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Minutes 09-07-00MINUTES OF SPECIAL CITY COMMISSION CAPITAL IMPROVEMENT PROJECT WORKSHOP MEETING HELD IN THE LIBRARY PROGRAM ROOM, BOYNTON BEACH, FLORIDA, ON THURSDAY, SEPTEMBER 7, 2000 AT 6:30 P.M. PRESENT: ALSO PRESENT: Gerald Broening, Mayor Ron Weiland, Vice Mayor Bruce Black, Commissioner Charlie Fisher, Commissioner ABSENT: William Sherman, Mayor Pro Tem Kurt Bressner, City Manager Dale Sugerman, Assistant City Manager Sue Kruse, City Clerk Jim Cherof, City Attorney Diane Reese, Finance Manager Quintus Greene, Development Manager John Guidry, Utilities Director/ Interim Eng. Director Bill Bingham, Fire Chief Marshall Gage, Police Chief John Wildner, Parks Director Wally Majors, Acting Recreation Director A. D. Denahan, Assistant Library Director Mr. Kurt Bressner, City Manager, moderated the Workshop, which he opened at 6:30 P.M. Mr. Bressner stated that the meeting was a continuation of a budget work session held the previous month in which Staff was asked to come back to the Commission to finalize some operating budget issues as well as get into a more detailed discussion on capital project revenues and expenses. The agenda for the night's meeting included 1) Operating Budget Issues; 2) Analysis of Revenue Options for CIP Projects; and 3) Analysis of CIP Projects to Generate an "A" List and a "B" List. The participants were given handouts pertaining to 1) Reorganization of the Engineering Department, 2) Charts giving breakdowns of potential funding sources for the Capital Improvement Projects including examples of loan amounts, debt service, terms and rates of interest, 3) A list of Capital Improvement Sources/Uses Sorted by Rank for a five-year period including total project dollar amounts using a base example of a $10M bond issue with total debt service amount of $6.5M against total CIP projects of $80.125M. This chart included the 34 ranked CIP projects, which came out of the community input given at the recent CIP meetings. It also included current projects which are in process and projects for which there was a reserve for construction (i.e. Vision 20/20 projects); 4) copies of the Preliminary Budget for Fiscal Year 2000/2001. The Commission and Senior Staff discussed the capital improvement projects item by item, with Senior Staff and the City Manager analyzing and commenting on the items to help guide the Commissioners in their decisions which were: 1) which projects MEETING MINUTES CITY COMMISSION WORKSHOP CAPITAL IMPROVEMENT PROJECTS BOYNTON BEACH, FLORIDA September 7, 2000 to fund, 2) how to fund them, 3) when to fund them. The Commissioners were charged with deciding whether they wanted to borrow money to complete the projects and if so, to select the method to be used. Operating Budget Ms. Diane Reese, Finance Director recapped the operating budget, distributing the revised preliminary budgets. Revenues increased through beach decals and some tower leases. The Board Dinner was moved from the City Commission budget and put in the City Hall budget. An additional appropriation of $50,000 was put in for the Public Affairs Division for promotions and marketing. The G.I.S. portion of Engineering was transferred into the I.T.S. Department. A position for Traffic Engineer was added for Public Works Administration. The Project Manager formerly in Facilities Management was transferred to Engineering. Website development for $25,000 and $10,000 for holiday programs were added. Ms. Reese believed that these additions should address the concerns expressed in the recent budget workshop, stating that the City was still in balance. Commissioner Fisher inquired about disaster recovery and Mr. Bressner stated that the City would be looking at some FEMA grants and other funding opportunities to handle this issue. There was some discussion generated by Vice Mayor Weiland pertaining to the need for an Occupational License Inspector and the idea that the police officers could do the job. Chief Gage stated that the agencies who are doing this do not have the demands for service that they do in Boynton Beach. He was willing to have the officers do this on an intermittent, periodic basis but could not assure any kind of complete coverage. Ms. Reese stated that the revenues obtained from his license inspections helped to pay his salary. Mr. Greene stated that a lot more was being asked of the person than just checking for occupational licenses. He was being cross-trained and since he had been on-board, the City had been able to identify a lot more people without licenses than previously. Engineering Department Mr. Dale Sugerman, Assistant City Manager, related that they had reorganized the department into two separate divisions. They had removed the GIS function from Engineering, and put it into ITS and added funds for a Traffic Planner or Traffic Engineer. Mr. Sugerman commented on the handout given to the Commissioners and Senior Staff on the Engineering Department's organization. One side of the chart displayed the traditional Engineering Services Division, which handles Engineering Design and Development Support. The other side of the chart was a new activity, the Construction Services Division, which will help support all of the capital improvement projects that will be done over the next five plus years. Commissioner Fisher asked how much of this had been contracted out last year?. Mr. Sugerman stated that a lot of the engineering work such as a Product Engineer to sign and seal the plans was contracted out. The new activity, Construction Services, has never been done so it has not been contracted out. Mr. Bressner stated that he would not recommend that the City hire a real estate administrator at this time. He believed this should be out-sourced until the MEETING MINUTES CITY COMMISSION WORKSHOP CAPITAL IMPROVEMENT PROJECTS BOYNTON BEACH, FLORIDA September 7, 2000 City's need for land acquisition was firmed up. For budget purposes this money would be paid for contracted services, he said. Mayor Broening stated that it would give the City much-needed control over the multitude of projects it was undertaking. Mr. Bressner said that this approach reflected the wish of the Commission to consolidate and systematize its activities in the area of construction and development. I. Analysis of Revenue Options for CIP Projects Mr. Bressner referred the participants to the document entitled "CIP Potential Funding Sources", and reviewed the methods he used to set up the charts, asking Ms. Reese to explain the six funding methods in detail. He stated that the good news was that with the $1.4 million the City had, it could leverage $10 Million and not raise taxes because it would be paying the debt service off from existing revenues. Ms. Reese explained the six methods of funding displayed in the CIP Potential Funding Sources matrix. Some of the choices given were GO Bonds (Voter referendum); Florida League of Cities Municipal Bond Pool, twice a year, 20 & 30 year terms (Interlocal Agreement); Commercial bank loan 10 & 15 years (Ordinance); and Municipal Service Tax District or MSTU's (Ordinance). Ms. Reese elaborated about the FLC bond pool, saying that if the City went into the November bond pool, it would not have to start drawing on that money until it was needed. They could get in the pool now at the lower interest rate. Ms. Reese stated that the City would have to adopt a Resolution, which stated that the City would commit to budget and allocate for the debt service. Ms. Reese further elaborated on the MSTU's which are strictly for fire services (less EMS). This option takes a year or so to set in motion, requiring consultant analyses, voter notification and other procedures. After discussion, the Commission reached consensus that it was O.K. to borrow money but they preferred not to use the GO bond route, preferring instead the FLC bond money in the amount of $10 Million, which could be paid through the City's public service tax. After the citizens saw evidence of the City's good faith in the area of providing improved public safety services and facilities, the Commissioners felt it would be easier to ask for a GO bond a little later on. Mr. Bressner stated that the citizens had identified a very aggressive list of capital projects. There was no question but that the City would have to borrow money in order to accomplish them, joining many other cities that were paying for capital projects in this manner. Mr. Bressner reminded the Commission that they had gone to the community and asked their opinions on capital projects and that if you ask for somebody's opinion, you must be prepared to follow through and do something about it. MEETING MINUTES CITY COMMISSION WORKSHOP CAPITAL IMPROVEMENT PROJECTS BOYNTON BEACH, FLORIDA September 7, 2000 Mr. Bressner pointed out that this was the first step in the five-year plan and that the City would be asking the Commission for a GO bond and an MSTU as well as the $10 Million bond issue. In order to handle a non-utility project list of $86 Million, borrowing $10 Million was a good start but it was just a start. The community was going to have to get on-board with the idea of actually having the bond approved by referendum. You' are not going to avoid going to the voters and asking to raise taxes for worthy projects. He said that even with spreading the projects out over the next several years, the City would be looking at $23 Million in referendum GO bonds. They were looking at $10.5 cumulatively in MSTU's and at $10 Million of non-referendum or funding pool to drive the construction of approximately 70% of $86 Million. He stated that all $86 Million of the projects were probably not necessary. But they were deemed as being appropriate for the community. Mr. Sugerman asked "What about the utilities?" Mr. Bressner said that those could be done now and that one had to keep in mind that there are almost $41 Million of utility projects that can be funded. If you are looking at things to demonstrate good faith to the community, the stormwater projects are a good example. There are $5.7 Million of utility-based projects, many related to the stormwater program ready to go next year. Mayor Broening expressed concern about whether the revenue streams were up to the task. He looked at the 5.4% reduction in shared revenues from the State and the County over the last five years and although there were assurances from Tallahassee, he had not seen a nickel flow in here and he wished to proceed cautiously. It is not just the next two or three years but the next 20 or 30 years the City will have to pay. He said he believed General Obligation bonds were a very fair way for people to share in the cost of the improvements. He still believed there was a fundamental fiduciary responsibility to understand where it is that we are going and that he was not yet comfortable with it. Commissioner Black commented that 29% of the population did not make a contribution to the ad valorem taxes of a General Obligation bond and that this was inequitable. He reiterated his position that the General Obligation bond issue should not be the first step in the journey. Mr. Bressner said that the $1.4 Million would get $10 Million of some good and worthy projects but it would not be good for the long term. Mayor Broening believed that in the long-term solution would be to improve the tax base. II. Analysis of CIP Projects Mr. Bressner explained the two-page flow chart entitled "City of Boynton Beach Capital Improvement Sources/Uses FY2001-FH2005. Mr. Bressner went through the items on each section of the flow chart, beginning with the Revenue Projections and Descriptions. He remarked that in the first item, "Ocean Avenue Promenade - Reserves", the $886,115 under Revenue Amount was money that had been set aside in Visions 2020 and is "available" for use on the Ocean Avenue Promenade. He commented on and explained each of the revenue items. MEETING MINUTES CITY COMMISSION WORKSHOP CAPITAL IMPROVEMENT PROJECTS BOYNTON BEACH, FLORIDA September 7, 2000 He stated that the City had the $900,000 for Boat Club Park #1 and that it was waiting for word on the $1.7M for Boat Club Park #2 from the County. He pointed to the main item the Commissioners were considering, "Possible bond issue or loan with Public Service Tax as collateral of $10 Million". Mr. Sugerman commented that on the $810,000 for the Renovation of Executive Course and Practice Range that no revenues were shown for it but it would be covered by retained earnings. The Commissioners then considered the top ten projects on the first page and discussed which ones were necessary and which were discretionary only. Mr. Bressner added an increment for street resurfacing repair for $280,000 and sidewalk replacement or installation, stating that there was a lot of demand for these things and no sustained funding pool. He further commented that these would be recurrent capital expenses each year. Each of the 34 projects described on the flow chart were mentioned and discussed briefly. Concerning the item entitled "Police Sub-Station, North Area", Chief Gage stated that this was a request that was presented at a number of community meetings. He personally did not support it. He heard it as a request for visibility from police. He stated that when you create a substation you create an expectation of finding a fully staffed substation when you knock on the door. It has merits but significant costs were associated with it to make sure it worked well. He believed that this could be resolved by putting more officers into the zones and satisfying the needs of those particular areas. The Commissioners discussed their thoughts on borrowing money and th~ various strategies preferred. Mayor Broening stated he wanted to move ahead on the MSTU and would prefer a 20-year loan from the Florida League of Cities. Commissioner Fisher agreed with the Mayor, stating he would be willing to consider a bond issue down the road when the City's progress was reviewed after the initial projects. Commissioner Black said he concurred with the Mayor entirely but he liked the 15-year term and going ahead with plans for a bond issue. He wanted to move on the MSTU for the moving of fire station #1 and possibly putting a station #4 wherever the Chief thought it was necessary. He stated the response times were getting kind of high and that the City needed to move on this since it will take a whole year for all the planning activity. It was decided that the Commission would meet in the Library Program Room on Monday, September 11, 2000 at 5:30 p.m. in order to develop a final list of projects to be undertaken. The meeting adjourned at 8:40 P.M. MEETING MINUTES CITY COMMISSION WORKSHOP CAPITAL IMPROVEMENT PROJECTS BOYNTON BEACH, FLORIDA September 7, 2000 Attest: Recording Secretary (two tapes) CITY OF BOYNTON BEACH Mayor Pro Tem COmmissioner Commissioner