Loading...
Minutes 07-16-09 MINUTES OF THE CITY COMMISSION BUDGET WORKSHOP MEETING HELD IN THE LIBRARY PROGRAM ROOM, LIBRARY, BOYNTON BEACH, FLORIDA, At 1:00 P.M., ON THURSDAY JULV: 16,2009 Present: Jerry Taylor, Mayor Woodrow L. Hay, Vice Mayor Ron Weiland, Commissioner Jose Rodriguez, Commissioner Marlene Ross, Commissioner Kurt Bressner, City Manager James Cherof, City Attorney Janet Prainito, City Clerk Mayor Taylor called the workshop to order at 1:01 p.m. 1. Continued Review of Proposed Budget for Fiscal Year 2009/10 Mr. Bressner reviewed additional information on the savings found in the budget to be $568,250. It included the following changes: . Reduced cell phone allocations . Deletion of half-time Administrative Secretary position in the City Manager's office of $17,000 . Change in the management package for a savings of $38,102 . Medical and vision savings of $370,000 in the General Fund The total savings was $440,250. Additional savings were added to the models and the resulting millage rates were calculated. The impact of the changes included the assumptions the police facility is furloughed, there would be no layoffs, there would be a salary freeze, and the other changes would stay in place for all models. If the surplus goes to zero, the tax rate would be 6.44. If the grant is not received, the rate would increase to 6.72 to recover the $1.2 million for the 15 police officers. The anticipated grant is for $1.1 million. Working with model one and eliminating the $1.2 million surplus would bring the tax rate down from 6.4 to 6.1 with the program cuts, salary reduction and police facility furloughed. Attorney Cherof reminded the Commission of the existence of collective bargaining agreements that have to be negotiated. If there is no agreement with the recommendations, it could ultimately go to impasse and require several months into the new fiscal year for resolution. Commissioner Weiland summarized that one or two programs could be added back i'"lto the budget and offset the savings that have been found in the workshop. Mr. Bressner cautioned model one included a 2% salary reduction that requires collective bargaining. Transferring the 1 Meeting Minutes Budget Workshop Boynton Beach, FL July 16, 2009 firefighters to be paid out of the Fire assessment funds wouid decrease the assessment to 6.63 mills. Every l/lOth of a mill generated $386,000 of revenue. A discussion on the DROP ensued. Changes would have to be done by ordinance, but it would only affect new participants. Mr. Bressner explained when a participant enters the DROP, the employee is deemed to be retired. The salary base used to calculate the obligation for the pension fund deducts the employee's salary as an actuarial obligation. Pension payments are actually paid and the employee can remain employed with the City for up to Five years. The pension payments are placed in a funding account and invested with a guaranteed rate of return of 7%. The employee continues to receive a salary including raises, but contributions to the pension fund are ceased. On the last day of employment the employee receives a lump sum check for the accumulated penSion payments while in the DROP plus the investment gains. Mr. Atwood stressed the City's obligation is reduced at the beginning of the DROP because there are no further pension contributions being made. Lt. Gary Chapman, Boynton Beach Police Department and Chair of the Police Pension Board, added the DROP is a steering mechanism for retirement. If an individual does not enter the DROP and continues employment, the multiplier would increase and increase the oension benefit up to 100%. The DROP requires termination of employment after five years. The difference between an entry level pay and the retiree's current pay is a savings to the City. There would also be payouts for accumulated vacation and percentage of accumulated sick leave. If the employee participated in any deferred compensation savings it would also go with the employee. The City does not pay into the deferred compensation program for the employees. Commissioner Weiland noted there was a tax benefit received for paymerlts into the deferred compensation plan while employed. Lt. Chapman stressed the 457 Deferred Compensation is independent of the penSion benefit. Commissioner Rodriguez drew the distinction between the 457 Deferred Compensation with employee contributions and those employees who are paid a salary and the City allocates additional funds to the 457 Deferred Compensation program as a bonus. The management package that costs the City $123,000 a year is completely different than the employees contributing into a deferred compensation plan. Mr. Bressner countered that it was not a bonus, it was part of total compensation. Upon retirement, the funds contributed to a deferred compensation plan are then held in a trust fund and can be withdrawn at a specific age as an annuity or lump sum disbursement. Commissioner Weiland contended the contracts were becoming too lucrative and the City cannot afford the expense. Commissioner Rodriguez inquired when the executive deferred program had been approved. Mr. Bressner responded it had been ongoing since the' 1990s. Mr. Chapman noted executive employees have a personal obligation to take care of their own retirement. Commissioner Rodriguez alleged many top executives are now getting a zero bonus and all the perks are dropped. The City should take the same approach since this is public dollars. Commissioner Rodriguez voiced his disappointment that the leadership of the City making over $100,000 a year, would not give up the executive deferred compensation, cash conversion, and 2 Meeting Minutes Budget Workshop Boynton Beach, FL July 16, 2009 extra vacation days in lieu of cutting the salaries of the rest of the organization 2%. The excuse had been made it was a retention tool, but in today's market the perks should be furloughed. Commissioner Weiland added law Firms are laying off some of their attorneys and not giving any bonus incentives. His concern was the budget process had been ongoing since March and during the budget workshop it was revealed that monies can be used to pay salaries from the fire assessment funds and $400,000 of other monies was found and $2.7 million brought to the General Fund. Commissioner Weiland sought an explanation why the monies were not discovered until the workshops. He opined that Mr. Bressner held back information from the Commission. Mr. Bressner countered that the Commission had given the budget team very little direction. Commissioner Weiland stressed direction has been given for the last three months indicating a final decision would be made after reviewing all the data and numbers. Commissioner Weiland wanted more time to find other ways to save monies. Mr. Bressner wanted motions on what should be done and move the budget forward. Commissioner Rodriguez contended it was very clear the intention of the Commission was to go through the budget line item by line item. At the conclusion of the inspection of the figures, motions would be made and decisions rendered on what should be cut and what should not be cut. Mayor Taylor commented it was not appropriate to compare the private sector to the public sector because government provides a service, not make a profit. Many of the employees could be making more money in the private sector with their experience and education. The deferred compensation for top officials was a standard in the industry and he had no intention of. cutting the deferred compensation contributions. Mayor Taylor noted of the $400,000 savings found, over $300,000 was from the medical contracts that would have evolved without the budget workshops. He felt .the City Manilger and Directors had been hired to compile the info;mation and he could study the information. A Commissioner should know the duties of the various departments and their personnel. Over 70 employees had been present f,or three days and their hourly wages would offset much more than the $70,000 in savings that had been found. Mr. Bressner submitted a budget and if a Commissioner does not feel he is doing the job, tl;]en the motion should be made to fire the City Manager. Mayor Taylor did not feel it was necessary to have 80 employees sitting in meetings to enlighten the Commission how they do their jobs. Mayor Taylor made a motion to accept the 7.3 model and go on from there. Commissioner Weiland disagreed with Mayor Taylor and suggested there was a close relationship between Mayor Taylor and Mr. Bressner. Mayor Taylor denied the accusation of a relationship any closer than Commissioner Weiland had with the City Manager. Vice Mayor Hay seconded the motion. Commissioner Weiland advised he had lost trust with the City Manager and that was why he met with the City Attorney to get straight answers he could not get from the City Manager. 3 Meeting Minutes Budget Workshop Boynton Beach, FL July 16. 2009 Commissioner Rodriguez understood Mayor Taylor's comments and noted the City Manager had made the decision to have all the top staff present. The Commission had an obligation tc review and understand the budget because the Commission reported to the citizens. Commissioner Rodriguez alleged the millage rate that would be approved was determined based on monies that were found to assist balancing the budget. He recalled that six years ago the expense of a new library was voted down and yet the monies were found to build the library anyway. He did think the workshop should continue and accountability attained. Mayor Taylor called for a vote on the motion to set the millage rate at 7.3. The motion passed 3-2. (Commissioners Weiland and Rodriguez dissenting.) Commissioner Weiland stated he was absolutely shocked. Commissioner Rodriguez accused Mayor Taylor of skimming through the budget every year and then "blow off" anything that anybody said. Commissioner Rodriguez indicated Mayor Taylor's attitude was ridiculous and a result of his not running for re-election. Mayor Taylor countered that the budget should have nothing to do with anyone's election. Commissioner Weiland added the Mayor would not be held accountable because he was not running for re-election. Commissioner Rodriguez suggested the Mayor go play golf. Commissioner Weiland directed Mr. Bressner to throv.' all the information in the garbage can. (Commissioner Weiland left the room) (Commissioner Weiland re-entered the room as Vice Mayor Hay began his comments.) Vice Mayor Hay commented on the lack of a coordinated effort in the scheduling and location of the budget workshop and the participants. He made the following suggestions: . Use a meeting coordinator . Schedule departments for specific times . Better visual aids . Use reliable microphones or amplification system . Workspace be re-designed with Commission facing audience Commissioner Weiland interjected the proposal had been approved for each department to review their staffing and budget figures line-by-Iine which was not being accomplished. Vice Mayor Hay continued his comments suggesting that mini workshOps may be necessary before the actual budget workshop is held. Each Commissioner should review the materials and ask questions of departments and the City Manager to avoid inappropriate remarks and insinuations during the budget process. Vice Mayor Hay contended the Commission needed to do a better job preparing for the meetings to avoid wasting time. The current process did not work and changes needed to be made by everyone. The rate of 7.3 mills was only a starting point and more workshops specific to the areas of concern could result in lowering the rate further. Boynton Beach is the third largest City in Palm Beach County and supplies the most services to its citizens. Past mistakes need to be overcome and progress made to move forward. Vice 4 Meeting rJJinutE.:; Budget Workshop Boynton Beach, FL July 16, 2009 Mayor Hay did not want to be part of a dysfunctional team that could not work toward the betterment of the City of Boynton Beach. Mayor Taylor indicated he had met with individuals in the waste management business and wanted to withdraw his proposal for a franchise for the sanitation department. He had been informed by a top executive in the franchise business that Boynton Beach had the best sanitation department and a franchise would result in a tremendous increase in rates for the citizens. It was obvious the move would be detrimental and Mayor Taylor withdrew the suggestion. Mayor Taylor adjourned the meeting at 1:59 p.m. CITY OF BOYNTON BEACH Jose Rodriguez, VI 1n.~ g~< Ronald Wei , Commissioner ~~/~ Woodrow L. Hay, Commissioner ..-/1/Jg / </ / Zd~-<h-n~. Marlene R',ss, Comm;ssioner ATTEST: fit! dith A. Pyle, q eputy City Clerk 5