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Minutes 07-21-10 Budget MINUTES OF THE SPECIAL BUDGET WORKSHOP HELD IN THE LIBRARY PROGRAM ROOM, 208 S. SEACREST BOULEVARD, BOYNTON BEACH, FLORIDA, AT 1 :00 P.M., ON JULY 21,2010 PRESENT: Jose Rodriguez, Mayor Marlene Ross, Vice Mayor William Orlove, Commissioner Woodrow L. Hay, Commissioner Steven Holzman, Commissioner Kurt Bressner, City Manager James Cherof, City Attorney Janet Prainito, City Clerk CONTINUED BUDGET DISCUSSIONS Mr. Bressner began the third day of budget discussions. At this point the figures reflected a $213,434 surplus. The enterprise funds needed to be discussed and a review of a tentative millage rate and the resolution relating to the fire assessment. The General Fund balance had changed reflecting the restoration of the records technicians, Community Service Officers and the Code Compliance Officer. The pension payments did not have to be included because they had already been calculated into the budget figures. Under the grants section, there were no funds allocated for the Youth Violence Prevention Program. It was scheduled to expire on September 30, 2010. The County's contribution had not been determined. There had been speculation that the Florida Department of Law Enforcement grant had been administratively continued until December 31, 2010. With the current funding levels, the Program could continue until the end of the calendar year. The Criminal Justice Commission would be requesting a 50/50 match from the County. The total program costs were $270,000 and the City's exposure would be approximately $140,000 with a net of $110,000. It is not reflected in the budget. Lori LaVerriere, Assistant City Manager, offered an estimate that $30,000 from the City and the County could provide a program for $60,000. It would not include the Youth Violence Prevention Coordinator or anything else. Mr. Atwood advised three part-timers had been funded out of the grant. The smaller program would not use those staff members by utilizing resources within Recreation. The proposed program would be a sustenance program and not very rich or dynamic as far as new activities. It would be a fairly low-key program. Mayor Rodriguez requested $75,000 be added to the wish list that could be $150,000 with the County match and continue all the current programs. Mr. Bressner agreed and reiterated it was in the grant portion of the budget and not technically a General Fund item. 1 Meeting Minutes Special City Commission Budget Workshop Boynton Beach, FL July 21, 2010 The $545,000 figure was the balance after the pension pre..payments had been made and the health insurance. The proceeds from the traffic fund had not been appropriated to anything even with the $75,000 added for the Youth Violence Prevention Program. The budget impact analysis indicates the use of the funds would be totally within the discretion of the Commission. They represented the anticipated revenue stream from the traffic cameras for nine or ten months. Mr. Bressner felt it was a conservative estimate. There could be some funds available then for law enforcement or public safety related activities. Programs that should be restored could utilize the funds. Mayor Rodriguez's recommendation for the dollars was to have them set aside for either a new Police facility or a new City Hall. He had been working on a concept that would provide a new City Hall and a new Police station. It was his opinion the new buildings could move forward quickly and the downtown begin to be developed. The location had not been determined. He requested the Commission hold the $600,000 for debt service on a new City HalllPolice Station. The revenue was not anticipated and the opportunity to build in a down economy with reduced costs may not arise again. Commissioner Orlove liked the concept, but wanted to use the funds to restore the three positions in the Fire Department unless other cuts could be made. Mayor Rodriguez indicated the three firefighter positions could be added to the wish list and not impact the traffic fund monies. Commissioner Orlove disagreed. Mayor Rodriguez thought the wish list should be reviewed and decisions made. The firefighter positions would add $203,000 to cover salaries, benefits and equipment. Mayor Rodriguez asked the Chief to re-evaluate administration costs. Commissioner Hay agreed with the Mayor and Commissioner Orlove and definitely wanted to see the three firefighters re-instated. He also wanted to discuss the Neighborhood Specialist position. Mr. Bressner indicated with Ms. Lyons' seniority it would be unlikely she would leave the employ of the City. If she transferred to another department the services she currently provides would be eliminated. There are also positions in Utilities and the incumbents will not be displaced, but may displace someone with less seniority, unless other qualified positions would allow internal movement. There will be opportunities that arise for employees to maintain employment with the City. Commissioner Hay suggested the traffic monies be set aside as suggested, but, if necessary, be used to balance the budget. Mr. Bressner advised there were two other revenue streams that had not been discussed. First, the fleet deferral of 25% would result in additional revenues of $205,000 for one year. A 50% deferral would be $410,000. He cautioned deferring the expense would create the costs coming back into the budget the next fiscal year. The Fire Department's adjustment included a one-year deferral of fleet purchases for $500,000. They will eventually have to be added back into the budget. 2 Meeting Minutes Special City Commission Budget Workshop Boynton Beach, FL July 21,2010 Commissioner Holzman speculated the deferral would generate an approximate $1 million capital cost. He did not feel it was realistic. The fleet includes lighter use vehicles and could be pushed back one year. The Police Department budget was reduced by $120,000 for vehicle replacement. The fleet deferral was non-police and non-fire monies. Mr. Livergood interjected the Police Department had extended the life of a number of vehicles. Their $120,000 reduction would carry from year to year to year. The replacement year in every vehicle in the department would be extended one year. The dollar amount would have to be reinstated to keep the yearly increment. Some vehicles were being removed from the fleet. Mr. Livergood pointed out the monies reflected in the budget were an arbitrary 25% reduction and the specific vehicles have not been determined. Mayor Rodriguez questioned the figure of $106,000 for car allowances and $108,000 in the budget. Mr. Bressner clarified it was only an allowance in lieu of providing a City vehicle for the use of the employee. As part of the PBA labor contract, there are take- home cars that are City vehicles funded through the program. Outside of the Police Department, there are only 12 to 15 cars in the fleet. Mayor Rodriguez inquired if the list had been reviewed to assure the cars are needed by the employees. Mr. Bressner had reviewed the list last year, but not this year. The cars are issued because the employee may have to respond quickly. Utilities have vehicles assigned to employees for specified time periods to correspond to field assignment responsibilities. Mr. Livergood noted the $205,000 included cars, utility trucks, and vans and was not the take-home vehicles. The policy of the City is to pre-fund vehicles and assess a yearly amount to be set aside so a vehicle is fully funded when purchased. The suggestion is to defer one year of payments and subsequently defer the replacement purchase. Commissioner Orlove asked Mr. Livergood if the plan would impact the vehicles significantly. Mr. Livergood alleged it would add to some maintenance costs. If the cost of maintenance for a vehicle became extreme, approval of a budget amendment would be brought before the Commission. Mr. Bressner commended Mr. Livergood and his staff for being stewards of the monies. Mayor Rodriguez noted the cell phone bill had increased by $4,000 to $58,000. Ms. LaVerriere ad'Jised City cell phones were returned and some employees preferred to go on a cell allowance. The cell phone allowance has gone up and the City owned phone costs would decrease. On the issue of car allowance, more accurate figures would be provided. The expense had decreased $2,000. Mayor Rodriguez advised business meetings had decreased from $67,000 to $55,000. Books and publications had decreased from $46,000 to $35,000. Memberships had gone up slightly and varies within departments. The League of Cities memberships provide policy, guidance and information to the Commission and it has increased with the City Commission having the largest line item. Good value is derived from the membership. Mr. Bressner stressed many memberships 3 Meeting Minutes Special City Commission Budget Workshop Boynton Beach, FL July 21,2010 are required to maintain certifications. Mr. Livergood wanted the Fleet Administrator to be aware of current industry standards and trends. Training budget had an estimated $4,000 increase that actually remained flat. The Police Department line item had the most increase. Chief lmmler explained legislative changes required dispatchers to be sent to a training academy. All of the municipalities will have to bear the cost of establishing an academy. The Chief had anticipated an expense of $10,000 to $15,000. It would be a combined effort and affect all 9-1-1 dispatchers. Mayor Rodriguez inquired if outsourcing had been considered. Chief lmmler advised there was discussion about combining some back office operations, crime scene investigation and some evidence custodial activities with Boca Raton and Delray Beach. Mr. Bressner added intergovernmental agreements would be required. Chief lmmler pointed out the DNA lab expenditure had been approved. The dispatch operation consolidation would take longer to achieve because of the Delray system. All three municipalities are on the same radio system. The CAD system would be problematic because all three municipalities use different records management systems. Commissioner Holzman asked when the savings would be realized from the combined lab and crime scene investigations. Chief Immler predicted the savings would be immediate as soon as the lab was operational. Mr. Bressner emphasized the cases would be processed much faster. Commissioner Orlove inquired if the savings had been calculated for combining the three dispatch centers. Chief lmmler thought the savings could be significant. Each City would have tO,pay $18,000 to RCC to do a study and produce a road map for combining the dispatch centers. The dollars were included in the budget. The costs savings to combine dispatch centers was not easily calculated. Another dynamic would be more DNA processing would mean more cases could be prosecuted. The other element to a consolidated dispatch center is Fire Rescue. Fortunately all three cities dispatch their fire services and the three departments use the same radio frequency. Fire had the option of going with the County, but a delay in call times would be created for potentially emergency response. The City of Boynton Beach felt, from a customer service point of view, to keep the response time low, a call center in Boca would be better. The goal was a hub for Boca, Delray and Boynton with each having their own identity, but inner operability for police and fire. The County acknowledged it would be a good model. It would take another year to work out the details. Mayor Rodriguez recalled an in depth study had been done. Mr. Bressner agreed that in 2006 a study had been done. Chief Immler recalled $160,000 had been spent and the department was studied for six months in great detail and it was very complimentary. Mr. Bressner knew another study had been done in 1998. The Mayor moved on to safety and noted clothing and shoes had increased. Mr. Livergood indicated shoes for blue collar employees were a shoe allowance line item. 4 Meeting Minutes Special City Commission Budget Workshop Boynton Beach, FL July 21, 2010 The plan is to now buy the shoes for the employees. Ms. LaVerriere interjected the plan would save the City about $50 an employee on shoes alone. The next item was $300,000 for uniforms. Ms. LaVerriere explained the uniforms and cleaning were all part of union bargaining. The Police Department share was $190,000. Mayor Rodriguez asked if there was any sharing of the expense. Ms. LaVerriere reported a specified number of shirts, pants and shorts were provided. If more were needed, they could be purchased by the employee. Each contract is different. Mayor Rodriguez commented salaries are often discussed, but many perks are offered that have a dollar value. He wanted to see the cost of the incentives included in talks regarding salaries. Mr. Bressner interjected there was a convenience factor for the City because the clothing provided a public image for the residents to identify employees and monitor their conduct. Commissioner Holzman contended the contract negotiations should include discussion of salaries, benefits and incentives in comparison to other municipalities. He was confident not everyone was doing as much as the City of Boynton Beach. Commissioner Orlove thought each employee would be given a break down of the salary, benefits and incentives' dollar value. Ms. Goebelt indicated the City did not produce a benefit statement at this time. She stressed the shoe allowance was $190 a year and the new contract provides for vendor provided shoes for $90 resulting in $60,000 in savings. There was a reduction in some uniforms too. The issues are addressed every single year. The total package is viewed in light of no raises, loss of a bonus day and many other changes were made. Kofi Boateng, Utilities Director, made an opening statement. Utilities is the largest enterprise fund. The operations fund the Capital Improvement Program and related expenses as well as any growth demand. It is based on the user fees and driven by regulatory departments to meet the health aspects and the needs of the customers. Striving to excel and provide safe water, wastewater and drainage is the goal by improving operations and maintaining the infrastructure to meet the challenges in the future. Trends suggest there will be a dwindling workforce and the City's staff has decreased from 158 employees in 2005 to 133.5 employees today. There is also a growing trend of unfunded, regulatory mandates. Due to technology contaminates are more readily identified and must be contained. The economic downturn has required many problems to be patched rather than replaced and Mr. Boateng cautioned the infrastructure could experience grave failures without the necessary investment. There are opportunities to invest in new technology and leverage the innovations and cultivate a more versatile workforce by automating the programs. Mayor Rodriguez remarked he had struggled with the 33% rate hike because he thought it was poor planning to have such a big jump and smaller gradual increases would have been preferred by the citizens and they responded resulting in a decrease. Mr. Boateng pointed out it had been 10 to 15 years since the last increase. Mayor Rodriguez stressed better planning has to be done to avoid the large increases. Commissioner Holzman inquired if the budgeting was restricted to the coming fiscal year or estimates for the next five to six years. He contended it would be best to be 5 Meeting Minutes Special City Commission Budget Workshop Boynton Beach, FL July 21, 2010 conservative and raise the rate 1 % or 2% now rather than a larger increase in the future. Mr. Bressner responded in the current fiscal year, with the rate adjusted down to a 7% increase, the Department was running $1.4 million below the estimate. It was based on the fact there would be no additional connections beyond the current customer base. The projected rate increase for next year is $1.5 million over the current budget. It translates to a 7.5% adjustment on the base rate, the demand charge. The commodity increase would be 1 %. The previous rate increase put more emphasis on the demand charge because it is the investment in the utility and to provide service whether it is used or not. The pipes and materials have to be maintained. The rates that are paid cover operating costs, capital costs, construction costs and the ongoing debt service. There is also anticipated debt if a bond issue is sought. Commissioner Orlove asked how the City of Boynton Beach compared with other local municipalities with similar customer bases. Mr. Boateng advised a benchmark study had been done. Delray serves 60,000 people and Boynton serves about 87,000 people and operating expenses for both municipalities were in the $11 million range. It could be concluded the City of Boynton has significant efficiencies that are provided in the operations. Mr. Bressner advised a new 2010 rate comparison would be supplied. Mr. Boateng related the budget projects a 5.3% cut based on the elimination of three vacant positions, paring some programs and reducing services including chemicals and electricity. The fleet reduction saved about $30,000. Services and supplies were cut by $552,000 and shared resources with ITS/GIS. Two positions were funded with Planning and Development that will now be reduced to one. The total cuts are $969,000. Mr. Boateng offered to point out how the cuts were distributed through the various divisions. Commissioner Holzman had seen the reduction of a TV truck specialist due to lack of work and questioned how it would impact service. Mr. Boateng explained the TV truck program was a revenue-driven program. After the work was completed, the crew would have been hired by developers to do inspection work. The economy has weakened that revenue source and was the basis for the cut Mr. Bressner added the reduced development level and the ongoing maintenance of the entire system cannot sustain the tvvo trucks and the crew. Mr. Boateng said a separate inspection program is in place that uses newer inspection equipment that was purchased and operated by City of Boynton Beach employees. There was recently an intensive evaluation of the sanitary system and retrofitted all the leaks that were found and estlilblished a base for future asset management. In conjunction with the evaluation, the existing TV crew was trained to operate the new equipment. Michael Low, Deputy Director of Utilities, reported the new equipment cost $98,000. Commissioner Holzman expressed concern it was revenue driven project and he understood there was ongoing expenses and income. He did not understand the logic of cutting a program that if more inspections were done, more money would be generated. Mr. Bressner explained the money was generated when a developer had constructed a line and asked the City to accept the 6 Meeting Minutes Special City Commission Budget Workshop Boynton Beach, FL July 21,2010 line. The developer pays the fee. Once ownership of the line is transferred to the City there would be no further fee as income. Mr. Boateng clarified there are two programs. The revenue opportunities occur once during construction. Attorney Cherof remarked the revenue should match, in some degree, the cost of services and the type of fee would not be a revenue source or profit center. Commissioner Holzman's other concern with the entire Utilities budget was the big line items for other contractual services. He wanted to know what the services were and why so much money was being expended. Mr. Low responded it covered major repair contracts and purchasing generators and the contractual services run through each division and project. Mr. Bressner recommended an analysis be done and provide a side-by-side comparison of all divisions for those type of services. He indicated there are areas that have been outsourced for ongoing maintenance activities rather than having staff do the work. It is not all emergencies. Much of it is scheduled maintenance but through outside contractors. It appeared to Commissioner Holzman that some of the work such as ground maintenance, software maintenance, vehicle maintenance is already in the budget and then there is other contract maintenance in addition. Mayor Rodriguez asked if there was a contingency line item for each department and Mr. Atwood advised some departments did. Mr. Boateng said 4% to 6% of the operating budget was an industry standard. The funds were carried over year to year. Barb Conboy, Utilities Manager, responded the contingency funds have been used. She advised $200,000 was budgeted each year, keeping the operating budget manageable but any water or sewer line breaks could cost $25,000 to $40,000. The contingency funds are utilized. The monies are transferred to the operating account so there are no expenses in a contingency. It will be drawn down. Mayor Rodriguez questioned if the contingency was in addition to the other line items previously referred to. Ms. Conboy indicated it was a separate line in the general administration. Other contractual services are enumerated such as elevator maintenance, AC maintenance or sludge. Monies are routinely moved from division contingencies to the proper expense line. There is currently $10,000 of contingency remaining. Mayor Rodriguez wanted to see a break down of what was spent. Ms. Conboy stressed the monies were never expensed out of the contingency account. The budget is amended monthly. Pete Mazzella, Deputy Director of Utilities, further explained contingency was a one line item that only sees transfers of fUllds and the budget is reduced. It would be expensed out of the other line items so the costs can be tracked. The contingency is a reserve of about ~ of 1 % of the total budget. The accounting procedures were discussed to improve the budget reporting. Mr. Low clarified the contingency is available for use in all other accounts depending on where the need arises. Commissioner Holzman returned to the TV inspection service and recalled in 2007 the City had piggybacked with the City of Jacksonville for $507,000 and asked if it was still in the budget. Mr. Boateng advised it is completed and both contracts are in the process of being closed. Mr. Mazzella advised there was five phases to the program and phase five was just being done. All the clay pipe in the sewer system, 7 Meeting Minutes Special City Commission Budget V.Jorkshop Boynton Beach, FL July 21,2010 approximately 940,000 linear feet, were televised over the last few years. There was an inspection phase, then a repair phase when the pipes were relined and infiltration reduced saving money. Mr. Bressner surmised the question began with the three crew members proposed to be laid off. The question was if their knowledge skills would enable them to find a suitable position within the organization. Mr. Boateng indicated the Human Resources Department was looking into two vacant positions that may be available and the affected employees would be given the opportunity to compete for those positions. The supervisory position may be laid off. Dan Hager, Golf Manager, was confident the cuts he had proposed would not equate to a hardship for the customers. The 4% reduction in operating expenses is an effort to budget only the bare necessities to get the job done. The capital outlay was reduced by 64% that was achieved by eliminating grounds improvements for one year and possibly two. The course is in great condition because most of the long-range capital improvements had been completed. The greens have been resurfaced and the irrigation system was rebuilt. The capital surcharge revenue is $136,000 that should offset maintenance equipment replacement of $122,000 and not drain capital reserves. Non-operating expenses were reduced by 36% by lowering the contingency fund of $65.000 to $50,000. A reduction in sales in the Pro Shop allows a reduction in a cost of goods sold from $70,000 to $45,000. The 8% reduction in the budget exceeds the City guide lines. The expenses cannot exceed the projected revenues. The three factors that could negatively impact the Golf Course over which there is no control is the declining economy, although avid golfers find a way to play the game. The weather is a daunting enemy with the worst winter since 1986. From January through April eight bad weather days was the norm. This past year had 24 bad weather days with an average daily revenue of only $7,000 as opposed to $8,400 a day. The hot weather can also be an issue. The third possible enemy would be competition with other golf courses. The supply is way ahead of the demand. Mr. Hagar reported the capital projects are done with the exception of $122,000 in maintenance equipment that has floated year-to-year with the assistance of excellent mechanics and maintenance. Cart replacement is scheduled for budget year 2011/12 at $200,000. The course is solvent with no bond indebtedness. The course is rated the number one municipal golf course in the State of Florida. Mayor Rodriguez developed that the irrigation is from the nine lakes on the property. No water is used from the Boynton Beach system. The course is in the Palm Beach County utility area. Commissioner Orlove noted a decrease in customers was anticipated due to the economy. Mr. Hagar added the game of golf is not growing and competition from new courses being opened can be substantial. Commissioner Holzman questioned the retail aspect of disposing of stale merchandise. Mr. Hagar replied the stale merchandise has been gradually eliminated from the retail shop. The 8 Meeting Minutes Special City Commission Budget Workshop Boynton Beach, FL July 21, 2010 goal is to meet the needs of the customers for impulse items with $85,000 in projected sales at a cost of $50,000. Mayor Rodriguez thanked Mr. Hager for his efforts and hard work. Mr. Bressner remarked the staff did a marvelous job. Jeff Livergood, Director of Public Works and Engineering, discussed the revenues in Solid Waste. In 2007, a series of rate increases were approved to avoid a large increase. The planned rate for 2010/11 would be $14 and had been in the ordinances for the past four years. The rate is an integral part of what can be done in operations as well as the amount of the contribution to the General Fund. Trends over the next five years will be reviewed to plan for future increases including labor expenses. A comparison with other cities was included in the materials. Mr. Bressner noted last year services were offered to Lantana and they did not agree even with a reduction in the rate to their residents. The expense reduction included the loss of nine positions out of 49. It would reduce six employees from the residential services from automated and bulk trash. It would be accomplished by moving from a four, ten-hour day task system to a five, eight-hour day schedule and provide the exact same level of services. The residents will not see any changes. Nine positions were being eliminated; five were vacancies and four were from layoffs. Human Resources was working to find other opportunities for the staff. Reducing the commercial roll-off drivers was the next item. The roll-offs were a profit center for many years. The rates were competitive with the private sector and profits went into the fund balance to benefit the residents. Mayor Rodriguez wanted further discussion on the matter because he saw it as an area of opportunity. Mr. Livergood projected the roll-off revenue to be $950,000 as opposed to previous revenue of almost $2 million a year. The operating expenses would be $450.000 to $500,000. The roll-off service is the large dumpsters seen at construction sites. A fixed rate is charged to dispose of the material. The development and construction department is so depressed five drivers were not needed. The estimated revenue this year is $930,000. Commissioner Holzman asked what was done with the containers not being used. Mr. Livergood indicated they were sitting at the Rolling Green complex. Commissioner Holzman did not like seeing all the containers from 1-95. A fence to screen them from view would be the best solution. It is a necessary evil to store the containers. Mayor Rodriguez was concerned that there was surplus of roll-offs that would never be used. Mr. Livergood pointed out the cost for a roll-off was only $500 to $700 and the life cycle is three years. Mr. Bressner advised there were repairs welded and when finally done they were sold as scrap iron. They could be sold or not replaced as they wear out. Mayor Rodriguez suggested the stock should be reviewed and assessed when the market cost is low. The replacement and repair cost line item is showing a reduction. If the construction market turns around, the City should be prepared to respond. There are currently 75 roll-offs and some could be phased out and not replaced to save 9 Meeting Minutes Special City Commission Budget Workshop Boynton Beach, FL July 21,2010 money. Mayor Rodriguez mentioned only City-owned roll-offs can be used within the City of Boynton Beach with an exclusive franchise. Mr. Livergood clarified that typical roll-off for a construction site is for mixed construction and demolition. If it is mixed on site the City has the exclusive right to take it. If it is separated on site into all piles of steel, all piles of aggregate, dry wall; then the builder has the ability to contract separately fo~ a single source item. Commissioner Holzman asked about the bag that was being advertised that held 3,000 pounds of trash. Mr. Livergood reiterated if it was mixed construction debris the City would haul it. Homeowners would not have a need for the bag because the City would take a considerable amount and if they put out more the City still takes it. The use of the bags has not been seen in the City. Mr. Livergood summarized the Solid Waste program is very successful and the detail budget reflects that fact. The transfers to the General Fund have been generous. This year $3.4 million is being transferred. A fund balance has been building and the Department is very judicious in its expenses. The rates have been enabling the fund balance to grow. This year the transfer to the General Fund will probably be $1 million to $1.5 million. The 2011/2012 year will probably not include a transfer. Mayor Rodriguez thanked Mr. Livergood for his presentation and hard work. Mr. Atwood commented the warehouse was the best warehouse operation he had ever seen. The inventory control is under $1,000 differential a year. More than half of the warehouse is related to purchasing and storage of the City Clerk's records. There are two floors. Rodney Vicki, the storekeeper at the warehouse, reported there was also a warehouse at utilities for the fittings, pipes, valves, couplings and hydrants. The main warehouse stores medical supplies for the Fire Department, uniforms for Fire, Police and general employees, and janitorial supplies for all departments. Mayor Rodriguez recalled the janitorial services were going to be outsourced and wondered how that would affect the warehouse. Mr. Atwood speculated the supplies would no longer be stored at the warehouse. Mr. Vicki continued that Parks irrigation hardware and electrical supplies were maintained as well as street signs. All surplus goods are collected and then sold on E-bay or to another company. With a few people, a lot is being done. Mr. Atwood included the pick up and delivery of mail is another responsibility of the warehouse. Ordering parts and supplies for fleet is another duty and any other special orders are processed through the warehouse. Chuck Magazine, Risk Manager, announced he has reduced his budget by 6%, but the City had to assume more risk. The deductibles were increased and the limits reduced. The current staffing levels would be able to handle the claims. There may be increased claims activity due to the increase in self insured retentions and deductibles. The goal is to reduce the total number of claims. Mayor Rodriguez inquired if the City carried insurance for the vehicles covered with a car allowance. Mr. Bressner indicated the individual is required to carry their own insurance coverage. Enhanced liability coverage is required. The City carries liability, comprehensive and collision. 10 Meeting Minutes Special City Commission Budget Workshop Boynton Beach, FL July 21,2010 Mr. Magazine explained the City insurance is bench marked by the total cost of risk method and the City's data is included in a national benchmarking survey. The standard of governmental entities appears to be approximately $10 per $1,000 of revenue. The City is $2 per $1,000 of revenue comparing quite favorably. Over the last several years the number of worker comp claims has decreased. The safety administrator has helped reduce the claims by being onsite with training and providing safety assistance. Many departments have taken an active interest in reducing the number of claims. Supervisors and managers are working with their staff to reduce risk. The cost containment is at $3,800 while the County is at $19,000 and the State is at $18,000. Attorney involved cases have also decreased to 1.4%. Mr. Magazine boasted any call from an employee and his staff gets the person to a doctor as a priority. The employee needs to be seen and treated first. Mayor Rodriguez inquired if there were comparisons with other cities. The data was not available. Boca Raton has copied many of the City of Boynton's programs. Mr. Magazine felt the City was a leader within the State and the Claims Administrator had been asked to put together a training program for others. Mayor Rodriguez inquired if the total cost of claims was actual dollars. Mr. Magazine replied the City self-insured the first $350,000 per claim. Pam Brown, Claims Administrator, added the attorney involvement is based on companies and entities that are self-insured. Commissioner Holzman asked if many claims went over the self insured rate. Ms. Brown could not recall a case. The $350,000 level keeps the premiums down and staff works very hard to keep the costs down. In regard to Safety, the OSHA reportable cases have reduced by 42%, the incident rate by 37% and motor vehicle accidents by 10%. Disaster recovery reflects $1.3 million from insurance and $6.1 million from FEMA and the State. Another check for $148,000 was just received from insurance and still working with FEMA to acquire additional funds. Mr. Atwood indicated the monies from FEMA go to where the expenses were charged. They are in a separate fund and cannot be counted as new money. Mr. Bressner interjected it was a Disaster Recovery Fund. There is a negative balance, but it is not significant. It would never have a surplus. Mr. Atwood explained the last check contained monies from the Golf Course debris. Mr. Magazine concluded that the department had four staff members and noted he had listed some recommendations. The Commission commended Mr. Magazine and his staff and encouraged them to keep up the good work. Mr. Bressner outlined a long term project was the possibility of an employee clinic to reduce some cost Funding has been a problem, but it may be a strategy to deal with even better cost containment for worker comp clajms. It would be nice from a wellness point of view to co-mingle it with an employee wellness or preventive health care program. More details have to be reviewed. Willis, the insurance consultant, has been working on the possibility, but not many clinics co-mingle wellness and workers compensation. 11 Meeting Minutes Special City Commission Budget Workshop Boynton Beach, FL July 21, 2010 Commissioner Holzman inquired if there was a sole supplier of workers comp claims or was it spread around. Mr. Magazine advised it used to be managed care and you created your own provider list. The City is no longer using managed care, but the provider list has been maintained and doctors added or deleted based on experience of the employees. In an effort to bring revenue to the City, he had discussed bringing other smaller cities into the insurance program and collect a premium from them. Mr. Livergood discussed fleet maintenance and addressed the fact that one vacant mechanic position would be eliminated. Fleet maintenance is mechanics, gas, equipment an'd replacement of vehicles. It supports all departments and then each department pay the fund for maintenance and to replace the fleet. The budget is dependent on the size of the Departments it supports. Expenses can only be cut if vehicles are cut. Commissioner Orlove noticed the budget was reduced. Mr. Livergood admitted the fleet benefited from the fuel market. Next year it could increase. The reduction of one staff member would save $80,000 for benefits and tools. It was decided a short break could be taken and public input be entertained after the break. (Meeting recessed at 3:26 p.m.) (Meeting reconvened at 3:40 p.m.) Don Scantlan, 13 Cedar Circle, thanked the Commission for the opportunity to speak and understood the Sunshine Law could be difficult to work around. He thanked the Commission for the job they do running the City. Mr. Scantlan spoke about the sensationalism around the concept of raising taxes. He advocated a revenue neutral budget for the City so the tax bills do not increase. The economy is not what it used to be, but 90% of the people are still working and brighter days are ahead. The City does not need to be a Cadillac, rather provide a good service with the money and resources available. Given to staff, it is money well spent. The complaint against public entities and government is that you don't get what you pay for. But, if you do, it is money well spent. The problem with foreclosures is far more than the taxes. Gertrude Sullivan, 201 NE 6th Avenue, asked the Commission to consider the little man. The government was nickel and dimeing the little man to death and she would just as soon see the Commission raise the taxes rather than adding to the problem. Ms. Sullivan suggested avoiding some of the entertainment and let people keep their jobs. Pay cuts could be done and don't forget the little person and stop living above your means. The City Commission ran for their position and she asked them to listen to the people and consider their needs. Herb Suss, 1711 Woodfern Drive, thanked the City Manager and commended the Commission for doing a very necessary job. He agreed the residents had to live within their means, but it cannot go to a breaking point where the service drops and quality of life decreases There has to be a balance to substantiate and keep the level of living 12 Meeting Minutes Special City Commission Budget Workshop Boynton Beach, FL July 21,2010 without back tracking in many of the departments. People will not want to live here and move out of the area that cannot attract business. There is a terrific staff in water filtration and engineering. Layoffs would be a loss of experienced people. Police and Fire should not be cut and if more fire personnel are cut the responsibility comes to the City if someone gets injured. Garbage collection and utilities are very important services including pumping stations. Willie Aiken, "(26 NE 1st Street, understood it was a tough decision and saving all the jobs was important. There was a concern in the Heart of Boynton and the special activities that are not the most important things on the budget right now, but to the homeowners they are important. The events are all they have. He read from one of two letters that had been sent requesting that the Neighborhood Specialist position be continued. It provides the community with direction and is a beacon in the City. It would lead to a negative impact in the Community. The position provides results to citizen complaints by working behind the doors. Without the position, it cuts off the lifeline from the people to the City. When issues arise they are dealt with in a professional manner and gets results. Mike Osborne, 3712 Coelebs Avenue, a Utility Department employee and union steward wanted to discuss some things said regarding the utility budget. One of the challenges was a dwindling workforce and that is the truth. The workforce shrank from 160 to 133 employees and the remaining employees are still doing the same work plus more because the base has gotten broader and there has been more construction and things to take care of. They did not mention that many of existing 133 positions that did not previously exist are top level management contract positions. Another challenge was the economy, but the last report says utilities revenue increased 10.2% and yet layoffs were being suggested. Mr. Osborne hoped at least a couple of the positions could be saved, especially those from the TV truck. The contract to televise the 940,000 linear feet cost the City almost $7 million over a three-year period. The City has two trucks that can do the same work, but one truck cannot keep up with the continuous maintenance. There was also discussion on contingency and that $50,000 was spent at one house. It was a house that had just been inspected by the contractor. The proposed budget also reflects a $9,000 raise to a manager to supervise six people and it is in his job description already. There is nothing to give the other two workers a raise that will get double the workload with only one TV truck. There needed to be some fairness involved especially in the Utilities Department. Mr. Osborne stressed that if a storm pops up. the utility workers make sure the water is being pumped and sewage is being dispersed. With fewer workers the recovery could be very difficult. Commissioner Holzman inquired about the $9,000 raise proposed for one management level position. Ms. Goebelt responded the paper work had been submitted to Human Resources for evaluation and it was rejected. Mr. Osborne's point was well taken and the manager was already performing those functions. 13 Meeting Minutes Special City Commission Budget Work~hop Boynton Beach, FL July 21,2010 Brian Edward, 629 NE 9th Avenue, thanked the staff as a citizen and understood the position of the Commission. It is hard to argue the cuts when there are vacancies and managers report the work can still get done. The City has to respond to the public comments and businesses with the taxes and a way to deal with foreclosures to attract new residents and businesses. A great first step was being taken with the budget discussions and collaboration throughout the City. Mr. Edwards thought great strides were being made. No one else coming forward, Mayor Rodriguez closed the public hearing. Mayor Rodriguez commented the best way to attract businesses and people is to keep the taxes down. Staff has done a wonderful job with an attitude the work can be done with less The Mayor had firmly asserted he would not support a tax increase or millage rate increase. The northeast section of the City is one of the hardest hit areas with the Crossings development having 79 foreclosures. The community could collapse. The Preserve has 27 foreclosure properties. If taxation is increased, the statistic will only get worse. A great job on the budget i.s being done and Mayor Rodriguez commended the community and the budget exercise. Commissioner Hay agreed to keep as many dollars on the street to stimulate the economy was necessary. The building of a new police station was discussed and postponed until the dollars were available. The $600,000 that is proposed to be set aside for new facilities could save several jobs. It appears a building is being given more money than the people. The projected figure could be very conservative and more money may be possible. He urged the Commission to carefully consider their action before sacrificing jobs. Mr. Bressner advised, based on the wish list restoration items, the budget had a positive balance of $141,261 without allocating any of the $600,000 and does not increase the millage rate from 6.7 mills. Commissioner Holzman indicated everyone had done a good job of budgeting this year. He asked if Mr. Bressner could paint a picture of what awaits the next fiscal year with regard to lack of transferring of funds, the continued downturn in the economy and potential tax revenue. Mr. Bressner explained there were several transfers of funds that were one time transfers done this fiscal year to assist balancing the budget. There was $3.7 million of fire assessm~nt funds gained from savings achieved through efficient construction management at Fire Station #5. The $1 million of Solid Waste represents a one-year transfer of revenues. The operating sustained expenses will continue the next fiscal year, hopefully at a reduced rate. With 75% to 80% of the cost being personnel expenses. it becomes harder to bring down expenses without staff reductions. Commissioner Holzman recounted it would be a $4 million deficit going into next year. Mr". Bressner noted it was basically the roll back rate. Mr. Livergood added the $22.2 million would include the one-time transfer of $3.1 million from the capital fund. 14 Meeting Minutes Special City Commission Budget Workshop Boynton Beach, FL July 21, 2010 Mayor Rodriguez recalled the shortfall in revenues from last year was approximately $7 million to $8 million. Every year he had been involved in the budget there has been a gap and the dollars are found. Mr. Atwood cautioned this would be the end of cleaning out the reserves. Mr. Bressner countered that last year the reserves were split between two years with this being the second and last installment. The taxable value reduction at the current millage rate generates $4 million less. The CRA taxable values dropped around $920,000 assuming the millage rate stayed at the 6.7 rate. He calculated what the rate would be if $1 million was added to the adjustment to meet the expenses for next year. The expenses have been met with the current budget calculations. The roll back rate would be 7.9 mills. Some communities are taking their tentative millage rate somewhere between their current rate and roll back rate. The rate can be adjusted down at the last public hearing on the budget. The dollars that would be generated through an increased millage rate would be building the reserve for next year. It is a difficult concept for taxpayers, but a wise decision to make. On the issue of furloughs, there has to be some research done by staff including the City Attorney. Mr. Bressner believed it should be across the board, but it may not be possible. The Fair Labor Standards Act has to be considered for exempt employees being considered hourly employees, eligible for overtime and may not be appropriate through U.S. Department of Labor regulations. The practice in other cities and entities regarding furlough days was discussed. The figures submitted may require impact bargaining and a whole host of other issues that have to be reconciled. The current figures barely balance the budget. There are no reserves for the next fiscal year and could result in a deficit situation projected for October 2nd with the fiscal year beginning October 1st. The recurring transfers of approximately $7 million may not be eligible. The Property Appraiser predicted that commercial property assessed values would drop in the coming year. Mr. Atwood interjected that due to appraisal appeals, $390,000 of tax revenue had to be returned to the Tax Collector. Mayor Rodriguez educated the two new Commissioners that the millage rate would not be finally decided at this time and more information could be gathered. The proposed rate could be decreased but not increased in future hearings. Mr. Bressner recommended a rate be set between 7.6 mills and 7.2 mills. Commissioner Holzman felt first and foremost, the property values would go down again next year. Foreclosures would continue to rise in certain communities and removed from the tax roll. A serious decline in property values will occur again. It is the Commission's job to make tough decisions and slim the budget for the future to avoid huge cuts next year. The Commission also has to look for ways to increase the tax base. The roll back rate is unacceptable. The employee costs have to be reduced, health care costs brought under control, deferred compensation issues resolved and tighten the City budget. Planning ahead is essential and cuts must continue to be made along with slowly raising the taxes. Mr. Bressner advised a 3/10th mill is 6.76 to 7.06 15 Meeting Minutes Special City Commission Budget Workshop Boynton Beach, FL July 21, 2010 representing $327,000 per 1/10th of a mill. Mr. Holzman noted the resident's taxes would continue to go down because the property values would be decreasing. Mayor Rodriguez remarked that the citizens will still feel increased taxes from the County, South Florida Water Management and the School Board. The total taxes would go up even if the City of Boynton tax rate remains the same. Assessments are now being instituted too. Commissioner Holzman concluded that the taxes were previously cut back too far and a vision for the future was not foreseen. Mayor Rodriguez contended the City had been inefficient growing the operation. There is emphasis on the employees, but the Commission has a responsibility to the 67,000 citizens. It was the responsibility of Mr. Bressner to run the City as efficiently as possible and it was his decision who should be laid off because ultimately he reports to the Commission. Vice Mayor Ross noted the City was the second largest employer in the City. The full range of services are provided to the citizens. The issue of health care would be further discussed, but it would be difficult since this is the second year of the wage freeze. Health care is a quality of life issue that needs further discussion. Deferred compensation is another difficult decision to be made. The benefit was offered to some in lieu of wage increases. It is a real challenge and could have a big impact on the budget. Vice Mayor Ross appreciated the Mayor's vision, but Commissioner Hay's statement regarding putting buildings before people was very compelling. Commissioner Hay inquired, based on the projected downturn in property value, what would be the fate to keep the same amount a household currently pays. Mr. Bressner replied it was difficult to answer because everybody's situation is different with no common formula. All taxable values did not go down the same percentage. Over 85% of the residential properties in Boynton Beach would pay less if the millage rate stays the same. Attorney Cherof advised the roll back rate referred to in the Statute is the millage rate set to get exactly the same amount of revenue as last year. The roll back rate calculated by the Finance Department is 8.0727. Mayor Rodriguez wanted the Commission to consider a rate of 7.0 knowing it can be decreased. Commissioner Orlove wanted to go up to 7.3 mills and have further discussion. He did not necessarily agree with Vice Mayor Ross's view on health care. The rate would provide a $3 million cushion. He did feel further cuts on the wish list would be appropriate. Mayor Rodriguez's goal was to be more efficient and to lower the millage rate. There is $600,000 of possible revenue and $404,000 from the wish list. Mr.' Sressner adv!sed the $404,000 would be included in the base rate of 6.7 mills with coverage up to $142,000. Commissioner Orlove countered that even if half of the wish list were taken back, it would not give anywhere near the cushion that would be needed if the transfers are gone and there are no reserves, The differences between a 7.2, 7.3 and 7.0 millage rate were considered. Commissioner Orlove would rather consider a higher rate than to go too low. Commissioner Holzman chimed in and agreed with the Mayor. He did not want to peg into a point that allows everything to be done and have a 16 Meeting Minutes Special City Commission Budget Workshop Boynton Beach, FL July 21, 2010 cushion, that is not the case. Mayor Rodriguez declared there was agreement with 7.1 mills. Mr. Bressn'er predicted another wild card would be the impact of the Value Adjustment Board and the net impact of any refund that may be required. Mr. Atwood projected there would be $594,000 short in tax receipts this fiscal year. Mr. Bressner calculated the shortfall would be 1/10th of a mill so the 7.1 millage rate would be short if the entire wish list is kept. There would be no margin for error. Commissioner Holzman did not want to cover the wish list entirely. There have already been concessions just because money is available. Mayor Rodriguez announced senior staff would come back with some recommendations on concessions that are outstanding. Furloughs would need to be discussed with further information from Human Resources. The traffic fund savings had not been totally agreed upon. There was consensus for a rate of 7.2 mills. Attorney Cherof read the title of Proposed Resolution No. R10-100 by title only Motion Commissioner Holzman so moved. Vice Mayor Ross seconded the motion. The motion passed unanimously. Mr. Bressner noted the fire assessment rate had to be addressed. The proposal was to carry the rate forward at the same rate as last year. Ms. LaVerriere advised it was a preliminary rate adoption with the final adoption on September 13, 2010. It is a flat fee of $68 per residence. Mr. Atwood reported that it generates a net amount after exemptions of $3.365. Commissioner Orlove asked Chief Bingham if the assessment was maintained at the current rate, what does that provide the community and the department. Chief Bingham replied the fire assessment dollars and General Fund dollars were in one account and rolled over into the regular budget. Commissioner Orlove recalled it had funded the building of Fire Station #5. It is now supplementing the budget of the Fire Department. Chief Bingham agreed it was in addition to capital costs used to build Station #4 in its entirety, Station #2, as well as Fire Station #5. It also funds firefighters and operating equipment. It is not just for capital improvements. Mr. Bressner stated of the $3.3 million, $3.2 million is operating expenses. Commissioner Orlove understood the monies were to retain the response time by building stations and providing services to the public with the best response time in the County. Commissioner Orlove questioned if the same rate is retained would the service level diminish. Chief Bingham concluded the response time could possibly diminish given the current budget constraints. Commissioner Holzman verified the monies were already included in the budget revenues. It was sold to the public for a specific purpose and was now being used for 17 Meeting Minutes Special City Commission Budget Workshop Boynton Beach, FL July 21,2010 general operating expenses. Mr. Bressner advised the Commission had re-authorized the Fire Assessment last year to make the transition. It expired in seven years and the Commission re-authorized the assessment with the understanding it has to be authorized on an annual basis. Mayor Rodriguez reiterated the original intent was to build three fire stations. Chief Bingham corrected the statement that it was not the entire original intent. There were also staffing issues that were included for the 24 new personnel at the new station. Chief Bingham cautioned that Stations #1 and#3 were getting old and some funds have been set aside to keep those stations maintained and are listed in the capital improvement part of the budget. The figures revealed $100,000 plus $50,000 for some planned facility work for new garage doors and other items at Fire Station #3. Mayor Rodriguez advised he was initially against the assessment because it was a tax on the citizens. It did have a purpose and now it distributes the expense of the Fire Department across all citizens equally. Commissioner Hay recalled the outcry from the public was very positive and the citizens wanted the faster response and were willing to pay. Commissioner Orlove wanted to keep the assessment the way it is and had great respect for the Chief and the Department. His only concern was the money was being appropriated from one account to another and the original purpose for the funds is being maintained. He expressed hope that in the future it could be reduced. Attorney Cherof read Proposed Resolution No. R10-101 by title only authorizing a public hearing for approval of a fire assessment. Motion Commissioner Hay moved to approve. Vice Mayor Ross and Commissioner Orlove seconded the motion. The motion passed unanimously. Mr Bressner discussed the next step in the process to bring the information up-to-date, but cautioned the figures had to be reviewed very carefully. The matters could be further discussed during regular City Commission meetings. Mr. Bressner commended the Commission for their hard work and dedication. There was consensus to adjourn and Mayor Rodriguez properly adjourned the meeting at 4:57 p.m. (Continued on next page) 18 Meeting Minutes Special City Commission Budget VVorkshop Boynton Beach, FL July 21,2010 CITY OF BOYNTON BEACH A TrEST: ith A. Pyle, eputy City Cl . 19