pleased to present the Operating Budget for Fiscal Years 2006-07 as well as the Financial Operating Plan for the next four years beyond that. As he indicated in the budget transmittal, particularly with respect to the General Fund, the budget was balanced and there was a slight surplus. On Roman numeral page vi of the Budget Message, a notation was made under the chart that basically said after July 1, they would have better information regarding revenues. When the budget was put together, it was based on the preliminary assessed values for the community. They did not have final assessed values, nor did they have some finalized numbers from the State for some sales tax and other shared revenues. As indicated in the Budget Message on page vi, Mr. Bressner distributed a supplemental report to the Commissioners with the updated assessed values and how that affected the tax rate. It would allow the Commission to consider reducing the tax rate more than Mr. Bressner originally recommended in the transmittal. As a result of factoring in the increased assessed value, the taxable value in the City was actually $5.6B as opposed to the $5.4B shown in the original valuation. The numbers in the supplemental report distributed to the Commissioners were the final numbers on which the recommendations would be based. In the budget transmittal message, Mr. Bressner had recommended the base millage rate be reduced from 7.5% to 7.4%. The other impact was the State sales tax went up about $266K from what it was estimated based on the June 1, 2006 estimates from the State. If the tax rate, millage rate, was left at 7.4%, that would provide an additional revenue stream of about $1,122,000. 20 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 Mr. Bressner had asked staff to come up with some options for the Commission to consider. The bottom line took into consideration the varying tax rates ranging from 7.4% to 7.1% if the water utility tax was kept. That was a new utility revenue stream proposed this year. Last year, when he had presented that as a recommendation to the Commission, the Commission rejected the proposal for the Water Utility Tax. Anticipating there may be a similar reaction this year, Mr. Bressner also showed an analysis leaving that out of the equation. The figures were acceptable down to a millage rate of 7.2%. That did not take into consideration any expenses in the budget program or any additions that the Commission may want to add to the program. Each year when the Commission goes through the budget, there are programs and activities they want to see put into the budget that were not included in these numbers. If they were to reduce the millage rate from 7.5% to 7.2% and if the Water Utility Tax was not included, there would still be a small surplus of $213K. In past years, they had to balance the budget using the unobligated fund balances in the General Fund. They were not doing that this year and it was the first time in five years since he had been with the City that they were able to do this on a cash basis. The downside to reducing the tax rate was that the base would be lowered for future Commissions, requiring them to raise the tax rates if they saw a need to do so. One of the key decisions the Commission would be making as part of the budget hearings was to approve a Resolution that had a preliminary millage rate. It could be left at the 7.4% that had been in the recommended budget and still reduce it in September prior to the budget hearings, or change the rate as part of the deliberations. He suggested the Commission could get down to a millage rate of 7.2% and still have a small cash balance left and still meet expenses, which he thought was good news. Commissioner McCray asked what would happen if they went to a millage rate of 7.0%. Mr. Bressner responded cuts would have to be made in the budget. Commissioner Ensler asked for status on the Water Utility Tax. Mr. Bressner commented it was not in place now. That was being presented to the Commission as part of the budget deliberations. The actual ordinance would have to be approved some time in September. Commissioner Ensler asked to see the details of what was being proposed with the Water Utility Tax. Mr. Bressner responded as far as the impact on users, the information was on Roman numeral page vi. For example, if someone used 5,000 gallons of water, they would pay a Utility tax of $1.08 based on a 10% utility tax. Mayor Taylor suggested starting on Roman numeral page 1 and proceeding through the pages until someone wanted to discuss something. Mr. Mummert responded to Commissioner McCray's earlier question about the impact of going to a millage rate of 7.0%, declaring it would mean a deficit of about $700K. BUDGET TRANSMITTAL LETTER FROM KURT BRESSNER DATED JUNE 29. 2006 On page 1, Commissioner Ensler did not understand why five more people had to be added to the Police Force in the managerial capacity of lieutenant and sergeant. He did not mind adding officers, but was not in favor of adding any additional lieutenants or sergeants. There seemed 21 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 to be a management structure in place to cover the current officers. There were two majors, six lieutenants, twenty-two sergeants, and 120 officers. He was against adding more supervisory infrastructure. Matt Immler, Chief of Police, affirmed that in 1999, the Department had 128 people and now had 154 people. The increase was entirely officers without any addition of sergeants or lieutenants. Also, there was a very young force and supervision was needed much more intensely than it had been in the past. He did not see much of an issue about the lieutenant and sergeant because they were operational people and would be needed. Commissioner Ensler did see a problem with the additional lieutenant and sergeant. Chief Immler was hearing that a major supervising 3 lieutenants was a good span of control. Commissioner Ensler thought increasing the police force by 3 officers did not justify adding two supervisors. Chief Immler responded it was not to supervise the 3 people being added this year. It was to supervise all those people that had been added since 1999. Commissioner Ensler thought the organization chart seemed to be quite clear. It was on page 113 of the General Fund. Chief Immler remarked they had taken a lieutenant who had been in the Investigative Services Division who supervised the detectives and moved him to the Community Policing Unit. They would then have a lieutenant who was dedicated to overseeing the Department's efforts as far as problem-oriented policing. They needed to replace that lieutenant in the Detective Division (which is referred to as the Investigative Services Division) due to the nature of the work in that Division. They also created another unit known as the Special Victims Unit where they handle the unfunded mandate by the State for elderly and child abuse. When just looking at span-of- control issues, it might appear the situation was adequate as it was. However, operationally, it was not adequate. The reason he put those people in the budget was he believed they were needed. Mayor Taylor said there were two different shifts between which the leadership had to be split. Vacations and illnesses also had to be taken into consideration. There were not always that many individuals on duty. Commissioner Ensler responded they had that all along and everything had been working fine. Chief Immler responded everything had not been working fine and that was the whole point. They added the lieutenant to the Community Policing Unit. They had to bring a sergeant in from the street due to the difficulties in the Evidence Section. That problem occurred because there was no supervision in there, so they added a level of supervision there. One of the sergeants was going to be on the road and the other would be administrative. The lieutenant was going to supervise the Detectives and the officers would be assigned operationally to the street level. Commissioner Ensler would personally support leaving the sergeant in but wanted to see the lieutenant taken out. Also on Roman numeral page 1, Commissioner McCray asked if the Human Resource Analyst was replacing someone. Mayor Taylor responded everything was an addition if it was in the budget. Commissioner McCray asked if the City had a large enough staff that an Analyst was required. 22 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 sharyn Goebelt, Human Resource Director, stated this was a new position for several reasons. They were planning to automate Human Resources. A lot of the functions that should be done in Human Resources were currently being done in the Finance Department. They also needed to do some statistical analysis they had not done but should be doing. As the City's workforce grows, it was a good addition to the team. Commissioner McCray noted Financial Services was adding an Accounting Technician part-time and it appeared to be overlapping. Ms. Goebelt responded the processing of promotions and increases were currently being handled by the Finance Department and those functions should be housed in Human Resources. Commissioner McCray understood but felt the budget requests were a wish list only. On Roman numeral page ii, Commissioner Ensler was concerned about the addition of personnel in Planning & Zoning and Building. The revenue for permits was decreased $1.3M for the coming year and they were seeing a decrease in the building industry in terms of the amount of expansion that was going on. They were in a recession area. He thought the staff was going to see less work than it had over the last two to four years. It was time, he thought, to hold the line with the number of people they now had. Mayor Taylor thought the additional people should have been added the previous year. He was still getting quite a few complaint calls from people who could not get permits out of the Building Department. He felt they did need additional help and he would much rather give them the people they needed than continue to get complaints from the citizens. Commissioner Ensler inquired whether the Planning and Zoning Planner was involved with building permits. Nancy Byrne, Assistant Development Director, declared all of the Development staff was basically involved with permitting. What the Commission was looking at in terms of positions in Building was a Fee Coordinator and a GIS Addressing Analyst. The Building Division collects capital improvement fees, fire impact fees, recreation impact fees, art in public places fees, and County/State impact fees. The Plan Reviewer was now collecting that money and that was why the plans were getting held up. The Plan Reviewer was not an accountant. Correcting the errors in calculations added to the permit turnaround times. They needed someone who could do this and with the help of the new Building Official, were hoping to make payments of permits more efficient for developers; taking escrow and pre-payments so when they wanted permits turned around on an overtime basis, it could be done very quickly. They needed someone with more of an accounting background than they had on the staff now so the Plan Reviewers and Permitting staff could concentrate on issuing permits. Commissioner Ensler had a problem with adding 3 people at a time when the workload would be decreasing. Ms. Byrne appreciated where he was coming from, but when she checked their revenue at lunch, they were $1.1M over this year's projected revenue in Building. Their projections were very conservative. Commissioner Ensler asked, then, for more realistic projections for revenue. Ms. Byrne commented the revenue projections were based on today's fee charts for Planning & Zoning and Building, but they would be coming to the Commission in September with additional recommendations on revenue options for both Building and Planning & Zoning, since their fees had not increased in Planning & Zoning since 1994. To outsource the disciplines needed to review permits would cost at least double the salary of their senior employees. If another catastrophic event occurred like a hurricane, there would be no way they 23 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 could handle it. They were up 2,000 permits in the past five years. Commissioner Ensler still did not believe it made sense to ask for three more people and project a drop in revenues. Ms. Byrne responded that a review of the revenue projections over the past three years would show they had consistently been between $2M and $3M in excess of the projections each year. Vice Mayor McKoy asked Ms. Byrne if they had considered what impact it would have on staffing and dollars to spread out the workload and be open on Saturdays. Many cities had decided to open on Saturdays for the convenience of those who could not come during regular working hours. Ms. Byrne responded they had not looked at this to date. They did dffer a private, paid overtime service where plan reviews were done on the weekends. They had just become fully staffed, except they were still short in Field Inspection and Plan Review. Their staffing was not close to full until May. They had been short-staffed for a long time and at this point, had to re-evaluate where the work levels were and make sure staff was handling what was in the system right now. They also had an attrition plan in place. There were several employees in the DROP program. If, as Commissioner Ensler was concerned, they saw a dramatic slowdown, they would leave those positions in attrition - they would not fill them. Of the senior Plan Review positions, two are going to retire in January and June of next year, leaving them without senior technical expertise in that department. Vice Mayor McKoy asked to see an analysis of the impact on staffing and dollars of being open on Saturdays. Ms. Byrne agreed to do so. Commissioner Ensler noted the actual forecast for this year was $6.375M in permits and fees. The forecast for next year was $5.216M or a reduction of 22%. Mayor Taylor recalled the Commission had recently criticized Development Director Quintus Greene for all the complaints they were getting from the community about the Building Department. Mayor Taylor and others had asked at the time why they had not asked for more people so the job could be done. Now they were asking for more people and being criticized for asking. Mayor Taylor did not see a decreased workload. Commissioner Ensler asked Building to come back with a new figure for permits and fees. Mr. Bressner accepted responsibility for this along with Mr. Mummert. They were very conservative when it came to Building & Development because those were one-time revenues, not ongoing revenues. They had to be very careful not to overstate what they were going to be. The development cycle was very fickle right now in terms of what is going on. While there were a lot of items in the pipeline now, they also knew a number of projects were being put on the shelf and put on hold. In regard to owner-occupied, multi-family developments, the lending threshold is now 60% of the units sold. That was a significant change in financing from the past. Banks were tightening up on financing and this was why they were seeing a lot of owner- occupied units switching to rental, where the financing was more favorable. Also, a number of developers refunded deposits for purchasers because the construction costs had been so high. This was a dangerous area, he thought, in which to be anything but ultra-conservative. Vice Mayor McKoy supported providing departments with staffing; however, he was just offering another alternative towards reducing the workload so the work could get done. They had been hearing a lot of concerns from citizens who were not able to get things done. Ms. Byrne said they were trying to be sensitive to that. On the Planning staff, they were down one Senior Planner, had Comprehensive Plan amendments that had to go through to the State and they had not been successful in this so far. They had been working diligently on getting the 24 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 LDRs done, but were trying to use in-house staff for development plans coming through. As of today, the Planning Department was $53K over their projected budget for the entire year and there were 2.5 months left in the fiscal year. Ms. Byrne believed the workload was not slowing down. There was a need in the Planning Department especially because they had some Commission directives and there was not enough staff to handle them. Outsourcing was very expensive. Commissioner McCray noted he had not ever had a status report on the Building Hot Line and felt that would have been helpful at budget time. Mr. Bressner indicated they were getting very few calls on that line. Commissioner Ensler was also concerned about the Community Marketing Manager for the Library, and Commissioner McCray agreed. He thought this was a "nice to have" kind of position, but it was not the time to do it. He thought next year, when the Library was finished, it might be possible. Craig Clark, Interim Library Director, referred to the Library goals on page 186-187. Goal #4 was to create a community relations marketing team. There were several objectives they wanted to cover. The responsibilities are three-fold. The main one would be to assist with fundraising opportunities. Commissioner Ensler thought there was already a fundraising staffer, but that was Debbie Majors and her responsibility was to explore and obtain grants. Assistant City Manager Hawkins noted Ms. Majors was not a fundraiser. Instead, she contacted State and philanthropic funds for assistance. Mr. Clark continued, saying the community relations person would be out in the community along with himself attending community meetings, Chamber of Commerce meetings, homeowner association meetings, and networking in the community. They needed to step up their marketing plan and create some professional quality brochures in English and foreign languages such as Spanish, French, and Creole that reflect the needs of the community. The Community Marketing Manager would also assist the Library Director in holding focus groups to determine what types of services the communities need. Marketing was a trend in public libraries and most public libraries did have this position to assist Administration. Mayor Taylor asked why this person did not come under the Library and Community Outreach position. Mr. Clark responded that person was not recommended by the City Manager, although they might ask again next year. Commissioner McCray thought it would be cheaper to get the brochures done by a company specializing in that instead of paying a salary of $54K. He had a problem with this position also. Commissioner Ferguson had some comments about the total number of personnel, but wished to hold them until the end. Vice Mayor McKoy thought as the Library was growing there may be a need for this, but not at this particular time. Mayor Taylor agreed, adding the Library would not even be complete until February of 2007. 25 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 On Roman numeral page iii under the General Fund Budget heading, Commissioner Ensler referred to the comment, "The estimated expenditures for the 2005-06 fiscal year are projected to be $2.08M over the budgeted amounts." Commissioner Ensler asked whether this was before or after receiving compensation from Federal Emergency Management Association (FEMA). Mr. Mummert responded the overage in expenditures was primarily related to the hurricanes. They also indicated an overage in revenues. Some of that overage in revenues would be attributed to increased building fees, but it was also attributed to revenues coming in from the hurricanes. They had to be reported separately. The expenses show on the expense side and the revenues coming in show on the revenue side. To date, they were up to about $2.2M overall, not all attributable to the General Fund, with some attributable to the Solid Waste and Utilities Funds. Commissioner Ensler thought a significant part of that increase was already covered by FEMA and would not affect the bottom line, and Mr. Mummert agreed. On Roman numeral page iii, Mr. Bressner commented the fund reserve was about a four-month operating reserve, which was the best the City had in years. Commissioner McCray had a class that said to be fiscally sound, a City should have reserves of six months. On Roman numeral page vii, Commissioner Ensler said there was mention of the Fire Assessment Fund and he was not sure when this should be covered. There was an issue of salaries and where should they be charged. Mr. Bressner responded there was the $1.7M that was currently being paid out of the Fire Assessment Fund to cover the staffing costs for the 24 personnel. Last year during the budget reviews, he recommended these expenses be moved to the General Fund but financially, they were unable to do so. In February of 2006 he mentioned they would be working towards that. Moving the $1. 7M into the General Fund would free up some capital for brick and mortar for the Fire Assessment for construction of facilities. Also, it would greatly increase the operating budget for the Fire Department in terms of what it was in prior years because they would be showing 100% of the salaries in the budget. The question was, though, whether or not from an accounting trail, this would be the best way to show this transaction. He thought Commissioner Ensler felt the money should stay here because this was what was originally proposed as part of the framework for the Fire Assessment; that those fire positions for Fire Station #4, which was the new fire station when the Fire Assessment was originally approved, should continue in the Fire Assessment Fund and stay there until the Fire Assessment expired in two years. Commissioner Ensler said it was really an accounting question. Should the money be put into the Fire Fund or the firemen into the General Fund and he wanted to be consistent with the original decision made by the Commission to leave them there for seven years. They could take the money out of the General Revenue so it would not affect it either way. Mr. Bressner said as long as there was a like transfer of $1.7M from the General Fund to the Capital Improvement Budget, you get to the same place. What staff did was take it directly from the Fire Assessment to the Capital Improvement Fund. Commissioner McCray felt it needed to stay where it was. When the Fire Assessment was voted on, the Commission promised the citizens Fire Station #5 and they did not get that. He referred to Roman numeral page xxviii where it said, "...The Capital Improvement Fund and all operating costs originally charged to the Fire Department Fund have been transferred to the General Fund." Commissioner McCray felt the Commission was not being consistent. It had promised 26 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 the citizens of Boynton Beach and they were not delivering. There was no money to build Fire Station #5. When he looked at the CIP, there was a $13M deficit. Mr. Bressner responded they had some funds to pay for it. Mr. Bressner deferred to Mr. Mummert, asking him to break it down into Fire Assessment and non-Fire Assessment funds. Mr. Mummert referred to page 317, the Five Year Budget Plan - Sources & Uses Fire Assessment Fund. As indicated, the numbers did not include the operating costs that had been transferred into the General Fund, but what was left was approximately $6.1M of available resources coming into the Fire Assessment over the next two years 2006-07 and 2007-08. What they were proposing was that those monies be transferred into CIP and go towards the total overall cost of building Fire Station #5, the EOC, and Communications. They would keep a separate accounting of those funds that were directly related to Fire Station #5 for the purposes of Fire Assessment. They essentially did have about $6.1M that would be going towards the total cost of Fire Station #5 that would come out of Fire Assessment. Commissioner McCray gave the beginning fund balance in 2004-05 and carried it out through 2007-2008 where the balance was $715,400. He was hearing they had $6.1M for Fire Station #5. He asked when the Fire Assessment Fund would end. He thought it would cost much more than $6.1M to build Fire Station #5. They would not be able to deliver unless they found funds from some place else. Mr. Mummert referred back to the Commission meeting of February 28 to talk about the CIP. At that point in time, they mentioned that for accounting purposes, they felt it was best to move Fire Station #5 into the CIP, so they had one place to account for all those costs. They indicated there would be about $6M available from the Fire Assessment and the remaining $l1M they suggested should come from a proposed $20M bond issue, which they discussed at that meeting. Commission gave direction to proceed forward with that bond issue. Commissioner McCray noted Mr. Mummert had not been at the City when the Fire Assessment analysis had been done and when it was presented to the citizens in Boynton Beach and the Commission. They were all told if they went through the 7 years, we would have enough money to build everything that was needed. Commissioner Ferguson agreed. Commissioner McCray had a problem with this item. Commissioner McCray was not in favor of transferring the money to the General Fund, believing it should stay with the Fire Assessment. That is what that money was obligated for. He said if there was not enough money to pay the employees, they needed to get rid of the employees. Mr. Mummert noted the monies over the last two years could be taken out of the Fire Assessment, but now, as opposed to having $6.1M to transfer and apply towards capital costs, there would be about $3.4 to $3.6M less. Commissioner McCray understood that, saying he wanted to be honest. Mr. Mummert continued, saying there would only be about $2.5M available for capital. Commissioner McCray felt when the Fire Assessment came to the citizens of Boynton and everyone voted for it, the Commission had not produced (Fire Station #5) and had failed the citizens. Commissioner Ensler believed Commissioner McCray agreed to leave the personnel in the Fund where they were put originally by the Commission and transfer the money there to pay their salaries. Mr. Bressner said there was a big difference there. There was a $3.4M difference. Commissioner Ensler wanted to pay the salaries of the people to be consistent with the original 27 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 decision and consistent with an audit trail. If there were any questions about lawsuits, there would be a consistent trail about the way things were done. Commissioner McCray asked for a timeframe for when the Commission told the citizens Fire Station #5 would be up and running, during the time the Fire Assessment was under discussion. They hired employees to work there and everything was supposed to be on line. It was not on line and he did not understand. Mr. Bressner responded in the Capital Improvement Budget from last budget year, it showed starting in 2006-07. Fire Station #5 was specifically listed. There was no Fire Station #5 in existence in the original plan that was approved by the Commission in 2001. Fire Station #4 became the Headquarters (HQ) station downtown. Originally, the HQ station was going to move out onto Woolbright. That was downsized and 9 acres of property were purchased in 2003 on High Ridge. A decision was made at that time to downsize the station on Woolbright and to move the HQ station in to Gateway and High Ridge. Commissioner McCray asked what the station number was the Commission said was going to be put in the northeast section. Mr. Bressner said that was Station #4. Commissioner McCray asked where Station #4 was now. Bill Bingham, Fire Chief, declared the northeast station was originally going to be Station #1. There had been some changes since then in regard to the downtown area and some of the developments downtown as far as keeping #1 there. Earlier in the meeting he provided the Commissioners a timeline and a narrative timeline. In looking at that, on April of 2003, The Urban Group continued to look for land for Station #4, which was actually the first station out of the box of the three stations. In the three years and three months since that date, they had found land for three stations: Station #4, Station #2 on Woolbright, and Station #5 that would serve the northeast section of the City. They built two of those stations and were in the process of designing the final station, which was Station #5 at Gateway and 1-95, and had completely staffed all of the stations. Commissioner McCray asked when Station #5 was completed, would more personnel be required. Chief Bingham responded they would not. Commissioner McCray felt if they did not have Station #5 up and running now, they were overstaffed and that was his concern. Chief Bingham said they were not overstaffed. They had just hired those folks within the last month. Right now, they were still completing their training. When Station #4 was being built, they had come up with a plan for the southeast section of the City. Instead of waiting for the fire station to be built, they were going to hire the people, buy the units, staff the units, and run them out of other stations. They did that. They saw significant decreases in their Citywide response time prior to Station #4 actually coming on line August 6, 2005 because they actually had units running into that zone on January 1, 2005. They were doing the same thing with the northeast station right now. They had another rescue unit that should be delivered by mid- August and the new people they just hired would be on that rescue unit and they would be responding exclusively to the northeast section of the City. Commissioner McCray asked where they would be working out of, because he felt they had sold the Commission a "bag of goods" that he could not swallow. They did not have a complete station that was supposed to be fully manned. There was no place to put the people. This was flawed and he could not vote for this budget. They had not kept their promises to the citizens 28 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 about the Fire Assessment. He believed they had over-hired, saying things would be on line, but they were not on line. In answer to Commissioner McCray's question about where the personnel would be deployed from, Chief Bingham indicated they would be stationed at Station #3 temporarily, only because they were still remodeling Station #1 from hurricane damage last year. Then, as soon as the station is done, they would have that rescue unit responding out of Station #1 into the northeast section. Until that time, they would be responding from Station #3 down Gateway into the northeast section of the City. Commissioner McCray was not in favor of this. Commissioner Ensler asked when Station #5 in the northeast would be open. Chief Bingham responded they were looking at June or July of 2008. Commissioner Ensler commented that was two years away but they had hired all of the people. Chief Bingham responded they hired them, and they were responding from another station into that district. Again, they had some success with Station #4. Their overall response time prior to staffing the units for Station #4, even though Station #4 was not yet built, was about 5.8 minutes per response. After January 1, 2005, which was still 8 months before Station #4 was completed, they had dropped the response time down to 4.36 minutes per call because they had units running into that zone. Commissioner McCray felt the City was overstaffed, too top-heavy and needed to start trimming. Mr. Bressner asked why would they not want to improve the service to all areas of the community? That was exactly what the Chief was doing with respect to the additional staffing for the fire stations. The reason they were doing that was to compensate for the fact that fire station was not on line. The Chief said they experimented with that on Station #4. It worked and they were carrying through to provide balanced services throughout the community. Commissioner McCray related a personal experience where the response time to N.W. 1th Avenue in the northeast was ten minutes. On Roman numeral pages vi and vii, Commissioner Ensler pointed to the statement that the revenue base for building permits would go down from the estimate of $4.1M to $2.8M, and asked that Mr. Bressner review this in light of today's discussion. Mr. Bressner responded that as he indicated previously, he was being conservative since they were one-time revenues. Commissioner Ensler responded he was not being conservative with the staff. Mr. Bressner indicated it would be looked at again, but he was comfortable with the numbers that were in the budget. Referring back to the Fire Assessment and whether or not to transfer the money from the Fire Assessment Fund to the General Fund, Mayor Taylor asked if staff needed direction. Mr. Bressner noted there were two different recommendations from Commission. Commissioner Ensler wanted to provide an audit trail that would keep everything in the Fire Assessment Fund and if necessary, transfer the dollars into the General Fund to pay for the salaries but to run everything through the Fire Assessment. What Commissioner McCray said was use the money from the Fire Assessment for the salaries. Commissioner McCray responded he had not said that. He agreed with what Commissioner Ensler had said. He wanted the money to stay in the Fire Assessment. Mr. Bressner indicated he had misunderstood, and that the two Commissioners agreed. 29 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 Mr. Bressner responded that the Capital Improvement Budget had to be revised to show the construction of the fire station and what was attributable to the fire station in the Fire Assessment as well. There would be a partial expense for the EOC portion of the building shown in the CIP and the fire station would be shown in the Fire Assessment. That would keep it absolutely clean. The CIP team would meet and this would probably be available for the Commission next week. On page 8 of the General Fund, Mayor Taylor noted the comment about Code Compliance salaries. He had prepared a salary comparison with eight other cities for Code officer salaries and he showed a significant difference between the minimum salary and the maximum salary for the City's Code Compliance personnel. He did not want to lose those people and wanted the Commissioners and the City Manager to take a look at this and see if anyone thought it was worth an adjustment at this time. Mayor Taylor distributed a copy of his research to the Commissioners and the City Manager. Mr. Bressner responded the reason he did not approve the reclassification was when they did the MGT Study, they looked at this twice and felt the comparables were as shown; however, if Mayor Taylor had some new data, they would look at it. On Roman numeral page ix, Commissioner Ensler asked how many of the staff were paid for by the City and what was the long-term intent of the City subsidizing the Schoolhouse Children's Museum. Mr. Clark responded the City currently paid for two full-time staff and split a part-time staff member. There was originally a fifteen-year management agreement and he believed there were about seven years left on it. Commissioner Ensler asked who paid for the operating costs. Mr. Bressner responded the City paid part of that overhead cost, as part of the referenced agreement. Mr. Bressner thought it would be a good idea to take a look at the management agreement and see when it expired and the Commission agreed they would like to see it. Since it was 5:00 p.m., the time Mayor Taylor had earlier said the meeting would end, the Commissioners were polled about continuing. The consensus was to continue until 6:00 p.m. The City Attorney had another appointment and had to leave, but Assistant City Attorney Tolces was present to replace him. On Roman numeral page xvii, Commissioner Ensler inquired why the Golf Course was operating at a deficit for a couple of years. Dan Hager, Manager of Golf Operations, and Scott Wahlin, Manager of Maintenance Operations, came forward to respond. Mr. Hager declared they were operating at a deficit due to the hurricanes. They lost the entire month of November in revenues. They had been doing quite well other than that, but the hurricanes had significantly affected them. Although they were reimbursed by FEMA, the loss of revenue was gone forever. The amount of that reimbursement from FEMA was 87.5% total for Hurricanes Frances and Jean, but they had not been reimbursed this year for their out-of-pocket expenses. Mr. Bressner indicated there was no coverage for lost business. 30 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 Commissioner Ensler said 2005-06 showed revenues of $2.6M and expenditures of $2.9M. He questioned whether the $228 loss for this FY would be reimbursed by FEMA. Mr. Hager responded most of it would be reimbursed by FEMA. Commissioner Ensler asked how much money they expected they would get back to cover this fiscal year. Mr. Hager responded, between 75% and 87.5% of that number. Mr. Bressner asked if the revenue stream shown in the summary, the $2.6M of revenue for this fiscal year, included the FEMA reimbursement already. The response indicated it was a deficit. Commissioner Ensler commented in this year's budget there was a figure of revenue of $2.7M, and an expenditure of $2.741M or a loss of $41.9K, which had to come out of the reserves. He did not understand why they would want to have a plan that operated the Golf Course at a loss. Scott Wahlin responded that was coming from reserves that were set aside in previous years. They were also going to be putting $150K into a reserve account to repair/replace the irrigation system. Commissioner Ensler agreed with that, but they would need money to do those things, and the plan for next year showed a loss. Mr. Wahlin responded the $150K was included in the expenditures. They were not actually operating at a loss. That was showing they were taking that amount of money out of another reserve account that existed now. Commissioner Ensler asked how much of the $2.741M expense had to do with the irrigation work? Mr. Bressner responded, $150K. Commissioner Ferguson commented traditionally, the Golf Course generated excess revenues of $100K to $120K and they had been turning that back to the City for 20-30 years. Mr. Hager replied they had not generated that much money each year. They had been self-sufficient, as they were by Charter, and they currently had $530K in retained cash and $800K total in reserve monies, and $300K in reserve accounts as of September 30, 2005. Mr. Bressner thought Commissioner Ferguson's question was how much was transferred from the Golf Fund to the General Fund, and the answer was nothing. Commissioner Ensler had a problem with the presentation. He felt when revenues were shown, operating expenditures should be shown as a separate item from capital improvements where the money comes from elsewhere. Mr. Bressner stated this was just a "snapshot" that went into the Budget memo. Commissioner Ensler understood that, saying it did not show the difference between operating revenue versus total expenditures, including capital improvements. The capital improvements are buried in there and a person would not know that by looking at it. Mr. Bressner responded they were all in the expense item. Commissioner Ensler commented if that was taken out, what were the operating expenses? In that case, Mr. Bressner responded there would be a slight surplus of about $100K. On Roman numeral page xviii, Commissioner Ensler asked about the Solid Waste Fund balance that was growing to $1.5M, and what could/should that money be used for? Jeff Livergood, Director of Public Works, responded the goal was to try to build up a fund balance as you would with the General Fund. They try to build up several months of operating reserves and the same thing had to happen with the Solid Waste Fund. The Solid Waste Fund experiences many expenses up front with FEMA when there is a hurricane response. Their expenses this year from that cause were nearly $1.2M. What they pointed out in the budget transmittal was that for a number of years, the Solid Waste Fund contributed dollars to the General Fund. As recently a couple of years ago, that was $550K per year and they were no longer doing that. They wanted to get to a point where they had a reserve fund built up again, 31 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 and evaluate the rate in three years to see if it is appropriate and once again, keep stable rates or begin transferring dollars again to the General Fund. Commissioner McCray referred to Roman numeral page xviv, and noted the comment that a separate rate ordinance would be submitted for City Commission consideration at its August 1, 2006 meeting. Why were they going for a dollar increase? For poor people, that was $12 a year. Mr. Livergood responded it was an Enterprise Fund and functioned entirely based upon the rates it receives. As noted on the transmittal, the rate of $10.50 a month was established in 1990, 16 years ago. Through automation, they had been able to reduce 12 employees, become much more efficient and the commercial accounts had risen. They had been able to do a good job of keeping the residential rates stable. It would be their desire to keep them stable, but if they wanted to have a fund balance built up for hurricanes and to evaluate being able to make transfers to the General Fund again, it was necessary to put a dollar per month surcharge on and build in an inflationary growth factor of $.50 per month in the coming years, because they no longer had the Fund balance to avoid it. On Roman numeral page xx, Commissioner Ensler inquired about the Shopper Hopper and the comment that this program's viability needed to be discussed. Mr. Bressner responded the City was losing money on the program. There were $277.1K in expenses and $32.5K in revenue. This was definitely a very popular program, but in light of overall budget costs, this needed to be looked at. Mr. Bressner responded this program was unique to this City. Since the time it was implemented, the CRA had started its trolley system, which had been very well received. In addition, Palm Tran had established a kind of "dial-a-bus" system where you can subscribe and get from Point A to Point B in the Palm Tran system. They had augmented that with their fixed route system. The Shopper Hopper is paid for from the Local Option Gas Tax. The City subsidizes this and it is an expensive program. A number of individuals on fixed incomes use it for transportation to shopping or trips to or from the Senior Center. He would proVide ridership data to the Commission. Commissioner Ensler felt they should look at redundancy in service. The seniors had to be taken care of, but the system had to be made as efficient as possible relative to Palm Tran and the CRA trolley. Mr. Bressner responded if the Commission wanted to leave it as it was, they should do some kind of performance audit next year to determine where the overlaps were, and possibly make some adjustments. On Roman numeral page xxi, Fleet Maintenance Fund, Commissioner McCray noted that going by 2005-06, there were expenditures of $6.3M and in 2006-07 there would be an expenditure of $7.0M. Mr. Livergood explained there was considerable fluctuation in the expenditures of the Fleet Maintenance Fund, because it included the capital expenditures for equipment. The equipment expenditures were not level in that you could expect a routine or inflationary increase each year. They varied based on the time to replace equipment and some of the apparatus could be very costly. Commissioner McCray asked if gasoline was included, and Mr. Livergood confirmed it was, on the expenditure side. Commissioner McCray asked how much that had gone up. Mr. Livergood thought they anticipated an increase of about $200K per year Citywide, for all vehicles, including Police cars. 32 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 On page 1 entitled Summary of General Fund Expenses, Commissioner Ensler looked at how much was spent and budgeted for this year and how much of an increase was shown for Building and Planning & Zoning. They were talking about 20-22% increases and he did not understand that when activity was going to be dropping. For example, there was an increase of $776K to a proposed budget of $981K, an increase of over $200K from actual to the new plan. In addition, under Development, the actual to the new plan went up by almost $400K. This was in excess of a $500K increase over the current actual. Ms. Byrne asked Commissioner Ensler to look at the revenue the Development Department brought in compared to its expenditures. They returned to the General Fund a good portion of their revenue, so they were covering their expenditures each year for the entire department. Commissioner Ensler asked how they could increase the budgets of those two departments by over $500M over the actual. Ms. Byrne believed the items he was looking at were the additional bodies, primarily in salary dollars, of three people. In Planning & Zoning there was one staff member and the increase from the MGT Study in salaries was being reflected in the numbers. That was 1/3 of the three-year adjustment. Mr. Bressner indicated the other part is they were covering staffing for a full year whereas in the past fiscal year, they were covering some of the Building Inspector and Plan Reviewer costs contractually. In looking at the expenses for this fiscal year on the contractual services, they went way over because they were not able to hire staff at the salary ranges they had before the MGT Study. Commissioner Ensler was willing to overcome some of his objections, but to increase that budget by over $500M was not something he could accept when he had to vote for the budget. Mayor Taylor questioned whether the increase covered the salaries of all the people in the department and the answer was affirmative. Mr. Bressner indicated the issue of salaries in the Building Department was exacerbated by the fact that during the year, they did not have a full staff. If you were comparing from one year to the next on those items, the increase was because they ended up having to use contractual services. In the Building Department, for example, the additional salaries, including the full complement for the staff, including the impact of the MGT Study, amounted to $234,433. For the new staffing of the one position in the Building Department, it was $83,377, including benefits; $46,000 was for the microfilming of capital projects; and $18K was other contractual services for public records. That is where $382K of increase went for the Building Department. In Planning & Zoning, staffing was $103,401 for existing staff and a similar situation where Planning personnel were not here or the City was paying for it on a consulting basis. There was one new staff member for $52,322 and the capital for that staffing at $3,500. That is where the $159K comes from. Commissioner Ensler needed to discuss this with Mr. Bressner as he still had problems with the size of the increase. Commissioner McCray's concern was with the Fire Department. They went up almost $4M and they wanted to transfer $1.7M. Mr. Bressner responded of the $2.4M increased budget, $1.7M was the transfer from the Fire Assessment - the equivalent salary cost for those 24 persons. Commissioner McCray asked how many personnel were being added, and Mr. Bressner responded they were adding two persons for the next fiscal year. Chief Bingham responded they were actually only adding 1.5 next year. Mr. Bressner believed the positions added this year were for fire inspections/prevention. Commissioner McCray thought the whole budget was way out of line. 33 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 On page 3 of Summary of Other Fund Expenses, Commissioner Ensler noted the increase for Fleet Maintenance was 28% and asked for the reason. Mr. Bressner responded it depended on what vehicles were scheduled for replacement in any given year. If they had a sewer Vac All in the Utilities Department, that would be close to $250K for one piece of equipment. The other thing that went into this was the take-home cars in the Police Department. That was a heavy expense started last fiscal year. The Fleet Plan that accompanies the budget shows which units are to be replaced in any given year. They try to balance that since some years they have more than others. If they had additional garbage trucks, that added to it as well. They were sometimes big-ticket items. Commissioner Ensler confirmed with Mr. Bressner that next year, the figures could drop. Also on page 3, Commissioner Ensler inquired about Memorial Park where it went from $227K to $459K and he asked why there was such a large increase. Mr. Mummert commented it was an accounting thing. On page 301, in the details, $185K of that expenditure was technically a surplus. Budget numbers are presented as being equal. If there is a surplus, it is a reserve for future appropriations so the revenues and expenses equal each other. Commissioner Ensler did not understand that because you could have expenses and revenues that were different and in some cases there was a surplus and in some cases there was an over-expenditure. He asked what the real cost was of the Memorial Park for this coming year. The response from Mr. Mummert was $459K minus $185K or $271K for operating and the rest was surplus. Commissioner Ensler thought it should not show up as an expense. Commissioner McCray noted while he did not have a problem with this personally, the public did not have the benefit of the backup provided to the Commissioners and so he agreed with Commissioner Ensler. A lengthy discussion ensued and the result was that Mr. Bressner asked the Finance Department to come back to the Commission with a recommendation. On page 6, Commissioner McCray asked what the City was getting for $13K in contractual services and what was the original request? Also, the Neighborhood Improvements Grants were reduced by $6K and he needed explanation on that. Regenia Scott, Neighborhood Services, declared they wanted to be able to provide the 120 neighborhood associations with more outreach and leadership type trainings, which would be facilitated by Neighborhood Works and other agencies to build the capacities of the associations. The request was initially put in for $20K, but after review, it was cut by $13,000, so there was only $7K in that line item now to provide those services. Commissioner McCray then asked what she had requested for the Neighborhood Improvement Grants and Ms. Scott responded the initial request was for $50,000 and it was approved for $44K. She had asked for $6,500 for office supplies initially to be able to provide more communications to the neighborhood associations. That request was approved for $3,000. Commissioner Ensler asked how much had been requested for training and what kind of training would that cover? Ms. Scott responded the training was for staff and for neighborhood residents to get off-site training. Sometimes training was provided by national organizations so they could look at other neighborhoods and observe what they had done to improve. The initial request for Neighborhood Improvement Grants was put in for $25K and it had been approved for $20K. Commissioner McCray inquired about Furniture & Fixtures and Ms. Scott said they requested $8,550 so they could upgrade their current office equipment and fixtures, but that was denied. 34 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 On page 19, Commissioner Ensler inquired about the three promotions in the Fire Department from lieutenant to captain. He was trying to understand the reason for promoting three people from lieutenant to captain. Chief Bingham responded these were reclassifications. They tried to have a captain that had responsibility for each of the Fire Stations, plus a captain on the road to support the battalion chief as an incident commander. Commissioner Ensler expressed his understanding of the Fire Department organization chart with Chief Bingham as the head of it and three deputy fire chiefs. Chief Bingham said each of the deputy fire chiefs had a major responsibility. One was the Fire Marshall, one was Administration, and the other Operations. Commissioner Ensler asked how many captains reported to the Deputy Chief of Operations. Chief Bingham stated last year, the battalion chiefs would report to the deputy chief of operations, a span of control of three as far as operations was concerned. Just for clarification, Chief Bingham indicated all the deputy chiefs were staff employees; they were not in the fire stations. Chief Bingham clarified under the Fire Chief were three administrative deputy chiefs. And then the department splits off into the Administrative section and the Operations section. Commissioner Ensler asked what organization the three people that were being promoted to were in. Chief Bingham responded they were currently lieutenants. Commissioner Ensler asked which of the three sections were they coming from? Chief Bingham responded, Operations. They were all shift-level employees. Commissioner Ensler asked how many people would report to the deputy chief in Operations. Chief Bingham responded he would have the three battalion chiefs, the person in charge of each of the A, B, and C shifts. For clarification, Chief Bingham remarked the deputy chief of Operations and all the deputy chiefs were staff employees, not shift employees. They were not in the fire stations. Where the captains came into play was the span of control from the battalion chief downward. Currently, there were 9 lieutenants on each shift. That was a very large span of control in an organization such as theirs, so what the captain does is reduce that span of control. Commissioner Ensler asked how many captains reported to each battalion chief. Chief Bingham responded there was one and now there would be two or six total. Commissioner Ensler thought there were three battalion chiefs, each supervising two people who supervised nine people. Chief Bingham responded they supervised not only the captains but also the remaining six lieutenants. The captains had additional responsibilities of maintaining the station and other responsibilities. Commissioner Ensler confirmed the direct supervision by the battalion chief was two people, and Chief Bingham responded eight people. The captains did not necessarily supervise the lieutenants. Because there would be only six lieutenants with five stations, there would be days when there were no captains on duty at a particular station, but that did not mean there was not a captain responsible for that station. This was more a functional issue than a chain of command issue. Commissioner Ensler asked how many firefighters reported to the captains or lieutenants. Chief Bingham responded there were 41 firefighters per shift and on any given day, there were 32 firefighters on shift. The remaining firefighters were either on Kelly days, vacation days, or other approved absences. Commissioner Ensler questioned, of the eleven people who were either captains or lieutenants, how many people did those eleven people supervise? Chief Bingham commented they had anywhere from 3 to 6 firefighters reporting to each lieutenant, but it depended on what unit they were on and if a captain was on duty. There were a number of variables that came into play. 35 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 Commissioner Ensler asked Chief Bingham to provide the Commission an organizational chart of the Operations part of the Fire Department, including the different people by position and how many people report to those people. Chief Bingham agreed to do that. Commissioner McCray asked why they had to do this when they did not have five fire stations. Fire Station #5 was not on line. Chief Bingham responded the reclassification had nothing to do with Fire Station #5 and he had misspoken earlier and called it #4. On page 25, Commissioner McCray noted Neighborhood Services asked for a projector and he inquired what that was for. Mr. Bressner responded it was for community meetings and it was a computer projector that hooked up to a laptop and was used for presentations. On page 25 also, Commissioner Ensler noted $175K for library books. He asked if that was funding to replace books in the in the current library or books to stock the new library. Mr. Clark responded this was their annual budget to replace the current stock before expanding the library. Commissioner Ensler asked where the money was for books for the new library? Mr. Clark responded they had $50K set aside in a special fund. Commissioner Ensler did not see that anywhere in the budget. Mr. Clark stated it was in a revolving account. They received library fines and then spent that money on things like opening day collections. Commissioner Ensler asked if there were an accounting for this money. Mr. Bressner responded there was an accounting for it and he would provide that to the Commissioners. Mr. Bressner responded these were non-budgeted funds. Commissioner McCray asked how many non-budgeted funds were in the City? Mr. Mummert responded within the audited financial statements, they had a fund termed Miscellaneous Trust #691. These were various monies such as library fines and they go into that account and are accounted for at audit time. It was just not considered a budgeted fund. Commissioner Ensler asked if the Commission had the right to approve those expenditures. If it did not show up anywhere, how could the Commission exercise its supervisory authority? Commissioner McCray and Mayor Taylor expressed interest in how much money was in #691 in total. Mr. Mummert would have to pull the financial statements, but he was able to provide a complete accounting of this and would do so. On page 25, Vice Mayor McKoy inquired which facility had requested the four video surveillance cameras. Wally Majors, Recreation & Parks Director, explained they would cover the Civic Center auditorium, east and west rooms, and areas that would have congregations of people. Also on page 25, Commissioner McCray asked about the beach wheelchair under Parks. Jody Rivers, Parks Superintendent, replied it was to make the beach ADA accessible. Mayor Taylor thought Hunters Run had donated one. Ms. Rivers responded they had one, but needed two. Vice Mayor McKoy thought a foundation might be able to provide one for this purpose, and Ms. Rivers responded they would definitely look into that. Commissioner Ensler asked where the $lM was for the new library. Mr. Bressner responded it was in the CIP list. 36 Meeting Minutes Special City Commission Meeting Boynton Beach, Florida July 11, 2006 Commissioner Ferguson had a question on page 34, but the consensus was to adjourn and resume on the following day. Adiournment The Commission duly adjourned the meeting by consensus at 5:50 p.m. CITY OF BOYNTON BEACH ATTEST: ~tlAt~ Recording Secretary 071206 J;;;;;er - t~ ~~. Commissioner ~ 37